Press Release

Spirit AeroSystems Holdings, Inc. Reports Second Quarter 2008 Financial Results; Raises Full-Year 2008 EPS Guidance

- Second Quarter 2008 Revenues grew 11 percent to $1.1 billion

- Operating Income grew 33 percent as Operating Margins expanded to 12.8 percent

- Fully Diluted Earnings Per Share increased 27 percent to $0.62 per share

- Total Backlog increased 9 percent to approximately $30 billion

Company Release - 7/31/2008 7:30 AM ET

WICHITA, Kan., July 31 /PRNewswire-FirstCall/ -- Spirit AeroSystems Holdings, Inc. (NYSE: SPR) reported second quarter 2008 financial results reflecting revenue and earnings growth across the company as ship set deliveries for large commercial aircraft increased and lower period expenses were realized.

Spirit's second quarter 2008 revenues increased to $1.1 billion, up 11 percent from the same period last year. Operating income increased 33 percent to $136 million, up from $102 million in the same period a year ago as revenues increased and research and development costs and SG&A expenses declined. Net income was $86 million, or $0.62 per fully diluted share, up 27 percent from $68 million, or $0.49 per fully diluted share, in the same period of 2007 (Table 1).


    Table 1.  Summary Financial Results

    ($'s in Millions, except per   2nd Quarter            Six Months
     share data)                  2008     2007  Change  2008    2007  Change

    Revenues                     $1,062   $959    11%   $2,099 $1,913    10%
    Operating Income               $136   $102    33%     $266   $206    29%
    Operating Income as a % of
     Revenues                     12.8%  10.6%  220 BPS  12.7%  10.8%  190 BPS
    Net Income                      $86    $68    27%     $172   $138    25%
    Net Income as a % of
     Revenues                      8.1%   7.1%  100 BPS   8.2%   7.2%  100 BPS
    Earnings per Share (Fully
     diluted)                     $0.62  $0.49    27%    $1.23  $0.99    24%
    Fully Diluted Weighted Avg
     Share Count (Millions)       139.8  139.2           139.8  139.2

"We delivered a record 270 ship sets to our customers in the second quarter while we rebalanced 787 production, made progress on new development programs, and won new business," said President and Chief Executive Officer Jeff Turner. "Revenues increased and company-wide operating margins and net income expanded as we continue to execute our business plan and improve performance across the company," Turner continued. "We have made good progress in establishing the Spirit brand across the aerospace industry in our three years as an independent company. The recent A350 XWB wins, along with our new business jet and defense programs, demonstrate the value we bring to the industry in terms of aerostructures design, manufacturing, and product support capability," Turner added. "Additionally, we are pleased to be expanding Spirit's U.S. operations by establishing a new design and manufacturing facility in the State of North Carolina. This facility will provide Spirit the capacity and capability to execute new programs and serve as an important base for future growth."

"As for the outlook of the commercial aerospace market," Turner maintained, "we absolutely believe that we operate in a global market which will continue to see strong long-term growth. While today's countervailing market forces create some uncertainty about the near-term, our backlog continues to expand and our strategy is squarely focused on being the market leader in terms of total value creation for our customers and our shareholders over the long-term."

Spirit's backlog during the quarter increased 9 percent from $27.5 billion to $29.9 billion, as combined 2008 year-to-date net orders for 962 aircraft at Boeing and Airbus outpaced their combined deliveries of 486 aircraft. Spirit's backlog is calculated based on contractual prices for products and volumes from the published firm order backlogs of Boeing and Airbus along with firm orders from other customers.

Spirit updated its contract profitability estimates during the second quarter of 2008, resulting in a $4 million favorable cumulative catch-up adjustment reflected mainly in the Fuselage Systems segment, compared to a $3 million favorable cumulative catch-up adjustment for the second quarter of 2007 reflected mainly in the Propulsion Systems segment.

Cash flow from operations was $7 million for the second quarter of 2008, compared to $14 million for the second quarter of 2007, as the company received additional cash advances from Boeing associated with the 787 program; continued to invest in new development programs; and made cash tax payments of $82 million (Table 2).


