Spirit AeroSystems Holdings, Inc. Reports Third Quarter 2012
Financial Results; Reports Revenues of $1.365 billion and EPS of
($0.94) Including Previously Announced New Program Charges and
Insurance Settlement
WICHITA, Kan., Nov. 1, 2012 /PRNewswire/ -- Spirit AeroSystems
Holdings, Inc. [NYSE: SPR] reported third quarter 2012 financial
results reflecting continued strong demand for large commercial
aircraft, solid core program operating performance, the impact of
new program charges, and the final insurance settlement for claims
relating to the April 14, 2012 severe
weather event at its Wichita, Kan.
facility. Spirit's third quarter 2012 revenues were $1.365 billion, up 21% from $1.130 billion for the same period of 2011,
driven by higher production volumes.
Operating loss was ($211) million,
compared to operating income of $121
million for the same period in 2011, driven by previously
announced new program charges, partially offset by the final
insurance settlement relating to the severe weather event and a net
pre-tax $18 million favorable
cumulative catch-up adjustment driven by productivity and
efficiency on core programs and other one-time expense reductions.
Table
1. Summary Financial Results (unaudited)
|
|
|
|
|
3rd
Quarter
|
|
Nine
Months
|
|
($ in
millions, except per share data)
|
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|
|
|
|
|
|
|
Revenues
|
$1,365
|
$1,130
|
21%
|
$3,972
|
$3,645
|
9%
|
Operating (Loss) Income
|
($211)
|
$121
|
(275%)
|
($6)
|
$254
|
(102%)
|
Operating (Loss) Income as a % of
Revenues
|
(15.4%)
|
10.7%
|
(2,610) BPS
|
(0.1%)
|
7.0%
|
(710) BPS
|
Net
(Loss) Income
|
($134)
|
$67
|
(300%)
|
($26)
|
$132
|
(120%)
|
Net
(Loss) Income as a % of Revenues
|
(9.8%)
|
6.0%
|
(1,580) BPS
|
(0.7%)
|
3.6%
|
(430) BPS
|
(Loss)
Earnings Per Share (Fully Diluted)
|
($0.94)
|
$0.47
|
(300%)
|
($0.18)
|
$0.93
|
(119%)
|
Fully
Diluted Weighted Avg Share Count
|
140.1
|
142.2
|
|
139.8
|
142.3
|
|
|
|
|
|
|
|
|
Net loss for the quarter was ($134)
million, or ($0.94) per share,
compared to net income of $67
million, or $0.47 per fully
diluted share, in the same period of 2011. Additionally, the
current quarter includes a $19
million (see Item A in Appendix), or $0.14 per share, positive tax impact related to
net losses driven by new program charges.
As previously announced, the company reached a final settlement
with insurers for all claims relating to the April 14, 2012 severe weather event at its
Wichita, Kan. facility. The
settlement amount of approximately $235
million reflects claims significantly lower than previously
estimated and resolves all property damage, clean-up, recovery, and
business interruption costs. The settlement amount less current
quarter expenses was recognized as a gain in the third quarter
2012. The remaining cash settlement of $130 million ($235
million less the $105 million
cash advance received in the second quarter 2012) is expected in
the fourth quarter 2012.
"Strong market demand for our products continues as large
commercial aircraft deliveries increased 7 percent and deliveries
across all programs increased 12 percent over the third quarter of
2011," said President and Chief Executive Officer Jeff Turner. "As demonstrated by the third
quarter results, our core programs are performing well and we are
financially healthy."
"While new airplane programs are always challenging, I am
extremely disappointed in our management of the complexity on these
programs. We have struggled with the development and early
production on certain programs as highlighted by the charges in the
quarter. However, it is important to note that as these programs
are now transitioning to full rate production and experiencing rate
increases we are applying our lessons learned and focusing on
driving operational performance and cost improvement into these
programs," Turner continued.
"Our backlog of approximately $34
billion reflects the strong global demand for commercial
aircraft and positions us well to realize the long-term value and
generate cash," Turner concluded.
Spirit's backlog at the end of the third quarter of 2012 was
approximately $34 billion. Spirit
calculates its backlog based on current contractual prices for
products and volumes from the published firm order backlogs of
Airbus and Boeing, along with firm orders from other customers.
