WICHITA, Kan., Aug. 12, 2013 /PRNewswire/ --
Key Announcements from Ongoing Strategic and Financial
Review
- Initiating process to divest Oklahoma sites1
- Aligning to support our customers and programs
- Adding talent to our leadership team
- Reducing costs
Spirit 2Q13 Consolidated Results – Revenue, EPS, Operating
Margin, Cash Flow, Liquidity, and Backlog
- Total revenues of $1.521 billion,
up 13% y/y
- Reports EPS loss of ($1.47),
adjusted diluted EPS of $0.72*
- Reports Operating (Loss) Margin of (15.7%), Adjusted Operating
Margin of 11.7%*
- Cash From Operations of $60
million, adjusted Free Cash Flow of $21 million*, YTD adjusted Free Cash Flow of
($90) million*
- Records net pre-tax charge of ($448)
million primarily on Gulfstream programs (per GAAP method of
contract accounting)
- Charge is related primarily to forecasted cost growth in years
2014-2019 with minimal cash flow impact in the current period
- Cash and cash equivalents were $317
million
- Total backlog ~$38
billion
Consolidated Financial Results Summary
Table 1.
Summary Financial Results (unaudited)
|
|
|
|
|
|
2nd
Quarter
|
|
Six
Months
|
|
($ in millions,
except per share data)
|
2013
|
2012
|
Change
|
2013
|
2012
|
Change
|
|
|
|
|
|
|
|
Revenues
|
$1,521
|
$1,341
|
13%
|
$2,963
|
$2,607
|
14%
|
Operating (Loss)
Income
|
($239)
|
$83
|
(388%)
|
($94)
|
$205
|
(146%)
|
Operating (Loss)
Income as a % of Revenues
|
(15.7%)
|
6.2%
|
(2,190)
BPS
|
(3.2%)
|
7.9%
|
(1,110)
BPS
|
Net (Loss)
Income
|
($209)
|
$35
|
(697%)
|
($128)
|
$109
|
(217%)
|
Net (Loss) Income
as a % of Revenues
|
(13.7%)
|
2.6%
|
(1,630)
BPS
|
(4.3%)
|
4.2%
|
(850)
BPS
|
(Loss) Earnings
Per Share (Fully Diluted)
|
($1.47)
|
$0.24
|
(713%)
|
($0.90)
|
$0.76
|
(218%)
|
Fully Diluted
Weighted Avg Share Count
|
141.3
|
142.7
|
|
141.1
|
142.6
|
|
|
|
|
|
|
|
|
*Non-GAAP financial measure, see Appendix for reconciliation
1Representing ~12-14% of YTD Consolidated Spirit
Revenue
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) reported second
quarter 2013 financial results reflecting continued strong demand
for large commercial aircraft, strong mature program operating
performance, and the impact of new program charges. Spirit's second
quarter 2013 revenues were $1.521
billion, up 13 percent from $1.341 billion for the same period of 2012,
driven by higher production volumes and non-production
revenues.
(Logo:
http://photos.prnewswire.com/prnh/20130515/CG13652LOGO )
Operating loss was ($239) million,
compared to operating income of $83
million for the same period in 2012, driven by new program
pre-tax charges of approximately ($448)
million, or ($2.61) per share,
partially offset by a net pre-tax $41
million, or $0.24 per share
favorable cumulative catch-up adjustment due to improvements in
productivity and efficiency on mature programs.
The second quarter of 2012 included a pre-tax ($65) million, or ($0.31) per share charge for expenses related to
the April 14, 2012 severe weather
event at the Wichita, KS facility
and debt financing, as well as a pre-tax ($7) million, or ($0.03) per share additional forward loss on the
A350 non-recurring wing program.
Net loss for the current quarter was ($209) million, or ($1.47) per share, compared to net income of
$35 million, or $0.24 per fully diluted share, in the same period
of 2012.
"We made progress on the strategic and financial review during
the second quarter of 2013, and have already taken several actions,
including the previously announced initiation of the process to
divest our Oklahoma sites," said
President and Chief Executive Officer Larry
Lawson. "This is the result of a strategic decision to
target our resources more towards value-added engineering and
manufacturing where we have the strongest competitive advantage and
potential for growth. Tactically, we're aligning the company
towards its customers and programs, we're taking action to reduce
our costs, and are adding talent to our leadership team."
