SPR - Earnings call transcript Q3 2021 | Spirit AeroSystems Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to Spirit AeroSystems Third Quarter 2021 Earnings Conference Call. My name is Juan, and I will be your coordinator today. [Operator Instructions]. I would now like to turn the presentation over to Aaron Hunt, Director of Investor Relations. Please proceed.

Aaron Hunt

good and Juan, you, morning, everyone. Thank Spirit's to Third Quarter Call. Results XXXX Welcome Aaron Relations. Investor Director I'm of Hunt, And today and Tom President, division, Gentile; Mark with Sam Executive and Chief Spirit's Chief me Suchinksi; President Senior are Operating Spirit's Marnick. Officer Vice of Executive President Spirit's Chief and Officer, and Financial Vice President Commercial Officer, After by Tom, performance will we outlook, questions. opening Sam our comments take and and Mark your regarding

in I begin, detailed goals to remind discussion any to that likely or presentation. include release, in in are need you we our and projections involve may at statement SEC of Before forward-looking the our earnings which the are today filings we risks, the end in our

disclosures our of when and we use In results. measures reconciliation earnings we addition, you for to non-GAAP discussing refer our presentation release and

Officer, reminder, call a at website to With As and broadcast can to today's over on our Gentile. turn you slide would our presentation Executive that, Tom like the I investor.spiritaero.com. follow Chief

Thomas Gentile

Thank Spirit. you, for results Commercial, Space been transformation everyone. exciting business Spirit's Aaron, X formation one of new quarter and to morning, This of & past call. segments: and announced has the good We Defense third quarter Aftermarket. Welcome

these will QX new begin also results in reporting our beginning We with segments X XXXX.

last key and years, drive margins lot priorities: Over our $X a the over X X years X we XX.X%. diversify our delever about talked have billion our revenues, to

sheet. of all the Sam During discuss margins areas. this our Mark will on quarter, progress X will of these about and discuss status we on progress on balance talk made I progress diversification. have will

Let's start with diversification.

in jet history, transformation year content. aerostructure and and boosting was our Our the a catalyst assets business Bombardier's in last acquisition aftermarket Airbus, our our largest of

defense unmanned content Project We Ministry U.K. for aircraft of also Defense. an the Mosquito, added with

acquisition a that participants, close Belfast cover Bombardier resulted Mark complete. pension in in more we taken actions have defined on the XX% gain the which in to was Our integration new to detail Among later. key the benefit is activity plan will

fully separated also transition We concluded IT our recently Bombardier's from and now systems. have services agreement

Lastly, we the X next capturing track on to X% synergies to planned are years. our are realize target full the over X and

our We COO, segment. the her have on you in it an business President turn I'll now of appointed Marnick, where to commercial we over to as new the recovery. our give Sam update Sam? are

Samantha Marnick

Great. Thank you, Tom.

translate commercial recovery traffic will Delta eventually newly include months. rates. Airbus levels. case our rates the increased eVTOL. with in Boeing approximately established The such will In drove the as in showing increase, slowdown More saw work and spread we pre-pandemic air decline strong of summer, as support when segment rates early other narrow-body traffic and commercial summer of believe the of a it this recovery as a recently, growth the work Our continued create business domestic jets as in reached well subsequently vaccination areas COVID and we COVID variant and domestic for later to production XX%

have XX rates per to have and we production MAX, just XXX month. achieved the For aircraft continued increase

XXX to the approximately fourth approximately approximately to inventory of In quarter, XX units XXX we a XXXX. delivered shipsets we XX Boeing, the XXX deliver the of We to the end by shipsets XXX buffer and decline units in track are on on track the see remain of quarter permanent reach XXXX. to and third year by

year. with remain as On the to then the narrow-body that to to the AXXX end XX production aircraft Airbus' XXX month our buffer of and we cushion aligned had maintain a per increase planned deliveries for Airbus by We program, expect system. this

projected rate to several over increases Airbus that committed AXXX next are also the We years. has achieving the

increase XX% to with travel continuing is benefit On backlog quarter recovery and the and first to since stay our sync capacity plan will will per plan continue domestic in The we aircraft production and will commercial in Airbus third the in recover, Spirit X to production to shipsets in travel month XXXX. other XX approximately AXXX some program, half as Spirit the delivered of tied and of to We to narrow-body we take repurpose time our believe to widebody narrow-body international defense opportunities. aircraft. they

in resume program, the In communicated. a forward on with the $XX they to XXX million line took we XXX coordinate the as On changes continue schedule that quarter, the deliveries. we we Boeing third work program, loss previously with to

from so we mentioned, structure, COVID Tom Spirit system emerge crisis. positioning stronger the are optimize we to and cost As our production

we Over we few have a been developing. initiatives to number operationalize started have months, past the of the

In with of AXXX highly has September, parts late spoiler transfer new [indiscernible] robots we lay molding the the autoclave, which eliminated also carbon in in center Wichita. need production new factory The directly consolidated uses the of ongoing Prestwick, about into the space logistics The global the our that Scotland. grand just during and toured a Airbus quarter, operations center, for GDLC across can operating feet square line floor our X that digital fiber The Spirit's XX,XXX fabrication. process we initial During for over centralized that than system XXX,XXX unique buildings had XXX,XXX distribute resin new store costs equipment. an to type warehouse saving feet. more associated automated opening and square is receive, state-of-the-art

drive we Wing Innovation this feet will have of that, finished new over research turn I'll year. Prestwick, like of Aerospace is back the opening and on XX,XXX square to Center, laboratory Tom. Tomorrow. over Airbus' our construction With partners office for it in grand for that earlier over which help also advanced projects facility space The XX While

Thomas Gentile

finalized acquisition first & which very Thanks, of Defense & of the contributed X FMI XXXX in the and Space to we growth Space ownership, segment, January have the In years strong Sam. of our seen the results during have business. Defense

areas: in next-generation be rotorcraft and attritable and Going aircraft, forward, focusing next-generation Space, X we Defense fixed-wing space, hypersonics, & in missiles. will drones

growth impact air production international widebody the in for areas. in and and that delay leverage recovery capacity on have widebody we will the defense our rates, to repurpose continue opportunities traffic Given

for Last to products development in Prototype and market Defense future. we foundation on and the infrastructure have big Research, Senator to the the of Polaris, tooling assembly National engineering how with with manufacturing center experience Spirit development our participated Martin we with partnership square to in demonstrator. unveil University's for Wichita business form on a digital was high-temperature growth. defense and lab we National integrate wide space than composite activities The and a design Lockheed the manufacturing online the Skunk event. event Space NIAR. U.S. already for an much capital key new we California, and and bring inspection. our more advanced advanced The can in Defense Center faster can defense manufacturing Institute from how this Moran has nondestructive capabilities, worked in demonstrator. opened testing space Lockheed month, than will are an including XXX,XXX digital advanced of effort leaders closely capability collaboration the demonstrate range covering & State from gained hand Martin's our Lockheed the and fabrication, Research capability we Jerry August, Aviation Works for bring business new others. to In place, Palmdale, feet With of in and and with

key for and prototyping Defense growth. Space capabilities industrialization the enablers center that will expect offers the Spirit's We & development, be

million Another effort $XX Belfast Wingman prime XXXX The as this Spirit for defense program. for late is Belfast U.K. Mosquito. the Spirit research Loyal called and development in role U.K.'s Project the program, selected

at With typical these initiatives track in achieve in place, margins. we by defense billion $X revenue remain on XXXX to defense