Spirit updated its contract profitability estimates during the
third quarter of 2012, resulting in the previously announced
pre-tax charges of ($184) million on
the 787 program related to the wing; ($163)
million on the G650 Wing program; ($151) million on the BR725 (Engine Nacelle
Package for the G650); ($88) million
on the G280 Wing program; and ($4)
million on other combined programs. Additionally, the
company recorded a net pre-tax $18
million, or $0.09 per share,
favorable cumulative catch-up adjustment driven by core program
productivity and efficiency and other one-time expense
reductions.
In comparison, the third quarter of 2011 operating income
included a net pre-tax $4 million
favorable cumulative catch-up adjustment, and a pre-tax
($10) million new program
forward-loss.
Cash flow from operations was a $103
million source of cash for the third quarter of 2012,
compared to a $66 million source of
cash for the third quarter of 2011. The current quarter
compared to the same period of 2011 includes an additional
$50 million customer advance
associated with a customer agreement on the A350 fuselage program,
partially offset by the timing of accounts receivable and accounts
payable. (Table 2)
Excluding the $50 million customer
advance payment, cash flow from operations was a $53 million source of cash in the
quarter.
Table
2. Cash Flow and Liquidity
|
|
|
|
|
3rd
Quarter
|
Nine
Months
|
($ in
millions)
|
2012
|
2011
|
2012
|
2011
|
|
|
|
|
|
Cash
Flow from Operations
|
$103
|
$66
|
$236
|
($176)
|
Purchases of Property, Plant &
Equipment*
|
($67)
|
($80)
|
($171)
|
($164)
|
|
|
|
|
|
|
|
|
September 27,
|
December 31,
|
Liquidity
|
|
|
2012
|
2011
|
|
|
|
|
|
Cash
|
|
|
$222
|
$178
|
Total
Debt
|
|
|
$1,179
|
$1,201
|
*Purchases of Property, Plant & Equipment
include purchases related to the April 14th severe weather
event
|
Cash balances at the end of the quarter were $222 million and debt balances were $1,179 million. Approximately $19.9 million of the credit facility is reserved
for financial letters of credit.
As also previously announced, to address the charges in the
quarter, the company amended its senior secured loan and credit
facility to adjust the senior secured leverage ratio through the
first quarter of 2013 and the other financial covenant ratios
through the second quarter of 2013, after which times the financial
covenant ratios will revert back to pre-amended ratios. No
event of default has occurred.
The company's credit rating was affirmed at BB and placed on
stable outlook by Standard and Poor's, and was affirmed at Ba2 and
placed on negative outlook by Moody Investor Services following the
third quarter announcement regarding new program charges.
Financial Outlook
Spirit's revenue guidance is updated for the full-year 2012 and
is now expected to be between $5.2 and
$5.3 billion based on Boeing's 2012 delivery guidance
of approximately 585 to 600 aircraft; expected B787 ship set
deliveries; expected Airbus deliveries in 2012 of approximately 580
aircraft; internal Spirit forecasts for other customer production
activities; expected non-production revenues; and foreign exchange
rates consistent with those in the third quarter of 2012.
Fully diluted earnings per share guidance for 2012 is now
expected to be approximately $0.19 –
$0.24. Excluding the net insurance
benefit, loss per share is now expected to be approximately
($0.43) – ($0.38) (See item B in Appendix).
Cash flow from operations, less capital expenditures of
approximately $250 million for 2012,
is now expected to be between $250 million
and $350 million in the aggregate. Excluding the net
insurance benefit of approximately $100
million, cash flow from operations, less capital
expenditures of approximately $250
million, is now expected to be between $150 million and $250 million in the aggregate.
The 2012 cash flow from operations guidance includes $250 million of customer cash advances related to
the A350 fuselage.
Spirit's revenue guidance for the full-year 2013 is expected to
be between $5.8 and $6.0 billion.
Fully diluted earnings per share guidance for 2013 is expected
to be between $1.90 – $2.10 per share. Excluding weather related
expenses, fully diluted earnings per share guidance for 2013 is
expected to be between $2.20 - $2.40
per share (See item B in Appendix).
Cash flow from operations, less capital expenditures of
approximately $400 million for 2013
is expected to be between ($150) million and
($50) million in the aggregate (Table 3). Excluding weather
related expenditures, cash flow from operations, less
capital expenditures for 2013 is expected to be between
($50) million and $50 million in the aggregate. (Tables 4 and
5)
Risk to our financial guidance includes, among other factors:
787 delivery volumes; higher than forecast non-recurring and
recurring costs on our development programs; commercial settlements
with customers; mid-range business jet market risks; and our
ability to achieve anticipated productivity and cost improvements.
