Business Wire | Nov 3, 2021 07:30AM EDT

Spirit AeroSystems Reports Third Quarter 2021 Results

Nov. 03, 2021

WICHITA, Kan.--(BUSINESS WIRE)--Nov. 03, 2021--Spirit AeroSystems Holdings, Inc. (NYSE: SPR) ("Spirit" or the "Company") reported third quarter 2021 financial results.

Table 1. Summary Financial Results (unaudited) 3rd Quarter Nine Months

($ in millions, except per 2021 2020 Change 2021 2020 Changeshare data)

Revenues $980 $806 22% $2,883 $2,528 14%

Operating Loss ($157) ($177) 11% ($380) ($711) 47%

Operating Loss as a % of (16.0%) (21.9%) 590 (13.2%) (28.1%) **Revenues BPSNet Loss ($114) ($156) 27% ($421) ($574) 27%

Net Loss as a % of Revenues (11.6%) (19.3%) ** (14.6%) (22.7%) 810 BPSLoss Per Share (Fully ($1.09) ($1.50) 27% ($4.04) ($5.53) 27%Diluted)Adjusted Loss Per Share ($1.13) ($1.34) 16% ($2.59) ($4.45) 42%(Fully Diluted)*Fully Diluted Weighted Avg 104.3 103.9 104.2 103.8Share Count** Represents an amount equal to or in excess of 100% or not meaningful. "Despite the challenges over the past two years we have been making a number of transformative changes. We maintained momentum on our strategy to diversify and grow, which we believe will position us to emerge stronger as the aviation industry recovers," said Tom Gentile, Spirit AeroSystems President and Chief Executive Officer. "Given the changes in our business, we decided we were at the right point to organize around three new business segments. Beginning with the 2021 fiscal year-end, Spirit will report results in the Commercial, Defense & Space and Aftermarket segments. In line with these reporting segments, we also announced a new organizational structure to focus on growth in these key markets."

"Although we have experienced some schedule changes and execution challenges on certain programs, including the 787, we are maintaining our cash guidance for the year of $(200) to $(300) million."

Revenue

Spirit's third quarter of 2021 revenue was $980.0 million, up 22% from the same period of 2020, primarily due to higher production deliveries on the Boeing 737 and increased revenue from the recently acquired A220 wing and Bombardier programs. These increases were partially offset by the lower widebody production rates due to reduced international air traffic resulting from the impacts of COVID-19. Deliveries increased to 250 shipsets during the third quarter of 2021 compared to 206 shipsets in the same period of 2020, including Boeing 737 deliveries of 47 shipsets compared to 15 shipsets in the same period of the prior year.

Spirit's backlog at the end of the third quarter of 2021 was approximately $33 billion, with work packages on all commercial platforms in the Boeing and Airbus backlog.

Earnings

Operating loss for the third quarter of 2021 was $156.6 million, as compared to operating loss of $176.9 million in the same period of 2020. The decreased loss was primarily driven by lower forward loss charges and lower excess capacity costs in the third quarter of 2021 compared to the third quarter of 2020. Third quarter 2021 earnings included $57.1 million of excess capacity costs and net forward loss charges of $70.4 million, primarily driven by schedule changes on the Airbus A350 program and reduced production demand on the Boeing 787 program as previously described in the second quarter 2021 Subsequent Event section. In comparison, during the third quarter of 2020, Spirit recorded excess capacity costs of $72.6 million and $128.4 million of net forward loss charges. Additionally, during the third quarter of 2020, Spirit recognized restructuring expenses of $19.5 million for cost-alignment and headcount reductions.

Other income for the third quarter 2021 was $94.8 million, compared to a net expense of $10.0 million for the same period in the prior year. The increase is primarily driven by a curtailment gain of $61 million recognized in the third quarter of 2021 resulting from the closure of the defined benefit plans acquired as part of the Bombardier Acquisition.

