WICHITA,
Kan., Feb. 6, 2024 /PRNewswire/ --
Fourth Quarter 2023
- Revenues of $1.8 billion
- EPS of $0.52; Adjusted EPS* of
$0.48
- Cash provided by operations of $113
million; Free cash flow* of $42
million
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) ("Spirit," "Spirit
AeroSystems" or the "Company") reported fourth quarter and
full-year 2023 financial results.
Table 1.
Summary Financial Results (unaudited)
|
|
|
|
|
4th
Quarter
|
|
Twelve
Months
|
|
($ in millions,
except per share data)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
|
Revenues
|
$1,813
|
$1,320
|
37 %
|
$6,048
|
$5,030
|
20 %
|
Operating Income
(Loss)
|
$198
|
($139)
|
**
|
($151)
|
($281)
|
46 %
|
Operating Income
(Loss) as a % of Revenues
|
10.9 %
|
(10.5 %)
|
**
|
(2.5 %)
|
(5.6 %)
|
310
BPS
|
Net Income
(Loss)
|
$59
|
($243)
|
**
|
($633)
|
($546)
|
(16 %)
|
Net Income (Loss) as
a % of Revenues
|
3.2 %
|
(18.4 %)
|
**
|
(10.5 %)
|
(10.8 %)
|
30
BPS
|
Income (Loss) Per
Share (Fully Diluted)
|
$0.52
|
($2.32)
|
**
|
($5.94)
|
($5.21)
|
(14 %)
|
Adjusted Income
(Loss) Per Share (Fully Diluted)*
|
$0.48
|
($1.46)
|
**
|
($4.02)
|
($2.81)
|
(43 %)
|
Fully Diluted
Weighted Avg Share Count
|
116.2
|
104.8
|
|
106.6
|
104.6
|
|
|
|
|
|
|
|
|
** Represents
an amount in excess of 100% or not meaningful.
|
"Speaking on behalf of everyone at Spirit, the quality and
safety of the products we produce is paramount above all," said
Pat Shanahan, President and Chief Executive Officer, Spirit
AeroSystems. "Over the past month, we have been working shoulder to
shoulder with our customer to take a series of actions to
strengthen our systems and processes to accelerate the improvement
of our operations."
Revenue
Spirit's revenue in the fourth quarter of 2023 increased from
the same period of 2022 primarily due to higher production
deliveries on Commercial programs, higher Defense and Space and
Aftermarket segment revenues, as well as the previously disclosed
impacts from the Boeing Memorandum of Agreement (the "MOA")
executed in October 2023 including
favorable pricing adjustments on the Boeing 787 program and the
reversal of the potential claim related to the Boeing 737 vertical
fin attach fittings issue. Overall deliveries increased to
398 shipsets during the fourth quarter of 2023 compared to 343
shipsets in the same period of 2022. This includes Boeing 737
deliveries of 104 shipsets compared to 81 shipsets in the same
period of the prior year.
Spirit's backlog at the end of the fourth quarter of 2023 was
approximately $49 billion, which
includes work packages on all commercial platforms in the Airbus
and Boeing backlog.
Earnings
Operating income for the fourth quarter of 2023 improved
compared to the same period of 2022 primarily driven by the
favorable impact of the Boeing MOA executed in October 2023 to the Boeing 787 program, including
favorable change in estimates as well as a material right
obligation liability reversal recognized during the fourth quarter
of 2023.
As a result of the favorable pricing adjustments to the Boeing
787 program resulting from the Boeing MOA executed in October 2023, Spirit recorded forward loss
reversals of $205.6 million and
material right obligation liability reversal of $155.0 million related to the Boeing 787 program
during the fourth quarter of 2023.
Total change in estimates in the fourth quarter of 2023 included
net forward loss reversals of $34.3
million and unfavorable cumulative catch-up adjustments for
periods prior to the fourth quarter of $55.4
million. Net forward loss reversals were primarily driven by
the Boeing 787 program as discussed above, as well as additional
forward losses on the Airbus A350 program and the Airbus A220
program primarily driven by higher estimates of supply chain, labor
and other costs. The forward losses on the Airbus A350
program of $76.0 million and Airbus
A220 program of $57.7 million include
net incremental losses for anticipated performance obligations
beyond 2025 of $28.8 million in
total. Unfavorable cumulative catch-up adjustments were primarily
related to the Boeing 737 program, reflecting increased factory
performance costs. Excess capacity costs during the fourth quarter
of 2023 were $31.2 million. In
comparison, during the fourth quarter of 2022, Spirit recognized
$113.7 million of net forward loss
charges, $58.7 million of unfavorable
cumulative catch-up adjustments and excess capacity costs of
$31.2 million.
