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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-2436320
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page
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For the Three
Months Ended
|
|
For the Nine
Months Ended |
||||||||||||
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September 28,
2017 |
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September 29,
2016 |
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September 28,
2017 |
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September 29,
2016 |
||||||||
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($ in millions, except per share data)
|
||||||||||||||
Net revenues
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$
|
1,748.2
|
|
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$
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1,711.4
|
|
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$
|
5,268.4
|
|
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$
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5,222.9
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Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales
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1,478.5
|
|
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1,439.4
|
|
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4,738.3
|
|
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4,470.4
|
|
||||
Selling, general and administrative
|
48.8
|
|
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52.2
|
|
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146.8
|
|
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172.4
|
|
||||
Impact of severe weather event
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—
|
|
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—
|
|
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19.9
|
|
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—
|
|
||||
Research and development
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9.5
|
|
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5.4
|
|
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21.2
|
|
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15.9
|
|
||||
Total operating costs and expenses
|
1,536.8
|
|
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1,497.0
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|
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4,926.2
|
|
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4,658.7
|
|
||||
Operating income
|
211.4
|
|
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214.4
|
|
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342.2
|
|
|
564.2
|
|
||||
Interest expense and financing fee amortization
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(10.4
|
)
|
|
(12.2
|
)
|
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(30.1
|
)
|
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(47.5
|
)
|
||||
Other income (expense), net
|
1.9
|
|
|
(0.3
|
)
|
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4.6
|
|
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(8.7
|
)
|
||||
Income before income taxes and equity in net income of affiliate
|
202.9
|
|
|
201.9
|
|
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316.7
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|
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508.0
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||||
Income tax provision
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(55.9
|
)
|
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(57.3
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)
|
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(84.9
|
)
|
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(147.8
|
)
|
||||
Income before equity in net income of affiliate
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147.0
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|
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144.6
|
|
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231.8
|
|
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360.2
|
|
||||
Equity in net income of affiliate
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0.2
|
|
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0.5
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|
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0.3
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|
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1.3
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|
||||
Net income
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$
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147.2
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|
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$
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145.1
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|
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$
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232.1
|
|
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$
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361.5
|
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Earnings per share
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|
|
|
|
|
|
|
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||||
Basic
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$
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1.27
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|
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$
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1.16
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$
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1.97
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$
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2.82
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Diluted
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$
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1.26
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|
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$
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1.16
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|
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$
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1.95
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$
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2.80
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Dividends declared per common share
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$
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0.10
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|
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$
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—
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|
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$
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0.30
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|
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$
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—
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|
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For the Three
Months Ended
|
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For the Nine
Months Ended |
||||||||||||
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September 28,
2017 |
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September 29,
2016 |
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September 28,
2017 |
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September 29,
2016 |
||||||||
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($ in millions)
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||||||||||||||
Net income
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$
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147.2
|
|
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$
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145.1
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|
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$
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232.1
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|
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$
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361.5
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Changes in other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
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||||
Pension, SERP, and Retiree medical adjustments, net of tax effect of $0.2 and ($0.2) for the three months ended, respectively, and $1.2 and ($0.6) for the nine months ended, respectively
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(0.6
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)
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0.4
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(1.5
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)
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1.4
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|
||||
Unrealized foreign exchange loss on intercompany loan, net of tax effect of ($0.4) and $0.3 for three months ended, respectively, and ($1.0) and $1.4 for the nine months ended, respectively
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1.3
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|
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(1.1
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)
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3.9
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|
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(5.5
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)
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||||
Foreign currency translation adjustments
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13.1
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(7.8
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)
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31.2
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|
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(38.8
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)
|
||||
Total other comprehensive income (loss)
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13.8
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|
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(8.5
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)
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33.6
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|
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(42.9
|
)
|
||||
Total comprehensive income
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$
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161.0
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$
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136.6
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$
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265.7
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$
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318.6
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|
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September 28,
2017 |
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December 31,
2016 |
||||
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($ in millions)
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||||||
Assets
|
|
|
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|
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Cash and cash equivalents
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$
|
726.6
|
|
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$
|
697.7
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Restricted cash
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3.2
|
|
|
—
|
|
||
Accounts receivable, net
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851.7
|
|
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660.5
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|
||
Inventory, net
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1,363.2
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1,515.3
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|
||
Other current assets
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67.3
|
|
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36.9
|
|
||
Total current assets
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3,012.0
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2,910.4
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Property, plant and equipment, net
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2,018.7
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1,991.6
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||
Pension assets
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309.2
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|
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282.3
|
|
||
Other assets
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197.3
|
|
|
220.9
|
|
||
Total assets
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$
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5,537.2
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$
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5,405.2
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Liabilities
|
|
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|
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Accounts payable
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$
|
762.1
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|
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$
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579.7
|
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Accrued expenses
|
258.3
|
|
|
216.2
|
|
||
Profit sharing
|
65.7
|
|
|
101.4
|
|
||
Current portion of long-term debt
|
27.9
|
|
|
26.7
|
|
||
Advance payments, short-term
|
131.0
|
|
|
199.3
|
|
||
Deferred revenue and other deferred credits, short-term
|
68.3
|
|
|
312.1
|
|
||
Deferred grant income liability - current
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21.0
|
|
|
14.4
|
|
||
Other current liabilities
|
601.7
|
|
|
94.4
|
|
||
Total current liabilities
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1,936.0
|
|
|
1,544.2
|
|
||
Long-term debt
|
1,060.9
|
|
|
1,060.0
|
|
||
Advance payments, long-term
|
255.6
|
|
|
342.0
|
|
||
Pension/OPEB obligation
|
40.3
|
|
|
43.9
|
|
||
Deferred revenue and other deferred credits
|
166.5
|
|
|
146.8
|
|
||
Deferred grant income liability - non-current
|
44.9
|
|
|
63.4
|
|
||
Other liabilities
|
273.6
|
|
|
276.1
|
|
||
Stockholders' Equity
|
|
|
|
|
|
||
Preferred stock, par value $0.01, 10,000,000 shares authorized, no shares issued
|
—
|
|
|
—
|
|
||
Common stock, Class A par value $0.01, 200,000,000 shares authorized, 115,624,845 and 121,642,556 shares issued and outstanding, respectively
|
1.2
|
|
|
1.2
|
|
||
Additional paid-in capital
|
1,081.0
|
|
|
1,078.9
|
|
||
Accumulated other comprehensive loss
|
(153.3
|
)
|
|
(186.9
|
)
|
||
Retained earnings
|
2,310.9
|
|
|
2,113.9
|
|
||
Treasury stock, at cost (30,273,833 and 23,936,092 shares, respectively)
|
(1,480.9
|
)
|
|
(1,078.8
|
)
|
||
Total stockholders’ equity
|
1,758.9
|
|
|
1,928.3
|
|
||
Noncontrolling interest
|
0.5
|
|
|
0.5
|
|
||
Total equity
|
1,759.4
|
|
|
1,928.8
|
|
||
Total liabilities and stockholders' equity
|
$
|
5,537.2
|
|
|
$
|
5,405.2
|
|
|
For the Nine Months Ended
|
||||||
|
September 28,
2017 |
|
September 29,
2016 |
||||
|
($ in millions)
|
||||||
Operating activities
|
|
|
|
|
|
||
Net income
|
$
|
232.1
|
|
|
$
|
361.5
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||
Depreciation expense
|
159.0
|
|
|
149.1
|
|
||
Amortization expense
|
0.2
|
|
|
0.2
|
|
||
Amortization of deferred financing fees
|
2.5
|
|
|
18.5
|
|
||
Accretion of customer supply agreement
|
1.5
|
|
|
3.5
|
|
||
Employee stock compensation expense
|
15.9
|
|
|
35.7
|
|
||
Excess tax benefit of share-based payment arrangements
|
—
|
|
|
0.1
|
|
||
Loss from interest rate swap
|
1.1
|
|
|
—
|
|
||
(Gain) loss from foreign currency transactions
|
(5.9
|
)
|
|
15.9
|
|
||
Loss (gain) on impairment and disposition of assets
|
7.9
|
|
|
(0.5
|
)
|
||
Deferred taxes
|
29.0
|
|
|
34.7
|
|
||
Pension and other post-retirement benefits, net
|
(32.5
|
)
|
|
(5.0
|
)
|
||
Grant liability amortization
|
(13.9
|
)
|
|
(8.6
|
)
|
||
Equity in net income of affiliate
|
(0.3
|
)
|
|
(1.3
|
)
|
||
Changes in assets and liabilities
|
|
|
|
|
|||
Accounts receivable
|
(177.8
|
)
|
|
(220.8
|
)
|
||
Inventory, net
|
433.9
|
|
|
257.3
|
|
||
Accounts payable and accrued liabilities
|
212.8
|
|
|
(18.6
|
)
|
||
Profit sharing/deferred compensation
|
(35.9
|
)
|
|
2.8
|
|
||
Advance payments
|
(154.7
|
)
|
|
(101.8
|
)
|
||
Income taxes receivable/payable
|
(36.0
|
)
|
|
1.3
|
|
||
Deferred revenue and other deferred credits
|
(222.8
|
)
|
|
26.0
|
|
||
Other
|
208.5
|
|
|
24.4
|
|
||
Net cash provided by operating activities
|
624.6
|
|
|
574.4
|
|
||
Investing activities
|
|
|
|
|
|
||
Purchase of property, plant and equipment
|
(138.7
|
)
|
|
(156.8
|
)
|
||
Proceeds from sale of assets
|
0.3
|
|
|
0.6
|
|
||
Net cash used in investing activities
|
(138.4
|
)
|
|
(156.2
|
)
|
||
Financing activities
|
|
|
|
|
|
||
Proceeds from issuance of bonds
|
—
|
|
|
299.8
|
|
||
Principal payments of debt
|
(2.3
|
)
|
|
(16.7
|
)
|
||
Payments on term loan
|
(12.5
|
)
|
|
—
|
|
||
Payments on bonds
|
—
|
|
|
(300.0
|
)
|
||
Taxes paid related to net share settlement awards
|
(13.8
|
)
|
|
(15.2
|
)
|
||
Excess tax benefit of share-based payment arrangements
|
—
|
|
|
(0.1
|
)
|
||
Debt issuance and financing costs
|
(0.9
|
)
|
|
(17.2
|
)
|
||
Proceeds from financing under the New Markets Tax Credit Program
|
7.6
|
|
|
—
|
|
||
Purchase of treasury stock
|
(402.1
|
)
|
|
(649.6
|
)
|
||
Change in restricted cash
|
(3.2
|
)
|
|
—
|
|
||
Dividends paid
|
(35.7
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(462.9
|
)
|
|
(699.0
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
5.6
|
|
|
(6.1
|
)
|
||
Net increase (decrease) in cash and cash equivalents for the period
|
28.9
|
|
|
(286.9
|
)
|
||
Cash and cash equivalents, beginning of period
|
697.7
|
|
|
957.3
|
|
||
Cash and cash equivalents, end of period
|
$
|
726.6
|
|
|
$
|
670.4
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
Changes in Estimates
|
|
September 28, 2017
|
|
September 29, 2016
|
|
September 28, 2017
|
|
September 29, 2016
|
||||||||
(Unfavorable) Favorable Cumulative Catch-up Adjustment by Segment
|
|
|
|
|
|
|
|
|
||||||||
Fuselage Systems
|
|
$
|
(2.4
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
5.3
|
|
|
$
|
15.1
|
|
Propulsion Systems
|
|
2.4
|
|
|
(1.6
|
)
|
|
4.3
|
|
|
(1.8
|
)
|
||||
Wing Systems
|
|
(2.8
|
)
|
|
(0.8
|
)
|
|
19.1
|
|
|
18.7
|
|
||||
Total (Unfavorable) Favorable Cumulative Catch-up Adjustment
|
|
$
|
(2.8
|
)
|
|
$
|
(4.3
|
)
|
|
$
|
28.7
|
|
|
$
|
32.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Forward Loss) and Changes in Estimates on Loss Programs by Segment
|
|
|
|
|
|
|
|
|
||||||||
Fuselage Systems
|
|
$
|
(0.9
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(238.5
|
)
|
|
$
|
(133.0
|
)
|
Propulsion Systems
|
|
1.3
|
|
|
(0.5
|
)
|
|
(46.7
|
)
|
|
6.0
|
|
||||
Wing Systems
|
|
(2.4
|
)
|
|
0.9
|
|
|
(74.4
|
)
|
|
5.1
|
|
||||
Total Forward Loss
|
|
$
|
(2.0
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
(359.6
|
)
|
|
$
|
(121.9
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Total Change in Estimate
|
|
$
|
(4.8
|
)
|
|
$
|
(5.5
|
)
|
|
$
|
(330.9
|
)
|
|
$
|
(89.9
|
)
|
EPS Impact (diluted per share based upon statutory rates)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.44
|
)
|
|
September 28,
2017 |
|
December 31,
2016 |
||||
Trade receivables
|
$
|
837.7
|
|
|
$
|
647.3
|
|
Other
|
14.7
|
|
|
18.4
|
|
||
Less: allowance for doubtful accounts
|
(0.7
|
)
|
|
(5.2
|
)
|
||
Accounts receivable, net
|
$
|
851.7
|
|
|
$
|
660.5
|
|
|
September 28,
2017 |
|
December 31,
2016 |
||||
Raw materials
|
$
|
314.6
|
|
|
$
|
281.9
|
|
Work-in-process
|
760.4
|
|
|
790.7
|
|
||
Finished goods
|
34.1
|
|
|
30.9
|
|
||
Product inventory
|
1,109.1
|
|
|
1,103.5
|
|
||
Capitalized pre-production
(1)
|
85.4
|
|
|
103.5
|
|
||
Deferred production
(2)
|
657.6
|
|
|
717.4
|
|
||
Forward loss provision
(3)
|
(488.9
|
)
|
|
(409.1
|
)
|
||
Total inventory, net
|
$
|
1,363.2
|
|
|
$
|
1,515.3
|
|
|
(1)
|
For the period ended September 28, 2017, includes
$73.6
and
$7.9
on the A350 XWB and Rolls-Royce BR725 programs, respectively. For the period ended December 31, 2016, includes
$83.7
and
$15.2
on the A350 XWB and Rolls-Royce BR725 programs, respectively.
|
(2)
|
For the period ended September 28, 2017, includes
$629.1
and
$126.3
on the A350 XWB and Rolls-Royce BR725 programs, respectively. For the period ended December 31, 2016, includes
$657.2
and
$114.6
on the A350 XWB and Rolls-Royce BR725 programs, respectively.
|
(3)
|
For the period ended September 28, 2017, includes
($263.1)
,
($139.4)
, and
($76.9)
on the A350 XWB, Rolls-Royce BR725, and B787 programs, respectively. For the period ended December 31, 2016, includes
($255.8)
and
($140.8)
on the A350 XWB and Rolls-Royce BR725 programs, respectively. The forward loss charge recorded on the B787 program in the second quarter of 2017 exceeded the program's inventory balance. The excess of the charge over the program's inventory was classified as a contract liability and reported in other current liabilities on the balance sheet in the amount of
$275.9
as of September 28, 2017. Includes a
$2.1
reclassification between Work-in-process and Forward loss provision as of December 31, 2016.
|
Model
|
|
Current Block Deliveries
|
|
Contract Block
Quantity
|
||
A350 XWB
|
|
198
|
|
|
800
|
|
Rolls-Royce BR725
|
|
302
|
|
|
350
|
|
|
September 28,
2017 |
|
December 31,
2016 |
||||
Land
|
$
|
15.8
|
|
|
$
|
14.9
|
|
Buildings (including improvements)
|
693.5
|
|
|
642.5
|
|
||
Machinery and equipment
(1)
|
1,452.1
|
|
|
1,373.9
|
|
||
Tooling
|
999.6
|
|
|
982.4
|
|
||
Capitalized software
(1)
|
262.1
|
|
|
261.9
|
|
||
Construction-in-progress
|
239.6
|
|
|
193.7
|
|
||
Total
|
3,662.7
|
|
|
3,469.3
|
|
||
Less: accumulated depreciation
|
(1,644.0
|
)
|
|
(1,477.7
|
)
|
||
Property, plant and equipment, net
|
$
|
2,018.7
|
|
|
$
|
1,991.6
|
|
|
|
September 28,
2017 |
|
December 31,
2016 |
||||
Intangible assets
|
|
|
|
|
|
||
Patents
|
$
|
1.9
|
|
|
$
|
1.9
|
|
Favorable leasehold interests
|
6.3
|
|
|
6.3
|
|
||
Total intangible assets
|
8.2
|
|
|
8.2
|
|
||
Less: Accumulated amortization - patents
|
(1.8
|
)
|
|
(1.8
|
)
|
||
Accumulated amortization - favorable leasehold interest
|
(4.5
|
)
|
|
(4.2
|
)
|
||
Intangible assets, net
|
1.9
|
|
|
2.2
|
|
||
Deferred financing
|
|
|
|
|
|
||
Deferred financing costs
|
39.5
|
|
|
38.5
|
|
||
Less: Accumulated amortization - deferred financing costs
|
(33.4
|
)
|
|
(32.2
|
)
|
||
Deferred financing costs, net
|
6.1
|
|
|
6.3
|
|
||
Other
|
|
|
|
|
|
||
Goodwill - Europe
|
2.5
|
|
|
2.3
|
|
||
Equity in net assets of affiliates
|
4.7
|
|
|
4.4
|
|
||
Supply agreements
(1)
|
21.1
|
|
|
17.0
|
|
||
Restricted cash - collateral requirements
|
20.0
|
|
|
19.9
|
|
||
Deferred Tax Asset - non-current
|
100.3
|
|
|
128.8
|
|
||
Other
|
40.7
|
|
|
40.0
|
|
||
Total
|
$
|
197.3
|
|
|
$
|
220.9
|
|
|
(1)
|
Under two agreements, certain payments accounted for as consideration paid by the Company to a customer and a supplier are being amortized as reductions to net revenues.
|
|
September 28,
2017 |
|
December 31,
2016 |
||||
B787
|
$
|
549.8
|
|
|
$
|
834.8
|
|
Boeing - All other programs
|
9.6
|
|
|
18.6
|
|
||
A350 XWB
|
34.5
|
|
|
116.7
|
|
||
Airbus — All other programs
|
1.6
|
|
|
2.2
|
|
||
Other
|
25.9
|
|
|
27.9
|
|
||
Total advance payments and deferred revenue/credits
|
$
|
621.4
|
|
|
$
|
1,000.2
|
|
Balance, December 31, 2016
|
$
|
77.8
|
|
Grant liability amortized
|
(13.8
|
)
|
|
Exchange rate
|
1.9
|
|
|
Total deferred grant income liability, September 28, 2017
|
$
|
65.9
|
|
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.
|
|
|
September 28, 2017
|
|
December 31, 2016
|
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
||||||||
Senior unsecured term loan A (including current portion)
|
$
|
473.1
|
|
|
$
|
473.1
|
|
(2)
|
$
|
485.2
|
|
|
$
|
484.8
|
|
(2)
|
Senior unsecured notes due 2022
|
294.5
|
|
|
306.4
|
|
(1)
|
293.8
|
|
|
307.0
|
|
(1)
|
||||
Senior unsecured notes due 2026
|
297.2
|
|
|
298.2
|
|
(1)
|
296.9
|
|
|
292.4
|
|
(1)
|
||||
Malaysian loan
|
—
|
|
|
—
|
|
(2)
|
1.0
|
|
|
0.9
|
|
(2)
|
||||
Total
|
$
|
1,064.8
|
|
|
$
|
1,077.7
|
|
|
$
|
1,076.9
|
|
|
$
|
1,085.1
|
|
|
|
(1)
|
Level 1 Fair Value hierarchy.
|
(2)
|
Level 2 Fair Value hierarchy.
|
|
September 28, 2017
|
|
December 31, 2016
|
||||||||||
|
Current
|
Noncurrent
|
|
Current
|
Noncurrent
|
||||||||
Senior unsecured term loan A
|
$
|
24.9
|
|
$
|
448.2
|
|
|
$
|
24.9
|
|
$
|
460.3
|
|
Senior notes due 2022
|
—
|
|
294.5
|
|
|
—
|
|
293.8
|
|
||||
Senior notes due 2026
|
—
|
|
297.2
|
|
|
—
|
|
296.9
|
|
||||
Malaysian term loan
|
—
|
|
—
|
|
|
1.0
|
|
—
|
|
||||
Present value of capital lease obligations
|
3.0
|
|
21.0
|
|
|
0.8
|
|
9.0
|
|
||||
Total
|
$
|
27.9
|
|
$
|
1,060.9
|
|
|
$
|
26.7
|
|
$
|
1,060.0
|
|
|
|
Defined Benefit Plans
|
||||||||||||||
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
||||||||||||
Components of Net Periodic Pension Expense/(Income)
|
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
||||||||
Service cost
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
Interest cost
|
|
9.4
|
|
|
11.4
|
|
|
28.3
|
|
|
34.5
|
|
||||
Expected return on plan assets
|
|
(18.2
|
)
|
|
(19.7
|
)
|
|
(54.6
|
)
|
|
(59.0
|
)
|
||||
Amortization of net loss
|
|
0.1
|
|
|
1.6
|
|
|
0.1
|
|
|
4.0
|
|
||||
Special termination benefits
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.9
|
|
||||
Net periodic pension (income) expense
|
|
$
|
(8.5
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(25.5
|
)
|
|
$
|
(8.8
|
)
|
|
(1)
|
Special termination benefits related to early retirement incentives offered as part of a voluntary retirement plan in the first quarter of 2016.
|
|
|
Other Benefits
|
||||||||||||||
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
||||||||||||
Components of Other Benefit Expense
|
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
||||||||
Service cost
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
Interest cost
|
|
0.3
|
|
|
0.5
|
|
|
0.9
|
|
|
1.6
|
|
||||
Amortization of prior service cost
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||||
Amortization of net gain
|
|
(0.5
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
||||
Special termination benefits
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
||||
Net periodic other benefit (income) expense
|
|
$
|
(0.1
|
)
|
|
$
|
0.8
|
|
|
$
|
(0.5
|
)
|
|
$
|
5.4
|
|
|
(1)
|
Special termination benefits related to early retirement incentives offered as part of a voluntary retirement plan in the first quarter of 2016.
|
|
For the Three Months Ended
|
||||||||||||||||||||
|
September 28, 2017
|
|
September 29, 2016
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income available to common stockholders
|
$
|
147.1
|
|
|
115.8
|
|
|
$
|
1.27
|
|
|
$
|
144.9
|
|
|
124.4
|
|
|
$
|
1.16
|
|
Income allocated to participating securities
|
0.1
|
|
|
0.1
|
|
|
|
|
|
0.2
|
|
|
0.1
|
|
|
|
|
||||
Net income
|
$
|
147.2
|
|
|
|
|
|
|
|
|
$
|
145.1
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted potential common shares
|
|
|
|
1.1
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
147.2
|
|
|
117.0
|
|
|
$
|
1.26
|
|
|
$
|
145.1
|
|
|
125.3
|
|
|
$
|
1.16
|
|
|
For the Nine Months Ended
|
||||||||||||||||||||
|
September 28, 2017
|
|
September 29, 2016
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income available to common shareholders
|
$
|
231.9
|
|
|
117.8
|
|
|
$
|
1.97
|
|
|
$
|
361.2
|
|
|
128.2
|
|
|
$
|
2.82
|
|
Income allocated to participating securities
|
0.2
|
|
|
0.1
|
|
|
|
|
|
0.3
|
|
|
0.1
|
|
|
|
|
||||
Net income
|
$
|
232.1
|
|
|
|
|
|
|
|
|
$
|
361.5
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted potential common shares
|
|
|
|
1.1
|
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
$
|
232.1
|
|
|
119.0
|
|
|
$
|
1.95
|
|
|
$
|
361.5
|
|
|
129.0
|
|
|
$
|
2.80
|
|
|
As of
|
|
As of
|
||||
|
September 28, 2017
|
|
December 31, 2016
|
||||
Pension
|
$
|
(98.5
|
)
|
|
$
|
(98.5
|
)
|
SERP/Retiree medical
|
19.0
|
|
|
20.5
|
|
||
Foreign currency impact on long term intercompany loan
|
(15.2
|
)
|
|
(19.1
|
)
|
||
Currency translation adjustment
|
(58.6
|
)
|
|
(89.8
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(153.3
|
)
|
|
$
|
(186.9
|
)
|
Balance, December 31, 2016
|
$
|
163.7
|
|
Charges to costs and expenses
|
5.4
|
|
|
Payouts
|
(3.6
|
)
|
|
Exchange rate
|
0.8
|
|
|
Balance, September 28, 2017
|
$
|
166.3
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
||||||||
Kansas Development Finance Authority bond
|
$
|
0.6
|
|
|
$
|
0.8
|
|
|
$
|
2.3
|
|
|
$
|
2.7
|
|
Rental and miscellaneous income (loss)
|
0.5
|
|
|
0.2
|
|
|
(0.9
|
)
|
|
0.3
|
|
||||
Interest income
|
1.9
|
|
|
1.0
|
|
|
4.4
|
|
|
2.7
|
|
||||
Foreign currency losses
|
(1.1
|
)
|
|
(2.3
|
)
|
|
(1.2
|
)
|
|
(14.4
|
)
|
||||
Total
|
$
|
1.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
4.6
|
|
|
$
|
(8.7
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
||||||||
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems
|
$
|
957.0
|
|
|
$
|
880.3
|
|
|
$
|
2,812.1
|
|
|
$
|
2,679.7
|
|
Propulsion Systems
|
407.9
|
|
|
453.0
|
|
|
1,250.7
|
|
|
1,373.3
|
|
||||
Wing Systems
|
382.2
|
|
|
376.8
|
|
|
1,201.7
|
|
|
1,161.5
|
|
||||
All Other
|
1.1
|
|
|
1.3
|
|
|
3.9
|
|
|
8.4
|
|
||||
|
$
|
1,748.2
|
|
|
$
|
1,711.4
|
|
|
$
|
5,268.4
|
|
|
$
|
5,222.9
|
|
Segment Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems
(1)
|
$
|
148.3
|
|
|
$
|
142.5
|
|
|
$
|
218.5
|
|
|
$
|
340.9
|
|
Propulsion Systems
(1)
|
74.2
|
|
|
77.5
|
|
|
188.9
|
|
|
250.9
|
|
||||
Wing Systems
(1)
|
50.9
|
|
|
51.1
|
|
|
140.2
|
|
|
174.7
|
|
||||
All Other
|
0.2
|
|
|
0.6
|
|
|
(0.5
|
)
|
|
2.0
|
|
||||
|
273.6
|
|
|
271.7
|
|
|
547.1
|
|
|
768.5
|
|
||||
Corporate SG&A
|
(48.8
|
)
|
|
(52.2
|
)
|
|
(146.8
|
)
|
|
(172.4
|
)
|
||||
Impact of severe weather event
|
—
|
|
|
—
|
|
|
(19.9
|
)
|
|
—
|
|
||||
Research and development
|
(9.5
|
)
|
|
(5.4
|
)
|
|
(21.2
|
)
|
|
(15.9
|
)
|
||||
Unallocated cost of sales
(2)
|
(3.9
|
)
|
|
0.3
|
|
|
(17.0
|
)
|
|
(16.0
|
)
|
||||
Total Operating Income
|
$
|
211.4
|
|
|
$
|
214.4
|
|
|
$
|
342.2
|
|
|
$
|
564.2
|
|
|
(1)
|
Includes forward losses, changes in estimates on loss programs, and cumulative catch-up adjustments. These changes in estimates are further detailed in Note 3, Changes in Estimates.
|
(2)
|
Includes
$1.5
and
$7.7
of warranty expense for the three months ended
September 28, 2017
and
September 29, 2016
, respectively and
$3.2
and
$12.0
for the nine months ended
September 28, 2017
and
September 29, 2016
, respectively. Also includes a charge for excess purchases and purchase commitments of
$11.5
for the nine months ended
September 28, 2017
and
$11.8
related to early retirement incentives for the nine months ended
September 29, 2016
.
|
(i)
|
Holdings, as the parent company and parent guarantor to the A&R Credit Agreement, as further detailed in Note 12, Debt;
|
(ii)
|
Spirit, as the subsidiary issuer of the 2022 Notes and the 2026 Notes;
|
(iii)
|
The Company’s subsidiaries (“Non-Guarantor Subsidiaries”) on a combined basis;
|
(iv)
|
Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Holdings and the Non-Guarantor Subsidiaries, (b) eliminate the investments in the Company’s subsidiaries, and (c) record consolidating entries; and
|
(v)
|
Holdings and its subsidiaries on a consolidated basis.