Now nacelles the doubled able activities combine States Europe. for activity. control Boeing in Aftermarket shift United our with our our to and similar The Bombardier for to Airbus segment. repairs let's surfaces flight acquisition for We in aftermarket were

us Our base our added repairs do that these in acquisition JV EGAT can repairs. of Boeing where all both Taiwan Then in Applied we Aerodynamics Airbus with provides we now in of can Asia radome and do a locations.

margins. significant million opportunities activities in new at revenue addition aftermarket of future. Spirit growth growth by to these for in targeting are $XXX business XXXX up We opens new accretive the The

to Space Commercial, around business organizational we addition In our to new structure align & X segments: decision that Aftermarket. growth, made capturing and Defense the these

will announced beginning reporting external diversification. fourth X This We results. with new quarter that change our segments the business structure accelerate Spirit's to these XXXX we also will focus

to remain a split we future across aspirational, the achieve committed the XX-XX-XX revenue segments. While of in X

to to Now it take I'll Mark results. Mark? you financial turn detailed over our through

Mark Suchinksi

Despite staying position to recovery how to continue Tom, strategy go is well of as challenges safe. Spirit with to emerge us We in of over earlier last Spirit Tom I hope well The Thanks, that diversify grow. the the new narrow-body benefits position doing to and a stronger right taking couple and we focus put and believe market rise. we're actions our segments X maximize the the products years, rates detailed sharp morning, a good maintained and and has focus services. production new on with will everyone. on and to the everybody

and our diversification excited move in are change journey. for the forward We will they how us

For begin new segments. we results, in the will fourth quarter reporting X these

for Please let's jet was Slide due from of lower programs. Now revenue pandemic continued the increases X. of higher the last acquired and same AXXX increased recently COVID-XX from the production business rates XX% These increase quarter was turn $XXX international deliveries. XXXX XXX were the program well on our year. impacts wing partially to resulting the primarily pause air results. the third by up traffic Boeing's widebody The and Revenue Bombardier million, to on revenue rates as to from the production offset the on move quarter XXX as quarter

to the to of same XXX in Turning increased deliveries quarter shipsets to deliveries. compared XXXX. shipsets XXX Overall,

this have We deliveries deliver in third roughly to on The third last quarter quarter remain shipsets XX delivered the XXX of year. year. XXX to shipsets compared track increased XX to

in of on excludes of to the We valuation reported quarter $X.XX earnings per share the negative negative $X.XX Adjusted XXXX. and EPS compared in Let's deferred negative EPS EPS compared this third turn $X.XX XXXX. allowance pension now tax to earnings gain. curtailment period asset to per per Adjusted was negative share Slide of share of $X.XX same quarter X.

increasing operating and in production XXXX. improvement costs lower our year, contributed and to the reduction along The the saw including costs. in of negative last the quarter We capacity negative quarter restructuring with to margins. XX% third cost expenses, we with at improved actions result have XX% rates, over third taken excess Looking the compared have to

compared period loss quarter, XXXX. $XXX lower same We charges also third last million $XX to charges the third forward loss recognized million of to year. quarter In of the recognized compared the forward in we

changes. also program, million driven additional forward XXX in in to recorded the income to the related we was during an charges litigation was reserve valuation to which Boeing assets. of allowance related forward related tax Also the the quarter's of well million well primarily This loss by schedule on a on noncash quarter, most as loss $XX of AXXX as as reduction $XX deferred as $XX additional million program, schedule

from due employees who plans benefit Additionally, defined the the primarily members are pension other of accrual curtailment of the income shorts acquired as plan the acquisition. expected the $XX to future gain at of effective the Bombardier year. the increased benefits to The closure of of is of close all million a end resulting part for

received free negative XXXX. $XX quarter million refund in in in full will was statements. additional income $XXX $XXX tax period Free $XX financial an flow compared quarter same the refund, benefited cash Free the October of X. cash million. million to was The which approximately expected year turning our flow completes refund reflected Slide to million be fourth flow tax of the for income Now $XXX on million cash from million $XX positive

the during we Protection of $XX addition, Aviation Manufacturing million from award $XX quarter, In received Jobs the the million Program.

$XXX expect cash be to between the and $XXX million. million year for continue flow We to negative free

and debt and debt. the quarter XX. balances $X.X We ended billion Let's Slide billion cash with of $X.X cash now on turn of to third

loan million years. over of were the basis terms we term replacing of our to a market of term existing next points. our to achieve $XXX term of Due In X XXX completed we In debt delevering, in conditions, $X billion down to $XXX the we syndication October, a paying loan interest reduction committed able remain loan. million rate

proceeds lower the to the $XXX by we plan interest incremental environment, liabilities. higher rate upsized repay million the Given it interest use debt-like with to about

include this do financials not quarter new Third activity.

will to fourth term reflect and expect the new and on debt loan in November cash XXXX close financials the We balances. quarter the