    Table 2.  Cash Flow and Liquidity
                                         2nd Quarter       Six Months
    ($'s in Millions)                    2008    2007     2008     2007

    Cash Flow from Operations              $7     $14      $78      $65
    Purchases of Property, Plant &
     Equipment                           ($54)   ($72)   ($119)   ($159)

                                                       June 26, December 31,
    Liquidity                                            2008       2007

    Cash                                                  $147     $133
    Current Portion of Long-term Debt
     plus Long-term Debt                                  $595     $595

Cash balances at the end of the second quarter were $147 million, up $14 million from year-end 2007. Debt balances at the end of the second quarter were $595 million, unchanged from year-end 2007 as term loan borrowings associated with Spirit Malaysia were offset by planned debt payments. The company repaid $75 million in outstanding borrowings against its credit line on April 2, 2008. At the end of the second quarter of 2008, $636 million of the $650 million revolving credit facility was undrawn. Approximately $14 million of the credit facility continues to be used for financial letters of credit.

The company's long-term credit ratings remain unchanged with a BB rating at Standard & Poor's and a Ba3 rating at Moody's.

2008 Outlook

Spirit revenue guidance for the full-year 2008 remains unchanged and is expected to be approximately $4.4 billion based on 2008 Boeing delivery guidance of 475-480 aircraft, 2008 Airbus delivery guidance of approximately 470 aircraft, and internal Spirit forecasts for other products as well as revenue associated with non-recurring development work.

Fully diluted earnings per share guidance for 2008 has increased to between $2.35 and $2.45 to reflect improved performance in the first half of 2008 and current expectations for the second half of 2008.

Cash flow from operations full-year guidance is unchanged and is expected to be approximately $400 million. Capital expenditures guidance for 2008 is unchanged and is expected to be approximately $275 million (Table 3).

    Table 3.  Financial Outlook
                                               2008 Guidance

    Revenues                                   ~$4.4 billion

    Earnings Per Share (Fully Diluted)          $2.35 - $2.45

    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 assumes the benefit of a retroactive
      extension to the U.S. research tax credit.


          Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements." 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," "expect," "anticipate," "intend," "estimate," "believe," "project," "continue," "plan," "forecast," or other similar words. These statements reflect management's current view 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 forward-looking statements include, but are not limited to, our ability to continue to grow our business and execute our growth strategy; the build rates of certain Boeing aircraft including, but not limited to, the B737 program, the B747 program, the B767 program and the B777 program, and build rates of the Airbus A320 and A380 programs; the success and timely progression of Boeing's new B787 and Airbus' new A350 aircraft programs, including receipt of necessary regulatory approvals; our ability to enter into supply arrangements with additional customers and the ability of all parties to satisfy their performance requirements under existing supply contracts with Boeing, Airbus, and other customers; any adverse impact on Boeing's and Airbus' production of aircraft resulting from cancellations or reduced orders by their customers; the impact of continuing high oil prices on the commercial aviation market; 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, such as U.S. export control laws, the Foreign Corrupt Practices Act, environmental laws and agency regulations, both in the U.S. and abroad; the effect of new commercial and business aircraft development programs, and the resulting timing and resource requirements that may be placed on us; the cost and availability of raw materials and purchased components; our ability to recruit and retain highly skilled employees and our relationships with the unions representing many of our employees; spending by the United States and other governments on defense; the outcome or impact of ongoing or future litigation and regulatory actions; and our exposure to potential product liability claims. These factors are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. Except to the extent required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                                   Appendix

    Segment Results

Fuselage Systems

Fuselage Systems segment revenues for the second quarter of 2008 were $493 million, up almost 10 percent over the same period last year, as deliveries to Boeing increased. Operating margin for the second quarter of 2008 was 18.7 percent, compared to 18.3 percent in the second quarter of 2007, as productivity gains on the 737 program generated a favorable cumulative catch-up adjustment and more than offset higher R&D spending in the current quarter.

Propulsion Systems

Propulsion Systems segment revenues for the second quarter of 2008 were $297 million, up 14.5 percent over the same period last year as deliveries to Boeing increased. Operating margin for the second quarter of 2008 was 16.6 percent compared to 17.0 percent in the second quarter of 2007, as favorable cumulative catch-up adjustments in the prior year quarter were not repeated in the current quarter.

Wing Systems

Wing Systems segment revenues for the second quarter of 2008 were $264 million, up 7.7 percent over the same period last year, as deliveries to Boeing increased. Operating margin for the second quarter of 2008 was 12.4 percent compared to 11.6 percent in the second quarter of 2007, reflecting improved operating efficiencies and lower R&D expenses.



