B/E Aerospace (Nasdaq: BEAV), the world’s leading manufacturer
of aircraft cabin interior products and the world’s leading
distributor of aerospace fasteners and consumables, today announced
fourth quarter and full year 2009 financial results.
Except as otherwise noted, the fourth quarter and full year 2008
commentary in this release excludes the impact of the 2008 non-cash
intangible assets impairment charge as described in “Reconciliation
of Non-GAAP Measures”.
FOURTH QUARTER 2009
HIGHLIGHTS
- Fourth quarter 2009 revenues of
$479.4 million declined 9.0 percent as compared with 2008.
- Fourth quarter 2009 operating
earnings of $71.9 million declined 20.8 percent as compared with
fourth quarter 2008 operating earnings. Adjusting both periods to
exclude foreign exchange effects and AIT costs (defined below),
fourth quarter 2009 adjusted operating earnings of $77.1 million
declined 9.4 percent and the adjusted operating margin of 16.1
percent was essentially flat as compared with the prior year
period.
- Fourth quarter 2009 net earnings
were $33.3 million, or $0.33 per diluted share, and include a $0.02
per diluted share debt extinguishment expense related to a $100
million prepayment of long-term debt.
- Fourth quarter 2009 free cash
flow of $53.2 million represented a free cash flow conversion rate
of 160 percent of net earnings.
- Fourth quarter 2009 book-to-bill
ratio was in excess of one for the first time in twelve months;
spares bookings increased significantly at the commercial aircraft
segment.
FULL YEAR 2009
HIGHLIGHTS
- 2009 revenues of $1.94 billion
declined 21.1 percent as compared with 2008 proforma revenues.
Proforma 2008 results include the results of the acquired Honeywell
Consumables Solutions distribution business (HCS), as if the
acquisition had occurred on January 1, 2008.
- 2009 operating earnings of
$296.1 million, declined by 24.8 percent as compared with 2008
proforma operating earnings. Adjusting both periods to exclude
foreign exchange effects and AIT costs, 2009 adjusted operating
earnings of $325.0 million declined by 16.5 percent as compared
with 2008 proforma adjusted operating earnings on the 21.1 percent
decline in revenues. 2009 adjusted operating margin of 16.8 percent
expanded by 100 basis points compared with proforma 2008 adjusted
operating margin.
- 2009 net earnings were $142.0
million, or $1.43 per diluted share, and include a $0.02 per
diluted share debt extinguishment expense related to a $100 million
prepayment of long-term debt in the fourth quarter.
FOURTH QUARTER CONSOLIDATED
RESULTS
Fourth quarter 2009 revenues of $479.4 million declined by $47.4
million, or 9.0 percent, as compared with fourth quarter 2008
revenues of $526.8 million. The $47.4 million decrease in
consolidated revenues was primarily due to a lower level of demand
for consumables products and commercial aircraft spares as a result
of reduced activity at airline and MRO maintenance facilities,
reduced aircraft capacity, and a decrease in revenue passenger
miles flown.
Fourth quarter 2009 operating earnings of $71.9 million declined
20.8 percent as compared with fourth quarter 2008 operating
earnings of $90.8 million. Adjusting both periods to exclude
foreign exchange effects and AIT costs, fourth quarter 2009
adjusted operating earnings of $77.1 million declined 9.4 percent
and the adjusted operating margin of 16.1 percent was essentially
flat as compared with the prior year period.
Fourth quarter 2009 net earnings were $33.3 million, or $0.33
per diluted share, and include a $0.02 per diluted share debt
extinguishment expense related to a $100 million prepayment of
long-term debt.
Commenting on the company’s recent performance, Amin J. Khoury,
Chairman and Chief Executive Officer of B/E Aerospace said, “We are
pleased to report results for the fourth quarter and full year 2009
somewhat above our guidance of $0.31 and $1.40 per diluted share,
respectively. These results reflect the ongoing difficult operating
conditions experienced by our airline customers. In spite of these
trying conditions, we generated strong cash flows, as evidenced by
our free cash flow conversion rate of 160 percent, and we
strengthened our balance sheet by prepaying $100 million of bank
debt. Importantly, our book-to-bill ratio for the quarter was in
excess of one for the first time in twelve months. We expect to
generate a book-to-bill ratio in excess of one during 2010.”
