- Delivered 243 shipsets, compared to 159 in Q2 2020; delivered
35 737 shipsets in Q2 2021 compared to 19 in Q2 2020 and 29 in Q1
2021
- Revenue of $1 billion in Q2 2021, compared to $645 million in
Q2 2020 and $901 million in Q1 2021
- Cash used in operations improved by $200 million from Q2 2020
and $142 million from Q1 2021
- Cash guidance unchanged: full-year 2021 cash used in operations
is expected to be between $(50) to $(150) million; full-year 2021
free cash flow* is expected to be between $(200) and $(300)
million
- EPS of $(1.30) in Q2 2021 compared to $(2.46) in Q2 2020;
Adjusted EPS* of $(0.31) in Q2 2021 compared to $(2.28) in Q2
2020
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) (“Spirit” or the
“Company”) reported second quarter 2021 financial results.
Table 1. Summary Financial Results (unaudited)
2nd Quarter
Six Months
($ in millions, except per share data)
2021
2020
Change
2021
2020
Change
Revenues
$1,002
$645
55%
$1,903
$1,722
11%
Operating Loss
($98)
($367)
73%
($224)
($535)
58%
Operating Loss as a % of Revenues
(9.7%)
(56.9%)
**
(11.8%)
(31.0%)
**
Net Loss
($135)
($256)
47%
($307)
($419)
27%
Net Loss as a % of Revenues
(13.5%)
(39.7%)
**
(16.1%)
(24.3%)
820 BPS
Loss Per Share (Fully Diluted)
($1.30)
($2.46)
47%
($2.95)
($4.04)
27%
Adjusted Loss Per Share (Fully Diluted)*
($0.31)
($2.28)
86%
($1.51)
($3.12)
52%
Fully Diluted Weighted Avg Share Count
104.2
103.9
104.2
103.8
** Represents an amount equal to or in excess of 100% or not
meaningful.
“With continued improvement in domestic air traffic, we are
seeing strong recovery in narrowbody production rates as compared
to a year ago, which is leading to improved cash flow performance,”
said Tom Gentile, Spirit AeroSystems President and Chief Executive
Officer.
“As a result of our ongoing engagement with Boeing on the 787
program, we identified an additional issue in the forward section
of the fuselage. We continue to coordinate with Boeing to ensure
that we are performing all necessary rework. Primarily driven by
this issue, we have recognized a $46 million forward loss on the
787 program in this quarter.”
Revenue
Spirit’s second quarter of 2021 revenue was $1.0 billion, up 55%
from the same period of 2020, primarily due to higher production
deliveries on the Boeing 737 and Airbus A320 programs and increased
revenue from the recently acquired A220 wing and Bombardier
programs. These increases were partially offset by the lower
widebody production rates due to reduced international air traffic
resulting from the impacts of COVID-19. Deliveries increased to 243
shipsets during the second quarter of 2021 compared to 159 shipsets
in the same period of 2020, including Boeing 737 deliveries of 35
shipsets compared to 19 shipsets in the same period of the prior
year.
Spirit’s backlog at the end of the second quarter of 2021 was
approximately $34 billion, with work packages on all commercial
platforms in the Boeing and Airbus backlog.
Earnings
Operating loss for the second quarter of 2021 was $97.7 million,
as compared to operating loss of $367.0 million in the same period
of 2020. The decreased loss was primarily driven by lower forward
loss charges, lower costs related to excess capacity and lower
losses on disposal of assets in the second quarter of 2021 compared
to the second quarter of 2020. Second quarter 2021 earnings
included $47.5 million of excess capacity costs and $9.9 million of
favorable cumulative catch-up adjustments. Additionally, the second
quarter of 2021 included net forward loss charges of $52.2 million,
primarily driven by Boeing 787 engineering analysis and rework. In
comparison, during the second quarter of 2020, Spirit recorded
$194.1 million of net forward loss charges, excess capacity costs
of $82.8 million and $37.7 million of unfavorable cumulative
catch-up adjustments. Additionally, during the second quarter of
2020, Spirit recognized loss on disposal charges of $22.9 million
related to certain long lived assets on the Boeing 787 and Airbus
A350 programs.
