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 2010 financial results.
FOURTH QUARTER 2010 HIGHLIGHTS VERSUS
FOURTH QUARTER PRIOR YEAR
- Revenues of $541.8 million increased
13.0 percent. Fourth quarter bookings were approximately $600
million and the book-to-bill ratio was 1.1 to 1. Fourth quarter
orders included strong double digit bookings increases for both
consumables and commercial aircraft spares.
- Adjusted operating earnings of $91.0
million increased 26.6 percent. Adjusted operating margin of 16.8
percent expanded 180 basis points. Adjusted operating earnings and
adjusted operating margin exclude acquisition and severance related
costs of $9.2 million. Operating earnings (on a GAAP basis),
including the items mentioned above, were $81.8 million an increase
of $9.9 million, or 13.8 percent.
- Adjusted net earnings per share of
$0.47 increased 34.3 percent. Adjusted net earnings exclude
acquisition and severance related costs of approximately $0.06 per
share, interest on borrowings in excess of funds deployed for
acquisitions of approximately $0.04 per share, and debt prepayment
costs of approximately $0.06 per share in 2010 (approximately $0.02
per share in 2009).
- Free cash flow of $84.8 million,
represents a free cash flow conversion ratio of 271.8 percent of
net earnings (179.6 percent of adjusted net earnings).
- Net earnings and earnings per diluted
share (on a GAAP basis) were $31.2 million and $0.31 per share,
respectively, as compared with net earnings and net earnings per
share of $33.3 million and $0.33 per share, respectively in
2009.
- During the fourth quarter, the company
completed two acquisitions, prepaid all of its outstanding bank
term debt and put in place a lower cost more flexible revolving
credit facility.
FULL YEAR 2010 HIGHLIGHTS VERSUS PRIOR
YEAR
- Revenues of $1.984 billion increased
$46.5 million, or 2.4 percent.
- Adjusted operating earnings of $325.2
million increased 9.8 percent. Adjusted operating margin of 16.4
percent expanded 110 basis points. Operating earnings, (on a GAAP
basis), were $316.0 million (15.9 percent of revenues) and
increased by $19.9 million, or 6.7 percent.
- Adjusted net earnings per share of
$1.61 increased 11.0 percent. Adjusted net earnings exclude the
items discussed above and approximately $0.02 per share debt
prepayment cost which occurred in the second quarter of 2010. Net
earnings and earnings per diluted share (on a GAAP basis),
including the items discussed above, were $143.3 million and $1.42
per share, respectively.
- Free cash flow of $226.9 million,
represents a free cash flow conversion ratio of 158.3 percent of
net earnings (140.0 percent of adjusted net earnings).
- Strong orders for both consumables and
commercial aircraft segment spares in the fourth quarter of 2010
are sufficiently encouraging that the company is adjusting full
year 2011 guidance by dropping the lower end of the guidance range
that was previously provided. The company now expects 2011 net
earnings per diluted share of approximately $1.95.
FOURTH QUARTER CONSOLIDATED
RESULTS
Fourth quarter 2010 revenues of $541.8 million increased $62.4
million, or 13.0 percent, as compared with the same period of the
prior year. The increase was due to a higher level of revenues
reported by the consumables management segment (CMS) and by the
commercial aircraft segment (CAS), and reflects the recent
acquisitions of TSI Group, Inc. (TSI) and Satair A/S’s aerospace
fastener distribution business (Satair) during the fourth quarter
of 2010. For financial reporting purposes, TSI is reported as a
component of CAS and Satair is included as a component of CMS.
Fourth quarter 2010 adjusted operating earnings of $91.0 million
increased 26.6 percent on the aforementioned 13.0 percent increase
in revenues. Adjusted operating margin was 16.8 percent and
expanded 180 basis points as compared with the prior year period.