Fourth quarter 2023 EPS was $0.52,
compared to $(2.32) in the same
period of 2022. Fourth quarter 2023 adjusted EPS* was $0.48, which excludes the incremental deferred
tax asset valuation allowance and net pension termination charges.
In the same period of 2022, adjusted EPS* was $(1.46), which excluded the incremental deferred
tax asset valuation allowance and pension termination charges.
(Table 1)
Cash
Cash from operations during the fourth quarter of 2023 includes
the previously disclosed funding of approximately $100 million received from Boeing per the terms
of the MOA executed in October 2023
for tooling and capital through 2025 for certain planned and
potential Boeing 737 and 787 program rate increases. Free
cash flow* in the fourth quarter of 2023 was $42 million.
The cash balance at the end of the fourth quarter of 2023 was
$824 million, reflecting the proceeds
from issuance of common stock and exchangeable senior notes during
the fourth quarter of 2023. (Table 2)
Table 2. Cash
Flow, Cash and Total Debt (unaudited)
|
|
|
|
|
|
4th
Quarter
|
|
Twelve
Months
|
|
($ in
millions)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
|
Cash provided by
(used in) Operations
|
$113
|
($27)
|
**
|
($226)
|
($395)
|
43 %
|
Purchases of
Property, Plant & Equipment
|
($72)
|
($39)
|
(84 %)
|
($148)
|
($122)
|
(22 %)
|
Free Cash
Flow*
|
$42
|
($66)
|
**
|
($374)
|
($516)
|
28 %
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
Cash and Total
Debt
|
|
|
|
2023
|
2022
|
|
Cash
|
|
|
|
$824
|
$659
|
|
Total
Debt
|
|
|
|
$4,084
|
$3,869
|
|
|
|
|
|
|
|
|
** Represents
an amount in excess of 100% or not meaningful.
|
2024 Financial Outlook
Spirit will not be providing guidance at this time until there
is further clarity on the timing of 737 MAX production rate
increases from our customer in relation to FAA approval and ongoing
price negotiations with Airbus.
Segment Results
Commercial
Commercial segment revenue in the fourth quarter of 2023
increased from the same period of the prior year, primarily due to
higher production across all programs as well as the favorable
pricing impact on the Boeing 787 program resulting from the Boeing
MOA executed in October 2023. Operating margin for the fourth
quarter of 2023 increased compared to the same period of 2022,
primarily due to favorable change in estimates recorded in the
current period. In the fourth quarter of 2023, change in estimates
for the segment included $47.5
million of net forward loss reversals and $51.0 million of unfavorable cumulative catch-up
adjustments. Additionally, during the fourth quarter of 2023, the
Commercial segment included excess capacity costs of $30.3 million. In comparison, during the fourth
quarter of 2022, the segment recognized $111.3 million of net forward losses,
$58.3 million of unfavorable
cumulative catch-up adjustments and excess capacity costs of
$29.7 million.
Defense & Space
Defense & Space segment revenue in the fourth quarter of
2023 increased from the same period of the prior year, primarily
due to higher activity on development programs and higher
production on the KC-46 Tanker program in the current period.
Operating margin for the fourth quarter of 2023 decreased compared
to the same period of 2022, primarily due to higher unfavorable
change in estimates recorded in the current period. The segment
recorded net forward losses of $13.2
million, unfavorable cumulative catch-up adjustments of
$4.4 million, and excess capacity
costs of $0.9 million in the fourth
quarter of 2023. The forward losses were primarily driven by higher
production cost estimates on the Sikorsky CH-53K program and the
unfavorable cumulative catch-up adjustment was primarily driven by
the Boeing P-8 program. In comparison, during the fourth quarter of
2022, the segment recognized net forward losses of $2.4 million, unfavorable cumulative catch-up
adjustments of $0.4 million and
excess capacity costs of $1.5
million.
