Fourth Quarter 2022
- Revenue of $1.3 billion
- EPS of $(2.32); Adjusted EPS* of $(1.46)
- Cash used in operations of $27 million; Free cash flow* usage
of $66 million
- Delivered 81 737 shipsets in the quarter, up 17% q/q and 59%
y/y
Full-Year 2022
- Revenue of $5.0 billion
- EPS of $(5.21); Adjusted EPS* of $(2.81)
- Cash used in operations of $395 million; Free cash flow* usage
of $516 million
- Delivered 281 737 shipsets, up 73% y/y
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) (“Spirit” or the
“Company”) reported fourth quarter and full-year 2022 financial
results.
Table 1. Summary Financial Results (unaudited)
4th Quarter
Twelve Months
($ in millions, except per share data)
2022
2021
Change
2022
2021
Change
Revenues
$1,320
$1,070
23
%
$5,030
$3,953
27
%
Operating Loss
($139
)
($79
)
(76
%)
($281
)
($459
)
39
%
Operating Loss as a % of Revenues
(10.5%
)
(7.4%
)
(310) BPS
(5.6%
)
(11.6%
)
600 BPS
Net Loss
($243
)
($120
)
**
($546
)
($541
)
(1
%)
Net Loss as a % of Revenues
(18.4%
)
(11.2%
)
(720) BPS
(10.8%
)
(13.7%
)
290 BPS
Loss Per Share (Fully Diluted)
($2.32
)
($1.15
)
**
($5.21
)
($5.19
)
(0
%)
Adjusted Loss Per Share (Fully Diluted)*
($1.46
)
($0.84
)
(74
%)
($2.81
)
($3.46
)
19
%
Fully Diluted Weighted Avg Share Count
104.8
104.3
104.6
104.2
** Represents an amount in excess of 100% or not
meaningful.
“2022 was a challenging year for the entire industry as we
worked through supply chain part shortages and labor attrition,
which impacted overall deliveries and profitability,” said Tom
Gentile, President and Chief Executive Officer, Spirit
AeroSystems.
“We learned a lot over the course of the year which we will
apply to future production rate increases. Our free cash flow usage
in the quarter was within the range we indicated on our third
quarter earnings call. While we spent more in the fourth quarter to
achieve those results, those investments should position us better
for future rate increases. On the 737 program, we plan to produce
approximately 420 shipsets in 2023.”
Revenue
Spirit’s revenue in the fourth quarter of 2022 was $1.3 billion,
up 23 percent from the same period of 2021. This increase was
primarily due to higher production deliveries on the Boeing 737
program as well as increased Defense and Space revenue. Overall
deliveries increased to 343 shipsets during the fourth quarter of
2022 compared to 277 shipsets in the same period of 2021. This
includes Boeing 737 deliveries of 81 shipsets compared to 51
shipsets in the same period of the prior year.
Spirit’s full-year 2022 revenue was $5.0 billion, up 27 percent
from 2021. This increase was primarily due to higher production
deliveries on the Boeing 737 and Airbus A320 and A220 programs, as
well as increased Aftermarket and Defense and Space revenue,
partially offset by lower production deliveries on the Boeing 747
and 787 programs. Overall deliveries increased to 1,297 shipsets
during 2022 compared to 1,022 shipsets in 2021. This includes
Boeing 737 deliveries of 281 shipsets compared to 162 shipsets in
the prior year.
Spirit’s backlog at the end of the fourth quarter of 2022 was
approximately $37 billion, which includes work packages on all
commercial platforms in the Airbus and Boeing backlog.
Earnings
Operating loss for the fourth quarter of 2022 was $138.8
million, compared to operating loss of $79.0 million in the same
period of 2021. The greater operating loss was primarily driven by
higher changes in estimates during the fourth quarter of 2022 as
well as the absence of income related to the Aviation Manufacturing
Jobs Protection (AMJP) Program that was recognized in the fourth
quarter of 2021, partially offset by higher production volumes on
the Boeing 737 program.
Changes in estimates in the fourth quarter of 2022 included net
forward loss charges of $113.7 million and unfavorable cumulative
catch-up adjustments for the periods prior to the fourth quarter of
$58.7 million. The forward losses related primarily to the Airbus
A350 and Boeing 787 programs. The Airbus A350 program forward loss
primarily reflects additional costs related to labor, freight and
rework resulting from production and quality issues as well as
parts shortages. The forward loss on the Boeing 787 program was
driven by increased cost estimates related to production and rework
requirements. The unfavorable cumulative catch-up adjustments
relate primarily to the Boeing 737 and the Airbus A320 programs.
