The Spirit AeroSystems Magazine

CREATINGVALUE

2009 Issue One

I N T H I S I S S U E :

747-8 FREIGHTER4

6

10

FEATURE ARTICLES

2 MOMENTUM

COMMUNITY12

4TH QUARTER 2008 FINANCIALS14

STOCK WATCH15

2009

V O L U M E T H R E E

N U M B E R O N E

2009 COMPANYFOCUS

8

EXCELLENCE INERGONOMICS

GULFSTREAM G650

MOMENTUMTHE SPIRIT AEROSYSTEMS MAGAZINE2009 ISSUE ONE

EDITOR:Lisa Conklin

CONTRIBUTORS:Brian BlackStacey BrownChris GilmoreJoseph OnijalaLin RamsayBob Smith

Momentum is published quarterly for external readers as well as Spirit AeroSystems employees worldwide.

The copyright for photographs and illustrations in Momentum is not always owned by Spirit AeroSystems. Please contact Spirit AeroSystems for more information.

CONTACT:MomentumP.O. Box 780008 MC K12-14Wichita, KS 67278-0008momentum@spiritaero.com

To subscribe to the electronic version of Momentum, visit www.spiritaero.com/momentum.aspx

© Spirit AeroSystems, 2009

SHADOW WORKS

5

spiritaero.com 3

Spirit’s 747-8 Freighter team celebrated a major

program milestone in December 2008. Spirit’s major

assembly build team successfully completed and shipped

the first forward section for the program.

“Thanks to the knowledge, skills and abilities of Spirit’s

747 build team, we were able to overcome unique design

challenges and time constraints to successfully build and

deliver the first 747-8 Freighter forward section to Boeing,”

said Stan Ternes, 747 Structures Product Line Manager.

Boeing’s 747-8 Freighter boasts a number of innovative

improvements. The program is using 787 technologies

to significantly improve the economics and functionality

of the airplane while also improving fuel efficiency and

reducing emissions and noise. It has a new wing design,

next-generation GEnx engines, and a modern flight deck.

Parts of the 747 airplane have been built in Spirit’s

Wichita facility dating as far back as 1967.

4 MOMENTUM

ANOTHER MILESTONE

747-8 image courtesy of The Boeing Company

spiritaero.com 5

In March 2008, Spirit announced a contract to design, produce and integrate a flight-ready wing for the Gulfstream G650 Business Jet. Because preliminary design work had begun prior to the announcement, the team has nearly two-and-a-half years invested in the program. The wing assembly work will be done at Spirit’s Tulsa, Okla., facility; nearly 400 employees from all areas of the company came together to assist in the success of the program.

In January 2009, Spirit’s AeroStructures Business Unit completed a major milestone on the program with initial assembly work beginning in the final assembly jig, or tooling fixture. The wing’s primary structure includes ribs, spars and wing skins which all come together in the final assembly jig.

One of the more impressive accomplishments on the program came in the engineering phase. During this phase, Spirit engineers successfully developed the wing box, fixed leading edge, fixed trailing edge, and flight control surfaces. Equally challenging was the design and integration of the

mechanical and electrical systems for the “fly-by-wire” control surfaces.

Program management said that much of 2008 was spent fabricating detail parts and sub-assemblies in support of the wing box assembly efforts. Approximately 6,000 detail parts and assemblies will be supplied by Spirit’s worldwide supply base. Of those 6,000 parts, nearly 1,000 are being manufactured by Spirit’s Wichita facility.

Also in 2008, the G650 sub-assembly and final assembly areas were prepared in Tulsa. One significant highlight is the 60-foot-long upper and lower wing skin assembly tool and automated fastening equipment that were completed in preparation for production.

Spirit’s first flight test article for this program is scheduled to be completed in the second quarter of 2009, and closely followed by subsequent units. Spirit is scheduled to deliver its first production unit to Gulfstream near the end of 2009.

PREPARING for PRODUCTION

Initial assembly work for the first Gulfstream G650 wing structure comes together in a final assembly jig.

6 MOMENTUM

SPIRIT EMPLOYEES TACKLE ERGONOMICS ISSUES

Two shoulder injuries and a hernia operation. That was the

employee injury tally in Spirit’s 777 thrust reverser blocker door

assembly area when employees decided to do something about it.

The result ended up being much more than simply a reduction of

injury risk.