Adjusted operating earnings growth and adjusted operating margin
expansion were driven by ongoing operational efficiency initiatives
and an improved revenue mix. Operating earnings (on a GAAP basis),
including the items mentioned above, were $81.8 million and
increased by $9.9 million, or 13.8 percent.
Adjusted net earnings per share of $0.47 increased 34.3 percent,
reflecting the aforementioned items and an approximate $0.03 per
share tax benefit arising from recent legislation which extended
the research and development tax credit. Fourth quarter 2010 net
earnings, (on a GAAP basis), were $31.2 million, or $0.31 per
diluted share.
Fourth quarter 2010 free cash flow was $84.8 million and
represents a free cash flow conversion ratio of 271.8 percent of
net earnings (179.6 percent of adjusted net earnings).
Commenting on the company’s recent performance, Amin J. Khoury,
Chairman and Chief Executive Officer of B/E Aerospace said, “During
the last few months the company has completed two important
financings, has prepaid all of its outstanding indebtedness, and
has completed two acquisitions. We’ve presented our results herein
both including and excluding the impacts of the items discussed
above on the company’s financial results. Our fourth quarter
adjusted operating earnings growth of 26.6 percent was driven by
strong margin expansion by our consumables management segment (CMS)
and by our commercial aircraft segment (CAS). CMS adjusted
operating earnings and adjusted operating margin increased 22.7
percent and 210 basis points, respectively, as compared to the
fourth quarter of the prior year. CAS adjusted operating earnings
and adjusted operating margin increased 42.8 percent and 280 basis
points, respectively, as compared to the fourth quarter of the
prior year. Fourth quarter adjusted earnings before income taxes
increased 30.9 percent year-over-year. The free cash flow
conversion ratio was 271.8 percent of net earnings (179.6 percent
of adjusted net earnings). Our total backlog, both booked and
awarded but unbooked, including the addition of approximately $175
million of backlog from the two businesses acquired in the fourth
quarter, is now approximately $5.75 billion.”
“During the fourth quarter we substantially improved our already
favorable capital structure by prepaying our $343 million bank term
debt and replacing our revolving credit facility with a new $750
million revolving line of credit. The new revolving line of credit,
which currently bears interest at LIBOR plus 250 basis points,
reduces our current bank borrowing cost from approximately 5.75
percent to approximately 2.8 percent, provides the company with
greater financial flexibility and extends the maturity of the line
of credit from July 2013 to December 2015.”
“Based on our record backlog, our expectation of continued
growth in passenger travel and attendant increases in capacity, and
on our expectation of higher levels of wide-body aircraft
deliveries beginning in 2011, we expect full year 2011 earnings per
diluted share of approximately $1.95,” concluded Mr. Khoury.
Adjusted operating earnings, adjusted operating margin, adjusted
earnings before income taxes, adjusted net earnings, adjusted net
earnings per share, free cash flow and free cash flow conversion
ratio are non-GAAP financial measures. For more information see
"Reconciliation of Non-GAAP Financial Measures."
FOURTH QUARTER SEGMENT
RESULTS
The following is a tabular summary and commentary of revenues,
and operating earnings by segment, on a GAAP and adjusted
basis:
REVENUES Three Months Ended December 31, ($ in
millions)
Segment
2010 2009
% Change Consumables management $ 200.6 $
181.1 10.8 % Commercial aircraft 280.8 239.0 17.5 % Business jet
60.4 59.3 1.9 % Total $ 541.8 $ 479.4
13.0 %
OPERATING EARNINGS Three Months Ended
December 31, ($ in millions) 2010 2010
Adjusted to 2009 Segment 2010
Adjusted 2009 % Change
Consumables management $ 37.7 $ 42.1 $ 34.3 22.7 % Commercial
aircraft 39.6 44.4 31.1 42.8 % Business jet 4.5 4.5
6.5 -30.8 % Total $ 81.8 $ 91.0 $ 71.9 26.6 %
Fourth quarter 2010 consumables management segment (CMS)
revenues of $200.6 million increased 10.8 percent as compared with
the fourth quarter of 2009. Fourth quarter orders at CMS, exclusive
of Satair, grew at a double digit rate versus the fourth quarter of
the prior year. Fourth quarter 2010 CMS adjusted operating earnings
of $42.1 million increased 22.7 percent and adjusted operating
margin of 21.0 percent increased by 210 basis points. Including the
above mentioned items, CMS operating earnings (on a GAAP basis) for
the fourth quarter of 2010 were $37.7 million an increase of 9.9
percent as compared to the prior year period.
