|
Delaware
|
|
001-33160
|
|
20-2436320
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
SPIRIT AEROSYSTEMS HOLDINGS, INC.
|
|
|
Date: February 1, 2019
|
/s/ Jose Garcia
|
|
Jose Garcia
|
|
Senior Vice President and Chief Financial Officer
|
•
|
Revenue of $1.8 billion, up 7% y/y
|
•
|
Earnings per share (EPS) of $1.68; Adjusted EPS* of $1.85, up 40% y/y
|
•
|
Segment operating margin of 16.3%, compared to 14.9% in Q3 2018 and 16.4% in Q4 2017
|
•
|
Revenue of $7.2 billion, up 3% y/y
|
•
|
EPS of $5.65; Adjusted EPS* of $6.26, up 17% y/y
|
•
|
Cash from operations of $770 million; Adjusted free cash flow* of $565 million
|
•
|
Repurchased 9.3 million shares for $800 million
|
•
|
Revenue of $8.0 - $8.2 billion
|
•
|
Given the uncertainty of timing of closing the Asco acquisition, we are unable to provide GAAP EPS and cash from operations guidance; both will be provided upon closure of the transaction
|
•
|
Adjusted EPS* of $7.35 - $7.60, excluding the impact of the potential Asco acquisition
|
•
|
Adjusted cash from operations* of $875 - $975 million; Adjusted free cash flow* of $625 - $675 million, each excluding the impact of the potential Asco acquisition
|
|
|
|
Table 3. Financial Outlook Issued February 1, 2019
|
2019 Guidance
|
|
|
|
|
Revenues
|
$8.0 - $8.2 billion
|
|
Adjusted Earnings Per Share (Fully Diluted)*^
|
$7.35 - $7.60
|
|
Effective Tax Rate
|
~22%
|
|
Adjusted Cash from Operations*^
|
$875 - $975 million
|
|
Adjusted Free Cash Flow*^
|
$625 - $675 million
|
|
^ Adjusted figures exclude the impact of the Asco acquisition, including transaction costs and gain/loss on derivative instrument (foreign currency forward contract based on acquisition purchase price).
|
||
Table 4. Segment Reporting (unaudited)
|
|
|
|
|
||||||||||||||||||
|
|
Fourth Quarter
|
|
Twelve Months
|
||||||||||||||||||
($ in millions)
|
|
2018
|
|
2017
(1)
|
|
Change
|
|
2018
|
|
2017
(1)
|
|
Change
|
||||||||||
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems
|
|
|
$1,017.4
|
|
|
|
$918.7
|
|
|
10.7
|
%
|
|
|
$4,000.8
|
|
|
|
$3,730.8
|
|
|
7.2
|
%
|
Propulsion Systems
|
|
442.9
|
|
|
415.5
|
|
|
6.6
|
%
|
|
1,702.5
|
|
|
1,666.2
|
|
|
2.2
|
%
|
||||
Wing Systems
|
|
374.4
|
|
|
377.1
|
|
|
(0.7
|
%)
|
|
1,513.0
|
|
|
1,578.8
|
|
|
(4.2
|
%)
|
||||
All Other
|
|
0.6
|
|
|
3.3
|
|
|
(81.8
|
%)
|
|
5.7
|
|
|
7.2
|
|
|
(20.8
|
%)
|
||||
Total Segment Revenues
|
|
|
$1,835.3
|
|
|
|
$1,714.6
|
|
|
7.0
|
%
|
|
|
$7,222.0
|
|
|
|
$6,983.0
|
|
|
3.4
|
%
|
Segment Earnings from Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems
|
|
|
$158.4
|
|
|
|
$124.6
|
|
|
27.1
|
%
|
|
|
$576.1
|
|
|
|
$329.6
|
|
|
74.8
|
%
|
Propulsion Systems
|
|
79.6
|
|
|
84.3
|
|
|
(5.6
|
%)
|
|
283.5
|
|
|
267.7
|
|
|
5.9
|
%
|
||||
Wing Systems
|
|
60.3
|
|
|
70.4