"These actions reflect a commitment to our shareholders,
customers and employees to sharpen Spirit's focus and generate
cash. To that end, the decision to pursue a divestiture of our
Oklahoma sites was a difficult one
and has been the result of careful evaluation given the investment
made to date and the capacity inherent in these high quality
manufacturing sites," Lawson continued.
"Spirit's strong second quarter performance across the Fuselage
and Propulsion segments demonstrates our capability to deliver
solid earnings and cash flow. At the same time, Spirit will
continue to invest in the next generation wide body products to
support our customers and the long-term growth trends in this
market segment. Future cost growth recognized in the quarter
relates primarily to higher forecasted supply chain and labor costs
on our business jet programs. I'd like to stress that with the
pursuit of strategic alternatives for our Oklahoma sites, our focus on performance
remains unabated."
"Spirit's robust $38 billion
backlog represents the growing, globally-diverse demand for our
industry-leading products and capabilities. As single-aisle
products remain the major driver of large commercial aerospace
market growth over the next twenty years, Spirit is well positioned
with approximately 65 percent of backlog on the next generation 737
MAX and A320neo programs. Longer-term, we believe there are growth
opportunities in large commercial aircraft as well as potentially
in the defense market," Lawson concluded.
Spirit's backlog at the end of the second quarter of 2013 was
approximately $38 billion.
Spirit calculates its backlog based on current contractual
prices for products and volumes from the published firm order
backlogs of Boeing and Airbus, along with firm orders from other
customers.
Spirit updated its contract profitability estimates during the
second quarter of 2013, resulting in a net pre-tax $41 million, or $0.24 per share, favorable cumulative catch-up
adjustment due to improvements in productivity and efficiency on
mature programs.
Additionally, the company recorded net pre-tax charges of
($448) million, or ($2.61) per share. These include pre-tax charges
of ($234) million, or ($1.36) per share, on the G650 wing program;
($191) million, or ($1.12) per share, on the G280 wing program;
($22) million, or ($0.13) per share, on the 787 program related to
the wing content; and a net ($9)
million, or ($0.05) per share,
on the 747-8 and 767 programs combined. The BR725 nacelle
program recorded a benefit from a charge reversal of $8 million, or $0.05 per share.
Approximately 15 percent of the $448
million charge in the Wing Segment is related to current
year cost performance with the balance of the charge primarily
related to higher forecasted supply chain and labor costs on our
business jet programs in years 2014-2019.
In comparison, the second quarter of 2012 operating income
included a pre-tax $6 million
favorable cumulative catch-up adjustment, and a ($7) million additional forward loss on the A350
non-recurring wing program.
Cash flow from operations was a $60
million source of cash for the second quarter of 2013,
compared to a $121 million source of
cash for the second quarter of 2012. The same period of 2012
included insurance cash advances of $105
million associated with the severe weather event, and a
customer advance payment of $50
million associated with a customer agreement on the A350 XWB
fuselage program.
Table 2.
Cash Flow and Liquidity
(unaudited)
|
|
|
|
|
2nd
Quarter
|
Six
Months
|
($ in
millions)
|
2013
|
2012
|
2013
|
2012
|
|
|
|
|
|
Cash Flow from
Operations
|
$60
|
$121
|
$14
|
$133
|
Purchases of
Property, Plant & Equipment**
|
($55)
|
($50)
|
($135)
|
($104)
|
Free Cash
Flow*
|
$5
|
$72
|
($121)
|
$29
|
Adjusted Free Cash
Flow*#
|
$21
|
($29)
|
($90)
|
($220)
|
#Excludes
Net Severe Weather Impact and Net A350 Customer Advances
|
|
|
|
June
27,
|
December
31,
|
Liquidity
|
|
|
2013
|
2012
|
|
|
|
|
|
Cash
|
|
|
$317
|
$441
|
Total
Debt
|
|
|
$1,173
|
$1,176
|
**Purchases of
Property, Plant & Equipment includes purchases related to the
April 14th, 2012 severe weather
event
|
Cash balances at the end of the quarter were $317 million and debt balances were $1,173 million. At the end of the second quarter
of 2013, the company's $650 million
revolving credit facility remained undrawn.
(Table 2)
The company's credit rating remained unchanged at Ba2 and
negative outlook by Moody's Investor Services, and was affirmed at
BB and placed on negative outlook by Standard and Poor's following
the second quarter announcement regarding new program charges.
