Fourth Quarter 2017 Results
- Revenue of $1.7 billion, up 9%
y/y
- Earnings per share (EPS) of $1.07; Adjusted EPS* of $1.32, up 48% y/y
- Cash from operations of $(51)
million; Free cash flow* of $(185)
million, which takes into account the planned $236 million of 787 interim pricing repaid to
Boeing
- Adjusted free cash flow* of $51
million, up 13% y/y
- Repurchased 1.2 million shares for $100
million at an average share price of $83.78
Full-Year 2017 Results
- Revenue of $7.0 billion, up 3%
y/y
- EPS of $3.01; Adjusted EPS* of
$5.35, up 17% y/y
- Cash from operations of $574
million; Free cash flow* of $301
million, which takes into account the planned $236 million of 787 interim pricing repaid to
Boeing
- Adjusted free cash flow* of $537
million, up 28% y/y
- Repurchased 7.5 million shares for $502
million at an average share price of $66.67
Issues Full-Year 2018 Guidance
- Revenue of $7.1 - $7.2 billion
- EPS of $6.25 - $6.50
- Cash from operations of $850 -
$950 million; Free cash flow* of
$550 - $600
million
- Increase in high-return capital expenditures and R&D with
savings from tax reform
- Authorization for share repurchase program increased to
$1 billion
WICHITA, Kan., Feb. 2, 2018 /CNW/ -- Spirit AeroSystems
Holdings, Inc. [NYSE: SPR] reported fourth quarter and full-year
2017 financial results driven by solid performance.
Table 1.
Summary Financial Results (unaudited)
|
|
|
|
4th
Quarter
|
|
Twelve
Months
|
|
($ in millions,
except per share data)
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
|
|
|
|
|
|
|
Revenues
|
$1,715
|
$1,570
|
9%
|
$6,983
|
$6,793
|
3%
|
Operating
Income
|
$227
|
$161
|
41%
|
$569
|
$725
|
(22%)
|
Operating Income
as a % of Revenues
|
13.2%
|
10.2%
|
300
BPS
|
8.1%
|
10.7%
|
(260)
BPS
|
Net
Income
|
$123
|
$108
|
13%
|
$355
|
$470
|
(24%)
|
Net Income as a %
of Revenues
|
7.2%
|
6.9%
|
30
BPS
|
5.1%
|
6.9%
|
(180)
BPS
|
Earnings Per Share
(Fully Diluted)
|
$1.07
|
$0.89
|
20%
|
$3.01
|
$3.70
|
(19%)
|
Adjusted Earnings
Per Share (Fully Diluted)*
|
$1.32
|
$0.89
|
48%
|
$5.35
|
$4.56
|
17%
|
Fully Diluted
Weighted Avg Share Count
|
114.9
|
121.1
|
|
117.9
|
127.0
|
|
"2017 was a strong year for Spirit as highlighted by strong
deliveries, the completion of the Boeing agreement, the launch of
our growth initiatives in fabrication and defense, and the
continued emphasis on total capital return to shareholders," Spirit
President and CEO Tom Gentile
said.
Revenue
Spirit's fourth quarter 2017 revenue was $1.7 billion, up nine percent from the same
period of 2016, primarily driven by higher recurring and
non-recurring activity on the Boeing 737 program, higher production
deliveries on the 787 program and increased defense-related
activity, partially offset by lower production deliveries on the
Boeing 777 program. Revenue for the full year increased three
percent to $7.0 billion, primarily
due to higher recurring and non-recurring activity on the Boeing
737 program, higher production deliveries on the Airbus A350 XWB
and A320 programs and increased defense-related activity, partially
offset by lower production deliveries on the Boeing 777 program and
decreased Global Customer Support and Services (GCS&S)
activity. (Table 1)
Spirit's backlog at the end of the fourth quarter of 2017 was
approximately $47 billion, with work
packages on all commercial platforms in the Boeing and Airbus
backlog.
Earnings
Operating income for the fourth quarter of 2017 was $227 million, up 41 percent compared to
$161 million in the same period of
2016, primarily due to higher non-recurring activity on the Boeing
737 program and favorable changes in estimates on the Boeing 787
program, partially offset by unfavorable changes in estimates on
the Boeing 737 program. Operating income for the full year was
$569 million, down compared to
$725 million in 2016, with the
decrease primarily due to the impact from the MOU with Boeing
entered into during the second quarter of 2017. Fourth quarter EPS
was $1.07, up compared to
$0.89 in the same period of 2016.
