Press Release

Spirit AeroSystems Holdings, Inc. Reports First Quarter 2008 Financial Results; Updates Full-Year 2008 Financial Outlook

- First quarter 2008 revenues grew 9 percent to $1.036 billion

- Operating margins expanded to 12.6 percent

- Fully Diluted Earnings Per Share increased 22 percent to $0.61 per share

- Total backlog increased to approximately $27.5 billion

Company Release - 4/29/2008 7:30 AM ET

WICHITA, Kan., April 29 /PRNewswire-FirstCall/ -- Spirit AeroSystems Holdings, Inc. (NYSE: SPR) reported first quarter 2008 financial results reflecting solid revenue and earnings growth in its core businesses as volume increased on the 737 program and operating efficiencies across the business offset the impact of delays in the 787 program.

Spirit's first quarter 2008 revenues increased to $1.036 billion, up 9 percent from the same period last year. Operating income increased 25 percent to $130 million, up from $104 million in the same period a year ago. Net income was $85 million, or $0.61 per fully diluted share, up from $70 million, or $0.50 per fully diluted share, in the same period of 2007 (Table 1).



    Table 1.  Summary Financial Results
                                                     1st Quarter
    ($'s in Millions, except per share data)     2008        2007     Change

    Revenues                                   $1,036        $954         9%
    Operating Income                             $130        $104        25%
    Operating Income as a % of Revenues         12.6%       10.9%    170 BPS
    Net Income                                    $85         $70        22%
    Net Income as a % of Revenues                8.2%        7.3%     90 BPS
    Earnings per Share (Fully diluted)          $0.61       $0.50        22%
    Fully Diluted Weighted Avg Share
     Count (Millions)                           139.6       139.0


"The first quarter results of our core businesses are in-line with my expectations and I am pleased with the progress we are making towards realizing our 2008 goals in spite of the challenges on the 787," said President and Chief Executive Officer Jeff Turner. "Revenues increased, and company-wide operating margins and net income expanded as we continued to execute well across our core businesses," Turner added. "The additional delay on the 787 schedule is unfortunate. Over the past four years we have made significant investments in the program and our 787 team has worked tirelessly to meet our customer commitments," Turner continued. "In the first quarter we aggressively began taking steps to mitigate the impact from slowing 787 production. Today, we are continuing to implement the revised Boeing production and delivery schedule, and we are reflecting the financial implications of the revised schedule in our outlook," Turner added.

"During the quarter we made solid progress on our strategy to diversify. We won major structures work on the new Cessna Citation Columbus business jet; announced our participation on the new Gulfstream G650 business jet; secured an aftermarket contract to provide overhaul, repair, and modification services for Cathay Pacific Airways' fleet of 777 Trent 800 Thrust Reversers; and just last week we announced a new maintenance joint venture with HAECO to establish a regional service center to serve the Asia-Pacific region," Turner concluded.

Spirit's backlog during the quarter increased four percent from $26.5 billion to $27.5 billion, as combined net orders for 683 aircraft at Boeing and Airbus outpaced their combined deliveries of 238 aircraft. Spirit's backlog is calculated based on contractual prices for products and volumes from the published firm order backlogs of Boeing, Airbus, and other customers.

Spirit updated its contract profitability estimates during the first quarter of 2008, resulting in a $2 million favorable cumulative catch-up adjustment, compared to a $6 million favorable cumulative catch-up adjustment for the first quarter of 2007.



    Table 2.  Cash Flow and Select Balance Sheet Information
                                                           1st Quarter
    ($'s in Millions)                                 2008              2007

    Cash Flow from Operations                         $70               $50
    Purchases of Property, Plant & Equipment         ($66)             ($88)

                                                    Mar. 27,         Dec. 31,
    Cash and Debt Balances                           2008              2007

    Cash                                             $203              $133
    Current Portion of Long-term Debt plus
     Long-term Debt                                  $667              $595


Cash flow from operations was $70 million for the first quarter, compared to $50 million for first quarter 2007, as the company continued to invest in the 787 program and other development programs (Table 2). During the quarter Spirit and Boeing reached an agreement to revise certain 787 contract payment terms. The revised terms, among other things, alter the payment terms for 787 unit deliveries from Spirit to Boeing. The amendment also eliminated the existing delayed payment schedule for ship sets delivered prior to aircraft certification and ties all payments for ship sets not covered by the additional advances to the date of delivery by Spirit to Boeing. The revised terms will result in additional cash advance payments to Spirit from Boeing during 2008. The initial payment of $124 million was received by Spirit in the first quarter. The balance of the advance payments will be made to Spirit over the remaining three quarters of 2008. The additional advances will be applied against the purchase price of ship sets delivered until fully repaid.

