þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-2436320 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
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Item 1.
Condensed Consolidated Financial Statements (unaudited)
(unaudited)
For the Three
For the Six
Months Ended
Months Ended
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
($ in millions, except per share data)
$
1,465.6
$
1,056.0
$
2,515.2
$
2,099.3
1,354.6
919.6
2,282.6
1,820.7
41.1
38.1
80.1
77.4
6.3
12.6
19.3
22.5
1,402.0
970.3
2,382.0
1,920.6
63.6
85.7
133.2
178.7
(21.7
)
(13.8
)
(42.6
)
(27.8
)
0.1
0.1
0.2
0.2
0.1
2.7
1.6
(2.8
)
42.1
74.7
92.4
148.3
(11.9
)
(19.6
)
(27.2
)
(37.4
)
30.2
55.1
65.2
110.9
(0.1
)
(0.5
)
(0.3
)
$
30.1
$
55.1
$
64.7
$
110.6
$
0.21
$
0.40
$
0.46
$
0.80
$
0.21
$
0.39
$
0.45
$
0.79
(unaudited)
June 30,
December 31,
2011
2010
($ in millions)
$
154.1
$
481.6
347.9
200.2
2,440.2
2,507.9
60.1
47.6
29.9
57.4
3,032.2
3,294.7
1,497.6
1,470.0
185.3
172.4
38.3
55.0
101.3
109.9
$
4,854.7
$
5,102.0
$
456.7
$
443.5
173.8
190.7
27.7
29.6
9.6
9.5
36.2
169.4
41.3
302.6
5.7
5.1
9.5
14.4
760.5
1,164.8
1,185.0
1,187.3
662.5
655.2
75.9
72.5
126.3
128.4
34.5
29.0
118.9
53.9
1.2
1.1
0.2
0.3
989.8
983.6
(66.0
)
(75.3
)
965.4
900.7
1,890.6
1,810.4
0.5
0.5
1,891.1
1,810.9
$
4,854.7
$
5,102.0
(unaudited)
For the Six
For the Six
Months Ended
Months Ended
June 30, 2011
July 1, 2010
($ in millions)
$
64.7
$
110.6
64.4
55.2
2.4
2.1
4.6
4.3
5.2
21.6
(1.2
)
(3.1
)
(1.0
)
6.7
(0.1
)
0.7
7.9
2.2
(17.5
)
(5.0
)
(5.7
)
(2.6
)
(0.6
)
0.5
0.3
(143.6
)
(119.5
)
75.6
(172.2
)
(12.4
)
40.5
(2.0
)
9.7
(125.9
)
(74.4
)
28.8
26.4
(255.0
)
(14.8
)
57.7
5.3
(241.9
)
(117.3
)
(84.4
)
(130.6
)
0.4
0.1
(0.8
)
(84.0
)
(131.3
)
(4.1
)
(5.9
)
1.2
3.1
(2.9
)
(2.8
)
1.3
(327.5
)
(251.4
)
481.6
369.0
$
154.1
$
117.6
$
0.1
$
5.4
$
(4.6
)
$
($, , £, and RM in millions other than per share amounts)
($, , £, and RM in millions other than per share amounts)
June 30,
December 31,
2011
2010
$
337.0
$
191.5
10.9
8.7
$
347.9
$
200.2
June 30,
December 31,
2011
2010
$
224.9
$
234.0
1,691.8
1,748.5
39.6
40.9
1,956.3
2,023.4
483.9
484.5
$
2,440.2
$
2,507.9
($, , £, and RM in millions other than per share amounts)
June 30,
December 31,
2011
2010
$
266.5
$
261.1
166.4
167.7
27.8
19.6
138.5
115.9
930.1
1,115.1
220.2
134.4
518.7
492.0
85.7
73.1
38.1
36.4
48.2
92.6
$
2,440.2
$
2,507.9
(1)
Net of settlement adjustments related to the B787 Amendment
recorded in the second quarter of 2011.
(2)
Net of $53.3 forward-loss recorded in the second quarter of 2011 for the G280 program.
(3)
Includes non-program specific inventory cost accruals and miscellaneous other
work-in-process.
(4)
Net of $28.2 forward-loss recorded in the first quarter of
2011 for the Sikorsky CH-53K
program.
June 30,
December 31,
2011
2010
$
14.1
$
7.4
14.2
24.6
1.7
0.8
0.4
6.4
29.2
9.8
60.5
57.3
20.5
27.3
2.7
3.4
$
150.1
$
130.2
(1)
B747 inventory non-recurring production costs related to the B747-8 program.
(2)
Net of $28.2 forward-loss recorded in the first quarter of
2011 for the Sikorsky CH-53K
program.
($, , £, and RM in millions other than per share amounts)
$
484.5
(44.1
)
43.5
$
483.9
June 30,
December 31,
2011
2010
$
214.3
$
221.8
239.4
262.7
30.2
$
483.9
$
484.5
$
760.0
(255.8
)
116.6
0.1
$
620.9
June 30,
December 31,
2011
2010
$
467.8
$
639.3
169.8
145.1
(16.7
)
(24.4
)
$
620.9
$
760.0
(1)
Approximately $90.4 of cost capitalized in deferred production is related to deliveries of
thirteen B787 ship sets for the six months ended June 30, 2011. The remainder of the balance
is associated with settlement adjustments related to the B787 Amendment, including prior
ship sets delivered.
($, , £, and RM in millions other than per share amounts)
June 30,
December 31,
2011
2010
$
17.5
$
17.1
425.9
419.7
785.4
752.9
604.6
542.0
116.0
103.9
154.4
174.3
2,103.8
2,009.9
(606.2
)
(539.9
)
$
1,497.6
$
1,470.0
($, , £, and RM in millions other than per share amounts)
June 30,
December 31,
2011
2010
$
2.0
$
2.0
9.7
9.7
27.8
26.8
39.5
38.5
(1.0
)
(0.9
)
(3.9
)
(3.6
)
(18.2
)
(15.9
)
16.4
18.1
64.3
64.4
(34.0
)
(29.4
)
30.3
35.0
0.6
1.2
3.0
2.9
4.0
4.3
41.5
39.6
5.5
8.8
$
101.3
$
109.9
(1)
Under an agreement with Airbus, certain payments accounted for as consideration given by
a vendor to a customer will be amortized as a reduction to net revenues beginning in the
second half of 2011.
$
2.9
0.1
$
3.0
($, , £, and RM in millions other than per share amounts)
June 30,
December 31,
2011
2010
$
24.8
$
32.5
0.3
0.7
661.8
1,023.3
40.2
54.9
36.9
37.5
10.5
7.3
$
774.5
$
1,156.2
June 30, 2011
$
133.5
(1.9
)
(0.7
)
1.1
$
132.0
June 30, 2011
$
133.4
(2.6
)
1.2
$
132.0
($, , £, and RM in millions other than per share amounts)
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level
1 assets and liabilities include debt and equity securities and derivative contracts that are
traded in an active exchange market.
Level 2
Observable inputs other than Level 1 prices such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data for substantially the full term
of the assets or liabilities. Level 2 assets and liabilities include debt securities with
quoted prices that are traded less frequently than exchange-traded instruments and derivative
contracts whose value is determined using a pricing model with inputs that are observable in
the market or can be derived principally from or corroborated by observable market data.
Observable inputs, such as current and forward interest rates and foreign exchange rates, are
used in determining the fair value of our interest rate swaps and foreign currency hedge
contracts.
Level 3
Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of assets and liabilities. Level 3 assets and liabilities
include financial instruments whose value is determined using pricing models, discounted cash
flow methodologies, or similar techniques, as well as instruments for which the determination
of fair value requires significant management judgment or estimation.