To address the charges in the quarter, the company has amended
its senior secured loan and credit facility to suspend the existing
financial covenants through the fourth quarter of 2014, after which
time the financial covenants will again apply. During this
period, the company will be subject to a liquidity covenant and any
draws under the revolving credit facility will be subject to
borrowing base limitations. No event of default has
occurred.
* Non-GAAP financial measure, see Appendix for
reconciliation
Financial Outlook and Risk to Future Financial
Results
On May 2, 2013, Spirit announced a
comprehensive strategic and financial review of the company's
development programs in Tulsa,
Wichita, Kinston, and St. Nazaire
and a suspension of financial guidance. The review is
on-going and may result in additional strategic decisions and
financial impact. Factors which are the subject of, and could
impact our review include those described more fully in the "Risk
Factors" section of our filings with the Securities and Exchange
Commission. These factors include Spirit's ability to achieve
acceptable shipset pricing with its customers including as it
relates to derivative airplane model pricing on the 787-9 and
787-10, our ability to achieve anticipated productivity and cost
improvement for all of our airplane programs, the risk of higher
than forecast non-recurring costs on new programs, and fluctuations
in demand in the market for commercial and business jet
aircraft.
Segment Results
Fuselage Systems
Fuselage Systems segment revenues for the second quarter of 2013
were $732 million, up 17 percent from
the same period last year, driven by higher production volumes.
Operating profits were $150
million, with operating margins of 20.5 percent as compared
to 15.22 percent during the same period of 2012. In the
second quarter of 2013 the segment recorded a pre-tax forward loss
of ($5) million on the 747-8 program
reflecting program performance, and a net pre-tax $28 million favorable cumulative catch-up
adjustment as a result of improved productivity and efficiency on
mature programs. In comparison, the segment realized a net pre-tax
$1 million favorable cumulative
catch-up adjustment in the second quarter of 2012.
Propulsion Systems
Propulsion Systems segment revenues for the second quarter of
2013 were $419 million, up 19 percent
from the same period last year, driven by higher production
volumes. Operating profits were $82
million for an operating margin of 19.5 percent as compared
to 16.12 percent in the second quarter of 2012. In the
second quarter of 2013 the segment realized a pre-tax forward loss
of ($4) million on the 767 program
reflecting program performance, a pre-tax benefit of $8 million on the BR725 program due to a reversal
of previously recognized forward loss charge, and a net pre-tax
$12 million favorable cumulative
catch-up adjustment driven by improved productivity and efficiency
on other mature programs. In comparison, the segment
realized a net pre-tax $2 million
favorable cumulative catch-up adjustment in the second quarter of
2012.
Wing Systems
Wing Systems segment revenues for the second quarter of 2013
were $369 million, up 3 percent from
the same period last year, driven by higher production volumes.
Operating losses of ($404) million
reflects the ($448) million charges
for an operating margin of (109.7) percent as compared to
7.92 percent during the same period of 2012. In the
second quarter of 2013 the segment recorded pre-tax forward loss
charges of ($234) million on the G650
program; ($191) million on the G280
program; and ($22) million on the 787
program primarily due to increased supply chain and labor cost
estimates. Additionally, in the current quarter, the segment
realized a net pre-tax $1 million
favorable cumulative catch-up adjustment. In comparison, in the
second quarter of 2012 the segment recorded a net pre-tax
$3 million favorable cumulative
catch-up adjustment and a pre-tax ($7)
million additional forward loss on the A350 non-recurring
wing program.
2Warranty reserve of $2.6
million in 2012 reclassified from segment operating income
to unallocated cost of sales to conform to current year
presentation.
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; 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 certification and first
delivery of Airbus' A350 XWB aircraft program, receipt of necessary
regulatory approvals, and customer adherence to their announced
schedules; our ability to successfully negotiate new pricing under
our main supply agreement with Boeing; 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; our ability to sell our
Oklahoma sites for a price
acceptable to us; 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 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 any
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. Additional information concerning these
and other factors can be found in our filings with the Securities
and Exchange Commission, including our most recent Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q.
Appendix
Table 3.