On March 19, 2008, Spirit amended its credit agreements, to among other things, increase the company's revolving credit facility from $400 million to $650 million. Cash balances at the end of the first quarter were $203 million, up $46 million from a year ago, reflecting the $124 million advance payment from Boeing; planned investment in Spirit's core business, primarily for the 787 program; and $75 million of borrowings against the company's $650 million credit facility. Debt balances at the end of the first quarter were $667 million, up $72 million from year-end 2007, reflecting the outstanding borrowing on the credit facility and planned debt principal payments. The $75 million in outstanding borrowings against the company's credit line was repaid in full on April 2, 2008.

During the quarter, Standard & Poor's revised the company's credit outlook from negative to stable following Spirit's announcement of its increased credit line. Standard & Poor's and Moody's confirmed their respective BB and Ba3 corporate ratings for Spirit.

2008 Outlook

Spirit previously issued 2008 revenue guidance of approximately $4.7 billion based on previously issued 2008 Boeing delivery guidance of 480- 490 aircraft and internal Spirit forecasts for Airbus and other products. Spirit's revenue guidance assumed delivery of approximately forty-five 787 ship sets from Spirit to Boeing. On April 9, 2008, Boeing announced a revised schedule that shifted first customer deliveries of the 787 to the third quarter of 2009, with approximately twenty-five 787 aircraft now expected to be delivered by the end of 2009.

Spirit now expects to achieve 2008 revenues of approximately $4.4 billion based on the revised 787 schedule; 2008 Boeing delivery guidance of 480-490 aircraft; 2008 Airbus delivery guidance of greater than 470 aircraft; and internal Spirit forecasts for other products.

Fully diluted earnings per share for 2008 is now expected to be between $2.25 and $2.35 as improved operating efficiencies are expected to offset a portion of the impact of delays in the 787 program (Table 3).



    Table 3.  Financial Outlook
                                                    2008 Guidance

    Revenues                                        ~$4.4 billion

    Earnings Per Share (Fully Diluted)              $2.25 - $2.35

    Effective Tax Rate (% Pre-Tax Earnings)             ~33%*

    Cash Flow From Operations                       ~$400 million

    Capital Expenditures                            ~$275 million

    Capital Reimbursement                           ~$116 million

    * Effective tax rate guidance among other factors, assumes the benefit of
      an extension to the U.S. research tax credit.


For 2008, cash flow from operations is expected to be approximately $400 million as revised 787 payment terms shift cash receipts from 2009 and early 2010 into 2008. Capital expenditures are expected to be approximately $275 million in 2008.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements that reflect the plans and expectations of Spirit AeroSystems Holdings, Inc. To the extent that statements in this press release do not relate to historical or current facts, they may constitute forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "plan", "forecast", "anticipate", "believe", "project", "continue", or other similar words. These statements reflect Spirit AeroSystems Holdings, Inc.'s current view with respect to future events and are subject to risks and uncertainties, both known and unknown. Such risks and uncertainties may cause the actual results of Spirit AeroSystems Holdings, Inc. to vary materially from those anticipated in forward-looking statements, and therefore we caution investors not to place undue reliance on them. Potential risks and uncertainties include, but are not limited to: our customers' aircraft build rates; the ability to enter into supply arrangements with additional customers and satisfy performance requirements under existing contracts; any adverse impact on our customers' production of aircraft; the success and timely progression of our customers' new programs including, but not limited to The Boeing Company's 787 aircraft program; future levels of business in the aerospace and commercial transport industries; competition from original equipment manufacturers and other aerostructures suppliers; the effect of governmental laws; the effect of new commercial and business aircraft development programs; the cost and availability of raw materials; the ability to recruit and retain highly skilled employees and relationships with unions; spending by the United States and other governments on defense; our continuing ability to operate successfully as a stand-alone company; the outcome of ongoing or future litigation and regulatory actions; and our exposure to potential product liability claims. Additional information as to factors that may cause actual results to differ materially from our forward-looking statements can be found in Spirit AeroSystems Holdings, Inc.'s filings with the United States Securities and Exchange Commission. Spirit AeroSystems Holdings, Inc. undertakes no obligation and does not intend to update publicly any forward- looking statements after the date of this press release, except as required by law.

                                   Appendix

    Segment Results

Fuselage Systems

Fuselage Systems segment revenues for the first quarter of 2008 were $492 million, up 11 percent over the same period last year, as deliveries to Boeing increased 8 percent. Operating margin for the first quarter of 2008 was 18.1 percent, compared to 18.6 percent in the first quarter of 2007, reflecting higher R&D expense.

Propulsion Systems

Propulsion Systems segment revenues for the first quarter of 2008 were $275 million, up 6 percent over the same period last year as 737 deliveries increased and fewer wide-body deliveries were made to Boeing during the first quarter of 2008. Operating margin for the first quarter of 2008 was 16.2 percent compared to 15.5 percent in the first quarter of 2007, reflecting improved operating efficiencies.