Third quarter EPS was $(1.09), compared to $(1.50) in the same period of 2020. Third quarter 2021 adjusted EPS* was $(1.13), which excluded the incremental deferred tax asset valuation allowance and the curtailment gain. During the same period of 2020, adjusted EPS* was $(1.34), which excluded the impacts of planned acquisitions, restructuring costs and the voluntary retirement program offered during 2020. (Table 1)

Cash

Cash provided by operations in the third quarter of 2021 improved to $211 million, compared to $(53) million in the same quarter last year, primarily due to the receipt of $228 million of tax refund as a result of carrybacks permitted by the CARES Act, $38 million resulting from the Aviation Manufacturing Jobs Protection Program as well as positive impacts of working capital. Free cash flow* in the third quarter of 2021 was $174 million as compared to $(72) million in the same period of 2020. The cash balance at the end of the third quarter of 2021 was $1.4 billion. (Table 2)

Table 2. Cash Flowand Liquidity(unaudited) 3rd Quarter Nine Months

($ in millions) 2021 2020 Change 2021 2020 Change

Cash provided by $211 ($53) $13 ($613)(used in) ** **OperationsPurchases of ($37) ($19) 91% ($90) ($70) 28%Property, Plant &EquipmentFree Cash Flow* $174 ($72) ** ($77) ($683) (89%)

September December 30, 31,

Liquidity 2021 2020

Cash $1,431 $1,873

Total Debt $3,595 $3,874

** Represents an amount equal to or in excess of 100% or not meaningful. Financial Outlook and Risk to Future Financial Results - Unchanged November 3, 2021

Full-year 2021 cash used in operations is expected to be between $(50) and $(150) million; full-year 2021 free cash flow* is expected to be between $(200) and $(300) million, consistent with previously provided guidance.

Please refer to our Cautionary Statement Regarding Forward-Looking Statements below and the section captioned "Risk Factors" in the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q.

* Non-GAAP financial measure, see Appendix for reconciliation

Segment Results

Fuselage Systems

Fuselage Systems segment revenue in the third quarter of 2021 increased 14 percent from the same period last year to $481.2 million, primarily due to increased production volumes from the Boeing 737 and recently acquired Bombardier programs, partially offset by lower production volumes on the Boeing 777 and 787 programs. Operating margin for the third quarter of 2021 increased to (11) percent, compared to (23) percent during the same period of 2020. This increase was primarily due to less net forward losses recognized. In the third quarter of 2021, the Fuselage Systems Segment includes restructuring expenses of $0.2 million and excess capacity costs of $36.2 million, compared to restructuring expenses of $6.6 million and excess capacity costs of $42.0 million during the same period in 2020. In the third quarter of 2021, the segment recorded pretax $1.6 million of unfavorable cumulative catch-up adjustments and $49.9 million of net forward losses. In the third quarter of 2020, the segment recorded pretax $8.8 million of favorable cumulative catch-up adjustments and $92.0 million of net forward losses.

Propulsion Systems

Propulsion Systems segment revenue in the third quarter of 2021 increased 45 percent from the same period last year to $247.8 million, primarily due to increased revenue from the Boeing 737 program and aftermarket sales, partially offset by decreased production volume on the Boeing 777 and 787 programs. Operating margin for the third quarter of 2021 increased to 9 percent, compared to (9) percent during the same period of 2020, primarily due to increased Boeing 737 production volumes and the resulting decrease in excess capacity costs. In the third quarter of 2021, the segment recorded excess capacity costs of $10.8 million, compared to excess capacity costs of $17.5 million and $3.8 million of restructuring expenses in the third quarter of 2020. The segment recorded pretax $1.6 million of favorable cumulative catch-up adjustments and $5.9 million of net forward losses in the third quarter of 2021. In comparison, during the same period of the prior year, the segment recorded pretax $4.6 million of unfavorable cumulative catch-up adjustments, and $14.9 million of net forward losses.

Wing Systems

Wing Systems segment revenue in the third quarter of 2021 increased 44 percent from the same period last year to $243.0 million, primarily due to increased production deliveries on the Boeing 737 and Airbus A220 programs, partially offset by decreased production volume on the Boeing 787 program. Operating margin for the third quarter of 2021 increased to (7) percent, compared to (14) percent during the same period of 2020, primarily due to increased Boeing 737 production volumes and the resulting decrease in excess capacity costs, partially offset by higher costs on the Airbus A320 program. In the third quarter of 2021, the segment includes $0.6 million of restructuring costs and excess capacity costs of $10.1 million, compared to the same period the prior year, which included restructuring expenses of $9.1 million and excess capacity costs of $13.1 million. In the third quarter of 2021, the segment recorded pretax $2.9 million of unfavorable cumulative catch-up adjustments and $14.6 million of net forward losses. In the third quarter of 2020, the segment recorded pretax $0.4 million of favorable cumulative catch-up adjustments and $21.5 million of net forward losses.