Amounts presented in this earnings release on a proforma basis
have been calculated as if the HCS acquisition had occurred on
January 1, 2008. See the table in “Full Year Segment Results” for a
presentation of the actual and proforma amounts for 2008. In
addition (i) consolidated adjusted operating earnings and adjusted
operating margin, (ii) consumables management segment and
commercial aircraft segment adjusted operating earnings and
adjusted operating margin, and (iii) free cash flow and free cash
flow conversion rate are non-GAAP financial measures. Full year
2008 and fourth quarter 2008 operating earnings, net earnings and
net earnings per diluted share presented in this press release
excludes the impact of the non-cash goodwill and intangible asset
impairment charge recorded in the fourth quarter of 2008, and are
also non-GAAP financial measures. For more information see
"Reconciliation of Non-GAAP Financial Measures."
References to “AIT costs” in this news release refer to the
acquisition, integration and transition expenses related to the
integration of the HCS business, which was acquired in July 2008,
with the company’s consumables management segment.
FOURTH QUARTER SEGMENT
RESULTS
The following is a tabular summary and commentary of revenues
and operating earnings by segment:
REVENUES Three Months Ended December 31, ($
in millions) 2009
2008 % Change Consumables
management $ 181.1 $ 232.5 -22.1 % Commercial aircraft 239.0 233.2
2.5 % Business jet 59.3 61.1 -2.9 % Total $ 479.4 $
526.8 -9.0 %
OPERATING EARNINGS Three Months Ended
December 31, ($ in millions) 2009
2008 % Change Consumables management $ 34.3 $
49.5 -30.7 % Commercial aircraft 31.1 33.5 -7.2 % Business jet
6.5 7.8 -16.7 % Total $ 71.9 $ 90.8 -20.8 %
Fourth quarter 2009 consumables management segment revenues of
$181.1 million declined 22.1 percent as compared with fourth
quarter 2008 revenues of $232.5 million. The decline in consumables
management segment revenues reflects reduced activity at airline
and MRO maintenance facilities, reduced aircraft capacity, a
decrease in revenue passenger miles flown, and substantially
reduced activity at business jet manufacturers. Fourth quarter 2009
operating earnings declined by 30.7 percent as a result of the
lower level of demand in the current year period and a very
favorable revenue mix in the prior year period. Excluding AIT
costs, fourth quarter 2009 adjusted operating earnings were $40.5
million, and adjusted operating margin was 22.4 percent, a 170
basis point improvement compared with the immediately preceding
quarter.
Fourth quarter 2009 commercial aircraft segment revenues of
$239.0 million increased 2.5 percent as compared with the same
period in the prior year. Fourth quarter 2009 operating earnings
were $31.1 million or 13.0 percent of revenues as compared with
fourth quarter 2008 operating earnings of $33.5 million or 14.4
percent of revenues. Excluding foreign exchange effects from both
periods, 2009 adjusted operating earnings of $30.8 million
increased by $9.1 million or 41.9 percent and adjusted operating
margin increased by 360 basis points to 12.9 percent reflecting
successful cost reduction activities, improved manufacturing
efficiencies and an overall favorable mix of products in the
current year period.
Fourth quarter 2009 business jet segment revenues of $59.3
million decreased 2.9 percent, and operating earnings of $6.5
million decreased by $1.3 million, as a result of an unfavorable
product mix and the negative impact of reduced operating leverage
in the current year period.
FULL YEAR CONSOLIDATED
RESULTS
For the year ended December 31, 2009, revenues of $1.94 billion
declined $518.1 million, or 21.1 percent, as compared with 2008
proforma revenues of $2.46 billion.