You should review carefully the sections captioned "Risk Factors"
in our 2011 Form 10-K filed with the Securities and Exchange
Commission on February 23, 2012 and
our subsequently filed Form 10-Qs for a more complete discussion of
these and other factors that may affect our business.
Table
3. Financial Outlook
|
|
2011
Actual
|
|
2012
Guidance
|
|
2013
Guidance
|
|
|
|
|
|
|
|
Revenues
|
|
$4.9 billion
|
|
$5.2 -
$5.3 billion
|
|
$5.8 -
$6.0 billion
|
|
|
|
|
|
|
|
Earnings Per Share (Fully Diluted)
|
|
$1.35
|
|
$0.19 -
$0.24
|
|
$1.90 -
$2.10
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
31.0%
|
|
N/M(1)
|
|
~31.0%
|
|
|
|
|
|
|
|
Cash
Flow from Operations
|
|
($47)
million
|
|
$500 -
$600 million
|
|
$250 -
$350 million
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
$250 million
|
|
~$250
million
|
|
~$400
million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
4. Severe Weather Adjustments
to Financial Outlook
|
|
2011
Actual
|
|
2012
Guidance
|
|
2013
Guidance
|
|
|
|
|
|
|
|
Revenues
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Earnings Per Share (Fully Diluted)
|
|
-
|
|
($0.62)(3)
|
|
$0.30(3)
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Cash
Flow from Operations
|
|
-
|
|
($100)
million
|
|
$50
million
|
|
|
|
|
|
|
|
Capital
Expenditures
|
|
-
|
|
-
|
|
($50
million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
5. Financial Outlook Excluding
Severe
Weather Adjustments(2)
|
|
2011
Actual
|
|
2012
Guidance
|
|
2013
Guidance
|
|
|
|
|
|
|
|
Revenues
|
|
$4.9 billion
|
|
$5.2 -
$5.3 billion
|
|
$5.8 -
$6.0 billion
|
|
|
|
|
|
|
|
Adjusted (Loss) Earnings Per Share (Fully
Diluted)
|
|
$1.35
|
|
($0.43)
- ($0.38)(3)
|
|
$2.20 -
$2.40(3)
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
31.0%
|
|
N/M(1)
|
|
~31.0%
|
|
|
|
|
|
|
|
Adjusted Cash Flow from Operations
|
|
($47)
million
|
|
$400 -
$500 million
|
|
$300 -
$400 million
|
|
|
|
|
|
|
|
Adjusted Capital Expenditures
|
|
$250 million
|
|
~$250
million
|
|
~$350
million
|
|
|
|
|
|
|
|
(1) Spirit
is not providing effective tax rate guidance due to the sensitivity
of the annual effective tax rate estimate to even minimal changes
to forecasted fourth quarter pre-tax earnings.
|
(2)
Excludes net severe weather impacts.
(3)
Non-GAAP financial measure, see item B in Appendix for
reconciliation.
|
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" that
may involve many risks and uncertainties. Forward-looking
statements reflect our current expectations or forecasts of future
events. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "may," "will,"
"should," "expect," "anticipate," "intend," "estimate," "believe,"
"project," "continue," "plan," "forecast," or other similar words,
or the negative thereof, unless the context requires otherwise.
