WICHITA, Kan., Dec. 27, 2018 /PRNewswire/ -- Spirit
AeroSystems [NYSE: SPR] announced today that it executed a
Memorandum of Agreement (MOA) with The Boeing Company that
establishes, among other items:
- Pricing terms for certain programs including the Boeing Next
Generation 737, Boeing 737 MAX, 767, 777 freighters and 777-9, the
Boeing 787 Dreamliner well into the next decade;
- Boeing 737 pricing based on production rates above and below
current production levels;
- Investments for tooling and capital for certain Boeing 737 rate
increases;
- Joint cost reduction programs for the Boeing 777X and 787
Dreamliner;
- Boeing's agreement to provide consent to the Company's
acquisition of S.R.I.F. N.V., the parent company of Asco
Industries, N.V.; and
- The release of liability and claims asserted by both companies
related to Boeing 737 disruption activity and other matters.
Prior agreements between Boeing and Spirit have memorialized a
cost reduction program with respect to the Boeing 737 and pricing
for the Boeing 747 and 777 models.
"This agreement further strengthens the long-standing
partnership between Boeing and Spirit as it removes uncertainty
well into the next decade. The agreement establishes pricing and
capital investment for a range of potential production rate
increases on the 737 program. With the new agreement, we expect
price to exceed cost eventually on the 787 program. We are excited
to continue to build on our relationship and look forward to future
opportunities with our largest customer," said Spirit President and
CEO Tom Gentile. "With this
agreement, we maintain our target of 7 to 9 percent conversion of
revenue to free cash flow."
On the web: www.spiritaero.com
On Twitter: @SpiritAero
About Spirit AeroSystems Inc.
Spirit
AeroSystems designs and builds aerostructures for both commercial
and defense customers. With headquarters in Wichita, Kansas, Spirit operates
sites in the U.S., U.K., France and Malaysia. The company's
core products include fuselages, pylons, nacelles and wing
components for the world's premier
aircraft. Spirit AeroSystems focuses
on affordable, innovative
composite and aluminum manufacturing solutions to support customers
around the globe. More information is available
at www.SpiritAero.com.
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 "aim," "anticipate,"
"believe," "could," "continue," "estimate," "expect," "goal,"
"forecast," "intend," "may," "might," "objective," "outlook,"
"plan," "predict," "project," "should," "target," "will," "would,"
and other similar words, or phrases, 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: 1) our ability to continue to grow our business
and execute our growth strategy, including the timing, execution,
and profitability of new and maturing programs; 2) our ability to
perform our obligations under our new and maturing commercial,
business aircraft, and military development programs, and the
related recurring production; 3) our ability to accurately estimate
and manage performance, cost, and revenue under our contracts,
including our ability to achieve certain cost reductions with
respect to the B787 program; 4) margin pressures and the potential
for additional forward losses on new and maturing programs; 5) our
ability and our suppliers' ability to accommodate, and the cost of
accommodating, announced increases in the build rates of certain
aircraft and expanding model mixes; 6) the effect on aircraft
demand and build rates of changing customer preferences for
business aircraft, including the effect of global economic
conditions on the business aircraft market and expanding conflicts
or political unrest in the Middle
East or Asia; 7) customer
cancellations or deferrals as a result of global economic
uncertainty or otherwise; 8) the effect of economic conditions in
the industries and markets in which we operate in the U.S. and
globally and any changes therein, including fluctuations in foreign
currency exchange rates; 9) the success and timely execution of key
milestones such as the receipt of necessary regulatory approvals,
including our ability to obtain in a timely fashion any required
regulatory or other third party approvals for the consummation of
our announced acquisition of Asco, and customer adherence to their
announced schedules; 10) our ability to successfully negotiate, or
re-negotiate, future pricing under our supply agreements with
Boeing and our other customers; 11) our ability to enter into
profitable supply arrangements with additional customers; 12) the
ability of all parties to satisfy their performance requirements,
including our ability to timely deliver quality products, under
existing supply contracts with our two major customers, Boeing and
Airbus, and other customers, and the risk of nonpayment by such
customers; 13) 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, domestic
or international hostilities, or acts of terrorism; 14) any adverse
impact on the demand for air travel or our operations from the
outbreak of diseases or epidemic or pandemic outbreaks; 15) our
ability to avoid or recover from cyber-based or other security
attacks, information technology failures, or other disruptions; 16)
returns on pension plan assets and the impact of future discount
rate changes on pension obligations; 17) our ability to borrow
additional funds or refinance debt, including our ability to obtain
the debt to finance the purchase price for our announced
acquisition of Asco on favorable terms or at all; 18) competition
from or in-sourcing by commercial aerospace original equipment
manufacturers and competition from other aerostructures suppliers;
19) 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 the United Kingdom Bribery Act, and
environmental laws and agency regulations, both in the U.S. and
abroad; 20) the effect of changes in tax law, such as the effect of
The Tax Cuts and Jobs Act that was enacted on December 22, 2017, and changes to the
interpretations of or guidance related thereto, and the Company's
ability to accurately calculate and estimate the effect of such
changes; 21) any reduction in our credit ratings; 22) our
dependence on our suppliers, as well as the cost and availability
of raw materials and purchased components; 23) our ability to
recruit and retain a critical mass of highly-skilled employees and
our relationships with the unions representing many of our
employees; 24) spending by the U.S. and other governments on
defense; 25) the possibility that our cash flows and our credit
facility may not be adequate for our additional capital needs or
for payment of interest on, and principal of, our indebtedness; 26)
our exposure under our revolving credit facility to higher interest
payments should interest rates increase substantially; 27) the
effectiveness of any interest rate hedging programs; 28) the
effectiveness of our internal control over financial reporting; 29)
the outcome or impact of ongoing or future litigation, claims, and
regulatory actions; 30) exposure to potential product liability and
warranty claims; 31) our ability to effectively assess, manage and
integrate acquisitions that we pursue, including our ability to
successfully integrate the Asco business and generate synergies and
other cost savings; 32) the consummation of our announced
acquisition of Asco while avoiding any unexpected costs, charges,
expenses, adverse changes to business relationships and other
business disruptions for ourselves and Asco as a result of the
acquisition; 33) our ability to continue selling certain
receivables through our supplier financing program; 34) the risks
of doing business internationally, including fluctuations in
foreign current exchange rates, impositions of tariffs or
embargoes, trade restrictions, compliance with foreign laws, and
domestic and foreign government policies; and 35) our ability to
complete the accelerated stock repurchase, among other things.
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.
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SOURCE Spirit AeroSystems Inc.