capacity cumulative the XXX to to primarily our by adjustments on quarter segment revenue on higher programs, and due X%. revenues quarter, the let's third XX% in and of XXX prior Now Propulsion of year. Bombardier $X comparison, a In Operating on the margin higher partially by year. the revenue negative recorded quarter. It by forward programs. were This forward for the Slide decrease twin-aisle XXXX, the XXXX, of to during production on Operating performance recorded turn The the to due losses. $X losses adjustments of and offset comparison, during period adjustments to volumes was production production period and up production AXXX improved XX% the unfavorable catch-up segment the Operating losses. recorded X% decreased the forward excess The favorable the to main $X million costs XXX programs, XXXX. drivers million result of of negative compared up the and was profitability. was unfavorable operating increases same segment resulting in negative quarter XX% quarter The negative offset primarily and decrease business in were Defense period partially cumulative same compared of same offset cumulative and net volumes the Increased to Fuselage our quarter the XXX in adjustments based program. quarter XX. losses. partially production decreased $XX of in XXX is the due margin to improvement XXXX segment $XX production resulting and program Aftermarket. XX% to the third the primarily production million were to in The lower million aftermarket quarter segment on XXX excess to the fourth capacity the $X quarter net sales, Beginning of volumes segment compared on Spirit's of primarily third positive higher a profitability forward the million the of the in cumulative favorable million $XX catch-up same $X the Space X% the reported forward period of jet results same segments margin quarter will to was and catch-up the higher programs. of XX% on volume last the of of of XXXX, AXXX X $XX partially the for and on In XXXX. $XX quarter In in compared XX% compared segment quarter of financial losses segment by costs compared higher XXXX. and program. were and million results, revenues in catch-up the XXXX, with new of a reflect Commercial, on offset by million third volumes & XXX million the the recorded compared third the million costs, during divisions: XXX margin Wing negative recorded during

starting In Aftermarket to course For make of Commercial times approximately the have Space and year the segment the we beginning and set the & turbulences us is X%. years cash efforts XX% better to overcome over faced are expect reach we of free year. adversity our last up have faced, we Defense ahead. our set to take at this revenues, closing, target we our -- XX% full XXXX, hold approximately flow Despite for holding few the up to collective

comments. position we company. for segments it way key stronger will our narrow-body the that, give points, focus higher and us emerge sharp some navigate can to with believe closing us turn a over new on business recovery the rates We defense through and that aftermarket I achieving on better to With like to path future so Tom dependent execution. back proper the and will reaching flight a is Our perspective growing production a

Thomas Gentile

the of Thanks, Mark. X years Commercial, business, The Space Aftermarket. reinforced of past transform segments: to & and couple our about Defense we have the need our new excited are business and launch

and of our have in MAX X the the history the industry. Commercial the disruption Our dual crises the to largest segment recover grounding pandemic. These COVID-XX from created continues of crises

of a focus the part the Vaccinations safe traffic in vaccination of critical help global During air has rates the will employees. and recovery our our safety this are of industry. time, staying primary accelerate on been aviation higher

working As federal which applies to comply contractors, contractor, to mandate President our of are Biden's for federal we with a U.S. vaccine all workers.

encouraged to continue We our to working towards our medical all or To get making workers goal, date, have of apply vaccinated actively a we for to we'll religious disruption to are production exemption. and operations. customers progress increase. rates our to this to with or good OEM our and employees the starting at recovering With are partners domestic union narrow-body begin we world both travel faster, see avoid our of around

to working that our aircraft. recovery production to meet benefit our production own of been we narrow-body with us. production to Spirit International take narrow-body longer backlog XX% The they the are traffic targets to since emerging have recover. the billion ensure we have closely repurpose target as Defense Bombardier's $XXX to In to revenue our down business well aircraft by and excess to business, $X in aftermarket widebody supply XXXX. With million We & will revenue will chain meantime, of flowed is air JV ready achieving continue as Aerodynamics widebody track achieve in grow the XXXX. on our with recent we EGAT, capacity acquisitions and will segment is Aftermarket our help Applied which by Space of

down took the investment-grade also committed we credit on paying We our rating. pandemic regained the during remain debt to and

proceeds down and sheet other billion objective balance Term our of refinanced from and to that by This over track. interest B take pay we to that Our the high-cost cash past use years, and delever Loan lower advantage our $X liabilities. we X next quarter, is from on to will rates, refinancing remains

productivity projects our innovation improve operations. We also and to continue to invest in

happy will your of take we taken the actions We recover. as to we narrow-body that, margins have to our questions. that contribute achieving expect be With rates XX.X% production objective will continue to

Operator

Instructions]. [Operator

question David Strauss Our Barclays. comes from from first

David Strauss

Mark, I cash the guess, the could fourth like we've actually adjusting cash in that refund. little flow? million you've you're you maybe higher got, touch is QX, tax It and than at the a $XXX implied still got, talked the refund so tax quarter implying on quarter about $XX million midpoint, payment. QX burn looks what I think for kind the the the you or maybe pension seen QX in you've fourth bit of

Mark Suchinksi

Yes, David.

quarter, that will got, items free would I our onetime right. In fourth say, the flow. You've we've X cash got that impact

indicated, As $XX you received discussed, of end million million, cash here refund at of that remaining, around I we've got the the October. as we income $XX tax

And that's be normal past, a helping of we'll we as normal the And to discussed Bombardier of will that, so in catch-up the in plus quarter. the ballpark $XXX-or-so million we've a had of commitment in the that payment acquisition. tailwind quarter. a the But pension acquisition, part make as payments that definitely the also, part as onetime fourth are

we're of things where we impact on quarter so could million, million headwind free if in look comfortable still some that overall, $XXX There's million. quarter at the at in to a flow. to you our quarter fourth expecting around an the are on that uncertainty, XXX of primarily the hit potentially around million so $XXX the cash And $XXX right? have can $XXX we And now, feel level

down more. tightened haven't that really we So

XXX to quarter And up. $XXX things hit get of of on up started weeks, we cash. that saw over building assets, free move of cash we we dates. and headwinds end But the the we'll will fourth program. received, we as comfortable of been reduction up now some workers, into we're we've were, Thanksgiving the million. then in handle ramp deliver that the cash the hire and to flow the contract a think in got consume which negative holiday, full that we $XXX fully we think we on And third our drove expect But very that got coming quarter, cash program, that some has year to I including has our XXX the the part is as million where WIP a the had the Christmas we've that $XXX the to will one start start better delivery will in line holiday, tax million higher the on the some

of think summarize and So deliver would than rate obviously the the quarter, some won't the that for the I we'll we that's I break fourth we you. way be the delivered, in the seeing quarter. fourth full XX more it in will benefits help But

David Strauss

range the down based XXX to XX getting buffer just on by Okay. think a next just about year, about Should as end of a your think on we And the year on Boeing drawing XXX we talking for as XX we follow-up MAX quick month, talking you're inventory next of in MAX? year. be about should around next to to thinking -- deliveries the about

Thomas Gentile

Yes.

So I communicated we'll Tom. XX little that's down beginning per see math, by maybe have they to this year. them our We'll the a But inventory. that we'll the mean is the ballpark, is Boeing of that higher. simple David, month lag ends aircraft get and What in up. wait burn they'll where publicly if you do to

year. QX we've to by think will As we get it of said, XX next

gives a but I the depends you after think could those indicated up numbers, production what so Boeing on you does be, add ballpark first quarter. math you And it all the if really what of

Mark Suchinksi

Yes.