2009 operating earnings of $296.1 million, declined by 24.8
percent as compared with 2008 proforma operating earnings of $393.8
million. Adjusting both periods to exclude foreign exchange effects
and AIT costs, 2009 adjusted operating earnings of $325.0 million
declined by 16.5 percent on the 21.1 percent decline in revenues.
2009 adjusted operating margin of 16.8 percent expanded by 100
basis points compared with proforma 2008 adjusted operating
margin.
2009 net earnings were $142.0 million or $1.43 per diluted share
and include a $0.02 per diluted share debt extinguishment expense
related to a $100 million prepayment of long-term debt in the
fourth quarter.
FULL YEAR SEGMENT
RESULTS
The following is a tabular summary and commentary of revenues
and operating earnings by segment on an as reported and proforma
basis:
REVENUES Year Ended December 31, ($ in
millions) 2009 2008
2008 % Change
Proforma Proforma Consumables management $ 798.1 $
697.3 $ 1,043.1 -23.5 % Commercial aircraft 911.3 1,138.7 1,138.7
-20.0 % Business jet 228.3 274.0 274.0 -16.7 %
Total $ 1,937.7 $ 2,110.0 $ 2,455.8 -21.1 %
OPERATING
EARNINGS Year Ended December 31, ($ in millions)
2009 2008 2008 % Change
Proforma Proforma Consumables management $ 151.0 $
158.5 $ 198.5 -23.9 % Commercial aircraft 121.0 158.0 158.0 -23.4 %
Business jet 24.1 37.3 37.3 -35.4 % Total $
296.1 $ 353.8 $ 393.8 -24.8 %
2009 consumables management segment revenues of $798.1 million
declined 23.5 percent as compared with 2008 proforma revenues of
$1.04 billion. The decline in consumables management segment
revenues reflects reduced activity at airline and MRO maintenance
facilities, reduced aircraft capacity, a decrease in revenue
passenger miles flown, and substantially reduced activity at
business jet manufacturers. Consumables management segment
operating earnings were $151.0 million for 2009. Excluding AIT
costs, 2009 adjusted operating earnings were $170.8 million or 21.4
percent of revenues as compared with 2008 proforma adjusted
operating earnings of $208.2 million or 20.0 percent of proforma
revenues.
2009 commercial aircraft segment revenues of $911.3 million
declined 20.0 percent reflecting retrofit program push outs,
reduced activity at airlines and MRO maintenance facilities,
reduced aircraft capacity and a decrease in revenue passenger miles
flown. 2009 operating earnings were $121.0 million or 13.3 percent
of sales as compared with 2008 operating earnings of $158.0 million
or 13.9 percent of revenues. Excluding foreign exchange effects
from both periods, 2009 adjusted operating earnings of $130.0
million decreased by 8.1 percent and adjusted operating margin
increased by 190 basis points to 14.3 percent in spite of the 20.0
percent decrease in revenues, reflecting successful cost reduction
activities, improved manufacturing efficiencies and an overall
favorable mix of product revenues during 2009.
2009 business jet segment revenues of $228.3 million decreased
16.7 percent, and operating earnings decreased by $13.2 million, or
35.4 percent, to $24.1 million reflecting an unfavorable product
mix, severance costs and the negative impact of reduced operating
leverage in 2009.
LIQUIDITY AND BALANCE SHEET
METRICS (as of December 31, 2009)
As of December 31, 2009, cash and cash equivalents were $120.1
million and reflect a $100 million prepayment of long-term debt
during the fourth quarter of 2009. Free cash flow in the fourth
quarter was $53.2 million, representing a free cash flow conversion
rate of 160 percent. Net debt as of December 31, 2009 was $898.6
million, which represents total debt of $1.02 billion less cash and
cash equivalents of $120.1 million. The company’s 2009 net
debt-to-net-capital ratio of 38.3 percent improved by 470 basis
points as compared with the prior year. There were no borrowings
outstanding on the company’s $350 million revolving credit facility
and the company has no debt maturities until 2014.