Fair Value Measurements
June 30, 2011
At June 30, 2011 using
Quoted Prices in
Significant
Active Markets
Other
Significant
Total Carrying
Assets
Liabilities
for Identical
Observable
Unobservable
Amount in
Measured at
Measured at Fair
Assets
Inputs
Inputs
Description
Balance Sheet
Fair Value
Value
(Level 1)
(Level 2)
(Level 3)
$
112.3
$
112.3
$
$
112.3
$
$
$
3.5
$
3.6
$
$
3.6
$
$
$
(5.4
)
$
$
(5.4
)
$
$
(5.4
)
$
$
(0.2
)
$
1.2
$
(1.4
)
$
$
(0.2
)
$
($, , £, and RM in millions other than per share amounts)
Fair Value Measurements
December 31, 2010
At December 31, 2010 using
Quoted Prices in
Significant
Active Markets
Other
Significant
Total Carrying
Assets
Liabilities
for Identical
Observable
Unobservable
Amount in
Measured at
Measured at Fair
Assets
Inputs
Inputs
Description
Balance Sheet
Fair Value
Value
(Level 1)
(Level 2)
(Level 3)
$
372.1
$
372.1
$
$
372.1
$
$
$
3.5
$
3.5
$
$
3.5
$
$
$
(9.3
)
$
$
(9.3
)
$
$
(9.3
)
$
$
(1.6
)
$
2.0
$
(3.6
)
$
$
(1.6
)
$
June 30, 2011
December 31, 2010
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
$
563.3
$
564.9
$
566.2
$
568.3
294.5
316.5
294.2
315.0
300.0
308.3
300.0
300.4
18.4
17.8
18.2
17.9
$
1,176.2
$
1,207.5
$
1,178.6
$
1,201.6
($, , £, and RM in millions other than per share amounts)
Effective
Fair Value,
Notional Amount
Expires
Variable Rate
Fixed Rate
(1)
Fixed Rate
(2)
June 30, 2011
July 2011
3 Month LIBOR
4.27
%
7.17
%
$
(1.0
)
July 2011
3 Month LIBOR
3.23
%
6.13
%
$
(2.2
)
March 2013
1 Month LIBOR
0.72
%
3.62
%
$
(0.1
)
June 2013
1 Month LIBOR
0.84
%
3.74
%
$
(0.2
)
July 2014
1 Month LIBOR
1.37
%
4.27
%
$
(1.9
)
Total
$
(5.4
)
(1)
The fixed rate represents the rate at which interest is paid by the Company pursuant to
the terms of its interest rate swap agreements.
(2)
The effective Term B fixed interest rate represents the fixed rate of the derivative
instrument plus the 175 basis-point margin on the pro rata share of Term B-1 and 325
basis-point margin on the pro rata share of Term B-2 above the variable LIBOR borrowing rate
we pay on the Term B loan.
($, , £, and RM in millions other than per share amounts)
June 30, 2011
December 31, 2010
Foreign
Foreign
USD
Currency
USD
Currency
Year
Buy/(Sell)
(1)
Buy/(Sell)
(1)
Buy/(Sell)
(1)
Buy/(Sell)
(1)
$
(11.6
)
£
7.2
$
(44.1
)
£
27.3
(9.0
)
5.5
(8.9
)
5.7
(0.1
)
(0.1
)
$
(20.6
)
£
12.6
$
(53.0
)
£
32.9
(1)
Includes foreign currency hedge contracts for 2011 through 2013 novated to Spirit Europe as a
result of the acquisition of BAE
Aerostructures on April 1, 2006, which had no underlying contractual transactions at the
inception date of the contracts and, therefore, are classified as net debt securities which are
not subject to hedge accounting. The mark-to-market values of these net debt securities are
recorded through the Condensed Consolidated Statement of Operations on a monthly basis in
accordance with FASB authoritative guidance on investments debt and equity securities
disclosures.
($, , £, and RM in millions other than per share amounts)
Fair Values of Derivative Instruments
Other Asset Derivatives
Other Liability Derivatives
June 30, 2011
December 31, 2010
June 30, 2011
December 31, 2010
$
$
$
5.4
$
9.3
0.3
0.1
0.3
1.3
0.1
0.2
0.4
0.1
5.7
10.8
0.4
0.7
0.5
0.7
0.4
1.2
0.6
1.4
0.8
1.9
1.1
2.1
$
1.2
$
2.0
$
6.8
$
12.9
Location of
Location of (Gain)
(Gain) or Loss
or Loss Recognized
Reclassified
in Income on
from
Derivative
Derivatives in
Accumulated
OCI into
(Ineffective Portion
and
Amount
Cash Flow
Amount of Gain or (Loss) Recognized
Income
Amount of Loss Reclassified from
Excluded from
Amount of Loss Recognized in Income on
Hedging
in OCI, net of tax, on Derivative
(Effective
Accumulated OCI into Income
Effectiveness
Derivative (Ineffective Portion and Amount
Relationships
(Effective Portion)
Portion)
(Effective Portion)
Testing)
Excluded from Effectiveness Testing)
For the Three Months Ended
For the Three Months Ended
For the Three Months Ended
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
Interest
Other (income)/
$
(1.5
)
$
(0.4
)
expense
$
3.2
$
4.2
expense
$
$
Sales/
Other
0.2
(0.6
)
Revenue
0.5
(income)/expense
$
(1.3
)
$
(1.0
)
$
3.2
$
4.7
$
$
($, , £, and RM in millions other than per share amounts)
Location of
Location of (Gain)
(Gain) or Loss
or Loss Recognized
Reclassified
in Income on
from
Derivative
Derivatives in
Accumulated
OCI into
(Ineffective Portion
and Amount
Cash Flow
Amount of Gain or (Loss) Recognized
Income
Amount of Loss Reclassified from
Excluded from
Amount of Loss Recognized in Income on
Hedging
in OCI, net of tax, on Derivative
(Effective
Accumulated OCI into Income
Effectiveness
Derivative (Ineffective Portion and Amount
Relationships
(Effective Portion)
Portion)
(Effective Portion)
Testing)
Excluded from Effectiveness Testing)
For the Six Months Ended
For the Six Months Ended
For the Six Months Ended
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
Interest
Other (income)/
$
(1.6
)
$
(2.1
)
expense
$
6.4
$
8.5
expense
$
$
Sales/
Other
0.8
(2.5
)
Revenue
0.1
0.8
(income)/expense
$
(0.8
)
$
(4.6
)
$
6.5
$
9.3
$
$
June 30, 2011
December 31, 2010
Current
Noncurrent
Current
Noncurrent
$
0.5
$
3.0
$
0.9
$
2.6
0.1
$
0.5
$
3.1
$
0.9
$
2.6
($, , £, and RM in millions other than per share amounts)
Amortized
Approximate
Cost
