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Spirit AeroSystems Holdings, Inc. Reports Second Quarter 2014 Financial Results; Revenues of $1.8 billion and EPS of $1.01; Raises 2014 Guidance

Companies mentioned in this article: Spirit AeroSystems Holdings, Inc.

WICHITA, Kan., Aug. 1, 2014 /PRNewswire/ -- Spirit AeroSystems Holdings, Inc. [NYSE: SPR] reported second quarter 2014 financial results including continued healthy demand for large commercial aircraft and strong mature program operating performance. Spirit's second quarter 2014 revenues were $1.8 billion, up from $1.5 billion for the same period of 2013 on higher deliveries.

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Operating income was $216 million, up from a loss of ($239) million for the same period in 2013. Net income for the quarter was $143 million, or $1.01 per fully diluted share.

    Table 1.  Summary Financial Results (unaudited)
    ----------------------------------------------

                                                       2nd Quarter                         Six Months
                                                       -----------                         ----------

    ($ in millions,
     except per
     share data)                                      2014          2013 Change            2014          2013 Change
    ---------------                                   ----          ---- ------            ----          ---- ------


    Revenues                                        $1,803        $1,521            19%  $3,532        $2,963            19%

    Operating
     Income (Loss)                                    $216        ($239)          191%    $411         ($94)          537%

    Operating
     Income (Loss)
     as a % of
     Revenues                                        12.0%      (15.7%)     2,770 BPS   11.6%       (3.2%)     1,480 BPS

    Net Income
     (Loss)                                           $143        ($209)          168%    $297        ($128)          332%

    Net Income
     (Loss) as a %
     of Revenues                                      8.0%      (13.7%)     2,170 BPS    8.4%       (4.3%)     1,270 BPS

    Earnings (Loss)
     Per Share
     (Fully
     Diluted)                                        $1.01       ($1.47)          169%   $2.07       ($0.90)          330%

    Fully Diluted
     Weighted Avg
     Share Count                                     142.4         141.3                  143.2         141.1

"Spirit continues to grow with the commercial aerospace upcycle and realize improved operational performance," said President and Chief Executive Officer Larry Lawson. "In the second quarter our team delivered the 5,000(th) Next Generation 737 fuselage. We continued to execute at all-time high production rates while improving our quality. Also this quarter, we made significant progress on the A350 program," Lawson continued.

"Other notable events include the initiation of Spirit's first ever share repurchase in our nine year history. We also redefined and further energized our aftermarket business model with new senior leadership, Bill Brown, and a name change to Global Customer Support and Services. These actions are all part of the disciplined transformation processes occurring at the company."

"Looking to the future, Spirit's value proposition is attractive as the commercial aerospace cycle remains strong and program execution and operational performance continue to be our focus," Lawson continued.

Spirit's backlog at the end of the second quarter of 2014 was approximately $41 billion.

Spirit updated its contract profitability estimates during the second quarter of 2014 to reflect improved performance and reduced risks, resulting in net pre-tax $19 million, or $0.09 per share(#), favorable cumulative catch-up adjustments on mature programs.

In comparison, the second quarter of 2013 included net pre-tax charges of ($448) million and net pre-tax favorable cumulative catch-up adjustments of $41 million.

Free cash flow was a $128 million* source of cash for the second quarter of 2014, compared to a $5 million* source of cash for the second quarter of 2013 reflecting improved operational performance, timing of cash tax payments, and lower capital expenditures. (Table 2)

    Table 2.  Cash
     Flow and
     Liquidity
     (unaudited)

                       2nd Quarter     Six Months
                       -----------     ----------

    ($ in millions)               2014            2013             2014                   2013
    --------------                ----            ----             ----                   ----


    Cash Flow from
     Operations                   $165             $60             $210                    $14

    Purchases of
     Property, Plant &
     Equipment                   ($37)          ($55)           ($90)                ($135)

    Free Cash Flow*               $128              $5             $120                 ($121)


                                                       July 3,          December 31,

    Liquidity                                                    2014                   2013
                                                                 ----                   ----


    Cash                                                         $382                   $421

    Total Debt                                                 $1,160                 $1,167

Cash balances at the end of the quarter were $382 million and debt balances were $1,160 million. At the end of the second quarter of 2014, the company's $650 million credit facility remained undrawn.