When a deliveries, give back and come said, I guys XXX more narrow-body higher. on assumption you've AXXX. we particularly that a to you talk directional as year, good think you our maybe that the first after Tom of little we'll David, it's and the specifics got there,

Operator

The JPMorgan. next Seth from question comes Seifman

Seth Seifman

related here. X could I XXX, kind wonder questions if on little you so the of a talk

of additional What's is low fourth cash we to there? rework? some there rate the given Is of it down how the the quarter XXX the to Is costs related capacity about you that deliveries? And impact then and cash flow think has come what excess quarter it now related fourth of there, when XXX? about you? First driver are all, to talked

Mark Suchinksi

Sure, Seth.

-- line. prior the XXX, in we we work we're fact I was month. here, X was and still is referencing, what the pause got that we're the building the factory flowing the aircraft on producing product We've to have in were Specifically process. at per And

number we had quarter. deliveries the saw the of that You in

although So lot to is what the product, able we it that of that a complete from collect is means weren't cash to ship Boeing.

things of down when things it's to direction so our Boeing not the and are between just able with standing accordance take makes -- in still I with going the think collect to And we the try had in XX the an impact fourth challenges the has quarter. of we When working the our that. third decision being and and we quarter. on expecting not from on with while there's going the And on dialed to having minimize factory in where to the with But cash in our the as some make were quarter to an has Obviously, what cost. and set to the per level they're now the We've resume Boeing flow deliveries, that's to work process in impact FAA that line decisions the on impact approximately deliver deliver. uncertainty definitely program, year, still or to we're deliveries be. where

were X drag true costs, I say and full get set is making when an obviously, of of excess there's And we that than wouldn't excess guidance side the and of roughly go that overhead And level anytime not the fourth to the so starting the on flow that something if our with out less year. resulting costs. we aircraft you continue some at then to per from producing to anticipating we quarter the for provide But month factory deliveries, XXX headwind reduce will that. can't our product that, that in in

impact on you has only And programs, I'll which that margins from slightly other also things you in loss, guys there, has so of Boeing a be impact not produce XXX forward we but probably -- many a pylons that produce quarter, which our fuselages, our be. negative of and cause wings thought has the did but slowdown that and third flowed more would production tell been into also the where we which to depressed negative

Operator

Our comes Myles UBS. next Walton from question from

Louis Raffetto

got to actually. for if You've I come Mark, just Raffetto you, Myles. can Lou on back

why think I to with if the looks was and the SG&A that in mentioned quarter. a that wondering anything just where you so million. of litigation high I charge had cost $XX flowed do

Mark Suchinksi

on. litigation reserve $XX Yes, in booked and in you're of million spot The additional the recorded was SG&A quarter.

that's so it out second why reason seems were of quarter. costs SG&A to And so where the the in compared line

Thomas Gentile

other now are and weren't on in Belfast operations included SG&A SG&A, the the Yes, they was factor last in there QX year.

Louis Raffetto

into guess Okay. That's about a margins I do going about bit little this then -- little how a quarter, then great. bit we just you and lower. And XXXX? mentioned the third being think margins those XQ into

Mark Suchinksi

AXXX will bottom excess cost the the on pick the will obviously will improve production overhead. and volumes the more up that line. on top volumes will production be XXX line help because It the programs, margins. Well, and It reduce help us as absorbing on

continued as to it's really is there. we're us bit a fourth targeting time obviously, see XXXX. get higher back into the the very a is challenging of through we and fourth XXXX, of But always as So the rates, margins occur little to quarter that based what in long take to pre-pandemic we on the and clearly, margins little that expanding to that our current we'll going projections you their have we as because on what communicated of Airbus we comfortable calls, XXXX. will move holidays as feel recovery the narrow-body But track Boeing has into production move to the with progress quarter rates narrow-body as continue

Thomas Gentile

in breakeven margins Right. And is What operational that increase. an cash in XX.X% the month. aircraft flow terms normalized And to back on production rates we'll be get we've to our in MAX, said the be narrow-body of goal XX for once is XXXX. basis per about would at

Operator

from next question Sheila Kahyaoglu from The Jefferies. comes

Sheila Kahyaoglu

think do cash how a MAX I if David's your just program? the today? operating to you to headcount employees about labor margin think Can kind you expect given that, we free the year, and go you on shortages? and previously organically maybe MAX following talked by maybe about the hiring we next up of on margin of Where think follow-up is So ramp remind X,XXX And where us was about as XXXX. it at flow the just where the question, could peak into it

Thomas Gentile

aircraft MAX XXXX, get said where is which were were per Right. what we we in the the is XX.X%. would ramp once targets of whole which about is company in to that a back the of get targeting, Well, level terms up, that XX we've we to margin month, is

-- said, a to cash next get as back level. really and to the on goal operational flow So from an year, basis is we've breakeven

next the levels period year rates get the for still level. transition when when in up we in as to is to MAX, the margins And month future, that's they aircraft like the So recover. XX.X% a see would start XX per that

to our X,XXX to just of In We MAX date over continue, employees to don't get and to a really has XXXX in next the line, those pandemic. terms X but And XX,XXX break is on but with are Boeing out on or they're as have are right that right in And say programs. goal program. really production working we of employees did now. employees the that Obviously, now. by employees of fact years. back all other We've do off focused rehire where we that's folks MAX X,XXX of going employees, overall, the the crises about those grounding during of rates X about we lot also We Wichita, them already. the X,XXX with are laid our production recalled we Wichita,

that I that ensure will fallout thing say group employees can mandate. have other that to we recall The would any of have we is might we the mitigation from vaccine

we As we're do employees ensure can said, have I to that to avoid we have we that disruptions working don't and disruptions. help recall

Sheila Kahyaoglu

for year Tom, just by breakeven XXXX, to or Does is full the quickly. up number follow year-end? a that

Thomas Gentile

due that's million full think to next just be to an offset don't repayment operational year. of is we're out, thing I'll The have It will that year be on a that. all point $XXX I one able we Boeing advance basis. going to Sheila,

that excluding on focused just breakeven... we're So

Operator

Harned from comes Our next question from Bernstein. Doug

Douglas Harned

Going XXX, Could trying work what also, in you now. the assumption of planning right just have next to might forward XX is kind your in XXX? so for for you us your pressure the and base it involvement case you XXX back knowing are to around because the Boeing's that is months describe what much understand -- over what uncertainty -- change. to assumption your on the is repair bulkhead And inspection there's must the this

Thomas Gentile

case, Well, base to what terms want said which per forward. has Great. going by aircraft really back is of we're in guided get Boeing X they to month

process work production identified way obviously, parts forward to rework. done us needed, part have they validate been rework, mentioned, mentioned, you it's in includes areas up the We've that that. with bulkhead. a we've started in preparing basically is look are pressure on what Boeing what it. to rework that at related of issues to starting that this are the the engineering and that's program, identified already it's back are it and that, on we've And fuselage and forward as we've With on regard schedule. we and that. cases, to engineering we going areas conjunction And we're partners restart in in we produced We've the to XXX we've some do to right and analysis building Now and by with on we and to have the section is specifications. have deliveries, the they build they the that schedule, And couple already provide their the have they extensive other fuselage, what go But necessary the indicated and to that where there that the publicly.