Wing Systems

Wing Systems segment revenues for the first quarter of 2008 were $262 million, up 9 percent over the same period last year, as deliveries to Boeing increased by 8 percent and deliveries to Airbus increased 7 percent. Operating margin for the first quarter of 2008 was 12.4 percent compared to 9.6 percent in the first quarter of 2007, reflecting improved operating efficiencies and lower R&D expenses. Wing Systems benefited from a favorable cumulative catch-up adjustment of approximately $2 million in the first quarter of 2008, compared to approximately $6 million favorable cumulative catch-up adjustment for the first quarter of 2007.



    Table 4.  Segment Reporting
                                                       1st Quarter
    ($'s in Millions, except margin percent)     2008       2007      Change

    Segment Revenues
       Fuselage Systems                         $492.0     $445.2      10.5%
       Propulsion Systems                       $274.7     $260.4       5.5%
       Wing Systems                             $262.3     $241.2       8.7%
       All Other                                  $7.4       $7.3       1.4%
    Total Segment Revenues                    $1,036.4     $954.1       8.6%

    Segment Earnings from Operations
       Fuselage Systems                          $89.1      $83.0       7.3%
       Propulsion Systems                        $44.5      $40.3      10.4%
       Wing Systems                              $32.5      $23.2      40.1%
       All Other                                  $0.4       $0.8     (50.0%)
    Total Segment Operating Earnings            $166.5     $147.3      13.0%

    Unallocated Corporate SG&A Expense          ($36.1)    ($42.5)    (15.1%)
    Unallocated Research & Development Expense   ($0.2)     ($1.0)    (80.0%)
    Total Earnings from Operations              $130.2     $103.8      25.4%

    Segment Operating Earnings as % of Revenues
       Fuselage Systems                          18.1%      18.6%   (50) BPS
       Propulsion Systems                        16.2%      15.5%    70  BPS
       Wing Systems                              12.4%       9.6%   280  BPS
       All Other                                  5.4%      11.0%  (560) BPS
    Total Segment Operating Earnings as %
     of Revenues                                 16.1%      15.4%    70  BPS

    Total Operating Earnings as % of Revenues    12.6%      10.9%   170  BPS



                          Spirit Ship Set Deliveries
                         (BASED ON FUSELAGE DELIVERIES)

                      2007 Spirit AeroSystems Deliveries


                       1st Qtr 2nd Qtr 3rd Qtr  4th Qtr  Total 2007
         B737            83       85      84      79        331
         B747             5        4       5       4         18
         B767             3        4       3       3         13
         B777            21       21      21      20         83
         B787*            0        1       0       0          1
         Total          112      115     113     106        446

         A320            93       84      91      91        359
         A330/340        22       21      22      20         85
         A380             0        0       2       3          5
         Total          115      105     115     114        449

         Hawker 850XP    16       15      17      20         68

         Total Spirit   243      235     245     240        963

    *  Full-Revenue Units Only, Does not include Static and Fatigue test
    units



                       2008 Spirit AeroSystems Deliveries

                      1st Qtr
         B737            93
         B747             4
         B767             3
         B777            20
         B787*            1
         Total          121

         A320            95
         A330/340        24
         A380             4
         Total          123

         Hawker 850XP    15

         Total Spirit   259

    *  Full-Revenue Units Only, Does not include Static and Fatigue test units


                      Spirit AeroSystems Holdings, Inc.
           Condensed Consolidated Statements of Operations (unaudited)

                                              For the Three Months Ended
                                            March 27, 2008    March 29, 2007

                                           ($ in millions, except per share
                                                         data)

    Net Revenues                                    $1,036.4           $954.1
      Operating costs and expenses:
      Cost of sales                                    857.3            794.8
      Selling, general and administrative               39.1             45.1
    Research and development                             9.8             10.4
        Total Costs and Expenses                       906.2            850.3
        Operating Income                               130.2            103.8
    Interest expense and financing fee amortization     (9.1)            (8.9)
    Interest income                                      5.7              7.7
    Other income, net                                    1.4              2.0
        Income From Continuing Operations
         Before Income Taxes                           128.2            104.6
    Income tax provision                               (43.0)           (34.8)
        Net Income                                     $85.2            $69.8

    Earnings per share
    Basic                                              $0.62            $0.54
    Shares                                             136.8            129.7

    Diluted                                            $0.61            $0.50
    Shares                                             139.6            139.0



                      Spirit AeroSystems Holdings, Inc.
                     Condensed Consolidated Balance Sheets