    Table 4. Segment Reporting

    ($'s in Millions,
     except margin            2nd Quarter                 Six Months
     percent)          2008    2007      Change     2008     2007      Change

    Segment Revenues
      Fuselage
       Systems       $493.4  $449.7        9.7%   $985.4   $894.9       10.1%
      Propulsion
       Systems       $296.9  $259.2       14.5%   $571.6   $519.6       10.0%
      Wing Systems   $264.4  $245.4        7.7%   $526.7   $486.6        8.2%
      All Other        $7.4    $4.5       64.4%    $14.8    $11.8       25.4%
    Total Segment
     Revenues      $1,062.1  $958.8       10.8% $2,098.5 $1,912.9        9.7%

    Segment Earnings
     from Operations
      Fuselage
       Systems        $92.4   $82.1       12.5%   $181.5   $165.1        9.9%
      Propulsion
       Systems        $49.3   $44.0       12.0%    $93.8    $84.3       11.3%
      Wing Systems    $32.9   $28.4       15.8%    $65.4    $51.6       26.7%
      All Other       ($0.3)   $0.7     (142.9%)    $0.1     $1.5      (93.3%)
    Total Segment
     Operating
     Earnings        $174.3  $155.2       12.3%   $340.8   $302.5       12.7%

    Unallocated
     Corporate
     SG&A Expense    ($38.0) ($51.9)     (26.8%)  ($74.1)  ($94.4)     (21.5%)
    Unallocated
     Research &
     Development
     Expense          ($0.2)  ($1.2)     (83.3%)   ($0.4)   ($2.2)     (81.8%)
    Total Earnings
     from
     Operations
                     $136.1  $102.1       33.3%   $266.3   $205.9       29.3%

    Segment Operating
     Earnings as % of
     Revenues
      Fuselage
       Systems        18.7%   18.3%      40 BPS    18.4%    18.4%           -
      Propulsion
       Systems        16.6%   17.0%    (40) BPS    16.4%    16.2%      20 BPS
      Wing Systems    12.4%   11.6%      80 BPS    12.4%    10.6%     180 BPS
      All Other       (4.1%)  15.6% (1,970) BPS     0.7%    12.7% (1,200) BPS
    Total Segment
     Operating
     Earnings as %
     of Revenues      16.4%   16.2%      20 BPS    16.2%    15.8%      40 BPS

    Total Operating
     Earnings as %
     of Revenues      12.8%   10.6%     220 BPS    12.7%    10.8%     190 BPS



                          Spirit Ship Set Deliveries
                      (One Ship Set equals One Aircraft)

                      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 Family        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      2nd Qtr     YTD 2008
    B737               93           95          188
    B747                4            7           11
    B767                3            3            6
    B777               20           22           42
    B787*               1            1            2
    Total             121          128          249

    A320 Family        95           95          190
    A330/340           24           21           45
    A380                4            2            6
    Total             123          118          241

    Hawker 850XP       15           24           39

    Total Spirit      259          270          529

    * 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           For the Six
                                       Months Ended           Months Ended
                                     June 26, June 28,      June 26,  June 28,
                                       2008     2007          2008      2007
                                      ($ in millions, except per share data)

    Net Revenues                    $1,062.1    $958.8     $2,098.5  $1,912.9
      Operating costs and expenses:
      Cost of sales                    874.5     788.7      1,731.8   1,583.5
      Selling, general and
       administrative                   40.9      54.3         80.0      99.4
      Research and development          10.6      13.7         20.4      24.1
          Total Costs and Expenses     926.0     856.7      1,832.2   1,707.0
          Operating Income             136.1     102.1        266.3     205.9
    Interest expense and financing
     fee amortization                  (10.5)     (9.5)       (19.6)    (18.4)
    Interest income                      5.0       7.2         10.7      14.8
    Other income, net                    0.2       1.8          1.6       3.8
          Income From Continuing
           Operations Before Income
           Taxes                       130.8     101.6        259.0     206.1
    Income tax provision               (44.4)    (33.6)       (87.4)    (68.3)
          Net Income                   $86.4     $68.0       $171.6    $137.8

    Earnings per share
    Basic                              $0.63     $0.50        $1.25     $1.04
    Shares                             137.0     134.9        136.9     132.3

    Diluted                            $0.62     $0.49        $1.23     $0.99
    Shares                             139.8     139.2        139.8     139.2



                      Spirit AeroSystems Holdings, Inc.
              Condensed Consolidated Balance Sheets (unaudited)