Segment Reporting
|
(unaudited)
|
(unaudited)
|
|
2nd
Quarter
|
Six
Months
|
($ in
millions)
|
2013
|
2012
|
Change
|
2013
|
2012
|
Change
|
|
|
|
|
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
Fuselage
Systems
|
$732.1
|
$627.4
|
16.7%
|
$1,450.0
|
$1,250.0
|
16.0%
|
Propulsion Systems
|
$418.6
|
$351.2
|
19.2%
|
$793.9
|
$695.2
|
14.2%
|
Wing
Systems
|
$368.6
|
$358.6
|
2.8%
|
$711.9
|
$655.2
|
8.7%
|
All
Other
|
$1.4
|
$3.8
|
|
$7.1
|
$6.4
|
|
Total Segment
Revenues
|
$1,520.7
|
$1,341.0
|
13.4%
|
$2,962.9
|
$2,606.8
|
13.7%
|
|
|
|
|
|
|
|
Segment (Loss)
Earnings from Operations
|
|
|
|
|
|
|
Fuselage
Systems
|
$150.0
|
$95.4
|
57.2%
|
$271.4
|
$183.5
|
47.9%
|
Propulsion Systems
|
$81.6
|
$56.7
|
43.9%
|
$146.9
|
$115.0
|
27.7%
|
Wing
Systems
|
($404.4)
|
$28.3
|
(1,529.0%)
|
($386.2)
|
$49.1
|
(886.6%)
|
All
Other
|
$1.7
|
$0.8
|
|
$3.3
|
$1.0
|
|
Total Segment
Operating (Loss) Earnings(1)
|
($171.1)
|
$181.2
|
(194.4%)
|
$35.4
|
$348.6
|
(89.8%)
|
|
|
|
|
|
|
|
Unallocated
Expense
|
|
|
|
|
|
|
Corporate
SG&A
|
($50.2)
|
($33.3)
|
50.8%
|
($89.8)
|
($74.0)
|
21.4%
|
Impact From Severe
Weather Event
|
($6.2)
|
($54.5)
|
|
($15.0)
|
($54.5)
|
|
Research &
Development
|
($2.0)
|
($1.3)
|
53.8%
|
($3.8)
|
($2.4)
|
58.3%
|
Cost of
Sales(1)
|
($9.0)
|
($9.6)
|
(6.3%)
|
($20.8)
|
($12.9)
|
61.2%
|
Total (Loss)
Earnings from Operations
|
($238.5)
|
$82.5
|
(389.1%)
|
($94.0)
|
$204.8
|
(145.9%)
|
|
|
|
|
|
|
|
Segment Operating
(Loss) Earnings as % of Revenues
|
|
|
|
|
|
|
Fuselage
Systems
|
20.5%
|
15.2%
|
530
BPS
|
18.7%
|
14.7%
|
400
BPS
|
Propulsion Systems
|
19.5%
|
16.1%
|
340
BPS
|
18.5%
|
16.5%
|
200
BPS
|
Wing
Systems
|
(109.7%)
|
7.9%
|
(11,760)
BPS
|
(54.2%)
|
7.5%
|
(6,170)
BPS
|
All
Other
|
121.4%
|
21.1%
|
|
46.5%
|
15.6%
|
|
Total Segment
Operating (Loss) Earnings as % of Revenues
|
(11.3%)
|
13.5%
|
(2,480)
BPS
|
1.2%
|
13.4%
|
(1,220)
BPS
|
|
|
|
|
|
|
|
Total Operating
(Loss) Earnings as % of Revenues
|
(15.7%)
|
6.2%
|
(2,190)
BPS
|
(3.2%)
|
7.9%
|
(1,110)
BPS
|
|
|
|
|
|
|
|
(1) Warranty reserve of $2.6 million and $4.9
million were reclassified from segment operating income to
unallocated cost of sales to conform to current year presentation
for each of the three and six months ended June 28th, 2012, respectively.