Douglas Harned

one And -- example. talk the are? about more use -- another? just able be to XX.X% if to the going you costs those downturn the to When margin, us on presumably you've perform where look Can want can one we something that will out? is getting the you allowed other whole Systems? Fuselage for one to to facility you of How about Systems, these segments, a it we efficiently has words, this things and this is come In in the stressed sense improvements I I time? should Systems, different at other you'll be should old Is you if come follow-up. where You at automation of take But be Prestwick, out what more expect opportunities when give Propulsion through or Wing more out should at over end. talked

Thomas Gentile

many are facilities. improvements the across Right. Well, of our really

warehousing changed in for in Global We've a Logistics That's much also increases X,XXX Center. mentioned the kits got Wichita, We've the Wichita. parts to that can factory flow our the So example, Digital more system XX,XXX deliver that brand-new efficiency. for we floor efficiently. Sam

subassemblies it fuselage, some X, about of is before, of I've our the we've plant, which we which big mentioned taken biggest plant out of manufacturing, X.X is plant our where XXX square X. million the feet but So build

track and entire the they'll those that So example, the and across Working improves system the flow. our move makes Spirit And traveled digitization eliminate leverage efficiency factory helps That and leaner the our and increases It any much of factory. in we lot units. also come a so so our fuselage quality. system, in for work. facilities campus entire to wing on our that well forward solutions box a as other through productivity conjunction and it SAP as and flow that added It to completed we've different added MES floor. partners, with product system, efficiency workflow can manufacturing we've

we advanced of So those Wichita. spoiler new did the line. resin we our transfer that work Over Prestwick, are mentioned molding examples on in some in

we They one both of we're efficiency the and our which wing new our to So on continued global leverage in on make-buy. Belfast. is in examples to And how drive to work the those addition area. our thing and supply supply the improvements particularly continued a drive are to of is competitiveness that But chain the haven't initiatives with chain, lot work there. on in brought the able probably in work biggest different about, AXXX our in of competitiveness do fuselage, and talked been the to we've driver, driving chain we've supply we've

all things of And driving are the we that headwinds. go the improved a back. some those combination performance of offsetting it's So those as are

be going at aircraft years than his widebody month, even XX heard about XXX it going was going So for before. as going about at it's a [indiscernible] month. it's XXXX, at be you are last call back X as as XXXX, say week. in X earnings recently to was example, X, at much going was headwinds was lower per production next AXXX that it to if be the to be is or aircraft rate X but was XX, go the it per at forward. to XXX, few to you X, for

headwinds. described margins those So And that to to back had we initiatives still the XX.X% have I to offset back the are that helping those XXXX. offset headwinds we and us get in

Operator

from comes next The question from Vertical Robert Stallard Research.

Robert Stallard

a from me. couple Just

weeks the any an next Wichita. the half there slipped workforce about also mitigate report in from could Italian risk vaguely not wondering was comment trying of to your there is wondering And do if quality of that perhaps few that's sub-supplier months. reports if you what you're this? seem have there earlier was few over implications press But a that I reckoned I to whether some even net. accurate. through this to ago, all, First this broadly, were more this vaccinated who week been have was

Thomas Gentile

Great.

Okay.

that to much a now. result XX% with it But regard get December and at do we a mentioned, substantially lot number of we few religious before I as And higher And But we have weeks employees, that. people vaccinations, the even with expect communication were of a union is includes the our our medical that to exemptions. for to deadline. who ago. as and things mitigate higher a we applied number we X So and that also be working of have can we will

and at rates have contact with in our recalled those them, the Wichita, list. of we we recall already, of least or laid but quite off been We've recall we X,XXX. X,XXX First X,XXX that of vaccination a high We've them. so have we employees on all, lot in with still recall are can

source employees for also we looked one can We've at as we've hires, that well. So some of contract bring up new and agencies new back. requisitions that's opened

disruption. in expect major we rates don't vaccination So The terms are issue of a increasing.

X. be getting either get board December good getting shape expect exemption. Our very for And applying when employees will on are or we we in vaccinated with an that to we

It's from We of sub-supplier, It's regard and processing our this after work those and Italian some located directly in did who MPS. but processing particular to some supplier. buy Now a the in did quarantine Italy. were house. we disposed appropriate does the with not Spirit anything assess able was called in of that sub-suppliers them with them to facility, parts, way in analyze that. that conjunction Boeing, have

issue in there to Spirit. really is ongoing regard that no supplier with So

Operator

question Our from Research. George from Shapiro next comes Shapiro

George Shapiro

cash wanted flow had payment. in follow second just I said Boeing I Mark, thought you positive, the quarter, to the 'XX in up. would excluding be

could breakeven. on If give to what next build you year? lower caused Is related the saying explanation you're difference just the change. Now XXX some

Mark Suchinksi

say and significant from quarter would that now. a what in where we the communicated fundamentally, we I change are George, second Yes, not there's

is a line our production are at definitely the next based we where -- as have in it on significant We free where point of unfolding assumptions year. to change this relates flow in no There cash sight rates time.

we CapEx our bit. viewpoint I in We'll quarter. factor that cash communicated different we excluding based would we on to But early than We more there some when focusing in to when to But what indicated, the getting Boeing, standpoint, Tom As We'll talk and a all into in operational an fundamentally, and isn't continue better revenue able have onetime around positive. moving -- back next deliveries little guidance to targets year breakeven and to from the for disclose are doing that, to execution repayment dramatically we about second go on talk quarter in say, XXXX the drive of half in. flow be too on But sight specifically than right now time, going would XXXX. cash January. back cash at flow I deep next being not point this of rates. and we're those line positive in fourth year, a production third say see definitely

Thomas Gentile

It apologize that's When we just I was we gave somehow than year, to we terminology. all were impression change subtly. were even flow we'll next breakeven, better George, the say something, if trying cash I saying. that be positive

has And nothing we're Mark in So said, our as outlook. yet. guidance changed not giving

will It changed. I that used. was mean to do next that didn't But had just that give impression We anything terminology year. an I