Aftermarket
Aftermarket segment revenue in the fourth quarter of 2023
increased compared to the same period of 2022, primarily due to
higher spare part sales. Operating margin for the fourth quarter of
2023 increased compared to the same period of 2022, primarily due
to the absence of a one-time inventory adjustment charge recognized
in the fourth quarter of 2022.
Table 3.
Segment Reporting (unaudited)
|
|
|
|
4th
Quarter
|
Twelve
Months
|
($ in
millions)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
Commercial
|
$1,517.1
|
$1,064.0
|
42.6 %
|
$4,885.0
|
$4,068.4
|
20.1 %
|
Defense
& Space
|
205.3
|
183.2
|
12.1 %
|
789.0
|
649.8
|
21.4 %
|
Aftermarket
|
90.5
|
72.9
|
24.1 %
|
373.9
|
311.4
|
20.1 %
|
Total Segment
Revenues
|
$1,812.9
|
$1,320.1
|
37.3 %
|
$6,047.9
|
$5,029.6
|
20.2 %
|
|
|
|
|
|
|
|
Segment Earnings
(Loss) from Operations
|
|
|
|
|
|
|
Commercial
|
$249.7
|
($79.4)
|
**
|
$49.2
|
($82.9)
|
**
|
Defense
& Space
|
3.7
|
20.7
|
(82.1 %)
|
44.7
|
72.8
|
(38.6 %)
|
Aftermarket
|
21.0
|
9.2
|
**
|
82.4
|
58.5
|
40.9 %
|
Total Segment
Operating Earnings (Loss)
|
$274.4
|
($49.5)
|
**
|
$176.3
|
$48.4
|
**
|
|
|
|
|
|
|
|
Segment Operating
Earnings (Loss) as % of Revenues
|
|
|
|
|
|
|
Commercial
|
16.5 %
|
(7.5 %)
|
**
|
1.0 %
|
(2.0 %)
|
300
BPS
|
Defense
& Space
|
1.8 %
|
11.3 %
|
**
|
5.7 %
|
11.2 %
|
(550)
BPS
|
Aftermarket
|
23.2 %
|
12.6 %
|
**
|
22.0 %
|
18.8 %
|
320
BPS
|
Total Segment
Operating Earnings (Loss) as % of Revenues
|
15.1 %
|
(3.7 %)
|
**
|
2.9 %
|
1.0 %
|
190
BPS
|
|
|
|
|
|
|
|
Unallocated
Expense
|
|
|
|
|
|
|
SG&A
|
($64.6)
|
($75.4)
|
14.3 %
|
($281.8)
|
($279.2)
|
(0.9 %)
|
Research &
Development
|
(11.5)
|
(13.9)
|
17.3 %
|
(45.4)
|
(50.4)
|
9.9 %
|
Total Earnings
(Loss) from Operations
|
$198.3
|
($138.8)
|
**
|
($150.9)
|
($281.2)
|
46.3 %
|
|
|
|
|
|
|
|
Total Operating
Earnings (Loss) as % of Revenues
|
10.9 %
|
(10.5 %)
|
**
|
(2.5 %)
|
(5.6 %)
|
310
BPS
|
|
|
|
|
|
|
|
** Represents
an amount in excess of 100% or not meaningful.