Fair Value
$
0.5
$
0.5
2.1
2.2
0.1
0.1
0.8
0.8
$
3.5
$
3.6
June 30,
December 31,
2011
2010
$
563.3
$
566.2
594.5
594.2
18.4
18.2
17.7
17.2
0.7
1.0
$
1,194.6
$
1,196.8
($, , £, and RM in millions other than per share amounts)
($, , £, and RM in millions other than per share amounts)
Defined Benefit Plans
For the Three
For the Six
Months Ended
Months Ended
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
$
1.4
$
1.5
$
2.8
$
3.1
11.0
10.4
22.2
20.8
(17.0
)
(16.0
)
(33.6
)
(31.9
)
(0.5
)
(0.1
)
(0.1
)
$
(5.1
)
$
(4.1
)
$
(8.7
)
$
(8.1
)
Other Benefits
For the Three
For the Six
Months Ended
Months Ended
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
$
0.7
$
0.8
$
1.5
$
1.5
0.9
1.0
1.9
1.9
0.2
0.3
0.4
$
1.6
$
2.0
$
3.7
$
3.8
($, , £, and RM in millions other than per share amounts)
($, , £, and RM in millions other than per share amounts)
For the Three Months Ended
June 30, 2011
July 1, 2010
Per
Per
Share
Share
Income
Shares
Amount
Income
Shares
Amount
$
29.5
139.2
$
0.21
$
54.5
137.5
$
0.40
0.6
2.4
0.6
1.6
$
30.1
$
55.1
0.7
1.3
$
30.1
142.3
$
0.21
$
55.1
140.4
$
0.39
For the Six Months Ended
June 30, 2011
July 1, 2010
Per
Per
Share
Share
Income
Shares
Amount
Income
Shares
Amount
$
63.5
138.9
$
0.46
$
109.4
137.4
$
0.80
1.2
2.5
1.2
1.5
$
64.7
$
110.6
1.0
1.7
$
64.7
142.4
$
0.45
$
110.6
140.6
$
0.79
($, , £, and RM in millions other than per share amounts)
For the Three Months Ended June 30, 2011
Before Tax
Tax (Expense)
Net-of Tax
Amount
or Benefit
Amount
$
42.0
$
(11.9
)
$
30.1
(2.4
)
0.9
(1.5
)
3.2
(1.2
)
2.0
0.8
(0.3
)
0.5
0.3
(0.1
)
0.2
0.3
(0.1
)
0.2
0.1
(0.1
)
(0.1
)
(0.1
)
(0.3
)
(0.3
)
$
42.8
$
(12.4
)
$
30.4
For the Three Months Ended July 1, 2010
Before Tax
Tax (Expense)
Net-of Tax
Amount
or Benefit
Amount
$
74.7
$
(19.6
)
$
55.1
(0.6
)
0.2
(0.4
)
4.3
(1.6
)
2.7
3.7
(1.4
)
2.3
(0.8
)
0.2
(0.6
)
0.5
(0.2
)
0.3
(0.3
)
(0.3
)
0.3
(0.1
)
0.2
(1.7
)
1.0
(0.7
)
(1.3
)
(1.3
)
$
75.4
$
(20.1
)
$
55.3
($, , £, and RM in millions other than per share amounts)
For the Six Months Ended June 30, 2011
Before Tax
Tax (Expense)
Net-of Tax
Amount
or Benefit
Amount
$
91.9
$
(27.2
)
$
64.7
(2.6
)
1.0
(1.6
)
6.4
(2.4
)
4.0
3.8
(1.4
)
2.4
1.1
(0.3
)
0.8
0.1
0.1
1.1
(0.4
)
0.7
2.3
(0.7
)
1.6
0.2
(0.1
)
0.1
2.1
(0.6
)
1.5
3.7
3.7
$
104.0
$
(30.0
)
$
74.0
For the Six Months Ended July 1, 2010
Before Tax
Tax (Expense)
Net-of Tax
Amount
or Benefit
Amount
$
148.0
$
(37.4
)
$
110.6
(3.4
)
1.3
(2.1
)
8.6
(3.3
)
5.3
5.2
(2.0
)
3.2
(3.7
)
1.2
(2.5
)
0.8
(0.2
)
0.6
(2.9
)
1.0
(1.9
)
0.2
(0.1
)
0.1
(9.3
)
5.4
(3.9
)
(6.8
)
(6.8
)
$
134.4
$
(33.1
)
$
101.3
($, , £, and RM in millions other than per share amounts)
($, , £, and RM in millions other than per share amounts)
($, , £, and RM in millions other than per share amounts)
$
18.7
13.5
(13.1
)
0.1
$
19.2
(1)
During the second quarter of 2011, we expensed an additional $9.0 to charges and
unallocated cost of sales due to changes in claims data and historical experience.
For the Three
For the Six
Months Ended
Months Ended
June 30,
July 1,
June 30,
July 1,
2011
2010
2011
2010
$
1.0
$
0.9
$
2.1
$
1.9
0.2
0.2
0.2
0.4
(1.1
)
1.6
(0.7
)
(5.1
)
$
0.1
$
2.7
$
1.6
$
(2.8
)
($, , £, and RM in millions other than per share amounts)
($, , £, and RM in millions other than per share amounts)
Three Months Ended
Six Months Ended
June 30,
July 1,
June 30,
July 1,
2011
2010
2011
2010
$
773.1
$
515.2
$
1,301.1
$
1,031.4
317.7
272.0
590.7
546.4
372.5
266.9
617.4
515.8
2.3
1.9
6.0
5.7
$
1,465.6
$
1,056.0
$
2,515.2
$
2,099.3
$
95.1
$
80.9
$
142.1
$
156.8
48.2
33.4
89.0
67.0
(31.2
)
28.3
(13.8
)
47.2
0.5
(2.5
)
0.5
(2.2
)
112.6
140.1
217.8
268.8
(37.6
)
(34.7
)
(72.7
)
(69.7
)
(0.5
)
(0.8
)
(1.0
)
(1.5
)
(10.9
)
(18.9
)
(10.9
)
(18.9
)
$
63.6
$
85.7
$
133.2
$
178.7
(1)
Includes recognition of deferred revenue associated with the
B787 Amendment in the second quarter of 2011.
(2)
Net of $28.2 forward-loss recorded for the Sikorsky CH-53K
program in the first quarter of 2011.
(3)
Net of 53.3 forward-loss recorded for the G280 program in the
second quarter of 2011.
(4)
Includes charges in the second quarter of 2011 of $9.0 change
in estimate to increase warranty and extraordinary rework reserves
and $1.8 in early retirement incentives elected by eligible
UAW-represented employees. Includes a charge in the second quarter of
2010 of $18.9 related to the grant of shares to employees represented
by the IAM in connection with the ratification of a new ten-year
labor contract on June 25, 2010.
($, , £, and RM in millions other than per share amounts)
(i)
Spirit, as the subsidiary issuer of the 2017 Notes and the 2020 Notes;
(ii)
The Subsidiary Guarantors, on a combined basis, as guarantors of the 2017 Notes and
the 2020 Notes;
(iii)
The Companys subsidiaries, other than the Subsidiary Guarantors, which will not
be guarantors of the 2017 Notes and the 2020 Notes (the Subsidiary Non-Guarantors), on
a combined basis;
(iv)
Consolidating entries and eliminations representing adjustments to (a) eliminate
intercompany transactions between or among Holdings, the Subsidiary Guarantors and the
Subsidiary Non-Guarantors, (b) eliminate the investments in the Companys subsidiaries
and (c) record consolidating entries; and
(v)
Holdings and its subsidiaries on a consolidated basis.