Commenting on the company's balance sheet and liquidity, Mr.
Khoury stated, "Strong cash flows during the fourth quarter allowed
us to prepay $100 million of long-term debt. In addition, during
2009 we completed our initiative to bring the HCS inventories
in-line with our distribution stocking business model. This effort
was the primary driver behind the $73.1 million full year increase
in net inventory, all of which occurred in the first half of the
year. With these inventory investments now behind us, we remain
confident in our free cash flow outlook and expect a free cash flow
conversion rate in excess of 100 percent for the full year
2010."
BOOKINGS
Bookings during the fourth quarter of 2009 were approximately
$480 million and represented a book-to-bill ratio of 1 to 1.
Backlog at the end of the quarter was approximately $2.7 billion, a
decrease of approximately 7 percent as compared with the company’s
December 31, 2008 backlog.
Mr. Khoury commented, “As expected, bookings improved during the
fourth quarter of 2009 and represent the first quarterly period
with a book-to-bill ratio in excess of one in over a year. The
increase in orders was highlighted by a recently announced order
from a major global airline to outfit one of its new B747-8
wide-body aircraft types and to retrofit certain of its existing
international wide-body aircraft with B/E Aerospace Super First
Class suites. The total award is in excess of $100 million and
deliveries under the retrofit portion of the program are expected
to commence early in 2011. Importantly, we began to see an
improvement in bookings for commercial aircraft spares during the
fourth quarter which is continuing during the first quarter of
2010. While consumables bookings during the fourth quarter remained
flat at the low rate reached in the third quarter of 2009,
consumables bookings in January 2010 have improved significantly
versus the run rates experienced over the prior two quarters,
providing support for our expectation that demand should improve in
2010 consistent with higher levels of global airline traffic.”
OUTLOOK
Commenting on the company’s outlook, Mr. Khoury stated, “Looking
forward, we expect first quarter and full year 2010 earnings per
diluted share of approximately $0.32 and $1.40, respectively. In
addition, we expect favorable quarterly earnings comparisons to
2009 beginning in the second quarter of 2010 and to generate free
cash flow in excess of 100 percent of net earnings for the full
year 2010. Importantly, based upon discussions with a number of our
major customers relative to their planned commercial aircraft
spares purchases, along with a marked pick-up in request for quote
activity (RFQ), as well as the conversion of a portion of the
supplier furnished equipment (SFE) programs awards, which we have
already won to purchase orders, we expect a book-to-bill ratio for
the full year in excess of 1 to 1 which we believe will drive a
significant increase in revenues, earnings and cash flows beginning
in 2011.”
The company’s financial guidance for 2010 is as
follows:
- The company expects an expansion
in orders and backlog in 2010 due to an expected improvement in
demand for consumables and commercial aircraft spares, the
conversion of a portion of unbooked SFE awards to bookings and an
expected increase in orders for cabin interior products for both
new build and retrofit aircraft arising from the recent increase in
RFQ activity related thereto.
- 2010 revenues are expected to be
approximately $1.85 billion, reflecting a lower level of commercial
aircraft and business jet deliveries in 2010 and the weak bookings
which the company experienced in 2009.
- First quarter 2010 earnings per
diluted share are expected to be approximately $0.32. The company
expects favorable quarterly earnings comparisons to 2009 beginning
in the second quarter of 2010.
- 2010 net earnings per diluted
share are expected to be flat at approximately $1.40 per diluted
share, due to improved margins on the approximately 5 percent lower
revenue level. The 2010 guidance of $1.40 per diluted share
includes approximately $0.04 per share for AIT costs which are
expected to be incurred during the first half of 2010.
- 2010 free cash flow is expected
to be in excess of $140 million reflecting a free cash flow
conversion rate in excess of 100 percent for the full year, with
weak free cash flow in the first quarter and stronger free cash
flow over the balance of the year.
- The company expects a
significant increase in revenues, earnings and cash flows beginning
in 2011.