Other income for the second quarter 2021 was $31.1 million,
compared to a net expense of $6.4 million for the same period in
the prior year. The increase primarily reflects income related to
the Belfast pension plan during the second quarter of 2021, as well
as a non-cash expense of $14.7 million recognized in the second
quarter of 2020 resulting from the voluntary retirement program
(VRP) offered during 2020 that did not recur in 2021.
Second quarter EPS was $(1.30), compared to $(2.46) in the same
period of 2020. Second quarter 2021 adjusted EPS* was $(0.31),
which excluded the impacts from the acquisitions, restructuring
costs and the incremental deferred tax asset valuation allowance.
During the same period of 2020, adjusted EPS* was $(2.28), which
excluded the impacts of planned acquisitions, restructuring costs
and the VRP offered during the first quarter of 2020. (Table 1)
Cash
Cash used in operations in the second quarter of 2021 was $(28)
million as compared to $(228) million in the same quarter last
year, primarily due to positive impacts of working capital. Free
cash flow* in the second quarter of 2021 was $(53) million as
compared to $(249) million in the same period of 2020. The cash
balance at the end of the second quarter of 2021 was $1.3 billion.
(Table 2)
Table 2. Cash Flow and Liquidity (unaudited) 2nd
Quarter Six Months ($ in millions)
2021
2020
Change
2021
2020
Change Cash used in Operations
($28)
($228)
(88%)
($198)
($560)
(65%)
Purchases of Property, Plant & Equipment
($26)
($20)
27%
($53)
($51)
4%
Free Cash Flow*
($53)
($249)
(79%)
($251)
($611)
(59%)
July 1,
December 31,
Liquidity
2021
2020
Cash
$1,269
$1,873
Total Debt
$3,601
$3,874
Financial Outlook and Risk to Future Financial Results –
Unchanged August 4, 2021
Full-year 2021 cash used in operations is expected to be between
$(50) and $(150) million; full-year 2021 free cash flow* is
expected to be between $(200) and $(300) million.
Please refer to our Cautionary Statement Regarding
Forward-Looking Statements below and 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.
Subsequent Event
Based on the preliminary assessment of the latest 787 program
demand received from Boeing on August 2, 2021, the Company expects
to incur an incremental forward loss of approximately $40 to $60
million in the third quarter of 2021 due to the impact of reduced
production volumes and the corresponding amount of fixed overhead
absorption applied to lower deliveries. This preliminary assessment
is subject to change if Boeing revises its production and delivery
plans.
Segment Results
Fuselage Systems
Fuselage Systems segment revenue in the second quarter of 2021
increased 51 percent from the same period last year to $492.2
million, primarily due to increased production volumes from the
Boeing 737 and recently acquired Bombardier programs, partially
offset by lower production volumes on the Boeing 787. Operating
margin for the second quarter of 2021 increased to (6.5) percent,
compared to (76.9) percent during the same period of 2020. This
increase was primarily due to increased Boeing 737 production
volumes and the resulting decrease in excess capacity costs, as
well as less net forward losses recognized. In the second quarter
of 2021, the Fuselage Systems Segment includes restructuring
expenses of $0.9 million, excess capacity costs of $27.6 million
and abnormal COVID-19 costs of $1.4 million compared to
restructuring expenses of $2.4 million, excess capacity costs of
$50.6 million, abnormal COVID-19 costs of $11.2 million, and loss
on disposal charges of $22.5 million related to certain long lived
assets on the Boeing 787 and Airbus A350 programs for the same
period in 2020. In the second quarter of 2021, the segment recorded
pretax $4 million of favorable cumulative catch-up adjustments and
$35.7 million of net forward losses. In the second quarter of 2020,
the segment recorded pretax $31.1 million of unfavorable cumulative
catch-up adjustments and $155.1 million of net forward losses.