Fourth quarter 2010 commercial aircraft segment (CAS) revenues
of $280.8 million increased 17.5 percent as compared with the prior
year period. CAS fourth quarter 2010 adjusted operating earnings of
$44.4 million increased 42.8 percent and adjusted operating margin
of 15.8 percent expanded 280 basis points as compared with the
prior year period, primarily due to an improved revenue mix and
ongoing operational efficiency initiatives. Margin expansion at CAS
was aided by year-over-year double digit increases in CAS spares
sales. Including the above mentioned items, CAS operating earnings
(on a GAAP basis) for the fourth quarter of 2010 were $39.6 million
an increase of 27.3 percent as compared to the prior year
period.
Fourth quarter 2010 business jet segment revenues of $60.4
million were essentially unchanged as compared with the prior year
period. Operating earnings of $4.5 million decreased $2.0 million
or 30.8 percent as compared with the prior year period, primarily
due to an unfavorable revenue mix.
FULL YEAR CONSOLIDATED
RESULTS
For the year ended December 31, 2010, revenues of $1.984 billion
increased 2.4 percent while adjusted operating earnings of $325.2
million increased by 9.8 percent, both as compared with the prior
year period.
For the year ended December 31, 2010, adjusted operating margin
of 16.4 percent increased by 110 basis points as compared with the
prior year. Full year 2010 operating earnings and operating margin,
as reported on a GAAP basis, were $316.0 million and 15.9 percent,
respectively, and increased by $19.9 million and 60 basis points,
respectively, as compared with the prior year.
For the year ended December 31, 2010, adjusted net earnings and
adjusted net earnings per diluted share were $162.0 million and
$1.61, respectively, as compared with adjusted net earnings and
adjusted net earnings per diluted share of $144.2 million and
$1.45, respectively, in the prior year period. Full year net
earnings for 2010 and 2009 as reported on a GAAP basis were $143.3
million, or $1.42 per diluted share, and $142.0 million, or $1.43
per diluted share, respectively.
FULL YEAR SEGMENT
RESULTS
The following is a tabular summary and commentary of revenues,
and operating earnings by segment, on a GAAP and adjusted
basis:
REVENUES Year Ended December 31, ($ in
millions) Segment
2010 2009 % Change Consumables management $
772.9 $ 798.1 -3.2 % Commercial aircraft 997.5 911.3 9.5 % Business
jet 213.8 228.3 -6.4 % Total $ 1,984.2 $
1,937.7 2.4 %
OPERATING EARNINGS Year Ended
December 31, ($ in millions) 2010 2010
Adjusted to 2009 Segment 2010
Adjusted 2009 % Change Consumables management
$ 153.2 $ 157.6 $ 151.0 4.4 % Commercial aircraft 148.7 153.5 121.0
26.9 % Business jet 14.1 14.1 24.1
-41.5 % Total $ 316.0 $ 325.2 $ 296.1 9.8 %
For the year ended December 31, 2010, CMS revenues of $772.9
million declined 3.2 percent as compared with the prior year
period, primarily as a result of lower revenues in the first
quarter of 2010 as compared with the first quarter of 2009. CMS
adjusted operating earnings and adjusted operating margin of $157.6
million and 20.4 percent, respectively, increased by $6.6 million
and 150 basis points, respectively, as compared with the prior
year. Full year 2010 CMS operating earnings, as reported on a GAAP
basis, were $153.2 million, up 1.5 percent as compared with
2009.