($, , £, and RM in millions other than per share amounts)
For the Three Months Ended June 30, 2011
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
1,362.4
$
11.4
$
118.7
$
(26.9
)
$
1,465.6
1,264.3
9.6
107.6
(26.9
)
1,354.6
35.9
1.0
4.2
41.1
6.0
0.3
6.3
1,306.2
10.6
112.1
(26.9
)
1,402.0
56.2
0.8
6.6
63.6
(21.4
)
(1.7
)
1.4
(21.7
)
1.5
(1.4
)
0.1
1.1
(1.0
)
0.1
37.4
0.8
3.9
42.1
(11.7
)
(0.3
)
0.1
(11.9
)
25.7
0.5
4.0
30.2
(0.1
)
(0.1
)
$
25.6
$
0.5
$
4.0
$
$
30.1
For the Three Months Ended July 1, 2010
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
947.5
$
0.3
$
128.5
$
(20.3
)
$
1,056.0
825.1
0.3
114.5
(20.3
)
919.6
32.5
1.4
4.2
38.1
11.6
1.0
12.6
869.2
1.7
119.7
(20.3
)
970.3
78.3
(1.4
)
8.8
85.7
(13.7
)
(1.0
)
0.9
(13.8
)
1.0
(0.9
)
0.1
0.9
1.8
2.7
66.5
(1.4
)
9.6
74.7
(18.4
)
0.5
(1.7
)
(19.6
)
48.1
(0.9
)
7.9
55.1
$
48.1
$
(0.9
)
$
7.9
$
$
55.1
($, , £, and RM in millions other than per share amounts)
For the Six Months Ended June 30, 2011
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
2,305.7
$
11.9
$
246.3
$
(48.7
)
$
2,515.2
2,094.3
9.5
227.5
(48.7
)
2,282.6
69.2
1.4
9.5
80.1
19.0
0.3
19.3
2,182.5
10.9
237.3
(48.7
)
2,382.0
123.2
1.0
9.0
133.2
(42.0
)
(3.1
)
2.5
(42.6
)
2.7
(2.5
)
0.2
2.1
(0.5
)
1.6
86.0
1.0
5.4
92.4
(27.7
)
(0.4
)
0.9
(27.2
)
58.3
0.6
6.3
65.2
(0.1
)
(0.4
)
(0.5
)
$
58.2
$
0.6
$
5.9
$
$
64.7
For the Six Months Ended July 1, 2010
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
1,886.2
$
0.5
$
247.2
$
(34.6
)
$
2,099.3
1,631.6
0.5
223.2
(34.6
)
1,820.7
67.5
1.9
8.0
77.4
21.5
1.0
22.5
1,720.6
2.4
232.2
(34.6
)
1,920.6
165.6
(1.9
)
15.0
178.7
(27.5
)
(2.0
)
1.7
(27.8
)
1.9
(1.7
)
0.2
1.9
(4.7
)
(2.8
)
141.9
(1.9
)
8.3
148.3
(37.2
)
0.7
(0.9
)
(37.4
)
104.7
(1.2
)
7.4
110.9
(0.3
)
(0.3
)
$
104.7
$
(1.2
)
$
7.1
$
$
110.6
($, , £, and RM in millions other than per share amounts)
June 30, 2011
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
125.6
$
$
28.5
$
$
154.1
380.4
10.0
121.7
(164.2
)
347.9
2,213.2
67.9
159.1
2,440.2
59.8
0.3
60.1
27.8
2.1
29.9
2,806.8
77.9
311.7
(164.2
)
3,032.2
1,020.4
314.3
162.9
1,497.6
180.5
4.8
185.3
279.9
(279.9
)
38.3
38.3
302.8
80.0
32.9
(314.4
)
101.3
$
4,628.7
$
472.2
$
512.3
$
(758.5
)
$
4,854.7
$
413.6
$
82.6
$
124.7
$
(164.2
)
$
456.7
160.1
0.6
13.1
173.8
26.2
1.5
27.7
7.2
2.4
9.6
36.2
36.2
40.1
1.2
41.3
4.5
1.2
5.7
5.4
4.1
9.5
688.8
87.7
148.2
(164.2
)
760.5
1,153.9
80.0
185.5
(234.4
)
1,185.0
662.5
662.5
75.9
75.9
91.6
34.7
126.3
25.1
9.4
34.5
181.3
0.3
17.3
(80.0
)
118.9
1.2
1.2
0.2
0.2
989.8
210.7
69.2
(279.9
)
989.8
(58.7
)
(7.3
)
(66.0
)
908.7
1.9
54.8
965.4
1,841.2
212.6
116.7
(279.9
)
1,890.6
0.5
0.5
1,841.2
212.6
117.2
(279.9
)
1,891.1
$
4,628.7
$
472.2
$
512.3
$
(758.5
)
$
4,854.7
($, , £, and RM in millions other than per share amounts)
December 31, 2010
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
416.1
$
$
65.5
$
$
481.6
180.6
6.6
96.4
(83.4
)
200.2
2,368.0
15.9
124.0
2,507.9
46.7
0.9
47.6
55.0
2.4
57.4
3,066.4
22.5
289.2
(83.4
)
3,294.7
1,018.0
302.0
150.0
1,470.0
169.5
2.9
172.4
279.9
(279.9
)
55.0
55.0
285.4
80.0
34.7
(290.2
)
109.9
$
4,874.2
$
404.5
$
476.8
$
(653.5
)
$
5,102.0
$
394.1
$
14.4
$
118.4
$
(83.4
)
$
443.5
169.9
20.8
190.7
27.3
2.3
29.6
7.2
2.3
9.5
169.4
169.4
295.6
7.0
302.6
3.9
1.2
5.1
9.7
4.7
14.4
1,073.2
18.3
156.7
(83.4
)
1,164.8
1,157.3
80.0
160.2
(210.2
)
1,187.3
655.2
655.2
72.5
72.5
94.2
34.2
128.4
26.4
2.6
29.0
116.1
17.8
(80.0
)
53.9
1.1
1.1
0.3
0.3
983.6
210.7
69.2
(279.9
)
983.6
(62.1
)
(13.2
)
(75.3
)
850.6
1.3
48.8
900.7
1,773.5
212.0
104.8
(279.9
)
1,810.4
0.5
0.5
1,773.5
212.0
105.3
(279.9
)
1,810.9
$
4,874.2
$
404.5
$
476.8
$
(653.5
)
$
5,102.0
($, , £, and RM in millions other than per share amounts)
For the Six Months Ended June 30, 2011
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
(209.8
)
$
19.0
$
(51.1
)
$
$
(241.9
)
(54.1
)
(19.0
)
(11.3
)
(84.4
)
0.2
0.2
0.4
(53.9
)
(19.0
)
(11.1
)
(84.0
)
(3.8
)
(0.3
)
(4.1
)
(24.2
)
24.2
1.2
1.2
(26.8
)
23.9
(2.9
)
1.3
1.3
(290.5
)
(37.0
)
(327.5
)
416.1
65.5
481.6
$
125.6
$
$
28.5
$
$
154.1
($, , £, and RM in millions other than per share amounts)
For the Six Months Ended July 1, 2010
Guarantor
Non-Guarantor
Consolidating
Spirit
Subsidiaries
Subsidiaries
Adjustments
Total
$
(101.4
)
$
(1.9
)
$
(14.0
)
$
$
(117.3
)
(45.3
)
(81.2
)
(4.1
)
(130.6
)
(86.0
)
86.0
0.1
(0.8
)
(0.7
)
(131.2
)
(81.2
)
(4.9
)
86.0
(131.3
)
(5.8
)
(0.1
)
(5.9
)
7.1
(7.1
)
83.1
2.9
(86.0
)
3.1
3.1
4.4
83.1
(4.3
)
(86.0
)
(2.8
)
(228.2
)
(23.2
)
(251.4
)
317.1
51.9
369.0
$
88.9
$
$
28.7
$
$
117.6
Three Months
Three Months
Percentage
Six Months
Six Months
Percentage
Ended
Ended
Change to
Ended
Ended
Change to
June 30, 2011
July 1, 2010
Prior Year
June 30, 2011
July 1, 2010
Prior Year
($ in millions)
$
1,465.6
$
1,056.0
39
%
$
2,515.2
$
2,099.3
20
%
1,354.6
919.6
47
%
2,282.6
1,820.7
25
%
41.1
38.1
8
%
80.1
77.4
3
%
6.3
12.6
(50
%)
19.3
22.5
(14
%)
63.6
85.7
(26
%)
133.2
178.7
(25
%)
(21.7
)
(13.8
)
57
%
(42.6
)
(27.8
)
53
%
0.1
0.1
0
%
0.2
0.2
0
%
0.1
2.7
(96
%)
1.6
(2.8
)
157
%
42.1
74.7
(44
%)
92.4
148.3
(38
%)
(11.9
)
(19.6
)
(39
%)
(27.2
)
(37.4
)
(27
%)
30.2
55.1
(45
%)
65.2
110.9
(41
%)
(0.1
)
(0.5
)
(0.3
)
67
%
$
30.1
$
55.1
(45
%)
$
64.7
$
110.6
(42
%)
Three Months
Three Months
Six Months
Six Months
Ended
Ended
Ended
Ended
Model
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
97
96
190
190
3
1
7
4
6
4
11
7
22
18
38
39
7
4
13
9
135
123
259
249
91
95
194
197
26
23
44
48
5
5
11
6
122
123
249
251
10
6
18
11
267
252
526
511
(1)
Previously included Hawker Beechcraft products only. Now includes Spirit deliveries associated with business and regional jets.