George Shapiro

had XX rates that tailwind you being then any money of And one in one because the the have the be not making I on maybe Tom, you're little you'd would lower. or that you bit reality, But on XXX, make a for thought production you. really because mentioned Okay. widebody quick XXX. headwinds a the yet

that. So if comment just on could you

Thomas Gentile

AXXX, That's XXX in you are situations. loss and exactly know, forward it. as both

that on less that production and XXX the is help. fact would that's the really headwind. So the It's lower

Mark Suchinksi

in we're on right, has flow. have I if -- that we Yes, if just produce on overhead negative we the cash also we less absorption. that less, that help a impact less delivering a But would will deliver you're situation and is forward -- comment George, loss, on final if means a

producing if And the on cash forward we balance, is loss side, good a of pro standpoint and A a but puts cash is bit a before. of on less we're -- little con. pressure because if a production on bit we flow a benefit little were and it it's -- from overhead side. there drag of so but a less flow there the units, what deliver on so producing than

Operator

RBC. question And from our Herbert from comes Ken next

Kenneth Herbert

after of you terms the wanted characterize think the to And I anything changing you as that you would seeing MAX? in think lead that, supply think as times doing? if you're be that's How I thought about now quality what beyond are further that the is incremental are where as mitigate on could 'XX, the supply in about risk yet then XX having MAX? or your chain XX to address you either steps could. up ask chain, risk you the maybe you take about were your suppliers? having from on And to to And about going to you you

Thomas Gentile

been rate and material of raw are supply lot we their XX, chain. that we're hiring with on purchases, our the quite of across line reviews surveys of doing site visits in their Well, working and and a very readiness in We've suppliers, flow. the confident hard terms

So have the already much levels. of news already all good is and higher up suppliers at these been our Spirit, and at we, levels

and The So recalled. can furloughed, is the there. infrastructure, but been be there, already capital tooling employees were maybe have

that so And going is along fine.

Mark year terms as really capital, of benefited we it of last new rates, we get into and when inventory was because that said, can But needed we in thing the a took inventory as couldn't turn going down, our off a draw other last is, fast working headwind spigot The that these a have bit for this year, gave suppliers down. year, we were cash we on them enough. of they that rates it. lot But while us

gives that in of terms readiness. rate cushion the bit little us a of So

in As that But need areas making employees is going beyond tap. many you've certain can the industries. issue that know some people our country they about the shortages rates hire people whole go we heard we go Wichita, sure be we have And as can up. to around affecting of the recall pool we that, in

to need take way working they're We've long that these forgings do be other advance like make issue going that those our The with sure place. in of been castings, are early. is that, to and when lead to especially time they scheduled suppliers increases things materials, and placed

We AXXX say XX and the validated beyond side, as XX been up that a And and fairly We've can to protected on terms we of then about side. per by now talked that meeting to I'd we're comes in aircraft XX. has that similar that already to up situation. higher that produce of getting high the right month at on as We've Boeing Airbus optimistic on overall, confident the and anything We've So really, the before. rate. at the rates been Airbus actually 'XX. summer the we're

Operator

Cai Cowen. comes from von Rumohr question from next The

Cai von Rumohr

totally down So shut saying number suppliers are they've XXX, production. a of their

you build mentioned you've have WIP. in that So a

you you profile many And look Boeing of don't how basically sort with fact deliver, many that only quarter? of the year inventory, how going how we what off we because you for deal on do kind exactly producing next to rate Just and burn to the know the for is should are X? delivered your given XX fourth

Thomas Gentile

right. Right,

Boeing well other line with taken production a as we've the new in right pause on suppliers. So and our now,

Boeing that year, to to We before So current producing deliveries we're And schedules. now. in the we'll flow regard to resuming production deliveries. the between about as just has getting X. them just has of Boeing. expect to new line Boeing with forth some It's do do And with Spirit end and not again, with back I year, the before, a talked ones and mentioned make nothing normal that right back rate next

schedule. aligning we And so of as are us is that's with well, what what they terms are giving in the

to other year. next So has in nothing terms Boeing their new communicated what of for add already than schedule

Cai von Rumohr

your an you to fourth, -- deliveries, ship are but quarter to going the XXX deliveries, would that giving but the hit pausing have third in production, opportunity end actually inventory the the pausing maybe So assume I of some toward excuse if cash reverse deliveries, somewhat would me, loss flow in lower projection? are pausing

Mark Suchinksi

and some by we We fourth and But customers. with quarter, think liquidating working cash to do tightly mean is tied the we'll moving program. based on that's right. relief of pretty with the some XXX there will there's the what believe of I on deliver those FAA the inventory some exactly deliveries level again, airline that think, But them with again, quarter. everything lot making I their Cai, of Yes, -- in of a on Boeing getting parts in be fourth

a we that at deliveries But quarter cash we indicated, got that lift fourth in time, should holds, quarter. deliveries that making the that on in to is have We're And the quarter. than get provide them little of all that. Tom on not sight we going dependent the airlines. if to a to this As -- fourth the bit of that make expect specific in in line a did We've deliveries schedule now. to third not more point

Operator

Next question from comes Wolfe Hunter Keay Research. from

Hunter Keay

then First MAXs? elaborate built for Can that deliver Is the the couldn't one. collect you still why one, increases XXs a you And like cost the storing collect were you quick AXXX mentioned? unique them, thought, there of cash something cash. What for those? different? you particular you that it Or you you that on you collected I though about contract? and is could the Even Is are something there -- still this MAXs, situation? kind

Thomas Gentile

let There's difference. me we us, MAX. Well, that on one always a Boeing, When paid product they've including no to ship take the first.

here the to us paid stored we've Wichita, those. for all and ones that So are Boeing those in shipped they've

in paid So them. -- there but they they're it. the we here for already to for pay stored has ship similar And Wichita, whenever Boeing, Boeing XXX, unit but with a

difference. no So

specifically? confused. question What AXXX Your on I'm was increase, and first a cost little

Mark Suchinksi

Yes.

we're dramatically seeing the up extended AXXX freight program, costs on on gone container specifically out coming Asia. water of seeing, we're the pressure Hunter, that, costs, have on some Times and have on costs So significantly. shipping

of I supply all think about read the some chain we've challenges.

move put many think But don't we on AXXX across to so we're impact see bit get as negative a little some back some freight relief seeing pressure world, think a normal. program. more we'll that our companies XXXX, maybe have costs -- have those AXXX the clarity. on from And just that they're We costs I as margins And that into But things the like our on start program. to long-lasting. other

of so you XXX situation. that were to MAX XX XX on They fairly is they that Boeing a what us to with haven't a could quickly. different and them the they dealing were resume stored on store The think delivered. produce, production fuselages bunch I XXX They insinuating situation. continue is as they wanted yet for have we XXX units

not so to them on they're us take really build And aircraft more more and wanting inventory.

book deliver And inventory and don't cash. the slowdown causes in don't the we a that and therefore, and get to we collect production. revenue the relieve So

X separate it's I X situations. think -- specific

Operator

from Next from question Morgan Kristine Stanley. Liwag comes

Kristine Liwag

with you and aside new -- changes what the operations to And reporting, X underlying for segments, discuss new can organizational this means ultimately Tom, the from alignment? with...