Spirit Ship Set
Deliveries
|
|
(One Ship Set
equals One Aircraft)
|
|
|
|
|
|
|
|
|
2012 Spirit
AeroSystems Deliveries
|
|
|
|
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
Total 2012
|
|
B737
|
105
|
105
|
107
|
100
|
417
|
|
B747
|
5
|
6
|
7
|
6
|
24
|
|
B767
|
7
|
6
|
6
|
6
|
25
|
|
B777
|
21
|
21
|
22
|
22
|
86
|
|
B787
|
8
|
11
|
9
|
15
|
43
|
|
Total
|
146
|
149
|
151
|
149
|
595
|
|
|
|
|
|
|
|
|
A320
Family
|
112
|
109
|
103
|
113
|
437
|
|
A330/340
|
25
|
24
|
26
|
22
|
97
|
|
A350
|
1
|
-
|
1
|
1
|
3
|
|
A380
|
7
|
6
|
3
|
8
|
24
|
|
Total
|
145
|
139
|
133
|
144
|
561
|
|
|
|
|
|
|
|
|
Business/Regional
Jet
|
12
|
19
|
27
|
26
|
84
|
|
|
|
|
|
|
|
|
Total
Spirit
|
303
|
307
|
311
|
319
|
1,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Spirit
AeroSystems Deliveries
|
|
|
|
|
1st Qtr
|
2nd Qtr
|
3rd Qtr
|
4th Qtr
|
YTD 2013
|
|
B737
|
106
|
115
|
|
|
221
|
|
B747
|
6
|
4
|
|
|
10
|
|
B767
|
6
|
5
|
|
|
11
|
|
B777
|
24
|
25
|
|
|
49
|
|
B787
|
17
|
14
|
|
|
31
|
|
Total
|
159
|
163
|
|
|
322
|
|
|
|
|
|
|
|
|
A320
Family
|
121
|
117
|
|
|
238
|
|
A330/340
|
27
|
30
|
|
|
57
|
|
A350
|
2
|
1
|
|
|
3
|
|
A380
|
7
|
10
|
|
|
17
|
|
Total
|
157
|
158
|
|
|
315
|
|
|
|
|
|
|
|
|
Business/Regional
Jet
|
20
|
19
|
|
|
39
|
|
|
|
|
|
|
|
|
Total
Spirit
|
336
|
340
|
|
|
676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
June 27,
2013
|
|
June 28,
2012
|
|
June 27,
2013
|
|
June 28,
2012
|
|
|
|
($ in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
1,520.7
|
$
|
1,341.0
|
$
|
2,962.9
|
$
|
2,606.8
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,690.2
|
|
1,156.8
|
|
2,927.3
|
|
2,247.9
|
Selling, general and
administrative
|
|
54.1
|
|
40.3
|
|
98.4
|
|
85.3
|
Impact from severe
weather event
|
|
6.3
|
|
54.5
|
|
15.1
|
|
54.5
|
Research and
development
|
|
8.6
|
|
6.9
|
|
16.1
|
|
14.3
|
|
Total operating
costs and expenses
|
|
1,759.2
|
|
1,258.5
|
|
3,056.9
|
|
2,402.0
|
|
Operating (loss)
income
|
|
(238.5)
|
|
82.5
|
|
(94.0)
|
|
204.8
|
Interest expense and
financing fee amortization
|
|
(17.3)
|
|
(28.1)
|
|
(34.9)
|
|
(46.4)
|
Interest
income
|
|
-
|
|
0.1
|
|
0.1
|
|
0.1
|
Other income
(expense), net
|
|
1.3
|
|
(4.2)
|
|
(8.6)
|
|
(0.7)
|
|
(Loss) income
before income taxes and equity in net loss of
affiliate
|
|
(254.5)
|
|
50.3
|
|
(137.4)
|
|
157.8
|
Income tax benefit
(provision)
|
|
45.0
|
|
(15.3)
|
|
9.3
|
|
(48.9)
|
|
(Loss) income
before equity in net income
(loss) of affiliate
|
|
(209.5)
|
|
35.0
|
|
(128.1)
|
|
108.9
|
Equity in net income
(loss) of affiliate
|
|
0.1
|
|
(0.1)
|
|
(0.1)
|
|
(0.4)
|
|
Net (loss)
income
|
$
|
(209.4)
|
$
|
34.9
|
$
|
(128.2)
|
$
|
108.5
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.47)
|
$
|
0.25
|
$
|
(0.90)
|
$
|
0.76
|
Shares
|
|
141.3
|
|
139.9
|
|
141.1
|
|
139.7
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
|
(1.47)
|
$
|
0.24
|
$
|
(0.90)
|
$
|
0.76
|
Shares
|
|
141.3
|
|
142.7
|
|
141.1
|
|
142.6
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
|
June 27,
2013
|
|
December 31,
2012
|
|
|
($ in
millions)
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
317.0
|
$
|
440.7
|
Accounts receivable,
net
|
|
600.6
|
|
420.7
|
Inventory,
net
|
|
2,187.0
|
|
2,410.8
|
Other current
assets
|
|
104.3
|
|
83.2
|
Total current assets
|
|
3,208.9
|
|
3,355.4
|
Property, plant and
equipment, net (variable interest entity restricted, $0.3 and $0.0
at June 27, 2013 and December 31, 2012, respectively)
|
|
1,739.4
|
|
1,698.5
|
Pension
assets
|
|
91.3
|
|
78.4
|
Other
assets
|
|
315.0
|
|
283.0
|
Total assets
|
$
|
5,354.6
|
$
|
5,415.3
|
Current
liabilities
|
|
|
|
|
Accounts payable
(variable interest entity nonrecourse, $0.2 and $0.0 at June 27,
2013 and December 31, 2012, respectively)
|
$
|
695.1
|
$
|
659.0
|
Accrued expenses