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements include, but are not limited to, B/E Aerospace’s
financial guidance and industry expectations for the next several
years and the expected benefits from the HCS acquisition. Such
forward-looking statements involve risks and uncertainties. B/E
Aerospace’s actual experience and results may differ materially
from the experience and results anticipated in such statements.
Factors that might cause such a difference include changes in
market and industry conditions and those discussed in B/E
Aerospace’s filings with the Securities and Exchange Commission,
which include its Proxy Statement, Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. For
more information, see the section entitled “Forward-Looking
Statements” contained in B/E Aerospace’s Annual Report on Form 10-K
and in other filings. The forward-looking statements included in
this news release are made only as of the date of this news release
and, except as required by federal securities laws, we do not
intend to publicly update or revise any forward-looking statements
to reflect subsequent events or circumstances.
About B/E Aerospace
B/E Aerospace is the world’s leading manufacturer of aircraft
cabin interior products and the world’s leading distributor of
aerospace fasteners and consumables. B/E Aerospace designs,
develops and manufactures a broad range of products for both
commercial aircraft and business jets. B/E Aerospace manufactured
products include aircraft cabin seating, lighting, oxygen, and food
and beverage preparation and storage equipment. The company also
provides cabin interior design, reconfiguration and
passenger-to-freighter conversion services. Products for the
existing aircraft fleet – the aftermarket – generate approximately
50 percent of sales. B/E Aerospace sells and supports its products
through its own global direct sales and product support
organization. For more information, visit the B/E Aerospace website
at www.beaerospace.com.
BE AEROSPACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (UNAUDITED)
(In Millions, Except Per Share
Data)
THREE MONTHS
ENDED YEAR ENDED
December 31,
December 31, December 31, December 31,
2009 2008 2009
2008 Net sales $ 479.4 $ 526.8 $
1,937.7 $ 2,110.0 Cost of sales 314.3 345.6 1,268.5 1,386.5
Selling, general and administrative 65.2 61.7 270.5 238.3 Research,
development and engineering 28.0 28.7 102.6 131.4 Asset impairment
charge - 390.0 -
390.0 Operating earnings (loss) 71.9 (299.2 ) 296.1
(36.2 ) Operating earnings, as percentage of net sales 15.0
% N/A 15.3 % N/A Interest expense, net 20.7 23.1 88.4 48.0
Debt prepayment costs 3.1 - 3.1
3.6 Earnings (loss) before income taxes
48.1 (322.3 ) 204.6 (87.8 ) Income tax expense (benefit)
14.8 (68.7 ) 62.6 11.6
Net earnings (loss) $ 33.3 $ (253.6 ) $ 142.0
$ (99.4 ) Net earnings (loss) per common share:
Basic $ 0.34 $ (2.59 ) $ 1.44 $ (1.05 )
Diluted $ 0.33 $ (2.59 ) $ 1.43 $ (1.05 )
Weighted average common shares: Basic 98.9 97.9 98.5 94.3 Diluted
100.0 97.9 99.3 94.3
BE AEROSPACE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(In Millions)
December 31, December 31, 2009
2008 ASSETS Current assets: Cash and
cash equivalents $ 120.1 $ 168.1 Accounts receivable, net 222.5
271.4 Inventories, net 1,247.4 1,197.0 Deferred income taxes, net
12.1 22.1 Other current assets 20.5 24.8 Total
current assets 1,622.6 1,683.4 Long-term assets 1,217.5
1,246.7 $ 2,840.1 $ 2,930.1
LIABILITIES AND
STOCKHOLDERS’ EQUITY Total current liabilities $ 335.7 $
509.7 Total long-term liabilities 1,056.9 1,153.9 Total
stockholders' equity 1,447.5 1,266.5
$
2,840.1 $ 2,930.1
BE AEROSPACE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Millions)
YEAR ENDED December 31,
December 31, 2009 2008 CASH FLOWS FROM
OPERATING ACTIVITIES: Net earnings (loss) $ 142.0 $ (99.4 )