Full year 2010 CAS revenues of $997.5 million increased 9.5
percent as compared with 2009. CAS adjusted operating earnings and
adjusted operating margin of $153.5 million and 15.4 percent,
respectively, increased $32.5 million and 210 basis points,
respectively, as compared with 2009. The 210 basis point increase
in adjusted operating margin was primarily a result of an improved
revenue mix and ongoing operational efficiency initiatives. Full
year 2010 CAS operating earnings and operating margin, as reported
on a GAAP basis, were $148.7 million (up 22.9 percent versus 2009)
and 14.9 percent (up 160 basis points versus 2009),
respectively.
For the year ended December 31, 2010, business jet segment
revenues of $213.8 million decreased 6.4 percent and operating
earnings of $14.1 million decreased $10.0 million or 41.5 percent
as compared with the prior year period, primarily as a result of
lower revenues and an unfavorable revenue mix in the current year
period.
LIQUIDITY AND BALANCE SHEET
METRICS
During the fourth quarter, the company prepaid its existing bank
term debt and replaced its existing revolving credit facility with
a new $750 million revolving credit facility. The amended and
restated credit agreement provides for a $750 million senior
secured revolving credit facility, which matures in December
2015.
Fourth quarter 2010 free cash flow was $84.8 million and
represents a free cash flow conversion ratio of 271.8 percent. The
free cash flow conversion ratio to adjusted net earnings was
approximately 179.6 percent. For the year ended December 31, 2010,
free cash flow was $226.9 million and the free cash flow conversion
ratio was 158.3 percent (140.0 percent of adjusted net earnings).
At December 31, 2010 cash stood at $78.7 million, net debt, which
represents total debt of $1.246 billion less cash, was $1.167
billion and the company’s net debt-to-net capital ratio was 42.1
percent. At December 31, 2010, the company had no borrowings
outstanding on its $750 million revolving credit facility and has
no debt maturities until July 2018.
BOOKINGS
Bookings during the fourth quarter of 2010 were solid at
approximately $600 million. The book-to-bill ratio was 1.1 to 1 for
the quarter. Backlog at the end of the quarter, including the
addition of approximately $175 million of backlog from the two
businesses acquired in the fourth quarter, was approximately $3.05
billion, an increase of approximately 13 percent as compared with
the company’s December 31, 2009 backlog. Supplier furnished
equipment (SFE) awards expanded to $2.7 billion. As a result, total
backlog, both booked and awarded but unbooked, expanded to a record
$5.75 billion, an increase of almost 11 percent as compared with
December 31, 2009.
Commenting on 2010 bookings, Mr. Khoury said, “From a sales and
marketing perspective, our commercial aircraft segment had a record
year for contract awards. During the year our main cabin seating
platforms were selected by a number of the world’s leading airlines
for both their wide-body and narrow-body aircraft. These coach
class seating awards are for seating for both new-buy aircraft and
retrofit seating for existing aircraft. 2010 record coach class
seating awards were driven primarily by our new patented Pinnacle™
main cabin seating platform, the industry’s lightest full-featured
seat. We successfully launched Pinnacle in late 2009, the Pinnacle
seating platform has captured awards to equip more than 1,000 new
or existing aircraft. These awards are initially valued in excess
of $400 million and are for both wide-body and narrow-body
aircraft. A number of the new-buy coach class awards that we won
resulted in the airlines contemporaneously ordering new coach class
seating for their existing aircraft.”
Mr. Khoury continued, “B/E Aerospace was particularly successful
in 2010 in the rapidly growing Chinese market. Our aircraft cabin
interior products were selected by a number of China’s leading
airlines including Air China, China Southern Airlines, and Hainan
Airlines for both their wide-body and narrow-body aircraft fleets.
The awards are initially valued at approximately $200 million. We
have continued to successfully pursue our ambitious objectives in
the Chinese aircraft interior equipment market having garnered a
majority of all orders over the past several years.”