The Boeing 737 unfavorable cumulative catch-up adjustment was
primarily driven by supply chain disruptions and increased costs
related to production rate recovery efforts, including costs
related to increased headcount and training. The Airbus A320
program unfavorable cumulative catch-up adjustment was driven by
operational and supply chain disruptions, and increased costs
related to material, freight and labor. Excess capacity costs
recorded during the fourth quarter of 2022 were $31.2 million. In
comparison, during the fourth quarter of 2021, Spirit recorded
$46.5 million of net forward loss charges and excess capacity costs
of $45.3 million. Additionally, income related to the AMJP Program
of $37.0 million was recognized as a reduction to costs of sales in
the fourth quarter of 2021.
Operating loss for the full year of 2022 was $281.2 million,
compared to operating loss of $459.2 million in 2021. This
improvement was primarily driven by higher production on the Boeing
737 program and lower excess capacity costs in 2022 compared to the
prior year.
Full-year 2022 earnings included net forward loss charges of
$250.3 million and unfavorable cumulative catch-up adjustments for
the periods prior to 2022 of $27.7 million. The forward losses were
primarily driven by increased cost estimates resulting from
production rate decreases and schedule changes, supply chain
disruptions, costs of rework, and other costs on the Boeing 787
program, and additional labor, freight, and other costs driven by
part shortages and production and quality issues on the Airbus A350
program. Full-year 2022 unfavorable cumulative catch-up adjustments
were primarily recognized on the Boeing 737 program, reflecting
increased costs for supply chain, raw material, labor and other
costs. Excess capacity costs recorded during 2022 were $157.3
million. In comparison, during 2021, Spirit recorded $241.5 million
of net forward loss charges, unfavorable cumulative catch-up
adjustments of $5.0 million, and excess capacity costs of $217.5
million. Additionally, income related to the AMJP Program of $41.1
million was recognized as a reduction to costs of sales in
2021.
Other expense for the full year of 2022 was $14.1 million,
compared to other income of $146.6 million in 2021. The increase in
expense was primarily due to non-cash pre-tax charges of $108.2
million driven by the termination of the Pension Value Plan A (PVP
A) in 2022, compared to a gain of $61.0 million in 2021 resulting
from the closure of the defined benefit plans acquired as part of
the Bombardier acquisition. In relation to the termination of the
PVP A, additional non-cash settlement charges are expected in the
first quarter of 2023. The Company also expects to receive an
after-tax cash reversion in 2023 resulting from the PVP A
termination in the range of $120 million to $140 million.
Fourth quarter 2022 EPS was $(2.32), compared to $(1.15) in the
same period of 2021. Fourth quarter 2022 adjusted EPS* was $(1.46),
which excludes the incremental deferred tax asset valuation
allowance and the costs related to the pension termination. During
the same period of 2021, adjusted EPS* was $(0.84), which excludes
the incremental deferred tax asset valuation allowance and a
pension settlement loss. (Table 1)
Full-year 2022 EPS was $(5.21), compared to $(5.19) in 2021.
2022 adjusted EPS* was $(2.81), which excludes the incremental
deferred tax asset valuation allowance, an investment agreement
settlement gain, losses related to Russia sanctions, and costs
related to the pension termination. Full-year 2021 adjusted EPS*
was $(3.46), which excludes the impacts from the acquisitions,
restructuring costs, the incremental deferred tax asset valuation
allowance, a pension curtailment gain and a pension settlement
loss. (Table 1)
Cash
Cash used in operations in the fourth quarter of 2022 was $27
million, compared to cash used in operations of $77 million in the
same quarter of 2021. The current period cash used in operations
included the quarterly cash repayment of $31 million related to the
Boeing 737 advance received in 2019. The fourth quarter of 2021
balance reflects the receipt of a $73 million tax refund resulting
from the CARES Act as well as the payment of $154 million towards
the Belfast pension plan. Free cash flow* in the fourth quarter was
a usage of $66 million, as compared to a usage of $137 million in
the same period of 2021.
Full-year cash used in operations in 2022 was $395 million,
compared to $63 million of cash used in operations in 2021. The
full-year 2022 cash used in operations reflects the repayment of
$123 million related to the Boeing 737 advance received in 2019.