Three Months
Three Months
Six Months
Six Months
Ended
Ended
Ended
Ended
Prime Customer
June 30, 2011
July 1, 2010
June 30, 2011
July 1, 2010
(Dollars in millions)
$
1,311.2
$
893.3
$
2,192.6
$
1,797.1
108.7
112.0
224.7
214.7
45.7
50.7
97.9
87.5
$
1,465.6
$
1,056.0
$
2,515.2
$
2,099.3
Three Months Ended
Three Months Ended
June 30, 2011
July 1, 2010
($ in millions)
$
773.1
$
515.2
317.7
272.0
372.5
266.9
2.3
1.9
$
1,465.6
$
1,056.0
$
95.1
$
80.9
48.2
33.4
(31.2
)
28.3
0.5
(2.5
)
112.6
140.1
(37.6
)
(34.7
)
(0.5
)
(0.8
)
(10.9
)
(18.9
)
$
63.6
$
85.7
(1)
Includes recognition of deferred revenue associated with the
B787 Amendment in the second quarter of 2011.
(2)
Net of $28.2 million forward-loss recorded for
the Sikorsky CH-53K program in the first half of 2011.
(3)
Net of $53.3 million forward-loss recorded for
the G280 program in the first half of 2011.
(4)
Includes charges in the second quarter of 2011 of $9.0 million change in estimate to increase warranty
and extraordinary rework reserves and $1.8 million in early retirement incentives elected by eligible
UAW-represented employees. Includes a charge in the second quarter of 2010 of $18.9 million related to the
grant of shares to employees represented by the IAM in connection with the ratification of a new
ten-year labor contract on June 25, 2010.
Six Months Ended
Six Months Ended
June 30, 2011
July 1, 2010
($ in millions)
$
1,301.1
$
1,031.4
590.7
546.4
617.4
515.8
6.0
5.7
$
2,515.2
$
2,099.3
$
142.1
$
156.8
89.0
67.0
(13.8
)
47.2
0.5
(2.2
)
217.8
268.8
(72.7
)
(69.7
)
(1.0
)
(1.5
)
(10.9
)
(18.9
)
$
133.2
$
178.7
(1)
Includes recognition of deferred revenue associated with the B787 Amendment in the first half of 2011.
(2)
Net of $28.2 forward-loss recorded for the Sikorsky CH-53K program in the first half of 2011.
(3)
Net of $53.3 million forward-loss recorded for the G280 program in the first half of 2011.
(4)
Includes charges in the first half of 2011 of $9.0 million change in estimate to increase
warranty and extraordinary rework reserves and $1.8 million in early retirement incentives
for eligible UAW-represented employees. Includes a charge in the
second quarter of 2010 of
$18.9 million related to the grant of shares to employees represented by the IAM in
connection with the ratification of a new ten-year labor contract on June 25, 2010.
For the Six Months Ended
June 30, 2011
July 1, 2010
($ in millions)
$
64.7
$
110.6
70.2
71.1
(376.8
)
(299.0
)
(241.9
)
(117.3
)
(84.0
)
(131.3
)
(2.9
)
(2.8
)
1.3
(327.5
)
(251.4
)
481.6
369.0
$
154.1
$
117.6
CH-53K and G280 programs and adjustments related to the B787
Amendment, partially offset by continued investments on the B787, Gulfstream G280 and G650, Airbus A350 XWB, Sikorsky CH-53K and Rolls-Royce
BR725 programs.
We expect
to continue
investing in new program inventory in the second half of 2011 as we incur additional up-front costs to
produce initial units, which traditionally have a higher cost. The mature Boeing and Airbus
program inventories increased $37.0 million for the six months ended June 30, 2011, compared with
an $8.0 million increase for these contracts in the same period in the prior year. In the second
quarter of 2011, inventory balances on remaining programs decreased $35.8 million, including
non-program specific inventory, as compared to a $70.8 million decrease for the same period in the
prior year.
our ability to continue to grow our business and execute our growth strategy, including
the timing and execution of new programs;
our ability to perform our obligations and manage costs related to our new commercial and
business aircraft development programs and the related recurring production;
potential reduction in the build rates of certain Boeing aircraft including, but not
limited to, the B737 program, the B747 program, the B767 program and the B777 program, and
build rates of the Airbus A320 and A380 programs, which could be negatively impacted by
continuing weakness in the global economy and economic challenges facing commercial
airlines, and by a lack of business and consumer confidence and the impact of continuing
instability in the global financial and credit markets, including, but not limited to,
sovereign debt concerns in Europe;
declining business jet manufacturing rates and customer cancellations or deferrals as a
result of the weakened global economy;
the success and timely execution of key milestones such as certification and delivery of
Boeings new B787 and Airbus new A350 XWB (Xtra Wide-Body) aircraft programs, including
first flight for the Airbus A350 XWB, receipt of necessary regulatory approvals and customer
adherence to their announced schedules;
our ability to enter into supply arrangements with additional customers and the ability
of all parties to satisfy their performance requirements under existing supply contracts
with Boeing and Airbus, our two major customers, and other customers and the risk of
nonpayment by such customers;
any adverse impact on Boeings and Airbus production of aircraft resulting from
cancellations, deferrals or reduced orders by their customers or from labor disputes or acts
of terrorism;
any adverse impact on the demand for air travel or our operations from the outbreak of
diseases or epidemic or pandemic outbreaks;
returns on pension plan assets and the impact of future discount rate changes on pension
obligations;
our ability to borrow additional funds or refinance debt;
competition from original equipment manufacturers and other aerostructures suppliers;
the effect of governmental laws, such as U.S. export control laws and anti-bribery laws
such as the Foreign Corrupt Practices Act, environmental laws and agency regulations, both
in the U.S. and abroad;
the cost and availability of raw materials and purchased components;
our ability to successfully extend or renegotiate our primary collective bargaining
contracts with our labor unions;
our ability to recruit and retain highly skilled employees and our relationships with the
unions representing many of our employees;
spending by the U.S. and other governments on defense;
the possibility that our cash flows and borrowing facilities may not be adequate for our
additional capital needs or for payment of interest on and principal of our indebtedness and
the possibility that we may be unable to borrow additional funds or refinance debt;
our exposure under our existing senior secured revolving credit facility to higher
interest payments should interest rates increase substantially;
the effectiveness of our interest rate and foreign currency hedging programs;
the outcome or impact of ongoing or future litigation and regulatory actions; and
our exposure to potential product liability and warranty claims.
the destruction of our suppliers facilities or their distribution infrastructure;
a work stoppage or strike by our suppliers employees;
the failure of our suppliers to provide materials of the requisite quality or in compliance with specifications;
the failure of essential equipment at our suppliers plants;
the failure of our suppliers to satisfy U.S. and international import and export control laws for goods that we
purchase from such suppliers;
the failure of suppliers to meet regulatory standards;
the failure, shortage or delays in the delivery of raw materials to our suppliers;
contractual amendments and disputes with our suppliers; and
inability of suppliers to perform as a result of the weakened global economy or otherwise.
Article I.
Exhibit
Number
Section 1.01 Exhibit
Spirit AeroSystems Holdings, Inc. Third Amended and Restated Long-Term Incentive Plan. (1)
Spirit AeroSystems Holdings, Inc. Amended and Restated Short-Term Incentive Plan. (2)
Spirit AeroSystems Holdings, Inc. Second Amended and Restated Short-Term Incentive Plan.