Fourth quarter adjusted EPS* was $1.32, up 48 percent compared to $0.89 in the same period of 2016. Full-year
EPS was $3.01, down compared to
$3.70 in 2016. Full-year adjusted
EPS* was $5.35 in 2017, up 17 percent
compared to $4.56 in 2016. (Table
1)
Cash
Cash from operations in the fourth quarter of 2017 was
$(51) million, down compared to
$142 million in the same quarter last
year, primarily due to the planned return of the payment received
on the 787 interim pricing agreement of $236
million to Boeing. Free cash flow* in the fourth quarter of
2017 was $(185) million, down
compared to free cash flow* of $45
million in the same quarter last year. Adjusted free cash
flow* excluding the return of the 787 interim pricing payment was
$51 million, an increase of 13
percent compared to $45 million in
the same period of 2016. Full-year cash from operations was
$574 million, down compared to
$717 million in 2016. Full-year free
cash flow* was $301 million, down
compared to $463 million in 2016.
Full-year adjusted free cash flow* to exclude the repayment and
preceding receipt of the 787 interim payment was $537 million, an increase of 28 percent compared
to $420 million in 2016. (Table
2)
Cash balance at the end of the year was $423 million. The company's $650 million revolving credit facility remained
undrawn at the end of the year.
During the fourth quarter, Spirit repurchased 1.2 million shares
for $100 million. During the year,
Spirit repurchased 7.5 million shares for $502 million. "The Board has authorized an
increase in our share repurchase program of approximately
$500 million, resulting in a total
program authorization of up to $1
billion," Gentile said.
Table 2.
Cash Flow and Liquidity (unaudited)
|
|
4th
Quarter
|
|
Twelve
Months
|
|
($ in
millions)
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
|
|
|
|
|
|
|
Cash from
Operations
|
($51)
|
$142
|
**
|
$574
|
$717
|
(20%)
|
Purchases of
Property, Plant & Equipment
|
($134)
|
($97)
|
38%
|
($273)
|
($254)
|
8%
|
Free Cash
Flow*
|
($185)
|
$45
|
**
|
$301
|
$463
|
(35%)
|
Adjusted Free Cash
Flow*
|
$51
|
$45
|
13%
|
$537
|
$420
|
28%
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
Liquidity
|
|
|
|
2017
|
2016
|
|
Cash
|
|
|
|
$423
|
$698
|
|
Total
Debt
|
|
|
|
$1,151
|
$1,087
|
|
|
** Represents an amount
equal to or in excess of 100% or not meaningful.
|
Financial Outlook
"In 2018, our focus will be on operational execution of planned
rate increases, achieving our growth initiatives and meeting our
commitments on margin and productivity," Gentile said. "We
intend to reinvest substantially all of the savings from tax reform
into high-return capital expenditures and research and development
to support our growth initiatives. In addition, we are also
increasing investment in workforce development and accelerating
productivity initiatives. All of these investments will deliver
high rates of return."
Table 3.
Financial Outlook Issued February 2, 2018
|
2018
Guidance
|
|
|
Revenues
|
$7.1 - $7.2
billion
|
|
|
Earnings Per Share
(Fully Diluted)
|
$6.25 -
$6.50
|
|
|
Effective Tax
Rate
|
21% -
22%
|
|
|
Cash from
Operations
|
$850 - $950
million
|
|
|
Free Cash
Flow*
|
$550 - $600
million
|
|
|
Risks applicable to our financial guidance are described more
fully in the Cautionary Statement Regarding Forward-Looking
Statements in this release.
Segment Results
Fuselage Systems
Fuselage Systems segment revenue in the fourth quarter of 2017
increased by 12.2 percent from the same period last year to
$918.7 million, primarily due to
higher production deliveries on the Boeing 737 program as well as
increased defense work and non-recurring activity on certain Boeing
programs, partially offset by lower production deliveries on the
Boeing 777 program. Operating margin for the fourth quarter of 2017
decreased to 14.1 percent, compared to 15.6 percent during the same
period of 2016, primarily due to unfavorable changes in estimates
recognized on the Boeing 737 program, partially offset by favorable
changes in estimates recognized on the Boeing 787 program. In the
fourth quarter of 2017, the segment recorded pretax $(21.7) million of unfavorable cumulative
catch-up adjustments and net favorable changes in estimates on
forward loss programs of $15.3
million.