On June 4, 2014, Spirit, Onex and certain other stockholders entered into an underwriting agreement for the sale by the stockholders of 8,168,351 shares of Spirit's class A common stock in a secondary public offering. In connection with the offering, Spirit repurchased 4 million shares of its class A common stock from the underwriters with $129.2 million of cash on hand. Following the transaction, Onex holds approximately 6 percent of total stockholder voting power and no longer maintains majority voting power of the company.

The company's credit rating remained unchanged at the end of the second quarter of 2014.

Financial Outlook and Risk to Future Financial Results

Spirit revenue guidance is increased for the full-year 2014 and is expected to be between $6.7 - $6.9 billion based on Boeing's 2014 delivery guidance of 715 to 725 aircraft; expected Airbus deliveries in 2014 at a similar level to those in 2013; internal Spirit forecasts for other customer production activities; expected non-production revenues; and foreign exchange rates generally consistent with those for the second quarter of 2014.

Fully diluted earnings per share guidance for 2014 is increased and is expected to be between $2.90 and $3.05 per share and does not include the impact of the year-to-date and potential future adjustments to the deferred tax asset valuation allowance.

Free cash flow guidance is increased and is now expected to be approximately $250 million*.

The effective tax rate for 2014 is forecast to be approximately 30.0 - 31.0 percent, reflecting the expected benefit of the U.S. Research Tax Credit for 2014, and excluding any potential adjustment to the valuation allowance recorded against the U.S. net deferred tax assets at the end of 2013. (Table 3)

Risks to our financial guidance are described in the Cautionary Statement Regarding Forward-Looking Statements contained in this release and in the "Risk Factors" section of our filings with the Securities and Exchange Commission.

    Table 3.  Financial Outlook
     Updated August 1, 2014      Previous 2014 Guidance   2014 Guidance
    --------------------------- ----------------------    -------------


    Revenues                          $6.5 - $6.7 billion  $6.7 - $6.9 billion


    Earnings Per Share (Fully
     Diluted)                               $2.50 - $2.65        $2.90 - $3.05


    Effective Tax Rate**                   ~31.0% - 32.0%      ~30.0% - 31.0%


    Free Cash Flow*                  ~$200 million        ~$250 million

Segment Results

Fuselage Systems

Fuselage Systems segment revenues for the second quarter of 2014 were $905 million, up from $732 million for the same period last year due to higher production deliveries. Operating margin for the second quarter of 2014 was 14.6 percent as compared to 21.2((1) (2)) percent during the same period of 2013. In the second quarter of 2014 the segment recorded pre-tax $3 million favorable cumulative catch-up adjustments on mature programs. In comparison, the segment realized a pre-tax ($5) million forward loss charge and pre-tax $28 million favorable cumulative catch-up adjustments in the second quarter of 2013.

Propulsion Systems

Propulsion Systems segment revenues in the second quarter of 2014 rose to $461 million, from $419 million for the same period last year on higher production deliveries. Operating margin for the second quarter of 2014 was 18.7 percent as compared to 20.3((1) (2)) percent in the second quarter of 2013. In the second quarter of 2014 the segment realized pre-tax $5 million favorable cumulative catch-up adjustments on mature programs. In comparison, the segment reported a pre-tax forward loss charge of ($4) million, a pre-tax benefit of $8 million due to a reversal of previously recognized forward loss, and pre-tax $12 million favorable cumulative catch-up adjustments in the second quarter of 2013.

Wing Systems

Wing Systems segment revenues in the second quarter of 2014 increased to $438 million from $369 million for the same period last year on higher production deliveries. Operating margin for the second quarter of 2014 was 16.2 percent as compared to (109.1)( (1) (2)) percent during the same period of 2013. In the second quarter of 2014 the segment recorded pre-tax $11 million favorable cumulative catch-up adjustments on mature programs. In comparison, in the second quarter of 2013 the segment recorded pre-tax forward loss charges of ($448) million and pre-tax $1 million favorable cumulative catch-up adjustments.

             (1)    For the three months ended June
                     27, 2013, corporate SG&A of
                     $1.8 million, $0.9 million and
                     $1.2 million was reclassified
                     from segment operating income
                     for Fuselage, Propulsion, and
                     Wing Systems, respectively, to
                     conform to current year
                     presentation.