Adjustments to reconcile net earnings (loss) to net cash flows
provided by operating activities, net of effects from acquisition:
Goodwill and intangible asset impairment charge -- 390.0
Depreciation and amortization 49.5 40.7 Deferred income taxes 45.3
(14.7 ) Non-cash compensation 24.1 15.5 (Benefit) provision for
doubtful accounts (1.6 ) 8.7 Loss on disposal of property and
equipment 2.8 0.5 Debt prepayment costs 3.1 3.6 Changes in
operating assets and liabilities: Accounts receivable 55.2 (22.2 )
Inventories (73.1 ) (262.0 ) Other current assets and other assets
16.5 3.9 Payables, accruals and other liabilities (181.5 )
50.9 Net cash flows provided by operating activities
82.3 115.5
CASH FLOWS FROM
INVESTING ACTIVITIES: Capital expenditures (28.4 ) (31.7 )
Acquisitions, net of cash acquired - (907.5 ) Other (0.9 )
(5.2 ) Net cash flows used in investing activities
(29.3 ) (944.4 )
CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from common stock issued, net of expenses
3.3 3.4 Purchase of treasury stock (1.7 ) (1.3 ) Principal payments
on long term debt (104.1 ) (152.8 ) Debt facility and debt
prepayment costs -- (50.3 ) Proceeds from long-term debt -- 1,124.1
Borrowings on line of credit -- 65.0 Repayments on line of credit
-- (65.0 ) Net cash flows (used in) provided
by financing activities (102.5 ) 923.1
Effect of foreign exchange rate changes on cash and cash
equivalents 1.5 (7.7 )
Net
(decrease) increase in cash and cash equivalents (48.0 ) 86.5
Cash and cash equivalents, beginning of year 168.1
81.6
Cash and cash equivalents, end of
year $ 120.1 $ 168.1
BE Aerospace, Inc.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
This release includes the financial measures “adjusted operating
earnings” and “adjusted operating margin” on a consolidated basis
and for each of the consumables management and commercial aircraft
segments, each of which are “non-GAAP financial measures” as
defined in Regulation G of the Securities and Exchange Act of 1934.
We define “adjusted operating earnings” as operating earnings
reported under GAAP less (i) in the case of adjusted operating
earnings on a consolidated basis the impact of foreign currency
translation adjustments, acquisition, integration and transition
(AIT) costs related to our acquisition of Honeywell’s Consumables
Solutions distribution business (HCS) and, for the 2008 periods,
the asset impairment charge described below, (ii) in the case of
adjusted operating earnings for the consumables management segment,
acquisition, integration and transition (AIT) costs related to our
acquisition of Honeywell’s Consumables Solutions distribution
business (HCS) and, for the 2008 periods, the asset impairment
charge described below and (iii) in the case of adjusted operating
earnings for the commercial aircraft segment, the impact of foreign
currency translation adjustments and, for the 2008 periods, the
asset impairment charge described below.
During the fourth quarter and year ended December 31, 2009, the
company incurred $6.2 million and $19.8 million, respectively, of
AIT costs relating to the HCS acquisition.
During the fourth quarter of 2008, the company recorded a
non-cash, after-tax charge of $300 million for impairment of
goodwill and intangible assets (approximately $390 million on a
pre-tax basis), in accordance with ASC Topic 350
“Intangibles-Goodwill and Other,” formerly SFAS No. 142, “Goodwill
and Other Intangible Assets.” The impairment charge was primarily
driven by adverse equity market conditions that caused a decrease
in market multiples and the company’s stock price as of December
31, 2008. Including the goodwill and intangible assets impairment
charge, 2008 fourth quarter and 2008 full year net loss and net
loss per diluted share were ($253.6) million and ($99.4) million
and ($2.59) and ($1.05) per diluted share, respectively.