These statements reflect management's current views with respect to
future events and are subject to risks and uncertainties, both
known and unknown. Our actual results may vary materially from
those anticipated in forward-looking statements. We caution
investors not to place undue reliance on any forward-looking
statements. Important factors that could cause actual results to
differ materially from those reflected in such forward-looking
statements and that should be considered in evaluating our outlook
include, but are not limited to, the following: our ability to
continue to grow our business and execute our growth strategy,
including the timing, execution and profitability of new programs;
our ability to perform our obligations and manage costs related to
our new commercial and business aircraft development programs and
the related recurring production; margin pressures and the
potential for additional forward-losses on aircraft development
programs; our ability to accommodate, and the cost of
accommodating, announced increases in the build rates of certain
aircraft, including, but not limited to, the Boeing B737, B747,
B767 and B777 programs, and the Airbus A320 and A380 programs; the
effect on business and commercial aircraft demand and build rates
of the following factors: continuing weakness in the global economy
and economic challenges facing commercial airlines, a lack of
business and consumer confidence, and the impact of continuing
instability in global financial and credit markets, including, but
not limited to, any failure to avert a sovereign debt crisis
in Europe; customer cancellations
or deferrals as a result of global economic uncertainty; the
success and timely execution of key milestones such as deliveries
of Boeing's B787 and first flight, certification and first delivery
of Airbus' A350 XWB aircraft program, including receipt of
necessary regulatory approvals, and customer adherence to their
announced schedules; our ability to enter into profitable supply
arrangements with additional customers; the ability of all parties
to satisfy their performance requirements under existing supply
contracts with Boeing and Airbus, our two major customers, and
other customers and the risk of nonpayment by such customers; any
adverse impact on Boeing's and Airbus' production of aircraft
resulting from cancellations, deferrals or reduced orders by their
customers or from labor disputes or acts of terrorism; any adverse
impact on the demand for air travel or our operations from the
outbreak of diseases or epidemic or pandemic outbreaks; returns on
pension plan assets and the impact of future discount rate changes
on pension obligations; our ability to borrow additional funds or
refinance debt; competition from original equipment manufacturers
and other aerostructures suppliers; the effect of governmental
laws, such as U.S. export control laws and U.S. and foreign
anti-bribery laws such as the Foreign Corrupt Practices Act and
United Kingdom Bribery Act, and environmental laws and agency
regulations, both in the U.S. and abroad; the cost and availability
of raw materials and purchased components; our ability to
successfully extend or renegotiate our primary collective
bargaining contracts with our labor unions; our ability to recruit
and retain highly skilled employees and our relationships with the
unions representing many of our employees; spending by the U.S. and
other governments on defense; the possibility that our cash flows
and borrowing facilities may not be adequate for our additional
capital needs or for payment of interest on and principal of our
indebtedness; our exposure under our existing senior secured
revolving credit facility to higher interest payments should
interest rates increase substantially; the effectiveness of our
interest rate and foreign currency hedging programs; the outcome or
impact of ongoing or future litigation, claims and regulatory
actions; our exposure to potential product liability and warranty
claims; and the accuracy or completeness of our assessment of
damage and costs of restoration and recovery from the severe
weather event that hit our Wichita,
Kan. facility on April 14,
2012. These factors are not exhaustive and it is not
possible for us to predict all factors that could cause actual
results to differ materially from those reflected in our
forward-looking statements. These factors speak only as of
the date hereof, and new factors may emerge or changes to the
foregoing factors may occur that could impact our business. As with
any projection or forecast, these statements are inherently
susceptible to uncertainty and changes in circumstances. Except to
the extent required by law, we undertake no obligation to, and
expressly disclaim any obligation to, publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. You should review carefully the
sections captioned "Risk Factors" in our 2011 Form 10-K filed with
the Securities and Exchange Commission on February 23, 2012 and our subsequently filed
Form10-Qs for a more complete discussion of these and other factors
that may affect our business.
Segment Results
Fuselage Systems
Fuselage Systems segment revenues
for the third quarter of 2012 were $660
million, up 22 percent from the same period last year
largely driven by higher production volumes. Operating margin
for the third quarter of 2012 was 17.2 percent as compared to 14.7
percent during the same period of 2011. In the third quarter of
2012 the segment recorded a net pre-tax $14
million favorable cumulative catch-up adjustment driven by
productivity and efficiency on core programs and other one-time
expense reductions. In comparison, the segment realized a net
pre-tax $1 million favorable
cumulative catch-up adjustment, and a pre-tax ($10) million new program forward-loss in
the third quarter of 2011.
Propulsion Systems
Propulsion Systems segment
revenues for the third quarter of 2012 were $358 million, up 16 percent from the same period
last year, largely driven by higher production volumes and
increased aftermarket volumes. Operating margin for the third
quarter of 2012 was (27.1) percent as compared to 17.1 percent in
the third quarter of 2011. In the third quarter of 2012 the segment
realized a net pre-tax $4 million
favorable cumulative catch-up adjustment associated with
productivity and efficiency on core programs and other one-time
expense reductions, and a pre-tax ($151)
million forward loss on the BR725 (Engine Nacelle Package
for the G650) driven by increased development and supply chain
costs. In comparison, the segment realized a net pre-tax
$5 million favorable cumulative
catch-up adjustment in the third quarter of 2011.