                                                   March 27,      December 31,
                                                     2008             2007
                                                 (unaudited)
                                                         ($ in millions)
    Current assets
    Cash and cash equivalents                       $203.4            $133.4
    Accounts receivable, net                         266.5             159.9
    Other receivable                                 112.1             109.5
    Inventory, net                                 1,499.5           1,342.6
    Prepaid expenses                                  12.1              14.2
    Income tax receivable                              1.1               9.6
    Other current assets                              72.7              73.6
         Total current assets                      2,167.4           1,842.8
    Property, plant and equipment, net             1,001.4             963.8
    Long-term receivable                             101.6             123.0
    Pension assets                                   331.9             318.7
    Other assets                                      99.2              91.6
         Total assets                             $3,701.5          $3,339.9

    Current liabilities
    Accounts payable                                $417.8            $362.6
    Accrued expenses                                 184.4             182.6
    Current portion of long-term debt                 13.4              16.0
    Advance payments short-term                      189.5             109.9
    Income tax payable                                42.3               2.5
    Other current liabilities                          7.5               1.4
         Total current liabilities                   854.9             675.0
    Revolving credit facility                         75.0               -
    Long-term debt                                   578.6             579.0
    Advance payments                                 660.5             653.4
    Other liabilities                                180.3             165.9
    Shareholders' equity
    Preferred stock, par value $0.01, 10,000,000
      shares authorized, no shares issued and
      outstanding                                      -                 -
    Common stock, Class A par value $0.01,
     200,000,000 shares authorized, 102,776,848
     and 102,693,058 issued and outstanding,
     respectively                                      1.0               1.0
    Common stock, Class B par value $0.01,
     150,000,000 shares authorized, 36,827,426
     and 36,826,434 shares issued and  outstanding,
      respectively                                     0.4               0.4
    Additional paid-in capital                       928.1             924.6
    Accumulated other comprehensive income           112.7             117.7
    Retained earnings                                310.0             222.9
         Total shareholders' equity                1,352.2           1,266.6
         Total liabilities and shareholders'
           equity                                 $3,701.5          $3,339.9



                        Spirit AeroSystems Holdings, Inc.
            Condensed Consolidated Statements of Cash Flow (unaudited)

                                        For the Three Months    For the Three
                                          Ended March 27,        Months Ended
                                              2008              March 29, 2007
                                                  ($ in millions)
    Operating activities
    Net Income                                $85.2                 $69.8

    Adjustments to reconcile net income
     to net cash provided by operating
     activities
         Depreciation expense                  28.0                  20.9
         Amortization expense                   2.1                   1.9
         Accretion of long-term receivable     (4.9)                 (5.5)
         Employee stock compensation expense    3.7                   6.6
         Excess tax liability/(benefit) from
           share-based payment arrangements     0.2                  (2.6)
         Loss from the ineffectiveness of
          hedge contracts                       0.3                     -
         Loss on disposition of assets          0.7                   0.1
         Loss from foreign currency
          transactions                          0.6                     -
         Deferred taxes                        (2.1)                  8.6
         Pension income, net                   (7.2)                 (5.9)

    Changes in assets and liabilities
         Accounts receivable                  (66.4)                (54.3)
         Inventory, net                      (155.8)                (63.6)
         Other current assets                   2.1                  10.3
         Accounts payable and accrued
          liabilities                          58.6                 (10.2)
         Customer advances                     89.1                  29.2
           Income taxes payable                47.8                  23.8
         Deferred revenue and other
          deferred credits                     (8.5)                 19.5
           Other                               (3.6)                  1.5
             Net cash provided by operating
               activities                      69.9                  50.1

    Investing Activities
    Purchase of property, plant and
     equipment                                (65.7)                (87.5)
    Long-term receivable                        -                    11.4
    Financial derivatives                       0.4                   1.1
    Investment in joint venture                (0.5)                  -
             Net cash (used in) investing
              activities                      (65.8)                (75.0)

    Financing Activities
    Proceeds from revolving credit
     facility                                  75.0                   -
    Principal payments of debt                 (1.6)                 (4.7)
    Debt issuance costs                        (6.8)                  -
    Excess tax (liability)/benefit from
     share-based payment arrangements          (0.2)                  2.6
             Net cash provided by (used
              in) financing activities         66.4                  (2.1)
    Effect of exchange rate changes on
     cash and cash equivalents                 (0.5)                  -
             Net increase (decrease) in
              cash and cash equivalents
              for the period                   70.0                 (27.0)
    Cash and cash equivalents, beginning
     of the period                            133.4                 184.3
    Cash and cash equivalents, end of the
     period                                  $203.4                $157.3

SOURCE Spirit AeroSystems Holdings, Inc.

Contact: investors, Phil Anderson, +1-316-523-1797, or media, Debbie Gann, +1-316-519-7340, both of Spirit AeroSystems Holdings, Inc.