|
* Non-GAAP financial measure, see Appendix for definition and
reconciliation
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" that
involve many risks and uncertainties. Forward-looking statements
generally can be identified by the use of forward-looking
terminology such as "aim," "anticipate," "believe," "could,"
"continue," "estimate," "expect," "forecast," "goal,"
"intend," "may," "might," "model," "objective," "outlook," "plan,"
"potential," "predict," "project," "seek," "should," "target,"
"will," "would," and other similar words, or phrases, or the
negative thereof, unless the context requires otherwise. These
statements are based on circumstances as of the date on which the
statements are made and they reflect management's current views
with respect to future events and are subject to risks and
uncertainties, both known and unknown, including, but not limited
to, those described in the "Risk Factors" section of the 2023 Form
10-K. 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:
- the continued fragility of the global aerospace supply chain
including our dependence on our suppliers, as well as the cost and
availability of raw materials and purchased components, including
increases in energy, freight, and other raw material costs as a
result of inflation or continued global inflationary
pressures;
- our ability and our suppliers' ability to meet stringent
delivery (including quality and timeliness) standards and
accommodate changes in the build rates or model mix of aircraft
under existing contractual commitments, including the ability or
willingness to staff appropriately or expend capital for current
production volumes and anticipated production volume
increases;
- our ability to maintain continuing, uninterrupted production at
our manufacturing facilities and our suppliers' facilities;
- our ability, and our suppliers' ability, to attract and retain
the skilled work force necessary for production and development in
an extremely competitive market;
- the effect of economic conditions, including increases in
interest rates and inflation, on the demand for our and our
customers' products and services, on the industries and markets in
which we operate in the U.S. and globally, and on the global
aerospace supply chain;
- the general effect of geopolitical conditions, including
Russia's invasion of Ukraine and the resultant sanctions being
imposed in response to the conflict, including any trade and
transport restrictions;
- the recent outbreak of war in Israel and the Gaza
Strip and the potential for expansion of the conflict in the
surrounding region, which may impact certain suppliers' ability to
continue production or make timely deliveries of supplies required
to produce and timely deliver our products, and may result in
sanctions being imposed in response to the conflict, including
trade and transport restrictions;
- our relationships with the unions representing many of our
employees, including our ability to successfully negotiate new
agreements, and avoid labor disputes and work stoppages with
respect to our union employees;
- the impact of significant health events, such as pandemics,
contagions or other public health emergencies (including the
COVID-19 pandemic) or fear of such events, on the demand for our
and our customers' products and services, the industries and the
markets in which we operate in the U.S. and globally;
- the timing and conditions surrounding the full worldwide return
to service (including receiving the remaining regulatory approvals)
of the B737 MAX, future demand for the aircraft, and any residual
impacts of the B737 MAX grounding on production rates for the
aircraft;
- our reliance on The Boeing Company ("Boeing") and Airbus Group
SE and its affiliates (collectively, "Airbus") for a significant
portion of our revenues;
- the business condition and liquidity of our customers and their
ability to satisfy their contractual obligations to the
Company;
- the certainty of our backlog, including the ability of
customers to cancel or delay orders prior to shipment on short
notice, and the potential impact of regulatory approvals of
existing and derivative models;
- our ability to accurately estimate and manage performance,
cost, margins, and revenue under our contracts, and the potential
for additional forward losses on new and maturing programs;
- our accounting estimates for revenue and costs for our
contracts and potential changes to those estimates;
- our ability to continue to grow and diversify our business,
execute our growth strategy, and secure replacement programs,
including our ability to enter into profitable supply arrangements
with additional customers;
- the outcome of product warranty or defective product claims and
the impact settlement of such claims may have on our accounting
assumptions;
- competitive conditions in the markets in which we operate,
including in-sourcing by commercial aerospace original equipment
manufacturers;
- our ability to successfully negotiate, or re-negotiate, future
pricing under our supply agreements with Boeing, Airbus and other
customers;
- the possibility that our cash flows may not be adequate for our
additional capital needs;
- any reduction in our credit ratings;
- our ability to access the capital markets to fund our liquidity
needs, and the costs and terms of any additional financing;
- our ability to avoid or recover from cyber or other security
attacks and other operations disruptions;
- legislative or regulatory actions, both domestic and foreign,
impacting our operations, including the effect of changes in tax
laws and rates and our ability to accurately calculate and estimate
the effect of such changes;
- spending by the U.S. and other governments on defense;
- pension plan assumptions and future contributions;
- the effectiveness of our internal control over financial
reporting;
- the outcome or impact of ongoing or future litigation,
arbitration, claims, and regulatory actions or investigations,
including our exposure to potential product liability and warranty
claims;
- adequacy of our insurance coverage;
- our ability to continue selling certain receivables through our
supplier financing programs;
- our ability to effectively integrate recent acquisitions, along
with other acquisitions we pursue, and generate synergies and other
cost savings therefrom, while avoiding unexpected costs, charges,
expenses, and adverse changes to business relationships and
business disruptions; and
- the risks of doing business internationally, including
fluctuations in foreign currency exchange rates, impositions of
tariffs or embargoes, trade restrictions, compliance with foreign
laws, and domestic and foreign government policies.
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 section captioned "Risk Factors" in the
Company's Annual Report on Form 10-K and the Company's Quarterly
Reports on Form 10-Q for a more complete discussion of these and
other factors that may affect our business.