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
1,573.0
|
|
|
$
|
311.8
|
|
|
$
|
(136.6
|
)
|
|
$
|
1,748.2
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
—
|
|
|
1,331.1
|
|
|
284.0
|
|
|
(136.6
|
)
|
|
1,478.5
|
|
|||||
Selling, general and administrative
|
3.9
|
|
|
41.3
|
|
|
3.6
|
|
|
—
|
|
|
48.8
|
|
|||||
Research and development
|
—
|
|
|
8.8
|
|
|
0.7
|
|
|
—
|
|
|
9.5
|
|
|||||
Total operating costs and expenses
|
3.9
|
|
|
1,381.2
|
|
|
288.3
|
|
|
(136.6
|
)
|
|
1,536.8
|
|
|||||
Operating (loss) income
|
(3.9
|
)
|
|
191.8
|
|
|
23.5
|
|
|
—
|
|
|
211.4
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(10.5
|
)
|
|
(1.3
|
)
|
|
1.4
|
|
|
(10.4
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
4.0
|
|
|
(0.7
|
)
|
|
(1.4
|
)
|
|
1.9
|
|
|||||
(Loss) income before income taxes and equity in net income of affiliate and subsidiaries
|
(3.9
|
)
|
|
185.3
|
|
|
21.5
|
|
|
—
|
|
|
202.9
|
|
|||||
Income tax benefit (provision)
|
0.8
|
|
|
(53.0
|
)
|
|
(3.7
|
)
|
|
—
|
|
|
(55.9
|
)
|
|||||
(Loss) income before equity in net income of affiliate and subsidiaries
|
(3.1
|
)
|
|
132.3
|
|
|
17.8
|
|
|
—
|
|
|
147.0
|
|
|||||
Equity in net income of affiliate
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
(0.2
|
)
|
|
0.2
|
|
|||||
Equity in net income of subsidiaries
|
150.1
|
|
|
17.7
|
|
|
—
|
|
|
(167.8
|
)
|
|
—
|
|
|||||
Net income
|
147.2
|
|
|
150.0
|
|
|
18.0
|
|
|
(168.0
|
)
|
|
147.2
|
|
|||||
Other comprehensive income (loss)
|
13.8
|
|
|
13.8
|
|
|
14.3
|
|
|
(28.1
|
)
|
|
13.8
|
|
|||||
Comprehensive income (loss)
|
$
|
161.0
|
|
|
$
|
163.8
|
|
|
$
|
32.3
|
|
|
$
|
(196.1
|
)
|
|
$
|
161.0
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
1,549.3
|
|
|
$
|
308.7
|
|
|
$
|
(146.6
|
)
|
|
$
|
1,711.4
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
—
|
|
|
1,298.8
|
|
|
287.2
|
|
|
(146.6
|
)
|
|
1,439.4
|
|
|||||
Selling, general and administrative
|
2.2
|
|
|
46.6
|
|
|
3.4
|
|
|
—
|
|
|
52.2
|
|
|||||
Research and development
|
—
|
|
|
5.0
|
|
|
0.4
|
|
|
—
|
|
|
5.4
|
|
|||||
Total operating costs and expenses
|
2.2
|
|
|
1,350.4
|
|
|
291.0
|
|
|
(146.6
|
)
|
|
1,497.0
|
|
|||||
Operating (loss) income
|
(2.2
|
)
|
|
198.9
|
|
|
17.7
|
|
|
—
|
|
|
214.4
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(12.1
|
)
|
|
(1.9
|
)
|
|
1.8
|
|
|
(12.2
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
4.0
|
|
|
(2.5
|
)
|
|
(1.8
|
)
|
|
(0.3
|
)
|
|||||
(Loss) income before income taxes and equity in net income of affiliate and subsidiaries
|
(2.2
|
)
|
|
190.8
|
|
|
13.3
|
|
|
—
|
|
|
201.9
|
|
|||||
Income tax benefit (provision)
|
0.6
|
|
|
(55.8
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
(57.3
|
)
|
|||||
(Loss) income before equity in net income of affiliate and subsidiaries
|
(1.6
|
)
|
|
135.0
|
|
|
11.2
|
|
|
—
|
|
|
144.6
|
|
|||||
Equity in net income of affiliate
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
0.5
|
|
|||||
Equity in net income of subsidiaries
|
146.2
|
|
|
11.2
|
|
|
—
|
|
|
(157.4
|
)
|
|
—
|
|
|||||
Net income
|
145.1
|
|
|
146.2
|
|
|
11.7
|
|
|
(157.9
|
)
|
|
145.1
|
|
|||||
Other comprehensive (loss) income
|
(8.5
|
)
|
|
(8.5
|
)
|
|
(17.7
|
)
|
|
26.2
|
|
|
(8.5
|
)
|
|||||
Comprehensive income (loss)
|
$
|
136.6
|
|
|
$
|
137.7
|
|
|
$
|
(6.0
|
)
|
|
$
|
(131.7
|
)
|
|
$
|
136.6
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
4,701.1
|
|
|
$
|
1,025.4
|
|
|
$
|
(458.1
|
)
|
|
$
|
5,268.4
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
—
|
|
|
4,282.9
|
|
|
913.5
|
|
|
(458.1
|
)
|
|
4,738.3
|
|
|||||
Selling, general and administrative
|
8.8
|
|
|
127.3
|
|
|
10.7
|
|
|
—
|
|
|
146.8
|
|
|||||
Impact of severe weather event
|
—
|
|
|
19.9
|
|
|
—
|
|
|
—
|
|
|
19.9
|
|
|||||
Research and development
|
—
|
|
|
19.4
|
|
|
1.8
|
|
|
—
|
|
|
21.2
|
|
|||||
Total operating costs and expenses
|
8.8
|
|
|
4,449.5
|
|
|
926.0
|
|
|
(458.1
|
)
|
|
4,926.2
|
|
|||||
Operating (loss) income
|
(8.8
|
)
|
|
251.6
|
|
|
99.4
|
|
|
—
|
|
|
342.2
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(30.1
|
)
|
|
(4.5
|
)
|
|
4.5
|
|
|
(30.1
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
9.8
|
|
|
(0.7
|
)
|
|
(4.5
|
)
|
|
4.6
|
|
|||||
(Loss) income before income taxes and equity in net income of affiliate and subsidiaries
|
(8.8
|
)
|
|
231.3
|
|
|
94.2
|
|
|
—
|
|
|
316.7
|
|
|||||
Income tax benefit (provision)
|
2.7
|
|
|
(70.2
|
)
|
|
(17.4
|
)
|
|
—
|
|
|
(84.9
|
)
|
|||||
(Loss) income before equity in net income of affiliate and subsidiaries
|
(6.1
|
)
|
|
161.1
|
|
|
76.8
|
|
|
—
|
|
|
231.8
|
|
|||||
Equity in net income of affiliate
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.3
|
|
|||||
Equity in net income of subsidiaries
|
237.9
|
|
|
76.8
|
|
|
—
|
|
|
(314.7
|
)
|
|
—
|
|
|||||
Net income
|
232.1
|
|
|
237.9
|
|
|
77.1
|
|
|
(315.0
|
)
|
|
232.1
|
|
|||||
Other comprehensive (loss) income
|
33.6
|
|
|
33.6
|
|
|
35.0
|
|
|
(68.6
|
)
|
|
33.6
|
|
|||||
Comprehensive income (loss)
|
$
|
265.7
|
|
|
$
|
271.5
|
|
|
$
|
112.1
|
|
|
$
|
(383.6
|
)
|
|
$
|
265.7
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
4,711.7
|
|
|
$
|
984.5
|
|
|
$
|
(473.3
|
)
|
|
$
|
5,222.9
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
—
|
|
|
4,047.0
|
|
|
896.7
|
|
|
(473.3
|
)
|
|
4,470.4
|
|
|||||
Selling, general and administrative
|
6.0
|
|
|
154.4
|
|
|
12.0
|
|
|
—
|
|
|
172.4
|
|
|||||
Research and development
|
—
|
|
|
14.4
|
|
|
1.5
|
|
|
—
|
|
|
15.9
|
|
|||||
Total operating costs and expenses
|
6.0
|
|
|
4,215.8
|
|
|
910.2
|
|
|
(473.3
|
)
|
|
4,658.7
|
|
|||||
Operating (loss) income
|
(6.0
|
)
|
|
495.9
|
|
|
74.3
|
|
|
—
|
|
|
564.2
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(47.2
|
)
|
|
(6.0
|
)
|
|
5.7
|
|
|
(47.5
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
11.5
|
|
|
(14.5
|
)
|
|
(5.7
|
)
|
|
(8.7
|
)
|
|||||
(Loss) income before income taxes and equity in net income of affiliate and subsidiaries
|
(6.0
|
)
|
|
460.2
|
|
|
53.8
|
|
|
—
|
|
|
508.0
|
|
|||||
Income tax benefit (provision)
|
1.8
|
|
|
(140.1
|
)
|
|
(9.5
|
)
|
|
—
|
|
|
(147.8
|
)
|
|||||
(Loss) income before equity in net income of affiliate and subsidiaries
|
(4.2
|
)
|
|
320.1
|
|
|
44.3
|
|
|
—
|
|
|
360.2
|
|
|||||
Equity in net income of affiliate
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
(1.3
|
)
|
|
1.3
|
|
|||||
Equity in net income of subsidiaries
|
364.4
|
|
|
44.3
|
|
|
—
|
|
|
(408.7
|
)
|
|
—
|
|
|||||
Net income
|
361.5
|
|
|
364.4
|
|
|
45.6
|
|
|
(410.0
|
)
|
|
361.5
|
|
|||||
Other comprehensive (loss) income
|
(42.9
|
)
|
|
(42.9
|
)
|
|
(44.5
|
)
|
|
87.4
|
|
|
(42.9
|
)
|
|||||
Comprehensive income (loss)
|
$
|
318.6
|
|
|
$
|
321.5
|
|
|
$
|
1.1
|
|
|
$
|
(322.6
|
)
|
|
$
|
318.6
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
687.8
|
|
|
$
|
38.8
|
|
|
$
|
—
|
|
|
$
|
726.6
|
|
Restricted cash
|
—
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|||||
Accounts receivable, net
|
—
|
|
|
876.9
|
|
|
330.4
|
|
|
(355.6
|
)
|
|
851.7
|
|
|||||
Inventory, net
|
—
|
|
|
925.1
|
|
|
438.1
|
|
|
—
|
|
|
1,363.2
|
|
|||||
Other current assets
|
—
|
|
|
63.7
|
|
|
3.6
|
|
|
—
|
|
|
67.3
|
|
|||||
Total current assets
|
—
|
|
|
2,556.7
|
|
|
810.9
|
|
|
(355.6
|
)
|
|
3,012.0
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,499.4
|
|
|
519.3
|
|
|
—
|
|
|
2,018.7
|
|
|||||
Pension assets, net
|
—
|
|
|
293.8
|
|
|
15.4
|
|
|
—
|
|
|
309.2
|
|
|||||
Investment in subsidiary
|
1,759.4
|
|
|
677.0
|
|
|
—
|
|
|
(2,436.4
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
333.6
|
|
|
121.1
|
|
|
(257.4
|
)
|
|
197.3
|
|
|||||
Total assets
|
$
|
1,759.4
|
|
|
$
|
5,360.5
|
|
|
$
|
1,466.7
|
|
|
$
|
(3,049.4
|
)
|
|
$
|
5,537.2
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
$
|
—
|
|
|
$
|
685.9
|
|
|
$
|
431.8
|
|
|
$
|
(355.6
|
)
|
|
$
|
762.1
|
|
Accrued expenses
|
—
|
|
|
231.8
|
|
|
26.5
|
|
|
—
|
|
|
258.3
|
|
|||||
Profit sharing
|
—
|
|
|
63.0
|
|
|
2.7
|
|
|
—
|
|
|
65.7
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
27.1
|
|
|
0.8
|
|
|
—
|
|
|
27.9
|
|
|||||
Advance payments, short-term
|
—
|
|
|
131.0
|
|
|
—
|
|
|
—
|
|
|
131.0
|
|
|||||
Deferred revenue and other deferred credits, short-term
|
—
|
|
|
66.8
|
|
|
1.5
|
|
|
—
|
|
|
68.3
|
|
|||||
Deferred grant income liability - current
|
—
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
21.0
|
|
|||||
Other current liabilities
|
—
|
|
|
597.2
|
|
|
4.5
|
|
|
—
|
|
|
601.7
|
|
|||||
Total current liabilities
|
—
|
|
|
1,802.8
|
|
|
488.8
|
|
|
(355.6
|
)
|
|
1,936.0
|
|
|||||
Long-term debt
|
—
|
|
|
1,052.4
|
|
|
165.3
|
|
|
(156.8
|
)
|
|
1,060.9
|
|
|||||
Advance payments, long-term
|
—
|
|
|
255.6
|
|
|
—
|
|
|
—
|
|
|
255.6
|
|
|||||
Pension/OPEB obligation
|
—
|
|
|
40.3
|
|
|
—
|
|
|
—
|
|
|
40.3
|
|
|||||
Deferred grant income liability - non-current
|
—
|
|
|
—
|
|
|
44.9
|
|
|
—
|
|
|
44.9
|
|
|||||
Deferred revenue and other deferred credits
|
—
|
|
|
163.6
|
|
|
2.9
|
|
|
—
|
|
|
166.5
|
|
|||||
Other liabilities
|
—
|
|
|
366.3
|
|
|
7.9
|
|
|
(100.6
|
)
|
|
273.6
|
|
|||||
Total equity
|
1,759.4
|
|
|
1,679.5
|
|
|
756.9
|
|
|
(2,436.4
|
)
|
|
1,759.4
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,759.4
|
|
|
$
|
5,360.5
|
|
|
$
|
1,466.7
|
|
|
$
|
(3,049.4
|
)
|
|
$
|
5,537.2
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
680.1
|
|
|
$
|
17.6
|
|
|
$
|
—
|
|
|
$
|
697.7
|
|
Accounts receivable, net
|
—
|
|
|
785.0
|
|
|
249.4
|
|
|
(373.9
|
)
|
|
660.5
|
|
|||||
Inventory, net
|
—
|
|
|
1,058.8
|
|
|
456.5
|
|
|
—
|
|
|
1,515.3
|
|
|||||
Other current assets
|
—
|
|
|
29.0
|
|
|
7.9
|
|
|
—
|
|
|
36.9
|
|
|||||
Total current assets
|
—
|
|
|
2,552.9
|
|
|
731.4
|
|
|
(373.9
|
)
|
|
2,910.4
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,462.3
|
|
|
529.3
|
|
|
—
|
|
|
1,991.6
|
|
|||||
Pension assets, net
|
—
|
|
|
268.1
|
|
|
14.2
|
|
|
—
|
|
|
282.3
|
|
|||||
Investment in subsidiary
|
1,928.8
|
|
|
544.4
|
|
|
—
|
|
|
(2,473.2
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
398.9
|
|
|
101.4
|
|
|
(279.4
|
)
|
|
220.9
|
|
|||||
Total assets
|
$
|
1,928.8
|
|
|
$
|
5,226.6
|
|
|
$
|
1,376.3
|
|
|
$
|
(3,126.5
|
)
|
|
$
|
5,405.2
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
$
|
—
|
|
|
$
|
527.0
|
|
|
$
|
426.6
|
|
|
$
|
(373.9
|
)
|
|
$
|
579.7
|
|
Accrued expenses
|
—
|
|
|
192.8
|
|
|
23.4
|
|
|
—
|
|
|
216.2
|
|
|||||
Profit sharing
|
—
|
|
|
97.2
|
|
|
4.2
|
|
|
—
|
|
|
101.4
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
25.1
|
|
|
1.6
|
|
|
—
|
|
|
26.7
|
|
|||||
Advance payments, short-term
|
—
|
|
|
199.3
|
|
|
—
|
|
|
—
|
|
|
199.3
|
|
|||||
Deferred revenue and other deferred credits, short-term
|
—
|
|
|
310.8
|
|
|
1.3
|
|
|
—
|
|
|
312.1
|
|
|||||
Deferred grant income liability - current
|
—
|
|
|
—
|
|
|
14.4
|
|
|
—
|
|
|
14.4
|
|
|||||
Other current liabilities
|
—
|
|
|
94.2
|
|
|
0.2
|
|
|
—
|
|
|
94.4
|
|
|||||
Total current liabilities
|
—
|
|
|
1,446.4
|
|
|
471.7
|
|
|
(373.9
|
)
|
|
1,544.2
|
|
|||||
Long-term debt
|
—
|
|
|
1,052.5
|
|
|
206.9
|
|
|
(199.4
|
)
|
|
1,060.0
|
|
|||||
Advance payments, long-term
|
—
|
|
|
342.0
|
|
|
—
|
|
|
—
|
|
|
342.0
|
|
|||||
Pension/OPEB obligation
|
—
|
|
|
43.9
|
|
|
—
|
|
|
—
|
|
|
43.9
|
|
|||||
Deferred grant income liability - non-current
|
—
|
|
|
—
|
|
|
63.4
|
|
|
—
|
|
|
63.4
|
|
|||||
Deferred revenue and other deferred credits
|
—
|
|
|
143.4
|
|
|
3.4
|
|
|
—
|
|
|
146.8
|
|
|||||
Other liabilities
|
—
|
|
|
349.5
|
|
|
6.6
|
|
|
(80.0
|
)
|
|
276.1
|
|
|||||
Total equity
|
1,928.8
|
|
|
1,848.9
|
|
|
624.3
|
|
|
(2,473.2
|
)
|
|
1,928.8
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,928.8
|
|
|
$
|
5,226.6
|
|
|
$
|
1,376.3
|
|
|
$
|
(3,126.5
|
)
|
|
$
|
5,405.2
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
525.7
|
|
|
$
|
98.9
|
|
|
$
|
—
|
|
|
$
|
624.6
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchase of property, plant and equipment
|
—
|
|
|
(122.1
|
)
|
|
(16.6
|
)
|
|
—
|
|
|
(138.7
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(121.8
|
)
|
|
(16.6
|
)
|
|
—
|
|
|
(138.4
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Principal payments of debt
|
—
|
|
|
(0.7
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
(2.3
|
)
|
|||||
Payment on term loan
|
—
|
|
|
(12.5
|
)
|
|
—
|
|
|
—
|
|
|
(12.5
|
)
|
|||||
Proceeds (payments) from intercompany debt
|
—
|
|
|
65.1
|
|
|
(65.1
|
)
|
|
—
|
|
|
—
|
|
|||||
Taxes paid related to net share settlement of awards
|
—
|
|
|
(13.8
|
)
|
|
—
|
|
|
—
|
|
|
(13.8
|
)
|
|||||
Debt issuance and financing costs
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||||
Proceeds from financing under the New Markets Tax Credit Program
|
—
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
402.1
|
|
|
(402.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(402.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(402.1
|
)
|
|||||
Change in restricted cash
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|||||
Proceeds (payments) from subsidiary for dividends paid
|
35.7
|
|
|
(35.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends paid
|
(35.7
|
)
|
|
|
|
|
—
|
|
|
—
|
|
|
(35.7
|
)
|
|||||
Net cash used in financing activities
|
—
|
|
|
(396.2
|
)
|
|
(66.7
|
)
|
|
—
|
|
|
(462.9
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|||||
Net increase in cash and cash equivalents for the period
|
—
|
|
|
7.7
|
|
|
21.2
|
|
|
—
|
|
|
28.9
|
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
680.1
|
|
|
17.6
|
|
|
—
|
|
|
697.7
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
687.8
|
|
|
$
|
38.8
|
|
|
$
|
—
|
|
|
$
|
726.6
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
481.3
|
|
|
$
|
93.1
|
|
|
$
|
—
|
|
|
$
|
574.4
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Purchase of property, plant and equipment
|
—
|
|
|
(121.4
|
)
|
|
(35.4
|
)
|
|
—
|
|
|
(156.8
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Other
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(120.4
|
)
|
|
(35.8
|
)
|
|
—
|
|
|
(156.2
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of bonds
|
—
|
|
|
299.8
|
|
|
—
|
|
|
—
|
|
|
299.8
|
|
|||||
Principal payments of debt
|
—
|
|
|
(14.4
|
)
|
|
(2.3
|
)
|
|
—
|
|
|
(16.7
|
)
|
|||||
Payments on bonds
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|
—
|
|
|
(300.0
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Proceeds (payments) from intercompany debt
|
—
|
|
|
51.0
|
|
|
(51.0
|
)
|
|
—
|
|
|
—
|
|
|||||
Debt issuance and financing costs
|
—
|
|
|
(17.2
|
)
|
|
—
|
|
|
—
|
|
|
(17.2
|
)
|
|||||
Taxes paid related to net share settlement of awards
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
—
|
|
|
(15.2
|
)
|
|||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
649.6
|
|
|
(649.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(649.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(649.6
|
)
|
|||||
Net cash used in financing activities
|
—
|
|
|
(645.7
|
)
|
|
(53.3
|
)
|
|
—
|
|
|
(699.0
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
—
|
|
|
(6.1
|
)
|
|||||
Net decrease in cash and cash equivalents for the period
|
—
|
|
|
(284.8
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
(286.9
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
894.2
|
|
|
63.1
|
|
|
—
|
|
|
957.3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
609.4
|
|
|
$
|
61.0
|
|
|
$
|
—
|
|
|
$
|
670.4
|
|
•
|
The ongoing activities of the VIE, collecting and remitting interest and fees, and NMTC compliance were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIE;
|
•
|
Contractual arrangements obligate the Company to comply with NMTC rules and regulations and provide various other guarantees to the Investment Fund and CDEs;
|
•
|
Chase lacks a material interest in the underlying economics of the project; and
|
•
|
The Company is obligated to absorb losses of the VIE.
|
•
|
our ability to continue to grow our business and execute our growth strategy, including the timing, execution, and profitability of new and maturing programs;
|
•
|
our ability to perform our obligations under our new and maturing commercial, business aircraft and military development programs, and the related recurring production;
|
•
|
our ability to accurately estimate and manage performance, cost, and revenue under our contracts, including our ability to achieve certain cost reductions with respect to the B787 program;
|
•
|
margin pressures and the potential for additional forward losses on new and maturing programs;
|
•
|
our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft;
|
•
|
the effect on aircraft demand and build rates of changing customer preferences for business aircraft, including the effect of global economic conditions on the business aircraft market and expanding conflicts or political unrest in the Middle East or Asia;
|
•
|
customer cancellations or deferrals as a result of global economic uncertainty or otherwise;
|
•
|
the effect of economic conditions in the industries and markets in which we operate in the U.S. and globally and any changes therein, including fluctuations in foreign currency exchange rates;
|
•
|
the success and timely execution of key milestones such as the receipt of necessary regulatory approvals and customer adherence to their announced schedules;
|
•
|
our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers;
|
•
|
our ability to enter into profitable supply arrangements with additional customers;
|
•
|
the ability of all parties to satisfy their performance requirements under existing supply contracts with our two major customers, Boeing and Airbus, and other customers, and the risk of nonpayment by such customers;
|
•
|
any adverse impact on Boeing’s 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;
|
•
|
our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions;
|
•
|
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 commercial aerospace OEMs and other aerostructures suppliers;
|
•
|
the effect of governmental laws, such as U.S. export control laws and U.S. and foreign anti-bribery laws such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad;
|
•
|
the effect of potential changes in tax law, such as those outlined in recent proposals on U.S. Tax Reform;
|
•
|
any reduction in our credit ratings;
|
•
|
our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components;
|
•
|
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 the A&R Credit Agreement may not be adequate for our additional capital needs or for payment of interest on and principal of our indebtedness;
|
•
|
our exposure under our Revolver to higher interest payments should interest rates increase substantially;
|
•
|
the effectiveness of any interest rate hedging programs;
|
•
|
the effectiveness of our internal control over financial reporting;
|
•
|
the outcome or impact of ongoing or future litigation, claims and regulatory actions; and
|
•
|
our exposure to potential product liability and warranty claims.
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
||||||||||||
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
|
||||||||
|
($ in millions)
|
|
($ in millions)
|
|
||||||||||||
Net revenues
|
$
|
1,748.2
|
|
|
$
|
1,711.4
|
|
|
$
|
5,268.4
|
|
|
$
|
5,222.9
|
|
|
Cost of sales
|
1,478.5
|
|
|
1,439.4
|
|
|
4,738.3
|
|
|
4,470.4
|
|
|
||||
Gross profit
|
269.7
|
|
|
272.0
|
|
|
530.1
|
|
|
752.5
|
|
|
||||
Selling, general and administrative
|
48.8
|
|
|
52.2
|
|
|
146.8
|
|
|
172.4
|
|
|
||||
Impact of severe weather event
|
—
|
|
|
—
|
|
|
19.9
|
|
|
—
|
|
|
||||
Research and development
|
9.5
|
|
|
5.4
|
|
|
21.2
|
|
|
15.9
|
|
|
||||
Operating income
|
211.4
|
|
|
214.4
|
|
|
342.2
|
|
|
564.2
|
|
|
||||
Interest expense and financing fee amortization
|
(10.4
|
)
|
|
(12.2
|
)
|
|
(30.1
|
)
|
|
(47.5
|
)
|
|
||||
Other income (expense), net
|
1.9
|
|
|
(0.3
|
)
|
|
4.6
|
|
|
(8.7
|
)
|
|
||||
Income before income taxes and equity in net income of affiliate
|
202.9
|
|
|
201.9
|
|
|
316.7
|
|
|
508.0
|
|
|
||||
Income tax provision
|
(55.9
|
)
|
|
(57.3
|
)
|
|
(84.9
|
)
|
|
(147.8
|
)
|
|
||||
Income before equity in net income of affiliate
|
147.0
|
|
|
144.6
|
|
|
231.8
|
|
|
360.2
|
|
|
||||
Equity in net income of affiliate
|
0.2
|
|
|
0.5
|
|
|
0.3
|
|
|
1.3
|
|
|
||||
Net income
|
$
|
147.2
|
|
|
$
|
145.1
|
|
|
$
|
232.1
|
|
|
$
|
361.5
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
Model
|
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
B737
|
|
137
|
|
126
|
|
399
|
|
384
|
B747
|
|
1
|
|
2
|
|
4
|
|
7
|
B767
|
|
8
|
|
6
|
|
21
|
|
19
|
B777
|
|
15
|
|
26
|
|
55
|
|
77
|
B787
|
|
37
|
|
30
|
|
105
|
|
99
|
Total Boeing
|
|
198
|
|
190
|
|
584
|
|
586
|
A320 Family
|
|
146
|
|
135
|
|
452
|
|
427
|
A330/340
|
|
21
|
|
17
|
|
60
|
|
50
|
A350 XWB
|
|
18
|
|
16
|
|
65
|
|
50
|
A380
|
|
2
|
|
4
|
|
10
|
|
17
|
Total Airbus
|
|
187
|
|
172
|
|
587
|
|
544
|
Business/Regional Jets
|
|
19
|
|
22
|
|
67
|
|
59
|
Total
|
|
404
|
|
384
|
|
1,238
|
|
1,189
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Prime Customer
|
|
September 28,
2017 |
|
September 29,
2016 |
|
September 28,
2017 |
|
September 29,
2016 |
||||||||
|
|
($ in millions)
|
|
($ in millions)
|
||||||||||||
Boeing
|
|
$
|
1,418.8
|
|
|
$
|
1,410.2
|
|
|
$
|
4,172.7
|
|
|
$
|
4,257.2
|
|
Airbus
|
|
257.4
|
|
|
240.4
|
|
|
853.8
|
|
|
744.2
|
|
||||
Other
|
|
72.0
|
|
|
60.8
|
|
|
241.9
|
|
|
221.5
|
|
||||
Total net revenues
|
|
$
|
1,748.2
|
|
|
$
|
1,711.4
|
|
|
$
|
5,268.4
|
|
|
$
|
5,222.9
|
|
|
Three Months Ended
|
||||||
|
September 28,
2017 |
|
September 29,
2016 |
||||
|
($ in millions)
|
||||||
Segment Revenues
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
957.0
|
|
|
$
|
880.3
|
|
Propulsion Systems
|
407.9
|
|
|
453.0
|
|
||
Wing Systems
|
382.2
|
|
|
376.8
|
|
||
All Other
|
1.1
|
|
|
1.3
|
|
||
|
$
|
1,748.2
|
|
|
$
|
1,711.4
|
|
Segment Operating Income
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
148.3
|
|
|
$
|
142.5
|
|
Propulsion Systems
|
74.2
|
|
|
77.5
|
|
||
Wing Systems
|
50.9
|
|
|
51.1
|
|
||
All Other
|
0.2
|
|
|
0.6
|
|
||
|
273.6
|
|
|
271.7
|
|
||
Corporate SG&A
|
(48.8
|
)
|
|
(52.2
|
)
|
||
Impact of severe weather event
|
—
|
|
|
—
|
|
||
Research and development
|
(9.5
|
)
|
|
(5.4
|
)
|
||
Unallocated cost of sales
(1)
|
(3.9
|
)
|
|
0.3
|
|
||
Total operating income
|
$
|
211.4
|
|
|
$
|
214.4
|
|
|
|
Nine Months Ended
|
||||||
|
September 28,
2017 |
|
September 29,
2016 |
||||
|
($ in millions)
|
||||||
Segment Revenues
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
2,812.1
|
|
|
$
|
2,679.7
|
|
Propulsion Systems
|
1,250.7
|
|
|
1,373.3
|
|
||
Wing Systems
|
1,201.7
|
|
|
1,161.5
|
|
||
All Other
|
3.9
|
|
|
8.4
|
|
||
|
$
|
5,268.4
|
|
|
$
|
5,222.9
|
|
Segment Operating Income
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
218.5
|
|
|
$
|
340.9
|
|
Propulsion Systems
|
188.9
|
|
|
250.9
|
|
||
Wing Systems
|
140.2
|
|
|
174.7
|
|
||
All Other
|
(0.5
|
)
|
|
2.0
|
|
||
|
547.1
|
|
|
768.5
|
|
||
Corporate SG&A
|
(146.8
|
)
|
|
(172.4
|
)
|
||
Research and development
|
(21.2
|
)
|
|
(15.9
|
)
|
||
Unallocated cost of sales
(1)
|
(17.0
|
)
|
|
(16.0
|
)
|
||
Total operating income
|
$
|
342.2
|
|
|
$
|
564.2
|
|
|
(1)
|
Includes $3.2 million and $12.0 million of warranty expense for the nine months ended September 28, 2017 and September 29, 2016, respectively. Also includes a charge for excess purchases and purchase commitments of $10.6 million for the nine months ended September 28, 2017 and $11.8 million related to early retirement incentives for the nine months ended September 29, 2016.
|
|
For the nine months ended
|
||||||
|
September 28, 2017
|
|
September 29, 2016
|
||||
|
($ in millions)
|
||||||
Net cash provided by operating activities
|
$
|
624.6
|
|
|
$
|
574.4
|
|
Net cash used in investing activities
|
(138.4
|
)
|
|
(156.2
|
)
|
||
Net cash used in financing activities
|
(462.9
|
)
|
|
(699.0
|
)
|
||
Effect of exchange rate change on cash and cash equivalents
|
5.6
|
|
|
(6.1
|
)
|
||
Net decrease in cash and cash equivalents for the period
|
28.9
|
|
|
(286.9
|
)
|
||
Cash and cash equivalents, beginning of period
|
697.7
|
|
|
957.3
|
|
||
Cash and cash equivalents, end of period
|
$
|
726.6
|
|
|
$
|
670.4
|
|
Period
(1)
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Repurchased Under the Plans or Programs
(2)
|
||||||
|
($ in millions other than per share amounts)
|
||||||||||||
|
|
|
|
|
|
|
|
||||||
June 30, 2017 - August 3, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$792.4
|
|
|
August 4, 2017 - August 31, 2017
|
1,644,018
|
|
|
|
$70.3359
|
|
|
1,644,018
|
|
|
|
$676.8
|
|
September 1, 2017 - September 28, 2017
|
1,048,833
|
|
|
|
$75.2049
|
|
|
1,048,833
|
|
|
|
$597.9
|
|
Total
|
2,692,851
|
|
|
|
$72.2323
|
|
|
2,692,851
|
|
|
|
$597.9
|
|
(1)
|
Our fiscal months often differ from the calendar months except for the month of December, as our fiscal year ends on December 31. For example, August 3, 2017 was the last day of our July 2017 fiscal month.
|
(2)
|
On November 1, 2016, the Company announced that our Board of Directors authorized a new share repurchase program for the purchase of up to $600.0 million of our class A common stock. On July 25, 2017, the Company increased the existing share repurchase program by up to an additional $400.0 million of our class A common stock, resulting in a total program authorization of $1.0 billion.
|
Article I.
