Second Quarter 2021 Earnings Review Tom Gentile President and Chief Executive Officer Sam Marnick Executive Vice President and Chief Operating Officer Mark Suchinski Senior Vice President and Chief Financial Officer August 04, 2021 Summary of Recent Events Named exclusive nacelle provider for the Rolls-Royce Pearl 10X engine Published first sustainability report Collaboration with Albany Engineered Composites to expand hypersonic capabilities Completed ~90% of integration tasks for the Bombardier acquisitio ...

Financial Data and Key Metrics Changes - Revenue for Q1 2021 was $901 million, down 16% from the same quarter last year, primarily due to lower production rates and reduced international air traffic caused by COVID-19 [32][33] - Earnings per share (EPS) was negative $1.65 compared to negative $1.57 in Q1 2020, with adjusted EPS at negative $1.22 compared to negative $0.79 in the same period last year [35] - Free cash flow usage for the quarter was $198 million, an improvement from $362 million in Q1 2020, primarily due to better working capital management [39][40] Business Line Data and Key Metrics Changes - Fuselage segment revenues were $437 million, down approximately $115 million compared to 2020, mainly due to lower production volumes on wide-body programs [43] - Propulsion revenue improved to $227 million, primarily due to higher revenue from the 737 MAX program and aftermarket revenues, with an operating margin of positive 7% compared to negative 2% in Q1 2020 [45] - Wing revenue decreased to $224 million, with an operating margin of negative 8%, primarily due to forward losses on the 787 and A350 programs [47] Market Data and Key Metrics Changes - Domestic air travel in the U.S. has shown recovery, with TSA checkpoint travel numbers consistently above 1 million since early March, indicating a positive trend for narrow-body aircraft [10][12] - International air traffic demand remains low compared to pre-pandemic levels and is expected to take longer to recover, impacting wide-body programs [13] Company Strategy and Development Direction - The company plans to produce about 160 737 MAX aircraft in 2021 to reduce inventory and support recovery in narrow-body demand [11][52] - Efforts are being made to diversify into defense programs, with expectations of 15% growth in defense business revenue for 2021 [26][54] - The integration of recently acquired sites is progressing, with projected synergies estimated at $42 million based on 2021 revenues [20] Management's Comments on Operating Environment and Future Outlook - Management expects the first half of 2021 to be challenging, with improvements anticipated in the latter half as narrow-body production rates increase [31][52] - The company is focused on deleveraging and aims to repay $1 billion in debt over the next three years as production rates recover [28][42] Other Important Information - The company recognized forward loss charges of $72 million in Q1 2021, primarily related to the 787 and A350 programs [38] - Cash and debt balances at the end of Q1 were approximately $1.4 billion and $3.6 billion, respectively [41] Q&A Session Summary Question: Clarification on 787 forward loss and fit-and-finish issues - Management clarified that the issues are related to their section of the aircraft, and there is no recourse for these specific issues [59][60] Question: A350 charge and production rate signals - Management indicated that about half of the forward loss on the A350 was related to schedule changes, with fewer aircraft requested despite the stated rate remaining the same [65][66] Question: Free cash flow breakeven point - Management stated that breakeven for the 737 program is in the high upper 20s to low 30s in terms of production per month, which would significantly help earnings and cash flow [76] Question: Production rates and inventory burn down - Management confirmed that they plan to produce 160 units this year while burning down existing inventory, which will provide a cushion for production [84][85] Question: Defense program revenue generation timeline - Management expects defense programs to start generating revenue within about two years as they move into low-rate initial production [110]

May 05, 2021 | --- | --- | |------------------------------------------------------|-------| | | | | First Quarter 2021 | | | | | | Earnings Review | | | | | | Tom Gentile | | | President and Chief Executive Officer | | | Sam Marnick | | | Executive Vice President and Chief Operating Officer | | | Mark Suchinski | | | Senior Vice President and Chief Financial Officer | | Summary of Recent Events Conducted extensive review and engineering analysis on 787 to help Boeing resume deliveries Completed 80% of integ ...