OUTLOOK
Commenting on the company’s outlook, Mr. Khoury stated,
“Currently, a number of factors that significantly influence our
business are positive. The global economy, a key factor in driving
global passenger traffic, continues to recover. As a result, the
global airlines are experiencing strong growth in revenues,
profitability and liquidity. Growing passenger traffic is driving
smart capacity increases and higher aircraft utilization. In
addition, due to record wide-body backlogs at the major OEM’s,
wide-body aircraft deliveries are expected to grow at an
approximately 75 percent higher average rate as compared to 2010
deliveries each year from 2011 to 2014 and to continue to catalyze
retrofit activity.”
The company’s financial guidance for 2011 is as
follows:
- The company expects orders and backlog
to continue to grow in 2011. The company also expects increasing
aftermarket demand for consumables and commercial aircraft segment
spares driven by the continuing growth in passenger traffic and
attendant increases in capacity, and an expected increase in orders
for cabin interior products arising from the expected acceleration
in deliveries of new wide-body aircraft beginning in 2011.
- 2011 revenues are expected to be
approximately $2.4 billion or approximately 20 percent higher than
2010 revenues, reflecting increased demand for our consumables
management and commercial aircraft segment products, and reflecting
the inclusion of the fourth quarter 2010 acquisitions for the full
year 2011.
- Strong orders for both consumables and
commercial aircraft segment spares in the fourth quarter of 2010
are sufficiently encouraging that the company is adjusting full
year 2011 guidance by dropping the lower end of the guidance range
that was previously provided. The company now expects 2011 net
earnings per diluted share of approximately $1.95.
- The 2011 free cash flow conversion
ratio is expected to be approximately 100 percent.
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements involve risks and uncertainties.
The Company’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 those discussed
in the Company’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 the Company’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, the Company does 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, 2010 2009
2010 2009 Revenues $ 541.8 $ 479.4 $ 1,984.2 $
1,937.7 Cost of sales 347.3 314.3 1,263.7 1,268.5 Selling, general
and administrative 81.1 65.2 291.7 270.5 Research, development and
engineering 31.6 28.0 112.8
102.6 Operating earnings 81.8 71.9
316.0 296.1 Operating earnings, as a percentage of revenues
15.1 % 15.0 % 15.9 % 15.3 % Interest expense, net 30.0 20.7
92.2 88.4 Debt prepayment costs 9.9 3.1
12.4 3.1 Earnings before income
taxes 41.9 48.1 211.4 204.6 Income taxes 10.7
14.8 68.1 62.6 Net
earnings $ 31.2 $ 33.3 $ 143.3 $ 142.0
Net earnings per common share: Basic $ 0.31 $
0.34 $ 1.44 $ 1.44 Diluted $ 0.31 $
0.33 $ 1.42 $ 1.43 Weighted average
common shares: Basic 100.1 98.9 99.7 98.5 Diluted 101.4
100.0 100.9 99.3
BE AEROSPACE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In Millions)
December 31, December 31, 2010
2009 ASSETS Current assets: Cash and
cash equivalents $ 78.7 $ 120.1 Accounts receivable, net 285.4
222.5 Inventories, net 1,372.0 1,247.4 Deferred income taxes, net
36.0 12.1 Other current assets 37.4 20.5 Total
current assets 1,809.5 1,622.6 Long-term assets 1,608.5
1,217.5 $ 3,418.0 $ 2,840.1
LIABILITIES AND
STOCKHOLDERS’ EQUITY Total current liabilities $ 453.9 $
335.7 Total long-term liabilities 1,360.1 1,056.9 Total
stockholders' equity 1,604.0 1,447.5
$
3,418.0 $ 2,840.1
BE AEROSPACE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
(In Millions)
Fiscal Year Ended December 31, 2010
2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net
earnings $ 143.3 $ 142.0 Adjustments to reconcile net earnings to
net cash flows provided by operating activities, net of effects