Spirit Shipset
Deliveries
|
(one shipset equals
one aircraft)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th Quarter
|
|
Twelve
Months
|
|
|
2023
|
2022
|
|
2023
|
|
2022
|
B737
|
|
104
|
81
|
|
356
|
|
281
|
B747
|
|
-
|
-
|
|
-
|
|
1
|
B767
|
|
9
|
8
|
|
33
|
|
31
|
B777
|
|
9
|
7
|
|
32
|
|
26
|
B787
|
|
11
|
7
|
|
36
|
|
20
|
Total Boeing
|
|
133
|
103
|
|
457
|
|
359
|
|
|
|
|
|
|
|
|
A220
|
|
20
|
14
|
|
63
|
|
60
|
A320 Family
|
|
150
|
144
|
|
573
|
|
591
|
A330
|
|
9
|
8
|
|
35
|
|
27
|
A350
|
|
17
|
11
|
|
54
|
|
48
|
Total Airbus
|
|
196
|
177
|
|
725
|
|
726
|
|
|
|
|
|
|
|
|
Business/Regional
Jet
|
|
69
|
63
|
|
236
|
|
212
|
|
|
|
|
|
|
|
|
Total
|
|
398
|
343
|
|
1,418
|
|
1,297
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Twelve
Months Ended
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
|
($ in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$1,812.9
|
|
$1,320.1
|
|
$6,047.9
|
|
$5,029.6
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,538.3
|
|
1,369.6
|
|
5,858.5
|
|
4,981.0
|
Selling, general and
administrative
|
|
64.6
|
|
75.4
|
|
281.8
|
|
279.2
|
Restructuring
costs
|
|
-
|
|
-
|
|
7.2
|
|
0.2
|
Research and
development
|
|
11.5
|
|
13.9
|
|
45.4
|
|
50.4
|
Other operating
expense
|
|
0.2
|
|
-
|
|
5.9
|
|
-
|
|
Total operating
costs and expenses
|
|
1,614.6
|
|
1,458.9
|
|
6,198.8
|
|
5,310.8
|
|
Operating income
(loss)
|
|
198.3
|
|
(138.8)
|
|
(150.9)
|
|
(281.2)
|
Interest expense and
financing fee amortization
|
|
(97.6)
|
|
(73.3)
|
|
(318.7)
|
|
(244.1)
|
Other expense,
net
|
|
(20.4)
|
|
(44.3)
|
|
(140.4)
|
|
(14.1)
|
|
Income (loss) before
income taxes and
equity in net loss of affiliates
|
|
80.3
|
|
(256.4)
|
|
(610.0)
|
|
(539.4)
|
Income tax (provision)
benefit
|
|
(21.4)
|
|
13.2
|
|
(22.5)
|
|
(5.2)
|
|
Income (loss) before
equity in net loss of
affiliates
|
|
58.9
|
|
(243.2)
|
|
(632.5)
|
|
(544.6)
|
Equity in net loss of
affiliates
|
|
(0.1)
|
|
(0.4)
|
|
(0.3)
|
|
(1.6)
|
|
Net income
(loss)
|
|
$58.8
|
|
($243.6)
|
|
($632.8)
|
|
($546.2)
|
Less noncontrolling
interest in earnings of subsidiary
|
|
($0.1)
|
|
$0.5
|
|
($0.1)
|
|
$0.5
|
|
Net income (loss)
attributable to Spirit
|
|
$58.7
|
|
($243.1)
|
|
($632.9)
|
|
($545.7)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.53
|
|
($2.32)
|
|
$
(5.94)
|
|
($5.21)
|
Shares
|
|
111.0
|
|
104.8
|
|
106.6
|
|
$104.6
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
0.52
|
|
($2.32)
|
|
$
(5.94)
|
|
($5.21)
|
Shares
|
|
116.2
|
|
104.8
|
|
106.6
|
|
$104.6
|
|
|
|
|
|
|
|
|
|
Dividends declared per
common share
|
|
$0.00
|
|
$0.00
|
|
$0.00
|
|
$0.03
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
($ in
millions)
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$823.5
|
|
$658.6
|
Restricted
cash
|
|
0.1
|
|
0.2
|
Accounts receivable,
net
|
|
585.5
|
|
489.5
|
Contract assets,
short-term
|
|
522.9
|
|
501.0
|
Inventory,
net
|
|
1,767.3
|
|
1,470.7
|
Other current
assets
|
|
52.5
|
|
38.3
|
Total current assets
|
|
3,751.8
|
|
3,158.3
|
Property, plant and
equipment, net
|
|
2,084.2
|
|
2,205.9
|
Intangible assets,
net
|
|
196.2
|
|
211.4
|
Goodwill
|
|
631.2
|
|
630.5
|
Right of use
assets
|
|
92.1
|
|
94.3
|
Contract assets,
long-term
|
|
-
|
|
1.2
|
Pension
assets
|
|
33.5
|
|
196.9
|
Restricted plan
assets
|
|
61.1
|
|
71.1
|
Deferred income
taxes
|
|
0.1