(variable interest entity nonrecourse, $0.6 and $0.0 at June 27,
2013 and December 31, 2012, respectively)
|
|
200.9
|
|
216.3
|
Current portion of
long-term debt
|
|
14.5
|
|
10.3
|
Advance payments,
short-term
|
|
107.3
|
|
70.7
|
Deferred revenue,
short-term
|
|
18.1
|
|
18.4
|
Other current
liabilities
|
|
144.1
|
|
92.3
|
Total current liabilities
|
|
1,180.0
|
|
1,067.0
|
Long-term
debt
|
|
1,158.2
|
|
1,165.9
|
Advance payments,
long-term
|
|
777.6
|
|
833.6
|
Deferred revenue and
other deferred credits
|
|
34.4
|
|
30.8
|
Pension/OPEB
obligation
|
|
77.6
|
|
75.6
|
Other
liabilities
|
|
258.1
|
|
245.5
|
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,
120,667,921 and 119,671,298 shares issued,
respectively
|
|
1.2
|
|
1.2
|
Common stock,
Class B par value $0.01, 150,000,000 shares authorized,
23,988,575 and 24,025,880 shares issued,
respectively
|
|
0.2
|
|
0.2
|
Additional paid-in
capital
|
|
1,019.6
|
|
1,012.3
|
Accumulated other
comprehensive loss
|
|
(157.9)
|
|
(145.2)
|
Retained
earnings
|
|
1,003.8
|
|
1,127.9
|
Total shareholders' equity
|
|
1,866.9
|
|
1,996.4
|
Noncontrolling
interest
|
|
1.8
|
|
0.5
|
Total equity
|
|
1,868.7
|
|
1,996.9
|
Total liabilities and equity
|
$
|
5,354.6
|
$
|
5,415.3
|
Spirit AeroSystems
Holdings, Inc.
Condensed
Consolidated Statements of Cash Flows
(unaudited)
|
|
|
For the Six Months
Ended
|
|
|
June 27,
2013
|
|
June 28,
2012
|
|
|
($ in
millions)
|
Operating
activities
|
|
|
|
|
Net (loss)
income
|
$
|
(128.2)
|
$
|
108.5
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
|
Depreciation
expense
|
|
78.5
|
|
77.4
|
Amortization
expense
|
|
5.8
|
|
14.4
|
Accretion of customer supply
agreement
|
|
0.2
|
|
0.1
|
Employee stock compensation
expense
|
|
12.0
|
|
8.6
|
Excess tax benefits from
share-based payment arrangements
|
|
(0.4)
|
|
(1.1)
|
Loss on disposition of
assets
|
|
0.4
|
|
3.6
|
Loss from discontinued hedge
accounting on interest rate swaps
|
|
-
|
|
2.2
|
(Gain) on effectiveness of
hedge contracts
|
|
(1.4)
|
|
(0.1)
|
Loss (gain) from foreign
currency transactions
|
|
10.1
|
|
(0.2)
|
Deferred
taxes
|
|
(40.0)
|
|
4.5
|
Long-term tax
provision
|
|
0.6
|
|
0.8
|
Pension and other
post-retirement benefits, net
|
|
(6.7)
|
|
(4.7)
|
Grant income
|
|
(3.3)
|
|
(2.5)
|
Equity in net loss of
affiliate
|
|
0.1
|
|
0.4
|
Changes in assets and
liabilities
|
|
|
|
|
Accounts
receivable
|
|
(184.3)
|
|
(202.1)
|
Inventory, net
|
|
276.2
|
|
(171.7)
|
Accounts payable and accrued
liabilities
|
|
35.2
|
|
56.5
|
Advance payments
|
|
(19.4)
|
|
197.9
|
Deferred revenue and other
deferred credits
|
|
5.0
|
|
(18.5)
|
Insurance Advances for
severe weather related expenses
|
|
-
|
|
105.0
|
Other
|
|
(26.1)
|
|
(46.2)
|
Net
cash provided by operating activities
|
|
14.3
|
|
132.8
|
Investing
activities
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(119.3)
|
|
(103.8)
|
Purchase of property,
plant and equipment - severe weather related expenses
|
|
(15.7)
|
|
-
|
Other
|
|
2.6
|
|
0.4
|
Net
cash (used in) investing activities
|
|
(132.4)
|
|
(103.4)
|
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
|
|
(4.0)
|
|
(564.3)
|
Debt issuance and
financing costs
|
|
-
|
|
(11.3)
|
Excess tax benefits
from share-based payment arrangements
|
|
0.4
|
|
1.1
|
Net
cash (used in) financing activities
|
|
(3.6)
|
|
(27.2)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(2.0)
|
|
0.1
|
Net
(decrease) increase in cash and cash equivalents for the
period
|
|
(123.7)
|
|
2.3
|
Cash and cash
equivalents, beginning of the period
|
|
440.7
|
|
177.8
|
Cash and cash
equivalents, end of the period
|
$
|
317.0
|
$
|
180.1
|
Management believes that the non-GAAP (Generally Accepted
Accounting Principles) measures (indicated by *) 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.