Table 4.SegmentReporting(unaudited) 3rd Quarter Nine Months

($ in 2021 2020 Change 2021 2020 Changemillions) SegmentRevenuesFuselage $481.2 $421.1 14.3% $1,410.5 $1,299.7 8.5%SystemsPropulsion 247.8 170.8 45.1% 716.2 565.6 26.6%SystemsWing Systems 243.0 168.3 44.4% 725.9 582.2 24.7%

All Other 8.0 46.1 (82.6%) 30.3 80.7 (62.5%)

Total $980.0 $806.3 21.5% $2,882.9 $2,528.2 14.0%SegmentRevenues Segment(Loss)EarningsfromOperationsFuselage ($53.9) ($96.7) 44.3% ($145.5) ($434.6) 66.5%SystemsPropulsion 21.9 (15.6) ** 66.8 (38.2) **SystemsWing Systems (15.8) (23.2) 31.9% (50.9) (52.1) 2.3%

All Other 2.4 19.1 (87.4%) 5.1 28.9 (82.4%)

TotalSegment ($45.4) ($116.4) ($124.5) ($496.0)Operating ** **(Loss)Earnings UnallocatedExpenseSG&A ($86.8) ($52.8) (64.4%) ($211.3) ($179.2) (17.9%)

Research & (12.8) (7.5) (70.7%) (34.3) (28.1) (22.1%)DevelopmentCost of (11.6) (0.2) ** (10.1) (8.1) **SalesTotal (Loss)Earnings ($156.6) ($176.9) 11.5% ($380.2) ($711.4) 46.6%fromOperations SegmentOperating(Loss)Earnings as% ofRevenuesFuselage (11.2%) (23.0%) ** (10.3%) (33.4%) **SystemsPropulsion 8.8% (9.1%) ** 9.3% (6.8%) **SystemsWing Systems (6.5%) (13.8%) 730 BPS (7.0%) (8.9%) 190 BPS

All Other ** ** ** ** ** **TotalSegmentOperating (4.6%) (14.4%) (4.3%) (19.6%)(Loss) 980 BPS **Earnings as% ofRevenues TotalOperating(Loss) (16.0%) (21.9%) 590 BPS (13.2%) (28.1%) **Earnings as% ofRevenues ** Represents an amount equal to or in excess of 100% or not meaningful. Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" that may involve many risks and uncertainties. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "aim," "anticipate," "believe," "could," "continue," "estimate," "expect," "goal," "forecast," "intend," "may," "might," "model," "objective," "outlook," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," and other similar words, or phrases, or the negative thereof, unless the context requires otherwise. These statements are based on circumstances as of the date on which the statements are made and they reflect management's current views with respect to future events and are subject to risks and uncertainties, both known and unknown. Our actual results may vary materially from those anticipated in forward-looking statements. We caution investors not to place undue reliance on any forward-looking statements.

Important factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following:

* any negative developments related to the COVID-19 pandemic, including, for example, with respect to (i) the duration, spread, severity, or any recurrence of the COVID-19 pandemic; (ii) any new variant strains of the underlying virus; (iii) the effectiveness, availability, and usage of vaccines; (iv) the duration and scope of governmental orders and restrictions related to COVID-19 on trade and transport restrictions; (v) the extent of the impact of COVID-19 on the global aerospace supply chain and the overall demand for our and our customers' products and services; (vi) the impact of COVID-19 on our ability to retain the skilled work force necessary for production and development, including from governmental policies related thereto such as the mandatory vaccination executive order applicable to federal contractors; and (vii) the impact of COVID-19 on our access to capital; * demand for our products and services and the general effect of economic or geopolitical conditions, or other events, such as pandemics, in the industries and markets in which we operate in the U.S. and globally; * the timing and conditions surrounding the full worldwide return to service (including receiving the remaining regulatory approvals) of the B737 MAX, future demand for the aircraft, and any residual impacts of the B737 MAX grounding on production rates for the aircraft; * our reliance on Boeing and Airbus for a significant portion of our revenues; * our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing, Airbus and other customers; * the business condition and liquidity of our customers and their ability to satisfy their contractual obligations to the Company; * the certainty of our backlog, including the ability of customers to cancel or delay orders prior to shipment; * our ability to accurately estimate and manage performance, cost, margins, and revenue under our contracts, and the potential for additional forward losses on new and maturing programs; * our accounting estimates for revenue and costs for our contracts and potential changes to those estimates; * our ability to continue to grow and diversify our business, execute our growth strategy, and secure replacement programs, including our ability to enter into profitable supply arrangements with additional customers; * the outcome of non-conformance, product warranty, defective product, or similar claims and the impact settlement of such claims may have on our accounting assumptions; * our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; * our ability and our suppliers' ability to meet stringent delivery (including quality and timeliness) standards and accommodate changes in the build rates of aircraft; * our ability to maintain continuing, uninterrupted production at our manufacturing facilities and our suppliers' facilities; * competitive conditions in the markets in which we operate, including in-sourcing by commercial aerospace original equipment manufacturers; * our ability to effectively integrate the acquisition of select assets of Bombardier along with other acquisitions that we pursue, and generate synergies and other cost savings therefrom, while avoiding unexpected costs, charges, expenses, and adverse changes to business relationships and business disruptions; * the possibility that our cash flows may not be adequate for our additional capital needs; * any reduction in our credit ratings; * our ability to access the capital markets to fund our liquidity needs, and the costs and terms of any additional financing; * our ability to avoid or recover from cyber or other security attacks and other operations disruptions; * legislative or regulatory actions, both domestic and foreign, impacting our plans, strategies, financial results, and operations, including the effect of changes in tax laws and rates and our ability to accurately calculate and estimate the effect of such changes; * our ability to recruit and retain a critical mass of highly skilled employees; * our relationships with the unions representing many of our employees, including our ability to avoid labor disputes and work stoppages with respect to our union employees; * spending by the U.S. and other governments on defense; * pension plan assumptions and future contributions; * the effectiveness of our internal control over financial reporting; * the outcome or impact of ongoing or future litigation, arbitration, claims, and regulatory actions or investigations, including our exposure to potential product liability and warranty claims; * adequacy of our insurance coverage; * our ability to continue selling certain receivables through our supplier financing programs; and * the risks of doing business internationally, including fluctuations in foreign currency exchange rates, impositions of tariffs or embargoes, trade restrictions, compliance with foreign laws, and domestic and foreign government policies.