Wing Systems
Wing Systems segment revenues for the
third quarter of 2012 were $345
million, up 25 percent from the same period last year,
largely driven by higher production volumes. Operating margin for
the third quarter of 2012 was (118.0) percent as compared to 8.2
percent during the same period of 2011. The segment recorded
pre-tax forward loss charges of $184
million on the 787 program; $163
million on the G650 Wing program; $88
million on the G280 Wing program; and $4 million on other combined programs due to
increased supply chain, factory support, and labor costs. In
comparison, the segment realized a net pre-tax ($2) million unfavorable cumulative catch-up
adjustment in the third quarter of 2011.
|
|
|
|
|
|
|
Table
6. Segment Reporting
|
(unaudited)
|
(unaudited)
|
|
3rd
Quarter
|
Nine
Months
|
($ in
millions)
|
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|
|
|
|
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
Fuselage Systems
|
$660.4
|
$541.6
|
21.9%
|
$1,910.4
|
$1,842.7
|
3.7%
|
Propulsion Systems
|
$357.6
|
$309.1
|
15.7%
|
$1,052.8
|
$899.8
|
17.0%
|
Wing Systems
|
$344.6
|
$276.8
|
24.5%
|
$999.8
|
$894.2
|
11.8%
|
All Other
|
$2.7
|
$2.2
|
22.7%
|
$9.1
|
$8.2
|
11.0%
|
Total
Segment Revenues
|
$1,365.3
|
$1,129.7
|
20.9%
|
$3,972.1
|
$3,644.9
|
9.0%
|
|
|
|
|
|
|
|
Segment
(Loss) Earnings from Operations
|
|
|
|
|
|
|
Fuselage Systems
|
$113.7
|
$79.6
|
42.8%
|
$294.7
|
$221.7
|
32.9%
|
Propulsion Systems
|
($96.9)
|
$52.8
|
(283.5%)
|
$16.8
|
$141.8
|
(88.2%)
|
Wing Systems
|
($406.7)
|
$22.6
|
(1,899.6%)
|
($358.7)
|
$8.8
|
(4,176.1%)
|
All Other
|
$0.2
|
$1.3
|
(84.6%)
|
$1.2
|
$1.8
|
(33.3%)
|
Total
Segment Operating (Loss) Earnings
|
($389.7)
|
$156.3
|
(349.3%)
|
($46.0)
|
$374.1
|
(112.3%)
|
|
|
|
|
|
|
|
Unallocated Corporate SG&A Expense
|
($38.6)
|
($35.1)
|
10.0%
|
($112.6)
|
($107.8)
|
4.5%
|
Unallocated Impact From Severe Weather Event
Expense
|
$218.8
|
$0.0
|
|
$164.3
|
$0.0
|
|
Unallocated Research & Development
Expense
|
($1.0)
|
($0.7)
|
42.9%
|
($3.4)
|
($1.7)
|
100.0%
|
Unallocated Cost of Sales(1)
|
$0.0
|
$0.0
|
|
($8.0)
|
($10.9)
|
(26.6%)
|
Total
(Loss) Earnings from Operations
|
($210.5)
|
$120.5
|
(274.7%)
|
($5.7)
|
$253.7
|
(102.2%)
|
|
|
|
|
|
|
|
Segment
Operating (Loss) Earnings as % of Revenues
|
|
|
|
|
|
|
Fuselage Systems
|
17.2%
|
14.7%
|
250 BPS
|
15.4%
|
12.0%
|
340 BPS
|
Propulsion Systems
|
(27.1%)
|
17.1%
|
(4,420) BPS
|
1.6%
|
15.8%
|
(1,420) BPS
|
Wing Systems
|
(118.0%)
|
8.2%
|
(12,620) BPS
|
(35.9%)
|
1.0%
|
(3,690) BPS
|
All Other
|
7.4%
|
59.1%
|
(5,170) BPS
|
13.2%
|
22.0%
|
(880) BPS
|
Total
Segment Operating (Loss) Earnings as % of Revenues
|
(28.5%)
|
13.8%
|
(4,230) BPS
|
(1.2%)
|
10.3%
|
(1,150) BPS
|
|
|
|
|
|
|
|
Total
Operating (Loss) Earnings as % of Revenues
|
(15.4%)
|
10.7%
|
(2,610) BPS
|
(0.1%)
|
7.0%
|
(710) BPS
|
|
|
|
|
|
|
|
(1)
Charges in the first nine months of 2012 are associated with UAW
stock compensation, Early Retirement incentives and asset
impairment charges; compared to charges in the first nine months of
2011 which were associated with a change in estimate for warranty
and extraordinary rework reserves and the UAW Early Retirement
Incentive in connection with the ratification of their ten-year
labor contract.