|
|
|
|
|
|
|
|
Adjusted Earnings
Per Share Excluding Impact of Forward Losses and Certain Other
Items
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
|
|
|
|
2012
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share
|
|
Earnings Per
Share
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings Per Share
|
|
|
$
0.24
|
|
$
(1.47)
|
|
|
|
|
|
|
|
|
|
|
2012 Second
Quarter Forward Loss
|
|
|
$
0.03
|
a
|
|
|
|
Impact from Severe
Weather Event
|
|
|
$
0.26
|
b
|
$
0.04
|
c
|
|
Net 2013 Second
Quarter Forward Losses
|
|
|
|
|
$
2.61
|
d
|
|
Favorable
Cumulative Catch-up Adjustment
|
|
|
$
(0.03)
|
e
|
$
(0.24)
|
f
|
|
Executive
Severance
|
|
|
|
|
$
0.05
|
g
|
|
Other
Credits
|
|
|
|
|
$
(0.04)
|
h
|
|
Tax Benefit
Reduction
|
|
|
|
|
$
(0.23)
|
i
|
|
|
|
|
|
|
|
|
|
Diluted
Shares
|
|
|
142.7
|
|
141.3
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
Excluding Impact of
|
|
|
$
0.50
|
|
$
0.72
|
|
|
Forward Losses and Certain Other Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a
|
Represents the net
earnings per share impact of A350 Non-Recurring Forward Loss
expense of $6.5 million. The earnings per share amount is presented
net of income taxes of 30.4 percent.
|
|
|
|
|
|
|
|
|
|
b
|
Represents the net
earnings per share impact of Severe Weather Event expense of $54.5
million. The earnings per share amount is presented net of income
taxes of 30.4 percent.
|
|
|
|
|
|
|
|
|
|
c
|
Represents the net
earnings per share impact of Severe Weather Event expense of $6.3
million. The earnings per share amount is presented net of income
taxes of 17.7 percent.
|
|
|
|
|
|
|
|
|
|
d
|
Represents the net
earnings per share impact of Net 2013 Second Quarter Forward Loss
expense of $448.3 million, including G650 Forward Loss of $234.2
million, G280 Forward Loss of $191.5 million, 787 Forward Loss of
$22.0 million, 747-8 Forward Loss of $5.0 million, 767 Forward Loss
of $4.0 million, and BR725 Forward Loss Reduction of $8.4 million.
The earnings per share amount is presented net of income taxes of
17.7 percent.
|
|
|
|
|
|
|
|
|
|
e
|
Represents the net
earnings per share impact of Favorable Cumulative Catch-up
Adjustment of $6.3 million. The earnings per share amount is
presented net of income taxes of 30.4 percent.
|
|
|
|
|
|
|
|
|
|
f
|
Represents the net
earnings per share impact of Favorable Cumulative Catch-up
Adjustment of $40.6 million. The earnings per share amount is
presented net of income taxes of 17.7 percent.
|
|
|
|
|
|
|
|
|
|
g
|
Represents the net
earnings per share impact of Executive Severance expense of $9.3
million. The earnings per share amount is presented net of income
taxes of 17.7 percent.
|
|
|
|
|
|
|
|
|
|
h
|
Represents the net
earnings per share impact of Other Credits of $7.0 million,
including BR725 Returns Credit of $4.4 milllion and French R&D
Tax Credit of $2.6 million. The earnings
per share amount is presented net of income taxes of 17.7
percent.
|
|
|
|
|
|
|
|
i
|
Represents the net
earnings per share impact of the Tax Benefit Reduction of $32.6
million due to the differences attributable to net losses driven by
Q2 events.