Propulsion Systems
Propulsion Systems segment revenue in the fourth quarter of 2017
increased 2.8 percent from the same period last year to
$415.5 million, primarily driven by
higher production deliveries on the Boeing 737 program,
partially offset by lower production deliveries on the Boeing 777
program. Operating margin for the fourth quarter of 2017 increased
to 20.7 percent, compared to 18.6 percent during the same period of
2016, primarily driven by higher non-recurring activity on certain
Boeing programs. In the fourth quarter of 2017, the segment
recorded pretax $(6.3) million of
unfavorable cumulative catch-up adjustments and net favorable
changes in estimates on forward loss programs of $6.5 million.
Wing Systems
Wing Systems segment revenue in the fourth quarter of 2017
increased by 8.6 percent from the same period last year to
$377.1 million, primarily due to
higher production deliveries on the Boeing 737, 787, and A320
programs, partially offset by lower production deliveries on the
Boeing 777 program. Operating margin for the fourth quarter of 2017
increased to 19.1 percent, compared to 14.1 percent during the same
period of 2016 primarily driven by the favorable changes in
estimates recognized on the Boeing 787 program. In the fourth
quarter of 2017, the segment recorded pretax $8.6 million of favorable cumulative catch-up
adjustments and net favorable changes in estimates on forward loss
programs of $10.5 million.
Table 4.
Segment Reporting (unaudited)
|
|
|
|
4th
Quarter
|
Twelve
Months
|
($ in
millions)
|
2017
|
2016
|
Change
|
2017
|
2016
|
Change
|
|
|
|
|
|
|
|
Segment
Revenues
|
|
|
|
|
|
|
Fuselage
Systems
|
$918.7
|
$819.1
|
12.2%
|
$3,730.8
|
$3,498.8
|
6.6%
|
Propulsion Systems
|
415.5
|
404.0
|
2.8%
|
1,666.2
|
1,777.3
|
(6.3%)
|
Wing
Systems
|
377.1
|
347.2
|
8.6%
|
1,578.8
|
1,508.7
|
4.6%
|
All
Other
|
3.3
|
(0.3)
|
**
|
7.2
|
8.1
|
(11.1%)
|
Total Segment
Revenues
|
$1,714.6
|
$1,570.0
|
9.2%
|
$6,983.0
|
$6,792.9
|
2.8%
|
|
|
|
|
|
|
|
Segment Earnings
from Operations
|
|
|
|
|
|
|
Fuselage
Systems
|
$129.2
|
$127.7
|
1.2%
|
$347.7
|
$468.6
|
(25.8%)
|
Propulsion Systems
|
86.2
|
75.0
|
14.9%
|
275.1
|
325.9
|
(15.6%)
|
Wing
Systems
|
72.2
|
48.9
|
47.6%
|
212.4
|
223.6
|
(5.0%)
|
All
Other
|
2.5
|
(0.4)
|
**
|
2.0
|
1.6
|
25.0%
|
Total Segment
Operating Earnings
|
$290.1
|
$251.2
|
15.5%
|
$837.2
|
$1,019.7
|
(17.9%)
|
|
|
|
|
|
|
|
Unallocated
Expense
|
|
|
|
|
|
|
Corporate
SG&A
|
($53.5)
|
($55.9)
|
4.3%
|
($200.3)
|
($228.3)
|
12.3%
|
Impact of Severe
Weather Event
|
-
|
(12.1)
|
**
|
(19.9)
|
(12.1)
|
(64.5%)
|
Research &
Development
|
(10.0)
|
(7.9)
|
(26.6%)
|
(31.2)
|
(23.8)
|
(31.1%)
|
Cost of
Sales
|
0.3
|
(14.4)
|
**
|
(16.7)
|
(30.4)
|
45.1%
|
Total Earnings
from Operations
|
$226.9
|
$160.9
|
41.0%
|
$569.1
|
$725.1
|
(21.5%)
|
|
|
|
|
|
|
|
Segment Operating
Earnings as % of Revenues
|
|
|
|
|
|
|
Fuselage
Systems
|
14.1%
|
15.6%
|
(150)
BPS
|
9.3%
|
13.4%
|
(410)
BPS
|
Propulsion Systems
|
20.7%
|
18.6%
|
210
BPS
|
16.5%
|
18.3%
|
(180)
BPS
|
Wing
Systems
|
19.1%
|
14.1%
|
500
BPS
|
13.5%
|
14.8%
|
(130)
BPS
|
All
Other
|
**
|
**
|
|
**
|
**
|
|
Total Segment
Operating Earnings as % of Revenues
|
16.9%
|
16.0%
|
90
BPS
|
12.0%
|
15.0%
|
(300)
BPS
|
|
|
|
|
|
|
|
Total Operating
Earnings as % of Revenues
|
13.2%
|
10.2%
|
300
BPS
|
8.1%
|
10.7%
|
(260)
BPS
|
|
|
|
|
|
|
|
|
** Represents an amount
equal to or 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
may involve many risks and uncertainties. Forward-looking
statements reflect our current expectations or forecasts of future
events. 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," "objective," "outlook,"