|
|
|
(14.3
|
%)
|
|
226.4
|
|
|
205.1
|
|
|
10.4
|
%
|
||||
All Other
|
|
—
|
|
|
2.5
|
|
|
**
|
|
|
0.3
|
|
|
2.0
|
|
|
(85.0
|
%)
|
||||
Total Segment Operating Earnings
|
|
|
$298.3
|
|
|
|
$281.8
|
|
|
5.9
|
%
|
|
|
$1,086.3
|
|
|
|
$804.4
|
|
|
35.0
|
%
|
Unallocated Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SG&A
|
|
|
($55.9
|
)
|
|
|
($54.8
|
)
|
|
(2.0
|
%)
|
|
|
($210.4
|
)
|
|
|
($204.7
|
)
|
|
(2.8
|
%)
|
Impact of Severe Weather Event
|
|
10.0
|
|
|
—
|
|
|
**
|
|
|
10.0
|
|
|
(19.9
|
)
|
|
**
|
|
||||
Research & Development
|
|
(11.2
|
)
|
|
(10.0
|
)
|
|
(12.0
|
%)
|
|
(42.5
|
)
|
|
(31.2
|
)
|
|
(36.2
|
%)
|
||||
Cost of Sales
|
|
2.4
|
|
|
0.3
|
|
|
**
|
|
|
(0.2
|
)
|
|
(16.7
|
)
|
|
98.8
|
%
|
||||
Total Earnings from Operations
|
|
|
$243.6
|
|
|
|
$217.3
|
|
|
12.1
|
%
|
|
|
$843.2
|
|
|
|
$531.9
|
|
|
58.5
|
%
|
Segment Operating Earnings as % of Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems
|
|
15.6
|
%
|
|
13.6
|
%
|
|
200 BPS
|
|
|
14.4
|
%
|
|
8.8
|
%
|
|
560 BPS
|
|
||||
Propulsion Systems
|
|
18.0
|
%
|
|
20.3
|
%
|
|
(230) BPS
|
|
|
16.7
|
%
|
|
16.1
|
%
|
|
60 BPS
|
|
||||
Wing Systems
|
|
16.1
|
%
|
|
18.7
|
%
|
|
(260) BPS
|
|
|
15.0
|
%
|
|
13.0
|
%
|
|
200 BPS
|
|
||||
All Other
|
|
**
|
|
|
**
|
|
|
**
|
|
|
**
|
|
|
**
|
|
|
**
|
|
||||
Total Segment Operating Earnings as % of Revenues
|
|
16.3
|
%
|
|
16.4
|
%
|
|
(10) BPS
|
|
|
15.0
|
%
|
|
11.5
|
%
|
|
350 BPS
|
|
||||
Total Operating Earnings as % of Revenues
|
|
13.3
|
%
|
|
12.7
|
%
|
|
60 BPS
|
|
|
11.7
|
%
|
|
7.6
|
%
|
|
410 BPS
|
|
(1)
|
Adjusted for ASU 2017-07 (Pension) as follows:
|
Fuselage Systems
|
|
|
|
$
|
(4.6
|
)
|
|
|
|
|
|
$
|
(18.1
|
)
|
|
|
Propulsion Systems
|
|
|
|
(1.9
|
)
|
|
|
|
|
|
(7.4
|
)
|
|
|
||
Wing Systems
|
|
|
|
(1.8
|
)
|
|
|
|
|
|
(7.3
|
)
|
|
|
||
All Other
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
||
Total Segment Impact
|
|
|
|
$
|
(8.3
|
)
|
|
|
|
|
|
$
|
(32.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SG&A
|
|
|
|
(1.3
|
)
|
|
|
|
|
|
(4.4
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Operating Earnings Impact
|
|
|
|
$
|
(9.6
|
)
|
|
|
|
|
|
$
|
(37.2
|
)
|
|
|
|
|
4th Quarter
|
|
Twelve Months
|
|||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||
B737
|
|
148
|
|
|
133
|
|
|
605
|
|
|
532
|
|
|
B747
|
|
2
|
|
|
2
|
|
|
6
|
|
|
6
|
|
|
B767
|
|
7
|
|
|
7
|
|
|
30
|
|
|
28
|
|
|
B777
|
|
12
|
|
|
15
|
|
|
44
|
|
|
70
|
|
|
B787
|
|
35
|
|
|
31
|
|
|
143
|
|
|
136
|
|
|
Total Boeing
|
|
204
|
|
|
188
|
|
|
828
|
|
|
772
|
|
|
|
|
|
|
|
|
|
|
|
|||||
A220
(1)
|
|
6
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
A320 Family
|
|
169
|
|
|
156
|
|
|
657
|
|
|
608
|
|
|
A330
|
|
16
|
|
|
20
|
|
|
62
|
|
|
80
|
|
|
A350
|
|
27
|
|
|
25
|
|
|
98
|
|
|