|
|
4.8
|
Other assets
|
|
99.9
|
|
91.8
|
Total assets
|
|
$6,950.1
|
|
$6,666.2
|
Liabilities
|
|
|
|
|
Accounts
payable
|
|
$1,106.8
|
|
$919.8
|
Accrued
expenses
|
|
420.1
|
|
411.7
|
Profit
sharing
|
|
15.7
|
|
40.5
|
Current portion of
long-term debt
|
|
64.8
|
|
53.7
|
Operating lease
liabilities, short-term
|
|
9.1
|
|
8.3
|
Advance payments,
short-term
|
|
38.3
|
|
24.9
|
Contract liabilities,
short-term
|
|
192.6
|
|
111.1
|
Forward loss provision,
short-term
|
|
256.6
|
|
305.9
|
Deferred revenue and
other deferred credits, short-term
|
|
49.6
|
|
21.7
|
Other current
liabilities
|
|
44.7
|
|
54.9
|
Total current liabilities
|
|
2,198.3
|
|
1,952.5
|
Long-term
debt
|
|
4,018.7
|
|
3,814.9
|
Operating lease
liabilities, long-term
|
|
84.3
|
|
85.4
|
Advance payments,
long-term
|
|
301.9
|
|
199.9
|
Pension/OPEB
obligation
|
|
30.3
|
|
25.2
|
Contract Liabilities,
long-term
|
|
161.3
|
|
245.3
|
Forward loss provision,
long-term
|
|
240.9
|
|
369.2
|
Deferred revenue and
other deferred credits, long-term
|
|
76.7
|
|
49.0
|
Deferred grant income
liability - non-current
|
|
25.8
|
|
25.7
|
Deferred income
taxes
|
|
9.1
|
|
1.3
|
Other non-current
liabilities
|
|
315.6
|
|
141.6
|
Equity
|
|
|
|
|
Common stock,
Class A par value $0.01, 200,000,000 shares
authorized,
105,304,482 and 105,252,421 shares issued and outstanding,
respectively
|
|
1.2
|
|
1.1
|
Additional paid-in
capital
|
|
1,429.1
|
|
1,179.5
|
Accumulated other
comprehensive loss
|
|
(89.7)
|
|
(203.9)
|
Retained
earnings
|
|
599.4
|
|
1,232.5
|
Treasury stock, at cost
(41,587,480 shares each period, respectively)
|
|
(2,456.7)
|
|
(2,456.7)
|
Total shareholders' equity
|
|
(516.7)
|
|
(247.5)
|
Noncontrolling
interest
|
|
3.9
|
|
3.7
|
Total equity
|
|
(512.8)
|
|
(243.8)
|
Total liabilities and equity
|
|
$6,950.1
|
|
$6,666.2
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
|
|
For the Twelve
Months Ended
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
|
($ in
millions)
|
Operating
activities
|
|
|
|
|
Net loss
|
|
($632.8)
|
|
($546.2)
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
Depreciation and
amortization expense
|
|
315.6
|
|
337.1
|
Amortization of deferred
financing fees
|
|
12.6
|
|
11.9
|
Accretion of customer supply
agreement
|
|
2.6
|
|
2.2
|
Employee stock compensation
expense
|
|
29.2
|
|
36.6
|
Loss on extinguishment of
debt
|
|
11.8
|
|
2.6
|
(Gain) loss from derivative
instruments
|
|
(0.5)
|
|
17.1
|
Loss (gain) from foreign
currency transactions
|
|
7.5
|
|
(18.9)
|
Loss on disposition of
assets
|
|
6.9
|
|
1.1
|
Deferred
taxes
|
|
18.1
|
|
8.5
|
Pension and other
post-retirement plans expense
|
|
55.1
|
|
37.1
|
Grant liability
amortization
|
|
(1.1)
|
|
(1.5)
|
Equity in net loss of
affiliates
|
|
0.3
|
|
1.6
|
Forward loss
provision
|
|
(178.5)
|
|
(89.7)
|
Gain on settlement of
financial instrument
|
|
(1.8)
|
|
(21.9)
|
Change in fair value of
acquisition consideration and settlement
|
|
(2.4)
|
|
-
|
Changes in assets and
liabilities
|
|
|
|
|
Accounts receivable,
net
|
|
(96.6)
|
|
(39.4)
|
Contract assets
|
|
(18.0)
|
|
(63.9)
|
Inventory, net
|
|
(295.1)
|
|
(118.2)
|
Accounts payable and accrued
liabilities
|
|
213.8
|
|
220.7
|
Profit sharing/deferred
compensation
|
|
(25.0)
|
|
(22.5)
|
Advance payments
|
|
114.1
|
|
(133.2)
|
Income taxes
receivable/payable
|
|
(3.4)
|
|
9.5