"plan," "predict," "project," "should," "target," "will," "would,"
and other similar words, or phrases, or the negative thereof,
unless the context requires otherwise. These statements 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: 1) our ability to continue to grow our business
and execute our growth strategy, including the timing, execution,
and profitability of new and maturing programs; 2) our ability to
perform our obligations under our new and maturing commercial,
business aircraft, and military development programs, and the
related recurring production; 3) our ability to accurately estimate
and manage performance, cost, and revenue under our contracts,
including our ability to achieve certain cost reductions with
respect to the B787 program; 4) margin pressures and the potential
for additional forward losses on new and maturing programs; 5) our
ability to accommodate, and the cost of accommodating, announced
increases in the build rates of certain aircraft; 6) the effect on
aircraft demand and build rates of changing customer preferences
for business aircraft, including the effect of global economic
conditions on the business aircraft market and expanding conflicts
or political unrest in the Middle
East or Asia; 7) customer
cancellations or deferrals as a result of global economic
uncertainty or otherwise; 8) the effect of economic conditions in
the industries and markets in which we operate in the U.S. and
globally and any changes therein, including fluctuations in foreign
currency exchange rates; 9) the success and timely execution of key
milestones such as the receipt of necessary regulatory approvals
and customer adherence to their announced schedules; 10) our
ability to successfully negotiate, or re-negotiate, future pricing
under our supply agreements with Boeing and our other customers;
11) our ability to enter into profitable supply arrangements with
additional customers; 12) the ability of all parties to satisfy
their performance requirements under existing supply contracts with
our two major customers, Boeing and Airbus, and other customers,
and the risk of nonpayment by such customers; 13) any adverse
impact on Boeing's and Airbus' production of aircraft resulting
from cancellations, deferrals, or reduced orders by their customers
or from labor disputes, domestic or international hostilities, or
acts of terrorism; 14) any adverse impact on the demand for air
travel or our operations from the outbreak of diseases or epidemic
or pandemic outbreaks; 15) our ability to avoid or recover from
cyber-based or other security attacks, information technology
failures, or other disruptions; 16) returns on pension plan assets
and the impact of future discount rate changes on pension
obligations; 17) our ability to borrow additional funds or
refinance debt; 18) competition from commercial aerospace original
equipment manufacturers and other aerostructures suppliers; 19) the
effect of governmental laws, such as U.S. export control laws and
U.S. and foreign anti-bribery laws such as the Foreign Corrupt
Practices Act and the United Kingdom Bribery Act, and environmental
laws and agency regulations, both in the U.S. and abroad; 20) the
effect of changes in tax law, such as the effect of The Tax Cuts
and Jobs Act (the "TCJA") that was enacted on December 22, 2017, and changes to the
interpretations of or guidance related thereto, and the Company's
ability to accurately calculate and estimate the effect of such
changes; 21) any reduction in our credit ratings; 22) our
dependence on our suppliers, as well as the cost and availability
of raw materials and purchased components; 23) our ability to
recruit and retain a critical mass of highly-skilled employees and