We use adjusted operating earnings and adjusted operating margin
to evaluate and assess the operational strength and performance of
our business and of particular segments of our business. We believe
these financial measures are relevant and useful for investors
because it allows investors to have a better understanding of the
company’s actual operating performance unaffected by the
acquisition, integration and transition costs associated with the
HCS acquisition, the impact of foreign currency translation
adjustments and asset impairment charge. These financial measures
should not be viewed as a substitute for, or superior to, operating
earnings, both on a consolidated and on a segment basis, the most
comparable GAAP measures, as a measure of the company’s operating
performance.
In addition, this release includes the financial measure "free
cash flow," which is also a non-GAAP financial measure. We define
"free cash flow" as net cash flows provided by operating activities
less capital expenditures. We use free cash flow to provide
investors with an additional perspective on the company's cash
flows provided by operating activities after taking into account
reinvestments. Free cash flow does not take into account debt
service requirements and therefore does not reflect an amount
available for discretionary purposes. This release also includes
the financial measure “free cash flow conversion rate”, which we
define as our free cash flow expressed as a percentage of net
earnings. We use free cash flow conversion rate to provide
investors with a measurement of our ability to convert our earnings
into free cash flow.
Pursuant to the requirements of Regulation G, the company is
providing the following tables which reconcile (i) consolidated
operating earnings to consolidated adjusted operating earnings,
(ii) consumables management segment operating earnings to adjusted
consumables management segment operating earnings, (iii) commercial
aircraft segment operating earnings to adjusted commercial aircraft
segment operating earnings and (iv) net cash flow provided by
operating activities to free cash flow. In each case, the most
comparable GAAP measure has been reconciled to the non-GAAP measure
presented in this press release.
RECONCILIATION OF OPERATING EARNINGS
TO ADJUSTED OPERATING EARNINGS (In Millions) Three
Months Ended Year Ended December 31, December
31, December 31, December 31, 2009
2008 2009 2008
Proforma Operating earnings (loss) $ 71.9 $ (299.2 ) $ 296.1
$ 3.8 Asset impairment charge - 390.0
- 390.0 Operating earnings, excluding
impairment 71.9 90.8 296.1 393.8 Foreign exchange
translation (benefit) cost (1.0 ) (11.8 ) 9.1 (14.4 ) Acquisition,
integration and transition costs 6.2 6.1
19.8 9.7 Adjusted operating
earnings $ 77.1 $ 85.1 $ 325.0 $ 389.1
RECONCILIATION OF CONSUMABLES MANAGEMENT SEGMENT
OPERATING EARNINGS TO ADJUSTED OPERATING EARNINGS (In
Millions) Three Months Ended Year Ended
December 31, December 31, December 31,
December 31, 2009 2008 2009 2008
Proforma Operating earnings (loss) $
34.3 $ (260.7 ) $ 151.0 $ (111.7 ) Asset impairment charge -
310.2 - 310.2 Operating
earnings, excluding impairment 34.3 49.5 151.0 198.5
Acquisition, integration and transition costs 6.2
6.1 19.8 9.7 Adjusted operating
earnings $ 40.5 $ 55.6 $ 170.8 $ 208.2
RECONCILIATION OF COMMERCIAL AIRCRAFT SEGMENT OPERATING
EARNINGS TO ADJUSTED OPERATING EARNINGS (In
Millions) Three Months Ended Year Ended
December 31, December 31, December 31,
December 31, 2009 2008
2009 2008 Operating
earnings (loss) $ 31.1 $ (46.3 ) $ 121.0 $ 78.2 Asset impairment
charge - 79.8 - 79.8
Operating earnings, excluding impairment 31.1 33.5 121.0
158.0 Foreign exchange translation (benefit) cost
(0.3 ) (11.8 ) 9.0 (16.6 ) Adjusted operating
earnings $ 30.8 $ 21.7 $ 130.0 $ 141.4
RECONCILIATION OF NET CASH FLOW FROM OPERATIONS TO FREE
CASH FLOW (In Millions) Three Months Ended
December 31, 2009 Net cash flow
provided by operating activities $ 59.8 Less: capital expenditures
(6.6 ) Free cash flow $ 53.2
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