Spirit AeroSystems(US:SPR)2022-02-15 21:11Revenue Generation - For the year ended December 31, 2021, approximately 35% of the company's net revenues were generated from sales of components to Boeing for the B737 aircraft, compared to 19% in 2020 and 53% in 2019[246]. - Approximately 80% of the company's net revenues in 2021 came from its two largest customers, Boeing and Airbus[278]. - Net revenues from direct sales to non-U.S. customers were approximately $1,130.8 million in 2021, representing 29% of total net revenues, up from 23% in 2020[363]. - For the twelve months ended December 31, 2021, Spirit AeroSystems reported net revenues of $3,953.0 million, an increase of 16.1% compared to $3,404.8 million in 2020[397]. - Commercial segment net revenues for the twelve months ended December 31, 2021 were $3,128.1 million, an increase of $416.8 million or 15.4% compared to the prior year[291]. - Defense & Space segment net revenues for the twelve months ended December 31, 2021 were $585.0 million, an increase of $93.7 million or 19.1% compared to the prior year[292]. - Aftermarket segment net revenues for the twelve months ended December 31, 2021 were $239.9 million, an increase of $37.7 million or 18.6% compared to the prior year[293]. Financial Performance - The company’s net loss for the twelve months ended December 31, 2021, was $540.8 million, compared to a net loss of $870.3 million in the prior year[272]. - The company’s operating loss for the twelve months ended December 31, 2021, was $459.2 million, compared to an operating loss of $812.8 million in the prior year[272]. - Gross loss profit for the twelve months ended December 31, 2021 was ($117.8) million, an improvement of $322.9 million compared to ($440.7) million for the same period in the prior year[280]. - Total comprehensive loss income for 2021 was $410.4 million, compared to a comprehensive loss of $915.2 million in 2020, indicating a significant reduction in overall losses[399]. - Basic and diluted loss per share for 2021 was $5.19, an improvement from a loss of $8.38 per share in 2020[397]. Cash Flow and Liquidity - The net cash outflow from operating activities for 2021 was $63.2 million, a decrease of $681.7 million compared to a net cash outflow of $744.9 million in 2020, primarily due to improved cash flows from operating income and working capital[344]. - The company had a net cash outflow of $163.8 million from investing activities in 2021, significantly reduced from a net cash outflow of $502.0 million in 2020, mainly due to the prior year's Bombardier acquisition[345]. - Financing activities resulted in a net cash outflow of $163.5 million in 2021, a change of $933 million compared to a net cash inflow of $769.5 million in 2020, influenced by debt redemptions and refinancing[346]. - The company anticipates sufficient liquidity to meet operating and financing needs for at least the next 12 months[412]. - The company expects future cash needs to include working capital, R&D, capital expenditures, and potential M&A activities, with significant capital required for new programs and increased production rates[350]. Debt and Financing - As of December 31, 2021, the company had a debt balance of approximately $3,792.2 million, with more than 50% being secured debt, and a cash balance of $1,478.6 million[309]. - The Amended Credit Agreement as of December 31, 2021 had an outstanding balance of $598.5 million, with customary covenants restricting additional indebtedness and other financial activities[315]. - The company was in compliance with all covenants contained in the indentures governing its outstanding debt as of December 31, 2021[334]. - The company has agreements to sell certain trade accounts receivable balances with Boeing, Airbus, and Rolls-Royce, allowing for monetization of receivables prior to payment[336]. Operational Challenges - The company expects ongoing demand challenges from the B737 MAX grounding to continue to be exacerbated by the COVID-19 pandemic[247]. - The company delivered 162 B737 MAX shipsets in 2021, a decrease from 606 shipsets in 2019, indicating ongoing production challenges[354]. - The company has implemented mandatory vaccination rules for all U.S. employees to comply with federal requirements, which may impact labor availability[244]. Program-Specific Financials - The B787 program incurred incremental forward loss charges of $46.4 million in Q2 2021 and $45.5 million in Q3 2021 due to reduced production volumes[249][250]. - The A350 program recorded forward loss charges of $55.2 million for the year ended December 31, 2021, driven by customer-driven production rate changes and quality-related costs[253]. - The company recognized an unfavorable change in estimates of $246.5 million during the twelve months ended December 31, 2021, primarily due to reduced production volumes on the B787 and A350 programs[277]. Pension and Employee Benefits - The company made contributions of $154.7 million to improve the funded status of the Belfast defined benefit plans during 2021, including a one-time special contribution of $137.6 million to the Shorts Pension plan[263]. - The projected benefit obligation would decrease by $163.4 million or increase by $173.9 million if the discount rate changed by 25 basis points[265]. Organizational Changes - The new organizational structure, effective October 1, 2021, includes three primary segments: Commercial, Defense & Space, and Aftermarket[240]. - The Commercial, Defense & Space, and Aftermarket segments represented approximately 79%, 15%, and 6% of net revenues for the twelve months ended December 31, 2021, respectively[290]. Market Conditions - The company anticipates that domestic air travel demand will improve in the near term, while international air travel demand will continue to lag behind[247]. - The company’s financial results are heavily dependent on global commercial aviation demand, which has been impacted by COVID-19[411].