our relationships with the unions representing many of our
employees; 24) spending by the U.S. and other governments on
defense; 25) the possibility that our cash flows and our credit
facility may not be adequate for our additional capital needs or
for payment of interest on, and principal of, our indebtedness; 26)
our exposure under our revolving credit facility to higher interest
payments should interest rates increase substantially; 27) the
effectiveness of any interest rate hedging programs; 28) the
effectiveness of our internal control over financial reporting; 29)
the outcome or impact of ongoing or future litigation, claims, and
regulatory actions; 30) exposure to potential product liability and
warranty claims; 31) our ability to effectively assess, manage and
integrate acquisitions that we pursue; 32) our ability to continue
selling certain receivables through our supplier financing program;
33) the risks of doing business internationally, including
fluctuations in foreign current exchange rates, impositions of
tariffs or embargoes, compliance with foreign laws, and domestic
and foreign government policies, among other things. 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. Additional information
concerning these and other factors can be found in our filings with
the Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
|
Spirit Shipset
Deliveries
|
|
(one shipset
equals one aircraft)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
Twelve
Months
|
|
|
2017
|
2016
|
|
2017
|
2016
|
B737
|
|
133
|
116
|
|
532
|
500
|
B747
|
|
2
|
1
|
|
6
|
8
|
B767
|
|
7
|
6
|
|
28
|
25
|
B777
|
|
15
|
19
|
|
70
|
96
|
B787
|
|
31
|
28
|
|
136
|
127
|
Total
Boeing
|
|
188
|
170
|
|
772
|
756
|
|
|
|
|
|
|
|
A320
Family(1)
|
|
156
|
147
|
|
608
|
574
|
A330/340
|
|
20
|
24
|
|
80
|
74
|
A350
|
|
25
|
19
|
|
90
|
69
|
A380
|
|
3
|
5
|
|
13
|
22
|
Total
Airbus
|
|
204
|
195
|
|
791
|
739
|
|
|
|
|
|
|
|
Business/Regional
Jets
|
|
21
|
29
|
|
88
|
88
|
|
|
|
|
|
|
|
Total
|
|
413
|
394
|
|
1,651
|
1,583
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
($ in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$1,714.6
|
|
$1,570.0
|
|
$6,983.0
|
|
$6,792.9
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
1,424.2
|
|
1,333.2
|
|
6,162.5
|
|
5,803.6
|
Selling, general and
administrative
|
53.5
|
|
55.9
|
|
200.3
|
|
228.3
|
Impact of severe
weather event
|
-
|
|
12.1
|
|
19.9
|
|
12.1
|
Research and
development
|
10.0
|
|
7.9
|
|
31.2
|
|
23.8
|
|
Total operating
costs and expenses
|
1,487.7
|
|
1,409.1
|
|
6,413.9
|
|
6,067.8
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
226.9
|
|
160.9
|
|
569.1
|
|
725.1
|
Interest expense and
financing fee amortization
|
(11.6)
|
|
(9.8)
|
|
(41.7)
|
|
(57.3)
|
Other income
(expense), net
|
2.6
|
|
1.4
|
|
7.2
|
|
(7.3)
|
|
Income before
income taxes and equity in net income of affiliate
|
217.9
|
|
152.5
|
|
534.6
|
|
660.5
|
Income tax
provision
|
(95.1)
|
|
(44.3)
|
|
(180.0)
|
|
(192.1)
|
|
Income before
equity in net income of affiliate
|
122.8
|
|
108.2
|
|
354.6
|
|
468.4
|
Equity in net income
of affiliate
|
-
|
|
-
|
|
0.3
|
|
1.3
|
|
Net
income
|
$122.8
|
|
$108.2
|
|
$354.9
|
|
$469.7
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
$1.08
|
|
$0.90
|
|
$3.04
|
|
$3.72
|
Shares
|
113.8
|
|
120.0
|
|
116.8
|
|
126.1
|
|
|
|
|
|
|
|
|
|
Diluted
|
$1.07
|
|
$0.89
|
|
$3.01
|
|
$3.70
|
Shares
|
114.9
|
|
121.1
|
|
117.9
|
|
127.0
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$0.10
|
|
$0.10
|
|
$0.40
|
|
$0.10
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
($ in
millions)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$423.3
|
|
$697.7
|
Restricted
cash
|
$2.2
|
|
-
|