|
Contract
liabilities
|
|
(3.0)
|
|
(30.4)
|
Pension plans employer
contributions
|
|
186.6
|
|
19.5
|
Deferred revenue and other
deferred credits
|
|
53.6
|
|
(14.4)
|
Other
|
|
4.3
|
|
0.1
|
Net
cash used in operating activities
|
|
($226.1)
|
|
($394.6)
|
Investing
activities
|
|
|
|
|
Purchase of property, plant
and equipment
|
|
(148.0)
|
|
(121.6)
|
Acquisition, net of cash
acquired
|
|
-
|
|
(31.3)
|
Other
|
|
0.2
|
|
(2.6)
|
Net
cash used in investing activities
|
|
($147.8)
|
|
($155.5)
|
Financing
activities
|
|
|
|
|
Proceeds from issuance of
debt
|
|
242.7
|
|
-
|
Proceeds from issuance of
long term bonds
|
|
1,200.0
|
|
900.0
|
Proceeds from issuance of
common stock, net
|
|
220.7
|
|
-
|
Borrowings under revolving
credit facility
|
|
5.4
|
|
-
|
Payment on revolving credit
facility
|
|
(0.6)
|
|
-
|
Payment of principal -
settlement of financial instrument
|
|
-
|
|
(289.5)
|
Customer
financing
|
|
180.0
|
|
-
|
Principal payments of
debt
|
|
(64.1)
|
|
(47.6)
|
Payments on term
loans
|
|
(5.9)
|
|
(6.0)
|
Payments on bonds
|
|
(1,200.0)
|
|
(779.2)
|
Payment of acquisition
consideration
|
|
(6.0)
|
|
-
|
Taxes paid related to net
share settlement awards
|
|
(6.6)
|
|
(7.2)
|
Proceeds from issuance of
ESPP stock
|
|
6.3
|
|
3.9
|
Debt issuance and financing
costs
|
|
(28.5)
|
|
(32.3)
|
Dividends paid
|
|
-
|
|
(4.2)
|
Proceeds from noncontrolling
interest
|
|
-
|
|
3.7
|
Payment of debt
extinguishment costs
|
|
(11.8)
|
|
(2.6)
|
Net
cash used in financing activities
|
|
$531.6
|
|
($261.0)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
9.8
|
|
(8.9)
|
Net
decrease in cash, cash equivalents and restricted cash for the
period
|
|
$167.5
|
|
($820.0)
|
Cash, cash equivalents,
and restricted cash, beginning of the period
|
|
678.4
|
|
1,498.4
|
Cash, cash equivalents,
and restricted cash, end of the period
|
|
$845.9
|
|
$678.4
|
|
|
|
|
|
Reconciliation of
Cash, Cash Equivalents, and Restricted Cash:
|
|
December 31,
2023
|
|
December 31,
2022
|
Cash and cash
equivalents, beginning of the period
|
|
$658.6
|
|
$1,478.6
|
Restricted cash,
short-term, beginning of the period
|
|
0.2
|
|
0.3
|
Restricted cash,
long-term, beginning of the period
|
|
19.6
|
|
19.5
|
Cash, cash equivalents,
and restricted cash, beginning of the period
|
|
$678.4
|
|
$1,498.4
|
|
|
|
|
|
Cash and cash
equivalents, end of the period
|
|
$823.5
|
|
$658.6
|
Restricted cash,
short-term, end of the period
|
|
0.1
|
|
0.2
|
Restricted cash,
long-term, end of the period
|
|
22.3
|
|
19.6
|
Cash, cash equivalents,
and restricted cash, end of the period
|
|
$845.9
|
|
$678.4
|
Appendix
In addition to reporting our financial
information using U.S. Generally Accepted Accounting Principles
(GAAP), management believes that certain non-GAAP measures (which
are indicated by * in this report) provide investors with important
perspectives into the company's ongoing business performance. The
non-GAAP measures we use in this report are (i) adjusted diluted
earnings (loss) per share and (ii) free cash flow, which are
described further below. The company does not intend for the
information to be considered in isolation or as a substitute for
the related GAAP measures. Other companies may define and calculate
the measures differently than we do, limiting the usefulness of the
measures for comparison with other companies.