Exhibit
Number
|
|
Section 1.01 Exhibit
|
10.1
*
|
|
|
|
|
|
10.2†*
|
|
|
|
|
|
10.3†*
|
|
|
|
|
|
10.4†*
|
|
|
|
|
|
10.5†*
|
|
|
|
|
|
10.6†*
|
|
|
|
|
|
10.7†*
|
|
|
|
|
|
10.8†*
|
|
|
|
|
|
10.9†*
|
|
|
|
|
|
10.10†*
|
|
|
|
|
|
10.11††
|
|
|
|
|
|
31.1
*
|
|
|
|
|
|
31.2
*
|
|
|
|
|
|
32.1
**
|
|
|
|
|
|
32.2
**
|
|
|
|
|
|
101.INS@
*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH@
*
|
|
XBRL Taxonomy Extension Schema Document.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Sanjay Kapoor
|
|
Executive Vice President and Chief Financial
|
|
November 3, 2017
|
Sanjay Kapoor
|
|
Officer (Principal Financial Officer)
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Mark J. Suchinski
|
|
Vice President and Corporate Controller (Principal Accounting Officer)
|
|
November 3, 2017
|
Mark J. Suchinski
|
|
|
|
|
BORROWER:
|
SPIRIT AEROSYSTEMS, INC.
|
|
By:
/s/ Rhonda Harkins
|
|
Name: Rhonda Harkins
|
|
Title: Treasurer
|
|
|
PARENT GUARANTOR:
|
SPIRIT AEROSYSTEMS HOLDINGS, INC.
|
|
By: /s/
Rhonda Harkins
|
|
Name: Rhonda Harkins
|
|
Title: Treasurer
|
|
|
ADMINISTRATIVE AGENT:
|
BANK OF AMERICA, N.A.,
|
|
as Administrative Agent
|
|
By: /s/
Gerund Diamond
|
|
Name: Gerund Diamond
|
|
Title: Assistant Vice-President
|
|
|
LENDERS:
|
BANK OF AMERICA, N.A.,
|
|
as a Lender, Swing Line Lender and an L/C Issuer
|
|
By: /s/
Prathamesh Kshirsagar
|
|
Name: Prathamesh Kshirsagar
|
|
Title: Vice-President
|
|
|
|
MIZUHO BANK, LTD.,
|
|
as a Lender and an L/C Issuer
|
|
By: /s/
Donna DeMagistris
|
|
Name: Donna DeMagistris
|
|
Title: Authorized Signatory
|
|
|
|
THE BANK OF NOVA SCOTIA,
|
|
as a Lender
|
|
By: /s/
Mauricio Saishio
|
|
Name: Mauricio Saishio
|
|
Title: Director
|
|
|
|
CITIBANK, N.A.,
|
|
as a Lender
|
|
By: /s/
Brian Reed
|
|
Name: Brian Reed
|
|
Title: Vice President
|
|
|
|
MORGAN STANLEY BANK, N.A.,
|
|
as a Lender
|
|
By: /s/
Manish Desai
|
|
Name: Manish Desai
|
|
Title: Authorized Signatory
|
|
|
|
ROYAL BANK OF CANADA,
|
|
as a Lender
|
|
By: /s/
Richard C. Smith
|
|
Name: Richard C. Smith
|
|
Title: Managing Director
|
|
|
|
THE BANK OF TOKYO-MITSUBISHI UFJ,LTS.,
|
|
as a Lender
|
|
By: /s/
Thomas J. Sterr
|
|
Name: Thomas J. Sterr
|
|
Title: Authorized Signatory
|
|
|
|
COMPASS BANK,
|
|
as a Lender
|
|
By: /s/
Daniel Feldman
|
|
Name: Daniel Feldman
|
|
Title: Vice President
|
|
|
|
U.S. BANK NATIOANL ASSOCIATION
|
|
as a Lender
|
|
By: /s/
Tim Landro
|
|
Name: Tim Landro
|
|
Title: Vice President
|
|
|
|
WELLS FARGO BANK, N.A.,
|
|
as a Lender
|
|
By: /s/
Adam Spreyer
|
|
Name: Adam Spreyer
|
|
Title: Director
|
|
|
|
FIFTH THIRD BANK, an Ohio Banking corporation,
|
|
as a Lender
|
|
By: /s/
Lafayette J. Ford
|
|
Name: Lafayette J. Ford
|
|
Title: SVP and Director
|
|
|
|
BRANCH BANKING AND TRUST COMPANY,
|
|
as a Lender
|
|
By: /s/
Tevor H. Williams
|
|
Name: Tevor H. Williams
|
|
Title: Assistant Vice President
|
|
|
|
PNC BANK, NATIONAL ASSOCIATION,
|
|
as a Lender
|
|
By: /s/
Michael L. Monniger
|
|
Name: Michael L. Monniger
|
|
Title: Senior Vice President
|
|
|
|
SUNTRUST BANK,
|
|
as a Lender
|
|
By: /s/
Justin Lien
|
|
Name: Justin Lien
|
|
Title: Director
|
|
|
|
THE BANK OF NEW YORK MELLON,
|
|
as a Lender
|
|
By: /s/
John T. Smathers
|
|
Name: John T. Smathers
|
|
Title: Director
|
|
|
|
COMERICA BANK,
|
|
as a Lender
|
|
By: /s/
Eric Hendrickson
|
|
Name: Eric Hendrickson
|
|
Title: Relationship Manager
|
|
|
|
INTRUST BANK, N.A.,
|
|
as a Lender
|
|
By: /s/
Bruce A Long
|
|
Name: Bruce A Long
|
|
Title: Managing Director
|
|
|
|
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
|
|
as a Lender
|
|
By: /s/
Nupur Kumar
|
|
Name: Nupur Kumar
|
|
Title: Authorized Signatory
|
|
|
|
By: /s/ Lea Baerlocher
|
|
Name: Lea Baerlocher
|
|
Title: Authorized Signatory
|
|
SCOTIABANK (IRELAND) DESIGNATED ACTIVITY COMPANY
|
|
as a Lender
|
|
By: /s/
David Muldoon
|
|
Name: David Muldoon
|
|
Title: Managing Director & Senior Risk Officer
|
|
|
|
By: /s/
Mary Theresa Mulvany
|
|
Name: Mary Theresa Mulvany
|
|
Title: Associate Director
|
|
Corporate Banking
|
|
Scotiabank (Ireland) Designated Activity Company
|
A.
|
Boeing and Seller are parties to the Special Business Provisions MS-65530-0016, dated June 16, 2005, (the “SBP”) and the General Terms Agreement BCA-65530-0016, dated June 17, 2005, (the “GTA”), and including any Amendments to the SBP and GTA (collectively the “Sustaining Agreement”).
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B.
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The Parties now seek to amend the SBP to incorporate the agreements set forth in the Collective Resolution Memorandum of Understanding executed by the Parties on August 1, 2017.
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1.
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The list of “Amendments” within the Sustaining SBP is hereby deleted and replaced in its entirety as follows:
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AMENDMENTS
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Amend Number
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Description
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Effective Date
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Approval
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1
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Revise Company name from Mid-Western Aircraft Systems Incorporated to Spirit AeroSystems throughout document. Update Attachments 1, 2, 4, 14 and 16.
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2/23/2006
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H. McCormick
R. Stone
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2
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Incorporate CCNs as listed in Amendment 2 Attachment A, includes addition of new section 12.19, modification to sections 3.4.9, 12.16 and 32.0, updates to Attachments 1, 2, 6, 7, 15, 16, 19 and 20.
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4/11/2007
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H. McCormick
J. Edwards
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3
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Incorporate CCNs as listed in Amendment 3 Attachment A, updates to Attachments 1, 2, 7, 14, 15, 16 and 22.
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11/28/2007
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H. McCormick
J. Edwards
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4
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Incorporate CCNs as listed in Amendment 4 Attachment A. Updates to Attachments 1, 2, 7, 14, 15, 16. Incorporate Attachment 1A per CCN 508, 1328.
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7/8/2008
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S.Hu
W. Wallace
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5
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Incorporate CCNs as listed in Amendment 5 Attachment A, includes addition of new section 12.3.1.1 Updates to Attachments 1, 2, 7, 14, 15, 16, 20.
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6/22/2009
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S. Hu
R. Stone
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6
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Incorporate CCNs as listed in Amendment 6 Attachment A. Updates to Attachments 1, 2, 4, 7, 9, 10, 14, 16.
Incorporate Attachment 9 per CCN 2385.
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11/23/2010
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S.
Hu
M. Milan
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7
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Incorporate CCNs as listed in Amendment 7 Attachment A, includes addition of new section 12.13.3.1. Updates to Attachments 1, 2, 4, 7, 9, 14, 16. Incorporate Attachment 1B per CCN 4212 and Attachment 23 per the 767-2C MOA.
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7/29/2011
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S.
Hu
M. Milan
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8
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Incorporate CCNs as listed in Amendment 8 Attachment A, includes revisions to section 7.9 and 12.13.1.1. Updates to Attachments 1, 2, 4, 7, 9, 14, 15, 16.
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2/6/2013
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C. Howell
M. Milan
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9
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Incorporate Attachment 25 - 737 Max Titanium Inner Wall Agreement.
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9/4/2014
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E. Flagel
M. Milan
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10
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Incorporate Attachment 26-737 Derailment.
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9/2/2014
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B. Folden
R. Ast
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11
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Incorporate Attachment 27 -737-MAX Non Recurring Agreement, and Attachment 28 737/747/767/777 Pricing Agreement. Updates Section 4.1, Attachment 4 Section B.1., Attachments 9 and 15.
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3/10/2015
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C.Howell
R. Ast
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12
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Delete and replace Attachment 25 Section 3.0
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4/9/2015
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K. Drawsky
R. Ast
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13
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Incorporate CCNs as listed in Amendment 13 Attachment A, updates to Attachments 1, 2, 7, 9, 14, and 16.
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1/4/2016
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L. Taylor
K. Leyba
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14
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Incorporate Attachment 25, Addendum 1.
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4/21/2015
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D. Blaylock
R. Grant
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15
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NULL
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16
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NULL
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17
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Incorporate Attachment 29, 777X Non-Recurring Agreement
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12/23/2015
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A. Lucker
E. Bauer
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18
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NULL
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19
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NULL
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20
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737 MAX Inner Wall
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12/17/2015
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S. Garcia-Deleone
J.Reed
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21
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Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
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5/9/2016
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D. Blaylock
R.Grant
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22
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737 MAX Composite Inner Wall Line Movement
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11/2/2016
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D. Blaylock
E. Bossler
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23
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737 MAX 9 INITIAL and CIW Line [*****] Tooling Incentive AGREEMENT
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12/16/2016
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D. Blaylock
E. Bossler
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24
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Incorporate CCNs as listed in Amendment 23 Attachment A, updates to Attachments 1, 2, 7, 9, and 14.
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12/20/2016
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L. Taylor
K. Leyba
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25
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Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
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3/17/2017
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D. Blaylock
E. Bossler
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26
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Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
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3/23/2017
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D. Blaylock
E. Bossler
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27
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Incorporate Attachment 30, 737 NG / MAX Vapor Barrier Agreement, updates to Attachments 1 and 9
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3/31/2017
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B. Edwards
K. Clark
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28
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Revisions to Attachment 29, 777X NRE Agreement
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6/22/2017
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K. O'Connell
C. Green
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29
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Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
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7/20/2017
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D. Blaylock
E. Bossler
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30
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Collective Resolution Sustaining Pricing and Provisions Agreement (Delete and Replace SBP Sections 4.1, 4.1.1, 5.1.1, 5.2, 5.2.1, 7.2, 8.0, 12.11, and 12.13.1.1 and SBP Attachments 1, 1B, 10 Section A10.2.10, 15, 16, 22, 27, and 29. Delete and Reserve SBP Attachments 1C, 20, and 28. Incorporate SBP Attachment 1D and 31.)
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9/22/2017
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B. Edwards
B. Wilson
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2.
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The SBP is hereby amended by deleting the list of “Attachments” within the Sustaining SBP and replacing it in its entirety with a new SBP list of Attachments as follows:
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Attachment 1D
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MAX Composite Inner Wall SOW
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Attachment 23
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767-2C SOW
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Attachment 24
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Anti-Lobbying Certificate
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Attachment 25
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737 Max Titanium Inner-Wall Work Transfer SOW
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Attachment 26
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737 Derailment
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Attachment 27
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737 MAX Non-Recurring Agreement
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Attachment 28
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Reserved
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Attachment 29
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777X Non-Recurring Agreement
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Attachment 30
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737 NG / MAX Vapor Barrier Agreement
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Attachment 31
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Annual Shipset Production Rate-Based Adjustment
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3.
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The SBP is hereby amended by deleting SBP Section 4.1 “Recurring Price” and replacing it in its entirety as follows:
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4.
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The SBP is hereby amended by deleting SBP Section 4.1.1 “Interim Extension Pricing” and replacing it in its entirety as follows:
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5.
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The SBP is hereby amended by deleting SBP Section 5.1.1 “Invoicing Requirements” and replacing it in its entirety as follows:
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6.
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The SBP is hereby amended by deleting SBP Section 5.2 “Recurring Payment” and replacing it in its entirety as follows:
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7.
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The SBP is hereby amended by deleting SBP Section 5.2.1 “Non-Recurring Payment” and replacing it in its entirety as follows:
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(1)
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Seller shall bear the risk of loss and shall provide at no cost to Boeing on Boeing’s behalf as the owner thereof, control, accountability, care, storage, maintenance, and insurance for such property, plant and equipment to the same extent Seller generally provides such services with respect to property, plant and equipment owned by Seller; it being understood, however, that Boeing as the owner thereof bears the economic burden of any applicable depreciation and obsolescence for such property, plant and equipment;
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(2)
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Seller shall not create or be responsible for the creation by others, any lien, claim or right of any person or entity other than the rights of Boeing, in respect of any property, plant and equipment, to which Boeing acquires title to and ownership of pursuant to this Section 5.2.1.
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8.
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The SBP is hereby amended by deleting SBP Section 7.2 “Change Pricing Criteria” and replacing it in its entirety as follows:
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7.2
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Change Pricing Criteria
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a.
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For Engineering Changes, the recurring price impact to the Attachment 1 part Price for each individual Change exceeds [*****] of the then current Price for that part or for Statement of Work allocation Changes, the recurring price impact to the Attachment 1 part Price for each individual Change exceeds [*****] of the then current Price for that part (see note 1 below), and
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b.
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The recurring price impact for each individual Change exceeds [*****] per year based on then current requirements forecasted for the following calendar year.
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Non-Discounted Price (Post Change)
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Column D
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Column E
|
|||
Y+X
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(Y+X)*(1-Z)
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(Y+X)*(1-Z)
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(Y+X)*(1-Z)
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(Y+X)*(1-Z)
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(Y+X)*(1-Z)
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a.
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The non-recurring price impact for each individual Change exceeds [*****], and
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b.
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The non-recurring Change is associated with a new statement of work (not for current configuration of parts defined in Attachment 1 as of June 16, 2005.
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9.
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The SBP is hereby amended by adding a new SBP Section 7.5.2 “737 Rate [*****]” as follows:
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10.
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The SBP is hereby amended by deleting SBP Section 8.0 “Governing Quality Assurance Requirements” and replacing it in its entirety as follows:
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11.
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The SBP is hereby amended by deleting SBP Section 12.11 “Subcontracting” and replacing it in its entirety as follows:
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12.
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The SBP is hereby amended by deleting SBP Section 12.13.1.1 “ATA Stringers” and replacing it in its entirety as follows:
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13.
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The SBP is hereby amended by deleting SBP Attachment 1 “Work Statement and Pricing” and replacing it in its entirety with a new SBP Attachment 1, attached hereto as Exhibit A.
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14.
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The SBP is hereby amended by deleting SBP Attachment 1B and replacing it in its entirety with a new SBP Attachment 1B, attached hereto as Exhibit B.
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15.
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The SBP is hereby amended by deleting SBP Attachment 1C “Model 777-200LRF (Freighter) Rigid Cargo Barrier” in its entirety and replacing it with a new SBP Attachment 1C denoted as “Reserved”, attached hereto as Exhibit C.
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16.
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The SBP is hereby amended by deleting SBP Attachment 1C “MAX Composite Inner Wall SOW 1C”, and replacing it in its entirety as a new SBP Attachment 1D “MAX Composite Inner Wall SOW”, attached hereto as Exhibit D.
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17.
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The SBP is hereby amended by deleting SBP Attachment 10 Section A10.2.10 “Relocation/Subcontract Notification (Puget Sound only)” and replacing it in its entirety with a new SBP Attachment 10 Section A10.2.10, attached hereto as Exhibit E.
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18.
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The SBP is hereby amended by deleting the 737 Maximum Production Rate and Model Mix Constraint matrix contained in SBP Attachment 15 “Maximum Production Rate and Model Mix Constraint Matrix” and replacing it in its entirety with a new SBP Attachment 15 737 Maximum Production Rate and Model Mix Constraint Matrix, attached hereto as Exhibit F.
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19.
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The SBP is hereby amended by deleting SBP Attachment 16 “Boeing Provided Details (BPD) and Supplier Banked Material (SBM)” and replacing it in its entirety with a new SBP Attachment 16, attached hereto as Exhibit G.
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20.
|
The SBP is hereby amended by deleting SBP Attachment 20 “Quantity Based Price Adjustment Formula” and replacing it in its entirety with a new SBP Attachment 20 denoted as “Reserved”, attached hereto as Exhibit H.
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21.
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The SBP is hereby amended by deleting SBP Attachment 22 “Abnormal Escalation” and replacing it in its entirety with a new SBP Attachment 22, attached hereto as Exhibit I.
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22.
|
The SBP is hereby amended by deleting SBP Attachment 27 “737 MAX Non-Recurring Agreement” and replacing it in its entirety with a new SBP Attachment 27, attached hereto as Exhibit J.
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23.
|
The SBP is hereby amended by deleting SBP Attachment 28 “737/747/7671[sic]777 Pricing Agreement through 2015” and replacing it in its entirety with a new SBP Attachment 28 denoted as “Reserved”, attached hereto as Exhibit K.
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24.
|
The SBP is hereby amended by deleting SBP Attachment 29 “777X NON-RECURRING AGREEMENT” and replacing it in its entirety with a new SBP Attachment 29, attached hereto as Exhibit L.
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25.
|
The SBP is hereby amended by adding a new SBP Attachment 31 “Annual Shipset Production Rate-Based Adjustment”, attached hereto as Exhibit M.
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26.
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Entire Agreement.
Except as otherwise indicated, all terms defined in the GTA or SBP shall have the same meanings when used in this Amendment No. 30. This Amendment No. 30 constitutes the complete and exclusive agreement between the Parties with respect to the subject matter of this Amendment No. 30, and this Amendment No. 30 supersedes all previous agreements, including, but not limited to, the Collective Resolution Memorandum of Understanding, dated August 1, 2017, between the Parties relating to the subject matter of Amendment No. 30, whether written or oral. The GTA and SBP shall remain in full force and effect and are not modified, revoked, or superseded except as specifically stated in this Amendment No. 30.
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27.
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No Admission of Liability. No Precedential Value.
The Parties acknowledge that this Amendment No. 30 reflects a compromise resolution by the Parties of certain claims and that nothing contained in this Amendment No. 30 constitutes or will be construed as an acknowledgement or admission of liability or absence of liability in any way on the part of the Parties, each of which expressly denies any liability or wrongdoing in connection with such claims, and the Parties agree not to issue any public statement or comment to the contrary. The Parties agree that this Amendment No. 30, and the terms and conditions hereof, including without limitation the figures used to reach all pricing and payment figures herein, will have no precedential value and therefore will not be used in support or defense of any other claim arising from the Parties’ contracts.
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28.
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Governing Law.
This Amendment No. 30 will be governed by the laws of the state of Washington exclusive of Washington’s conflict of laws principles.
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29.
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Order of Precedence.
In the event of a conflict between the terms of this Amendment No. 30 and either the SBP or GTA, the terms of this Amendment No. 30 shall have precedence with respect to the subject matter of this Amendment No. 30.
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The Boeing Company
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Spirit AeroSystems Inc.
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Acting by and through its division
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Boeing Commercial Airplanes
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By:
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/s/ Breanna Edwards
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|
By:
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/s/ William Wilson
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|
|
Name:
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Breanna Edwards
|
|
Name:
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William Wilson
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|
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|
|
Title:
|
Procurement Agent
|
|
Title:
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Senior Manager
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|
|
Date:
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9-22-2017
|
|
Date:
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9-22-2017
|
1.
|
RECURRING PRICING PERIOD
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a)
|
Non-Discounted Price means the pricing prior to application of production rate-based discounts, if such discounts are applicable. Non-Discounted Prices are subject to Changes in accordance with SBP Section 7.0. Non-Discounted Prices are listed in SBP Attachment 1 Exhibit(s) B.1, B.2, C.1, C.2, D.1, D.2, F.1 and F.2.
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i.
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In the event there is an error in the calculation of Prices contained in this SBP Attachment 1, the Parties shall correct said Prices.
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b)
|
The pricing as set forth in sections 2 through 5 and section 7 below are for the pricing period January 1, 2016 through December 31, 2022 (the “Pricing Period”).
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c)
|
The pricing on and after January 1, 2023 will be negotiated by the Parties, and the Parties will begin negotiating twenty-four (24) months prior to January 1, 2023.
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i.
|
Pricing on and after January 1, 2023 for 737 NG / MAX will take into account market dynamics, productivity improvements and other cost reductions resulting from increases in rates above [*****] APM, if Boeing is then producing at such rates.
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d)
|
In the event the Parties are unable to agree on follow-on pricing prior to the end of the Pricing Period, interim pricing will take effect and continue thereafter until the earlier of such time as: (i) the Parties agree to follow-on pricing; or (ii) pricing is established in accordance with GTA Section 33.0 and this SBP Attachment 1. The period between the end of the Pricing Period and the establishment of follow-on pricing shall be defined as the “Interim Pricing Period”.
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e)
|
Interim Pricing Reconciliation:
|
i.
|
Boeing and Seller will validate and agree on phase i amounts for Seller shipments from January 1, 2016 through October 1, 2017. The applicable Party shall make payment within [*****] days of validating the reconciled amount.
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ii.
|
Boeing and Seller will validate and agree on phase ii amounts for Seller shipments from October 2, 2017 through December 31, 2017. The applicable Party shall make payment within [*****] days of validating the reconciled amount.
|
f)
|
Annual Shipset Production Rate-Based Adjustment:
|
i.
|
All Shipsets (excluding 767-2C) delivered by Seller to Boeing during the Pricing Period and any subsequent Interim Pricing Period shall be subject to the calculation set forth in SBP Attachment 31.
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2.
|
737 NG / MAX and P-8 RECURRING PRICING
|
a)
|
737 NG / MAX and P8 Pricing
|
Table 1 - 737 NG / MAX Discount Structure
|
||||
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
[*****]% discount*
|
[*****]% discount*
|
[*****]% discount*
|
[*****]% discount*
|
[*****]% discount*
|
*discount applicable to Non-Discounted Price
|
Table 2 - 737 Pricing Reference Table
|
|||||||
Production Rate
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
[*****]
|
Col A
|
Col A
|
Col B
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Col C
|
Col D
|
Col E
|
Col E
|
[*****] through [*****]
|
Col A
|
Col A
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Col B
|
Col C
|
Col D
|
Col E
|
Col E
|
Less than [*****]
|
Col A
|
Col A
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Col B
|
Col B
|
Col B
|
Col B
|
Col B
|
i.
|
The pricing referenced in Table 2 (737 Pricing Reference Table) shall take effect for deliveries on and after January 1
st
of each year following the year in which the applicable rate is achieved and held, except as noted in sections 2.a)vi and 2.a)vii below.
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ii.
|
In the event Boeing does not achieve and hold rate [*****] in 2018, pricing listed in Column B of SBP Attachment 1 Exhibit B.1 and B.2 shall apply for the remainder of the Pricing Period (starting January 1, 2018) until Boeing does so.
|
iii.
|
In the event Boeing achieves and holds rate [*****] but does not achieve and hold rate [*****], pricing in Column C of SBP Attachment 1 Exhibit B.1 and B.2 shall apply for the remainder of the Pricing Period until Boeing does so; provided, if rates drop below rate [*****], pricing in Column B of SBP Attachment 1 Exhibit B.1 and B.2 shall apply until such time as rate [*****] is achieved again and held. Further, if rates drop to between rate [*****] and rate [*****], after initially achieving rate [*****], pricing in Column C of SBP Attachment 1 Exhibit B.1 and B.2 shall apply until such time as rate [*****] is achieved again and held.
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iv.
|
In the event a new or adjusted Master Schedule is released in accordance with the SBP, which slides implementation of production rate [*****] beyond 2018 or production rate of [*****] beyond 2019 or requires any production rate reductions, the Parties agree to update SBP Attachment 1 Exhibit A and determine applicable Prices.
|
v.
|
Should an update to Prices be required as set forth in the preceding clause (iv), the Parties shall use the appropriate pricing column from SBP Attachment 1 Table 2 to determine the correct Price within [*****] calendar days of when an update is determined to be necessary. In the event reconciliation is required, the Parties will
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vi.
|
In the event 737 production rates increase to [*****] after calendar year 2018, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column B until the month after rate [*****] is achieved. At that time, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column C, except as provided in SBP Attachment 1 Section 2.a)iii.
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vii.
|
In the event 737 production rates increase to [*****] after calendar year 2019, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column C until the month after rate [*****] is achieved. At that time, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column D (if the then current year is 2020) or SBP Attachment 1 Exhibit B.1 and B.2 Column E (if the then current year is 2021 or 2022), except as provided in SBP Attachment 1 Section 2.a)iii.
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viii.
|
Examples:
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b)
|
737 Interim Pricing
|
i.
|
If the Parties are unable to reach agreement on follow-on pricing before January 1, 2023, Boeing will pay interim pricing from January 1, 2023 as defined within Table 3 737 Interim Pricing Reference Table. The Non-Discounted Price and the Prices in columns A, B, and C in SBP Attachment 1 Exhibits B.1 and B.2 shall be escalated or de-escalated using the indices and methodology provided in SBP Section 4.1.1 (for clarity, columns D and E of said Exhibits are not applicable during the Interim Pricing Period). The 737 P-8 will be included in 737 production rates, however, Table 3 below does not apply to the 737 P-8 Products (reference SBP Attachment 1 Section 3) or 737 MAX CIW (reference SBP Attachment 1D), which is included within the 737 MAX Thrust Reverser Prices listed in SBP Attachment 1 Exhibit B.1.
|
ii.
|
In addition, Boeing agrees to pay Seller $[*****] per year escalated or de-escalated according to the indices with a base year of 2017 (including the weighting and timing of the indices) provided in SBP Section 4.1.1. This payment shall be made annually on [*****], starting the first year of interim pricing, or a pro rata portion of this payment will be made on or about the date of determination of pricing. These payments will not be subject to any reconciliation or retroactive adjustment.
|
iii.
|
Notwithstanding the interim pricing set forth in this Section, the Parties will use the dispute resolution process in GTA Section 33.0 to determine reasonable pricing if pricing is not agreed upon by December 31, 2023.
|
iv.
|
At the earlier of such time as: (i) the Parties agree to follow-on pricing; or (ii) pricing is established in accordance with GTA Section 33.0 and this SBP Attachment 1, the Parties will reconcile interim pricing with the follow-on pricing and a corresponding debit or credit as applicable will be made retroactive to the day after the end of the Pricing Period.
|
c)
|
Additional 737 MAX Pricing:
|
i.
|
The Parties agree to negotiate a delta price for the 737-8200 MAX based on the 737-8 MAX configuration through Post Rev [*****] as defined in SBP Attachment 1 Section 2.d)i and 2.d)ii, and the Prices listed in Attachment 1 Exhibit(s) B.1 and B.2 . Until such price is negotiated, the agreed interim pricing is the then current pricing for the 737-8 MAX. The Parties agree pricing will be negotiated and agreed upon within [*****] days after the first Seller delivery of the 737-8200 fuselage to Boeing. At such time as a subsequent pricing agreement has been achieved, the Parties will reconcile interim pricing with the agreed-upon pricing, and a corresponding debit or credit as applicable will be made.
|
i.
|
The Parties agree to negotiate a delta price for the 737-10 MAX based on the 737-9 MAX configuration through 737-9 Post Rev [*****] as defined in SBP Attachment 1 Section 2.d)iii and 2.d)iv below and the Prices listed in Attachment 1 Exhibit B.1 and B.2. Until such price is negotiated, the agreed interim pricing is the then current pricing for the 737-9 MAX. The Parties agree pricing will be negotiated and agreed upon within [*****] days after the first Seller delivery of the 737-10 fuselage to Boeing. At such time as a subsequent pricing agreement has been achieved, the Parties will reconcile interim pricing with the agreed-upon pricing, and a corresponding debit or credit as applicable will be made.
|
ii.
|
The Parties agree, pricing for all 737 MAX minor models shall utilize the same production rate-based discount methodology as described in SBP Attachment 1 Section 2.a) and 2.b).
|
d)
|
Changes to 737 MAX Pricing prior to respective ATCs:
|
i.
|
737-8 Pricing:
|
ii.
|
Post Rev [*****]:
|
iii.
|
737-9 Pricing:
|
iv.
|
737-9 Post Rev [*****]:
|
v.
|
737-7 (7150) Pricing:
|
vi.
|
737-7 Post Rev [*****]:
|
vii.
|
Any other 737 MAX minor models will follow the same approach as specified in this Section 2.d) and added to SBP Attachment 1 Exhibit(s) B.1 and B.2.
|
e)
|
Changes to 737 MAX Pricing Post ATC
|
i.
|
737-8 Pricing
|
a.
|
Seller will submit a separate change proposal for Changes directed subsequent to 737-8 ATC through [*****] by no later than [*****]. The Parties agree to negotiate the proposal within [*****] days of submittal.
|
b.
|
The Parties agree SBP Attachment 27 shall not apply to Changes directed post ATC for the 737-8.
|
c.
|
The Parties agree all Changes directed post 737-8 ATC will be in accordance with SBP Section 7.0.
|
ii.
|
737-9 Pricing
|
a.
|
The Parties agree SBP Attachment 27 shall not apply for 737-9 Changes directed post ATC for the 737-9.
|
b.
|
The Parties agree all Changes directed post 737-9 ATC will be in accordance with SBP Section 7.0.
|
iii.
|
737-7 (7150) Pricing
|
a.
|
The Parties agree SBP Attachment 27 shall not apply for 737-7 (7150) Changes directed post ATC for the 737-7 (7150).
|
b.
|
The Parties agree all Changes directed post 737-7 (7150) ATC will be in accordance with SBP Section 7.0.
|
iv.
|
Any other 737 MAX minor models will follow the same approach as specified in this Section and added to SBP Attachment 1 Exhibit(s) B.1 and B.2.
|
3.
|
737 P-8 INTERIM PRICING
|
4.
|
747 RECURRING PRICING
|
a)
|
747 Pricing Period
|
5.
|
767 RECURRING PRICING (EXCLUDING 767-2C)
|
a)
|
767 Pricing Period
|
6.
|
767-2C RECURRING PRICING
|
7.
|
777 RECURRING PRICING (EXCLUDES 777X)
|
a)
|
777 Pricing Period
|
•
|
[*****] to be paid on or about [*****]*
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]**
|
•
|
[*****] to be paid on or about [*****]***
|
8.
|
NON-RECURRING PRICING:
|
a)
|
Boeing agrees to pay Seller a fixed sum of $[*****] to support 737 rate [*****] APM [*****] expenditures by Seller, as follows:
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
i.
|
Boeing shall issue purchase orders no later than [*****] days prior to the above dates.
|
ii.
|
Payment will be made by Boeing to Seller in accordance with SBP Section 5.2.1.
|
b)
|
Boeing agrees to pay Seller a fixed sum of $[*****] to support 737 rate [*****] APM [*****] expenditures, which the Parties agree includes 737-8 rate tooling* (only from rate [*****] up to and including [*****]), 737-9 rate tooling* (only from rate [*****] up to and including [*****]), 737 CIW rate tooling* (only from rate [*****] up to and including [*****]), 737-8200 rate tooling* (only up to and including rate [*****]), 737-7 (7150) rate tooling* (only up to and including rate [*****]), and 737-10 rate tooling* (only up to and including rate [*****]). Payments shall be made as follows:
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
•
|
[*****] paid no later than [*****]
|
i.
|
Boeing shall issue purchase orders no later than [*****] days prior to the above dates.
|
ii.
|
Seller will submit CTLs for rate [*****] tooling, starting [*****]. The above payments in this section are not contingent upon CTL submittal by Seller or approval by Boeing.
|
iii.
|
Payment will be made by Boeing to Seller in accordance with SBP Section 5.2.1.
|
iv.
|
|
v.
|
Upon completion of all CTLs, Seller will notify Boeing that all CTLs have been submitted.
|
vi.
|
SBP Attachment 1 Exhibit G identifies the rate tooling settlements that are and are not included within the $[*****] fixed sum payment set forth in this Section 8.b). For the avoidance of doubt, SBP Attachment 27 does not apply to the $[*****] fixed sum payment set forth in this Section 8.b).