Spirit AeroSystems Holdings, Inc. Fourth Amended and Restated Long-Term Incentive Plan.
Code of Ethics
(i) Spirit AeroSystems Holdings, Inc. Code of Ethics and Business Conduct, as amended. *
(ii) Spirit AeroSystems Holdings, Inc. Code of Conduct for Finance Employees. (3)
Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
XBRL Instance Document.
XBRL Taxonomy Extension Schema Document.
XBRL Taxonomy Extension Calculation Linkbase Document.
XBRL Taxonomy Extension Definition Linkbase Document.
XBRL Taxonomy Extension Label Linkbase Document.
XBRL Taxonomy Extension Presentation Linkbase Document.
(1)
Incorporated by reference to the Registrants Registration Statement on Form S-8 (File
No. 333-174951), filed with the SEC on June 17, 2011, Exhibit 99.1
(2)
Incorporated by reference to the Registrants Registration Statement on Form S-8 (File
No. 333-150401), filed with the SEC on April 23, 2008 Exhibit 99.1
(3)
Incorporated by reference to the Registrants Annual Report on Form 10-K (File
No. 001-33160), filed March 5, 2007, Exhibit 14.1
*
Filed herewith
**
Furnished herewith
Signature
Title
Date
Senior Vice President and Chief
August 5, 2011
Financial Officer (Principal Financial Officer)
Page | ||||
ARTICLE I PURPOSE
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1 | |||
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Section 1.01. Purpose
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1 | |||
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ARTICLE II DEFINITIONS
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1 | |||
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Section 2.01. Affiliate
|
1 | |||
Section 2.02. Beneficiary or Beneficiaries
|
2 | |||
Section 2.03. Board of Directors
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2 | |||
Section 2.04. Change in Control
|
2 | |||
Section 2.05. Code
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2 | |||
Section 2.06. Committee
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2 | |||
Section 2.07. Company
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2 | |||
Section 2.08. Effective Date
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2 | |||
Section 2.09. Employee
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2 | |||
Section 2.10. Employer
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2 | |||
Section 2.11. Onex
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2 | |||
Section 2.12. Participant
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3 | |||
Section 2.13. Person
|
3 | |||
Section 2.14. Plan
|
3 | |||
Section 2.15. Plan Year
|
3 | |||
Section 2.16. Qualifying Retirement
|
3 | |||
Section 2.17. Separation from Service
|
3 | |||
Section 2.18. Shares
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3 | |||
Section 2.19. Sole Discretion
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3 | |||
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ARTICLE III ELIGIBILITY
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3 | |||
|
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Section 3.01. Eligibility
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3 | |||
|
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ARTICLE IV BENEFITS
|
4 | |||
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Section 4.01. Benefits
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4 | |||
Section 4.02. Grants of Shares
|
4 | |||
Section 4.03. Lapse Restriction
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5 | |||
Section 4.04. Additional Conditions
|
6 | |||
Section 4.05. Restriction on Transfer of Shares
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6 | |||
Section 4.06. Dividends
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6 | |||
Section 4.07. Limitations on Stockholder Rights
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6 |
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Section 4.08. Certificates and Legends
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6 | |||
|
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ARTICLE V PAYMENT OF BENEFITS
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|
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Section 5.01. Payment of Cash Benefits
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7 | |||
Section 5.02. Payments in the Event of Death
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7 | |||
|
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ARTICLE VI SOURCE OF BENEFITS
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8 | |||
|
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Section 6.01. Source of Benefits
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8 | |||
Section 6.02. Multiple Employers
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8 | |||
|
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ARTICLE VII ADMINISTRATION
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8 | |||
|
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Section 7.01. Committee
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8 | |||
Section 7.02. Reliance on Certificates, etc.
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9 | |||
Section 7.03. Plan Records
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9 | |||
|
||||
ARTICLE VIII AMENDMENT AND TERMINATION
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9 | |||
|
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Section 8.01. Amendment
|
9 | |||
Section 8.02. Termination
|
9 | |||
|
||||
ARTICLE IX RESTRICTIONS ON ALIENATION
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10 | |||
|
||||
Section 9.01. Restrictions on Alienation
|
10 | |||
|
||||
ARTICLE X MISCELLANEOUS
|
10 | |||
|
||||
Section 10.01. Effective Date
|
10 | |||
Section 10.02. Transfers and Payments Net of Withholding
|
10 | |||
Section 10.03. Binding on Successors
|
11 | |||
Section 10.04. Adoption by Other Employers
|
11 | |||
Section 10.05. Minors and Incompetents
|
11 | |||
Section 10.06. Erroneous Payments
|
11 | |||
Section 10.07. Headings
|
12 | |||
Section 10.08. Notices
|
12 | |||
Section 10.09. Severability
|
12 | |||
Section 10.10. No Contract of Employment
|
12 | |||
Section 10.11. Certain Limitations
|
12 | |||
Section 10.12. State Law
|
12 | |||
Section 10.13. Government and Other Regulations
|
12 | |||
Section 10.14. Nonexclusivity of the Plan
|
12 |
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- 1 -
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A. | In the event of a Change in Control, each Participant who is employed by the Employer on the date of the closing of the Change in Control or who was involuntarily terminated by the Employer without cause during the 90-day period ending on the date of the closing of the Change in Control will be automatically fully (100%) vested with respect to all of the Restricted Shares previously granted under the Plan (and not previously forfeited) so that, immediately prior to the closing of the Change in Control, such Shares will no longer be subject to any lapse restriction or risk of forfeiture imposed in connection with this Plan. | ||
B. | In the event of a Participants Qualifying Retirement, the Participant will be automatically fully (100%) vested with respect to all of the Restricted Shares previously granted under the Plan (but not forfeited) so that, immediately prior to the Qualifying Retirement, such Shares will no longer be subject to any lapse restriction or risk of forfeiture imposed in connection with this Plan. |
- 5 -
- 6 -
- 7 -
A. | Determine in its Sole Discretion the eligibility of any individual to participate in the Plan; | ||
B. | Make discretionary interpretations regarding the terms of the Plan and make factual findings with respect to any issue arising under the Plan, including, but not limited to, the power to determine whether an individual is eligible to participate in the Plan or receive benefits under the Plan and whether an individual has incurred a Separation from Service, with its interpretation to be final and conclusive; | ||
C. | Compute the amounts payable for any Participant or other person in accordance with the provisions of the Plan, determine the manner and time for making such payments in accordance with the provisions of the Plan, and determine and authorize the person or persons to whom such payments will be paid; |
- 8 -
D. | Receive and review claims for benefits and render decisions respecting such claims under the Plan; | ||
E. | Make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of this Plan; | ||
F. | Appoint such agents, specialists, legal counsel, accountants, consultants, or other persons as the Committee deems advisable to assist in administering the Plan; and | ||
G. | Maintain all records of the Plan. |
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SPIRIT AEROSYSTEMS HOLDINGS, INC. | ||||||
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Name: | |||||
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Title: | |||||
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Page | ||||
ARTICLE I PURPOSE
|
1 | |||
|
||||
Section 1.01. Purpose
|
1 | |||
|
||||
ARTICLE II DEFINITIONS
|
1 | |||
|
||||
Section 2.01. Affiliate
|
1 | |||
Section 2.02. Board of Directors
|
2 | |||
Section 2.03. Change in Control
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2 | |||
Section 2.04. Code
|
2 | |||
Section 2.05. Committee
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2 | |||
Section 2.06. Company
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2 | |||
Section 2.07. Effective Date
|
2 | |||
Section 2.08. Employee
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2 | |||
Section 2.09. Employer
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2 | |||
Section 2.10. Onex
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2 | |||
Section 2.11. Participant
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3 | |||
Section 2.12. Person
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3 | |||
Section 2.13. Plan
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3 | |||
Section 2.14 Separation from Service
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3 | |||
Section 2.15. Shares
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3 | |||
Section 2.16. Sole Discretion
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3 | |||
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ARTICLE III ELIGIBILITY
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3 | |||
|
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Section 3.01. Eligibility
|
3 | |||
|
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ARTICLE IV GRANTS OF SHARES
|
3 | |||
|
||||
Section 4.01. Grants and Related Awards
|
3 | |||
Section 4.02. Lapse Restriction
|
4 | |||
Section 4.03. Additional Conditions
|
5 | |||
Section 4.04. Restriction on Transfer of Shares
|
5 | |||
Section 4.05. Dividends
|
6 | |||
Section 4.06. Limitations on Stockholder Rights
|
6 | |||
Section 4.07. Certificates and Legends
|
6 |
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ARTICLE V ADMINISTRATION
|
6 | |||
|
||||
Section 5.01. Committee
|
6 | |||
Section 5.02. Reliance on Certificates, etc.