|
Spirit
Ship Set Deliveries
|
(One
Ship Set equals One Aircraft)
|
|
|
|
|
|
|
2011
Spirit AeroSystems Deliveries
|
|
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
Total
2011
|
B737
|
93
|
97
|
95
|
92
|
377
|
B747
|
4
|
3
|
4
|
6
|
17
|
B767
|
5
|
6
|
6
|
6
|
23
|
B777
|
16
|
22
|
21
|
19
|
78
|
B787
|
6
|
7
|
5
|
7
|
25
|
Total
|
124
|
135
|
131
|
130
|
520
|
|
|
|
|
|
|
A320
Family
|
103
|
91
|
103
|
106
|
403
|
A330/340
|
18
|
26
|
24
|
25
|
93
|
A350
|
-
|
-
|
-
|
-
|
-
|
A380
|
6
|
5
|
7
|
6
|
24
|
Total
|
127
|
122
|
134
|
137
|
520
|
|
|
|
|
|
|
Business/Regional Jet
|
10
|
13
|
12
|
14
|
49
|
|
|
|
|
|
|
Total
Spirit
|
261
|
270
|
277
|
281
|
1,089
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
Spirit AeroSystems Deliveries
|
|
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
YTD
2012
|
B737
|
105
|
105
|
107
|
|
317
|
B747
|
5
|
6
|
7
|
|
18
|
B767
|
7
|
6
|
6
|
|
19
|
B777
|
21
|
21
|
22
|
|
64
|
B787
|
8
|
11
|
9
|
|
28
|
Total
|
146
|
149
|
151
|
|
446
|
|
|
|
|
|
|
A320
Family
|
112
|
109
|
103
|
|
324
|
A330/340
|
25
|
24
|
26
|
|
75
|
A350
|
1
|
-
|
1
|
|
2
|
A380
|
7
|
6
|
3
|
|
16
|
Total
|
145
|
139
|
133
|
|
417
|
|
|
|
|
|
|
Business/Regional Jet
|
12
|
19
|
27
|
|
58
|
|
|
|
|
|
|
Total
Spirit
|
303
|
307
|
311
|
|
921
|
|
|
|
|
|
|
|
|
Spirit
AeroSystems Holdings, Inc.
|
|
Condensed Consolidated Statements of
Operations
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
|
For the
Nine Months Ended
|
|
|
|
|
September 27, 2012
|
|
September 29, 2011
|
|
September 27, 2012
|
|
September 29, 2011
|
|
|
|
($ in
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
1,365.3
|
$
|
1,129.7
|
$
|
3,972.1
|
$
|
3,644.9
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,746.7
|
|
963.0
|
|
3,994.6
|
|
3,245.6
|
|
Selling,
general and administrative
|
|
40.6
|
|
38.4
|
|
125.9
|
|
118.5
|
|
Impact
from severe weather event
|
|
(218.8)
|
|
-
|
|
(164.3)
|
|
-
|
|
Research
and development
|
|
7.3
|
|
7.8
|
|
21.6
|
|
27.1
|
|
|
Total
operating costs and expenses
|
|
1,575.8
|
|
1,009.2
|
|
3,977.8
|
|
3,391.2
|
|
|
Operating (loss) income
|
|
(210.5)
|
|
120.5
|
|
(5.7)
|
|
253.7
|
|
Interest
expense and financing fee amortization
|
|
(16.2)
|
|
(19.0)
|
|
(62.6)
|
|
(61.6)
|
|
Interest
income
|
|
-
|
|
-
|
|
0.1
|
|
0.2
|
|
Other
income (expense), net
|
|
4.1
|
|
(1.6)
|
|
3.4
|
|
-
|
|
|
(Loss)
income before income taxes and equity in net loss of
affiliate
|
|
(222.6)
|
|
99.9
|
|
(64.8)
|
|
192.3
|
|
Income tax
provision
|
|
88.3
|
|
(32.4)
|
|
39.4
|
|
(59.6)
|
|
|
(Loss)
income before equity in net loss of affiliate
|
|
(134.3)
|
|
67.5
|
|
(25.4)
|
|
132.7
|
|
Equity in
net loss of affiliate
|
|
(0.1)
|
|
(0.2)
|
|
(0.5)
|
|
(0.7)
|
|
|
Net
(loss) income
|
$
|
(134.4)
|
$
|
67.3
|
$
|
(25.9)
|
$
|
132.0
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
earnings per share
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.94)
|
$
|
0.48
|
$
|
(0.18)
|
$
|
0.93
|
|
Shares
|
|
140.1
|
|
139.4
|
|
139.8
|
|
139.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
(0.94)
|
$
|
0.47
|
$
|
(0.18)
|
$
|
0.93
|
|
Shares
|
|
140.1
|
|
142.2
|
|
139.8
|
|
142.3
|
Spirit
AeroSystems Holdings, Inc.