Adjusted Diluted Earnings (Loss) Per Share. To provide
additional transparency, we have disclosed non-GAAP adjusted
diluted earnings (loss) per share (Adjusted EPS). This metric
excludes various items that are not considered to be directly
related to our operating performance. Management uses Adjusted EPS
as a measure of business performance, and we believe this
information is useful in providing period-to-period comparisons of
our results. The most comparable GAAP measure is diluted earnings
(loss) per share.
Free Cash Flow. Free Cash Flow is defined as GAAP cash provided
by (used in) operating activities (also referred to herein as "cash
from operations"), less capital expenditures for property, plant
and equipment. Management believes Free Cash Flow provides
investors with an important perspective on the cash available for
stockholders, debt repayments including capital leases, and
acquisitions after making the capital investments required to
support ongoing business operations and long-term value creation.
Free Cash Flow does not represent the residual cash flow available
for discretionary expenditures as it excludes certain mandatory
expenditures. The most comparable GAAP measure is cash provided by
(used in) operating activities. Management uses Free Cash Flow as a
measure to assess both business performance and overall
liquidity.
The tables below provide reconciliations between the GAAP and
non-GAAP measures.
Adjusted
EPS
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31
|
|
Twelve months
ended
December 31
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings (Loss) Per Share
|
|
$0.52
|
|
($2.32)
|
|
($5.94)
|
|
($5.21)
|
Deferred Tax
Asset Valuation Allowance (a)
|
|
(0.01)
|
|
0.62
|
|
1.49
|
|
1.63
|
Investment
Agreement Settlement Gain (b)
|
|
-
|
|
-
|
|
-
|
|
(0.14)
|
Losses related
to Russia Sanctions (c)
|
|
-
|
|
-
|
|
-
|
|
0.19
|
Pension
Termination Charges (d)
|
|
(0.03)
|
|
0.24
|
|
0.43
|
|
0.72
|
Adjusted Diluted
Earnings (Loss) Per Share
|
|
$0.48
|
|
($1.46)
|
|
($4.02)
|
|
($2.81)
|
|
|
|
|
|
|
|
|
|
Diluted Shares (in
millions)
|
|
116.2
|
|
104.8
|
|
106.6
|
|
104.6
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents the deferred
tax asset valuation allowance (included in Income tax
provision)
|
|
|
|
(b)
|
Represents the
settlement gain resulting from the settlement of the repayable
investment agreement with the U.K. Department of Business,
Energy and Industrial Strategy (included in Other
income)
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Represents the
impairment charges and reserve adjustments related to the
suspension of all sales and service activities relating to
sanctioned Russian business activities. These losses are directly
attributable to the sanctions, incremental to similar costs
(or income) incurred for reasons other than the sanctions and are
not expected to recur, and therefore, are not indicative of
Spirit's ongoing operational performance (primarily included in
Cost of Sales)
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
Represents the net
non-cash charges related to the termination of the U.S. Pension
Value Plan A (included in Other income)
|
Free Cash
Flow
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31
|
|
Twelve months
ended
December 31
|
|
($ in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Cash from
Operations
|
$113
|
|
($27)
|
|
($226)
|
|
($395)
|
|
Capital
Expenditures
|
(72)
|
|
(39)
|
|
(148)
|
|
(122)
|
|
Free Cash
Flow
|
$42
|
|
($66)
|
|
($374)
|
|
($516)
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Spirit Aerosystems