90
|
|
|
A380
|
|
2
|
|
|
3
|
|
|
6
|
|
|
13
|
|
|
Total Airbus
|
|
220
|
|
|
204
|
|
|
835
|
|
|
791
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Business/Regional Jet
(1)
|
|
15
|
|
|
21
|
|
|
71
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
439
|
|
|
413
|
|
|
1,734
|
|
|
1,651
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) Airbus acquired majority ownership in the C-Series program (subsequently renamed to the A220 program) in July 2018; all C-Series deliveries prior to Q3 2018 are included in Business/Regional Jet and all subsequent A220 deliveries are included in A220.
|
|||||||||||||
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
|
($ in millions)
|
||||||
Assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
|
$773.6
|
|
|
|
$423.3
|
|
Restricted cash
|
|
0.3
|
|
|
2.2
|
|
||
Accounts receivable, net
|
|
545.1
|
|
|
722.2
|
|
||
Contract assets, short-term
|
|
471.3
|
|
|
—
|
|
||
Inventory, net
|
|
1,012.6
|
|
|
1,449.9
|
|
||
Other current assets
|
|
51.8
|
|
|
53.5
|
|
||
Total current assets
|
|
2,854.7
|
|
|
2,651.1
|
|
||
Property, plant and equipment, net
|
|
2,167.6
|
|
|
2,105.3
|
|
||
Contract assets, long-term
|
|
52.2
|
|
|
—
|
|
||
Pension assets
|
|
326.7
|
|
|
347.1
|
|
||
Other assets
|
|
284.7
|
|
|
164.3
|
|
||
Total assets
|
|
|
$5,685.9
|
|
|
|
$5,267.8
|
|
Liabilities
|
|
|
|
|
||||
Accounts payable
|
|
|
$902.6
|
|
|
|
$693.1
|
|
Accrued expenses
|
|
313.1
|
|
|
269.3
|
|
||
Profit sharing
|
|
68.3
|
|
|
109.5
|
|
||
Current portion of long-term debt
|
|
31.4
|
|
|
31.1
|
|
||
Advance payments, short-term
|
|
2.2
|
|
|
100.0
|
|
||
Contract liabilities, short-term
|
|
201.0
|
|
|
—
|
|
||
Forward loss provision, short-term
|
|
13.3
|
|
|
—
|
|
||
Deferred revenue and other deferred credits, short-term
|
|
18.8
|
|
|
64.6
|
|
||
Deferred grant income liability - current
|
|
16.0
|
|
|
21.6
|
|
||
Other current liabilities
|
|
58.2
|
|
|
331.8
|
|
||
Total current liabilities
|
|
1,624.9
|
|
|
1,621.0
|
|
||
Long-term debt
|
|
1,864.0
|
|
|
1,119.9
|
|
||
Advance payments, long-term
|
|
231.9
|
|
|
231.7
|
|
||
Pension/OPEB obligation
|
|
34.6
|
|
|
40.8
|
|
||
Contract liabilities, long-term
|
|
326.7
|
|
|
—
|
|
||
Forward loss provision, long-term
|
|
169.7
|
|
|
—
|
|
||
Deferred revenue and other deferred credits
|
|
32.4
|
|
|
161.0
|
|
||
Deferred grant income liability - non-current
|
|
28.0
|
|
|
39.3
|
|
||
Other liabilities
|
|
135.6
|
|
|
252.6
|
|
||
Stockholders' Equity
|
|
|
|
|
||||
Preferred stock, par value $0.01, 10,000,000 shares authorized, no shares issued
|
|
—
|
|
|
—
|
|
||
Common stock, Class A par value $0.01, 200,000,000 shares authorized, 105,461,817 and 114,447,605 shares issued and outstanding, respectively
|
|
1.1
|
|
|
1.1
|
|
||
Additional paid-in capital
