Spirit AeroSystems Holdings, Inc. First Quarter 2009 Performance - PowerPoint PPT Presentation

Spirit AeroSystems Holdings, Inc. First Quarter 2009 Performance Review Jeff Turner President and Chief Executive Officer Rick Schmidt Chief Financial Officer April 30, 2009 1

First Quarter 2009 Summary � Solid operating performance across core programs � Returned to full-rate production following the IAM strike at Boeing � Responding to challenging markets � Began operations at Spirit Malaysia � Backlog of $29.6 billion Solid First Quarter Performance… Financially Strong 2

Fuselage Systems Segment Revenues & Operating Margins � Revenue and operating margins 25.0% 18.7% $700 began recovery following the IAM 18.1% Revenue (millions) 17.4% 20.0% 15.2% strike at Boeing $525 Margin 15.0% 11.3% 493 492 485 431 $350 10.0% Delivered 6,000 th 737 Fuselage unit � 288 $175 5.0% $0 0.0% � Shipped third 747-8 Freighter unit 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 � Progressing on Sikorsky CH-53K 777 Freighter forward section 41 � Assessing the suspension of the Cessna Columbus program 6,000 th 737 Fuselage Executing Well in Challenging Market 3

Propulsion Systems Segment Revenues & Operating Margins � Revenue and operating margins $500 25.0% began recovery following the IAM 17.0% Revenue (millions) $400 16.6% 20.0% 16.2% 16.2% strike at Boeing Margin 12.6% $300 15.0% 297 292 275 $200 10.0% � 227 747-8 engine pylon first flight test 169 $100 5.0% successful $0 0.0% � 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 Successfully completed Birdstrike, Pressure and First Pass Testing for Rolls-Royce BR725 Rolls-Royce BR725 Thrust Reverser � Pylon design and build for Mitsubishi Regional Jet on track � Solid Aftermarket growth & margins 747-8 Engine Pylon Executing Well in Challenging Market 4

Wing Systems Segment Revenues & Operating Margins � Revenue and operating margins $600 20.0% began recovery following the IAM $500 Revenue (millions) 12.4% 15.0% 12.4% strike at Boeing $400 10.9% Margin 8.8% $300 10.0% 4.1% 264 262 � $200 247 Completed first A320 under-wing 221 5.0% 182 $100 panel assembly at Malaysia facility $0 0.0% 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 � FX headwind in Q1 and for total year 747-8 Section 44 Aft Keel Beam � Focused on… – Business Jet market challenges and development programs – Boeing 747-8 Section 44 manufacturing Malaysia’s First Under-Wing Panel Spirit Malaysia Coming On-line… Focused on Development Programs 5

787 Update � Shipped airplane number six forward fuselage… Last flight test airplane � Airplane number seven progressing through systems installation process… Entry Into Service airplane � Planned restart of composite forward Airplane Number Six Cockpit fuselage production in mid-2009 � Overall product quality excellent � Supporting engineering change activity � Continuing to work with supply base to support customer ramp-up 787 Forward Fuselage Systems � Focused on improving profitability Installation Facility Customer-Focused Execution Plan 6

Business Environment � Global economic conditions continue to impact demand for air travel � Customers taking action to match supply and demand for new airplanes where appropriate � Measured production rate increases in 2006-2008 and current backlogs providing flexibility in a dynamic market � Prudent contingency measures well underway at Spirit – Shared new program investments – Continuous focus on expense management and process improvement – Conservative end-market forecasting – Early adoption of hiring freeze – Executive, management, and some non-management salary freezes Structured to Manage in a Cyclical Business 7

Spirit AeroSystems Holdings, Inc. First Quarter 2009 Financial Results Rick Schmidt Chief Financial Officer April 30, 2009 8

First Quarter 2009 Financial Summary � Financial results impacted by Machinists’ strike at Boeing – Q1 Revenues $887 million, down 14% from Q1 2008 – Q1 Operating Margins 11.0% vs Q1 2008 of 12.6% – Q1 Fully diluted earnings per share decreased 26% to $0.45 – Q1 ship set deliveries were 30 units below pre-strike delivery levels, resulting in a reduction of $256M revenue and $0.18 EPS – FX Revenue headwind of $40M � Operating cash flow in Q1 of ($149) million – Lower earnings on reduced deliveries driven by IAM strike at Boeing – Inventory growth on development programs � Solid balance sheet and liquidity – $116M cash balance at quarter end – Utilized $75 million from revolving credit facility… $575 million undrawn – Full repayment expected by year-end 2009 – Net Debt to Total Capital ratio 28.6%, up from 22.3% at Q4 2008 on utilization of revolving credit facility Strike Impacted Results… Financially Strong 9