|
SBP Attachment 1 Exhibit A
Based on 737 Master Schedule [*****]
|
|
|||||
|
|
|
|
|
|
C/L
|
|
Exhibit B.1 and B.2 Pricing Column
|
Fuselage FOB
|
[*****]
[39 Pages Omitted]
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
[*****]
[5 Pages Omitted]
|
Model
|
End Item Number
|
Description
|
Non-Discounted Price
|
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
[*****]
[60 Pages Omitted]
|
Product
|
Model
|
MMC
|
Non-Discounted Price
|
|
|
|
|
|
747 S41
|
747-8P
|
[*****]
|
[*****]
|
|
|
|
|
|
|
747-8F
|
[*****]
|
[*****]
|
|
|
|
|
|
747 Strut
|
747-8 Strut
|
[*****]
|
[*****]
|
|
|
|
|
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
[*****]
[2 Pages Omitted]
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
[*****]
[33 Pages Omitted]
|
Product
|
Model
|
MMC
|
Non-Discounted Price
|
|
|
|
|
|
767 S41
|
767F
|
[*****]
|
[*****]
|
|
|
|
|
|
767 Strut
|
767 Strut GE
|
[*****]
|
[*****]
|
|
|
|
|
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
[*****]
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
[*****]
[7 Pages Omitted]
|
End Item Number
|
End Item Description
|
CCN 6650 (Units 1-3)
|
CCN 6650 Unit 4
|
CCN 6650 (Units 5-23)
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
2027
|
[*****]
|
End Item Number
|
End Item Description
|
(Units 1-4)
|
(Units 5-23)
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
2027
|
[*****]
|
Model
|
MMC
|
Non-Discounted Pricing
|
|
|
|
|
|
777-300ER
|
[*****]
|
[*****]
|
|
|
|
|
|
777-200LR
|
[*****]
|
[*****]
|
|
|
|
|
|
777F
|
[*****]
|
[*****]
|
|
|
|
|
|
777 Strut GE115
|
[*****]
|
[*****]
|
|
|
|
|
|
777 Nacelle GE115
|
[*****]
|
[*****]
|
|
|
|
|
|
300ER-200LR-200F Slats
|
|
[*****]
|
|
|
|
|
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
[*****]
[3 Pages Omitted]
|
Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
[*****]
[11 Pages Omitted]
|
737-8
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
Rate Tooling to support up to and including [*****] APM
|
Reference SBP Attachment 27
|
Rate Tooling to support above [*****] APM up to and including [*****] APM
|
Reference Pricing Settlement CCN 10657 dated 02/06/2017
|
Rate Tooling to support above [*****] APM up to and including [*****] APM
|
Reference SBP Attachment 1 section 8.b)
|
737-9
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
Rate Tooling to support up to and including [*****] APM
|
Reference SBP Attachment 27
|
Rate Tooling to support above [*****] APM up to and including [*****] APM
|
Reference SBP Attachment 1 section 8.b)
|
737-7 (7150) and 737-8200
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
737-7 (7150) Rate Tooling to support up to and including [*****] APM
|
Reference SBP Attachment 1 Section 8.b)
|
737-8200 Rate Tooling to support up to and including [*****] APM
|
Reference SBP Attachment 1 Section 8.b)
|
737 MAX CIW
|
Composite Inner Wall (CIW)
|
Rate Tooling to support up to and including [*****] APM
|
Reference SBP Attachment 27
|
Rate Tooling to support above [*****] APM up to and including [*****] APM
|
Reference Pricing Settlement CCN 10657 dated 02/06/2017
|
Rate Tooling to support above [*****] APM up to and including [*****] APM
|
Reference SBP Attachment 1 Section 8.b)
|
737-10
|
Fuselage, Wing, and Propulsion End Items (All SOW excluding CIW)
|
Rate Tooling to support up to and including [*****] APM
|
Reference SBP Attachment 1 Section 8.b)
|
1.
|
With reference to SBP Section 3.2 Period of Performance, the wording in section 3.2 is superseded in its entirety by the following for the parts listed in this SBP Attachment 1B:
|
2.
|
With reference to SBP Section 4.1 Recurring Price, wording in section 4.1 is superseded in its entirety by the following for the statement of work listed in this Attachment 1B:
|
3.
|
With reference to SBP Section 4.1.1 Interim Extension Pricing, wording in section 4.1.1 is superseded in its entirety by the following for the statement of work listed in this SBP Attachment 1B:
|
A.
|
Material
- [*****].
|
B.
|
Labor
- [*****].
|
4.
|
Unless otherwise provided under written agreement between the Parties, payments shall be paid in accordance with SBP Section 5.2.
|
5.
|
Non-Recurring Tooling payment shall be paid in accordance with SBP Section 5.2.1.
|
6.
|
With reference to SBP Section 7.5 Schedule Acceleration/Deceleration and SBP Attachment 6 Lead Time Matrix, the 747-8 Nacelle Hardware listed in this Attachment 1B will be subject to the same 747 Strut / Nacelle (S/N) Lead Times, as outlined in Amendment 5 of SBP MS-65530-0016 Attachment 6, column 747.
|
7.
|
With reference to SBP Attachment 16 Boeing Provided Details and Supplier Banked Material, Attachment 16 will be updated to reflect the current GE115 Boeing Provided Details for installation on the Inlet.
|
8.
|
With reference to SBP Attachment 20 Quantity Based Price Adjustment Formula, Attachment 20 is deleted in its entirety and not applicable for the statement of work listed in this Attachment 1B.
|
9.
|
With reference to SBP Attachment 22 Abnormal Escalation, Attachment 22 is deleted in its entirety and not applicable for the statement of work listed in this Attachment 1B.
|
Major Model
|
End Item Number
|
Description
|
MMC
|
Non-Discounted Price
|
Comments
|
CCN
|
[*****]
|
1.
|
With reference to SBP Section 4.1 Recurring Price, Section 4.1 is replaced by the following only for the statement of work listed in this SBP Attachment 1D:
|
Attachment 15
|
||||||||
MODELS
|
Monthly
|
Wichita
|
STRUCTURES
|
|
Engines
|
|||
|
Production Protection Rate
|
Capacity
|
MIX
|
Units Separation
|
Skin Polish
|
|
PSD
Protection
|
WCH Capacity
|
737
|
[*****] Units
|
[*****] Units
|
|
|
|
|
[*****]
|
|
[*****]
|
||||||||
|
|
MAXIMUM Output @
[*****]
/mo
|
|
|
|
|
|
|
[*****]
|
NOTES: The number of [*****], and [*****] airplanes shown above reflect a total capability of [*****]. The number of [*****] airplanes shown above reflect a total capability of [*****]. The number of [*****] model airplanes which can be manufactured with a corresponding reduction in the number of [*****] models is [*****] with [*****] of separation between [*****] model units. Production capacity and combinations of [*****] and [*****] models are limited to a total of [*****] with [*****] of separation . The combinations in the matrix above reflect the number of [*****] airplanes that can be produced with a corresponding reduction in [*****] models.
|
|||||||||
|
|
|
|
|
|
|
|
|
|
NOTES: The maximum [*****] deliveries shown above reflect a total capability of [*****] with the following limitations:
Combined [*****] deliveries will never exceed a total [*****] and will be reduced inline with the [*****] implementation
Maximum combined [*****] deliveries shall not exceed [*****]
A minimum of [*****] of Separation [*****] between any [*****] deliveries of any [*****] will result in a corresponding reduction in the number of other [*****]
deliveries
[*****] deliveries are limited to [*****],
[*****] deliveries of [*****] and [*****] models are limited to a total of [*****] with at least [*****] of separation
The [*****] deliveries include all models of the [*****] aircraft (i.e. [*****])
Maximum Protection Rate will not go above [*****]
to
[*****] before [*****] (All dates below are Spirit FOB dates)
Combined Maximum Protection Rate for [*****]will not exceed [*****]prior to [*****]
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****]prior to [*****]
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****]prior to [*****]
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****]prior to [*****]
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****]prior to [*****]
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****]prior to [*****]
Combined Maximum Protection Rate for [*****] models will not go above [*****]to [*****]prior to [*****]
|
•
|
Maximum combined [*****] deliveries shall not exceed [*****]
|
•
|
A minimum of [*****]of Separation ([*****]) between any [*****]
|
•
|
[*****]must utilize the [*****] or [*****]
|
•
|
[*****]must utilize the [*****]
|
•
|
[*****]deliveries are limited to [*****]
|
•
|
At rate [*****]- [*****]of separation on [*****]between [*****]
|
•
|
[*****] deliveries of [*****]and [*****]models are limited to a total of [*****]
|
•
|
The [*****] deliveries include all models of the [*****] aircraft (i.e. [*****])
|
•
|
Maximum [*****] Protection Rate will not go above [*****]to [*****]before [*****] (Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****] prior to [*****](Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****] prior to [*****](Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****] prior to [*****](Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****]will not go above [*****]to [*****] prior to [*****](Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****]will not go above [*****]prior to [*****](Spirit FOB for rate [*****])
|
MAXIMUM PRODUCTION RATE
|
||
Models
|
Monthly Production Protection Rate
|
Units/M-Days Separation
|
[*****]
|
||
*[*****] and [*****] not available once [*****] is implemented
**Subject to below model mix constraint tables - [*****] deliveries of any [*****] will result in a corresponding reduction in the number of other models [*****]
Table “[*****]MODEL MIX CONSTRAINTS (Airplanes with [*****])”
Table “[*****]MODEL MIX CONSTRAINTS ([*****])”
|
[*****] MODEL MIX CONSTRAINTS (Airplanes with [*****])
|
|||
Capacity
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|||
|
|
|
|
[*****] MODEL MIX CONSTRAINTS ([*****])
|
|||
Capacity
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
•
|
Maximum combined [*****] deliveries shall not exceed [*****]
|
•
|
A minimum of [*****] of Separation [*****] between any [*****]
|
•
|
Maximum combined [*****] deliveries shall not exceed [*****]
|
•
|
[*****] must utilize the [*****]
|
•
|
[*****] cannot have more than [*****] scheduled on [*****] and cannot have more than [*****] in a consecutive [*****] span
|
•
|
[*****] must utilize the [*****]
|
•
|
[*****] deliveries are limited to [*****]
|
•
|
At rate [*****]-[*****] of separation on [*****] between [*****] and/or [*****]
|
•
|
[*****]deliveries of [*****] and [*****] models are limited to a total of [*****]
|
•
|
The [*****] deliveries include all models of the [*****] aircraft (i.e., [*****])
|
•
|
Maximum [*****] Protection Rate will not go above [*****] to [*****] before [*****] (Spirit FOB) unless otherwise agreed by both Parties
|
•
|
Combined Maximum Protection Rate for [*****] will not exceed [*****]prior to [*****] (Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****] will not go above [*****] to [*****] prior to [*****] (Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****] will not go above [*****] to [*****] prior to [*****] (Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****] will not go above [*****] to [*****] prior to [*****] (Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****] will not go above [*****] to [*****] prior to [*****] (Spirit FOB)
|
•
|
Combined Maximum Protection Rate for [*****] will not go above [*****] to [*****] prior to [*****] (Spirit FOB)
|
a)
|
Boeing Provided Details (BPD)
|
b)
|
ATA Stringers Pricing
|
c)
|
ATA Stringers Interim Pricing
|
d)
|
737 ATA Stringer POA Pricing
|
e)
|
Supplier Banked Material (SBM):
|
|
|
SUPPLIER BANK MATERIAL (SBM)
|
|
Product Number
|
Program
|
Description
|
Quantity per S/S
|
[*****]
[4 Pages Omitted]
|
|||
|
Part Number
|
Description
|
Non-Discounted ATA Stringer Price
|
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
[*****]
[78 Pages Omitted]
|
1.
|
Prices for Recurring Products will be adjusted for Abnormal Escalation as provided below. In the event that escalation, as forecast by a composite of the identified below indices, exceeds [*****] for any given calendar year (“Abnormal Escalation”), the Prices for Recurring Products for the subsequent calendar year shall be adjusted by that percentage value which exceeds [*****]. Abnormal Escalation is calculated each year against the Prices for Recurring Products effective for that year and is not cumulative. The adjusted Prices for Recurring Products will revert back to the SBP Attachment 1 Prices for Recurring Products at the beginning of the subsequent calendar year.
|
2.
|
Adjustments to the Prices for Recurring Products will be determined by the following economic indices:
|
3.
|
Special Notes:
|
4.
|
Abnormal Escalation Formula:
|
5.
|
Example: Abnormal Escalation Price Increase
|
A.
|
Boeing and Seller have entered into an agreement SBP-MS-65530-0016 (SBP), GTA-BCA-65530-0016 (“GTA”) and AA-65530-0016 (AA) and all attachments and amendments thereto “Sustaining Contract" for Seller to provide product for current model aircraft and derivatives of those models.
|
B.
|
Seller currently supplies Products to Boeing under the Sustaining Contract in support of the current production 737 model aircraft.
|
C.
|
Boeing is seeking to develop, design and manufacture an aircraft currently designated as the 737 MAX to be sold under the 737-7 (7150), 737-8, 737-9, 737-8200, and 737-10 designations (the “737 MAX Program”).
|
D.
|
Boeing and Seller entered into interim pricing agreements documented under Contract Change Notice(s) (CCN) 6818 and 8015 against the Sustaining Contract for a portion of the costs incurred for design, stress and manufacturing engineering for fuselage, wing, thrust reverser and pylon Statements of Work (SOW) through December 31, 2013, the remainder of such costs the parties wish to account for in Section 2.2 of this SBP Attachment 27.
|
E.
|
Boeing and Seller entered into an interim pricing agreement documented under CCN 7586 against the Sustaining Contract for a portion of the costs incurred for the [*****] Thrust Reverser Statement of Work, the remainder of such costs the Parties wish to account for in Sections 2.2 and 10.0 of this SBP Attachment 27.
|
F.
|
Boeing and Seller wish to establish non-recurring pricing based upon the provisions of the Sustaining Contract and this SBP Attachment 27 in support of Boeing’s 737 MAX Program for the 737-7 (7150), 737-8,737-9, 737-8200, and 737-10 MAX models.
|
1.0
|
Applicability and Definitions
|
1.1
|
Applicability
|
1.1.1
|
This SBP Attachment 27 pertains only to the 737 MAX Program and does not alter any existing agreements relating to other items in the Sustaining Contract.
|
1.1.2
|
This SBP Attachment 27 only pertains to the non-recurring pricing for the 737 MAX Program.
|
1.1.3
|
Capitalized terms used herein but not otherwise defined shall have the meaning set forth in the Sustaining Contract.
|
1.2
|
Definitions
|
1.2.1
|
“Amended Type Certification” (ATC) means the date upon which type certificate amendment is received from the applicable regulatory body for the modified aircraft design.
|
1.2.2
|
“Baseline Statement of Work (BSOW)”: The total requirements set forth in Section 3.0 and Section 4.0 including any referenced Boeing specifications, documents, designs or manuals.
|
1.2.3
|
“[*****]”: The statement of work relating the titanium inner-wall for the aircraft described in the BSOW, which the Parties anticipate at this time to be performed by [*****].
|
1.2.4
|
“Initial Tooling”: All Tooling required for the first 737-8 Shipset unit and/or Engine Development Program (EDP) hardware, and such term shall subsequently apply to the 737-9, 737-7 (7150), 737-8200, 737-10 and the CIW.
|
1.2.5
|
“Non-Recurring-Non-Tooling Work”: Any Nonrecurring Work relating to the BSOW, other than Non-Recurring Tooling Work, including, but not limited to, design engineering, stress engineering, project manufacturing engineering, process manufacturing engineering, First Article Inspection, other IPT, and NC programming.
|
1.2.6
|
“Non-Recurring Tooling Work”: Any Nonrecurring Work relating to Tooling under the BSOW, including, but not limited to, tool design, tool fabrication, assembly tooling, integration tooling, detail tooling, and rotable tooling, but replacement of Tooling at end of useful life is not included and is not dispositioned as part of this SBP Attachment 27. Non-Recurring Tooling Work includes Tooling work performed by Seller’s vendors.
|
1.2.7
|
[*****]: As applicable, the Initial Tooling [*****] Amount or the Rate Tooling [*****] Amount, in each case as set forth in Exhibit A.
|
1.2.8
|
“Rate Tooling”: All Tooling, other than the Initial Tooling, required to support the build rate for the 737-8, 737-9, 737-7 (7150), 737-8200, 737-10, and the CIW.
|
1.2.9
|
“Pre-Implementation Tooling”: Any tooling identified in Section 4.0 of Attachment 27 Baseline Statement of Work that is required prior to [*****] settlement for initial tools. CTLs for pre-implementation tooling will be included with initial tooling CTLs when they are submitted. Incentive [*****] calculations outlined in section 6.4 of this SBP Attachment 27 are not applicable to Pre-Implementation tooling until the final CTL for initial tooling is submitted.
|
2.1
|
Effectiveness
|
2.2
|
CCN Reconciliation
|
3.0
|
non-recurring-non-tooling Statement of Work
|
3.1
|
In performance of the BSOW, Seller shall perform to the applicable requirements and obligations set forth in the following documents in accordance with the delegated engineering requirements contained in the Sustaining Contract:
|
3.1.1
|
The work depicted in the current revision of the 737 MAX Configuration Control Document (CCD) [*****]for 737-8, [*****] and [*****] for 737-7, [*****] for 737-9, [*****] for MAX 200, [*****] for MAX BBJ8, [*****] for MAX BBJ7, and [*****] for BBJ9 for Fuselage, Propulsion, and Wing Statements of Work.
|
3.1.1.1
|
Fuselage Structures Design Decision Memo [*****] for 737-7 (7150) Tailskid design and build on the first 737-7 (7150) MAX shipset (currently planned to be line unit [*****]).
|
3.1.2
|
Fuselage Structures System Requirements and Objectives (SR&O) 737 MAX Document [*****], Structures Fuselage Criteria Document [*****], Propulsion Specification Documents [*****], [*****], [*****];
|
3.1.3
|
The 737-8 Engineering Bill of Material (BOM) submitted by Seller, and listed in Exhibit [B] to this Attachment 27.
|
3.1.4
|
[*****], which is due to be published on [*****]. The content of [*****] is subject to mutual agreement of the Parties and will not represent any material change impacting Price to the unpublished version reviewed by both Parties that is dated [*****].
|
3.2
|
Program Schedule Baseline: Program baseline schedules as contained in Exhibit D to this Attachment 27.
|
3.3
|
The Parties agree the documents set forth in this Section 3 are the versions existing as of the date of SBP Amendment No. 30
.
|
4.0
|
non-recurring tooling Statement of Work
|
4.1
|
The Tooling Baseline consists of:
|
4.1.1
|
CCD [*****], with proposed revisions, submitted with letter [*****];
|
4.1.2
|
The 737-8 Engineering Bill of Material (BOM) submitted by Seller, associated with CCD [*****], as set forth in Exhibit [B] to this Attachment 27;
|
4.1.3
|
The Tooling List submitted by Seller, associated with CCD [*****] as set forth in Exhibit [C] to this Attachment 27;
|
4.1.5
|
[*****], which is due to be published on [*****]. The content of [*****] is subject to mutual agreement of the Parties and will not represent any material change impacting price to the unpublished version reviewed by both Parties that is dated [*****]; and,
|
4.2
|
For the avoidance of doubt, the BSOW referenced here is for the 737 MAX -8 Non-Recurring Work. Pricing, ground rules, statements of work, unique terms and non-recurring price for the other 737 MAX minor models will be subsequently agreed and incorporated into this SBP Attachment 27 at a later date.
|
5.0
|
PAYMENT FOR Non-Recurring Non-Tooling WORK
|
5.1
|
Payment
|
5.1.1
|
Boeing
will re
i
mburse
Seller
for
all costs
incurred
less
any
rebates
and discounts
in
performance
of
the Non
-
Recurr
i
ng
Non
-
Tooling
Work up to [*****], including
,
but not
li
mited to
,
[*****]
,
all as set
forth in
Exhibit
[E] to this Attachment 27
.
|
5.1.2
|
Seller will invoice its
costs
incurred less any
r
ebates and d
i
scounts
i
n performance of the
Non-
Recurring Non-Tooling Work up to Amended Type Certification for 737-7 (7150), 737-8, 737-9, 737-8200, 737-10, BBJ8, BBJ7, and BBJ9 [*****], for the [*****]
period preceding the month of invoice
,
and for other agreed to
costs that
|
▪
|
737
-
8 Fuselage
Non
-
Recurring Non-Tooling Define PO 843948 item 05
|
▪
|
737-8 Wing Non-Recurring Non-Tooling Define PO 843951
item
03
|
▪
|
737-8 Pylon
Non-Recurring
Non
-
Tooling Define PO 849241
item
11
|
▪
|
737-8
Thrust Reverser
Non-Recurr
i
ng Non
-
Tooling Define PO 849241 item 08
|
▪
|
737
-
9 Fuselage Non-Recurring Non-Too
l
ing Define PO
843948
item 06
|
▪
|
737-9 Wing Non-Recurring Non-Tooling Define PO 843951 item 04
|
▪
|
737
-
9 Pylon Non
-
Recurring Non-Tooling Define PO
849241
item
12
|
▪
|
737-9 Thrust Reverser Non-Recurring Non-Tooling Define PO 849241 item 09
|
▪
|
737-7 (7150)
Fuselage
Non
-
Recurring Non-Tooling Define PO 843948 item 07
|
▪
|
737-7 (7150) Wing Non-Recurring Non-Tooling Define PO 843951
i
tem 05
|
▪
|
737-7 (7150) Pylon Non-Recurring Non-Tooling Define PO 849241
item
13
|
▪
|
737-7 (7150) Thrust Reverser Non-Recurring Non-Tooling Define PO 849241 item 10
|
▪
|
737-8200
Fuselage
Non
-
Recurring Non-Tooling Define PO 843948 item 08
|
▪
|
737-8200 Wing Non-Recurring Non-Tooling Define PO XXXXXX
i
tem XX
|
▪
|
737-8200 Pylon Non-Recurring Non-Tooling Define PO XXXXXX
item
XX
|
▪
|
737-8200 Thrust Reverser Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
▪
|
MAX BBJ8
Fuselage
Non
-
Recurring Non-Tooling Define PO 843948 item 09
|
▪
|
MAX BBJ8 Wing Non-Recurring Non-Tooling Define PO XXXXXX
i
tem XX
|
▪
|
MAX BBJ8 Pylon Non-Recurring Non-Tooling Define PO XXXXXX
item
XX
|
▪
|
MAX BBJ8 Thrust Reverser Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
▪
|
MAX BBJ7
Fuselage
Non
-
Recurring Non-Tooling Define PO 843948 item 13
|
▪
|
MAX BBJ7 Wing Non-Recurring Non-Tooling Define PO XXXXXX
i
tem XX
|
▪
|
MAX BBJ7 Pylon Non-Recurring Non-Tooling Define PO XXXXXX
item
XX
|
▪
|
MAX BBJ7 Thrust Reverser Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
▪
|
MAX BBJ9
Fuselage
Non
-
Recurring Non-Tooling Define PO 843948 item 12
|
▪
|
MAX BBJ9 Wing Non-Recurring Non-Tooling Define PO XXXXXX
i
tem XX
|
▪
|
MAX BBJ9 Pylon Non-Recurring Non-Tooling Define PO XXXXXX
item
XX
|
▪
|
MAX BBJ9 Thrust Reverser Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
▪
|
737 MAX CIW Non-Recurring Non-Tooling Define and Build PO 218899 item 01
|
▪
|
737-8 Fuselage Non-Recurring Non-Tooling Build PO 843949 item 01
|
▪
|
737-8 Wing Non-Recurring Non-Tooling Build PO 843952 item 01
|
▪
|
737-8 Pylon Non-Recurring Non-Tooling Build PO 843942 item 04
|
▪
|
737-8 Thrust Reverser Non-Recurring Non-Tooling Build PO 843942 item 01
|
▪
|
737-9 Fuselage Non-Recurring Non-Tooling Build PO 843949 item 02
|
▪
|
737-9 Wing Non-Recurring Non-Tooling Build PO 843952 item 02
|
▪
|
737-9 Pylon Non-Recurring Non-Tooling Build PO 843942 item 05
|
▪
|
737-9 Thrust Reverser Non-Recurring Non-Tooling Build PO 843942 item 02
|
▪
|
737-7 (7150) Fuselage Non-Recurring Non-Tooling Build PO 843949 item 03
|
▪
|
737-7 (7150) Wing Non-Recurring Non-Tooling Build PO 843952 item 03
|
▪
|
737-7 (7150) Pylon Non-Recurring Non-Tooling Build PO 843942 item 06
|
▪
|
737-7 (7150) Thrust Reverser Non-Recurring Non-Tooling Build PO 843942 item 03
|
▪
|
737-8200 Fuselage Non-Recurring Non-Tooling Build PO 843949 item 04
|
▪
|
737-8200 Wing Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
▪
|
737-8200 Pylon Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
▪
|
737-8200 Thrust Reverser Non-Recurring Non-Tooling Build PO XXXXXX item XX”
|
5.1.3
|
Boeing will pay such invoices in accordance with SBP Section 5.2.1 after receipt of valid invoice and supporting data as defined in Exhibit [E] to this Attachment 27 along with a monthly description of significant accomplishments and work completed for the fuselage, wing, thrust reverser, pylon, and CIW statements of work. Seller will provide separate invoices for Fuselage, Wing, Thrust Reverser, Pylon, and CIW.
|
5.2
|
Rates
|
5.3
|
Cost Allocation
|
6.0
|
PAYMENT FOR Non-Recurring Tooling WORK
|
6.1
|
Payment
|
6.1.1
|
Boeing will reimburse Seller for all actual costs incurred less any rebates and discounts in performance of the Non-Recurring Tooling Work including, but not limited to, [*****] as set forth in Exhibit [F] submittal form]; up to the [*****] values identified in Exhibit [A] for Initial Tooling and Rate Tooling by applicable minor model. The [*****] Amount in Exhibit [A] shall be deemed to be reduced by [*****] respectively until all Certified Tool Lists (CTLs) are submitted and approved. Upon submittal of all CTL records associated with each [*****] Amount, such deemed reduction shall no longer apply, and Boeing will pay Seller any remaining amount due for tooling costs incurred up to the [*****] Amount as set forth in Exhibit [A] to this Attachment 27.
|
6.1.2
|
Seller will invoice its costs for the Non-Recurring Tooling Work, [*****], for the [*****] period preceding the month of invoice, and for other agreed to costs that have not been previously invoiced.
|
6.1.3
|
Boeing will pay such invoices in accordance with SBP Section 5.2.1 after receipt of valid invoice and supporting data as defined in Exhibit [F] to this Attachment 27, Seller will provide separate invoices for Fuselage, Wing, Thrust Reverser, Pylon, and CIW work.
|
6.2
|
Rates
|
6.3
|
Invoicing Requirements for Non-Recurring Tooling Work and Tooling Incentives
|
▪
|
737-8 Fuselage Initial Tools PO 843950X item 01
|
▪
|
737-8 Fuselage Rate Tools PO 860487 item 02
|
▪
|
737-8 Wing Initial Tools PO 843953 item 01
|
▪
|
737-8 Wing Rate Tools PO 860488 item 01
|
▪
|
737-8 Pylon Initial Tools PO 849243 item 03
|
▪
|
737-8 Pylon Rate Tools PO 860489 item 06
|
▪
|
737-8 Thrust Reverser Initial tools PO 849243 item 01
|
▪
|
737-8 Thrust Reverser Rate Tools PO 860489 item 05
|
▪
|
737-7 (7150) Fuselage Initial Tools PO XXXXXX item XX
|
▪
|
737-7 (7150) Thrust Reverser Initial Tools PO XXXXXX item XX
|
▪
|
737-7 (7150) Pylon Initial Tools PO XXXXXX item XX
|
▪
|
737-7 (7150) Wing Initial Tools PO XXXXXX item XX
|
▪
|
737-8200 Fuselage Initial Tools PO XXXXXX item XX
|
▪
|
737-8200 Thrust Reverser Initial Tools PO XXXXXX item XX
|
▪
|
737-8200 Pylon Initial Tools PO XXXXXX item XX
|
▪
|
737-8200 Wing Initial Tools PO XXXXXX item XX
|
▪
|
737-10 Fuselage Initial Tools PO XXXXXX item XX
|
▪
|
737-10 Thrust Reverser Initial Tools PO XXXXXX item XX
|
▪
|
737-10 Pylon Initial Tools PO XXXXXX item XX
|
▪
|
737-10 Wing Initial Tools PO XXXXXX item XX
|
▪
|
737-9 Fuselage Initial Tools PO 843950 item 05
|
▪
|
737-9 Thrust Reverser Initial Tools PO 849243 item 10
|
▪
|
737 MAX CIW Line unit [*****] Initial Tools PO 860489 item 04
|
▪
|
737-9 Initial Tool 2016 Incentive Payment PO 843950 item 06
|
▪
|
737 CIW line [*****] 2016 Incentive Payment PO 860489 item 07
|
▪
|
737-9 Initial Tool 2017 Incentive Payment PO 843950 item 07
|
▪
|
737 CIW line [*****] 2017 Incentive Payment PO 860489 item 08
|
▪
|
737-10X Fuselage Pre-Implementation Tools PO 218902 item 01
|
6.4
|
Incentive Fee
|
6.4.1
|
Upon submittal of all CTL’s associated with each [*****] Amount set forth in Exhibit A ([*****]), if Seller’s actual costs incurred in the completion of such work are less than the [*****] Amount, and taking into account any adjustments to such [*****] Amount pursuant to Section 8.0 (Changes), then Boeing shall pay to Seller, in addition to the amounts due under Section 6.1 (Payment), an incentive fee equal to [*****] as amended from time to time and agreed to between the parties per section 6.7 ([*****]).
|
6.4.2
|
If an incentive is earned in accordance with 6.4.1, Boeing will provide a purchase order within [*****]. Upon receipt of valid invoice from Seller, Boeing will pay such invoices in accordance with SBP 5.2.1.
|
6.4.3
|
For the purposes of the [*****]Initial Tooling and the MAX CIW Line Unit [*****]tooling, Boeing shall pay to Seller an incentive fee of no more than [*****]. The total incentives will be calculated in accordance with Section 6.4.1 of this SBP Attachment 27, subject to the caps described above. The Parties agree that nothing in this Section 6.4.3 shall have the effect of establishing any precedent with respect to the calculation of any future incentive fee, whether via this SBP Attachment 27 or otherwise.
|
6.4.4
|
For the purposes of the [*****] Initial Tooling, Boeing shall not pay to Seller an incentive fee. The Parties agree that nothing in this Section 6.4.4 shall have the effect of establishing any precedent with respect to the calculation of any future incentive fee.
|
6.4.5
|
For the purposes of the [*****] and [*****] Initial Tooling, Boeing shall pay to Seller an incentive fee of no more than $[*****] in total. The total incentive will be calculated in accordance with Section 6.4.1 of this SBP Attachment 27, subject to the caps described herein. The Parties agree that nothing in this Section 6.4.5 shall have the effect of establishing any precedent with respect to the calculation of any future incentive fee, whether via this SBP Attachment 27 or otherwise.
|
6.5
|
Schedule
|
7.0
|
BUDGET TRACKING, MONTHLY ACTUALS, AND INVOICE RECONCILIATION
|
7.1
|
Monthly Actuals
|
7.2.1
|
In conjunction with submittals of costs incurred, Seller will provide to Boeing its projected expenditures in connection with the performance of the Non-Recurring Non-Tooling Work for the succeeding [*****] period, in the form of the template set forth in Exhibit [E].
|
7.2.2
|
At the end of [*****], Boeing will issue its budget forecast for the Non-Recurring Non-Tooling Work for the succeeding [*****] period.
|
7.2.3
|
The Parties agree that regardless of any variances between such budgets and Seller’s costs, Boeing will continue to pay Seller in accordance with Section 5.1.
|
7.2.4
|
Weekly reporting requirements
|
7.2.5
|
Budget Management
|
7.3.1
|
Boeing and Seller will utilize the Event Tracking And Control (“ETAC”) reporting system to track design/stress engineering performance.