|
|
1,100.9
|
|
|
1,086.9
|
|
||
Accumulated other comprehensive loss
|
|
(196.6
|
)
|
|
(128.5
|
)
|
||
Retained earnings
|
|
2,713.2
|
|
|
2,422.4
|
|
||
Treasury stock, at cost (40,719,438 and 31,467,709 shares, respectively)
|
|
(2,381.0
|
)
|
|
(1,580.9
|
)
|
||
Total stockholders’ equity
|
|
1,237.6
|
|
|
1,801.0
|
|
||
Noncontrolling interest
|
|
0.5
|
|
|
0.5
|
|
||
Total equity
|
|
1,238.1
|
|
|
1,801.5
|
|
||
Total liabilities and equity
|
|
|
$5,685.9
|
|
|
|
$5,267.8
|
|
|
|
For the Twelve Months Ended
|
||||||
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
|
($ in millions)
|
||||||
Operating activities
|
|
|
|
|
|
|
||
Net income
|
|
|
$617.0
|
|
|
|
$354.9
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
||||
Depreciation expense
|
|
230.6
|
|
|
214.1
|
|
||
Amortization expense
|
|
0.4
|
|
|
0.2
|
|
||
Amortization of deferred financing fees
|
|
17.9
|
|
|
3.4
|
|
||
Accretion of customer supply agreement
|
|
4.1
|
|
|
2.6
|
|
||
Employee stock compensation expense
|
|
27.4
|
|
|
22.1
|
|
||
Gain from derivative instruments
|
|
(7.2
|
)
|
|
(0.9
|
)
|
||
Gain from foreign currency transactions
|
|
(0.3
|
)
|
|
(8.1
|
)
|
||
Loss on impairment and disposition of assets
|
|
1.8
|
|
|
9.5
|
|
||
Deferred taxes
|
|
(38.0
|
)
|
|
52.4
|
|
||
Pension and other post-retirement benefits, net
|
|
(33.4
|
)
|
|
(34.7
|
)
|
||
Grant liability amortization
|
|
(21.6
|
)
|
|
(19.0
|
)
|
||
Equity in net income of affiliate
|
|
(0.6
|
)
|
|
(0.3
|
)
|
||
Forward loss provision
|
|
(170.9
|
)
|
|
—
|
|
||
Changes in assets and liabilities
|
|
|
|
|
||||
Accounts receivable, net
|
|
(47.9
|
)
|
|
(48.5
|
)
|
||
Contract assets
|
|
(8.5
|
)
|
|
—
|
|
||
Inventory, net
|
|
(61.3
|
)
|
|
319.6
|
|
||
Accounts payable and accrued liabilities
|
|
244.5
|
|
|
160.3
|
|
||
Profit sharing/deferred compensation
|
|
(40.9
|
)
|
|
7.6
|
|
||
Advance payments
|
|
(98.3
|
)
|
|
(209.6
|
)
|
||
Income taxes receivable/payable
|
|
(28.4
|
)
|
|
25.7
|
|
||
Contract liabilities
|
|
208.3
|
|
|
—
|
|
||
Deferred revenue and other deferred credits
|
|
16.9
|
|
|
(231.2
|
)
|
||
Other
|
|
(41.7
|
)
|
|
(46.4
|
)
|
||
Net cash provided by operating activities
|
|
|
$769.9
|
|
|
|
$573.7
|
|
Investing activities
|
|
|
|
|
||||
Purchase of property, plant and equipment
|
|
(271.2
|
)
|
|
(273.1
|
)
|
||
Other
|
|
3.4
|
|
|
0.3
|
|
||
Net cash used in investing activities
|
|
|
($267.8
|
)
|
|
|
($272.8
|
)
|
Financing activities
|
|
|
|
|
||||
Proceeds from issuance of bonds
|
|
1,300.0
|
|
|
—
|
|
||
Principal payments of debt
|
|
(6.7
|
)
|
|
(2.8
|
)
|
||
Payments on term loan
|
|
(256.3
|
)
|
|
(25.0
|
)
|
||
Payments on bonds
|
|
(300.0
|
)
|
|
—
|
|
||
Taxes paid related to net share settlement awards
|
|
(15.6
|
)
|
|
(14.2
|
)
|