|
Condensed Consolidated Balance
Sheets
|
(unaudited)
|
|
|
September 27, 2012
|
|
December 31, 2011
|
|
|
($ in
millions)
|
Current
assets
|
|
|
|
|
Cash and
cash equivalents
|
$
|
221.7
|
$
|
177.8
|
Accounts
receivable, net
|
|
514.6
|
|
267.2
|
Insurance
receivable - severe weather event
|
|
129.9
|
|
-
|
Inventory,
net
|
|
2,368.6
|
|
2,630.9
|
Other
current assets
|
|
105.8
|
|
79.9
|
Total current
assets
|
|
3,340.6
|
|
3,155.8
|
Property,
plant and equipment, net
|
|
1,657.0
|
|
1,615.7
|
Pension
assets
|
|
138.3
|
|
118.8
|
Other
assets
|
|
237.6
|
|
152.1
|
Total assets
|
$
|
5,373.5
|
$
|
5,042.4
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
|
652.6
|
$
|
559.4
|
Accrued
expenses
|
|
238.3
|
|
224.3
|
Current
portion of long-term debt
|
|
10.7
|
|
48.9
|
Advance
payments, short-term
|
|
62.3
|
|
8.8
|
Deferred
revenue, short-term
|
|
23.2
|
|
28.5
|
Other
current liabilities
|
|
50.1
|
|
43.6
|
Total current
liabilities
|
|
1,037.2
|
|
913.5
|
Long-term
debt
|
|
1,168.4
|
|
1,152.0
|
Advance
payments, long-term
|
|
846.1
|
|
655.9
|
Deferred
revenue and other deferred credits
|
|
31.8
|
|
34.7
|
Pension/OPEB obligation
|
|
89.2
|
|
84.2
|
Other
liabilities
|
|
239.1
|
|
237.4
|
Equity
|
|
|
|
|
Preferred
stock, par value $0.01, 10,000,000 shares authorized, no
shares issued
|
|
-
|
|
-
|
Common
stock, Class A par value $0.01, 200,000,000 shares
authorized, 119,518,290 and 118,560,926 issued,
respectively
|
|
1.2
|
|
1.2
|
Common
stock, Class B par value $0.01, 150,000,000 shares
authorized, 24,132,748 and 24,304,717 shares issued,
respectively
|
|
0.2
|
|
0.2
|
Additional
paid-in capital
|
|
1,009.0
|
|
995.9
|
Accumulated other comprehensive loss
|
|
(116.4)
|
|
(126.2)
|
Retained
earnings
|
|
1,067.2
|
|
1,093.1
|
Total shareholders'
equity
|
|
1,961.2
|
|
1,964.2
|
Noncontrolling interest
|
|
0.5
|
|
0.5
|
Total equity
|
|
1,961.7
|
|
1,964.7
|
Total liabilities and
equity
|
$
|
5,373.5
|
$
|
5,042.4
|
Spirit
AeroSystems Holdings, Inc.