The full-year 2021 balance reflects the receipt of $300 million tax
refund as a result of carrybacks permitted by the CARES Act,
partially offset by the payment of $154 million towards the Belfast
pension plan. Free cash flow* in 2022 was a usage of $516 million,
as compared to a usage of $214 million in 2021.
The cash balance at the end of the fourth quarter of 2022 was
$659 million. (Table 2)
Table 2. Cash Flow, Cash and Total Debt (unaudited)
4th Quarter
Twelve Months
($ in millions)
2022
2021
Change
2022
2021
Change
Cash used in Operations
($27
)
($77
)
(64
%)
($395
)
($63
)
**
Purchases of Property, Plant & Equipment
($39
)
($61
)
(36
%)
($122
)
($151
)
(19
%)
Free Cash Flow*
($66
)
($137
)
(52
%)
($516
)
($214
)
**
December 31,
December 31,
Cash and Total Debt
2022
2021
Cash
$659
$1,479
Total Debt
$3,869
$3,792
** Represents an amount in excess of 100% or not
meaningful.
Segment Results
Commercial
Commercial segment revenue in the fourth quarter of 2022
increased 26 percent from the same period of the prior year to $1.1
billion, primarily due to increased production revenues on the
Boeing 737, 777 and Bombardier business jets programs. Operating
margin for the fourth quarter of 2022 decreased to (8) percent,
compared to (2) percent during the same period of 2021, primarily
due to higher changes in estimates recorded in the current period
as well as the absence of income related to the AMJP Program that
was recognized in the fourth quarter of 2021, partially offset by
higher production volumes on the Boeing 737 program. In the fourth
quarter of 2022, changes in estimates for the segment included
$111.3 million of net forward losses and $58.3 million of
unfavorable cumulative catch-up adjustments. Additionally, during
the fourth quarter of 2022, the Commercial segment included excess
capacity costs of $29.7 million. In comparison, during the fourth
quarter of 2021, the segment recognized $47.0 million of net
forward losses, $1.9 million of unfavorable cumulative catch-up
adjustments and excess capacity costs of $43.3 million. Income
related to the AMJP Program of $32.3 million was recognized as a
reduction to costs of sales in the fourth quarter of 2021.
Defense & Space
Defense & Space segment revenue in the fourth quarter of
2022 increased 21 percent from the same period of the prior year to
$183.2 million, primarily due to higher activity on development
programs in the current period. Operating margin for the fourth
quarter of 2022 increased to 11 percent, compared to 8 percent
during the same period of 2021, primarily due to the absence of a
one-time charge recorded during the fourth quarter of 2021. The
segment recorded excess capacity costs of $1.5 million and net
forward losses of $2.4 million in the fourth quarter of 2022. In
comparison, during the fourth quarter of 2021, the segment
recognized excess capacity costs of $2.0 million, favorable changes
in estimates on forward loss programs of $0.5 million and $1.6
million of unfavorable cumulative catch-up adjustments in the
fourth quarter of 2021. Income related to the AMJP Program of $2.7
million was recognized as a reduction to costs of sales in the
fourth quarter of 2021.
Aftermarket
Aftermarket segment revenue in the fourth quarter of 2022
slightly decreased by one percent compared to the same period of
2021 to $72.9 million. Operating margin for the fourth quarter of
2022 decreased to 13 percent, compared to 23 percent during the
same period of 2021, primarily due to a one-time inventory
adjustment charge as well as the absence of income related to the
AMJP Program of $2.0 million that was recognized in the fourth
quarter of 2021.