When 777 mechanics began having shoulder issues because

of the awkward positions they had to endure while using torque

tools, Production Operations Specialist Mark Brunhoeber and his

team saw an opportunity to help alleviate body injury.

“Our main goal was to fix the problem so employees weren’t

getting hurt when they performed the task,” Brunhoeber said.

“In addition to reducing the injury risk, we ended up gaining

significant benefits on production time and quality.”

The team’s project was part of Spirit’s ergonomics focus.

The company’s ergonomics group began a program in 2008 to

actively encourage employees to take ownership in their workplace

environment, and to seek improvements to their working

conditions.

“The

teams who

participate in this program are

made of employees that really have a direct

contribution to the impact of their work life,” said Kathy

Jester, Spirit ergonomist. “It gives them a positive avenue and a

way to take ownership of their health and well being.”

The program to which Jester is referring a Spirit-created program

based on an international ergonomics competition. After seeing

what was done on the national level, Spirit ergonomists were

energized to initiate a similar program locally.

A VENUE FOR INNOVATIONThe inaugural year for Spirit’s internal competition, called Spirit

Ergonomics Excellence Cup, yielded 82 entries from employee

teams on the shop floor. After narrowing the entries down to 17

finalists, an external panel of judges scored the entries based on

the same criteria as the international competition. One Spirit entry

was even accepted to the international competition, which will

take place in March 2009.

TAKING OWNERSHIP

spiritaero.com 7

The project finalists were graded on a number of criteria, including innovation,

cost savings, study/experimentation, simplicity, applicability and risk reduction.

Each entry looked at the potential for ergonomic injury by assessing the old method,

and then re-assessing after the new method was implemented. Several of the

projects ended with a zero-risk rating.

With such significant results from the first year of the project, Spirit ergonomists

plan to continue the competition and innovation for years to come. In addition to

reducing the risk to employees in their jobs, other benefits typically come into play

such as cost savings, time savings, and an increase in quality.

Brunhoeber and Gary Bigley, 777 mechanic, know all too well.

“Previously, the physical force needed to complete the job was incredible,” said

Bigley. “What made the task so difficult was the short wrenches and awkward body

contortion required in the confined workspace. At the end of just half of a job, every

muscle in my upper body was in pain. Now, the job is 100 percent more enjoyable,

and there is no joint pain or muscle soreness,” Bigley concluded.

“The team was initially working on the ease of the job and to reduce the risk,”

Brunhoeber said. “We didn’t see the additional benefits until we compiled the data;

it was then we realized that together, we’d stumbled onto something great.”

777 mechanic Gary Bigley demonstrates the new torque process for blocker doors. The process was a result of a company-wide ergonomics competition.

ABOVE: SPIRIT ERGONOMISTS USE A RISK ASSESSMENT SOFTWARE PROGRAM TO DETERMINE RISK FACTORS BEFORE AND AFTER A PROJECT.

After scoring significant new-business wins in 2008 by

teaming with Airbus and Cessna to build all-new jetliners, Spirit

AeroSystems this year is pivoting toward raising its profile in two

areas: in the defense realm and the business- and regional jet

business.

DIVERSIFICATION IS THE NAME OF THE GAME

Three years after separating from Boeing, Spirit AeroSystems

continues the quest to diversify its customer base. The company’s

big announcement in May 2008 that it is teaming with Airbus to build

the A350 XWB jetliner demonstrated Spirit’s success in expanding

beyond its heritage Boeing contracted work.

With the new A350 work package in hand to design and build the

plane’s Section 15 fuselage, its fixed leading edge and spar, Spirit is

seeing the diversification effort begin to pay off.

“With that work package, we will become the largest structures

supplier for Airbus,” said David Walker, Spirit senior vice president -

Sales & Marketing.

“The A350 was the opportunity of the decade for us with Airbus,”

Walker said. “In order to diversify, we needed to take advantage of the

opportunity Airbus had before us. That’s what we did.”

OPPORTUNITIES AWAITWalker sees Spirit moving toward two opportunities this year.

The first is teaming with major defense-industry players such as

Boeing, Lockheed Martin and Northrop Grumman to build military

airframes.

The second is continuing to cultivate relationships with regional-jet

and business-jet builders.

Walker said new customers in those markets will broaden Spirit’s

business base.

Spirit already has its collective toe in defense-industry waters: it is

building the fuselage for Boeing’s P-8A and P-8I maritime submarine

surveillance aircraft. Spirit also has a major role in developing the CH-

53K helicopter’s cockpit fuselage.