First Quarter 2009 Financial Results Operating Income % of Revenues Revenues (Millions) Includes Includes estimated Includes estimated strike impact 15.0% $1,200 estimated strike impact of $256M 12.8% strike impact $1,062 $1,027 12.6% $1,036 Includes estimated strike impact 11.0% $887 10.8% of $451M $900 Includes 10.0% Includes estimated strike $646 estimated impact and lower pension income strike impact $600 of $53M 4.4% 5.0% $300 0.0% $0 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 Earnings Per Share (Fully diluted) Includes $0.80 estimated strike Includes impact of ($0.13) estimated strike $0.62 impact of ($0.18) $0.61 $0.53 $0.60 Includes estimated $0.45 strike impact of ($0.28) and pension impact of ($0.10) $0.40 $0.14 $0.20 $0.00 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 Q1 2009 Impacted by Strike… Solid Core Business Performance 10

First Quarter 2009 Period Expenses Research & Development Expense (Millions) SG&A (Millions) $50 $60 $50 Includes $5M acquisition $40 evaluation related expense $41 $39 $39 $38 $40 $36 $30 $30 $20 $15 $14 $20 $13 $11 $10 $10 $10 $0 $0 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 % of % of Sales 0.9% 1.0% 1.2% 2.4% 1.6% Sales 3.8% 3.9% 3.8% 5.5% 4.3% Reflects lower sales Reflects lower sales due to strike due to strike Disciplined Expense Management 11

First Quarter 2009 Income Statement SPIRIT AEROSYSTEMS HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) 1Q 09 1Q 08 % Change (Dollars in Millions, Except Per Share Data) $ 887 $ 1,036 (14%) Net Revenues Cost of sales 737 857 (14%) Selling, general and administrative 38 39 (3%) Research and development 14 10 40% 98 130 (25%) Operating Income 11.0% 12.6% (160) BPS Operating Income % of Revenues $ 63 $ 85 (26%) Net Income Fully Diluted Weighted Avg Shares 139.9 139.6 <1% EPS (Fully diluted) $ 0.45 $ 0.61 (26%) Q1 2009 Results Impacted by Strike 12

Cash and Debt Balances Credit Ratings S&P: BB Moody’s: Ba3 Millions Total Debt Cash Millions $800 $300 $667 $663 $250 $595 $592 $588 $217 $600 $203 $200 $178 $147 $400 $150 $116 $100 $200 $50 $0 $0 3/27/08 6/26/08 9/25/08 12/31/08 4/2/09 3/27/08 6/26/08 9/25/08 12/31/08 4/2/09 Credit-line Credit-line $75M $0M $0M $0M $75M $75M $0M $0M $0M $75M Borrowing Borrowing Well Positioned for Market Dynamics 13

Cash Flow – First Quarter 2009 � Cash Items $ Millions 3M 09 3M 08 – Expected Q1 increase in accounts Net Income $ 63 $ 85 receivable Depreciation & Amortization $ 33 $ 30 – Lower earnings due to strike impact Other Non-Cash Items $ (2) $ (10) – Increased working capital investments for new programs… 787, Working Capital/Accrued Liabilities $ (223) $ (161) 747-8 and Gulfstream Customer Advances, Net $ (24) $ 89 – Liquidating 787 customer advances Other $ 4 $ 38 on delivery to Boeing Operating Cash Flow $ (149) $ 71 � Capital Expenditures Capital Expenditures $ (54) $ (66) – Lower spending as 787 requirements Customer Reimbursed Capital Expenditures $ 29 $ - are completed or rescheduled – Minimizing new investment in anticipation of market downturn New Programs Driving Working Capital Growth 14

2008 Inventory Growth ($M) Actual Actual Growth Notes Category 12/31/07 12/31/08 2008 $243M for 787: Delivery delays, early units more expensive engineering changes. Costs recovered over contract Physical & Deferred $1,025 $1,314 ($289) block (Raw material, parts, work in progress, excess $37M for Gulfstream: New program startup over/under average) $9M All Other: Pre-Production 280 418 (138) $143M for Gulfstream: New program startup, (Capitalized engineering) engineering changes ($3)M for 787: - 8 Model complete. Costs amortized over first 500 units Non-Recurring 38 150 (112) ($2)M All Other (Billable engineering costs) $49M for 747-8: New program engineering costs billable in 2009 $56M for A350, BR725, Cessna, Sikorsky New Total $1,343 $1,882 ($539) Programs: New program engineering costs billable in future periods $7M All Other: Legacy Programs $240M, or 45%, of Total Increase for 787. Another $206M, or 38%, of Total for New Gulfstream Programs (Including BR725 Nacelles). Legacy Programs Largely Stable 15