Table 4. Segment Reporting (unaudited)
4th Quarter
Twelve Months
($ in millions)
2022
2021
Change
2022
2021
Change
Segment Revenues Commercial
$1,064.0
$844.3
26.0
%
$4,068.4
$3,128.1
30.1
%
Defense & Space
183.2
152.0
20.5
%
649.8
585.0
11.1
%
Aftermarket
72.9
73.8
(1.2
%)
311.4
239.9
29.8
%
Total Segment Revenues
$1,320.1
$1,070.1
23.4
%
$5,029.6
$3,953.0
27.2
%
Segment (Loss) Earnings from Operations Commercial
($79.4
)
($20.2
)
**
($82.9
)
($220.6
)
62.4
%
Defense & Space
20.7
12.0
72.5
%
72.8
44.3
64.3
%
Aftermarket
9.2
16.8
(45.2
%)
58.5
50.3
16.3
%
Total Segment Operating (Loss) Earnings
($49.5
)
$8.6
**
$48.4
($126.0
)
**
Segment Operating (Loss) Earnings as % of Revenues
Commercial
(7.5
%)
(2.4
%)
(510) BPS
(2.0
%)
(7.1
%)
510 BPS
Defense & Space
11.3
%
7.9
%
340 BPS
11.2
%
7.6
%
360 BPS
Aftermarket
12.6
%
22.8
%
**
18.8
%
21.0
%
(220) BPS
Total Segment Operating (Loss) Earnings as % of Revenues
(3.7
%)
0.8
%
(450) BPS
1.0
%
(3.2
%)
420 BPS
Unallocated Expense SG&A
($75.4
)
($68.6
)
(9.9
%)
($279.2
)
($279.9
)
0.3
%
Research & Development
(13.9
)
(19.0
)
26.8
%
(50.4
)
(53.3
)
5.4
%
Total Loss from Operations
($138.8
)
($79.0
)
(75.7
%)
($281.2
)
($459.2
)
38.8
%
Total Operating Loss as % of Revenues
(10.5
%)
(7.4
%)
(310) BPS
(5.6
%)
(11.6
%)
600 BPS
** Represents an amount in excess of 100% or not meaningful.
*
Non-GAAP financial measure, see
Appendix for 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,” “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 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 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
markets in which we operate in the U.S. and globally;
- 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 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;
- 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,
including the ability to staff appropriately for current production
volumes and anticipated production volume increases;
- 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 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;
- 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 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;
- 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)
4th Quarter
Twelve Months
2022
2021
2022
2021
B737
81
51
281
162
B747
-
2
1
6
B767
8
7
31
34
B777
7
5
26
23
B787
7
6
20
37
Total Boeing
103
71
359
262
A220 (1)
14
13
60
50
A320 Family
144
136
591
467
A330
8
5
27
20
A350
11
10
48
42
Total Airbus
177
164
726
579
Business/Regional Jet (2)
63
42
212
181
Total
343
277
1,297
1,022
(1)
Beginning in 2022, A220
deliveries reflect the number of wing end item deliveries instead
of pylon end item deliveries, as previously reported. 2021 A220
deliveries have been updated to reflect wing units.
(2)
2021 Business/Regional Jet
deliveries incorporate changes resulting from alignment of shipset
reporting from acquired businesses.
Spirit AeroSystems Holdings,
Inc.
Condensed Consolidated
Statements of Operations
(unaudited)
For the
Three Months Ended
For the
Twelve Months Ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
($ in millions, except per
share data)
Net revenues
$1,320.1
$1,070.1
$5,029.6
$3,953.0
Operating costs and expenses: Cost of sales
1,369.6
1,061.4
4,981.0
4,070.8
Selling, general and administrative
75.4
68.6
279.2
279.9
Restructuring costs
-
0.1
0.2
8.2
Research and development
13.9
19.0
50.4
53.3
Total operating costs and expenses
1,458.9
1,149.1
5,310.8
4,412.2
Operating loss
(138.8
)
(79.0
)
(281.2
)
(459.2
)
Interest expense and financing fee amortization
(73.3
)
(64.9
)
(244.1
)
(242.6
)
Other (expense) income, net
(44.3
)
7.9
(14.1
)
146.6
Loss before income taxes and equity in net loss of
affiliates
(256.4
)
(136.0
)
(539.4
)
(555.2
)
Income tax benefit (expense)
13.2
16.6
(5.2
)
17.2
Loss before equity in net loss of affiliates
(243.2
)
(119.4
)
(544.6
)
(538.0
)
Equity in net loss of affiliates
(0.4
)
(0.9
)
(1.6
)
(2.8
)
Net loss
(243.6
)
(120.3
)
(546.2
)
(540.8
)
Less noncontrolling interest in earnings of subsidiary
0.5
-
0.5
-
Net loss attributable to common shareholders
($243.1
)
($120.3
)
($545.7
)
($540.8
)