But the company wants to take on more of a role in helping build

military aircraft.

“Our performance on the P-8A has been great,” Walker said. “I

know that the Boeing folks couldn’t be happier with our work.

“Performing that work grows our customer base, and that’s a credit

to our people out in the business units.”

Walker said Spirit is in line to possibly do more work for rotorcraft

contractor Sikorsky.

He cautions, however, that building relationships that lead to

contract signings take time.

“We worked two and a half years before signing the A350 contract.

There’s plenty of hard pick-and-shovel work that needs to be done

before we get there.”

That pick-and-shovel work falls on all Spirit employees, not just to

those in sales and marketing positions, Walker said.

“We need to continue to perform well for our customers,” he said.

“Our entire team is the face of Spirit. We’re like any other business:

if you please your customers with your performance, they will

become repeat customers.

“How the rest of the Spirit team performs is going to determine

how we do in the future.”

8 MOMENTUM

RENEWED FOCUSSPIRIT’S NEW BUSINESS FOCUS FOR 2009 WILL BE DIVERSIFICATION

“THE A350 WAS THE OPPORTUNITY OF THE DECADE FOR US WITH AIRBUS.”

-DAVID WALKER, SENIOR VICE PRESIDENT - SALES AND MARKETING

spiritaero.com 9

10 MOMENTUM

RESEARCH & DEVELOPMENT LEAD TO COMPETITIVE EDGE

Innovation has always been an integral part of Spirit

AeroSystems. From day one, Spirit has made significant

investments in research and development to gain intellectual

property and create competitive advantage.

“As a result, the company is not just a commodity provider,

but has a unique advantage and technological edge. The goal is

to ultimately lower costs and offer a more competitive product,”

said Bill Smith, intellectual property manager.

CREATING A BRANDSpirit’s technology development activities were recently given

a brand: ShadowWorks. It’s a name that conveys a significant,

long-term investment in the company’s development of new

aerospace product and process technologies. ShadowWorks is

not a subsidiary or organization; employees from many different

functions support technology development projects, and that

makes them all part of ShadowWorks.

Some of the areas ShadowWorks is involved in include

product areas such as composite fuselage, metallic fuselage,

nacelles, pylons, and wing structures. Other areas in the

technology spectrum with ongoing initiatives include modeling

and simulation, chemicals, manufacturing control systems,

dimensional technology, product definition, composite materials,

and robotics.

PARTNERING FOR SUCCESSSpirit AeroSystems’ ShadowWorks recently completed the

build and delivery of a Vacuum Assisted Resin Transfer Molding

(VARTM) aircraft fairing to Lockheed Martin. The fairing is part of

Lockheed Martin’s Advanced Composite Cargo Aircraft (ACCA)

project.

In October 2007, the United States Air Force Research

Laboratory (AFRL) awarded a contract to Lockheed Martin that

authorized the defense contractor to proceed with

Phase II of the ACCA Flight Demonstration

project.

Under the contract, Lockheed

Martin will build and flight-

demonstrate an X-Plane

type aircraft with

emphasis

on

innovative

structural

configurations

and concepts

to include

advanced

prototyping and

composite technologies. Its solution involves

replacement of the mid/aft fuselage and empennage of a Dornier

328J aircraft with advanced composites.

Spirit was asked to participate on the project by building one of

the composite fairings utilizing innovative composite technology.

The ShadowWorks team chose to manufacture one of the upper

composite fairings using VARTM technology.

VARTM is a composite manufacturing process in which dry

fibers are laid on a tool and vacuum sealed, and the resin is

drawn through the component with a vacuum pump. There are

several advantages to using the VARTM process: lower

DEVELOPING NEWTECHNOLOGY

spiritaero.com 11

Above: The composite fairing the ShadowWorks team manufactured for Lockheed Martin using VARTM technology.

costs, one-sided tooling, room temperature processing, and the

potential for high production turn-around just to name a few.

Spirit’s ShadowWorks team delivered the VARTM fairing to

Lockheed Martin in December 2008. The VARTM fairing project

was an opportunity for Spirit to forge a relationship with one of

the largest defense contractors in the world and to showcase

their composite technology.

“It has been a great experience working with and developing a

business relationship for Spirit with the world’s largest defense

contractor,” said Jeff Buxman, project lead for the ShadowWorks

team.