These factors are not exhaustive and it is not possible for us to predict all factors that could cause actual results to differ materially from those reflected in our forward-looking statements. These factors speak only as of the date hereof, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. Except to the extent required by law, we undertake no obligation to, and expressly disclaim any obligation to, publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You should review carefully the section captioned "Risk Factors" in the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q for a more complete discussion of these and other factors that may affect our business.

Spirit Shipset Deliveries(one shipset equals one aircraft) 3rd Quarter Nine Months 2021 2020 2021 2020

B737 47 15 111 52

B747 1 1 4 4

B767 8 9 27 20

B777 7 14 18 30

B787 5 30 31 92

Total Boeing 68 69 191 198

A220 12 9 39 32

A320 Family 105 108 331 365

A330 6 4 15 17

A350 9 12 32 51

Total Airbus 132 133 417 465

Business/Regional Jet ^(1) 50 4 139 ^(2) 26

Total 250 206 747 689

(1) Beginning in the fourth quarter of 2020, includes Business/Regional Jetdeliveriesrelated to the Bombardier acquisition(2) Incorporates changes resulting from alignment of shipset reporting fromacquiredsites. Q1 and Q2 2021 QTD deliveries are 43 and 46, respectively.Spirit AeroSystems Holdings, Inc.Condensed Consolidated Statements of Operations(unaudited)For the Three Months EndedFor the Nine Months EndedSeptember 30, 2021October 1, 2020September 30, 2021October 1, 2020($ in millions, except per share data)Revenue$980.0

$806.3

$2,882.9

$2,528.2

Operating costs and expenses:Cost of sales1,036.2

903.4

3,009.4

2,941.0

Selling, general and administrative86.8

52.8

211.3

179.2

Restructuring costs0.8

19.5

8.1

68.4

Research and development12.8

7.5

34.3

28.1

Loss on disposal of assets-

-

-

22.9

Total operating costs and expenses1,136.6

983.2

3,263.1

3,239.6

Operating loss(156.6

)

(176.9

)

(380.2

)

(711.4

)

Interest expense and financing fee amortization(58.8

)

(53.0

)

(177.7

)

(133.8

)

Other income (expense), net94.8

(10.0

)

138.7

(65.4

)

Loss before income taxes and equity in net loss of affiliate(120.6

)

(239.9

)

(419.2

)

(910.6

)

Income tax benefit7.9

85.2

0.6

340.0

Loss before equity in net loss of affiliate(112.7

)

(154.7

)

(418.6

)

(570.6

)

Equity in net loss of affiliate(0.9

)

(0.8

)

(1.9

)

(3.8

)

Net loss($113.6

)

($155.5

)

($420.5

)

($574.4

)

Loss per shareBasic($1.09

)