Loss per share Basic
$ (2.32
)
($1.15
)
$ (5.21
)
($5.19
)
Shares
104.8
104.3
104.6
104.2
Diluted
$ (2.32
)
($1.15
)
$ (5.21
)
($5.19
)
Shares
104.8
104.3
104.6
104.2
Dividends declared per common share
$0.00
$0.01
$0.03
$0.04
Spirit AeroSystems Holdings, Inc. Condensed
Consolidated Balance Sheets (unaudited) December
31,2022 December 31,2021 ($ in millions)
Assets Cash and cash equivalents
$658.6
$1,478.6
Restricted cash
0.2
0.3
Accounts receivable, net
489.5
461.6
Contract assets, short-term
501.0
443.2
Inventory, net
1,470.7
1,382.6
Other current assets
38.3
39.7
Total current assets
3,158.3
3,806.0
Property, plant and equipment, net
2,205.9
2,385.5
Intangible assets, net
211.4
212.3
Goodwill
630.5
623.7
Right of use assets
94.3
85.3
Contract assets, long-term
1.2
-
Pension assets
196.9
532.5
Restricted plan assets
71.1
-
Deferred income taxes
4.8
0.4
Other assets
91.8
91.6
Total assets
$6,666.2
$7,737.3
Liabilities Accounts payable
$919.8
$720.3
Accrued expenses
411.7
376.1
Profit sharing
40.5
63.7
Current portion of long-term debt
53.7
49.5
Operating lease liabilities, short-term
8.3
8.2
Advance payments, short-term
24.9
137.8
Contract liabilities, short-term
111.1
97.9
Forward loss provision, short-term
305.9
244.6
Deferred revenue and other deferred credits, short-term
21.7
72.7
Other current liabilities
54.9
105.2
Total current liabilities
1,952.5
1,876.0
Long-term debt
3,814.9
3,742.7
Operating lease liabilities, long-term
85.4
78.8
Advance payments, long-term
199.9
201.3
Pension/OPEB obligation
25.2
74.8
Contract liabilities, long-term
245.3
289.1
Forward loss provision, long-term
369.2
521.6
Deferred revenue and other deferred credits, long-term
49.0
32.1
Deferred grant income liability - non-current
25.7
26.4
Deferred income taxes
1.3
21.8
Other non-current liabilities
141.6
423.9
Stockholders' Equity Common stock, Class A par value $0.01,
200,000,000 shares authorized, 105,252,421 and 105,037,845 shares
issued and outstanding, respectively
1.1
1.1
Additional paid-in capital
1,179.5
1,146.2
Accumulated other comprehensive loss
(203.9
)
(23.7
)
Retained earnings
1,232.5
1,781.4
Treasury stock, at cost (41,523,470 shares each period)
(2,456.7
)
(2,456.7
)
Total stockholders’ equity
(247.5
)
448.3
Noncontrolling interest
3.7
0.5
Total equity
(243.8
)
448.8
Total liabilities and equity
$6,666.2
$7,737.3
Spirit AeroSystems Holdings,
Inc.
Condensed Consolidated
Statements of Cash Flows
(unaudited)
For the
Twelve Months Ended
December 31, 2022
December 31, 2021
($ in millions)
Operating activities Net loss
($546.2
)
($540.8
)
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities Depreciation and amortization expense
337.1
327.6
Amortization of deferred financing fees
11.9
15.1
Accretion of customer supply agreement
2.2
3.5
Employee stock compensation expense
36.6
25.8
Loss on extinguishment of debt
2.6
-
Loss (gain) from derivative instruments
17.1
(0.1
)
Gain from foreign currency transactions
(18.9
)
(4.4
)
Loss on disposition of assets
1.1
4.1
Deferred taxes
8.5
(4.5
)
Pension and other post-retirement plans income
37.1
(109.1
)
Grant liability amortization
(1.5
)
(1.5
)
Equity in net loss of affiliates
1.6
2.8
Forward loss provision
(89.7
)
(10.4
)
Gain on settlement of financial instrument
(21.9
)
-
Changes in assets and liabilities Accounts receivable, net
(37.1
)
51.5
Contract assets
(63.9
)
(70.9
)
Inventory, net
(118.2
)
30.9
Accounts payable and accrued liabilities
220.7
160.2
Profit sharing/deferred compensation
(22.5
)
6.2
Advance payments
(133.2
)
2.7
Income taxes receivable/payable
9.5
302.4
Contract liabilities
(30.4
)
(82.4
)
Pension plans employer contributions
19.5
(173.8
)
Other
(14.3
)
1.9
Net cash used in operating activities
($394.6
)
($63.2
)
Investing activities Purchase of property, plant and
equipment
(121.6
)
(150.6
)
Acquisition, net of cash acquired
(31.3
)
(21.1
)
Other
(2.6
)
7.9
Net cash used in investing activities
($155.5
)
($163.8
)
Financing activities Proceeds from issuance of debt
-
600.0
Proceeds from issuance of long-term bonds
900.0
-
Payment of principal - settlement of financial instrument
(289.5
)
-
Customer financing