from acquisition: Depreciation and amortization 52.4 49.5 Deferred
income taxes 45.3 45.3 Non-cash compensation 30.6 24.1 Tax benefits
realized from prior exercises of employee stock options (10.4) --
Provision (benefit) for doubtful accounts 3.0 (1.6) Loss on
disposal of property and equipment 6.1 2.8 Debt prepayment costs
12.4 3.1 Changes in operating assets and liabilities: Accounts
receivable (34.2) 55.2 Inventories (35.7) (73.1) Other current
assets and other assets 0.7 16.5 Accounts payable and accrued
liabilities 82.3 (181.5) Net cash flows provided by operating
activities 295.8 82.3
CASH FLOWS FROM INVESTING
ACTIVITIES: Capital expenditures (68.9) (28.4) Acquisitions,
net of cash acquired (470.8) -- Other (0.4) (0.9) Net cash flows
used in investing activities (540.1) (29.3)
CASH FLOWS
FROM FINANCING ACTIVITIES: Proceeds from common stock issued,
net of expenses 3.3 3.3 Purchase of treasury stock (6.7) (1.7)
Proceeds from long-term debt 644.4 -- Principal payments on long
term debt (418.9) (104.1) Debt facility and debt prepayment costs
(26.6) -- Tax benefits realized from prior exercises of employee
stock options 10.4 -- Borrowings on line of credit 358.9 --
Repayments on line of credit (358.9) -- Net cash flows provided by
(used in) financing activities 205.9 (102.5) Effect of foreign
exchange rate changes on cash and cash equivalents (3.0) 1.5
Net decrease in cash and cash equivalents (41.4) (48.0)
Cash and cash equivalents, beginning of year 120.1 168.1
Cash and cash equivalents, end of year $ 78.7 $ 120.1
BE AEROSPACE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
This release includes “adjusted net earnings” and “adjusted
earnings before taxes” and “adjusted operating earnings” and
“adjusted operating margin” on a consolidated basis and for each of
the consumables management and commercial aircraft segments, and
“free cash flow” and “free cash flow conversion ratio” each of
which are “non-GAAP financial measures” as defined in Regulation G
of the Securities and Exchange Act of 1934.
We define “adjusted net earnings” and “adjusted net earnings
before taxes” as net earnings and net earnings as reported under
GAAP before taxes, respectively, before acquisition and severance
costs related to the fourth quarter 2010 TSI and Satair
acquisitions, interest on borrowings in excess of funds deployed
for acquisitions, which is reflected by the unused portion of the
proceeds from our issuance of our 6.875% Senior Notes due 2020 in
September 2010, and debt prepayment costs related to the repayment
in full of the term loan facility of our prior credit facility in
the fourth quarter 2010. During the fourth quarter and year ended
December 31, 2009, we incurred debt prepayment costs of $3.1
million related to a prepayment of $100.0 million of borrowings
under the term loan agreement of our prior credit facility.
We define “adjusted operating earnings” as operating earnings as
reported under GAAP before acquisition and severance costs related
to the fourth quarter 2010 acquisition of TSI, in the case of the
commercial aircraft segment, and the fourth quarter acquisition of
Satair, in the case of the consumables management segment.
“Adjusted operating margin” is adjusted operating earnings
reflected as a percentage of revenue for the relevant period on a
consolidated or segment basis.
We use adjusted net earnings, adjusted net earnings before
taxes, 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 and severance costs associated with recent
acquisitions, the impact of unused borrowings and debt prepayment
costs. These financial measures should not be viewed as a
substitute for, or superior to, net earnings, in the case of
adjusted net earnings, or operating earnings, in the case of
adjusted operating earnings, the most comparable GAAP measures, as
a measure of the company’s operating performance.
In addition, the company defines “free cash flow” as net cash
flows provided by operating activities less capital expenditures.