Financial Performance - For the year ended December 31, 2020, net revenues were $3,404.8 million, a decrease of 56.7% compared to $7,863.1 million in 2019[243] - The company reported a net loss of $870.3 million for 2020, compared to a net income of $530.1 million in 2019, resulting in a basic loss per share of $8.38[243] - Operating loss for 2020 was $812.8 million, a significant decline from an operating income of $760.8 million in 2019[243] - Gross (loss) profit for the twelve months ended December 31, 2020 was $(440.7) million, a decrease of $1,517.4 million from $1,076.7 million in the prior year[294] - Operating (loss) income for the twelve months ended December 31, 2020 was $(812.8) million, which was $1,573.6 million lower than operating income of $760.8 million for the prior year[297] - The income tax provision for the twelve months ended December 31, 2020 was $220.2 million compared to $(132.8) million for the prior year, with an effective tax rate of 20.3%[300] - The company experienced a net cash outflow of $744.9 million from operating activities for the twelve months ended December 31, 2020, a decrease of $1,667.6 million compared to a net cash inflow of $922.7 million in the prior year[362] - The net cash outflow from investing activities for the twelve months ended December 31, 2020, was $502.0 million, compared to $239.9 million in the prior year, primarily due to the FMI and Bombardier acquisitions[363] - The company had a net cash inflow of $769.5 million from financing activities for the twelve months ended December 31, 2020, a decrease of $114.9 million compared to $884.4 million in the prior year[364] Debt and Liquidity - Total debt increased to $3,873.6 million in 2020, up from $3,034.3 million in 2019, indicating a rise in leverage[245] - Cash and cash equivalents decreased to $1,873.3 million in 2020 from $2,350.5 million in 2019, reflecting liquidity challenges[245] - The Company anticipates sufficient liquidity for the next 12 months, but may need additional financing if the COVID-19 pandemic recovery is worse than forecasted[324] - As of December 31, 2020, the Company has total contractual cash obligations of approximately $5,260.1 million, including principal payments under the Credit Agreement of $400.0 million and long-term bonds totaling $3,300.0 million[376] - Interest on debt obligations is projected to total approximately $96.6 million over the next several years, with significant payments due in 2021 and 2022[376] Operational Changes - The company incurred restructuring costs of $73.0 million in 2020, as part of its cost reduction strategy[243] - The company reduced its workforce by approximately 6,800 employees globally and implemented a four-day work week for salaried employees at its Wichita facility[256] - The company suspended its share repurchase program and reduced quarterly dividends to $0.01 per share in response to the pandemic[251] - The company has paused its share repurchase program, with $925 million remaining in the Board-approved program due to the impacts of the B737 MAX grounding and the COVID-19 pandemic[373] - The Company reduced its quarterly dividend to $0.01 per share to preserve liquidity, with future dividend payments subject to Board discretion based on operational results and financial condition[374] Production and Deliveries - Approximately 19% of net revenues in 2020 were generated from sales of components to Boeing for the B737 aircraft, down from 53% in 2019[253] - Deliveries to Boeing decreased to 256 shipsets during 2020, compared to 867 shipsets delivered in the prior year[293] - Deliveries to Airbus decreased to 591 shipsets during 2020, compared to 869 shipsets delivered in the prior year[293] - Spirit delivered 71 B737 MAX shipsets in the year ended December 31, 2020, compared to 606 shipsets in the year ended December 31, 2019, reflecting a significant decline in production due to the B737 MAX grounding and COVID-19 pandemic[371] - The B787 production rate was reduced from 10 aircraft per month to 5 aircraft per month, resulting in a forward loss charge of $192.5 million for the year ended December 31, 2020[259] Market Conditions and Future Outlook - The company expects continued negative impacts from the COVID-19 pandemic and the B737 MAX grounding on its operations and financial performance[249] - Boeing resumed deliveries of the B737 MAX in Q4 2020 after the FAA lifted the grounding order, with ongoing demand challenges expected due to the COVID-19 pandemic[256] - The company expects domestic air travel demand to recover sooner than international demand, with B737 MAX production rates anticipated to return to pre-pandemic levels before widebody production rates[258] Segment Performance - Fuselage Systems segment net revenues for the twelve months ended December 31, 2020 were $1,725.9 million, a decrease of 59% compared to the prior year[304] - Propulsion Systems segment net revenues for the twelve months ended December 31, 2020 were $784.5 million, a decrease of 62% compared to the prior year[306] - Wing Systems segment net revenues for the twelve months ended December 31, 2020 were $798.6 million, a decrease of 50% compared to the prior year[307] - All Other segment net revenues were $95.8 million, an increase of 787% compared to $10.8 million in the prior year[308] - Fuselage Systems segment operating margins were (26%) for the twelve months ended December 31, 2020, compared to 11% for the same period in the prior year[305] - Propulsion Systems segment operating margins were (5%) for the twelve months ended December 31, 2020, compared to 20% for the same period in the prior year[306] - Wing Systems segment operating margins were (8%) for the twelve months ended December 31, 2020, compared to 14% for the same period in the prior year[307] Acquisitions and Investments - The Bombardier Acquisition on October 30, 2020, resulted in a total goodwill amount of $565.3 million, with preliminary purchase price allocation still pending[272] - The company deferred $32.9 million in employer payroll taxes under the CARES Act, with 50% due by December 2021 and the remaining 50% by December 2022[256] - The company recorded a deferral of $31.5 million in VAT payments until March 2022 under the UK deferral scheme, along with receiving approximately $5.4 million in Employee Retention Credit subsidies from the UK government[256] Risk Factors - The Company operates in various non-U.S. markets, with facilities in the U.K., France, Malaysia, and Morocco, which exposes it to foreign operational risks[379] - Inflationary pressures may impact the Company's long-term contracts, although some contracts include price adjustment provisions to mitigate these effects[384] - The Company has agreements to sell trade accounts receivable balances with Boeing and Airbus, which are dependent on the financial strength of these companies and could impact liquidity if disrupted[375] - The Company has long-term supply agreements for raw materials, expecting stable pricing in the near term, while also focusing on strategic cost reduction plans to mitigate potential cost increases[385] - The Company has not entered into any off-balance sheet arrangements as of December 31, 2020, indicating a focus on maintaining transparency in financial reporting[378]