|
7.4
|
Invoice Reconciliation
|
7.4.1
|
In the event that Boeing disputes any Seller invoice, including without limitation, the invoice set forth in Section 2.2 above, Boeing will pay Seller the invoiced amount by the applicable deadline, in accordance with Section 5.1 or 6.1 (Payment), as applicable, but may review Seller’s books, records and documentation relating to the disputed amounts, provided that such review is conducted at reasonable times at Seller’s facility and that the scope of such review will not extend to any books, records, documentation or other information that is not necessary to support such disputed amounts. As a result of such review, any mutually agreed payment adjustments will be made in [*****]. Should the Parties fail to come to mutual agreement within [*****] of notification pursuant to Section 7.4.3, the Parties will resolve such disputes per GTA section 33.0.
|
7.4.2
|
The Parties recognize that Seller may in some instances have confidentiality obligations to third parties which limit the amount or nature of data that can be provided in invoice reconciliation. In such event, the Parties shall work together to determine
|
7.4.3
|
Boeing will have [*****]from the date the invoice is received to notify Seller of any exception to the actual costs listed in such invoice, otherwise the invoice will be deemed accepted.
|
8.0
|
Changes
|
8.1
|
In the event of any Change to the BSOW, directed by Boeing prior to Amended Type Certification as applicable to each MAX minor model (an “Initial Change”):
|
8.1.2
|
Costs associated with any revisions to the BSOWs that constitute a Change under Section 6 of the SBP and fall within the time period designated for Initial Changes, shall be addressed in accordance with 5.1.1 of this SBP Attachment 27 for Non-Recurring-Non-Tooling Work and 6.1.1 for Non-Recurring Tooling Work.
|
8.2
|
For clarification purposes, the change provisions of this SBP Attachment 27, rather than the change provisions in Section 7.0 of the SBP, will govern with respect to Initial Changes (provided, that the term “Change” as used herein, shall have the same meaning as that defined in the SBP, except as modified by this SBP Attachment 27), and equitable price adjustment with respect to Initial Changes will not be subject to the price thresholds described in Section 7.0 of the SBP. For each MAX minor model, Changes following the Initial Change period for such minor model shall be governed by the Sustaining Contract. For the avoidance of doubt Section 6.0 of the SBP shall apply except for the reference to Section 7.0 contained therein.
|
8.3
|
Change Negotiation Process
|
8.3.1
|
Following receipt of a direction from Boeing that constitutes a Change under this SBP Attachment 27, Seller will provide updated scope of work documents to Boeing, along with pricing submittals, identifying the associated cost and/or schedule impacts.
|
8.3.2
|
Within [*****] of receipt of such proposal, Boeing shall make a settlement offer to Seller. Following receipt of Boeing’s settlement offer, if the Parties are unable to reach agreement on an equitable adjustment within [*****], the negotiations shall be elevated to Senior Contracts Management for resolution.
|
8.3.3
|
Upon settlement the [*****] Amounts and/or schedule, this SBP Attachment 27 will be adjusted by Contract Change Notice (CCN) for all adjustments agreed in writing between the parties.
|
9.0
|
Weight
|
9.1.
|
Seller acknowledges the importance of an end item weight for the Products it delivers to Boeing and agrees to follow diligent weight reduction practices during the design process.
|
9.2
|
Based on the BSOW, Seller will provide non-binding Advisory Weight Guidelines (AWG) for the Seller provided dry products. No weight requirement, (such as those referenced in any requirement document) other than the AWG are applicable.
|
9.3
|
Such AWGs do not constitute a weight requirement, and failure to achieve such AWGs shall not constitute a breach under this SBP Attachment 27 or the SBP
|
9.4
|
These AWGs are for the end item level and are for production units only.
|
9.5
|
In addition, the above AWGs require that adjustments to AWG values be assessed in conjunction with Initial Changes having a weight impact.
|
9.6
|
Seller will provide Status Weight reporting and Actual Weight reporting once monthly via agreed to format.
|
10.1
|
The Parties continue to evaluate the transfer of the [*****] Statement of Work from Seller to Boeing.
|
10.2
|
Until such time as the transfer agreement has been executed, Seller will invoice Boeing [*****] for payments made to [*****] pursuant to the [*****]Statement of Work, and Boeing will pay such invoices net [*****] days after receipt thereof. For the avoidance of doubt, Seller will not duplicate such amounts in any invoice submitted pursuant to Section 5.1 or 6.1.
|
10.3
|
In the event the Parties are unable to reach a transfer agreement by [*****] Boeing and Seller will negotiate additional payment provisions or inclusion of the [*****] Statement of Work into this SBP Attachment 27.
|
11.0
|
propulsion Engine Development Plan (EDP) and test hardware
|
11.1
|
The parties will negotiate pricing for EDP Hardware and test hardware by [*****].
|
12.0
|
INCENTIVES: NON-RECURRING-NON-TOOLING
|
13.0
|
MISCELLANEOUS
|
13.1
|
This SBP Attachment 27 including all Exhibits and Attachments contain the entire agreement between Seller and Boeing about the subject matter hereof and supersedes all previous proposals, understandings, commitments, or representations whatsoever, oral or written for said effort. This SBP Attachment 27 may be changed only in writing by authorized representatives of Seller and Boeing. Except as specified herein, all other terms of the Sustaining Contract apply. In the event of a conflict between the terms of this SBP Attachment 27 and the Sustaining Contract, the terms of this SBP Attachment 27 will have precedence.
|
13.2
|
Reserved
|
13.3
|
The Parties will amend the Product Support and Assurance Document (PSAD) D6-83315 to incorporate the 737-7 (7150), 737-8, 737-9, 737-8200, 737-10, BBJ7, BBJ8, and BBJ9 models in Section 8.3.1 (a) “Warranty for Products”.
|
13.4
|
The D6-83323 Document denoting the 737 NG roles, responsibilities, and accountability for the 737 NG will apply to Seller’s engineering responsibility for the 737 MAX Products and nothing contained herein is intended to modify such allocation of roles, responsibilities and accountability for 737 MAX Products. For the avoidance of doubt, and despite reference to D6-83323 herein, the D6-83323 shall remain of lower precedence to the SBP, GTA, Purchase contract, and Order as specified in Section 13 (Order of Precedence) of the SBP.
|
737-8 [*****] Amounts
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
Initial Tooling [*****] Amount
|
$[*****]
|
Rate Tooling [*****] Amount to support up to and including [*****] APM
|
$[*****]
|
737-9 [*****] Amounts
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
Initial Tooling [*****] Amount
|
$[*****]
|
Rate Tooling [*****] Amount to support up to and including [*****]APM
|
To be negotiated per SBP Attachment 27 Section 6.3
|
737-7 (7150) and 737-8200 [*****] Amounts
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
Combined 737-7 (7150) and 737-8200 Initial Tooling [*****]Amount
|
$[*****]
|
737 MAX CIW [*****]
|
Composite Inner Wall (CIW)
|
Line Unit [*****] Amount
|
$[*****]
|
Rate Tooling [*****] Amount to support up to and including [*****] APM
|
To be negotiated per SBP Attachment 27 Section 6.3
|
737-10 [*****] Amounts
|
Fuselage, Wing, and Propulsion End Items
(All SOW excluding CIW)
|
Pre-Implementation - Fuselage Integration [*****]
|
$[*****]
|
Initial Tooling [*****] Amount
|
$[*****]
|
737 MAX Non-Recurring Actuals
|
|
|
|
||
Cumulative through Date Month/Year
|
|
|
|
||
|
|
|
|
|
|
Hours
|
Fuselage
|
Pylon
|
TR
|
Wing
|
Total
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
Total Hours
|
|
|
|
|
|
|
|
|
|
|
|
Avg Rate
|
Fuselage
|
Pylon
|
TR
|
Wing
|
Total
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
Fuselage
|
Pylon
|
TR
|
Wing
|
Total
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
Total Cost
|
|
|
|
|
|
737 MAX Non-Recurring Actuals - Totals
|
|
|
|
||
Date (Month/Year)
|
|
|
|
||
|
|
|
|
|
|
Hours
|
Month
|
Month
|
Month
|
Month
|
Month
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
Total Hours
|
|
|
|
|
|
|
|
|
|
|
|
Avg Rate
|
Month
|
Month
|
Month
|
Month
|
Month
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
Month
|
Month
|
Month
|
Month
|
Month
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
Total Cost
|
|
|
|
|
|
737 MAX Non-Recurring Actuals - (BY IPT)
|
|
|
|
||
Month, Year
|
|
|
|
||
|
|
|
|
|
|
Hours
|
Month
|
Month
|
Month
|
Month
|
Month
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
Total Hours
|
|
|
|
|
|
|
|
|
|
|
|
Avg Rate
|
Month
|
Month
|
Month
|
Month
|
Month
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
Month
|
Month
|
Month
|
Month
|
Month
|
Design Eng
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
NC
|
|
|
|
|
|
IPT
|
|
|
|
|
|
QA
|
|
|
|
|
|
Total Cost
|
|
|
|
|
|
Actuals by IP
|
|
|
||||||
Date Month/Year
|
|
|
||||||
|
|
|
|
|
||||
Hours
|
Month
|
Month
|
Month
|
Month
|
||||
Design Eng
|
|
|
|
|
||||
Stress Eng
|
|
|
|
|
||||
Project ME
|
|
|
|
|
||||
Offload DE
|
|
|
|
|
||||
Offload SE
|
|
|
|
|
||||
Process ME
|
|
|
|
|
||||
NC
|
|
|
|
|
||||
IPT
|
|
|
|
|
||||
Tool Design
|
|
|
|
|
||||
Tool Fab
|
|
|
|
|
||||
Total Fuselage Hours
|
|
|
|
|
||||
|
|
|
|
|
||||
Dollars
|
Month
|
Month
|
Month
|
Month
|
||||
Design Eng
|
|
|
|
|
||||
Stress Eng
|
|
|
|
|
||||
Project ME
|
|
|
|
|
||||
Define Offload
|
|
|
|
|
||||
Process ME
|
|
|
|
|
||||
NC
|
|
|
|
|
||||
IPT
|
|
|
|
|
||||
Tool Design
|
|
|
|
|
||||
Tool Fab
|
|
|
|
|
||||
Total Fuselage Dollars
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
||||
|
|
|
|
|
||||
Dollars with G&A
|
Month
|
Month
|
Month
|
Month
|
||||
Design Eng
|
—
|
|
—
|
|
—
|
|
—
|
|
Stress Eng
|
—
|
|
—
|
|
—
|
|
—
|
|
Project ME
|
—
|
|
—
|
|
—
|
|
—
|
|
Define Offload
|
—
|
|
—
|
|
—
|
|
—
|
|
Process ME
|
—
|
|
—
|
|
—
|
|
—
|
|
NC
|
—
|
|
—
|
|
—
|
|
—
|
|
IPT
|
—
|
|
—
|
|
—
|
|
—
|
|
Tool Design
|
—
|
|
—
|
|
—
|
|
—
|
|
Tool Fab
|
—
|
|
—
|
|
—
|
|
—
|
|
Total Fuselage Dollars
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
||||
|
|
|
|
|
737 MAX Nacelle Quarterly Analysis - SAMPLE
|
|||||||||||||||
737 MAX Nacelle Tools Actuals as of the close of business month of January (2/6/2014) (SAMPLE)
|
|||||||||||||||
|
|
|
|
|
IN-HOUSE HOURS
|
DOLLARS
|
|
TOTAL DOLLARS
|
|||||||
Tool Number
|
Unit Number
|
Serial Number
|
TCS Order Status
|
EST Committed/Closed Date
|
FAB
|
DESIGN
|
TOTAL HOURS
|
FAB
|
DSN
|
SUBCONTRACT
|
FACILITIES ASSIST
|
MATERIAL
|
TOTAL DOLLARS
|
|
CUM-TO-DATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
737 MAX STRUT SUPPLIER ACCOUNTABLE TOOLS - SAMPLE
|
|||||
Tool Number
|
Unit
|
Lifetime Serial
|
Open/Closed
|
Estimated Close Date
|
Cost
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
[*****] payable if [*****] Non-Recurring-Non-Tooling cost target is met, [*****] through [*****] of [*****]
|
•
|
[*****] payable if overall Non-Recurring-Non-Tooling cost target is achieved through 737-7 ATC. Value to be provided after [*****]
|
•
|
[*****] payable for ETAC releases [*****] on time
|
•
|
[*****] payable for ETAC releases [*****] on time
|
1.0
|
APPLICABILITY AND DEFINITIONS
|
1.1
|
Applicability
|
1.1.1
|
This Amendment pertains only to the 777X Program and does not alter any existing agreements relating to other items in the Sustaining Contract.
|
1.1.2
|
This Amendment pertains only to the non-recurring effort for the 777X Program.
|
1.1.3
|
Capitalized terms used herein but not otherwise defined shall have the meaning set forth in the Sustaining Contract.
|
1.2.1
|
“Amended Type Certification (ATC)”: means the date upon which type certificate amendment is received from the applicable regulatory body for the modified aircraft design.
|
1.2.2
|
“Baseline Statement of Work (BSOW)”: The total requirements set forth in Section 2.0 and Section 3.0 (including the referenced Boeing specifications, documents, designs or manuals therein).
|
1.2.3
|
“Initial Tooling”: All Tooling required for the first 777-9 Shipset unit and/or Engine Development Plan (EDP) hardware, and such term shall subsequently apply to the 777-8.
|
1.2.4
|
“Non-Recurring Non-Tooling Work”: Any Non-Recurring Work relating to the BSOW, other than Non-Recurring Tooling Work, including, but not limited to, design engineering, stress engineering, project manufacturing engineering, process manufacturing engineering, First Article Inspection, other IPT (Integrated Product Team), and NC (Numerical Control) programming.
|
1.2.5
|
“Non-Recurring Tooling Work”: Any Non-Recurring Work relating to Tooling under the BSOW, including, but not limited to, tool design, tool fabrication, assembly tooling, integration tooling, detail tooling, and rotable tooling, but replacement of Tooling at end of useful life is not included and is not dispositioned as part of this Amendment. Non-Recurring Tooling Work includes Tooling work performed by Seller’s vendors.
|
1.2.6
|
“Not To Exceed Amount (NTE Amount)”: As applicable, the Initial Tooling NTE Amount or the Rate Tooling NTE Amount, in each case as set forth in Exhibit A.
|
1.2.7
|
“Rate Tooling”: All Tooling, other than the Initial Tooling, required to support the build rate for the 777-9 aircraft.
|
1.2.11
|
“Major Change”: a change that is 1) equal to or greater than [*****]Seller estimated hours directed within the first [*****]months after [*****]is achieved or 2) a change that is equal to or greater than [*****]hours directed
|
|
subsequent to [*****]months after [*****]is achieved but no longer than [*****]months after [*****]is achieved. (See 777X ATC Process Flow, Exhibit I). Hours are determined based on all Non-Recurring activity.
|
1.2.12
|
“Accounting Year”: is based on Seller’s accounting year January 1 -December 31.
|
1.2.13
|
“Engineering Billing Rate”: The labor rate that Seller will submit to Boeing for the labor category of Engineering on a monthly basis.
|
1.2.14
|
“Engineering Cap Rate”: The maximum labor rate seller will submit to Boeing for the labor category of Engineering based on the annual true-up value. The true-up delta will be applied to all hours accumulated during the Seller’s Accounting Year.
|
1.2.15
|
“Engineering”: This term encompasses Seller’s Define Engineering, Stress Engineering, and Systems Engineering functions.
|
2.0
|
NON-RECURRING NON-TOOLING STATEMENT OF WORK
|
2.1
|
In performance of the BSOW for the 777-9, Seller shall perform to the applicable requirements and obligations set forth in the documents identified in 2.1.1 through 2.1.10, all in accordance with the delegated engineering responsibilities contained in: (i) the letter agreement 6-5A1C-BOD-14-011R2, Amendment 1 (Attachment 2) between Boeing and Seller dated 2-20-2014; and (ii) that version of D6-83323 as ultimately revised subsequent to execution of this Amendment to specifically address 777X engineering delegation responsibilities. The 777X Baseline Requirements Documents Structure is as set forth in Exhibit [J].
|
2.1.1
|
The work depicted in the current revision of the 777X Configuration Control Document Rev. [*****], Configuration Description, Model 792-487, dated [*****] for 777-9X Fuselage, Propulsion, and Wing Statements of Work.
|
2.1.2
|
777X S41 Fuselage Work Package Handbook, September 23, 2015.
|
2.1.3
|
Structures Fuselage Criteria Document [*****], dated February 15, 2015.
|
2.1.4
|
777X Fuselage Structural Design Criteria Supplemental Sec 41 Document [*****], dated May 1, 2015.
|
2.1.5
|
Reserved.
|
2.1.6
|
[*****], 777X Inlet Requirements and Criteria; dated June 26, 2015.
|
2.1.7
|
[*****], Specification for Thrust Reversers, dated June 29, 2015.
|
2.1.8
|
[*****], Requirements for Engine Pylon Structure 777X Aircraft, dated April 30, 2015.
|
2.1.9
|
[*****], 777X Nacelle Structural Analysis Criteria, dated June 10, 2015.
|
2.1.10
|
The Engineering Bill of Material (BOM) submitted by Seller, and listed in Exhibit [B].
|
2.2
|
In the event Seller is unable to comply with any requirement, Boeing and Seller’s engineering representatives will work together to define a mutually agreeable solution.
|
2.3
|
For the avoidance of doubt, the BSOW referenced here is for the 777-9 Non-Recurring Work. Pricing, ground rules, statements of work, unique terms, and non-recurring price for the 777-8 will be subsequently agreed and incorporated into this Amendment at a later date.
|
3.0
|
NON-RECURRING TOOLING STATEMENT OF WORK
|
3.1
|
The Tooling Baseline consists of:
|
3.1.1
|
All documents cited in Paragraph 2.1;
|
3.2
|
For the avoidance of doubt, the BSOW referenced here is for the 777-9 Non-Recurring Work. Pricing, ground rules, statements of work, unique terms, and non-recurring price for the 777-8 will be subsequently agreed and incorporated into this Amendment at a later date.
|
4.0
|
BUDGET TRACKING, MONTHLY ACTUALS, AND ACTUALS RECONCILIATION
|
4.1
|
Non-Recurring Non-Tooling Work and Non-Recurring Tooling Work
|
4.2.1
|
Seller will provide to Boeing its projected expenditures in connection with the performance of the Non-Recurring Non-Tooling and Tooling Work every [*****]months in [*****]and [*****]of each year for the 777X Non-Recurring Program [*****]. This will include monthly spend, headcount, and a correlation between Seller’s ETAC/SCAT and hours forecasted in the form of the template set forth in Exhibit [E].
|
4.2.2
|
[*****], in [*****]and [*****]of each year, Boeing will provide Seller a plan, including but not limited to budget forecast, documenting Seller’s Non-Recurring Non-Tooling performance of the BSOW (the “Non-Tooling Plan”). The Non-Tooling Plan shall include [*****]month plan by commodity (e.g. fuselage, floorbeams, wing, etc.).
|
4.2.3
|
Seller will submit the attached risk and opportunity template Exhibit [E] each month to identify technical, schedule and cost risks to both the Non-Recurring and recurring statements of work.
|
4.2.4
|
Budget Management
|
4.3.1
|
Boeing and Seller will utilize the Event Tracking And Control (“ETAC”) reporting system to track design/stress engineering performance.
|
4.4
|
Actuals Reconciliation
|
4.4.2
|
In the event that Boeing disputes Seller’s monthly actuals hours or annual true-up provided under 4.1, Boeing will issue Seller a purchase order for the undisputed hours and dollars by the applicable deadline in accordance with 5.1.2 or 5.2.2. Should the Parties fail to come to mutual agreement within [*****]business days of Boeing dispute notification, the Parties will resolve such disputes per GTA Section 33.0. Boeing shall have the right to visit Seller’s facility for the purpose of validating the number and type of disputed direct hours and true-up rate. During the course of such visit, Boeing may review Seller’s records and documents relating to the disputed hours, provided that such review is conducted at a reasonable time at Seller’s facility and that the scope of such review will only extend to any books, records, documentation or other information that is necessary to support such disputed hours and true-up rate. As a result of such review, any mutually agreed payment adjustments will be made in the payment [*****]months following the resolution of the disputed hours. If the dispute resolution is not satisfied within [*****]months from dispute notification, Boeing will issue Seller a PO for half the disputed value and work toward closure on the remaining amount. Any amounts due to Seller or Boeing will be paid in accordance with SBP Section 5.2.1 upon settlement of the disputed value.
|
4.4.3
|
The Parties recognize that Seller may in some instances have confidentiality obligations to third parties, which limit the amount or nature of data that can be provided in invoice reconciliation. In such event, the Parties shall work together to determine a mutually agreeable solution which enables the provision of supporting data in Section 4.1 in a manner that is in compliance with Seller’s confidentiality obligations to third parties.
|
5.1.1
|
Boeing will reimburse Seller for validated costs incurred in performance of the Non-Recurring Non-Tooling Work including, but not limited to, [*****] expense, all as set forth in Exhibit [E]. Labor will be priced in accordance with the labor rates in Section 5.3.
|
5.1.1.1
|
Offload engineering labor dollars expended in the performance of the Non-Recurring Work performed during such month will be invoiced by Seller and paid by Boeing as invoiced by the subcontractor to Seller with the addition of Seller G&A.
|
5.1.2
|
Seller will invoice its costs incurred less any rebates and discounts in performance of the Non-Recurring Non-Tooling Work on a [*****]basis.
|
•
|
Fuselage Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Fuselage Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
•
|
Floorbeams Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Floorbeams Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
•
|
Wing Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Wing Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
•
|
Pylon Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Pylon Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
•
|
Thrust Reverser Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Thrust Reverser Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
•
|
Inlet Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Inlet Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
•
|
Fan Cowl Non-Recurring Non-Tooling Define PO XXXXXX item XX
|
•
|
Fan Cowl Non-Recurring Non-Tooling Build PO XXXXXX item XX
|
5.1.3
|
Boeing will pay such invoices in accordance with SBP Section 5.2.1 after receipt of correct invoices.
|
5.2
|
Non-Recurring Tooling Work
|
5.2.1
|
The Parties shall negotiate NTE amounts for Tooling within a reasonable amount of time after 777X Firm Configuration is complete. Upon agreement of NTE amount for Tooling, the Parties will amend Exhibit [A] and Exhibit [C] within thirty (30) days to reflect the agreed NTE amount.
|
5.2.2
|
Boeing will reimburse Seller for validated costs incurred in performance of the Non-Recurring Tooling Work including, but not limited to, [*****] expense as set forth in Exhibit [E] submittal form. Labor will be priced in accordance with the labor rates in Section 5.3. Each individual Initial Tooling and Rate Tooling NTE Amount as identified in Exhibit [A] is deemed to be reduced by [*****] respectively until all Certified Tool Lists (CTLs) pertaining to the particular NTE Amount at issue are submitted and approved by Boeing. Upon submittal of all CTL records associated with each Tooling
|
•
|
Fuselage Initial Tools PO XXXXXX item XX
|
•
|
Fuselage Rate Tools PO XXXXX item XX
|
•
|
Floorbeam Initial Tools PO XXXXXX item XX
|
•
|
Floorbeam Rate Tools PO XXXXX item XX
|
•
|
Wing Initial Tools PO XXXXXX item XX
|
•
|
Wing Rate Tools PO XXXXXX item XX
|
•
|
Pylon Initial Tools PO XXXXXX item XX
|
•
|
Pylon Rate Tools PO XXXXXX item XX
|
•
|
Thrust Reverser Initial Tools PO XXXXXX item XX
|
•
|
Thrust Reverser Rate Tools PO XXXXXX item XX
|
•
|
Inlet Initial Tools PO XXXXXX item XX
|
•
|
Inlet Rate Tools PO XXXXXX item XX
|
•
|
Fan Cowl Initial Tools PO XXXXXX item XX
|
•
|
Fan Cowl Rate Tools PO XXXXXX item XX
|
5.2.4
|
Boeing will pay such invoices in accordance with SBP Section 5.2.1 after receipt of correct invoices.
|
5.2.7
|
Notwithstanding any other provisions of this Amendment, Boeing shall not be obligated to pay to Seller any amount in excess of the Tooling NTE Amount, provided however, that this sum may be adjusted in accordance
with 5.2.8.
|
5.2.8.1
|
If it is determined additional Tooling that is not driven by BSOW Change is required in excess of that set forth in the BSOW, all additional Tooling costs incurred to meet the requirements of initial build and rate to [*****] APM will be assumed by Seller and the Tooling NTE Amount shall not be adjusted.
|
5.2.8.2
|
If it is determined Seller can accomplish the requirements with less Tooling than that set forth in the BSOW, the Tooling NTE Amount shall not be adjusted and the cost savings shall be administered in accordance with Section 10.1 (Tooling Incentive).
|
5.2.8.3
|
For the sake of clarity, any Initial Change or Major Change shall result in a commensurate adjustment to the Tooling NTE Amount in accordance with Section 7.0 (Initial Changes & Major Changes).
|
Process Code
|
Rate Type
|
2015*
|
2016
|
2017
|
Rate 2018 and beyond
|
Define
|
Engineering
|
[*****]
|
To be negotiated in July of the previous year (Sec 4.4).
|
||
|
Billing Rate
|
||||
Define
|
Engineering Cap
|
||||
Build
|
Proj./Proc. ME
|
||||
Build
|
NC
|
||||
Build
|
QA
|
||||
Build
|
IPT
|
||||
Build
|
Other Engr
|
||||
Define
|
Tool Design
|
||||
Build
|
Tool Fab
|
6.0
|
ON-SITE BUYER PROGRAM MANAGEMENT
|
7.0
|
INITIAL CHANGES AND MAJOR CHANGES
|
7.1
|
In the event of any Initial Change or Major Change,
|
7.1.2
|
Costs associated with any revisions to the BSOWs that constitute an Initial Change or Major Change, shall be addressed in accordance with 5.1 of this Amendment for Non-Recurring-Non-Tooling Work and 5.2 for Non-Recurring Tooling Work.
|
7.2
|
For clarification purposes, the change provisions in 7.0 of this Amendment, rather than the Change provisions in Section 7.0 of the SBP, will govern with respect to Initial Changes or Major Changes, and equitable price adjustment with respect to Initial Changes or Major Changes will not be subject to the price thresholds described in Section 7.0 of the SBP.
|
7.3
|
Initial Change and Major Change Negotiation Process
|
7.3.1
|
Following receipt of a direction from Boeing that constitutes an Initial Change or Major Change under this Amendment, Seller will provide updated scope of work documents to Boeing, along with the associated Tooling NTE impacts, cost impacts, and/or schedule impacts.
|
7.3.2
|
For Tooling Not To Exceed (NTE) amounts within [*****]calendar days of receipt of such proposal, Boeing shall make a settlement offer to Seller. Following receipt of Boeing’s settlement offer, if the Parties are unable to reach agreement on an equitable adjustment within [*****]calendar days, the negotiations shall be elevated to Senior Contracts Management for resolution.
|
7.3.3
|
Upon settlement of the Tooling NTE Amounts and/or schedule, this Amendment will be updated and revised to include all adjustments agreed upon in writing between the Parties.
|
8.0
|
WEIGHT
|
8.1.
|
Seller acknowledges the importance of an end-item weight for the Products it delivers to Boeing and agrees to follow diligent weight reduction practices during the design process.
|
8.2
|
Based on the BSOW, Seller will provide non-binding Advisory Weight Guidelines (AWG) for the Seller-provided dry products. No weight requirement, (such as those referenced in any requirement document) other than the AWG are applicable.
|
8.3
|
Such AWGs do not constitute a weight requirement, and failure to achieve such AWGs shall not constitute a breach under this Amendment or the SBP.
|
8.4
|
These AWGs are for the end-item level and are for production units only.
|
8.5
|
In addition, the above AWGs require that adjustments to AWG values be assessed in conjunction with Initial Changes having a weight impact.
|
8.6
|
Seller will provide status weight reporting and actual weight reporting once monthly through ATC in a format to be agreed to by the Parties.
|
9.0
|
PROPULSION ENGINE DEVELOPMENT PLAN (EDP) AND TEST HARDWARE
|
9.1
|
The Parties will negotiate pricing for EDP and test hardware in accordance with the schedule below. Anticipated EDP and Test hardware is identified on Exhibit [K]. To be clear, EDP and Test Hardware is not included in section 2.0 of this Amendment, however EDP Tooling is included in section 3.0 of this Amendment. EDP and test hardware are not subject to the invoicing requirements listed under Exhibit [E]. PO’s will be released to Seller for ROM values and reconciled once firm fixed pricing is established. Below is the planned EDP negotiation schedule.
|
[*****]
|
|||||
10.0
|
INCENTIVES
|
•
|
$[*****] - First pass release quality through CMA is in excess of [*****]%, and
|
•
|
$[*****] - Less than [*****]% second effort driven by engineering and drafting error.
|
•
|
[*****]% payable for ETAC releases [*****]%-[*****]% on time
|
•
|
[*****]% payable for ETAC releases [*****]%-[*****]% on time
|
Quarter
|
Schedule Incentive
|
Quality Incentive
|
|
CMA Release
|
2nd Effort
|
||
4Q15
|
[*****]
|
||
1Q16
|
|||
2Q16
|
|||
3Q16
|
|||
4Q16
|
|||
Q17
|
|||
2Q17
|
|||
3Q17
|
|||
4Q17
|
|||
1Q18
|
|||
2Q18
|
|||
Total
|
11.0
|
MISCELLANEOUS
|
11.1
|
This Amendment, including all Exhibits and Attachments, contains the entire agreement between Seller and Boeing about the subject matter hereof and supersedes all previous proposals, understandings, commitments, or representations whatsoever, oral or written for said effort. This Amendment may be changed only in writing by authorized representatives of Seller and Boeing. Except as specified herein, all other terms of the Sustaining Contract apply. In the event of a conflict between the terms of this Amendment and the Sustaining Contract, the terms of this Amendment will have precedence.
|
11.2
|
The Parties will amend SBP Attachment 9 to include the 777-9 and 777-8, and SBP Attachment 4 to include the 777-9 and 777-8 under Section B.1.
|
11.3
|
The D6-83323 document shall be revised to denote the engineering delegation pertaining to the 777X Nacelle, Pylon, S41, LE Slats, Floor Beams, and Seat Tracks. For the avoidance of doubt, and despite reference to D6-83323 herein, D6-83323 shall remain of lower precedence to the SBP, GTA, Purchase contract, and Order as specified in Section 13 (Order of Precedence) of the SBP.
|
777X [*****]Tooling Amounts
|
[*****]
|
IDAS Configuration
|
Initial Tooling [*****] (Fuselage, Wing, and Propulsion) Amount
|
$[*****]
|
[*****]
|
Fuselage Rate Tooling [*****]Amount
|
Value will be
[*****]
|
|
Propulsion Rate Tooling [*****]Amount
|
Value will be
[*****]
|
|
Wing Rate Tooling [*****] Amount
|
Value will be
[*****]
|
|
A.
|
The following data and information (as specified in Paragraphs 1 through 9 below) necessary to substantiate Seller’s efforts, are to be provided by Seller at the time of its cost submittals. Additional information and data may be requested by Boeing to the extent reasonably required to substantiate Seller’s efforts and Seller will (if Seller concurs that such additional information is necessary) endeavor to supply such requested information within one week following such request. Failure to provide required information could delay payment for that questioned item until information is provided and validated.
|
1.
|
Weekly: For each IPT head count & hours by manager name
|
IPT
|
Manager Name
|
Non-Overtime Hours
|
Overtime Hours
|
SOW Description
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
Weekly: SCAT and ETAC Data
|
a.
|
See Attached Examples
|
3.