|
Condensed Consolidated Statements of Cash
Flows
|
(unaudited)
|
|
|
|
|
|
|
|
For the
Nine Months Ended
|
|
|
September 27, 2012
|
|
September 29, 2011
|
|
|
($ in
millions)
|
Operating activities
|
|
|
|
|
Net (loss)
income
|
$
|
(25.9)
|
$
|
132.0
|
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
|
|
|
|
|
Depreciation
expense
|
|
113.6
|
|
97.0
|
Amortization
expense
|
|
16.9
|
|
10.6
|
Accretion of customer supply
agreement
|
|
0.1
|
|
-
|
Employee stock compensation
expense
|
|
12.0
|
|
8.6
|
Excess tax benefits from
share-based payment arrangements
|
|
(1.2)
|
|
(1.2)
|
Loss on disposition of
assets
|
|
5.8
|
|
0.8
|
Loss from discontinued hedge
accounting on interest rate swaps
|
|
2.2
|
|
-
|
Loss on effectiveness of
hedge contracts
|
|
0.2
|
|
-
|
(Gain) / Loss from foreign
currency transactions
|
|
(5.9)
|
|
1.2
|
Deferred
taxes
|
|
(100.6)
|
|
16.0
|
Long-term tax
provision
|
|
1.3
|
|
8.9
|
Pension and other
post-retirement benefits, net
|
|
(7.0)
|
|
(7.4)
|
Grant income
|
|
(4.1)
|
|
(4.0)
|
Equity in net loss of
affiliate
|
|
0.5
|
|
0.7
|
Changes in
assets and liabilities
|
|
|
|
|
Accounts
receivable
|
|
(242.5)
|
|
(127.9)
|
Inventory, net
|
|
272.6
|
|
(61.1)
|
Accounts payable and accrued
liabilities
|
|
111.3
|
|
93.7
|
Advance payments
|
|
243.7
|
|
(158.7)
|
Deferred revenue and other
deferred credits
|
|
(7.3)
|
|
(265.1)
|
Insurance receivable for
severe weather related expenses
|
|
(129.9)
|
|
-
|
Insurance proceeds for
investing purposes - severe weather related expenses
|
|
(7.0)
|
|
-
|
Other
|
|
(13.3)
|
|
80.1
|
Net
cash provided by (used in) operating activities
|
|
235.5
|
|
(175.8)
|
Investing activities
|
|
|
|
|
Purchase
of property, plant and equipment
|
|
(163.5)
|
|
(164.2)
|
Purchase
of property, plant and equipment - severe weather related
expenses
|
|
(7.0)
|
|
-
|
Insurance
proceeds for investment purposes - severe weather related
expenses
|
|
7.0
|
|
-
|
Other
|
|
0.1
|
|
0.4
|
Net
cash (used in) investing activities
|
|
(163.4)
|
|
(163.8)
|
Financing activities
|
|
|
|
|
Proceeds
from revolving credit facility
|
|
170.0
|
|
-
|
Payments
on revolving credit facility
|
|
(170.0)
|
|
-
|
Proceeds
from issuance of debt
|
|
547.3
|
|
-
|
Principal
payments of debt
|
|
(567.0)
|
|
(5.3)
|
Debt
issuance and financing costs
|
|
(11.3)
|
|
-
|
Excess tax
benefits from share-based payment arrangements
|
|
1.2
|
|
1.2
|
Net
cash (used in) financing activities
|
|
(29.8)
|
|
(4.1)
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
1.6
|
|
0.4
|
Net
increase (decrease) in cash and cash equivalents for the
period
|
|
43.9
|
|
(343.3)
|
Cash and
cash equivalents, beginning of the period
|
|
177.8
|
|
481.6
|
Cash and
cash equivalents, end of the period
|
$
|
221.7
|
$
|
138.3
|
Appendix:
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) measures used in this report provide
investors with important perspectives into the company's ongoing
business performance. The company does not intend for the
information to be considered in isolation or as a substitute for
the related GAAP measure. Other companies may define the measure
differently.
A.
|
Represents
net earnings change due to tax rate differences attributable to net
losses driven by Q3 events: Q2 YTD effective tax rate - Q3 QTD
effective tax rate = rate impact from net losses * Q3 earnings
before tax = earnings impact 31% - 39.7% = (8.7%)*($222.6) earnings
before taxes = $19.37
|
|
B.
|
Adjusted Future EPS Guidance
|
|
|
2012
Guidance
|
2013
Guidance
|
Earnings Per Share (Fully Diluted)
|
$0.19 -
$0.24
|
$1.90 -
$2.10
|
|
|
|
Adjustment for Estimated Severe Weather
Impact
|
|
|
|
Severe
Weather Impact Adjustment (in millions)
|
($127.3)
|
$59.0
|
|
Tax Rate
Assumed
|
31%
|
31%
|
|
Share
Count Assumed (in millions)
|
142.9
|
144.1
|
Estimated Severe Weather Impact
|
~($0.62)
|
~$0.30
|
|
|
|
Adjusted Future EPS Guidance
|
($0.43) -
($0.38)
|
$2.20 - $2.40
|
|
|
|
SOURCE Spirit AeroSystems Holdings, Inc.