SIGNIFICANT PROJECTSOther recent ShadowWorks initiatives include the development

of processes for automated riveting and painting equipment for a

business jet customer, the development of a laminar flow nacelle

configuration that will provide a significant reduction in drag,

and the development of new titanium machining techniques that

have the potential to reduce machining times by 40 percent.

The ShadowWorks core group is comprised of research and

development engineers, analysts, and technicians who perform

research and development work full time. Additionally, many

employees from all different organizations and disciplines

support ShadowWorks projects.

Spirit employees working on ShadowWorks projects have

submitted more than 230 invention disclosures, resulting in 34

patents filed with the United States Patent and Trademark Office.

12 MOMENTUM

COMMUNITY SPIRIT

SPOTLIGHT ON WICHITASpirit employees and groups within the company participated

in the Salvation Army’s Adopt-A-Family program. Employees

had the option to sign up for a traditional family match or make

contributions to a specific child or children in the family. More

than 200 children and 140 adults received assistance because of

the generosity of Spirit employees.

Heartspring, an agency serving children with disabilities,

invited Spirit employees to Adopt-A-Classroom again in 2008.

Employee groups adopted eight classrooms and hand-delivered

personalized stuffed stockings to each child.

Spirit provided a corporate sponsorship for the Wichita

Symphony’s Holiday Concert, held in December. Employee

volunteers assisted with tickets and donations at the door. Nearly

2,000 people attended the concert, which was a benefit for the

Kansas Food Bank.

Additionally, Spirit employees held a site-wide toy drive. The

drive collected hundreds of toys which were distributed by the

Salvation Army to children in need.

SPOTLIGHT ON U.K.Nine employees from Spirit Europe took part in a 240-mile

cycle race across Ireland in 2008 raising funds for Macmillan

Cancer Support - the employee-selected charity for the 2008/2009

sponsorship year.

A total of £5,889.12 was raised and the donation was handed

over to Jan Forrest from Macmillan who said, “This very generous

gift will be used to enhanced the care available for people living

with cancer, provide support for their families and expand the

resources available for Macmillan nurses, doctors and other

professionals involved in the delivery of this care.”

“U Can Do It 2” is the advertising slogan used by the Ayrshire

Chamber of Commerce for their East Ayrshire Secondary School

Roadshow.

For the third year running, Spirit Europe was among several

local organizations who supported this event by providing

workshops for students between the ages of 13 and 14.

During six workshops, students received an overview of

Spirit AeroSystems, information on career opportunities and

participated in an aircraft design simulation exercise.

SPOTLIGHT ON OKLAHOMA Spirit employees in Oklahoma were able to help their local

food bank receive $100,000 worth of fish products from Chicken

of the Sea. The tuna fish, salmon, and ahi was delivered in

January as the result of a local citizen winning a national jingle

contest. The contest winner had pledged to donate the food to

the Community Food Bank of Eastern Oklahoma.

Since Spirit is heavily involved with this particular food bank,

employees were encouraged to vote daily for the winner of the

contest so the local food bank would receive the donation.

“We already supported the food bank with volunteers and cash

donations,” said Mark Walker, Spirit community relations. “‘It

takes a village’ is how we viewed the opportunity, and with the

help of Spirit employees it was successful.”

EMPLOYEES RESPOND TO NEEDS IN THEIR COMMUNITIES

spiritaero.com 13

Page 12, left: Spirit employees in Oklahoma volunteer at the Community Food Bank of Eastern Oklahoma.Above: Spirit employees in Wichita generously donated many boxes of toys to the Salvation Army.Below, left: Spirit Europe cyclists present a check to Macmillan Cancer Support.Below, right: Spirit Wichita employees handed out employee-made stockings to children with disabilities at local agency Heartspring.

14 MOMENTUM

4TH QUARTER 2008 RESULTS

Spirit AeroSystems reported fourth quarter and full-

year 2008 financial results Feb. 5 reflecting solid operating

performance, the unfavorable impact from the Machinists’ strike

at Boeing, and a lower pension income forecast that unfavorably

impacted the company’s contract accounting estimates.

Spirit’s fourth-quarter 2008 revenues were $646 million and

operating income was $28 million, as the combination of the

Machinists’ strike at Boeing and a lower pension income forecast

for the remainder of the contract blocks impacted financial

results for the quarter.