Propulsion Systems
Propulsion Systems segment revenue in the second quarter of 2021
increased 43 percent from the same period last year to $241.9
million, primarily due to increased revenue from the Boeing 737
program and aftermarket sales, partially offset by decreased
production volume on the Boeing 777 program. Operating margin for
the second quarter of 2021 increased to 11.7 percent, compared to
(10.2) percent during the same period of 2020, primarily due to
increased Boeing 737 production volumes and the resulting decrease
in excess capacity costs, as well as lower net forward losses
recognized compared to the same period of the prior year. In the
second quarter of 2021, the segment recorded excess capacity costs
of $7.1 million and $0.3 million of abnormal COVID-19 costs
compared to excess capacity costs of $17.5 million, abnormal
COVID-19 costs of $4.0 million and $1.6 million of restructuring
expenses in the second quarter of 2020. The segment recorded pretax
$5.9 million of favorable cumulative catch-up adjustments and $8.6
million of net forward losses in the second quarter of 2021. In
comparison, during the same period of the prior year, the segment
recorded pretax $5.1 million of unfavorable cumulative catch-up
adjustments, and $16.2 million of net forward losses.
Wing Systems
Wing Systems segment revenue in the second quarter of 2021
increased significantly from $122.5 million in the same period last
year to $259.3 million, primarily due to increased production
deliveries on the Boeing 737, Airbus A320 and A220 programs.
Operating margin for the second quarter of 2021 increased to (6.2)
percent, compared to (34.7) percent during the same period of 2020,
primarily due to increased Airbus A320 production volume as well as
lower forward losses compared to the same period of 2020. In the
second quarter of 2021, the segment includes $4.3 million of
restructuring costs, excess capacity costs of $12.8 million and
$0.7 million of abnormal COVID-19 costs compared to the same period
the prior year, which included restructuring expenses of $2.3
million, excess capacity costs of $14.7 million and abnormal
COVID-19 costs of $4.1 million. In the second quarter of 2021, the
segment recorded pretax $0.4 million of unfavorable cumulative
catch-up adjustments and $7.9 million of net forward losses. In the
second quarter of 2020, the segment recorded pretax $1.6 million of
unfavorable cumulative catch-up adjustments and $22.8 million of
net forward losses.
Table 4. Segment Reporting (unaudited) 2nd Quarter
Six Months ($ in millions)
2021
2020
Change
2021
2020
Change
Segment Revenues Fuselage Systems
$492.2
$327.1
50.5
%
$929.3
$878.6
5.8
%
Propulsion Systems
241.9
169.6
42.6
%
468.4
394.8
18.6
%
Wing Systems
259.3
122.5
**
482.9
413.9
16.7
%
All Other
8.7
25.4
(65.7
%)
22.3
34.6
(35.5
%)
Total Segment Revenues
$1,002.1
$644.6
55.5
%
$1,902.9
$1,721.9
10.5
%
Segment (Loss) Earnings from Operations Fuselage
Systems
($31.8
)
($251.5
)
87.4
%
($91.6
)
($337.9
)
72.9
%
Propulsion Systems
28.2
(17.3
)
**
44.9
(22.6
)
** Wing Systems
(16.2
)
(42.5
)
61.9
%
(35.1
)
(28.9
)
(21.5
%)
All Other
1.5
8.0
(81.3
%)
2.7
9.8
(72.4
%)
Total Segment Operating (Loss) Earnings
($18.3
)
($303.3
)
**
($79.1
)
($379.6
)
**
Unallocated Expense SG&A
($66.9
)
($49.0
)
(36.5
%)
($124.5
)
($126.4
)
1.5
%
Research & Development
(13.3
)
(8.3
)
(60.2
%)
(21.5
)
(20.6
)
(4.4
%)
Cost of Sales
0.8
(6.4
)
**
1.5
(7.9
)
**
Total (Loss) Earnings from Operations
($97.7
)
($367.0
)
73.4
%
($223.6
)
($534.5
)
58.2
%
Segment Operating (Loss) Earnings as % of Revenues
Fuselage Systems
(6.5
%)
(76.9
%)
**
(9.9
%)
(38.5
%)
** Propulsion Systems
11.7
%
(10.2
%)
**
9.6
%
(5.7
%)
** Wing Systems
(6.2
%)
(34.7
%)
**
(7.3
%)
(7.0
%)
(30) BPS All Other
** ** **
** ** **
Total Segment Operating (Loss) Earnings as % of Revenues
(1.8
%)
(47.1
%)
**
(4.2
%)
(22.0
%)