             (2)    For the three months ended June
                     27, 2013, research and
                     development of $3.2 million,
                     $2.5 million and $0.9 million
                     was reclassified from segment
                     operating income for Fuselage,
                     Propulsion, and Wing Systems,
                     respectively, to conform to
                     current year presentation.


    # The earnings per share amount is presented
     net of income taxes of 31.0%.


    * Non-GAAP financial measure, see Appendix
     for reconciliation.


     ** Effective tax rate guidance, among other
      factors, assumes the benefit attributable to
      the extension of the U.S. Research Tax
      Credit and does not assume an impact for any
      potential adjustment to the valuation
      allowance recorded against the U.S. net
      deferred tax assets at the end of 2013.

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 "may," "will," "should," "expect," "anticipate," "intend," "estimate," "believe," "project," "continue," "plan," "forecast," or other similar words, 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; 2) our ability to perform our obligations and manage costs related to our new and maturing programs; 3) margin pressures and the potential for additional forward losses on new and maturing programs; 4) our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft; 5) the effect on business and commercial aircraft demand and build rates of changing customer preferences, global economic conditions, conflicts in the Middle East or Asia, and the impact of continuing instability in global financial and credit markets; 6) the success and timely execution of key milestones, such as certification and first delivery of Airbus' A350 XWB aircraft program, receipt of necessary regulatory approvals and customer adherence to their announced schedules; 7) our ability to successfully negotiate future pricing under our agreements with Boeing; 8) our ability to enter into profitable supply arrangements with additional customers; 9) the ability of all parties to satisfy their performance requirements under existing supply contracts with our customers and the risk of nonpayment by such customers; 10) our ability to secure work for replacement programs; 11) any adverse impact on Boeing's and Airbus' production of aircraft; 12) any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 13) returns on pension plan assets and the impact of future discount rate changes on pension obligations; 14) our ability to borrow additional funds or refinance debt; 15) our ability to sell all or any portion of our Oklahoma sites on terms acceptable to us; 16) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 17) 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 United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 18) the cost and availability of raw materials and purchased components; 19) any reduction in our credit ratings; 20) our ability to recruit and retain highly skilled employees and our relationships with the unions representing many of our employees; 21) spending by the U.S. and other governments on defense; 22) the possibility that our cash flows and borrowing facilities may not be adequate; 23) our exposure under our existing senior secured revolving credit facility to higher interest payments should interest rates increase substantially; 24) the effectiveness of our interest rate and foreign currency hedging programs; 25) the effectiveness of our internal control over financial reporting; 26) the outcome or impact of ongoing or future litigation, claims and regulatory actions; and 27) our exposure to potential product liability and warranty claims. 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.

Appendix

    Table 4.  Segment
     Reporting                 (unaudited)         (unaudited)

                               2nd Quarter         Six Months
                               -----------         ----------

    ($ in millions)           2014            2013    Change                2014       2013 Change
    --------------            ----            ----    ------                ----       ---- ------


    Segment Revenues

       Fuselage Systems     $905.0          $732.1              23.6%   $1,763.3   $1,450.0           21.6%

       Propulsion Systems    460.5           418.6              10.0%      910.7      793.9           14.7%

       Wing Systems          438.3           368.6              18.9%      852.5      711.9           19.7%

       All Other             (0.5)            1.4                           5.3        7.1
                              ----             ---                           ---        ---

    Total Segment
     Revenues             $1,803.3        $1,520.7              18.6%   $3,531.8   $2,962.9           19.2%


    Segment Earnings
     (Loss) from
     Operations

       Fuselage Systems     $132.2          $155.0            (14.7%)     $274.2     $281.4          (2.6%)

       Propulsion Systems     86.2            85.0               1.4%      166.4      153.4            8.5%

       Wing Systems           71.0         (402.3)            117.6%      121.0    (381.8)         131.7%

       All Other               0.2             1.8                           0.3        3.4
                               ---             ---                           ---        ---

    Total Segment
     Operating Earnings
     (Loss)(1) (2)          $289.6        ($160.5)            280.4%     $561.9      $56.4          896.3%


    Unallocated Expense

    Corporate SG&A(1)      ($54.4)        ($54.1)              0.6%   ($114.9)   ($98.4)          16.8%