($1.50

)

($4.04

)

($5.53

)

Shares104.3

103.9

104.2

103.8

Diluted($1.09

)

($1.50

)

($4.04

)

($5.53

)

Shares104.3

103.9

104.2

103.8

Dividends declared per common share$0.01

$0.01

$0.03

$0.03

Spirit AeroSystems Holdings, Inc.Condensed Consolidated Statements of Operations(unaudited) For the Three Months For the Nine Months Ended Ended September October September October 1, 30, 2021 1, 2020 30, 2021 2020 ($ in millions, except per share data) Revenue $980.0 $806.3 $2,882.9 $2,528.2

Operating costs and expenses:Cost of sales 1,036.2 903.4 3,009.4 2,941.0

Selling, general and 86.8 52.8 211.3 179.2 administrativeRestructuring costs 0.8 19.5 8.1 68.4

Research and development 12.8 7.5 34.3 28.1

Loss on disposal of assets - - - 22.9

Total operating costs and 1,136.6 983.2 3,263.1 3,239.6 expensesOperating loss (156.6 ) (176.9 ) (380.2 ) (711.4 )

Interest expense and financing (58.8 ) (53.0 ) (177.7 ) (133.8 )fee amortizationOther income (expense), net 94.8 (10.0 ) 138.7 (65.4 )

Loss before income taxes and (120.6 ) (239.9 ) (419.2 ) (910.6 )equity in net loss of affiliateIncome tax benefit 7.9 85.2 0.6 340.0

Loss before equity in net loss of (112.7 ) (154.7 ) (418.6 ) (570.6 )affiliateEquity in net loss of affiliate (0.9 ) (0.8 ) (1.9 ) (3.8 )

Net loss ($113.6 ) ($155.5 ) ($420.5 ) ($574.4 )

Loss per shareBasic ($1.09 ) ($1.50 ) ($4.04 ) ($5.53 )

Shares 104.3 103.9 104.2 103.8

Diluted ($1.09 ) ($1.50 ) ($4.04 ) ($5.53 )

Shares 104.3 103.9 104.2 103.8

Dividends declared per common $0.01 $0.01 $0.03 $0.03 shareSpirit AeroSystems Holdings, Inc.Condensed Consolidated Balance Sheets(unaudited)September 30, 2021December 31, 2020($ in millions)AssetsCash and cash equivalents$1,430.6

$1,873.3

Restricted cash0.3

0.3

Accounts receivable, net527.6

484.4

Contract assets, short-term411.0

368.4

Inventory, net1,325.7

1,422.3

Other current assets121.1

336.3

Total current assets3,816.3

4,485.0

Property, plant and equipment, net2,406.9

2,503.8

Intangible assets, net216.2

215.2

Goodwill623.6

565.3

Right of use assets87.2

70.6

Contract assets, long-term-

4.4

Pension assets487.2

455.9

Deferred income taxes-

0.1

Other assets103.4

83.6

Total assets$7,740.8

$8,383.9

LiabilitiesAccounts payable$644.8

$558.9

Accrued expenses415.6

365.6

Profit sharing39.8

57.0

Current portion of long-term debt47.8

340.7

Operating lease liabilities, short-term8.3

5.5

Advance payments, short-term116.0

18.9

Contract liabilities, short-term109.9

97.6

Forward loss provision, short-term284.0

184.6

Deferred revenue and other deferred credits, short-term95.9

22.2

Other current liabilities88.4

58.4

Total current liabilities1,850.5

1,709.4

Long-term debt3,546.7

3,532.9

Operating lease liabilities, long-term80.5

66.6

Advance payments, long-term221.7

327.4

Pension/OPEB obligation335.6

440.2

Contract liabilities, long-term279.7

372.0

Forward loss provision, long-term491.6

561.4

Deferred revenue and other deferred credits, long-term34.8

38.9

Deferred grant income liability - non-current26.7

28.1

Deferred income taxes26.0

13.0

Other non-current liabilities422.2

437.0

Stockholders' EquityCommon stock, Class A par value $0.01, 200,000,000 shares authorized, 105,048,226 and 105,542,162 shares issued and outstanding, respectively1.1

1.1

Additional paid-in capital1,140.4

1,139.8

Accumulated other comprehensive loss(163.3)

(154.1)

Retained earnings1,902.8

2,326.4

Treasury stock, at cost (41,523,470 shares each period, respectively)(2,456.7)

(2,456.7)