||
Proceeds from issuance of ESPP stock
|
|
2.1
|
|
|
—
|
|
||
Debt issuance and financing costs
|
|
(23.2
|
)
|
|
(0.9
|
)
|
||
Proceeds from financing under the New Markets Tax Credit Program
|
|
—
|
|
|
7.6
|
|
||
Purchase of treasury stock
|
|
(805.8
|
)
|
|
(496.3
|
)
|
||
Dividends paid
|
|
(48.0
|
)
|
|
(47.1
|
)
|
||
Net cash used in financing activities
|
|
|
($153.5
|
)
|
|
|
($578.7
|
)
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
|
—
|
|
|
5.6
|
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
|
|
$348.6
|
|
|
|
($272.2
|
)
|
Cash, cash equivalents, and restricted cash, beginning of the period
|
|
445.5
|
|
|
717.7
|
|
||
Cash, cash equivalents, and restricted cash, end of the period
|
|
|
$794.1
|
|
|
|
$445.5
|
|
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents, beginning of the period
|
|
|
$423.3
|
|
|
|
$697.7
|
|
Restricted cash, short-term, beginning of the period
|
|
2.2
|
|
|
—
|
|
||
Restricted cash, long-term, beginning of the period
|
|
20.0
|
|
|
19.9
|
|
||
Cash, cash equivalents, and restricted cash, beginning of the period
|
|
|
$445.5
|
|
|
|
$717.6
|
|
|
|
|
|
|
||||
Cash and cash equivalents, end of the period
|
|
|
$773.6
|
|
|
|
$423.3
|
|
Restricted cash, short-term, end of the period
|
|
0.3
|
|
|
2.2
|
|
||
Restricted cash, long-term, end of the period
|
|
20.2
|
|
|
20.0
|
|
||
Cash, cash equivalents, and restricted cash, end of the period
|
|
|
$794.1
|
|
|
|
$445.5
|
|
|
4th Quarter
|
|
Twelve Months
|
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Cash from Operations
|
|
$203
|
|
|
|
($51
|
)
|
|
|
$770
|
|
|
|
$574
|
|
|
Capital Expenditures
|
(100
|
)
|
|
(134
|
)
|
|
(271
|
)
|
|
(273
|
)
|
|
||||
Free Cash Flow
|
|
$103
|
|
|
|
($185
|
)
|
|
|
$499
|
|
|
|
$301
|
|
|
Costs related to acquisition of Asco
|
42
|
|
a
|
—
|
|
|
66
|
|
b
|
—
|
|
|
||||
Cash returned under 787 interim pricing agreement
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Free Cash Flow
|
|
$145
|
|
|
|
$51
|
|
|
|
$565
|
|
|
|
$537
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
a
Represents the three months ended Q4 2018 Asco acquisition impact of $42 million comprised of:
|
|
|
||||||||||||||
- Cash paid on foreign currency forward contract of $27 million
|
|
|
||||||||||||||
- Transaction payments of $2 million
|
|
|
||||||||||||||
- Interest paid on proportion of new debt related to Asco of $13 million
|
|
|
||||||||||||||
|
|
|
||||||||||||||
b
Represents the twelve months ended Q4 2018 Asco acquisition impact of $66 million comprised of:
|
|
|
||||||||||||||
- Cash paid on foreign currency forward contract of $41 million
|
|
|
||||||||||||||
- Transaction payments of $10 million
|
|
|
||||||||||||||
- Interest paid on proportion of new debt related to Asco of $15 million
|
|
|