Accounts receivable,
net
|
722.2
|
|
660.5
|
Inventory,
net
|
1,449.9
|
|
1,515.3
|
Other current
assets
|
53.5
|
|
36.9
|
Total current assets
|
2,651.1
|
|
2,910.4
|
Property, plant and
equipment, net
|
2,105.3
|
|
1,991.6
|
Pension
assets
|
347.1
|
|
282.3
|
Other
assets
|
164.3
|
|
220.9
|
Total assets
|
$5,267.8
|
|
$5,405.2
|
Liabilities
|
|
|
|
Accounts
payable
|
$693.1
|
|
$579.7
|
Accrued
expenses
|
269.3
|
|
216.2
|
Profit
sharing
|
109.5
|
|
101.4
|
Current portion of
long-term debt
|
31.1
|
|
26.7
|
Advance payments,
short-term
|
100.0
|
|
199.3
|
Deferred revenue and
other deferred credits, short-term
|
64.6
|
|
312.1
|
Deferred grant income
liability - current
|
21.6
|
|
14.4
|
Other current
liabilities
|
331.8
|
|
94.4
|
Total current liabilities
|
1,621.0
|
|
1,544.2
|
Long-term
debt
|
1,119.9
|
|
1,060.0
|
Advance payments,
long-term
|
231.7
|
|
342.0
|
Pension/OPEB
obligation
|
40.8
|
|
43.9
|
Deferred revenue and
other deferred credits
|
161.0
|
|
146.8
|
Deferred grant income
liability - non-current
|
39.3
|
|
63.4
|
Other
liabilities
|
252.6
|
|
276.1
|
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,
114,447,605 and 121,642,556 shares issued and outstanding,
respectively
|
1.1
|
|
1.2
|
Additional paid-in
capital
|
1,086.9
|
|
1,078.9
|
Accumulated other
comprehensive loss
|
(128.5)
|
|
(186.9)
|
Retained
earnings
|
2,422.4
|
|
2,113.9
|
Treasury stock, at
cost (31,467,709 and 23,936,092 shares, respectively)
|
(1,580.9)
|
|
(1,078.8)
|
Total stockholders' equity
|
1,801.0
|
|
1,928.3
|
Noncontrolling
interest
|
0.5
|
|
0.5
|
Total equity
|
1,801.5
|
|
1,928.8
|
Total liabilities and equity
|
$5,267.8
|
|
$5,405.2
|
Spirit AeroSystems
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
For the Twelve
Months Ended
|
|
December 31,
2017
|
|
December 31,
2016
|
|
($ in
millions)
|
Operating
activities
|
|
|
|
Net income
|
$354.9
|
|
$469.7
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
Depreciation
expense
|
214.1
|
|
208.6
|
Amortization
expense
|
0.2
|
|
0.2
|
Amortization of deferred
financing fees
|
3.4
|
|
19.3
|
Accretion of customer supply
agreement
|
2.6
|
|
4.9
|
Employee stock compensation
expense
|
22.1
|
|
42.5
|
Excess tax benefits from
share-based payment arrangements
|
-
|
|
0.1
|
Gain from interest rate
swaps
|
(0.9)
|
|
-
|
(Gain) loss from foreign
currency transactions
|
(8.1)
|
|
17.4
|
Loss on impairment and
disposition of assets
|
9.5
|
|
0.4
|
Deferred
taxes
|
52.4
|
|
0.9
|
Pension and other
post-retirement benefits, net
|
(34.7)
|
|
3.5
|
Grant liability
amortization
|
(19.0)
|
|
(11.9)
|
Equity in net income of
affiliate
|
(0.3)
|
|
(1.3)
|
Changes in assets and
liabilities
|
|
|
|
Accounts receivable,
net
|
(48.5)
|
|
(139.1)
|
Inventory, net
|
319.6
|
|
207.8
|
Accounts payable and accrued
liabilities
|
160.3
|
|
(34.3)
|
Profit sharing/deferred
compensation
|
7.6
|
|
40.5
|
Advance payments
|
(209.6)
|
|
(144.4)
|
Income taxes
receivable/payable
|
25.7
|
|
(3.3)
|
Deferred revenue and other
deferred credits
|
(231.2)
|
|
12.4
|
Other
|
(46.4)
|
|
23.0
|
Net
cash provided by operating activities
|
$573.7
|
|
$716.9
|
Investing
activities
|
|
|
|
Purchase of property, plant
and equipment
|
(273.1)
|
|
(254.0)
|
Proceeds from sale of
assets
|
0.4
|
|
0.6
|
Other
|
(0.1)
|
|
-
|
Net
cash used in investing activities
|
($272.8)
|
|
($253.4)
|
Financing
activities
|
|
|
|
Proceeds from issuance of
bonds
|
-
|
|
299.8
|
Principal payments of
debt
|
(2.8)
|
|
(36.4)
|
Payments on term
loan
|
(25.0)
|
|
-
|
Payments on bonds
|
-
|
|
(300.0)
|
Taxes paid related to net
share settlement awards
|
(14.2)
|
|
(15.2)
|
Excess tax benefit from
share-based payment arrangements
|
-
|
|
(0.1)
|