Total stockholders' equity424.3

856.5

Noncontrolling interest0.5

0.5

Total equity424.8

857.0

Total liabilities and equity$7,740.8

$8,383.9

Spirit AeroSystems Holdings, Inc.Condensed Consolidated Balance Sheets(unaudited) September December 30, 2021 31, 2020 ($ in millions)AssetsCash and cash equivalents $1,430.6 $1,873.3

Restricted cash 0.3 0.3

Accounts receivable, net 527.6 484.4

Contract assets, short-term 411.0 368.4

Inventory, net 1,325.7 1,422.3

Other current assets 121.1 336.3

Total current assets 3,816.3 4,485.0

Property, plant and equipment, net 2,406.9 2,503.8

Intangible assets, net 216.2 215.2

Goodwill 623.6 565.3

Right of use assets 87.2 70.6

Contract assets, long-term - 4.4

Pension assets 487.2 455.9

Deferred income taxes - 0.1

Other assets 103.4 83.6

Total assets $7,740.8 $8,383.9

LiabilitiesAccounts payable $644.8 $558.9

Accrued expenses 415.6 365.6

Profit sharing 39.8 57.0

Current portion of long-term debt 47.8 340.7

Operating lease liabilities, short-term 8.3 5.5

Advance payments, short-term 116.0 18.9

Contract liabilities, short-term 109.9 97.6

Forward loss provision, short-term 284.0 184.6

Deferred revenue and other deferred credits, short-term 95.9 22.2

Other current liabilities 88.4 58.4

Total current liabilities 1,850.5 1,709.4

Long-term debt 3,546.7 3,532.9

Operating lease liabilities, long-term 80.5 66.6

Advance payments, long-term 221.7 327.4

Pension/OPEB obligation 335.6 440.2

Contract liabilities, long-term 279.7 372.0

Forward loss provision, long-term 491.6 561.4

Deferred revenue and other deferred credits, long-term 34.8 38.9

Deferred grant income liability - non-current 26.7 28.1

Deferred income taxes 26.0 13.0

Other non-current liabilities 422.2 437.0

Stockholders' EquityCommon stock, Class A par value $0.01, 200,000,000 shares 1.1 1.1authorized, 105,048,226 and 105,542,162 shares issued andoutstanding, respectivelyAdditional paid-in capital 1,140.4 1,139.8

Accumulated other comprehensive loss (163.3) (154.1)

Retained earnings 1,902.8 2,326.4

Treasury stock, at cost (41,523,470 shares each period, (2,456.7) (2,456.7)respectively)Total stockholders' equity 424.3 856.5

Noncontrolling interest 0.5 0.5

Total equity 424.8 857.0

Total liabilities and equity $7,740.8 $8,383.9

Spirit AeroSystems Holdings, Inc.Condensed Consolidated Statements of Cash Flows(unaudited)For the Nine Months EndedSeptember 30, 2021October 1, 2020($ in millions)Operating activitiesNet loss($420.5

)

($574.4

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activitiesDepreciation and amortization expense241.9

202.5

Amortization of deferred financing fees6.4

12.6

Accretion of customer supply agreement1.6

1.6

Employee stock compensation expense19.6

17.1

Gain from derivative instruments(0.1

)

-

Gain from foreign currency transactions(7.3

)

(1.1

)

Loss on disposition of assets2.3

24.9

Deferred taxes13.5

(34.3

)

Pension and other post-retirement benefits, net(104.5

)

57.2

Grant liability amortization(1.2

)

(3.2

)

Equity in net loss of affiliates1.9

3.8

Forward loss provision(1.1

)

226.3

Changes in assets and liabilitiesAccounts receivable, net(4.7

)

169.3

Contract assets(38.8

)

200.4

Inventory, net83.4

(66.1

)

Accounts payable and accrued liabilities99.4

(530.6

)

Profit sharing/deferred compensation(17.7

)

(46.2

)

Advance payments(1.2

)

(19.9

)

Income taxes receivable/payable227.2

(252.6

)

Contract liabilities(79.8

)

(44.1

)

Other(7.0

)

44.0

Net cash provided by (used in) operating activities$13.3

($612.8

)

Investing activitiesPurchase of property, plant and equipment(90.0

)

(70.4

)

Acquisition, net of cash acquired(21.1

)

(117.9

)

Other4.7

4.9

Net cash used in investing activities($106.4

)

($183.4

)

Financing activitiesProceeds from issuance of debt-

1,200.0

Payment on revolving credit facility-

(800.0

)

Customer financing(7.5

)

10.0

Principal payments of debt(30.1

)

(22.7

)