**
Total Operating (Loss) Earnings as % of Revenues
(9.7
%)
(56.9
%)
**
(11.8
%)
(31.0
%)
** ** Represents an amount equal to or in excess of 100% or
not meaningful.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains “forward-looking statements” that
may 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,” “goal,” “forecast,”
“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. 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 impact of the COVID-19 pandemic on our business and
operations, including on the demand for our and our customers’
products and services, on trade and transport restrictions, on the
global aerospace supply chain, on our ability to retain the skilled
work force necessary for production and development, and generally
on our ability to effectively manage the impacts of the COVID-19
pandemic on our business operations;
- demand for our products and services and the general effect of
economic or geopolitical conditions, or other events, such as
pandemics, in the industries and 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 Boeing and 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;
- 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 non-conformance product warranty, defective
product, or similar claims and the impact settlement of such claims
may have on our accounting assumptions;
- our dependence on our suppliers, as well as the cost and
availability of raw materials and purchased components;
- our ability and our suppliers’ ability to meet stringent
delivery (including quality and timeliness) standards and
accommodate changes in the build rates of aircraft;
- our ability to maintain continuing, uninterrupted production at
our manufacturing facilities and our suppliers’ facilities;
- 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;
- our ability to effectively integrate the acquisition of select
assets of Bombardier along with other acquisitions that 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;
- 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;
- our ability to recruit and retain a critical mass of highly
skilled employees;
- our relationships with the unions representing many of our
employees, including our ability to avoid labor disputes and work
stoppages with respect to our union employees;
- 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;
- 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) 2nd Quarter Six Months
2021
2020
2021
2020
B737
35
19
64
37
B747
2
1
3
3
B767
9
5
19
11
B777
6
7
11
16
B787
11
22
26
62
Total Boeing
63
54
123
129
A220
15
8
27
23
A320 Family
96
69
226
257
A330
4
5
9
13
A350
11
13
23
39
Total Airbus
126
95
285
332
Business/Regional Jet (1)
54
10
104
22
Total
243
159
512
483
(1) Beginning in the fourth quarter of 2020, includes
Business/Regional Jet deliveries related to the Bombardier
acquisition
Spirit AeroSystems Holdings, Inc. Condensed
Consolidated Statements of Operations (unaudited)
For the Three Months Ended
For the Six Months Ended
July 1, 2021 July 2, 2020 July 1, 2021 July
2, 2020 ($ in millions, except per share data)
Revenue
$1,002.1
$644.6
$1,902.9
$1,721.9
Operating costs and expenses: Cost of sales
1,014.4
925.1
1,973.2
2,037.6
Selling, general and administrative
66.9
49.0
124.5
126.4
Restructuring costs
5.2
6.3
7.3
48.9
Research and development
13.3
8.3
21.5
20.6
Loss on disposal of assets
-
22.9
-
22.9
Total operating costs and expenses
1,099.8
1,011.6
2,126.5
2,256.4
Operating loss
(97.7
)
(367.0
)
(223.6
)
(534.5
)
Interest expense and financing fee amortization
(59.1
)
(48.6
)
(118.9
)
(80.8
)
Other income (expense), net
31.1
(6.4
)
43.9
(55.4
)
Loss before income taxes and equity in net loss of affiliate
(125.7
)
(422.0
)
(298.6
)
(670.7
)
Income tax (provision) benefit
(9.0
)
167.6
(7.3
)
254.8
Loss before equity in net loss of affiliate
(134.7
)
(254.4
)
(305.9
)
(415.9
)
Equity in net loss of affiliate
(0.6