Thomas Gentile

I'm the that? get you question. of I Kristine, repeat the didn't part sorry, first could

Kristine Liwag

sure. Oh,

aside this for With the And on? expenses can reporting alignment? result discuss means X new will underlying what segments, reporting, in operations you from later in change this organizational and restructuring

Thomas Gentile

Right.

What named defense already, group no. So had did the the for is have gentleman Duane a space leader -- answer we've done that, a on a we in is restructuring and we past, and Hawkins.

which jet now group. the organization, and of stand-alone a And chain. Marnick is report group, has group that all Boeing Officer, that We've it's so as as Commercial our Sam an our group stayed group, because Airbus Aftermarket make-buy previously because that and reported our then of of Belfast pulled combined me. to got Operating the well Applied but terms into it and to as will entire our we've eVTOL our lead, out Marnick. And in Chief group, separate this continues includes now some business our which new and group, Aerodynamics, Sam additions supply

way reorganizing more that the So we was structured. are

as cash a Now this. expect But go X we'll for our to different in But as drive and those don't revenues, reporting segments, have we profitability report leader forward. go result flow of that's we'll and how we have those restructuring reporting we of we each any areas. we organization synergies as our aligned a and segments, costs forward the

Kristine Liwag

in freight I cash supplier Presumably, for flow flow something similar, issues the outlook? payment to could for Because facing XXXX, higher labor help, if positive guys free from cash more right? in of I there you in are for inflation are factoring free we're terms the they you in your that you of need are up are that so what And costs. your help facing, your suppliers. anticipating Great. would Boeing, suppliers additional back and XXXX facing follow aside mean even

Thomas Gentile

billion with did suppliers. We a No, over lot our of a during contract have suppliers lot be was XXX it OEMs. do in. XXXX have we worth totaled so of value. to with specifically back provided that help provided And back assistance that support we built could the contracts with $X that of and basically don't over that extensions, we anything We which to

specific any X about And support, with so we all our contracts suppliers tend of thinking XXXX, providing how are that's not to we're is years. but be

expiries a do during actually so low year expiries. quite of And have it's we some but XXXX,

locked And prices so for and the force in next most stay are in our for are part, will in. year force and the contracts

Operator

from Epstein America. of comes Next from Ron Bank question

Ronald Epstein

you. Tom, maybe two questions for

defense on one first the The business.

With how order you seems that of billion the million, to the to by How $XXX is on get right. -- propose to do trying you maybe to goal if $X by of math need XXXX, that pickups already going like there? grow in is my organic? business get to more I should we defense that mean program space? have? are do you that that? you the stuff think M&A about So be Or I of it will mean just

Thomas Gentile

billion Well, XXXX that is $X by first yes, all, growth of the get we're organic. anticipating to the to

this of programs their are they that and that includes won programs program we classified. new won that So to carry are it grow out. on, that level. And but programs have it's include they organic. it's just that we some record, are we we're already things as will current -- that the It's doesn't And achieve all But on, competing. we've

is is assault that the for FLRAA example, aircraft. So the future which the with for the and V-XXX, -- Bell program, long-range

that programs the that be records addition the would everything what based we won. did looking to that, that else on win But is or outlook. programs organic just put and incremental haven't of our at. So we're into we have If anticipated we of in

Mark Suchinksi

on in million revenue. we have and in And But more side, on annual $X in back XXXX, than X program programs sense earnings. the talk more had the level. some programs -- with we'll in million XX Ron, the our currently, excess more we on or defense that, we $X just Yes, specifically, future that about color of generate

doing some So side. a segment, have as -- facts. are the lot on product-driven we mean quick grow based just those we our to you previous been -- defense I didn't on

have we between is acquisition per with agreement of doing about XX% wins. stuff and of Tom opened somewhere The year, FMI we lot the XX% last the continue years, side. that on organic Over the Lockheed. -- good grow doors. defense a and really We're to and talked teaming couple of has a Tom has of lot

add new got hopper, programs. that a growing has we're Defense that X of a and we that the Our make job We've we on few the really talked difference, $X areas It's team billion great on continue going mentioned. defense Tom But programs a the winning to in we're few done one bigger Tom But about the to platforms. Space, that really that have. through. come about side. the based excited a could defense & just is

details. work. line we and primes. think the we calls, into has team see pleased We've really next earnings those over as got we great of with continue defense successes we're defense be we'll where it's with a lot with top revenues of job. can't -- the you Unfortunately, future we a great where on done I top Our classified years. sharing where we'll And But get a relationship more sometimes couple those is going secret, or win

Ronald Epstein

question. related a maybe then And you. Got you. Got

X customers, if where your see guys, XX I -- mean one kinds of all right? XX problems, biggest do XX your making them, your you has you caused to to issues years going they're not road, I beholden mean, for hard. right? So really really, so be this years, the are customer, of life is your problems, biggest picture, big yourself? Because you down

So business, I mean, manage much of mean, goal I mistakes? to in as to what's people's of how terms be your other subject ultimate you kind going this you're

Thomas Gentile

very more said clear made this Well, that our that it we've concentration one the the of that pandemic, vulnerable. things us is during is was Right.

with XX% of with customer. a you it future. that both we'd the So aerospace, and where include we there, Aftermarket. way, would to do XX a in get said, want is Spirit's be know the some Boeing we Defense But commercial to we have inorganic have industry. Space work if to XX% XX-XX-XX, ensure MAX said love growth, MAX. to diversify and well. in grow. we'll we aspiration be, to more Commercial, and much that's like organic include in would said, a the our is equipment, program, long And concentration that aerospace great be & the probably aspiration ultimately design lot original to go to think what diversified need manufacturing want we Boeing years, our to we and the by that that XX% as But obviously, champion we way is a growth and And We And

Ronald Epstein

that I Got Is ask it. May one Got it. okay? it. Got more?

Thomas Gentile

Sure.