Payments on term loan(3.0

)

(439.7

)

Payments on floating rate notes(300.0

)

-

Taxes paid related to net share settlement awards(5.0

)

(14.0

)

Proceeds from issuance of ESPP stock3.0

2.6

Debt issuance and financing costs-

(27.6

)

Purchase of treasury stock-

0.1

Dividends paid(3.2

)

(14.4

)

Other-

0.1

Net cash used in financing activities($345.8

)

($105.6

)

Effect of exchange rate changes on cash and cash equivalents(3.8

)

(3.3

)

Net decrease in cash, cash equivalents and restricted cash for the period($442.7

)

($905.1

)

Cash, cash equivalents, and restricted cash, beginning of the period1,893.1

2,367.2

Cash, cash equivalents, and restricted cash, end of the period$1,450.4

$1,462.1

Reconciliation of Cash and Cash Equivalents and Restricted Cash:September 30, 2021October 1, 2020Cash and cash equivalents, beginning of the period$1,873.3

$2,350.5

Restricted cash, short-term, beginning of the period0.3

0.3

Restricted cash, long-term, beginning of the period19.5

16.4

Cash, cash equivalents, and restricted cash, beginning of the period$1,893.1

$2,367.2

Cash and cash equivalents, end of the period$1,430.6

$1,441.3

Restricted cash, short-term, end of the period$0.3

$1.3

Restricted cash, long-term, end of the period19.5

19.5

Cash, cash equivalents, and restricted cash, end of the period$1,450.4

$1,462.1

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 and (ii) free cash flow, which are described further below. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define and calculate the measures differently than we do, limiting the usefulness of the measures for comparison with other companies.

Adjusted Diluted (Loss) Earnings Per Share. To provide additional transparency, we have disclosed non-GAAP adjusted diluted (loss) earnings per share (Adjusted EPS). This metric excludes various items that are not considered to be directly related to our operating performance. Management uses Adjusted EPS as a measure of business performance and we believe this information is useful in providing period-to-period comparisons of our results. The most comparable GAAP measure is diluted earnings per share.

Free Cash Flow. Free Cash Flow is defined as GAAP cash from operating activities (generally referred to herein as "cash provided by (used in) operations"), less capital expenditures for property, plant and equipment. Management believes Free Cash Flow provides investors with an important perspective on the cash available for stockholders, debt repayments including capital leases, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free Cash Flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures. The most comparable GAAP measure is cash provided by operating activities. Management uses Free Cash Flow as a measure to assess both business performance and overall liquidity.

The tables below provide reconciliations between the GAAP and non-GAAP measures.

Spirit AeroSystems Holdings, Inc.Condensed Consolidated Statements of Cash Flows(unaudited) For the Nine Months Ended September October 1, 30, 2021 2020 ($ in millions)Operating activitiesNet loss ($420.5 ) ($574.4 )

Adjustments to reconcile net loss to net cash providedby (used in) operating activitiesDepreciation and amortization expense 241.9 202.5

Amortization of deferred financing fees 6.4 12.6

Accretion of customer supply agreement 1.6 1.6

Employee stock compensation expense 19.6 17.1

Gain from derivative instruments (0.1 ) -

Gain from foreign currency transactions (7.3 ) (1.1 )

Loss on disposition of assets 2.3 24.9

Deferred taxes 13.5 (34.3 )

Pension and other post-retirement benefits, net (104.5 ) 57.2

Grant liability amortization (1.2 ) (3.2 )

Equity in net loss of affiliates 1.9 3.8

Forward loss provision (1.1 ) 226.3

Changes in assets and liabilitiesAccounts receivable, net (4.7 ) 169.3

Contract assets (38.8 ) 200.4

Inventory, net 83.4 (66.1 )

Accounts payable and accrued liabilities 99.4 (530.6 )

Profit sharing/deferred compensation (17.7 ) (46.2 )

Advance payments (1.2 ) (19.9 )

Income taxes receivable/payable 227.2 (252.6 )

Contract liabilities (79.8 ) (44.1 )

Other (7.0 ) 44.0

Net cash provided by (used in) operating activities $13.3 ($612.8 )

Investing activitiesPurchase of property, plant and equipment (90.0 ) (70.4 )

Acquisition, net of cash acquired (21.1 ) (117.9 )

Other 4.7 4.9

Net cash used in investing activities ($106.4 ) ($183.4 )

Financing activitiesProceeds from issuance of debt - 1,200.0

Payment on revolving credit facility - (800.0 )