                                                   June 26,       December 31,
                                                     2008             2007
                                                        ($ in millions)
    Current assets
    Cash and cash equivalents                       $147.4            $133.4
    Accounts receivable, net                         234.3             159.9
    Current portion of long-term receivable          110.8             109.5
    Inventory, net                                 1,652.8           1,342.6
    Prepaids                                          15.3              14.2
    Other current assets                              74.9              83.2
         Total current assets                      2,235.5           1,842.8
    Property, plant and equipment, net             1,028.8             963.8
    Long-term receivable                              50.8             123.0
    Pension assets                                   341.2             318.7
    Other assets                                      89.6              91.6
         Total assets                             $3,745.9          $3,339.9

    Current liabilities
    Accounts payable                                $404.9            $362.6
    Accrued expenses                                 172.3             182.6
    Current portion of long-term debt                  8.9              16.0
    Advance payments, short-term                     159.8              67.6
    Deferred revenue, short-term                      40.0              42.3
    Other current liabilities                         13.8               3.9
         Total current liabilities                   799.7             675.0
    Long-term debt                                   586.2             579.0
    Advance payments, long-term                      745.1             653.4
    Other liabilities                                171.4             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, 103,201,380
     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, 36,713,632
     and 36,826,434 shares issued and
     outstanding, respectively                         0.4               0.4
    Additional paid-in capital                       931.9             924.6
    Accumulated other comprehensive income           113.9             117.7
    Retained earnings                                396.3             222.9
         Total shareholders' equity                1,443.5           1,266.6
         Total liabilities and shareholders'
          equity                                  $3,745.9          $3,339.9



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

                                              For the Six         For the Six
                                              Months Ended        Months Ended
                                             June 26, 2008       June 28, 2007

                                                      ($ in millions)
    Operating activities
    Net Income                                  $171.6               $137.8
    Adjustments to reconcile net income
     to net cash provided by operating
     activities
         Depreciation expense                     57.8                 43.7
         Amortization expense                      4.6                  3.8
         Accretion of long-term receivable        (9.3)               (10.8)
         Employee stock compensation expense       7.5                 21.0
         Excess tax benefit from share-based
          payment arrangements                     -                  (34.5)
         Loss from the ineffectiveness of hedge
          contracts                                0.6                  -
         Gain (Loss) on disposition of assets     (0.4)                 0.1
         Deferred taxes                            0.5                 13.7
         Pension and other post-retirement
          benefits, net                          (14.3)               (14.6)

    Changes in assets and liabilities
         Accounts receivable                     (52.9)               (44.9)
         Inventory, net                         (310.2)              (212.4)
         Accounts payable and accrued
          liabilities                             43.3                 28.4
         Customer advances                       183.9                 54.2
         Income taxes payable                     10.3                 38.5
         Deferred revenue and other deferred
          credits                                  0.3                 36.2
         Other                                   (14.9)                 4.4
            Net cash provided by operating
             activities                           78.4                 64.6

    Investing Activities
    Purchase of property, plant and equipment   (119.4)              (159.2)
    Proceeds from sale of assets                   1.7                  0.2
    Long-term receivable                          56.5                 11.4
    Financial derivatives                          0.8                  2.5
    Investment in joint venture                   (1.0)                 -
            Net cash (used in) investing
             activities                          (61.4)              (145.1)

    Financing Activities
    Proceeds from revolving credit facility       75.0                  -
    Payments on revolving credit facility        (75.0)                 -
    Proceeds from issuance of debt                 9.4                  -
    Proceeds from government grants                1.4                  -
    Principal payments of debt                    (7.9)               (10.8)
    Debt issuance costs                           (6.8)                 -
    Excess tax benefit from share-based
     payment arrangements                          -                   34.5
    Executive stock repurchase                     -                   (1.0)
            Net cash provided by (used in)
             financing activities                 (3.9)                22.7
    Effect of exchange rate changes on cash
     and cash equivalents                          0.9                  0.5
            Net increase (decrease) in cash
             and cash equivalents for the
             period                               14.0                (57.3)
    Cash and cash equivalents, beginning of
     the period                                  133.4                184.3
    Cash and cash equivalents, end of the
     period                                     $147.4               $127.0

SOURCE Spirit AeroSystems Holdings, Inc.

Contact: Investor Relations, Phil Anderson, +1-316-523-1797, or Media, Debbie Gann, +1-316-526-3910, both of Spirit AeroSystems Holdings, Inc.