The company uses free cash flow to provide investors with an
additional perspective on the company’s cash flow 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. The company defines “free cash flow conversion ratio” as
free cash flow expressed as a percentage of the company’s net
earnings or adjusted net earnings. The company uses free cash flow
conversion ratio to provide investors with a measurement of its
ability to convert earnings into free cash flow.
Pursuant to the requirements of Regulation G of the Securities
and Exchange Act of 1934, we are providing the following tables
that reconcile the non-GAAP financial measures described above to
the most comparable GAAP financial measure:
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS
(In Millions, Except Per Share Data) Three
Three Months Ended Months
Ended Year Ended Year Ended December 31,
December 31, December 31, December 31,
2010 2009 2010 2009 Net earnings, as
reported $ 31.2 $ 33.3 $ 143.3 $ 142.0 Acquisition and severance
costs 9.2 - 9.2 - Interest on borrowings in excess of funds
deployed for acquisitions 6.0 - 6.0 - Debt prepayment costs 9.9 3.1
12.4 3.1 Adjustments to income taxes * (9.1 ) (1.0 )
(8.9
)
(0.9
) Adjusted net earnings 47.2
35.4 162.0 144.2 Adjusted net
earnings per common share $ 0.47 $ 0.35 $ 1.61
$ 1.45 Diluted weighted average common shares 101.4
100.0 100.9 99.3
* Adjustments to income taxes on
acquisition and severance costs, interest on borrowing in excess of
funds deployed for acquisitions, and debt prepayment costs (tax
rate of 29.6% 4th quarter 2010 and 32.2% for 2010, and 30.8% 4th
quarter 2009 and 30.6% for 2009)
RECONCILIATION OF EARNINGS BEFORE TAXES TO
ADJUSTED EARNINGS BEFORE TAXES (In Millions, Except Per
Share Data)
Three
Months Ended
December 31,
2010
Earnings before taxes $ 41.9 Acquisition and severance costs 9.2
Interest on borrowings in excess of funds deployed for acquisitions
6.0 Debt prepayment costs 9.9 Adjusted earnings
before taxes $ 67.0
RECONCILIATION OF OPERATING EARNINGS TO
ADJUSTED OPERATING EARNINGS
(In Millions, Except Per Share Data) Three Months
Ended Year Ended December 31, December 31,
2010 2010 Operating earnings $ 81.8 $ 316.0
Acquisition and severance costs 9.2 9.2
Adjusted operating earnings $ 91.0 $ 325.2
RECONCILIATION OF CONSUMABLES MANAGEMENT SEGMENT
OPERATING EARNINGS TO ADJUSTED
OPERATING EARNINGS
(In Millions, Except Per Share Data) Three Months
Ended Year Ended December 31, December 31,
2010 2010 Operating earnings $ 37.7 $ 153.2
Acquisition and severance costs 4.4 4.4
Adjusted operating earnings $ 42.1 $ 157.6
RECONCILIATION OF COMMERCIAL AIRCRAFT SEGMENT
OPERATING EARNINGS TO ADJUSTED
OPERATING EARNINGS
(In Millions, Except Per Share Data) Three Months
Ended Year Ended December 31, December 31,
2010 2010 Operating earnings $ 39.6 $ 148.7
Acquisition and severance costs 4.8 4.8
Adjusted operating earnings $ 44.4 $ 153.5
RECONCILIATION OF NET CASH FLOW PROVIDED BY OPERATING
ACTIVITIES TO FREE CASH FLOW (In Millions) Three
Months Ended Year Ended December 31,
December 31, 2010 2010 Net cash flow provided
by operating activities $ 124.5 $ 295.8 Capital expenditures
(39.7 ) (68.9 ) Free cash flow $ 84.8 $ 226.9
B/E Aerospace, Inc. (NASDAQ:BEAV)
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B/E Aerospace, Inc. (NASDAQ:BEAV)
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From Jun 2023 to Jun 2024