Customer financing (7.5 ) 10.0

Principal payments of debt (30.1 ) (22.7 )

Payments on term loan (3.0 ) (439.7 )

Payments on floating rate notes (300.0 ) -

Taxes paid related to net share settlement awards (5.0 ) (14.0 )

Proceeds from issuance of ESPP stock 3.0 2.6

Debt issuance and financing costs - (27.6 )

Purchase of treasury stock - 0.1

Dividends paid (3.2 ) (14.4 )

Other - 0.1

Net cash used in financing activities ($345.8 ) ($105.6 )

Effect of exchange rate changes on cash and cash (3.8 ) (3.3 )equivalentsNet decrease in cash, cash equivalents and restricted ($442.7 ) ($905.1 )cash for the periodCash, cash equivalents, and restricted cash, beginning 1,893.1 2,367.2 of the periodCash, cash equivalents, and restricted cash, end of the $1,450.4 $1,462.1 period Reconciliation of Cash and Cash Equivalents and September October 1,Restricted Cash: 30, 2021 2020Cash and cash equivalents, beginning of the period $1,873.3 $2,350.5

Restricted cash, short-term, beginning of the period 0.3 0.3

Restricted cash, long-term, beginning of the period 19.5 16.4

Cash, cash equivalents, and restricted cash, beginning $1,893.1 $2,367.2 of the period Cash and cash equivalents, end of the period $1,430.6 $1,441.3

Restricted cash, short-term, end of the period $0.3 $1.3

Restricted cash, long-term, end of the period 19.5 19.5

Cash, cash equivalents, and restricted cash, end of the $1,450.4 $1,462.1 period 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 and (ii) free cash flow, which are described further below. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define and calculate the measures differently than we do, limiting the usefulness of the measures for comparison with other companies.

Adjusted Diluted (Loss) Earnings Per Share. To provide additional transparency, we have disclosed non-GAAP adjusted diluted (loss) earnings per share (Adjusted EPS). This metric excludes various items that are not considered to be directly related to our operating performance. Management uses Adjusted EPS as a measure of business performance and we believe this information is useful in providing period-to-period comparisons of our results. The most comparable GAAP measure is diluted earnings per share.

Free Cash Flow. Free Cash Flow is defined as GAAP cash from operating activities (generally referred to herein as "cash provided by (used in) operations"), less capital expenditures for property, plant and equipment. Management believes Free Cash Flow provides investors with an important perspective on the cash available for stockholders, debt repayments including capital leases, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free Cash Flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures. The most comparable GAAP measure is cash provided by operating activities. Management uses Free Cash Flow as a measure to assess both business performance and overall liquidity.

The tables below provide reconciliations between the GAAP and non-GAAP measures.

Adjusted EPS Three months ended Nine months ended September October September October 30, 2021 1, 2020 30, 2021 1, 2020 GAAP Diluted Loss Per ($1.09) ($1.50) ($4.04) ($5.53) ShareCosts Related to - 0.02 a 0.01 a 0.15 aAcquisitionsRestructuring Costs - 0.12 b 0.05 b 0.41 b

Voluntary Retirement - 0.02 c - 0.52 cProgramDeferred Tax Asset 0.34 d - 1.72 d - Valuation AllowanceCurtailment (0.38) e - (0.33) e -

Adjusted Diluted Loss ($1.13) ($1.34) ($2.59) ($4.45) Per Share

Diluted Shares (in 104.3 103.9 104.2 103.8 millions) a Represents the transaction costs (included in SG&A) b Represents the restructuring expenses for cost-alignment and headcount reductions (included in Restructuring costs) c Represents the retirement incentive expenses resulting from the VRP offeredduring 2020 (included in Other income) d Represents the deferred tax asset valuation allowance (included in Incometax benefit) e Represents the curtailment gain resulting from the closure of the definedbenefit plans acquired as part of the Bombardier Acquisition (included in Other income)Free Cash Flow($ in millions)Three months endedNine months endedGuidanceSeptember 30 , 2021October 1, 2020September 30 , 2021October 1, 2020Full-Year 2021Cash Provided by (Used in) Operations$211

($53)

$13

($613)

($50) - ($150)

Capital Expenditures(37)

(19)

(90)

(70)

(150)

Free Cash Flow$174

($72)

($77)

($683)

($200 - $300)

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CONTACT: Investor Relations: Ryan Avey or Aaron Hunt (316) 523-7040 Media: Molly Edwards (316) 523-2479 On the web: http:/ /www.spiritaero.com