Debt issuance and financing
costs
|
(0.9)
|
|
(17.2)
|
Proceeds from financing
under New Markets Tax Credit Program
|
7.6
|
|
-
|
Purchase of treasury
stock
|
(496.3)
|
|
(649.6)
|
Change in restricted
cash
|
(2.2)
|
|
-
|
Dividends paid
|
(47.1)
|
|
-
|
Net
cash used in financing activities
|
($580.9)
|
|
($718.7)
|
Effect of exchange
rate changes on cash and cash equivalents
|
5.6
|
|
(4.4)
|
Net
decrease in cash and cash equivalents for the period
|
($274.4)
|
|
($259.6)
|
Cash and cash
equivalents, beginning of the period
|
697.7
|
|
957.3
|
Cash and cash
equivalents, end of the period
|
$423.3
|
|
$697.7
|
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,
(ii) free cash flow, and (iii) adjusted 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 Earnings Per Share. To provide additional
transparency, we have disclosed non-GAAP adjusted diluted 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, less capital expenditures for property, plant
and equipment. Management believes free cash flow provides
investors with an important perspective on the cash available for
shareholders, debt repayment, 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. Management uses free cash
flow as a measure to assess both business performance and overall
liquidity.
Adjusted Free Cash Flow. Management considers certain items that
arise from time to time to be outside the ordinary course of our
operations. Management believes that excluding these items provides
a better understanding of the underlying trends in the company's
operating performance and allows more accurate comparisons of the
company's operating results to historical performance. Accordingly,
Adjusted Free Cash Flow is defined as free cash flow less these
special items. The most comparable GAAP measure is cash provided by
operating activities.
The tables below provide reconciliations between the GAAP and
non-GAAP measures.
Adjusted
EPS
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
Twelve
Months
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Earnings
Per Share
|
$1.07
|
|
$0.89
|
|
$3.01
|
|
$3.70
|
Impact of Airbus
Agreement, CEO Retirement, and Debt Refinancing
1
|
-
|
|
-
|
|
-
|
|
0.86
|
Impact of MOU with
Boeing 2
|
-
|
|
-
|
|
2.10
|
|
-
|
Impact of the U.S.
Tax Reform 3
|
0.25
|
|
-
|
|
0.24
|
|
-
|
Adjusted Diluted
Earnings Per Share
|
$1.32
|
|
$0.89
|
|
$5.35
|
|
$4.56
|
|
|
|
|
|
|
|
|
Diluted Shares (in
millions)
|
114.9
|
|
121.1
|
|
117.9
|
|
127.0
|
|
|
1
|
Represents the net
earnings per share impact of the Airbus agreement of $0.68, CEO
retirement costs of $0.11 and debt refinancing charge of
$0.07.
|
|
|
2
|
Represents the net
earnings per share impact of the MOU with Boeing of
$2.10.
|
|
|
3
|
Represents the impact
of the Tax Cuts and Jobs Act of $28.7 million, which includes the
estimated impact of the transition tax of $44.9 million and a tax
benefit due to revaluation of deferred tax asset of $16.2 million,
which provides a net earnings per share impact of $0.24 for the
twelve months ended December 31, 2017.
|
Free Cash
Flow
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
4th
Quarter
|
|
Twelve
Months
|
|
Guidance
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2018
|
|
|
|
|
|
|
|
|
Cash from
Operations
|
($51)
|
$142
|
|
$574
|
$717
|
|
$850 -
$950
|
Capital
Expenditures
|
(134)
|
(97)
|
|
(273)
|
(254)
|
|
(300 -
350)
|
Free Cash
Flow
|
($185)
|
$45
|
|
$301
|
$463
|
|
$550 -
$600
|
Cash
(Received)/Returned under 787 Interim Pricing Agreement
|
236
|
-
|
|
236
|
(43)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash
Flow
|
$51
|
$45
|
|
$537
|
$420
|
|
|
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SOURCE Spirit AeroSystems Holdings, Inc.