Ronald Epstein

of to I previous kind hasn't worked you diversify paint that color but, well. with don't So tried and to teams, it management want really have

So this diversification down outsiders as won't looking can in we better same traps the path, you past? in the feel that in that I how fall happened go as you mean,

Thomas Gentile

situation. from key, mean I diversification sometimes the that. what the worked, back Well, say, of did Right. and work, not it learn didn't, is things the And every and sometimes but key and really say to where all foundation would we learn. the and can I single build base, helped they did we did was that's work we look where

different with dynamics of is how to We've issues experience One how to do how fall management and got program happened of of We set we programs that. so into know more don't execute different work. how a up that know customers learning to and programs for how those understanding some contracts those that we lot before. the to same that

thing. So one that's

to opportunities and The front of in the new about in other it's is talent. a broad-based. lot acquire We've Mark won been bring we've that us. also some some and having programs just talked more able more diversified defense new of

based FMI, high-temperature Maine, example, but at we materials. the are worldwide of there in terms there experts of XXXX which bought is For beginning some in

Dallas Aerodynamics in in the brought And accelerate picked And true helping And the new are of Bombardier up new then that, in really same this from group and growth. in experts I Belfast on done that again has are talent. the Applied that top aftermarket. that we've acquisition we've strengthened The say so would really aftermarket with bolt-on in is team. we

very as we're we've that forward talent in in these will Defense that's us So new areas that brought a are Aftermarket. go expertise and of that growth is that another I we lot think, and on, new really help strong factor, focusing & Space

Mark Suchinksi

this, we we're new new would a defense. the Ron, very arrangements. I to work, right are focused on be type A of we're talked of on that work. going kind defense new cost-plus the when about lot I lot platforms about also think say

We've the that We aftermarket. accretive. about fact percent are talked on big these focus have XX-plus margins

past. think when diversify bit made diversification about quite on to new we color Tom think that in we will may about you as being more where focus And our to And before. brand now of consistent that we to earnings on or So added generate the grew big, be that are and I flow. drive tried diversifying, about. What on focus, a of we've from just lead what there's is top compared that growing and areas kind some cash to cash think, of different that talked development investments programs commercial that the positive forever big the take different programs

something as an from a more it's focused we we a it's talk grow But very think about a quite are and company. and think about we standpoint. on mature diversify bit that are meaningful and much that and flow very, cash I earnings

Operator

from Sachs. comes And the Noah from question next Poponak Goldman

Noah Poponak

broadly you XX supply month Or beyond chain speaking, for in was their an a just, being confidence on rate on mentioned readiness that be to specific? range reasonable rate call, And your earnings getting volumes year incremental these chain challenges, your was eye seems different then view, and we'll MAX conversation. and them up I challenges because you items? supply their a next you and of month. higher and specified inventory, all and are in then chain that your the XX supply into then and optimistic constructive there in wondered, on Tom, And on to message other little MAX, a your there? realistic how that a of keep rate suggesting we roll consider seem when does Boeing that inventory seeing

Thomas Gentile

Great.

more I many a different suppliers. Boeing. say with would I is complex lot be that highlight other our their ours. In than other as would different I chain, only necessarily dealing So aerostructures. look chain is types supply of we words, than trying to wasn't supply They're

of we suppliers be things supply rate-ready terms the actions we When I don't can look have but aerostructures, necessary prepared, requirements challenges, meet so seeing our So they we and being for that always may that our see see. year. that in chain next there's at rate we the taking

We've said what XX month get Boeing for we're And of per parts is that regard MAX that to to had has just of volumes in lag publicly to provided the the them broader haven't on indicated -- the the burn difference at aircraft. So they're year, that suppliers they're a built much early we next guidance next set in complex could be buffer yet. is With to part we looking going to of year. aircraft up. going off

be end year, XX about by will now It at right we be and at of the time by next XXX quarter expect buffer the fourth of the it will XXX the So units. we get to is year.

be be become next of year, will rates what clear the burn and public rate in we off make that Boeing sure meeting for that that on so are And And as will terms we more and has. we'll requirements XXX as they well. the

Noah Poponak

just equipment their quickly rate, affects yours, If have to I of aware specific could commercial affects you to chain is is recognize broader the supply market that large at that. narrow-body follow manage than looking bottlenecks because Are up. original if I and you their any aerospace that that while you it

Thomas Gentile

you're of are because aware part could of in and specific talk not bottlenecks. up I'm obviously We to right. all industry it our Right. delivery. do Aircraft and hold the any watch complex we colleagues one even absolutely

But year. that have us. would So supply on I'm of aircraft would month next therefore chain XX and if impact delivery, not could up impact major aware any an of the the it bottlenecks holds part any Boeing per impact

Operator

the have Ciarmoli And question final from Michael time one question. we And Truist Securities. comes for more from

Michail Paraskevopoulos

million What's capacity it know up. Maybe picked originally, there? XXX. the there? you into schedule costs How provide should it just changes any those about cut ones, AXXX to about quick more of Excess then should thinking sort How costs wanted $XXX the 'XX? XX%, two think we forward? the change I Mark. charge, trajectory given detail going can And with be on you by obviously, we the

Mark Suchinksi

Thanks, Michael.

that we AXXX On XXX, bit XXXX, tick of costs of worth producing higher a $XXX We at a a recognized was a delivering hadn't we recorded the staffing fact That on mainly negative up rate AXXX. in on little -- XXX. due a overall million the mainly or in excess quarter. not costs, bit We those impact the the third the saw to the on bit costs. higher has the broke hiring, yet rate and on were up a and here roughly capacity but excess

And of into back in should with to year XXXX XXXX figuring well let excess down And that the XX% move reduction I still or XX% year total another see another -- rates think at would back, go as the the in up. as step looking me fourth you'll production we're we we rates costs. drop. year, see compared on excess And significant I tell you, this next to nice dip we're quarter. XX% next

are in ability helpful to that is projections be costs. the overall So really as Deliveries the driver large site. be of AXXX see going the I to rate well we're from based main We on and got as excess again on information the got our making progress. good a XX the good going will think We've all year AXXX next Airbus. we the wing up reduce

not help going to And but as costs lower will so to and cash profitability, is of lead that year, next that excess help all only well.

Thomas Gentile

And And actually its in program then the operationally, for quarter. AXXX, entire it really producing history schedule is has was in stabilizing. this the that probably changes, the It's on based forward loss it best Spirit.

issue pleased very to should that This really start with we're recovers. So And turn that as forward. air obviously, traffic was just around schedule-related. going

Operator

joining. much This concludes call. so for Thank today's you

may of great lines, your a your rest day. and You disconnect have now

Spirit AeroSystems (SPR) 3 Nov 212021 Q3 Earnings call transcript