    Impact From Severe
     Weather Event               -          (6.3)                            -    (15.1)

    Research &
     Development(2)          (6.8)          (8.6)           (20.9%)     (13.1)    (16.1)        (18.6%)

    Cost of Sales           (12.2)          (9.0)             35.6%     (23.3)    (20.8)          12.0%
                             -----                              ----       -----                      ----

    Total Earnings
     (Loss) from
     Operations             $216.2        ($238.5)            190.6%     $410.6    ($94.0)         536.8%


    Segment Operating
     Earnings (Loss) as
     % of Revenues

       Fuselage Systems      14.6%          21.2%         (660) BPS      15.6%     19.4%      (380) BPS

       Propulsion Systems    18.7%          20.3%         (160) BPS      18.3%     19.3%      (100) BPS

       Wing Systems          16.2%       (109.1%)       12,530  BPS      14.2%   (53.6%)     6,780  BPS

       All Other           (40.0%)         128.6%                         5.7%     47.9%
                            ------           -----                           ---       ----

    Total Segment
     Operating Earnings
     (Loss) as % of
     Revenues                16.1%        (10.6%)        2,670  BPS      15.9%      1.9%     1,400  BPS


    Total Operating
     Earnings (Loss) as
     % of Revenues           12.0%        (15.7%)        2,770  BPS      11.6%    (3.2%)     1,480  BPS


             (1)    For the three months ended June
                     27, 2013, corporate SG&A of
                     $1.8 million, $0.9 million and
                     $1.2 million was reclassified
                     from segment operating income
                     for Fuselage, Propulsion, and
                     Wing Systems, respectively, to
                     conform to current year
                     presentation. For the six
                     months ended June 27, 2013,
                     corporate SG&A of $4.1 million,
                     $2.1 million and $2.4 million
                     was reclassified from segment
                     operating income for Fuselage,
                     Propulsion, and Wing Systems,
                     respectively, to conform to
                     current year presentation.

             (2)    For the three months ended June
                     27, 2013, research and
                     development of $3.2 million,
                     $2.5 million and $0.9 million
                     was reclassified from segment
                     operating income for Fuselage,
                     Propulsion, and Wing Systems,
                     respectively, to conform to
                     current year presentation. For
                     the six months ended June 27,
                     2013, research and development
                     of $5.9 million, $4.4 million
                     and $2.0 million was
                     reclassified from segment
                     operating income for Fuselage,
                     Propulsion, and Wing Systems,
                     respectively, to conform to
                     current year presentation.

                               Spirit Ship Set Deliveries

                           (one ship set equals one aircraft)



                             2nd Quarter        Six Months
                             -----------        ----------

                                      2014                2013 2014**     2013
                                      ----                ----  -----     ----

                      B737             130                 115        255   221

                      B747               4                   4          9    10

                      B767               3                   5          6    11

                      B777              26                  25         52    49

                      B787              33                  14         64    31
                                       ---                 ---        ---   ---

                     Total             196                 163        386   322


              A320 Family*             121                 131        249   260

                  A330/340              30                  30         60    57

                      A350               5                   1          7     3

                      A380               7                  10         14    17
                                       ---                 ---        ---   ---

                     Total             163                 172        330   337


     Business/Regional Jet              33                  19         68    39
                                       ---                 ---        ---   ---


              Total Spirit             392                 354        784   698
                                       ===                 ===        ===   ===

    * 2013 A320 deliveries have
     been updated for the
     purpose of measuring wing
     ship set deliveries, from
     weighted average to total
     ship set.


    ** Includes four additional
     workdays as compared to
     prior year period.


                                                            Spirit AeroSystems Holdings, Inc.

