spirit 2008021308lehmanbros

8/2/2019 Spirit 2008021308LehmanBros

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Spirit AeroSystems, Inc.

2008 Lehman BrothersIndustrial Select Conference

February 13, 2008

Jeff TurnerPresident and CEO


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Agenda

Business Overview

2007 Summary

Focus Items

Market Update

Core Business and GrowthOpportunities


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Diversification FromBoeing Heritage- New programs

- Active Pipeline- M&A

#1 MarketShare

Globally

Design/Manufacture

Fuselages

Propulsion Systems Wing Systems

Tier 1Commercial

Aerospace Supplier- Boeing 90%

- Airbus 10%

Strong Core Business Excellent Market Position

Significant Scale- $3.9B 2007 Sales- 13,850 Employees

- 13M Sq. Ft. Footprint- 75+ Year History

Metal &CompositeStructures

Spirit Overview


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Most Complete Product Offering

CompanyNacelles /

ThrustReversers

Struts /Pylons

ForwardFuselage

OtherFuselage

Structures

Wing / FlightControl

Surfaces

Spirit Is The Aerosystems Industry Leader


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Largest Independent StructuresSupplier to BoeingB737 B747

B767

B787

B777

Shipset Value: $8.012.0MM


Shipset Value: $10.011.3MM Shipset Value: $4.06.9MM


Significant Content On All Boeing Single and

Twin-Aisle Programs


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Largest Independent StructuresSupplier to Airbus

A320 A380

Shipset Value: $0.9-1.4MM Shipset Value: $1.2MM

Established Relationships for the Future


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2007 Summary

Executed our business well Delivered 963 product ship sets

Increased revenues by ~20 percent from 2006$3.2B to $3.9B

Lower R&D and SG&A expense in 2007

Increased Operating Margins to 10.9%... EPS $2.13

Strong cash flow from core business Re-investing for growth

Strong balance sheet to support growth Prudent financial management

$521M in available liquidity Net Debt to Total Capital ratio of 26.7%

Backlog increased by over $7B from YE 2006 to $26.5B

Strong Core Business Long-term Value Creation


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Focus Items

737 Program on-track

2007

Increased production rate, 100% on-time delivery, Improved quality tothe customer

Fourth quarter

Total deliveries lower due to normal seasonality

First P-8A entered production

Fourth quarter unfavorable cum catch, not a systemic problem

2008

Increased delivery rate to 31 aircraft/month in January

Backlog increasing

Over 30 percent growth from 2006

Backlog of over 2,000 Airplanes at end of Jan 2008

~5.5 years of backlog at todays production rates

Growing Backlog Strong Operating Performance


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Focus Items

787 Program On-track

Delivered Flight Test Unit #2 The fourthforward fuselage delivery

Working with Boeing to assess deliveryschedule

Cash payment discussions continuingSeeking equitable adjustment due to schedule

shift and settlement of contractual matters

Financial Sensitivities

~20-25 shipset reduction in deliveries

Reduces Revenue by ~$175M-$225M Reduces EPS between ~$0.05 - $0.10 Improves margins Reduces Working Capital build-up

Customer Focused Execution Plan


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Focus Items

Strong Balance Sheet Strong Liquidity

$521M in available liquidity Net Debt to Total Capital ratio of 26.7%

Capital Resources

2007 Year-end Cash $133M

Available Revolver $388M

Available Liquidity $521M

$75M accordion available

Potential 787 short-term Working Capital build-up in 2008:*

~45 shipset delivery ($450M)

~20-25 shipset deliveries ($200M-$250M)

* Assumes Aircraft Certification in Jan 2009

Financially strong Extra Liquidity Protects Worst Case


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Growing the business

Onex completed

acquisition fromBoeing

Transitioned tostand-alonecompany

Dramatically

reduced coststructure

Increasedproduction rates

Onex completed

acquisition fromBoeing

Transitioned tostand-alonecompany

Dramatically

reduced coststructure

Increasedproduction rates

2005

2006

Acquired SpiritEurope AddedAirbus content

Established globalspare partsdistributioncapability

Won new businessjet and engine

nacelle work Increased

production rates

Successful InitialPublic Offering(November)

Acquired SpiritEurope AddedAirbus content

Established globalspare partsdistributioncapability

Won new businessjet and engine

nacelle work Increased

production rates

Successful InitialPublic Offering(November)