|
Monthly: Copy of detailed invoices for the following, but not limited to:
|
a.
|
Material & equipment (material for tooling excluded from invoicing requirement),
|
b.
|
Engineering offload - total hours and applicable labor rates (Infosys or other job shop), and
|
c.
|
Any other purchased services (consulting engineering (non-job shop), target analysis, lab tests, etc.)
|
4.
|
Monthly: Information from table below
|
5.
|
Monthly: List of justification to substantiate hours submitted by commodity
|
6.
|
Semi-annual: Projected Expenditures will be provided in accordance with 4.2.1.
|
7.
|
Annually: Seller will provide a schedule of submittals for items 3, 4, 5, and 8.
|
8.
|
Monthly: Seller to provide O’s and R’s for ongoing changes and all risk and opportunities with estimated values impacting the 777X Program.
|
9.
|
Integrated Master Schedule (IMS) Submission:
|
10.
|
Annual True-Up Validation Table
|
1.
|
This Attachment sets forth the methodology used to calculate the annual Shipset production rate-based adjustment for all Program Airplanes Products for the Pricing Period and any Interim Pricing Period as defined in SBP Attachment 1 Section 1. All Shipsets (excluding 767-2C) delivered by Seller to Boeing shall be used for determining total annual Shipset production rate quantities.
|
2.
|
If the total Shipset production quantities delivered is less than [*****]total Shipsets for any calendar year, Seller shall be entitled to compensation equal to [*****]per Shipset below [*****], multiplied by the total value of delivered Shipsets in the calendar year, calculated using the Prices identified in SBP Attachment 1 (excluding 767-2C pricing, SBP Attachment 1B SOW pricing, SBP Attachment 1D SOW pricing, and P-8 Fuselage pricing).
|
3.
|
Within [*****] of the end of each calendar year, the Parties will identify the Shipsets delivered in the prior year to determine total Shipset quantity. In the event Seller is entitled to compensation as defined above, Boeing shall issue a Purchase Order and issue payment in accordance with SBP Section 5.2.1.
|
4.
|
For clarity, this Annual Shipset Production Rate-Based Adjustment is not a Price adjustment. It is a mechanism for compensation to Seller if combined annual Shipset deliveries decrease below [*****].
|
1.
|
If Shipset production quantities delivered in a year (excluding 767-2C) is greater than or equal to [*****]in a calendar year, no additional compensation will be made.
|
Airplane Program
|
Annual Shipset Deliveries
|
737
|
[*****]
|
747
|
[*****]
|
767
|
[*****]
|
777
|
[*****]
|
Total
|
[*****]
|
2.
|
If Shipset production quantities delivered (excluding 767-2C) is [*****]in a calendar year, the annual Shipset production rate based adjustment would be computed as follows:
|
a.
|
The annual value (i.e., the total value, using SBP Attachment 1 Prices, of delivered Shipsets in the calendar year) of the affected programs equals [*****].
|
b.
|
Compensation to Seller will be [*****].
|
1.0
|
DEFINITIONS
|
1
|
2.0
|
ORDERING
|
3
|
2.1
|
Issuance of Orders
|
3
|
2.2
|
Acceptance of Orders
|
3
|
3.0
|
NOTICE OF LABOR NEGOTIATIONS
|
4
|
4.0
|
CREDIT OFFICE VISIBILITY
|
4
|
5.0
|
COST DATA AND ASSISTANCE
|
4
|
6.0
|
GENERAL & INTERNATIONAL REQUIREMENTS
|
4
|
6.1
|
Language
|
4
|
6.2
|
Currency
|
5
|
7.0
|
TERMINATION FOR CONVENIENCE
|
5
|
7.1
|
Basis for Termination; Notice
|
5
|
7.2
|
Termination Instructions
|
5
|
7.3
|
Termination Claim
|
6
|
7.4
|
Failure to Submit a Claim
|
8
|
7.5
|
Partial Termination
|
8
|
7.6
|
Product Price
|
8
|
7.7
|
Exclusions or Deductions
|
8
|
7.8
|
Payments
|
9
|
7.9
|
Accounting Practices
|
9
|
7.1
|
Records
|
9
|
8.0
|
EVENTS OF DEFAULT AND REMEDIES
|
9
|
8.1
|
Events of Default
|
9
|
8.2
|
Boeing Remedies
|
10
|
8.3
|
Spirit Remedies
|
13
|
8.4
|
Boeing and Spirit Remedies
|
14
|
9.0
|
TERMINATION OF AIRPLANE PROGRAM
|
14
|
9.1
|
Program Termination
|
14
|
9.2
|
Termination Liability
|
15
|
9.3
|
Transfer of Certain Property
|
15
|
10.0
|
DELAYS
|
15
|
10.1
|
Excusable Delay
|
15
|
10.2
|
Delays Attributable to Boeing
|
17
|
11.0
|
SUSPENSION OF WORK
|
17
|
|
|
|
|
- i -
|
|
13.0
|
ASSURANCE OF PERFORMANCE
|
18
|
14.0
|
LIMITATION OF SPIRIT'S RIGHT TO ENCUMBER ASSETS
|
19
|
15.0
|
COMPLIANCE
|
19
|
15.1
|
Compliance With Laws
|
19
|
15.2
|
Import/Export
|
19
|
15.3
|
Government Requirements
|
20
|
15.4
|
Ethic Requirements/Code of Conduct
|
21
|
16.0
|
INTEGRITY IN PROCUREMENT
|
21
|
17.0
|
APPLICABLE LAW
|
21
|
18.0
|
SURVIVAL
|
21
|
19.0
|
PUBLICITY AND CONFIDENTIALITY
|
22
|
19.1
|
Publicity
|
22
|
19.2
|
Confidentiality
|
22
|
20.0
|
RESPONSIBILITY FOR PERFORMANCE
|
23
|
20.1
|
Responsibilities of Spirit
|
23
|
20.2
|
Subcontracting
|
24
|
20.3
|
Reliance
|
24
|
20.4
|
Assignment
|
24
|
20.5
|
Relationship of Parties
|
26
|
20.6
|
Successors and Assigns
|
26
|
21.0
|
STRATEGIC ALIGNMENT
|
26
|
22.0
|
NON-WAIVER/PARTIAL INVALIDITY
|
27
|
23.0
|
HEADINGS
|
27
|
24.0
|
PRODUCT LIABILITY CLAIMS
|
27
|
25.0
|
DISPUTES
|
27
|
25.1
|
Obligations to Negotiate
|
27
|
25.2
|
Resolution of Disputes
|
27
|
26.0
|
TAXES AND DUTIES
|
28
|
26.1
|
Inclusion of Taxes in Price
|
28
|
26.2
|
Litigation
|
28
|
26.3
|
Rebates
|
28
|
27.0
|
COUNTERPARTS
|
28
|
28.0
|
AMENDMENTS
|
29
|
Amend
Number
|
Description
|
Date
|
Approval
|
1
2
|
Spirit name change - All references to Mid-Western Aircraft Systems Inc. are changed to Spirit AeroSystems Inc. or Spirit
8.1.A: Deleted reference to SBP Section 3.4.2.3 to conform with SBP Amendment 17
|
06/19/09
05/12/11
|
J. Loomis
M. Kurimsky
R. Parks
M. Kurimsky
|
A.
|
“Aircraft” means the Program Airplane and/or any Derivative thereof, as the context may require.
|
B.
|
"Customer" means any owner, lessee or operator of an aircraft or commodity, or designee of such owner, lessee or operator.
|
C.
|
“Derivative” means any model airplane designated by Boeing as a derivative of the Program Airplane and which includes all of the following conditions: (1) has the same number of engines as the Program Airplane; (2) utilizes essentially the same aerodynamic and propulsion design, major assembly components, and systems as the Program Airplane; (3) achieves other payload/range combinations by changes in body length, engine thrust, or variations in certified gross weight; (4) has the same body cross-section as the Program Airplane; and (5) is designated as a “derivative” to the FAA by Boeing. A Derivative shall not include any aircraft which has been or currently is in production as of the date of this Agreement.
|
D.
|
“Event of Default” shall have the meaning set forth in GTA Section 8.1.
|
E.
|
“Excusable Delay” shall have the meaning set forth in GTA Section 10.1.
|
F.
|
"FAA" means the United States Federal Aviation Administration or any successor agency thereto.
|
G.
|
"FAR" means the Federal Acquisition Regulations in effect on the date of this Agreement.
|
H.
|
Reserved
|
I.
|
"Order" means each purchase order and purchase contract, if any, (as generated in Boeing’s Enterprise Resource Planning (ERP) system or its equivalent) issued by Boeing and either accepted by Spirit under the terms of this Agreement and the SBP or issued by Boeing in accordance with this Agreement and the SBP.
|
J.
|
“Order Termination Notice” shall have the meaning set forth in GTA Section 7.1.
|
K.
|
“Person” means any individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
|
L.
|
"Procurement Representative" means the individual designated by Boeing as being primarily responsible for interacting with Spirit regarding this Agreement, the SBP and any Order.
|
M.
|
"Product" means goods (including Production Articles), including components and parts thereof, services, documents, data, software, software documentation and other information or items furnished or to be furnished to Boeing under any Order, including Tooling, except for Rotating Use Tooling (as defined in Boeing Document D33200). In addition "Product" has the meaning of "Product Definition" as defined in the SBP.
|
N.
|
“Production Articles” means those completed assemblies, defined and configured as set forth in SBP Attachment 2 “Production Article Definition and Contract Change Notices” as such Attachment may be amended from time to time in accordance with this Agreement and the SBP, for the Program Airplane and any Derivative.
|
O.
|
“Program” means the design, development, marketing, manufacture, sales and customer support of Program Airplanes, Derivatives and Products.
|
P.
|
“Program Airplane” means a commercial transport aircraft incorporating advanced technology and having a current model designation of 787, for which the configuration as of the date of this Agreement is defined in SBP Attachment 1 “Work Statement and Pricing”, SBP Attachment 2 “Production Article Definition and Contract Change Notices”, and SBP Attachment 4 “Work Statement Documents”. The attachments defining the Program Airplane may be amended from time to time in accordance with this Agreement and the SBP.
|
Q.
|
“Program Termination Notice” shall have the meaning set forth in GTA Section 9.1 “Program Termination”.
|
R.
|
Reserved
|
S.
|
“Shipset” means the total set of Production Articles to be provided by Spirit that is necessary for production of one Program Airplane or Derivative.
|
T.
|
"Tooling" means all tooling, used in production or inspection of Products, either provided to Spirit or supplied by Spirit whereby Boeing agrees to pay Spirit for the manufacture of the tooling. “Tooling” also includes Contractor-Use Tooling, Common-Use Tooling and Boeing-Use Tooling as defined in the SBP.
|
A.
|
Immediately stop work as specified in the Order Termination Notice;
|
B.
|
Immediately terminate its subcontracts and purchase orders relating to the work terminated;
|
C.
|
Settle any termination claims made by its subcontractors or suppliers; provided, that Boeing shall have approved the amount of such termination claims in writing prior to such settlement. Boeing shall review and respond to such claims in a timely manner. Spirit shall have the option to settle claims with its subcontractors or suppliers without Boeing’s prior written approval provided that Boeing shall only be obligated to consider amounts included in Spirit’s claim that in Boeing’s reasonable opinion are appropriate;
|
D.
|
Take all reasonable steps to preserve and protect all terminated inventory and related Products;
|
E.
|
At Boeing's written request (which shall be delivered within twelve (12) months, or at a time reasonably determined by the Parties, after the final settlement of any termination claim), transfer title (to the extent not previously transferred) and deliver to Boeing or Boeing's designee all supplies and materials, work-in-process, Tooling (to the extent not required by Spirit for the performance of any portion of the Order not terminated, this Agreement or the SBP) and manufacturing drawings and data produced or acquired by Spirit for the performance of the Order (to the extent terminated), all in accordance with the terms of such request;
|
F.
|
Be compensated for such items to the extent provided in GTA Section 7.3 “Termination Claim”;
|
G.
|
Take all reasonable steps required to return, or at Boeing's option and with prior written approval to destroy, all Proprietary Information and Materials (as defined in SBP Section 17.0 “Proprietary Information and Materials") of Boeing in the possession, custody or control of Spirit or any of its subcontractors or suppliers and relating solely to the work specified in the Order Termination Notice (to the extent such Proprietary Information and Materials are not required to support obligations that have not been terminated, subject to Spirit’s rights with respect to any such Proprietary Information and Materials as provided in SBP Section 15.2 “Rights and Obligations”;
|
H.
|
Take such other action as in Boeing's reasonable opinion may be necessary, and as Boeing shall direct in writing, to facilitate termination of the Order; and
|
I.
|
If the Order was terminated only in part, continue and complete performance of the work under the portion of the Order not terminated.
|
A.
|
If Boeing terminates an Order in whole or in part pursuant to GTA Section 7.1 “Basis for Termination Notice”, Spirit shall have the right to submit a written termination claim to Boeing in accordance with the terms of this GTA Section 7.3. A preliminary estimate of such termination claim shall be asserted to Boeing within forty-five (45) days after Spirit’s receipt of the applicable Order Termination Notice, and a final termination claim and all documentation supporting said claim must be provided to Boeing not later than six (6) months after the later of (i) Spirit's receipt of the applicable Order Termination Notice or (ii) completion of all actions required under GTA Section 7.2 “Termination Instructions” (other than Section 7.2.F), and shall be in the form prescribed by Boeing. Such claim shall contain sufficient detail to explain the amount claimed, including detailed inventory schedules and a detailed breakdown of all costs claimed separated into categories (e.g., materials, purchased parts, finished components, labor, burden, general and administrative), and to explain the basis for allocation of all other costs. Except as provided in GTA Section 7.3.E below, in no event shall claims for any Nonrecurring Work or profit be considered or paid by Boeing to Spirit
.
|
B.
|
Subject to paragraph (A) of this clause, Spirit shall be entitled to compensation for any termination claim with respect to any Order as provided in this paragraph (B) and in paragraph (C) of this clause. Spirit and Boeing may agree upon the whole or any part of the amount to be paid or remaining to be paid because of the termination. The agreed amount, whether under this paragraph (B) or paragraph (C) of this clause, exclusive of costs shown in paragraph (D) of this clause, may not exceed the total price of any Order terminated as reduced by (1) the amount of payments previously made with respect to the Order and (2) the price of any portion of the Order not terminated (for partial termination). and (3) the portion of the contract price reasonably attributable to Spirit’s Nonrecurring Work for that portion of the Order terminated.
|
C.
|
If Spirit and Boeing fail to agree on the whole amount to be paid because of the termination of any Order, Boeing shall pay Spirit the amounts determined by Boeing as follows, but without duplication of any amounts agreed on under paragraph (B) of this clause:
|
(1)
|
The contract price for completed supplies or services accepted by Boeing not previously paid for, adjusted for any saving of freight and other charges.
|
(2)
|
The total of:
|
(i)
|
The costs incurred in the performance of the work terminated, but excluding any costs attributable to supplies or services paid or to be paid
by Boeing;
and
|
(ii)
|
The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the Order
|
(3)
|
The reasonable costs of settlement of the Order terminated, including-
|
(i)
|
Accounting, legal, clerical, and other expenses reasonably necessary for the preparation of termination settlement proposals and supporting data;
|
(ii)
|
Costs associated with the termination and settlement of subcontracts (excluding the amounts of such settlements); and
|
(iii)
|
Storage, transportation, and other costs incurred, reasonably necessary for the preservation, protection, or disposition of (a) the termination inventory and (b) any items transferred and delivered to Boeing or Boeing’s designee pursuant to GTA Section 7.2.E.
|
D.
|
Spirit shall indemnify Boeing and hold Boeing harmless from and against (i) any and all claims, suits and proceedings against Boeing by any subcontractor or supplier of Spirit in respect of any such termination and (ii) all reasonable costs and expenses incurred by Boeing in connection with the defense or settlement of any such claim, suit or proceeding. If Boeing is threatened in writing with any such claim, suit or proceeding, or if any such claim, suit or proceeding is formally commenced against Boeing, which may give rise to a right of indemnification under this GTA Section 7.3, Boeing shall promptly give written notice thereof to Spirit. Spirit may, by delivery of written notice to Boeing within thirty (30) days following its receipt of any such notice from Boeing, elect to contest such claim in such manner as it deems necessary or advisable. If Spirit does not elect to contest any claim, Boeing shall have the exclusive right, but not the obligation, to prosecute, defend, settle or pay such claim, at Spirit's sole expense, provided that such prosecution, defense, settlement or payment is on reasonable terms and at a reasonable cost.
|
E.
|
Notwithstanding anything to the contrary in this GTA Section 7.3, in the event of the termination of a Spare Part Order and only in such event, Spirit’s termination claim for any terminated Spare Part Order will be allowed to include an amount attributable to the specific Nonrecurring Work associated with such terminated Spare Part Order and such amount will not be deducted under GTA Section 7.3.B (3).
|
A.
|
All unliquidated advances or other payments made by Boeing to Spirit pursuant to the terminated portion of any Order (The Parties acknowledge and agree that the total of [*****] in Advance Payments to be made the first and second quarter of 2006 ([*****] on February 15, 2006 and [*****] on May 15, 2006) as noted in SBP, Section 5.5, Advance Payments, is not subject to this exclusion or deduction herein.);
|
B.
|
Any loss incurred by Boeing with respect to Spirit, reasonably substantiated in good faith, in connection with any commercial airplane program;
|
C.
|
The agreed price for scrap allowance; and
|
D.
|
Except for normal spoilage and any risk of loss assumed by Boeing, the agreed fair value of property that is lost, destroyed, stolen or damaged.
|
A.
|
Subject to GTA Section 10.0 “Delays”, any failure by Spirit to deliver, when and as required by this Agreement, the SBP or any Order, any Product; or
|
B.
|
Spirit knowingly, willfully, or with gross negligence fails to perform or comply with any material obligation set forth in SBP Section 17.0 “Proprietary Information and Materials”; or
|
C.
|
Spirit knowingly, willfully, or with gross negligence has participated in the sale, purchase or manufacture of airplane parts without the required approval of the FAA or appropriate non-U.S. equivalent regulatory agency; or
|
D.
|
Boeing reasonably revokes and has not reinstated its determination that Spirit is in compliance to quality management system requirements per Attachment 10, Section A10.2 AS/EN/JISQ 9100 Certification/Registration.
|
E.
|
Any failure by Spirit to perform or comply with any obligation (other than as described in GTA Sections 8.1.A, 8.1.B, 8.1.C, 8.1.D, 8.2.F, 8.2.G, and 8.2.H) set forth in this Agreement, the SBP or any Order and such failure shall continue unremedied for a period of fifteen (15) days or more following receipt by Spirit of written notice from Boeing specifying such failure; or
|
F.
|
(a) the suspension, dissolution or winding-up of Boeing’s or Spirit's business, (b) Boeing’s or Spirit's inability to pay debts, or its nonpayment of debts, generally as they become due, (c) the institution of reorganization, liquidation or other such proceedings by or against Boeing or Spirit or the appointment of a custodian, trustee, receiver or similar Person for any such company's properties or business, (d) an assignment by Boeing or Spirit for the benefit of its creditors, or (e) any action of Boeing or Spirit for the purpose of effecting or facilitating any of the foregoing; or
|
G.
|
Any material failure by Spirit to comply with GTA 15.1 “Compliance with Laws” and GTA 15.2 “Import/Export”,
|
H.
|
Any failure by Spirit to comply with GTA
20.4
“Assignment”
.
|
A.
|
Cancellation
|
1.
|
For any Event of Default specified in Sections 8.1.A and 8.1.E that has a material operational or financial impact on Boeing, Boeing may, by giving written notice (“Order Cancellation Notice”) to Spirit, immediately cancel any Order for Products other than Production Articles, in whole or in part,
and Boeing shall not be required after delivery of such Order Cancellation Notice to accept the tender by Spirit of any Products subject to such cancellation.
|
2.
|
For any Event of Default specified in Sections 8.1.A and 8.1.E Boeing may, by giving written notice (“Recovery Plan Notice”) to Spirit, give notice of its intent to cancel any Order for Products (including Production Articles), this Agreement or the SBP, in whole or in part, after: (a) repeated Events of Default under Section 8.1.A or 8.1.E, as applicable, occurring within the [*****] prior to the date of such Recovery Plan Notice that have material operational or financial impact on Boeing; and (b) failure by Boeing and Spirit to reach an agreement in good faith on a recovery plan within [*****] days after Spirit’s receipt of such Recovery Plan Notice. Such recovery plan shall reasonably satisfy Boeing that Spirit is able to support Boeing requirements for Products in the amounts and within the delivery schedules Boeing reasonably requires. At the end of such [*****] day period, absent such agreement, if Boeing reasonably determines the Parties are unlikely to reach a mutually agreeable recovery plan, Boeing may, by giving written notice (“Cancellation Notice”) to Spirit, immediately
|
3.
|
For any Events of Default specified in Sections 8.1.B, 8.1.C, 8.1.D, 8.1.F
,
8.1.G and 8.1. H Boeing may, by giving a Recovery Plan Notice to Spirit, give notice of its intent to cancel any Order, this Agreement or the SBP, in whole or in part, after failure by Boeing and Spirit to reach an agreement in good faith on a recovery plan within [*****] days after Spirit’s receipt of such Recovery Plan Notice. Such recovery plan shall reasonably satisfy Boeing that Spirit is able to remedy the Event of Default or the circumstances that gave rise thereto so that Spirit will be able to comply with its contractual obligations. At the end of such [*****] day period, absent such agreement, if Boeing reasonably determines the Parties are unlikely to reach a mutually agreeable recovery plan, Boeing may, by giving a Cancellation Notice to Spirit, immediately cancel any Order, including but not limited to Orders for Production Articles, this Agreement or the SBP, in whole or in part, and Boeing shall not be required after delivery of such Cancellation Notice to accept the tender by Spirit of any Products subject to such cancellation.
|
B.
|
Cover
|
C.
|
Rework or Repair
|
D.
|
Reserved
|
E.
|
Reserved
|
F.
|
Tooling and Other Materials
|
8.3
|
Spirit Remedies
|
A.
|
Remedies Generally
|
B.
|
Setoff
|
A.
|
If delivery of any Product is delayed by unforeseeable circumstances beyond the control and without the fault or negligence of Spirit or of its suppliers or subcontractors (any such delay being hereinafter referred to as "Excusable Delay"), the delivery date of such Product shall be extended for a period to be determined by Boeing after an assessment by Boeing and Spirit of alternative work methods and consultation by Boeing with Spirit as appropriate. Excusable Delays may include, but are not limited to, acts of God, war, terrorist acts, riots, acts of government, fires, floods, earthquakes, epidemics, quarantine restrictions, freight embargoes, strikes or unusually severe weather, but shall exclude Spirit's noncompliance with any legal requirement as required by GTA Section 15.1 “Compliance with Laws”. However, the above notwithstanding, Boeing expects Spirit to use its best commercially reasonable efforts to continue production, recover lost time and support all schedules as established under this Agreement or any Order. Therefore, it is understood and agreed that (i) delays in delivery of any Product of less than [*****] days duration shall not be considered to be Excusable Delays unless such delays shall occur within [*****] days preceding the scheduled delivery date of any Product and (ii) if delay in delivery of any Product is caused by the default of any of Spirit's subcontractors or suppliers, such delay shall not be considered an Excusable Delay unless the supplies or services to be provided by such subcontractor or supplier are not obtainable from other sources in sufficient time to permit Spirit to meet the applicable delivery schedules.
|
B.
|
[Reserved].
|
C.
|
If an Excusable Delay lasts more than three (3) months and Boeing cancels this Agreement and the SBP or any Order, in whole or in part, Boeing may exercise its rights and remedies of cover in respect of such Products in accordance with GTA Section 8.2.B. However, subsequent to any such cancellation of this Agreement and the SBP or any Order, in whole or in part, Spirit shall, upon the written request of Boeing, transfer title to any or all of the items described in GTA Section 8.2.F.1 “Tooling and Other Materials” and deliver such items to Boeing or its designee in a manner to be mutually agreed by the Parties. Spirit shall be entitled to reasonable compensation for (i) any such Tooling transferred to Boeing or its designee pursuant to the preceding sentence, including Transportation Devices, less that portion of Shipset Prices for delivered Shipsets which may be reasonably attributable to Spirit’s recovery of such Tooling accepted by Boeing; and (ii) raw materials, parts, work-in-process, incomplete or completed assemblies in the possession or under the effective control of Spirit or any of its subcontractors or suppliers that are transferred and delivered to Boeing or its designee. Transportation costs for items transferred shall be at Boeing’s expense.
|
D.
|
No delay in performance by Spirit due to an Excusable Delay shall constitute an Event of Default or be construed in any way as a default by Spirit under this Agreement, the SBP or any Order.
|
A.
|
Spirit to Provide Assurance
|
B.
|
Meetings
|
(a)
|
In performing their respective obligations under this Agreement and the SBP, both Parties will comply with United States export control and sanctions laws, regulations, and orders, as they may be amended from time to time, applicable to the export and re-export of goods, software, technology, or technical data (“Items”) or services, including without limitation the Export Administration Regulations (“EAR”), International Traffic in Arms Regulations (“ITAR”), and regulations and orders administered by the Treasury Department’s Office of Foreign Assets Control (collectively, “Export Control Laws”).
|
(b)
|
The Party conducting the export shall be responsible for obtaining the required authorizations. The Party conducting the re-export shall be responsible for obtaining the required authorizations. Each Party shall reasonably cooperate with, and exercise reasonable efforts to support, the other Party in obtaining any necessary licenses or authorizations required to perform its obligations under this Agreement and the SBP.
|
(c)
|
The Party providing any Items under this Agreement or the SBP shall, upon written request of the other Party, notify the other Party of the Items’ Export Control Classification Numbers (“ECCNs”) as well as the ECCNs of any components or parts thereof if they are different from the ECCN of the Item at issue. If requested by Spirit, Boeing will consider providing assistance to enable Spirit to comply with the requirements of this paragraph.
|
(d)
|
Each Party represents that (i) the Items, and the parts and components thereof, it is providing under this Agreement and the SBP are not “defense articles” as that term is defined in 22 C.F.R. § 120.6 of the ITAR and (ii) the services it is providing under this Agreement and the SBP are not “defense services” as that term is defined in 22 C.F.R. § 120.9 of the ITAR. The Parties acknowledge that this representation means that an official capable of binding the Party providing such Items knows or has otherwise determined that such Items, and the parts and components thereof, are not on the ITAR’s Munitions List at 22 C.F.R. §121.1. Each Party agrees to reasonably cooperate with the other in providing, upon written request of the other Party, documentation or other information that supports or confirms this representation.
|
(e)
|
To the extent that such Items, or any parts or components thereof, were specifically designed or modified for a military end use or end user, the Party providing such Items shall notify the other Party of this fact and shall also provide the other Party with written confirmation from the United States Department of State that such Items, and all such parts or components thereof, are not subject to the jurisdiction of the ITAR.
|
15.3
|
Government Requirements
|
FAR 52.222-35
|
"Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era”
|
FAR 52.247-64
|
“Preference for Privately Owned U.S.-Flagged Commercial Vessels”
|
(i)
|
a Person, a principal business of which is as an original equipment manufacturer of commercial aircraft, defense systems, satellites, space launch vehicles or space vehicles;
|
(ii)
|
a Person that Boeing reasonably believes is unable to perform this Agreement, for reasons, including but not limited to, financial viability, export and import laws, and demonstrated past performance failures;
|
(iii)
|
a Person, that after giving effect to the transaction , would be the supplier of more than forty percent (40%) by value of the major structural components of any model of Boeing aircraft then in production, unless it is mutually agreed that significant identifiable benefits will accrue to Boeing as a result of the transaction; or;
|
(iv)
|
a Person who is one of the following companies or a parent, subsidiary or affiliate of one of the following companies: Lufthansa Technique; Israeli Aircraft Industries; HAECO; PEMCO Aeroplex, EADS/Airbus, or who is an airline or an operator of commercial aircraft in revenue service or a parent, subsidiary or affiliate of an airline or an operator of commercial aircraft in revenue service..
|
28.0
|
AMENDMENTS
|
BOEING
|
Spirit AeroSystems, Inc.
|
|
|
THE BOEING COMPANY
|
Spirit
AeroSystems, Inc.
|
Acting By and Through
|
|
Boeing Commercial Airplanes
|
|
|
|
/s/ Randall L. Parks
|
/s/ M. J. Kurimsky
|
Name: Randall L. Parks
|
Name: M. J. Kurimsky
|
Title: Procurement Manager
|
Title: Contracts Manager
|
Date: May 12, 2011
|
Date: May 12, 2011
|
1.0
|
DEFINITIONS
|
1
|
2.0
|
CONTRACT FORMATION
|
7
|
2.1
|
Order
|
7
|
2.2
|
Entire Agreement
|
7
|
2.3
|
Incorporated by Reference
|
7
|
2.4
|
Supporting Documentation
|
7
|
2.4.1
|
Supporting Documentation and Priority
|
7
|
2.4.2
|
Revision of Documents
|
8
|
2.4.3
|
Compliance
|
9
|
2.5
|
Administrative Authority and Agreement
|
9
|
2.5.1
|
Administrative Authority
|
9
|
2.5.2
|
Administrative Agreement
|
9
|
2.6
|
Written Authorization to Proceed
|
9
|
2.7
|
Order of Precedence
|
10
|
2.8.
|
Certain Remedies
|
10
|
3.0
|
SUBJECT MATTER OF SALE
|
11
|
3.1
|
Obligation to Purchase and Sell
|
11
|
3.1.1
|
Obligation to Purchase and Sell
|
11
|
3.1.2
|
Support of Delivery Schedule
|
11
|
3.1.3
|
Standard Parts and Multiple Source Parts
|
11
|
3.1.4
|
Period of Performance and Support
|
12
|
3.2
|
Subject Matter of Sale
|
12
|
3.2.1
|
Production Rates
|
12
|
3.3
|
Nonrecurring Work
|
13
|
3.3.1
|
Engineering Services
|
13
|
3.3.2
|
Product Development and Testing
|
13
|
3.3.2.1
|
Product Development and Test Activities
|
13
|
3.3.2.2
|
Static and Fatigue Test Articles
|
13
|
3.3.2.3
|
Second Fatigue Unit
|
13
|
3.3.3
|
Certification Support
|
15
|
3.3.4
|
Tooling
|
15
|
3.3.4.1
|
Tooling - General
|
15
|
3.3.4.2
|
Title to Tooling
|
15
|
3.3.4.3
|
Responsible Party
|
15
|
3.3.4.4
|
Common-Use Tooling
|
15
|
3.3.4.5
|
Use of Casting, Forging and Extrusion Tooling
|
16
|
3.3.4.6
|
Initial Planning
|
16
|
3.3.4.7
|
Accountability for Tooling
|
16
|
|
|
|
|
-i-
|
|
25.1.4
|
Workers’ Compensation
|
71
|
25.1.5
|
Certificates of Insurance
|
72
|
25.1.6
|
Self-Assumption
|
72
|
25.1.7
|
Protection of Property By Spirit
|
72
|
25.1.8
|
Compliance with Boeing Site Requirements
|
73
|
25.2
|
Obligations of Boeing
|
73
|
25.2.1
|
Indemnification for Negligence of Boeing or Subcontractor
|
73
|
25.2.2
|
Protection of Property By Boeing
|
73
|
26.0
|
PROPERTY INSURANCE
|
73
|
26.1
|
Insurance
|
73
|
26.2
|
Self Insurance
|
74
|
26.3
|
Certificate of Insurance
|
74
|
26.4
|
Notice of Damage or Loss
|
74
|
27.0
|
CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM (C-TPAT)
|
75
|
28.0
|
NON-WAIVER/PARTIAL INVALIDITY
|
75
|
29.0
|
HEADINGS
|
75
|
30.0
|
CUSTOMER CONTACT
|
76
|
31.0
|
APPLICABLE LAW
|
76
|
32.0
|
SURVIVAL
|
76
|
33.0
|
INVENTORY AT CONTRACT COMPLETION
|
77
|
34.0
|
DISPOSITION OF TOOLING
|
77
|
35.0
|
COUNTERPARTS
|
77
|
36.0
|
AMENDMENTS
|
77
|
37.0
|
RESTRICTIONS ON LOBBYING
|
78
|
37.1
|
Applicability
|
78
|
37.2
|
Certification
|
78
|
37.3
|
Flow Down
|
78
|
Attachment 1
|
Work Statement and Pricing
|
Attachment 2
|
Production Article Definition and Contract Change Notices
|
Attachment 3
|
Price Status and Summary Tables
|
Attachment 4
|
Work Statement Documents
|
Attachment 5
|
Boeing AOG Coverage
|
Attachment 6
|
Boeing AOG Shipping Notification
|
Attachment 7
|
Priced Parts List and Spares Pricing
|
Attachment 8
|
Spirit Data Submittals
|
Attachment 9
|
On-Site Terms and Conditions Supplement
|
Attachment 10
|
Quality Assurance Requirements
|
Attachment 11
|
Second Tier Report
|
Attachment 12
|
Non-U.S. Procurement Report Form
|
Attachment 13
|
[Reserved]
|
Attachment 14
|
Production Article Delivery Schedule
|
Attachment 15
|
Schedule Change Examples
|
Attachment 16
|
Pricing Methodologies
|
Attachment 17
|
Commercial Invoice Requirements (Customs Invoice) For Imports into the United States
|
Attachment 18
|
Abnormal Escalation
|
Attachment 19
|
[Reserved]
|
Attachment 20
|
Bonded Stores Requirements
|
Attachment 21
|
Boeing Furnished Material and Inventory Reporting Form
|
Attachment 22
|
Compliance and Cooperation regarding orders, Permits and Approvals
|
Attachment 23
|
Derivatives and Mission Improvement Performance to Plan
|
Attachment 24
|
Anti-Lobbying Certificate
|
Attachment 25
|
Incentive Payment
|
Attachment 26
|
Total Cost Management
|
Attachment 27
|
Risk Sharing
|
Attachment 28
|
Business Case for Rates Greater Than [*****] Shipsets Per Month
|
Attachment 29
|
Incentive Payment for Quality
|
Number
1
2
3
4
5
6
7
8
9
|
Description
Provisions for addition of second Fatigue Unit
Provisions for COPB5
Revised Payment Terms and Settlement of Claims
A10.3.1 Relocation/Subcontract Notification
D&MI Agreement
Changed all references of Mid-Western Aircraft Systems Inc. to Spirit AeroSystems Inc.