|
7 | |||
Section 5.03. Plan Records
|
7 | |||
|
||||
ARTICLE VI AMENDMENT AND TERMINATION
|
7 | |||
|
||||
Section 6.01. Amendment
|
7 | |||
Section 6.02. Termination
|
8 | |||
|
||||
ARTICLE VII MISCELLANEOUS
|
8 | |||
|
||||
Section 7.01. Effective Date
|
8 | |||
Section 7.02. Payments and Transfers Net of Withholding
|
8 | |||
Section 7.03. Binding on Successors
|
8 | |||
Section 7.04. Adoption by Other Employers
|
9 | |||
Section 7.05. Headings
|
9 | |||
Section 7.06. Notices
|
9 | |||
Section 7.07. Severability
|
9 | |||
Section 7.08. No Contract of Employment
|
9 | |||
Section 7.09. Certain Limitations
|
9 | |||
Section 7.10. State Law
|
9 | |||
Section 7.11. Government and Other Regulations
|
10 | |||
Section 7.12. Nonexclusivity of the Plan
|
10 |
-ii-
-1-
-2-
-3-
-4-
Years of Service After the Grant Date | Vested Percentage | |||
Less than 2
|
0 | % | ||
2 but less than 3
|
33 | % | ||
3 but less than 4
|
66 | % | ||
4 or more
|
100 | % |
-5-
A. | Determine in its Sole Discretion the eligibility of any individual to participate in the Plan; | ||
B. | Make discretionary interpretations regarding the terms of the Plan and make factual findings with respect to any issue arising under the Plan, including, but not limited to, the power to determine whether an individual is eligible to participate in the Plan or receive benefits under the Plan and whether an individual has incurred a Separation from Service, with its interpretation to be final and conclusive; |
C. | Compute the amounts payable for any Participant or other person in accordance with the provisions of the Plan, determine the manner and time for making such payments in accordance with the provisions of the Plan, and |
-6-
determine and authorize the person or persons to whom such payments will be paid; |
D. | Receive and review claims for benefits and render decisions respecting such claims under the Plan; | ||
E. | Make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of this Plan; | ||
F. | Appoint such agents, specialists, legal counsel, accountants, consultants, or other persons as the Committee deems advisable to assist in administering the Plan; and | ||
G. | Maintain all records of the Plan. |
-7-
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-9-
SPIRIT AEROSYSTEMS HOLDINGS, INC. | ||||
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By: | |||
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Name: | |||
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Title | : | ||
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-10-
Living the Our Ethical We are dedicated to the highest standards of ethical conduct, and dignity and respect in the workplace. |
1
Throughout this document, the terms Spirit and our Company mean Spirit AeroSystems Holdings, Inc. and any corporation, limited liability company, partnership or other entity that it controls, directly or indirectly, through one or more intermediaries. The Code is subject to revision as laws and regulations, which may vary by country and/or location, change. Employees are encouraged to review the most up-to-date policies posted on the Spirit Business Writings website and the latest version of the Code on the Spirit Ethics website. Some locations may also have unique policies that can be found on our Companys intranet sites. |
2
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3
» | Customer focused | |
» | Market driven | |
» | Performance excellence | |
» | Dignity and respect for all | |
» | Teamwork |
» | Make reliable, high-quality products that our customers and the public will have confidence using; | |
» | Perform our job functions efficiently and effectively; | |
» | Use processes that are safe for Spirit employees and for our surrounding environment and communities; and | |
» | Comply with all rules and regulations governing our work and products. |
4
5
6
Q: | I accidentally damaged a fuselage and Im afraid that its repair might cost our Company a lot of money. I know I need to report the situation, but Im afraid Ill be fired. What should I do? | |
A: | The Code requires that you report the damage to your supervisor or anyone listed in this section. Doing so will likely save our Company money in the long run and protect Spirits reputation. Failure to report a mistake could lead to more severe disciplinary actions than the reporting of an honest mistake. Our name is much more valuable than any amount of repair costs. |
7
8
» | Unwanted sexual attention of a persistent or offensive nature; | |
» | Threats, derogatory comments, slurs or name calling; | |
» | Display of offensive or derogatory posters, pictures, cartoons, drawings or gestures; and | |
» | Assault, unwanted touching, bullying or intimidation. |
9
Q | One of my coworkers often insults my ethnicity under his breath and tells other employees that Im not qualified to do my work. He recently refused to provide me work-related information I had requested, claiming that it was too high-tech for me to understand. | |
How should I handle this situation? | ||
A | Harassment can come in many forms, including derogatory remarks. If your coworker is intentionally and repeatedly offending you, and if you are unable to resolve the matter by directly confronting your coworker, then you should report the situation. Harassing behavior violates the Code and goes against our commitment to treat each other with dignity and respect. This conduct will never be allowed at Spirit. | |
Q | Lately, my supervisor has been making me feel nervous and uncomfortable. He often asks me out for drinks and comments on my appearance when no one else is around. Ive turned down all of his offers and have asked him to stop making these comments, but his behavior hasnt changed one bit. What should I do to fix this situation? | |
A | Because youve made it clear to your supervisor that his behavior is unwelcome and is making you feel uncomfortable, this may be sexual harassment. You should report his conduct right away. Please remember that you wont face any retaliation for making a good faith report. | |
Retaliation is a violation of the Code and will not be tolerated. |
10
Q: | Ive just been promoted to a new position in the manufacturing facility where I work. My supervisor has asked me to start immediately, even though I havent received training on the specialized machinery Ill be using. I understand the basics, and Im sure Ill pick it up quickly. Can I start using this equipment before I receive training? | |
A: | No. Proper training is critical to our commitment to prevent accidents and work-related injuries. You shouldnt perform work with any equipment that you havent been trained to use. Instead, inform your supervisor that you havent received proper training yet. |
11
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Q: | One of my coworkers frequently comes back from lunch slurring her words and smelling of liquor. She performs most of her work duties normally, but sometimes staggers when she walks and needs help running her equipment. Shes a nice person, and I dont want to get her in trouble. What should I do? | |
A: | You should raise your concerns with management or Human Resources. If your coworker is working under the influence of drugs or alcohol, she is endangering everyone around her and our customers. Our Company will not allow this kind of conduct. |
13
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» | Dealing with competitors. We may not engage in price fixing, bid rigging, market allocation, predatory pricing, or customer or supplier boycotts. It is crucial to avoid even the appearance of an agreement, whether formal or informal, to engage in any prohibited activity with a competitor. The safest rule for everyday business situations is to never discuss prices, costs or Spirit proprietary information or customers with a competitor. |
» | Participating in industry associations. Competition laws can even apply to casual information exchanges, so we must avoid situations in which there is discussion of future pricing, competitive initiatives and other information that might appear to restrain trade. Be particularly cautious of any proposed association activity that could have an effect on competition, such as the development of product standards or an industry code or practice. |
» | Dealing with customers. We must never make disparaging remarks about or misrepresent competitors or their products or services when interacting with actual or potential Spirit customers. Price discrimination or tying, which means providing one product to a customer only if they buy a second as well, can also violate competition laws. |
» | Collecting competitive information. We must collect information about our competitors activities in accordance with the law. It is appropriate for our Company to keep up with competitive developments and to review public information about our competitors. However, we cannot attempt to illegally acquire a competitors proprietary or confidential information, including information about facilities, manufacturing capacity, technical developments, bids or customers. |
16
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Q: | At times, its tough to meet Spirits high ethical standards and maintain our competitive standing. I will likely lose a big contract if I dont pay a local official a bribe. Does Spirit really want me to forego the business? |