Q1 YTD effective tax rate – Q2 QTD
effective tax rate = rate impact from net losses * Q2 earnings
before tax = earnings impact
30.5% - 17.7% =
12.8% * (254.5) earnings before tax =
$32.6
|
|
|
|
|
Operating Income %
of Revenues Excluding Impact of Forward Losses and Certain Other
Items
|
|
|
|
|
|
|
Second
Quarter
|
|
|
2012
|
|
2013
|
|
|
|
|
|
|
Operating Income
under GAAP
|
$
82.5
|
|
$
(238.5)
|
|
|
|
|
|
|
Adjustments to
Operating Income:
|
|
|
|
|
2012 Second Quarter
Forward Loss
|
$
6.5
|
a
|
|
|
Impact from Severe
Weather Event
|
$
54.5
|
|
$
6.3
|
|
Net 2013 Second
Quarter Forward Losses
|
|
|
$
448.3
|
b
|
Favorable Cumulative
Catch-up Adjustment
|
$
(6.3)
|
|
$
(40.6)
|
|
Executive
Severance
|
|
|
$
9.3
|
|
Other
Credits
|
|
|
$
(7.0)
|
c
|
Total
Adjustments
|
$
54.7
|
|
$
416.3
|
|
|
|
|
|
|
Adjusted Operating
Income
|
$
137.2
|
|
$
177.8
|
|
|
|
|
|
|
Revenue
|
$1,341.0
|
|
$1,520.7
|
|
|
|
|
|
|
Adjusted Operating
Income % of Revenues
|
10.2%
|
|
11.7%
|
|
|
|
|
|
|
a
|
A350 Non-Recurring
Forward Loss expense of $6.5 million.
|
|
b
|
Net 2013 Second
Quarter Forward Loss expense of $448.3 million, including G650
Forward Loss of $234.2 million, G280
Forward Loss of $191.5 million, 787 Forward Loss of $22.0 million,
747-8 Forward Loss of $5.0 million, 767 Forward Loss of $4.0 million, and BR725 Forward Loss
Reduction of $8.4 million.
|
|
c
|
Other Credits of $7.0
million, including BR725 Returns Credit of $4.4 milllion and French
R&D Tax Credit of $2.6 million.
|
|
|
|
|
|
Free Cash
Flow
|
|
|
|
|
|
|
2nd
Quarter
|
Six Months
|
|
2013
|
2012
|
2013
|
2012
|
|
|
|
|
|
Cash Provided by
Operating Activities
|
$59.7
|
$121.2
|
$14.3
|
$132.8
|
Capital
Expenditures
|
($54.8)
|
($49.6)
|
($135.0)
|
($103.8)
|
Free Cash
Flow
|
$4.9
|
$71.6
|
($120.7)
|
$29.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flow
|
|
|
|
|
|
|
2nd
Quarter
|
Six Months
|
|
2013
|
2012
|
2013
|
2012
|
|
|
|
|
|
Cash Provided by
Operating Activities
|
$59.7
|
$121.2
|
$14.3
|
$132.8
|
Net Severe Weather Impact
|
$6.3
|
($50.5)
|
$15.1
|
($50.5)
|
Net A350 Customer Advances
|
|
($50.0)
|
|
($198.8)
|
Adjusted Cash
Provided by (used in) Operating Activities
|
$66.0
|
$20.7
|
$29.4
|
($116.5)
|
|
|
|
|
|
Capital
Expenditures
|
($54.8)
|
($49.6)
|
($135.0)
|
($103.8)
|
Severe Weather Impact
|
$9.9
|
|
$15.7
|
|
Adjusted Capital
Expenditures
|
($44.9)
|
($49.6)
|
($119.3)
|
($103.8)
|
|
|
|
|
|
Adjusted Cash
Provided by (used in) Operating Activities
|
$66.0
|
$20.7
|
$29.4
|
($116.5)
|
Adjusted Capital
Expenditures
|
($44.9)
|
($49.6)
|
($119.3)
|
($103.8)
|
Adjusted Free Cash
Flow
|
$21.1
|
($28.9)
|
($89.9)
|
($220.3)
|
|
|
|
|
|
SOURCE Spirit AeroSystems Holdings, Inc.