Added additional Section 1.0: definitions
Amended SBP 5.5 in its entirety
Amended SBP 7.1 in its entirety
Added the D&MI One Plan Documents to SBP Attachment 4 table of documents
Added SBP Attachment 23
D&MI Advance Payment for S-41 Pre-Amendment 5 D&MI Nonrecurring Work
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
Restrictions on Lobbying
Added Section 37 to the contract
Pylon Firm Configuration Price Adjustment
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
D&MI Wing/Pylon Retro Proposal Phase I Advanced Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
|
Date
09/18/06
10/23/06
03/26/08
03/11/08
06/23/09
07/21/09
09/15/09
11/4/09
11/12/09
|
Approval
K. O’Brien
M. Kurimsky
T. Pierson
M. Kurimsky
R. Parks
L. McCutchen
J. Loomis
M. Kurimsky
R. Parks
M. Kurimsky
R. Parks
M. Kurimsky
Mario Guillen
W. Davis
Mario Guillen
Alex Webb
Jeff Loomis /
Mike Kurimsky
|
Number
10
11
12
13
14
15
16
|
Description
Quarterly Certified Inventory Reporting Form
1. Amended SBP Attachment 21 in its
entirety
D&MI 3Q09 Advance Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
Amended SBP Attachment 4 in its entirety
D&MI 4Q09 Advance Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
D&MI 1Q10 Advance Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
D&MI 2Q10 Advance Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
D&MI 3Q10 Advance Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
D&MI 4Q10 Advance Payment
Amended SBP 5.5 in its entirety
Amended SBP Attachment 1 in its entirety
Amended SBP Attachment 2 in its entirety
Amended SBP Attachment 3 in its entirety
|
Date
11/20/09
11/13/09
2/11/10
5/26/10
9/30/10
11/12/10
2/28/11
|
Approval
Peter Yi
Calleen Green
Jeff Loomis / Mike Kurimsky
Jeff Loomis /
Wade Davis
Jeff Loomis / Wade Davis
Mario Guillen
Wade Davis
Mario Guillen
Wade Davis
Mario Guillen
Wade Davis
|
Number
17
18
19
|
Description
MOA Dated 12-21-10 (Blockpoint 20 Settlement)
Amended or added: SBP Table of Contents, Sections 1.0, 3.1.1, 3.2.1, 3.3.1, 3.3.2.2, 3.3.4.3 and 3.3.4.8, 3.3.7, 3.3.7.1, 3.3.7.2, 3.3.7.3, 3.4.2.1, 3.4.5, 4.1.1, 4.1.3, 4.2, 4.3.1, 4.3.1.1, 4.4, 4.7, 4.8, 4.9, 4.10, 5.5, 5.6, 5.7, 5.8, 5.8.1, 5.8.2, 6.1, 6.2, 6.3, 7.1, 7.2, 7.2.1, 7.2.2, 7.2.3, 7.5, 7.5.1, 7.5.2, 7.8, 7.8.1, 7.8.2, 11.2
Deleted SBP Sections 3.3.2.3.I, 3.4.2.3, 7.9, 7.10
Amended or added SBP Attachments 1, 2, 3, 4, 7, 14, 16, 23, 25, 26, 27, 28
Deleted SBP Attachments 13 and 19
Throughout SBP, various references to: “SBP Attachment 7 Indentured Parts Price List and Spare Parts Pricing” are revised to “the SPPC”.
D&MI One Plan Update
Updated SBP Attachments 1, 3, 23, 25
Amended: SBP Section 7.4 per Amendment 3
D&MI One Plan Update
Updated SBP Attachments 1, 2, 3, 16, 23, 25
|
Date
5/12/11
8/24/11
8/20/12
|
Approval
R. Parks
M. Kurimsky
M. Guillen
M. Kurimsky
A. Mauldin
C. Cotner
|
1.0
|
DEFINITIONS
|
A.
|
“Administrative Agreement” shall have the meaning set forth in SBP Section 2.3 “Incorporated by Reference”.
|
B.
|
“Basic Factory Labor” means hours associated with direct charge touch labor effort.
|
C.
|
"Block Point" means a single Airplane line number where multiple changes are planned for simultaneous incorporation.
|
D.
|
“Boeing Furnished Material” shall have the meaning set forth in SBP Section 12.8.1 “Boeing Furnished Material; Bonded Stores Requirements”.
|
E.
|
“Boeing-Use Tooling” means certain gauge and interface Tooling (not including Boeing master gauges) manufactured by Spirit in accordance with designs provided by Boeing, to be used exclusively by Boeing.
|
F.
|
“Common-Use Tooling” means all Contractor-Use Tooling that enters into a Boeing facility or Boeing designated destination and that is required for use by Boeing and Spirit, and, if applicable, a Third Party.
|
G.
|
“Contract Change Notice” or “CCN” means any written notice sent by Boeing to Spirit describing any change to the general scope of this SBP pursuant to SBP Section 6.0 “Changes” and authorizing Spirit to proceed with the performance of work hereunder in accordance with such change description.
|
H.
|
“Contractor-Use Tooling” (also sometimes referred to as “Spirit-Use Tooling”) means all Tooling needed to manufacture and deliver Products (including, but not limited to, Supplier-Use Tools, Common-Use Tools, Mechanical Handling Equipment, Rotating Tools, Shipping Equipment, Interface Control Tools and Interface Production Tools as defined in Boeing Document D33200).
|
I.
|
“Cost Estimating Relationship” or “CER” means a mathematical expression of varying degrees of complexity expressing cost as a function of one or more variables. The relationship may utilize cost-to-cost variables, such as quality assurance hours to manufacturing hours, cost-to-non-cost variables, such as engineering hours to the number of engineering drawings, or non-cost to non-cost, such as pounds of thrust to weight. Variables can be referred to as, numerator and denominator, dependent and independent, or pool and base.
|
J.
|
“Cycle Time” means the period of time that elapses between the dates the Program executes a Customer implementation directive for a Program Airplane or Derivative and delivery of such Program Airplane or Derivative to such Customer
|
K.
|
"Derivatives and Mission Improvement", "D&MI" or “D/MI” means certain Nonrecurring Work for the 787-9 Derivative and/or 787-8 Mission Improvement, as described in SBP Section 3.3.7.
|
L.
|
“D&MI NR Value” means the agreed value of D&MI Nonrecurring Work as determined pursuant to the Performance to Plan process and modified pursuant to Attachment 23, Section II.B from time to time.
|
M.
|
“D&MI SOW” means the statement of work for Derivatives and Mission Improvement program activities.
|
N.
|
“Dataset” means any compilation of data or information (including, without limitation, numerical data, geometric definitions, program instructions or coded information) which may be used directly in, integrated with or applied to a computer program for further processing. A Dataset may be a composite of two or more other Datasets or an extract of a larger Dataset.
|
O.
|
“Documents” shall have the meaning set forth in SBP Section 2.4.1 “Supporting Documentation and Priority”.
|
P.
|
“Drawing” means a computer-based or manual depiction of graphics or technical information representing a Product or any part thereof and which includes the parts list and specifications relating thereto.
|
Q.
|
“End Item Assembly” means any Product which is described by a single part number and which is comprised of more than one component part.
|
R.
|
“Engineering Release” means engineering Drawings, Datasets or other Documents, that define the design requirements of any Product.
|
S.
|
"Incentive Payment" means funds provided by Boeing to Spirit as a performance incentive tied to key schedule, cost/price, technical performance, and risk management elements of Derivatives and Mission Improvement (D&MI).
|
T.
|
“LCF” means Large Cargo Freighter, a modified 747.
|
U.
|
“Life Cycle Product Team” or “LCPT”, “Integrated Product Team” or “IPT” or “Design Build Team” or “DBT” means a team composed of representatives from engineering, operations, procurement, finance, design-to-cost and other disciplines as Boeing and Spirit shall specify whose objective is to optimize designs for cost, weight, performance and producibility.
|
V.
|
“Manufacturing Work Package” or “Work Package” means manufacturing effort that Spirit will provide under this SBP.
|
W.
|
"Mission Improvement" or "MI" means a set of activities identified by the Parties and authorized by Boeing as Mission Improvement that are intended to improve the performance of the 787-8 Aircraft. Boeing’s initial MI plan includes efforts to both increase the Maximum Take-off Weight (MTOW) of the 787-8 Aircraft and reduce the Manufacturers’ Empty Weight (MEW) of the 787-8 Aircraft. The first incorporation point for MI changes is Block Point 20, which is Aircraft 20.
|
X.
|
"MI Block Point" means a single Airplane line number where multiple MI changes are planned for simultaneous incorporation.
|
Y.
|
“Miscellaneous Work” is Spirit performed work or services in connection with the Program not reflected in the Nonrecurring Work component of the pricing set forth in Attachment 1 and includes, but is not limited to,
|
Z.
|
“Nonconformance EPD” means nonconformance Emergent Process Document which is the documentation of a nonconforming product in Boeing’s quality systems.
|
AA.
|
“Nonrecurring Work” is Spirit performed work other than Recurring Work or Spares and Miscellaneous Work, which may include, but is not limited to, Product Definition, product development, Tooling, other tooling produced or utilized by Spirit in performance of this SBP, the Agreement or any Order, static and fatigue test articles, Transportation Devices and planning.
|
AB.
|
“Obsolescence” means the discontinuation of the requirement for any Product as a result of engineering or manufacturing change, which has rendered such Product no longer usable in the production of the Program Airplane or any Derivative.
|
AC.
|
"One Plan Document" means mutually agreed detailed planning documents containing the configuration D&MI SOW, detailed activities, work share agreements, integrated schedule, Spirit resource plans and other non-labor items (such as sub-contracted tooling) necessary to support the Nonrecurring Work for Derivatives and Mission Improvement statement of work.
|
AD.
|
"Other D&MI Nonrecurring Work" shall have the meaning set forth in SBP Section 3.3.7.3 "Other D&MI Nonrecurring Work”.
|
AE.
|
"Performance Based Advance Payments" means those D&MI advance payments subject to completion of specific events or performance criteria as provided in SBP Section 5.8 and further described in SBP Attachment 23.
|
AF.
|
"Performance Based Payments" means those D&MI payments subject to completion of specific events or performance criteria as provided in SBP Section 5.5 and further described in SBP Attachment 23.
|
AG.
|
"Performance to Plan" or "PtP" shall have the meaning set forth in SBP Section 3.3.7.1 "Performance to Plan".
|
AH.
|
“Price” means the amount to be paid by Boeing to Spirit for any Product in accordance with the terms of this SBP.
|
AI.
|
“Product Definition” means all of Spirit’s design and manufacturing deliverables (excluding Production Articles), including but not limited to layouts, datasets, stress notes and manufacturing plans required to design, build, test, certify, deliver and support the Products.
|
AJ.
|
“Product Support” and “Product Assurance” shall have the meaning set forth in the PSAD.
|
AK.
|
“Production Life” means, in the case of any Aircraft, the period of time, commencing as of the date hereof, during which (a) Boeing (or its assignees or successors in interest) plans, designs or prepares to produce, or is actually producing, such Aircraft or (b) Boeing (or any such assignee or successor) offers such Aircraft for sale.
|
AL.
|
“Program Level Tasks” means certain additional tasks to be mutually defined and agreed as provided in SBP Section 3.6.3 “Program Level Tasks”.
|
AM.
|
“Program Life” means the period of time, commencing as of the date hereof and continuing through the Production Life of all Aircraft and through such additional time during which Boeing (or its assignees or successors in interest) provides support to operators or users of any Aircraft.
|
AN.
|
“PSAD” means Boeing Document D6-83069-MidWestern Rev.A, “Product Support and Assurance Document for Major Structures for 787 Aircraft,” as amended from time to time in accordance with this SBP.
|
AO.
|
“Recurring Work” means sustaining Product Definition and work Spirit performs in producing Production Articles. The cost of Recurring Work can include, but is not limited to, design, tool maintenance, replacement, and storage, packaging, disposable shipping fixtures and maintenance of production planning.
|
AP.
|
"Research and Development" or "R&D" shall have the meaning set forth in SBP Section 3.3.7.2, "Research and Development".
|
AQ.
|
“Resource Plan” means a committed plan for the resources that will be used to accomplish the D&MI statement of work, including the necessary skill levels.
|
AR.
|
“SCD Products” means all goods, including components and parts thereof, designed to a Boeing Specification Control Drawing by Spirit or its subcontractors or suppliers, and provided or manufactured under this SBP.
|
AS.
|
“SCD Spare Parts” means Spare Parts that are also SCD Products.
|
AT.
|
“Shipset Price” means the Price to be paid for each Shipset.
|
AU.
|
“Spare Parts” or “Spares” means Production Articles or components thereof, and materials, assemblies and items of equipment relating thereto, which are intended for Boeing’s use or sale as spare parts or production replacements. The term “Spare Parts” includes, but is not limited to, Boeing Proprietary Spare Parts (as defined in SBP Section 3.5.1 “Certain Definitions”).
|
AV.
|
“Spare Parts Price Catalog” or “SPPC” means Spirit’s prices and lead times for Spare Parts.
|
AW.
|
“Spirit Personnel” means personnel employed by, or performing on behalf of, Spirit.
|
AX.
|
“Spirit Tag” means Spirit’s documentation, associated with a specific Shipset, of a nonconforming product in Spirit’s quality systems.
|
AY.
|
“Third Party” means any Person other than the Parties and their respective divisions, affiliates and subsidiaries.
|
AZ.
|
“Transportation Devices” shall have the meaning set forth in SBP Section 12.1.12 “Transportation Devices”.
|
BA.
|
“Type Certification” means the issuance of the Program Airplane type certificate per CFR (Code of Federal Regulations) Part 21. The type design approves designs on paper.
|
BB.
|
“Work Share Agreement” means an agreement between the Parties that defines the detailed D&MI Nonrecurring Work tasks to be accomplished by each Party.
|
2.0
|
CONTRACT FORMATION
|
2.1
|
Order
|
2.2
|
Entire Agreement
|
2.3
|
Incorporated by Reference
|
2.4
|
Supporting Documentation
|
2.4.1
|
Supporting Documentation and Priority
|
2.4.2
|
Revision of Documents
|
2.4.3
|
Compliance
|
2.5
|
Administrative Authority and Agreement
|
2.5.1
|
Administrative Authority
|
2.5.2
|
Administrative Agreement
|
2.6
|
Written Authorization to Proceed
|
2.7
|
Order of Precedence
|
A.
|
This SBP including Attachments (excluding all documents listed below), then
|
B.
|
The GTA (excluding all documents listed elsewhere in this listing), then
|
C.
|
Orders (excluding all documents listed elsewhere on this listing), then
|
D.
|
Administrative Agreement, then
|
E.
|
All Documents incorporated by reference in SBP Section 2.4 “Supporting Documentation”, then
|
F.
|
Any other Boeing generated exhibits, attachments, forms, flysheets, codes or documents that the Parties agree in writing shall be part of this SBP, then
|
G.
|
Engineering Drawing by Part Number and, if applicable, related Supplier Specification Plan (SSP), whether Boeing or Spirit generated, and lastly
|
H.
|
Any Spirit generated documents that the Parties agree in writing shall be part of this SBP.
|
2.8.
|
Certain Remedies
|
3.0
|
SUBJECT MATTER OF SALE
|
3.1
|
Obligation to Purchase and Sell
|
3.1.1
|
Obligation to Purchase and Sell
|
3.1.2
|
Support of Delivery Schedule
|
3.1.3
|
Standard Parts and Multiple Source Parts
|
3.1.4
|
Period of Performance and Support
|
3.2
|
Subject Matter of Sale
|
3.2.1
|
Production Rates
|
3.3
|
Nonrecurring Work
|
3.3.1
|
Engineering Services
|
3.3.2
|
Product Development and Testing
|
a.
|
Spirit shall provide the 2
nd
Fatigue to Boeing in [*****]
|
b.
|
The Parties will work together to mitigate any risk to the [*****] delivery date.
|
c.
|
Boeing shall issue a Purchase Order to Spirit by [*****]
|
d.
|
The Parties acknowledge that the pricing structure of the 2
nd
Fatigue is unique and sets no precedent for future pricing.
|
e.
|
Boeing and Spirit shall work together to identify cost reduction opportunities in the 2
nd
Fatigue and will negotiate a sharing of any such reductions.
|
f.
|
Boeing shall provide Spirit with OLTs for the production of [*****] production units. Once all fabrication of these [*****] units is complete, Spirit shall return the OLTs to Boeing. Spirit shall provide the date the OLTs are needed, and the production line units they will be used for.
|
g.
|
Boeing shall provide the necessary M&PT support to qualify Spirit’s “North Clean Room” to production standards. Spirit shall provide the schedule for Boeing M&PT support.
|
h.
|
Boeing shall provide the necessary M&PT support to qualify Spirit’s [*****] AFP machine to production standards. Spirit shall provide the schedule for Boeing M&PT support.
|
i.
|
Boeing and Spirit shall work together to release deviations to material specifications with regard to exposure limitations for fiberglass and adhesive. Spirit shall provide the specific needed deviations.
|
j.
|
Boeing shall work with Spirit to ensure PMI hardware supports Spirit need dates. Spirit shall schedule all PMI requirements to meet the [*****] delivery. Spirit shall provide a discrete list of PMI needed to complete the 2
nd
Fatigue, and the dates the PMI is needed. Boeing and Spirit shall work together to mitigate any effects caused by late shipment of PMI.
|
k.
|
Boeing and Spirit mutually recognize that the insertion of this additional Fatigue Unit [*****]. As of the time of this Amendment 1, the resulting [*****] ranges from [*****] to [*****] for a period of [*****]. Boeing and Spirit shall use all best commercially reasonable efforts to mitigate any schedule disruption, and, shall work together to mitigate any further schedule disruption to the production articles resulting from production of the 2nd Fatigue Unit. All efforts utilized shall be documented by the parties.
|
l.
|
[Reserved]
|
m.
|
Boeing shall work with Spirit to ensure Standards (Fasteners, Nuts, Bolts, etc), TMX material (titanium and aluminum), and Toray material supports Spirit need dates. Spirit shall provide a discrete list of these commodities that are needed to complete the 2
nd
Fatigue, and the dates the commodities are needed. Boeing and Spirit shall work together to mitigate any effects caused by late delivery of these commodities.
|
n.
|
To mitigate impacts to Spirit’s schedule, Boeing may complete some of the 2
nd
Fatigue work in its own factory. If Boeing elects to do this, the Parties will negotiate a reduction in the price of the 2
nd
Fatigue.
|
o.
|
Pricing is contained in Attachment 1.
|
p.
|
Documents specific to the Statement of Work for the second 2
nd
Fatigue are listed in Attachment 2.
|
3.3.3
|
Certification Support
|
3.3.4
|
Tooling
|
3.3.5
|
Life Cycle Product Teams
|
3.3.6
|
Weight Management and Reporting
|
3.3.7
|
Derivatives and Mission Improvement
|
3.4
|
Recurring Work
|
3.4.1
|
Production Articles
|
3.4.2
|
Delivery Point and Schedule
|
3.4.3
|
Delivery - Title and Risk of Loss
|
3.4.4
|
Transportation Routing Instructions
|
3.4.5
|
Sustaining Product Definition
|
3.4.6
|
Tooling Maintenance
|
3.4.7
|
Maintenance of Production Planning
|
3.4.8
|
Certification Support
|
3.4.9
|
Systems Integration
|
3.5
|
Spare Parts
|
3.5.1
|
Certain Definitions
|
A.
|
Aircraft on Ground (“AOG”) means the highest Spares priority. Spirit will expend best efforts to provide the earliest possible shipment of any Spare designated AOG by Boeing. Such effort includes but is not limited to working twenty-four (24) hours a day, seven (7) days a week and use of premium transportation. Spirit shall expend best commercially reasonable efforts to specify the delivery date of any such AOG Spare within [*****] hours of receipt of an AOG Spare request, but in no case should Spirit exceed [*****] hours to specify the delivery date.
|
B.
|
“Boeing Proprietary Spare Parts” means all Spare Parts which are manufactured (i) by Boeing, (ii) to Boeing’s detailed design with Boeing’s authorization, or (iii) in whole or in part using Boeing Proprietary Information.
|
C.
|
“Demand Date” means a date provided to Spirit by Boeing when Boeing wants the Product(s) on dock. Except as otherwise provided in this SBP, Spirit will provide a commitment to Boeing no later than [*****] days from notification of Demand Date.
|
D.
|
“Spirit’s Full Lead Time Spare” means a Spare in which the Demand Date is equal to or greater than Spirit’s normal lead time.
|
E.
|
“Initial Provisioning” shall have the meaning set forth in the PSAD.
|
F.
|
“Less Than Spirit’s Full Lead Time Spare (“Expedite”)” means a Spare in which the Demand Date is less than Spirit’s normal lead time and Spirit’s best effort commitment to meet the Demand Date is less than Spirit’s normal lead time.
|
G.
|
Purchased On Assembly (“POA”) - means any detail component needed to replace a component on an End Item Assembly currently in Boeing’s assembly line process. Spirit shall expend best efforts to provide the earliest possible delivery of any Spare designated as POA by Boeing. Such effort includes but is not limited to working twenty-four (24) hours a day, seven (7) days a week and use of premium transportation. Spirit shall expend best commercially reasonable efforts to specify the delivery date of any such POA within [*****] hours of a POA request, but in no case should Spirit exceed [*****] hours to specify the delivery date.
|
H.
|
“In-Production” means those Spare Parts that have been or will be manufactured in a configuration substantially the same as that required for the manufacture of any Production Article in production or offered to Customers by Boeing at the time such Spare Parts are ordered.
|
I.
|
“Out-of-Production” means those Spare Parts (i) with a configuration that is not substantially the same as the configuration of parts performing a similar function which are being manufactured for any Production Article in production or offered to Customers by Boeing at the time such Spare Parts are ordered or (ii) that require for their manufacture Tooling that is no longer used to manufacture parts for any Production Article.
|
J.
|
“Shelf Stock Spare Part” means a Spares Prone Part that has been ordered [*****] or more times by Boeing within the most recent [*****] month period.
|
K.
|
“Spare Parts Price Catalog” or “SPPC” means Spirit’s prices and lead times for Spare Parts.
|
L.
|
“Spares Prone Part” means a Spare Part that is identified and recommended by Boeing or Spirit in its provisioning data as a part that for the life of an Aircraft can be expected to be replaced during normal aircraft line maintenance or during overhaul of line replaceable units due to failure, wear, deterioration, maintenance, damage, loss, corrosion, vibration or temperature.
|
M.
|
“Special Configuration Spare Parts” means those Spare Parts which require both In-Production and Out-of-Production components for their manufacture or require special manufacturing operations applicable only to such Spare Parts.
|
3.5.2
|
Spare Parts Ordering and Delivery
|
a.
|
Shelf Stock Spare Parts will ship in not more than [*****] calendar days from receipt of an Order or prior to the applicable Demand Date, whichever is later.
|
b.
|
A Spares Prone Part that is not a Shelf Stock Spare Part that is in Spirit’s continuous production at the time of receipt of an Order will ship in not more than [*****] calendar days from receipt of an Order.
|
c.
|
Spare Parts that are not designated as Spares Prone Parts and are in Spirit’s continuous production at the time of receipt of an Order will ship [*****] (including AOG and Expedite) or within the [*****] identified in the SPPC from receipt of an Order, including parts that are unique to a single Customer (e.g., interior color coded parts), unless mutually agreed upon by Boeing and Spirit.
|
d.
|
Notwithstanding paragraph a above, for Spare Parts not in Spirit’s continuous production at the time of receipt of an Order, Spirit will [*****] to meet Boeing’s delivery requirements.
|
a.
|
Provide Boeing integrated solutions for customers’ material management operations and spares support;
|
b.
|
Provide guaranteed service levels to customers’ maintenance operations by Spirit holding and forward deploying inventory as deemed appropriate;
|
c.
|
Reduce inventory and process costs with better service levels to customers;
|
d.
|
Enable supply chain and customers to reduce costs and share benefits.
|
3.5.3
|
Spares Support
|
3.5.4
|
Reclassification
|
3.5.5
|
Sale of Boeing Proprietary Spare Parts
|
3.5.6
|
Initial Provisioning
|
3.6
|
Other Product Support and Miscellaneous Work
|
3.6.1
|
Product Support and Assurance
|
3.6.2
|
Miscellaneous Work
|
3.6.3
|
Program Level Tasks
|
3.6.4
|
Delivery Schedule of Other Products and Performance of Services
|
4.0
|
PRICING
|
4.1
|
Shipset Price
|
4.1.1
|
Nonrecurring Work Recovery
|
4.1.2
|
Abnormal Escalation
|
4.1.3
|
Shipset Price for Shipsets [*****] Through Year End [*****]
|
4.2
|
Derivative Pricing
|
4.3
|
Spare Parts Pricing
|
4.3.1
|
Pricing Methodology for In-Production Spare Parts
|
4.3.2
|
Pricing Methodology for Out-of-Production Spare Parts
|
4.3.3
|
Pricing for Special Configuration Spare Parts
|
4.3.4
|
Spares Pricing Factors
|
4.4
|
Prices for Miscellaneous Work
|
4.5
|
Pricing of Boeing’s Supporting Requirements
|
4.6
|
Pricing of Requirements for Modification or Retrofit
|
4.6.1
|
Boeing Responsibility or Regulatory Requirement
|
4.6.2
|
Contract In-Service Modification or Retrofit Work Performed by Boeing
|
4.7
|
Pricing for Research and Development
|
4.8
|
Pricing for Other D&MI Nonrecurring Work
|
4.9
|
Incentive Payments for D&MI
|
4.10
|
Risk Sharing
|
4.11
|
Incentive Payments for Quality
|
5.0
|
PAYMENT
|
5.1
|
Invoicing
|
5.1.1
|
Invoicing Requirements
|
5.1.2
|
Invoicing Shipset Identification
|
5.1.3
|
Spares and Miscellaneous Work Invoicing
|
5.1.4
|
Summary Invoices
|
5.1.5
|
Mailing Instructions
|
5.2
|
Payment Due Date
|
5.2.1
|
Payment Due Date
|
5.2.2
|
Reserved
|
5.3
|
Payment Method
|
5.4
|
Payment Errors
|
5.5
|
Advance Payments
|
5.6
|
Performance Based Payments for Research and Development
|
5.7
|
Payment of Incentive Payment
|
5.8
|
Performance Based Payments and Performance Based Advance Payments for Other D&MI Nonrecurring Work
|
5.8.1
|
Advance Payments for the Remaining D&MI Balance
|
5.8.2
|
Remaining Balance
|
6.0
|
CHANGES
|
6.1
|
Change Direction
|
6.2
|
Change Compliance
|
6.3
|
Change Pricing
|
7.0
|
CHANGE PROVISIONS
|
7.1
|
General Change Provisions
|
7.2
|
Work Statement Changes Subject to Price Adjustment
|
7.2.1
|
Changes
|
7.2.2
|
Annual Price Adjustments
|
7.2.3
|
Substantial Engineering or Manufacturing Changes
|
7.3
|
Changes Generated by Spirit Affecting Boeing or a Third Party
|
7.4
|
Schedule Acceleration/Deceleration
|
7.5
|
Total Cost Management
|
7.5.1
|
Total Cost Management
|
7.6
|
Price Adjustments to Maintain Price and Performance Competitiveness
|
7.7
|
Obsolescence
|
7.8
|
Price Adjustments and SBP Amendment
|
7.8.1
|
Price Adjustment
|
7.8.2
|
SBP Amendment
|
8.0
|
GOVERNING QUALITY ASSURANCE REQUIREMENTS
|
8.1
|
Quality Assurance Requirements
|
8.2
|
Spirit’s Disclosure and Acceptance
|
8.2.1
|
Spirit’s Disclosure
|
8.2.2
|
Spirit’s Acceptance
|
8.3
|
Boeing’s Inspection and Rejection
|
8.4
|
Rights of Boeing’s Customers and Regulators to Perform Inspections, Surveillance, and Testing
|
8.5
|
Retention of Quality Records
|
8.6
|
Inspection
|
9.0
|
STATUS REPORTS/REVIEWS
|
9.1
|
Notification of Shipment
|
9.2
|
General Reports / Reviews
|
A.
|
Product Definition maturity, schedule and performance updates;
|
B.
|
Delivery schedule updates, written recovery schedules, schedule impact issues and corrective action;
|
C.
|
Technical/manufacturing progress since the previous report period, including significant accomplishments, breakthroughs, problems and solutions;
|
D.
|
Spirit’s current and future capacity assessments, including Identification of changes to key manpower or staffing levels;
|
E.
|
Identification of the critical events/activities and a discussion of potential risk factors;
|
F.
|
Progress on open action items, including closure dates;
|
G.
|
Boeing supplied components, purchased components and raw material status;
|
H.
|
Identification of quality issues and resolutions;
|
I.
|
Manufacturing and quality inspection progress of first article Products;
|
J.