)
(1.5
)
(1.0
)
(3.0
)
Net loss
($135.3
)
($255.9
)
($306.9
)
($418.9
)
Loss per share Basic
($1.30
)
($2.46
)
($2.95
)
($4.04
)
Shares
104.2
103.9
104.2
103.8
Diluted
($1.30
)
($2.46
)
($2.95
)
($4.04
)
Shares
104.2
103.9
104.2
103.8
Dividends declared per common share
$0.01
$0.01
$0.02
$0.02
Spirit AeroSystems Holdings, Inc. Condensed Consolidated
Balance Sheets (unaudited) July 1, 2021
December 31, 2020 ($ in millions) Assets Cash
and cash equivalents
$1,269.3
$1,873.3
Restricted cash
0.3
0.3
Accounts receivable, net
516.3
484.4
Contract assets, short-term
358.7
368.4
Inventory, net
1,305.4
1,422.3
Other current assets
341.9
336.3
Total current assets
3,791.9
4,485.0
Property, plant and equipment, net
2,445.8
2,503.8
Intangible assets, net
214.9
215.2
Goodwill
619.0
565.3
Right of use assets
84.5
70.6
Contract assets, long-term
-
4.4
Pension assets
477.2
455.9
Deferred income taxes
1.2
0.1
Other assets
106.6
83.6
Total assets
$7,741.1
$8,383.9
Liabilities Accounts payable
$607.1
$558.9
Accrued expenses
333.6
365.6
Profit sharing
28.4
57.0
Current portion of long-term debt
47.9
340.7
Operating lease liabilities, short-term
7.7
5.5
Advance payments, short-term
85.0
18.9
Contract liabilities, short-term
87.1
97.6
Forward loss provision, short-term
231.4
184.6
Deferred revenue and other deferred credits, short-term
18.1
22.2
Other current liabilities
85.1
58.4
Total current liabilities
1,531.4
1,709.4
Long-term debt
3,552.7
3,532.9
Operating lease liabilities, long-term
78.8
66.6
Advance payments, long-term
255.1
327.4
Pension/OPEB obligation
415.2
440.2
Contract liabilities, long-term
300.3
372.0
Forward loss provision, long-term
507.4
561.4
Deferred revenue and other deferred credits, long-term
36.0
38.9
Deferred grant income liability - non-current
27.5
28.1
Deferred income taxes
26.9
13.0
Other non-current liabilities
449.5
437.0
Stockholders' Equity Common stock, Class A par value $0.01,
200,000,000 shares authorized, 105,429,840 and 105,542,162 shares
issued and outstanding, respectively
1.1
1.1
Additional paid-in capital
1,150.1
1,139.8
Accumulated other comprehensive loss
(152.1
)
(154.1
)
Retained earnings
2,017.4
2,326.4
Treasury stock, at cost (41,523,470 shares each period,
respectively)
(2,456.7
)
(2,456.7
)
Total stockholders’ equity
559.8
856.5
Noncontrolling interest
0.5
0.5
Total equity
560.3
857.0
Total liabilities and equity
$7,741.1
$8,383.9
Spirit AeroSystems Holdings, Inc. Condensed Consolidated
Statements of Cash Flows (unaudited)
For the Six Months Ended
July 1, 2021 July 2, 2020 ($ in millions)
Operating activities Net loss
($306.9
)
($418.9
)
Adjustments to reconcile net loss to net cash used in operating
activities Depreciation and amortization expense
160.3
135.4
Amortization of deferred financing fees
4.3
5.5
Accretion of customer supply agreement
1.1
1.2
Employee stock compensation expense
13.4
10.8
(Gain) loss from derivative instruments
(0.1
)
0.1
Loss (gain) from foreign currency transactions
4.9
(3.1
)
Loss on disposition of assets
1.4
23.6
Deferred taxes
12.5
(51.3
)
Pension and other post-retirement benefits, net
(30.5
)
65.9
Grant liability amortization
(0.8
)
(2.8
)
Equity in net loss of affiliates
1.0
3.0
Forward loss provision
(28.1
)
149.0
Changes in assets and liabilities Accounts receivable, net
(11.2
)
244.4
Contract assets
14.4
209.7
Inventory, net
111.8
(115.4
)
Accounts payable and accrued liabilities
(11.3
)
(551.8
)
Profit sharing/deferred compensation
(29.2
)
(60.1
)
Advance payments
(1.3
)
(19.8
)
Income taxes receivable/payable
8.3
(211.8
)
Contract liabilities
(82.1
)
(5.5
)
Other
(29.6
)
32.2
Net cash used in operating activities
($197.7
)
($559.7
)
Investing activities Purchase of property, plant and
equipment
(53.3
)
(51.2
)
Acquisition, net of cash acquired
(21.1
)
(117.9
)
Other
2.2
2.7
Net cash used in investing activities
($72.2
)
($166.4
)