Financial Data and Key Metrics Changes - Revenue for 2020 was $3.4 billion, down 57% from 2019, primarily due to lower production rates on the 737 MAX and the impacts of COVID-19 [48] - Earnings per share were negative $8.38 compared to positive $5.06 in 2019, with adjusted EPS at negative $5.72 [49] - Free cash flow for the year was a use of $864 million, compared to a source of $691 million in 2019 [54] - The company ended the fourth quarter with $1.9 billion in cash and $3.9 billion in debt [60] Business Line Data and Key Metrics Changes - Fuselage segment revenue was $1.7 billion, down from 2019, with an operating margin of negative 26% compared to positive 11% in the prior year [63] - Propulsion revenue was $785 million, down from the previous year, with an operating margin of negative 5% compared to positive 20% in 2019 [65] - Wing revenue was $799 million, down from 2019, with an operating margin of negative 9% compared to positive 14% in 2019 [66] Market Data and Key Metrics Changes - The defense business grew by over 20% in 2020, contributing to overall diversification [48] - The company expects Boeing commercial to account for 44% of revenue in 2021, down from 74% in 2019, while Airbus is expected to account for 23% [40] Company Strategy and Development Direction - The company aims to be a diversified design and manufacturing champion, focusing on Boeing, Airbus, defense, aftermarket, business and regional jets, and non-aerospace manufacturing [25] - The acquisition of Bombardier assets is expected to generate approximately $700 million in revenue in 2021, growing at about 15% annually [76] - The company plans to pay down $1 billion in debt over the next three years, starting with a $300 million floating rate note redemption [41][62] Management's Comments on Operating Environment and Future Outlook - Management views 2021 as a bridge year for recovery from the 737 MAX grounding and COVID-19 impacts, with expectations for improved production rates [81] - The company anticipates that single-aisle aircraft will recover first, benefiting from a backlog that is 85% narrow-body [43] - Management remains committed to regaining an investment-grade credit rating in the future [62] Other Important Information - The company implemented significant cost reductions, totaling $1 billion annually, or about 40% from the 2019 non-material base [11] - The company has established a forward loss liability of $282 million primarily related to the A220 program due to production schedule changes [70] Q&A Session All Questions and Answers Question: Can you provide perspective on the margin performance in 4Q versus 3Q? - Management clarified that the target margin is 16.5% once MAX production rates reach the low 40s [87] Question: Will the A220 program generate profit in the future? - Management expects the A220 to be profitable after the three to five-year forward loss period [89] Question: Do you expect MAX deliveries to pick up in 2021? - Management expects higher MAX deliveries in 2021 compared to 2020, with Boeing prioritizing delivery of built but undelivered units [95] Question: How will excess capacity costs proceed through the year? - Management anticipates a 30% reduction in excess capacity costs in 2021 compared to 2020 [100] Question: Is the Bombardier pension contribution included in the cash flow walk? - Management confirmed that the Bombardier pension contribution will flow through operating cash flow and is included in the cash flow walk [113]

| --- | --- | |---------------------------------------------------|-------| | | | | | | | Fourth Quarter and Full-Year 2020 | | | Earnings Review | | | | | | Tom Gentile | | | President and Chief Executive Officer | | | Mark Suchinski | | | Senior Vice President and Chief Financial Officer | | February 23, 2021 2020 Cost Reduction Actions Implemented cost reduction actions: Reduction of 8,000 commercial aviation employees Reduced executive pay by 20% Implemented 4-day work weeks for salaried workforce at Wi ...