                                                     Condensed Consolidated Statements of Operations

                                                                       (unaudited)


                                                                                    For the Three Months
                                                                                              Ended                         For the Six Months Ended
                                                                                   ---------------------                  ------------------------

                                                                     July 3, 2014                June 27, 2013                July 3, 2014                June 27, 2013
                                                                     ------------                -------------                ------------                -------------

                                                                               ($ in millions, except per share data)


    Net revenues                                                                   $1,803.3                      $1,520.7                     $3,531.8                   $2,962.9

    Operating costs and expenses:

    Cost of sales                                                                   1,525.9                       1,690.2                      2,993.2                    2,927.3

    Selling, general and
     administrative                                                                    54.4                          54.1                        114.9                       98.4

    Impact from severe weather event                             -                         6.3                             -                        15.1

    Research and development                                                            6.8                           8.6                         13.1                       16.1
                                                                                        ---                           ---                         ----                       ----

                                      Total operating costs and
                                      expenses                                         1,587.1                       1,759.2                      3,121.2                    3,056.9

                                     Operating income (loss)                             216.2                       (238.5)                       410.6                     (94.0)

    Interest expense and financing
     fee amortization                                                                (20.8)                       (17.3)                      (56.2)                    (34.9)

    Interest income                                            0.1                            -                          0.2                          0.1

    Other income (expense), net                                                         5.8                           1.3                          7.0                      (8.6)
                                                                                        ---                           ---                          ---                       ----

                                      Income (loss) before income
                                      taxes and equity in net
                                      income (loss) of affiliate                         201.3                       (254.5)                       361.6                    (137.4)

    Income tax (provision) benefit                                                   (58.1)                         45.0                       (65.0)                       9.3
                                                                                      -----                          ----                        -----                        ---

                                      Income (loss) before equity
                                      in net income (loss) of
                                      affiliate                                          143.2                       (209.5)                       296.6                    (128.1)

    Equity in net income (loss) of
     affiliate                                                                          0.2                           0.1                          0.4                      (0.1)
                                                                                        ---                           ---                          ---                       ----

                                     Net income (loss)                                  $143.4                      ($209.4)                      $297.0                   ($128.2)



    Earnings (loss) per share

    Basic                                                                             $1.01                       ($1.47)                       $2.09                    ($0.90)

    Shares                                                                            140.8                         141.3                        141.2                      141.1


    Diluted                                                                           $1.01                       ($1.47)                       $2.07                    ($0.90)

    Shares                                                                            142.4                         141.3                        143.2                      141.1

                                                Spirit AeroSystems Holdings, Inc.

                                              Condensed Consolidated Balance Sheets

                                                           (unaudited)

                                                             July 3, 2014           December 31, 2013
                                                             ------------           -----------------

                                                            ($ in millions)

    Current assets

    Cash and cash equivalents                                             $381.6                      $420.7

    Accounts receivable, net                                               729.1                       550.8

    Inventory, net                                                       1,875.4                     1,842.6

    Other current assets                                                    51.6                       130.1
                                                                            ----                       -----

        Total current assets                                             3,037.7                     2,944.2

    Property, plant and equipment, net                                   1,793.0                     1,803.3

    Pension assets                                                         270.1                       252.6

    Other assets                                                           120.6                       107.1
                                                                           -----                       -----

        Total assets                                                    $5,221.4                    $5,107.2
                                                                        ========                    ========

    Current liabilities

    Accounts payable                                                      $654.8                      $753.7

    Accrued expenses                                                       258.5                       220.6

    Current portion of long-term debt                                        9.9                        16.8

    Advance payments, short-term                                            71.4                       133.5

    Deferred revenue, short-term                                            27.0                        19.8

    Other current liabilities                                              213.4                       191.2
                                                                           -----                       -----

        Total current liabilities                                        1,235.0                     1,335.6

    Long-term debt                                                       1,150.4                     1,150.5

    Advance payments, long-term                                            750.6                       728.9

    Deferred revenue and other deferred
     credits                                                                29.2                        30.9

    Pension/OPEB obligation                                                 73.2                        69.8

    Other liabilities                                                      320.9                       310.5

    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,
     132,215,419 and 120,946,429 shares
     issued, respectively                                                    1.3                         1.2

    Common stock, Class B par value $0.01,
     150,000,000 shares authorized, 8,988,344
     and 23,851,694 shares issued,
     respectively                                                            0.1                         0.2

    Additional paid-in capital                                           1,028.1                     1,025.0

    Accumulated other comprehensive (loss)                                (44.4)                     (54.6)

    Retained earnings                                                      805.7                       508.7

    Treasury stock, at cost (4,000,000 and
     zero shares, respectively)                                          (129.2)                          -
                                                                          ------                         ---

        Total shareholders' equity                                       1,661.6                     1,480.5

    Noncontrolling interest                                                  0.5                         0.5
                                                                             ---                         ---

        Total equity                                                     1,662.1                     1,481.0
                                                                         -------                     -------

        Total liabilities and equity                                    $5,221.4                    $5,107.2
                                                                        ========                    ========

                                                 Spirit AeroSystems Holdings, Inc.