-
(10.0
)
Principal payments of debt
(47.6
)
(42.1
)
Payments on term loan
(6.0
)
(401.5
)
Payments on bonds
(779.2
)
(300.0
)
Taxes paid related to net share settlement awards
(7.2
)
(5.2
)
Proceeds from issuance of ESPP stock
3.9
3.0
Debt issuance and financing costs
(32.3
)
(3.4
)
Dividends paid
(4.2
)
(4.3
)
Proceeds from noncontrolling interest
3.7
-
Payment of debt extinguishment costs
(2.6
)
-
Net cash used in financing activities
($261.0
)
($163.5
)
Effect of exchange rate changes on cash and cash equivalents
(8.9
)
(4.2
)
Net decrease in cash, cash equivalents and restricted cash for
the period
($820.0
)
($394.7
)
Cash, cash equivalents, and restricted cash, beginning of the
period
1,498.4
1,893.1
Cash, cash equivalents, and restricted cash, end of the period
$678.4
$1,498.4
Reconciliation of Cash and Cash
Equivalents and Restricted Cash: December 31,2022
December 31,2021 Cash and cash equivalents, beginning of the
period
$1,478.6
$1,873.3
Restricted cash, short-term, beginning of the period
0.3
0.3
Restricted cash, long-term, beginning of the period
19.5
19.5
Cash, cash equivalents, and restricted cash, beginning of the
period
$1,498.4
$1,893.1
Cash and cash equivalents, end of the period
$658.6
$1,478.6
Restricted cash, short-term, end of the period
0.2
0.3
Restricted cash, long-term, end of the period
19.6
19.5
Cash, cash equivalents, and restricted cash, end of the period
$678.4
$1,498.4
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 (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
(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
Twelve months ended
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
GAAP Diluted Loss Per Share
($2.32
)
($1.15
)
($5.21
)
($5.19
)
Costs Related to Acquisitions
-
-
-
0.01
a
Restructuring Costs
-
-
-
0.05
b
Deferred Tax Asset Valuation Allowance
0.62
c
0.24
c
1.63
c
1.96
c
Curtailment Gain
-
-
d
-
(0.35
)
d
Pension Spinoff Settlement Loss
-
0.07
e
-
0.06
e
Investment Agreement Settlement Gain
-
-
(0.14
)
f
-
Losses related to Russia Sanctions
-
-
0.19
g
-
Pension Termination Charges
0.24
h
-
0.72
h
-
Adjusted Diluted Loss Per Share
($1.46
)
($0.84
)
($2.81
)
($3.46
)
Diluted Shares (in millions)
104.8
104.3
104.6
104.2
a
Represents the transaction costs
associated with acquisitions (included in SG&A)
b
Represents the restructuring
expenses for cost-alignment and headcount reductions (included in
Restructuring costs)
c
Represents the deferred tax asset
valuation allowance (included in Income tax benefit)
d
Represents the curtailment gain
resulting from the closure of the defined benefit plans acquired as
part of the Bombardier Acquisition (included in Other expense)
e
Represents the pension settlement
loss resulting from pension plan spinoff (included in Other
expense)
f
Represents the gain resulting
from the settlement of the repayable investment agreement with the
U.K. Department of Business, Energy and Industrial Strategy
(included in Other expense)
g
Represents the impairment charges
and reserve adjustments related to the suspension of all sales and
service activities relating to sanctioned Russian business
activities. These losses are directly attributable to the
sanctions, incremental to similar costs (or income) incurred for
reasons other than the sanctions and are not expected to recur, and
therefore, are not indicative of Spirit's ongoing operational
performance (primarily included in Cost of Sales)
h
Represents the non-cash charges
related to the termination of the U.S. Pension Value Plan A
(included in Other expense)
Free Cash Flow
($ in millions)
Three months ended
Twelve months ended
December 31, 2022
December 30, 2021
December 31, 2022
December 31, 2021
Cash Used in Operations
($27
)
($77
)
($395
)
($63
)
Capital Expenditures
(39
)
(61
)
(122
)
(151
)
Free Cash Flow
($66
)
($137
)
($516
)
($214
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230207005096/en/
Investor Relations: Ryan Avey or Aaron Hunt, (316) 523-7040
Media: Chuck Cadena, (316) 526-3910 or Haley Beattie, +44 2895
680850 On the web: http://www.spiritaero.com
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