2007

Successful secondaryoffering May 2007

Began 787 productiondeliveries

Won new contract

from Sikorsky, CH-53K

Named to Militaryproduct teams, KC-767Tanker and P-8APoseidon

Further aftermarketpenetration withCathay Pacific order

New European MROService Center

New Malaysian Facility

Progresstech JointVenture

Robust businesspipeline

Successful secondaryoffering May 2007

Began 787 productiondeliveries

Won new contract

from Sikorsky, CH-53K

Named to Militaryproduct teams, KC-767Tanker and P-8APoseidon

Further aftermarketpenetration with

Cathay Pacific order

New European MROService Center

New Malaysian Facility

Progresstech JointVenture

Robust businesspipeline

Strong

results

Selected by Cessna todesign and build fuselage

for their new

Large Cabin Business Jet

2008

Executing Our Strategy


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Sources: Boeing, Airbus data as of 12/31/07

Backlogs Remain Strong Orders Expected to Moderate in 2008

Large Commercial AircraftOrder and Backlog Trends

0

200

400

600

800

1000

1200

1400

1600

2001 2002 2003 2004 2005 2006 2007

An

nualorders

0

500

1000

1500

2000

2500

3000

3500

Backlog

Boeing orders Airbus orders Boeing backlog Airbus backlog

14231458

3,4213,427

AirbusBoeing

Backlog

1,3211,413

AirbusBoeing

Net Orders


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285 290398 441

475

320378

434453

>470

2004 2005 2006 2007 2008E

Boeing Airbus

605668

832

894945

Global economy remains healthy

Watch item

Potential for extended delivery

upcycle supported by

Diversified customer backlog

Airline growth plans

U.S. domestic replacement needs

Prudent delivery ramp-up since 2004

Source: Boeing and Airbus 2008 guidance.

Large Commercial Deliveries

Near-term Deliveries Continue to Increase

20042008

ECAGR

=12%

Large Commercial Aircraft Deliveries Remain Strong


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B737

B787

B777

A320

B747

OtherB767

A380

47%

23%

224444

13%

9%

5%

1%

1%

1%

Spirits Core Business

Revenue Pipeline

$26.5 Billion backlog at the end ofQ4 2007

98% sole source to Spirit Life of program contracts for Boeing

and A320

Cost Predictability Locked in labor costs through 2010

Long-term supply agreements

Limited exposure to rising raw

materials pricesTotal Backlog: $26.5 Billion

Based on Boeing and Airbus Firm OrderBacklog as of 12/31/07.

Excellent Revenue and Cost Predictability


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Military

Propulsion

Fuselage andWings

Regional and Business Jets

Growth Opportunities

787 Derivatives

A350XWB

Large Commercial Transport Commercial Aftermarket

777 Nacelle

P-8A Poseidon

KC-767 Tanker

Spirits Capabilities and Performance Enabling

Growth into New Markets

737 ThrustReversers


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2007

777 Thrust

ReverserCommercial Aftermarket

2006

UnidentifiedCustomer

2006

UnidentifiedCustomer

2008

Cessna CitationColumbus

Business Jets

2005BoeingBoeing

Large Commercial Transport

2007

Sikorsky CH-53KMilitary

2006

Acquired SpiritEurope

AirbusAirbus

Markets / Core Products

FuselageStructures &

Systems

PropulsionStructures &

Systems

Wing Structures& Systems

Active Opportunities2005 Business Base(Includes additional opportunities)

New Business Wins(Includes additional opportunities)

Building a More Diversified Business

Growing Organically and Through Acquisition


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Building a Global Business

50/50 Joint Venture

Establishes InternationalDesign and EngineeringCenter

Leverages global talent atcompetitive cost

Capacity for future growthand new programs

Expanding Spirits Operating Breadth and Capabilities

Around the Globe

Repair and Overhaul

Co-located in Prestwick

Nacelles and Composite

Structures for 737/777

Operational Mid 2008

Low Cost Manufacturing

Composites Focus 242K Sq. Ft./450 Employees

Operational, Q1 2009

Spirit Europe MRO Spirit - Progresstech

Spirit Malaysia


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Long-Term Value Creation

Growing Core Market

High Growth Platforms, Backlog Growth

Winning New Business

Leading the

OutsourcingTrend

B787 Content

Grow

th


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Summary

Strong Aerospace Market Robust delivery forecast

Executing our core business well Strong cash flow

generation, Solid revenue and earnings growth

Re-investing for growth... Winning new business

Financially strongPrudent balance sheet management

Good progress on 787

Positioned on best-selling platforms Over $26 billionbacklog

Strong Core Business Creating Long-term Value


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spirit 2008021308lehmanbros

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