                                          Condensed Consolidated Statements of Cash Flows

                                                            (unaudited)


                                                                       For the Six Months
                                                                             Ended
                                                                      -------------------

                                                                         July 3, 2014      June 27, 2013
                                                                         ------------      -------------

                                                                        ($ in millions)

    Operating activities

    Net income (loss)                                                               $297.0            ($128.2)

    Adjustments to reconcile net income (loss) to net cash provided by operating
     activities

    Depreciation expense                                                              83.5                78.5

    Amortization expense                                                              24.4                 5.8

    Accretion of customer supply agreement                                             0.5                 0.2

    Employee stock compensation expense                                                8.0                12.0

    Excess tax benefits from share-based payment
     arrangements                                                                    (2.3)              (0.4)

    Loss on disposition of assets                                                        -                0.4

    (Gain) from hedge contracts                                                      (1.3)              (1.4)

    (Gain) loss from foreign currency
     transactions                                                                    (5.7)               10.1

    Deferred  taxes                                                                    1.9              (40.0)

    Long-term tax provision                                                              -                0.6

    Pension and other post-retirement benefits,
     net                                                                            (12.8)              (6.7)

    Grant income                                                                     (3.9)              (3.3)

    Equity in net (income) loss of affiliate                                         (0.4)                0.1

    Changes in assets and liabilities

    Accounts receivable                                                            (172.4)            (184.3)

    Inventory, net                                                                  (73.6)              276.2

    Accounts payable and accrued liabilities                                        (41.8)               35.2

    Advance payments                                                                (40.4)             (19.4)

    Income taxes receivable/payable                                                  121.8              (31.0)

    Deferred revenue and other deferred credits                                        6.3                 5.0

    Other                                                                             20.7                 4.9

         Net cash provided by operating activities                                   209.5                14.3
                                                                                     -----                ----

    Investing activities

    Purchase of property, plant and equipment                                       (89.6)            (119.3)

    Purchase of property, plant and equipment -
     severe weather related expenses                                                     -             (15.7)

    Other                                                                              0.4                 2.6

         Net cash (used in) investing activities                                    (89.2)            (132.4)
                                                                                     -----              ------

    Financing activities

    Proceeds from issuance of bonds                                                  300.0                   -

    Principal payments of debt                                                      (11.9)              (4.0)

    Payment on bonds                                                               (300.0)                  -

    Excess tax benefits from share-based payment
     arrangements                                                                      2.3                 0.4

    Debt issuance and financing costs                                               (20.8)                  -

    Purchase of treasury stock                                                     (129.2)                  -

         Net cash (used in) financing activities                                   (159.6)              (3.6)
                                                                                    ------                ----

    Effect of exchange rate changes on cash and
     cash equivalents                                                                  0.2               (2.0)
                                                                                       ---                ----

         Net (decrease) in cash and cash equivalents
          for the period                                                            (39.1)            (123.7)

    Cash and cash equivalents, beginning of the
     period                                                                          420.7               440.7
                                                                                     -----               -----

    Cash and cash equivalents, end of the period                                    $381.6              $317.0
                                                                                    ======              ======

Management believes the non-GAAP (Generally Accepted Accounting Principles) measures (indicated by *) used in this report provide investors with important perspectives into the company's ongoing business performance. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measure. Other companies may define the measure differently.

                   Free Cash Flow

                  ($ in millions)


                    2nd Quarter          Six Months              Guidance
                    -----------          ----------              --------

                    2014       2013     2014         2013              2014
                    ----       ----     ----         ----              ----


    Cash
     Provided
     by
     Operating
     Activities   $164.5      $59.7   $209.5        $14.3       $460 - $485

    Capital
     Expenditures (36.6)    (54.8)  (89.6)     (135.0)    (210) - (235)
                   -----      -----    -----       ------

    Free Cash
     Flow         $127.9       $4.9   $119.9     ($120.7)         ~$250

Logo - http://photos.prnewswire.com/prnh/20130515/CG13652LOGO

SOURCE Spirit AeroSystems Holdings, Inc.