Spirit AeroSystems Holdings, Inc. (NYSE:SPR) Q3 2020 Earnings Conference Call November 3, 2020 11:00 AM ET Company Participants Ryan Avey - Director of Investor Relations Tom Gentile - President and Chief Executive Officer Mark Suchinski - Senior Vice President and Chief Financial Officer Conference Call Participants Myles Walton - UBS Carter Copeland - Melius Research Robert Spingarn - Credit Suisse Christine Huang - Morgan Stanley Sheila Kahyaoglu - Jefferies Doug Harned - Bernstein Ken Herbert - Canaccor ...

| --- | --- | |---------------------------------------------------|-------| | | | | | | | Third Quarter 2020 | | | Earnings Review | | | | | | Tom Gentile | | | President and Chief Executive Officer | | | Mark Suchinski | | | Senior Vice President and Chief Financial Officer | | November 3, 2020 Summary of Recent Events Continued actions on labor and non-labor cost reductions; reduction of 8,000 commercial employees and $1 billion of annualized cost savings Encouraged by progress on the 737 MAX return to se ...

| --- | --- | |---------------------------------------------------|-------| | | | | Second Quarter 2020 | | | Earnings Review | | | | | | Tom Gentile | | | | | | President and Chief Executive Officer | | | Mark Suchinski | | | Senior Vice President and Chief Financial Officer | | August 4, 2020 Summary of Recent Actions 2 | --- | --- | --- | |-------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------| | | ...

Financial Data and Key Metrics Changes - Revenue for Q2 2020 was $645 million, down 68% from the same quarter last year, primarily due to lower production rates on the 737 MAX and the impacts of COVID-19 [33][34] - Earnings per share (EPS) reported was negative $2.46 compared to positive $1.61 in the same quarter last year; adjusted EPS was negative $2.28 compared to positive EPS of $1.71 in the same period of 2019 [35] - Free cash flow for the quarter was a use of $249 million compared to a source of $192 million in the same period of 2019 [42] Business Line Data and Key Metrics Changes - Fuselage segment revenue was $327 million, down from the same period in 2019, with an operating margin of negative 77% compared to 12% in the prior year [45] - Propulsion segment revenue was $170 million, down compared to the same period of the prior year, with an operating margin of negative 10% compared to 19% in the same quarter of 2019 [46] - Wing segment revenue was $123 million, down compared to the same period last year, with an operating margin of negative 35% compared to 14% in the same quarter of 2019 [47] Market Data and Key Metrics Changes - Global passenger traffic fell by more than 90% in April and May compared to last year, with airlines losing more than $415 billion in revenue in 2020 [10][11] - The aviation industry is expected to take several years to recover, with domestic travel rebounding first, followed by international travel [10] Company Strategy and Development Direction - The company is focusing on cost reduction and preserving liquidity in response to lower production levels due to COVID-19 [11][43] - Significant cost-cutting measures have been implemented, including a reduction of more than $1 billion in costs or 40% of the non-material base of the business [15] - The company is also diversifying its operations, including partnerships with Virgin Hyperloop and Aerion for new transportation technologies [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the significant challenges posed by the MAX grounding and COVID-19 but remains confident in the long-term resilience of the aviation industry [11][51] - The company expects to return to cash flow positivity by 2022, contingent on production ramp-up and market recovery [56][100] Other Important Information - The company has made the decision not to renew the lease for the San Antonio facility and is assessing its global footprint and machine capacity [14] - The company is actively engaged in discussions with defense primes to leverage available capacity to support defense business growth [25] Q&A Session Summary Question: Can you elaborate on liquidity and cash breakeven? - Management indicated that cash burn will continue through next year, with expectations for cash flow positivity in 2022 [56][57] Question: What are the normalized margin targets at lower production rates? - The goal is to improve productivity and efficiency to achieve higher margins when production rates return to higher levels [65] Question: Insights on MAX production ramp? - The company plans to align employment levels to a production rate of about seven units per month, with a gradual ramp-up expected over the next 24 months [71] Question: Update on Bombardier transaction? - Both Bombardier and Asco deals have conditions that need to be met by specific long stop dates, with ongoing discussions to fulfill those conditions [89] Question: How do you view the 787 and A350 forward loss charges? - Forward loss charges are expected to be lower in Q3 due to updated production rate forecasts from Boeing and Airbus [111]