Despite the strike and pension impact in the third and fourth

quarters of 2008, full-year 2008 revenues were $3.772 billion

and operating income was $406 million. Increased production

volumes during the first eight months of 2008 and lower period

expenses for the year were more than offset by strike-related

reduced deliveries to Boeing in the third and fourth quarters of

2008.

“Our 2008 results reflect a successful, yet challenging year,”

said Jeff Turner, Spirit president and CEO.

“We increased production rates early in the year, made good

progress on development programs, strengthened and matured

customer relationships, and maintained our strong operating

performance across the company while managing through the

challenges of the Machinists’ strike at Boeing during the third

and fourth quarters of 2008,” Turner said.

“Our strategy remains solid and the company is financially

strong as we move into less certain times in the commercial

aerospace market. We are working closely with our customers

and monitoring developments across the industry as we look

forward into 2009 and beyond.”

Net income for the fourth quarter of 2008 was $20 million,

or 14 cents per fully diluted share compared with $76 million,

or 54 cents per fully diluted share, for the same period in 2007.

Full-year 2008 net income was $265 million, or $1.91 per fully

Production continues on Boeing Next-Generation fuselages at Spirit’s Wichita, Kan., facility. The 6,000th 737 fuselage is scheduled to be shipped to Boeing in late February 2009.

spiritaero.com 15

STOCK WATCHThe charts below show the stock price of Spirit compared to the S&P 500 index, the S&P 500 Aerospace and Defense index, and other aerospace companies. Prices/values are plotted as an index number. The base date for the price/values is Nov. 21, 2006, the date Spirit became a public entity. Each data point represents the end of a trade day.

Spirit vs. other U.S.-based aerospace suppliers

Comparisons:4-WEEK, Comparison since SPR IPO

Price/value as of

1/310/09 Price/value as

of 1/02/09PercentChange

Price/value as of 11/21/06*

PercentChange

Four-week Comparison Comparison since SPR IPO

TIER 1 AEROSPACE SUPPLIERSSPIRIT

BoeingGoodrichHexcelHoneywellPrecision Cast PartsRockwell CollinsUnited TechnologiesU.S. STOCK INDEXESS&P 500S&P 500 Aerospace and DefenseIndex* SPR IPO price, all others closing price as of 11/21/06

13.60

42.3138.66

8.2932.8164.9537.6847.99

825.88

268.82

10.81

45.2539.71

7.7334.6663.4040.8054.95

931.80

284.46

26.00

91.1045.1317.0142.9275.4659.6865.83

1,402.81

375.67

25.8%

-6.5%-2.6%7.2%

-5.3%2.4%

-7.6%-12.7%

-11.4%

-5.5%

-47.7%

-53.6%-14.3%-51.3%-23.6%-13.9%-36.9%-27.1%

-41.1%

-28.4%

diluted share compared with $297 million,

or $2.13 per fully diluted share for 2007.

Fourth quarter and full-year 2008 net

income benefited from the federal research

and experimentation (R&E) tax credit’s

retroactive extension, which reduced the

fourth-quarter 2008 tax expense by $8

million, increasing fully diluted earnings

per share by 6 cents per share.

During the third quarter of 2008, Spirit

responded to a labor strike at its largest

customer, The Boeing Company.

The work stoppage by the International

Association of Machinists and Aerospace

Workers (IAM) resulted in Spirit taking

immediate action to implement a reduced

work week schedule for certain employees

supporting most Boeing programs, which

remained in effect throughout the fourth

quarter of 2008. As a result, fourth-quarter

2008 ship set deliveries to Boeing were

63 units below pre-strike delivery levels,

resulting in a revenue reduction of $451

million and a reduction in earnings per

share of 28 cents.

The 2008 full-year impact of the strike

resulted in 72 fewer deliveries, resulting in

a revenue reduction of $504 million and a

reduction in earnings per share of 41 cents

per share.

The company’s backlog at the end of

2008 was $31.7 billion, up 20 percent from

year-end 2007.

The complete fourth-quarter 2008

and full-year 2008 financial results can be

accessed from the Spirit external web site’s

Investor Relations page at

www.spiritaero.com/investor.aspx.

Spirit vs. stock indexes and other aerospace suppliers

Headquarters

3801 S. Oliver St.

Wichita, KS 67210

Phone: (316) 526-9000

Toll Free: (800) 501-7597

www.spiritaero.com