A: | Yes. Our Company would much rather lose business if gaining this business requires bribery or other improper means. No contract is worth violating the law or our high standards of business ethics. The potential long-term damage to Spirits reputation and credibility more than offsets the short-term gain of winning the contract. |
19
» | Exports or re-exports to a sanctioned country | |
» | Imports or dealings with property originating from a sanctioned country | |
» | Assisting another company or person doing business with or in a sanctioned country | |
» | Financial transactions resulting from travel to, within or from a sanctioned country | |
» | New investments and other dealings in a sanctioned country or with designated individuals | |
» | Transfer of restricted software, technical data or technology via email, download, service work, meetings or visits to Spirit facilities | |
» | Export of articles or services designed or adaptable for military application |
20
Q: | While discussing a contract with my customer, I learn that the products we are exporting to the customer will eventually be shipped to Iran. Is this acceptable? |
A: | No. You cannot bypass export regulations by shipping goods through another country. This is called re-exporting, or transferring exported products from the original foreign recipient to another foreign recipient. If you know about this transfer and dont attempt to prevent it, you may be held liable. Contact the Import/Export Administration if you have questions regarding export laws and regulations. |
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Q: | A supervisor from another Spirit team has contacted me for information about one of our customers. I happen to know that her team deals mainly with this customers largest competitor. Im not sure I should reveal the requested information to her, even though she works for Spirit. What should I do? |
A: | Check the IP protection plans for both customers contracts. Keeping customer proprietary information properly separated and protected is critical, and should be one of your main concerns at all times. If you still have questions after consulting the plan, please contact your manager or the Ethics Office. |
23
» | Make only accurate and complete representations to our government customers; |
» | Never obtain or use sensitive procurement information about the selection process or competitor bids that would give our Company an unfair competitive advantage; |
» | Use only accurate and complete figures as the basis for pricing on bids for government contracts; and |
» | Fully disclose all cost and pricing data during the contract proposal and negotiation phase. |
24
Q: | I just found out that our supplier has reduced its prices. The prices quoted in a pending government contract are no longer accurate. Do I have a responsibility to tell the government customer? |
A: | Yes. The U.S. Truth in Negotiations Act (TINA) requires government contractors to disclose all cost and pricing data while negotiating a contract. It is important to keep accurate, detailed and up-to-date records of cost and pricing information for this reason. You should notify the Law Department of this issue before contacting the government customer or making any changes to the contract. |
25
» | Ensure that our facilitys reports, certifications and statements to the government are current, accurate and complete; | |
» | Follow all contract terms and obtain authorization before deviating from contract specifications; | |
» | Submit accurate cost and pricing data; | |
» | Never dispose of records or evidence relating to a government contract before the required retention period has ended; and | |
» | Never use government property, equipment or supplies for purposes other than those stated in the contract. |
26
Q: | A project Im working on has fallen behind schedule because of its many testing requirements. The tests seem repetitive and skipping a few isnt likely to affect the quality of the final product. Is it okay if I conduct only those tests that I think are absolutely necessary? This will save Spirit time and money. |
A: | No. You must conduct all tests required by the government contract and accurately record all results. Failure to follow proper testing procedures set forth in a contract can result in injury to other persons and property. It can also lead to expensive fines and can prevent future contracts, so stopping tests wont save us time or money in the long run. |
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Q: | One of my coworkers often comes to work late or leaves early, but records a full day. The other day, I asked him about it. He shrugged and told me to worry about my own timecard. I dont want to get him in trouble, but feel like this might be a Code violation. What should I do? |
A: | You should report this conduct because timekeeping fraud and failure to perform work is a Code violation that could result in disciplinary action, up to and including termination. Employees are responsible for accurately and diligently recording their time. Our Company uses timekeeping data to generate valuable financial and strategic information. Failing to report time honestly and accurately not only means that our Company cant rely on this information for planning, but also means that the records Spirit files publicly may be false. Employees may be directed by management to clock in/out as well as labor clocking. If you have any questions about maintaining or submitting records of any sort, please speak with your manager, Human Resources or the Ethics Office. |
31
» | Limited in value | |
» | Will not be viewed as a bribe or payoff | |
» | Consistent with generally accepted business practices and ethical standards | |
» | Will promote successful working relationships and goodwill | |
» | Would not reflect negatively on our Company if disclosed to the public | |
» | Not cash or cash equivalents (including gift certificates and vouchers) |
» | Hosted in a setting that is appropriate for a business | |
» | Reasonable | |
» | Unsolicited |
32
Q: | Id like to send a customer a New Years gift basket to show Spirits appreciation for their continued business. The basket is valued at U.S. $100. Is this an appropriate gift? |
A: | Yes. As long as your customer is not in any way employed by the government, this gift is appropriate because its unsolicited and nominal in value. Since you are thanking the customer for past business and fostering a good working relationship, the basket will not impair, or appear to impair, your customers ability to make fair, impartial decisions. If, on the other hand, you were to receive a gift basket valued at U.S. $100, you should share its contents with your work group rather than keep it for yourself. |
33
Q: | Id like to pursue a seasonal part-time job to earn extra money during the holidays. Is this okay? |
A: | Yes, so long as the second job is not with a Spirit competitor, supplier or business partner. You must also remember that your first responsibility is to our Company, so the second job must not interfere with your ability to fulfill your job duties for Spirit. |
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Q: | Im working with a contractor on one of Spirits reclamation projects. Some of the contractors workers hint that the contractors project strategies arent consistent with environmental requirements. Does this matter? After all, our Company isnt doing the work and theyre probably saving us money by cutting corners. |
A: | Yes, it matters. Ignoring any illegal or unethical acts is never the right thing to do. In addition, what the contractor is doing might expose Spirit to legal liabilities. Report the situation to anyone listed in Reporting Concerns and Seeking Guidance immediately. |
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Q: | Recently, a State Representative came to speak at our facility. I thought our Company couldnt endorse any political candidates. I personally dislike this politician and am upset that she was even on Company premises. What can I do about this? |
A: | Actually, under certain circumstances politicians may visit Company premises, as long as the event is coordinated with the Vice President of Corporate Communications & Public Affairs. While our Company cant use its name to endorse a candidate, Spirits name may be used to support a candidates position that promotes the interests of our Company. If you have questions or concerns about corporate or personal political activities, please speak with your supervisor or anyone listed in Reporting Concerns and Seeking Guidance. |
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©
2009 Spirit AeroSystems
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F09-02463 04/10
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/s/ Jeffrey L. Turner | ||||
Jeffrey L. Turner | ||||
President and Chief Executive Officer | ||||
Date: August 5, 2011 |
/s/ Philip D. Anderson | ||||
Philip D. Anderson | ||||
Senior Vice President and Chief Financial Officer | ||||
Date: August 5, 2011 |
/s/ Jeffrey L. Turner | ||||
Jeffrey L. Turner | ||||
President and Chief Executive Officer | ||||
Date: August 5, 2011 |
/s/ Philip D. Anderson | ||||
Philip D. Anderson | ||||
Senior Vice President and Chief Financial Officer | ||||
Date: August 5, 2011 |