WICHITA,
Kan., Aug. 12, 2013 /CNW/ -
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.