Financing activities Proceeds from issuance of debt
-
1,200.0
Payment on revolving credit facility
-
(800.0
)
Customer financing
(5.0
)
10.0
Principal payments of debt
(19.9
)
(14.8
)
Payments on term loan
(2.0
)
(11.4
)
Payments on floating rate notes
(300.0
)
-
Taxes paid related to net share settlement awards
(4.4
)
(13.8
)
Proceeds from issuance of ESPP stock
1.4
1.3
Debt issuance and financing costs
-
(24.5
)
Purchase of treasury stock
-
0.1
Dividends paid
(2.2
)
(13.4
)
Other
0.1
-
Net cash (used in) provided by financing activities
($332.0
)
$333.5
Effect of exchange rate changes on cash and cash equivalents
(2.1
)
(7.7
)
Net decrease in cash, cash equivalents and restricted cash for
the period
($604.0
)
($400.3
)
Cash, cash equivalents, and restricted cash, beginning of the
period
1,893.1
2,367.2
Cash, cash equivalents, and restricted cash, end of the period
$1,289.1
$1,966.9
Reconciliation of Cash and Cash
Equivalents and Restricted Cash: July 1, 2021
July 2, 2020 Cash and cash equivalents, beginning of the
period
$1,873.3
$2,350.5
Restricted cash, short-term, beginning of the period
0.3
0.3
Restricted cash, long-term, beginning of the period
19.5
16.4
Cash, cash equivalents, and restricted cash, beginning of the
period
$1,893.1
$2,367.2
Cash and cash equivalents, end of the period
$1,269.3
$1,947.1
Restricted cash, short-term, end of the period
$0.3
$0.3
Restricted cash, long-term, end of the period
19.5
19.5
Cash, cash equivalents, and restricted cash, end of the period
$1,289.1
$1,966.9
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 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 (Loss) Earnings Per Share. To provide
additional transparency, we have disclosed non-GAAP adjusted
diluted (loss) earnings 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
per share.
Free Cash Flow. Free Cash Flow is defined as GAAP cash from
operating activities (generally referred to herein as “cash used in
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
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 Six month ended July 1,
2021 July 2, 2020 July 1, 2021 July 2, 2020
GAAP Diluted Loss Per Share
($1.30)
($2.46)
($2.95)
($4.04)
Costs Related to Acquisitions
-
a
0.06
b
0.01
a
0.13
b
Restructuring Costs
0.01
c
0.04
d
0.04
c
0.29
d
Voluntary Retirement Program
-
0.08
e
-
0.50
e
Deferred Tax Asset Valuation Allowance
0.98
f
-
1.39
f
-
Adjusted Diluted Loss Per Share
($0.31)
($2.28)
($1.51)
($3.12)
Diluted Shares (in millions)
104.2
103.9
104.2
103.8
a
Represents the three and six months ended Q2 2021 transaction costs
(included in SG&A)
b
Represents the three and six months ended Q2 2020 transaction costs
(included in SG&A)
c
Represents the three and six months ended Q2 2021 restructuring
expenses for cost-alignment and headcount reductions (included in
Restructuring costs)
d
Represents the three and six months ended Q2 2020 restructuring
expenses for cost-alignment and headcount reductions (included in
Restructuring costs)
e
Represents the three and six months ended Q2 2020 retirement
incentive expenses resulting from the VRP offered during the first
quarter of 2020 (included in Other expense)
f
Represents the three and six months ended Q2 2021 deferred tax
asset valuation allowance (included in Income tax provision)
Free Cash Flow ($ in millions) Three months
ended Six months ended Guidance July 1, 2021 July 2, 2020 July 1,
2021 July 2, 2020 Full-Year 2021 Cash used in Operations
($28)
($228)
($198)
($560)
($50) - ($150)
Capital Expenditures
(26)
(20)
(53)
(51)
(150)
Free Cash Flow
($53)
($249)
($251)
($611)
($200 - $300)
* Non-GAAP financial measure, see Appendix for
reconciliation
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804005415/en/
Investor Relations: Ryan Avey or Aaron Hunt (316) 523-7040
Media: Molly Edwards (316) 523-2479 On the web: http:/
/www.spiritaero.com
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