|
Status on Tooling design and fabrication, as applicable, until completion;
|
K.
|
Inventory status of castings and forgings procured by Spirit (if applicable);
|
L.
|
Boeing’s requirements, changes, forecasts and other issues pertinent to Spirit’s performance under this SBP; and
|
M.
|
Sales and marketing status.
|
9.3
|
Problem Reports
|
9.4
|
Notice of Delay - Premium Effort
|
9.5
|
Utilization of Small Business Concerns
|
9.6
|
Diversity Reporting Format
|
10.0
|
BOEING ASSISTANCE AND INTERFACE COORDINATION
|
10.1
|
Boeing Technical / Manufacturing Assistance Regarding Spirit’s Nonperformance
|
10.2
|
[Reserved]
|
10.3
|
Interface Coordination
|
11.0
|
REPAIR AUTHORIZATION
|
11.1
|
Boeing-Performed Work
|
11.2
|
Reimbursement for Repairs
|
12.0
|
OTHER REQUIREMENTS
|
12.1
|
Packing and Shipping
|
12.1.1
|
General
|
12.1.2
|
Product Packaging
|
12.1.3
|
Packaging - Spares
|
12.1.4
|
Shipping Documentation
|
12.1.5
|
Insurance
|
12.1.6
|
Shipping Container Labels
|
12.1.7
|
Carrier Selection
|
12.1.8
|
Invoices
|
12.1.9
|
Noncompliance
|
12.1.10
|
Barcode Marking and Shipping
|
12.1.11
|
Consolidated Shipments and Markings
|
12.1.12
|
Transportation Devices
|
12.1.13
|
Disposable Shipping Fixtures
|
12.1.14
|
Price Inclusive
|
12.2
|
Cycle Time Requirements
|
12.3
|
Compatibility with Engineering, Business and Production Systems
|
12.4
|
Electronic Access, Communications and Data Exchange Via Telecommunications
|
12.5
|
Program Manager
|
12.6
|
Source Selection
|
12.7
|
International Cooperation
|
12.7.1
|
Market Access and Sales Support
|
12.7.2
|
Offset Assistance
|
12.8
|
Supply Chain Integration
|
12.8.1
|
Boeing Furnished Material; Bonded Stores Requirements
|
12.8.2
|
Procurement from Boeing or Its Service Providers
|
12.8.3
|
Third Party Pricing
|
12.8.4
|
Agency
|
12.8.5
|
Acceptance of Assignment, Novation, or Agency for Products within Spirit’s Work Statement
|
12.9
|
Responsibility for Property
|
12.10
|
Surplus Products
|
12.10.1
|
Return of Surplus Products
|
12.10.2
|
Substitution of Surplus Products
|
12.11
|
Compliance and Cooperation Regarding Orders, Permits and Approvals
|
13.0
|
ENVIRONMENTAL MANAGEMENT SYSTEMS AND HEALTH AND SAFETY MANAGEMENT SYSTEMS
|
14.0
|
WARRANTY
|
i.
|
The warranty period will expire upon the earlier of [*****] after delivery of the Aircraft to a Customer or [*****] after delivery of the Product to Boeing. Service life policy for primary structure will be [*****] pro-rata reimbursement after delivery of aircraft.
|
ii.
|
The warranty period will expire [*****] for flight test aircraft after delivery of the Product to Boeing
|
15.0
|
INTELLECTUAL PROPERTY
|
15.1
|
Certain Definitions
|
A.
|
“Proprietary Information” means all proprietary, confidential and/or trade secret information relating to the subject matter of the Aircraft and disclosed by one Party to the other, or developed, during the SBP Activity.
|
B.
|
“Product Proprietary Information” means all Proprietary Information related to the configuration or certification of the Aircraft that is developed or reduced to writing or electronic format (including, but not limited to, all technical data, calculations and manufacturing data sets that disclose explicit Aircraft configuration (expressly excluded from this definition are technical data, calculations, and manufacturing data sets where explicit Aircraft configuration data has been removed or otherwise modified so that such information cannot be used to replicate or disclose explicit Aircraft configuration), engineering design data including assembly requirement models, engineering intent objects, detail part model based definition, digital mock up solids, and bill of material data, analytical data and Boeing developed analytical tools, common architecture documentation, developmental test data, configuration memos and documentation, and coordination memos) for preliminary and final designs, analyses in support thereof and trade studies for configuration and certification.
|
C.
|
“Invention” means subject matter that is or becomes covered by an issued patent anywhere in the world or by any application pending in any patent office anywhere in the world. If and to the extent an
|
D.
|
“Background Proprietary Information” means any Proprietary Information belonging to a Party which was developed prior to or outside of the SBP Activity.
|
E.
|
“Background Invention(s)” means any Invention(s) conceived by a Party prior to or outside of the SBP Activity.
|
F.
|
“Joint SBP Activity Proprietary Information” means any Proprietary Information jointly developed by the Parties, or developed through the use or application of funds provided jointly by the Parties, during the SBP Activity.
|
G.
|
“Joint SBP Activity Invention(s)” means any Invention(s) conceived jointly by the Parties, or conceived through the use or application of funds provided jointly by the Parties, during the SBP Activity.
|
H.
|
“Spirit SBP Activity Proprietary Information” means any Proprietary Information solely developed by Spirit, or developed through the use or application of funds provided solely by Spirit, during the SBP Activity.
|
I.
|
“Spirit SBP Activity Invention(s)” means any Invention(s) solely conceived by Spirit, or conceived through the use or application of funds provided solely by Spirit, during the SBP Activity.
|
J.
|
“Boeing SBP Activity Proprietary Information” means any Proprietary Information developed during the SBP Activity, other than Joint SBP Activity Proprietary Information and Spirit SBP Activity Proprietary Information.
|
K.
|
“Boeing SBP Activity Invention(s)” means any Invention(s) conceived during the SBP Activity, other than Joint SBP Activity Inventions and Spirit SBP Activity Inventions.
|
L.
|
“SBP Activity” means all work conducted pursuant to this SBP, the GTA or any Order. Strictly for purposes of SBP Section 15.0 “Intellectual Property”, SBP Activity also includes “MOA Activity” as defined in 787 Program Memorandum Of Agreement dated , it being the intent of the Parties that the provisions of this Section 15.0 “Intellectual Property” shall retroactively apply to Proprietary Information and Inventions subject to such prior MOA’s.
|
M.
|
“Derivative Technology” means any Proprietary Information or Invention that is developed and brought to the point of practical application solely by either Party during or after the SBP Activity and is derived, in substantial part, (i) from any Background Proprietary Information of the other Party or any Proprietary Information solely developed by the other Party during the SBP Activity, or from any Joint SBP Activity Proprietary Information, and/or (ii) from any Background Invention(s) of the other Party or any Invention(s) solely conceived by the other Party during the SBP Activity, or from any Joint SBP Activity Invention(s).
|
15.2
|
Rights and Obligations
|
15.2.1
|
Product Proprietary Information
|
15.2.2
|
Background Proprietary Information and Inventions
|
a)
|
Each Party shall not disclose the other Party’s Background Proprietary Information to any Third Party without the prior written consent of the other Party, which shall not be unreasonably withheld if such disclosure is in connection with the Program and otherwise may be withheld in the other Party’s sole and absolute discretion. Any disclosure by either Party to any Third Party of the other Party’s Background Proprietary Information also shall be subject to the previous execution by such Third Party of a written agreement (which shall be reasonably satisfactory to, and enforceable by, such other Party) to protect such Background Proprietary Information under terms no less restrictive than those set forth herein.
|
b)
|
Boeing agrees to grant and hereby grants Spirit a royalty free license to use Boeing Background Proprietary Information and/or Boeing Background Inventions for work under the Program.
|
c)
|
Spirit agrees to grant and hereby grants a royalty free license to Boeing and a royalty free license on reasonable terms and conditions to any Third Party to use Spirit Background Proprietary Information or Spirit Background Inventions for work under the Program, subject in each case to Spirit’s Government approval, if required.
|
15.2.3
|
Joint SBP Activity Proprietary Information and Inventions
|
a)
|
Each Party may disclose any Joint SBP Activity Proprietary Information to any Third Party for work under the Program;
provided
that the Third Party shall have entered into a written agreement (which shall be reasonably satisfactory to, and enforceable by, each of Boeing and Spirit) to protect such Joint SBP Activity Proprietary Information under terms no less restrictive than those set forth herein. Any other disclosure by either Party to any Third Party shall require the prior written consent of the other Party, which shall not be unreasonably withheld.
|
b)
|
Each Party shall be free to use Joint SBP Activity Proprietary Information and Joint SBP Activity Inventions for work under (i) the Program, (ii) any other aerospace programs of Boeing (“Other Boeing Programs”). Any other use by either Party of Joint SBP Activity Proprietary Information or Joint SBP Activity Inventions shall require the prior written consent of the other Party, which may include a reasonable royalty, which license shall not be unreasonably withheld.
|
c)
|
Spirit and Boeing agree to grant any Third Party a royalty free license on reasonable terms and conditions to use Joint SBP Activity Proprietary Information and Joint SBP Activity Inventions for work under the Program.
|
d)
|
Any disclosure to or use by a Third Party of any Joint SBP Activity Proprietary Information or Joint SBP Activity Inventions for any Other Boeing Programs shall require a license from both Parties, which may include a reasonable royalty payable to Spirit when such use is for any Other Boeing Program and a reasonable royalty payable to Boeing when such use is for any Spirit Own Program. Approval by the Parties of any such license shall not be unreasonably withheld;
provided
that Spirit shall have been offered an opportunity, to the extent commercially feasible, to perform work (to which such Joint SBP Activity Proprietary Information or Joint SBP Activity Inventions is or are applicable) for such Other Boeing Program, but only if such Other Boeing Program is a commercial airplane program.
|
e)
|
The Parties shall decide on a case-by-case basis which Party will take the lead role in the preparation, filing, prosecution and maintenance (including with respect to fee payments) of Joint SBP Activity Inventions. The costs associated with the preparation, filing, prosecution and maintenance of Joint SBP Activity Inventions shall be shared equally by the Parties. If either Party declines to share the costs associated with the preparation, filing, prosecution or maintenance of any Joint SBP Activity Invention in any country, the declining Party shall retain the right to use such Joint SBP Activity Invention in such country, but shall thereafter have no right to grant or approve licenses of such Joint SBP Activity Invention to Third Parties in such country.
|
15.2.4
|
Spirit SBP Activity Proprietary Information and Inventions
|
a)
|
Boeing may disclose any Spirit SBP Activity Proprietary Information and Spirit SBP Activity Inventions to any Third Party for work under the Program;
provided
that the Third Party shall have entered into a written agreement (which shall be reasonably satisfactory to, and enforceable by, Spirit) to protect such Spirit SBP Activity Proprietary Information and Spirit SBP Activity Inventions under terms no less restrictive than those set forth herein. Any other disclosure by Boeing to any Third Party shall require the prior written consent of Spirit, which shall not be unreasonably withheld if such disclosure is in connection with any Other Boeing Program and otherwise may be withheld at Spirit’s sole and absolute discretion.
|
b)
|
Spirit agrees to grant and hereby grants Boeing a royalty free license to use Spirit SBP Activity Proprietary Information and Spirit SBP Activity Inventions for work under the Program, subject to Spirit’s Government approval, if required.
|
c)
|
Any use by Boeing of any Spirit SBP Activity Proprietary Information or Spirit SBP Activity Inventions for any Other Boeing Program shall be subject to a license from Spirit (which shall be on reasonable terms and conditions and may include a reasonable royalty), and subject to Spirit’s Government approval, if required. Approval by Spirit of any such license shall not be unreasonably withheld;
provided
that Spirit shall have been offered an opportunity, to the extent commercially feasible, to perform work (to which such Spirit SBP Activity Proprietary Information or Spirit SBP Activity Inventions is or are applicable) for such Other Boeing Program, but only if such Other Boeing Program is a commercial airplane program.
|
d)
|
Any other use by Boeing of Spirit SBP Activity Proprietary Information and SBP Activity Inventions shall be subject to a license (which may include a reasonable royalty) from Spirit, which shall be at Spirit’s sole and absolute discretion.
|
e)
|
Spirit agrees to grant any Third Party a royalty free license on reasonable terms and conditions to use any Spirit SBP Activity Proprietary Information or Spirit SBP Activity Inventions for work under the Program, subject to Spirit’s Government approval, if required.
|
f)
|
Any use by a Third Party of any Spirit SBP Activity Proprietary Information or Spirit SBP Activity Inventions for any Other Boeing Program shall be subject to a license from Spirit (which shall be on reasonable terms and conditions and may include a reasonable royalty), and subject to Spirit’s Government approval, if required. Approval by Spirit of any such license shall not be unreasonably withheld; provided that Spirit shall have been offered an opportunity, to the extent commercially feasible to perform
|
15.2.5
|
Boeing SBP Activity Proprietary Information and Inventions
|
a)
|
Spirit may disclose any Boeing SBP Activity Proprietary Information and Boeing SBP Activity Inventions to any Third Party for work under the Program; provided that the Third Party shall have entered into a written agreement (which shall be reasonably satisfactory to, and enforceable by, Boeing) to protect such Boeing SBP Activity Proprietary Information and Boeing SBP Activity Inventions under terms no less restrictive than those set forth herein. Any other disclosure by Spirit to any Third Party shall require the prior written consent of Boeing, which shall not be unreasonably withheld if such disclosure is in connection with any Other Boeing Program, and otherwise may be withheld at Boeing’s sole and absolute discretion.
|
b)
|
Boeing agrees to grant and hereby grants Spirit a royalty free license to use Boeing SBP Activity Proprietary Information and Boeing SBP Activity Inventions for work under the Program.
|
c)
|
Any other use by Spirit of Boeing SBP Activity Proprietary Information and Boeing SBP Activity Inventions shall be subject to a license (which may include a reasonable royalty) from Boeing, which shall be at Boeing’s sole and absolute discretion.
|
15.2.6
|
Third Party Proprietary Information and Inventions
|
15.2.7
|
Derivative Technology
|
15.3
|
Works of Authorship and Copyrights
|
15.4
|
Pre-Existing Inventions and Works of Authorship
|
15.5
|
Hardware, Materials, and Services General Terms Agreement (HMSGTA) and Supplemental License Agreement (SLA) Requirement
|
16.0
|
BOEING’S RIGHTS IN SPIRIT’S PATENTS, COPYRIGHTS, TRADE SECRETS, AND TOOLING
|
A.
|
An Event of Default has occurred and Boeing has elected to exercise any of its remedies as provided in GTA Section 8.0 “Events of Default and Remedies”;
|
B.
|
In Boeing’s judgment, exercised in good faith, it becomes necessary, in order for Spirit to comply with the terms of this SBP or any Order, for Boeing to use Proprietary Information and Materials of Spirit solely to provide support to Spirit (in the form of design, manufacturing, or on-site personnel assistance) substantially in excess of that which Boeing normally provides to its suppliers.
|
17.0
|
PROPRIETARY INFORMATION AND MATERIALS
|
18.0
|
SOFTWARE PROPRIETARY INFORMATION RIGHTS
|
19.0
|
INFRINGEMENT
|
20.0
|
DIGITIZATION OF PROPRIETARY INFORMATION AND MATERIALS
|
21.0
|
CONFIGURATION CONTROL
|
22.0
|
WEIGHT
|
(a)
|
Spirit shall use its best commercially reasonable efforts to achieve and maintain work package target weight as a maximum, but Spirit shall not be responsible with respect to the achievement and maintenance of such work package target weight beyond the use of such best commercially reasonable efforts; and
|
(b)
|
|
(c)
|
Boeing and Spirit shall mutually agree to Spirit’s work package weight commitment level, and such mutually agreed work package weight commitment level may be lesser or greater than the work package target weight. Once agreed, Spirit shall be responsible with respect to the achievement and maintenance of such work package weight commitment level.
|
23.0
|
LIFE CYCLE PRODUCT TEAM
|
23.1
|
Purpose
|
23.2
|
Assignment of Personnel
|
23.3
|
Employment Status
|
23.4
|
Team Leader
|
23.5
|
Discipline
|
23.6
|
Equipment and Supplies
|
23.7
|
Employment by Boeing of Spirit Personnel
|
24.0
|
ON-SITE REVIEW AND RESIDENT REPRESENTATIVES
|
24.1
|
Review
|
24.2
|
Resident Representatives
|
25.0
|
ON-SITE SUPPORT REQUIREMENTS
|
25.1
|
Obligations of Spirit
|
25.1.1
|
Indemnification for Negligence of Spirit or Subcontractor
|
25.1.2
|
Commercial General Liability
|
25.1.3
|
Automobile Liability
|
25.1.4
|
Workers’ Compensation
|
25.1.5
|
Certificates of Insurance
|
25.1.6
|
Self-Assumption
|
25.1.7
|
Protection of Property By Spirit
|
25.1.8
|
Compliance with Boeing Site Requirements
|
25.2
|
Obligations of Boeing
|
25.2.1
|
Indemnification for Negligence of Boeing or Subcontractor
|
25.2.2
|
Protection of Property By Boeing
|
26.0
|
PROPERTY INSURANCE
|
26.1
|
Insurance
|
26.2
|
Self Insurance
|
26.3
|
Certificate of Insurance
|
26.4
|
Notice of Damage or Loss
|
27.0
|
CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM (C-TPAT)
|
28.0
|
NON-WAIVER/PARTIAL INVALIDITY
|
29.0
|
HEADINGS
|
30.0
|
CUSTOMER CONTACT
|
31.0
|
APPLICABLE LAW
|
32.0
|
SURVIVAL
|
33.0
|
INVENTORY AT CONTRACT COMPLETION
|
34.0
|
DISPOSITION OF TOOLING
|
35.0
|
COUNTERPARTS
|
36.0
|
AMENDMENTS
|
37.0
|
RESTRICTIONS ON LOBBYING
|
37.1
|
Applicability
|
37.2
|
Certification
|
37.3
|
Flow Down
|
BOEING
|
|
SPIRIT AEROSYSTEMS, INC.
|
|
|
|
THE BOEING COMPANY
|
|
SPIRIT AEROSYSTEMS, INC.
|
Acting By and Through
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
/s/
Alicia Mauldin
|
|
/s/
Clint Cotner
|
Name:
Alicia Mauldin
|
|
Name:
Clint Cotner
|
Title:
Procurement Agent
|
|
Title:
Contracts Administrator
|
Date:
12/19/2012
|
|
Date:
12/14/2012
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
B.1
|
Non-D/MI Contract Change Notices
:
|
B.2
|
D/MI PtP Contract Change Notices:
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****] - [*****]
|
Total Recurring Price for Shipsets
[*****] - [*****]
|
Recurring Unit Price Adjustment for
[*****] - [*****]
|
Recurring Unit Price for [*****] - [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Section 41
|
[*****]
|
|||||
Amend 6
|
Section 41
|
||||||
Amend 11
|
Section 41
|
||||||
Amend 12
|
Section 41
|
||||||
Amend 13
|
Section 41
|
||||||
Amend 14
|
Section 41
|
||||||
Amend 15
|
Section 41
|
||||||
Amend 16
|
Section 41
|
||||||
|
|
Total [*****]
|
Total [*****]
|
|
|
|
|
Amend 17
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 18
|
Section 41
|
|
|
|
|
||
Amend 19
|
Section 41
|
|
|
|
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****] - [*****]
|
Total Recurring Price for Shipsets
[*****] - [*****]
|
Recurring Unit Price Adjustment for
[*****] - [*****]
|
Recurring Unit Price for [*****] - [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Pylon
|
[*****]
|
|||||
Amend 8
|
Pylon
|
||||||
Amend 9
|
Pylon
|
||||||
Amend 11
|
Pylon
|
||||||
Amend 12
|
Pylon
|
||||||
Amend 13
|
Pylon
|
||||||
Amend 14
|
Pylon
|
||||||
Amend 15
|
Pylon
|
||||||
Amend 16
|
Pylon
|
||||||
|
|
Total [*****]
|
Total [*****]
|
|
|
|
|
Amend 17
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 18
|
Pylon
|
|
|
|
|
||
Amend 19
|
Pylon
|
|
|
|
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****] - [*****]
|
Total Recurring Price for Shipsets
[*****] - [*****]
|
Recurring Unit Price Adjustment for
[*****] - [*****]
|
Recurring Unit Price for [*****] - [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 9
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 11
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 12
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 13
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 14
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 15
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 16
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
Total [*****]
|
Total [*****]
|
|
|
|
|
Amend 17
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 18
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 19
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****] - [*****]
|
Total Recurring Price for Shipsets
[*****] - [*****]
|
Recurring Unit Price Adjustment for
[*****] - [*****]
|
Recurring Unit Price for [*****] - [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Nose LG
|
[*****]
|
|||||
Amend 17
|
Nose LG
|
[*****]
|
|||||
Amend 18
|
Nose LG
|
||||||
Amend 19
|
Nose LG
|
Amendment
|
Work Package
|
R&D Nonrecurring Price Adjustment
|
Total R&D Nonrecurring Price
|
Other Nonrecurring Price Adjustment
|
Total Other Nonrecurring
|
Amendment 17
|
Sec 41
|
[*****]
|
|||
Amendment 17
|
Pylon
|
||||
Amendment 17
|
Wing LE
|
||||
Amendment 18
|
Sec 41
|
[*****]
|
|||
Amendment 18
|
Pylon
|
||||
Amendment 18
|
Wing LE
|
||||
Amendment 19
|
Sec 41
|
[*****]
|
|||
Amendment 19
|
Pylon
|
||||
Amendment 19
|
Wing LE
|
|
Description
|
Price
|
Amendment 1
|
2
nd
Fatigue Section 41 Barrel
|
[*****]
|
Amendment 2
|
COPB5 Test Article
|
[*****]
|
Document Nomenclature
|
Document Number
|
Configuration Memo for Wing LE (787-9)
|
[*****]
Rev New
[*****]
(Model 763-589-9_Spirit_S_14-16)
|
Configuration Memo for Section 41 (787-9)
|
[*****]
Rev New
[*****]
Model 763-589-9_Spirit_S_41
|
Configuration Memo for Pylon (787-9)
|
[*****]
Rev New
[*****]
Model 763-589-9_Spirit_Pylon
|
Boeing/Seller Responsibility, Accountability, Authority for 787 Program (RAA)
|
[*****]
|
Commonality Matrix
|
[*****]
|
PSAD
|
D6-83069-MidWestern, Rev A (5/5/05)
|
*
|
NORMAL HOURS BOEING’S PROCUREMENT REPRESENTATIVE
|
*
|
Performs all functions of procurement process.
|
*
|
Manages formal communication with Spirit.
|
*
|
SECOND SHIFT - AOG PROCUREMENT SUPPORT
|
*
|
May place order and assist with commitment and shipping information, working with several suppliers on a priority basis.
|
*
|
Provides a communication link between Spirit and Boeing.
|
*
|
24 HOUR AOG SERVICE - AOG CUSTOMER REPRESENTATIVE (CUSTOMER SERVICE DIVISION) (206) 662-7200
|
*
|
Support commitment information particularly with urgent orders.
|
*
|
Customer Service Representative needs (if available):
|
1.
|
Part Number
|
2.
|
Boeing Purchase Order
|
3.
|
Airline Customer & customer purchase order number
|
4.
|
Boeing S.I.S. #
|
To: FAX:
|
(206) 662-7145
|
Phone:
|
(206) 662-7200
|
Procurement Agent Name:
|
|
Phone:
|
|
From:
|
|
Today’s Date:
|
|
|
|
|
|
Part Number:
|
|
Customer P.O.:
|
|
Customer:
|
|
Ship Date:
|
|
Qty Shipped:
|
|
*SIS Number:
|
|
Boeing P.O.:
|
|
Pack Sheet:
|
|
*Airway Bill:
|
|
or Invoice:
|
|
Carrier:
|
|
*Flight #:
|
|
Freight Forwarder:
|
|
|
|
*
|
(check one)
|
*
|
Boeing
|
*
|
Direct Ship to Customer
|
*
|
Direct Ship to Spirit
|
A.
|
Template for Creation of IPPL and Spare Parts Price Catalog (SPPC) as defined in SBP Section 3.5
|
IPPL Outline and Criteria
|
|
|
|
Initial IPPL Bill of Material will be representative of BP 20.
|
|||
Indentured Parts list will be priced to a spareable part level.
|
|||
IPPL pricing will be equivalent the detail part pricing reflective of the [*****] Price based on an [*****] units.
|
|||
IPPL Pricing would not include Standards. Parties will establish a separate pricing list for Standards using [*****] methodology.
|
|||
IPPL Pricing to be updated with the annual price reset activity if necessary.
|
|||
IPPL Document to list [*****] price for details and for assemblies (not including [*******])
|
1.
|
Program Status Reports
(as requested by Boeing)
|
2.
|
Spirit’s program progress reports, highlighting significant accomplishments and critical program issues, etc.
|
3.
|
Product Definition Milestone Schedule
(as requested by Boeing)
|
4.
|
Spirit’s Product Definition schedule depicting key milestone events to support program requirements.
|
5.
|
Manufacturing Milestone Schedule
(as requested by Boeing)
|
6.
|
Spirit’s manufacturing schedule depicting key milestone events to support program requirements.
|
7.
|
Certified Tool List
|
8.
|
Spirit’s Certified Tool Lists for identifying all accountable tools, including any subsequent new, reworked or re-identified tools affecting the first production spares Product.
|
9.
|
Problem Reports
(as required)
|
10.
|
Spirit’s written notification to Boeing of program problems, potential program impact and corrective action.
|
11.
|
AOG Spares Support Plan
|
12.
|
Spirit ‘s written plan describing Spirit’s procedure for supporting AOG spares delivery requirements. Refer to SBP Section 3.5.3 for details.
|
13.
|
Order Readiness Matrix
|
14.
|
Spirit’s plan (matrix) identifying pre-manufacturing activities, such as, material procurement, tooling, planning and manufacturing readiness, that must be prioritized and completed prior to manufacture of a spares Product.
|
15.
|
Total Cost Management Plan
|
16.
|
Within six months of the effective date of this SBP Spirit will submit a TCM plan as required under SBP Section 7.5.
|
A10.1
|
Documents Incorporated by Reference
|
A10.1.1
|
Document AS/EN/JISQ 9100, “Quality Systems - Aerospace - Model for Quality Assurance in Design, Development, Production, Installation and Servicing”
|
A10.1.2
|
Document AS/EN/SJAC 9102, “Aerospace First Article Inspection (FAI) Requirement”
|
A10.1.3
|
Boeing Document
[*****]
|
A10.2
|
AS/EN/JISQ 9100 Certification/Registration
|
A10.2.1
|
Accreditation of Certification/Registration Body
|
A10.2.2
|
Records of Certification/Registration
|
a.
|
The accredited AQMS certificate(s) of registration;
|
b.
|
The audit report(s), including all information pertaining to the audit results in accordance with the applicable certification/registration scheme;
|
c.
|
Copies of all CRB finding(s), objective evidence of acceptance of corrective action(s), and closure of the finding(s).
|
A10.2.3
|
Right of Access to CRB
|
A10.2.4
|
Audit Results/Data Reporting to IAQG
|
A10.2.5
|
Notification to Boeing of Change in Status
|
A10.2.6
|
Provision of Boeing Quality Data to CRB
|
A10.2.7
|
CRB Access to Proprietary Data
|
A10.2.8
|
Spirit Compliance with CRB Requirements
|
A10.3
|
Additional Quality Assurance Requirements
|
A10.3.1
|
Relocation/Subcontract Notification
|
A10.3.2
|
English Language
|
A10.4
|
Guidance Documents
|
A10.4.1
|
Document AS/EN/SJAC 9103, “Variation Management of Key Characteristics”
|
A10.4.2
|
Document AS9006, “Deliverable Aerospace Software Supplement for AS9100A Quality Management Systems - Aerospace - Requirements for Software (based on AS9100A)”
|
A10.4.3
|
Boeing Document
[*****]
|
A10.4.4
|
Document
[*****]
|
Spirit Name:
|
Date:
|
||||
Spirit Contact: Phone:
|
|||||
BCA Procurement Agent Contact: Phone:
|
|||||
BCA Purchase Contract #:
|
|||||
Reporting Period * Jan - Mar Apr - Jun July - Sept Oct - Dec
|
Year:
|
||||
Definitions **
|
|||||
Small Business (SB)
|
The term “small business” shall mean a small business as defined pursuant to Section 3 of the Small Business Act (15 U.S.C.A. 632) and relevant regulations issued pursuant thereto. Generally, this means a small business organized for profit, it is independently owned and operated, is not dominant in the field of operations in which it is bidding, and meets the size standards as prescribed in Government regulations. (Includes SDBs, SMBEs and WOSBs)
|
||||
Small Disadvantaged business (SDB)
|
A small business certified by the U.S. Small Business Administration as a socially and economically small disadvantaged business for consideration of Government set-a-side contracting opportunities and business development. (Includes SDBs who are women-owned)
|
||||
Small Minority Business Enterprise (SMBE)
|
A small business that is at least 51 percent owned, operated and controlled by a minority group member (Asian, Black, Hispanic, and Native Americans); or, in the case of a publicly-owned business, at least 51% of the stock is owned by one or more minority group members and such individuals control the management and daily operations. (Includes SDBs)
|
||||
Women-owned Small Business (WOSB)
|
A small business concern that is at least 51 percent owned by one or more women; or, in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more women; and whose management and daily business operations are controlled by one or more women. (Includes WOSBs who are also SDBs)
|
||||
Contract Dollars Received by Spirit
|
|||||
A.
|
Boeing Commercial Airplanes contract dollars received by Spirit for the above reporting period* (report in whole numbers): $________________________________
|
||||
Value of Subcontract 2nd Tier Dollars Awarded
(for Boeing Commercial Airplanes Purchase Contracts ONLY)
|
|||||
Diversity Category
|
Reporting Period (see above*)
|
||||
Dollars
(report in whole numbers)
|
Percent of
Spirit Dollars
|
||||
B.
|
Small Business (SB)
|
|
(B ÷ A)
|
||
C.
|
Small Minority Business Enterprise (SMBE)
|
|
(C ÷ A)
|
||
D.
|
Women-owned Small Business (WOSB)
|
|
(D ÷ A)
|
||
Authorized Company Representative (Print):
|
Authorized Company Representative (Signature): Date:
|
Spirit Name
|
Country
|
Commodity/
Nomenclature
|
Bid
Dollars
|
Contracted
Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Month
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Baseline Schedule
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Revised Schedule
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Shipsets affected by month
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Shipset Months
|
[*****]
|
|||||||||
Total Shipset Months
|
[*****]
|
Month
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Baseline Schedule
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Revised Schedule
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Shipsets affected by month
|
[*****]
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
Shipset Months
|
[*****]
|
|||||||||
Total Shipset Months
|
[*****]
|
A.1
|
Price for non-conformance and traveled work identified in Spirit Generated Line Unit OSSN EPD (Open Ship Short Notification Emergent Process Document)
|
Traveled Work Nomenclature
|
Price Per Unit
|
SOI-A
|
$
[*****]
|
SOI-B
|
$
[*****]
|
Non-conformance EPD
|
$
[*****]
|
A.2
|
Price for non-conformance, repair or rework identified at Boeing
|
Fabrication dollars, these dollars include aluminum, titanium, composites and other. Other includes such elements as sealant, fasteners, coatings and other miscellaneous
|
Total Fabrication Dollars
|
[*****]
|
|
|
|
Total Assembly and Support dollars. This includes such elements as recurring assembly, Eng, ME, IE and other support functions
|
Assembly and Support
|
[*****]
|
|
|
|
Amortized Non-recurring included in baseline below
|
NR Amortization
|
[*****]
|
|
|
|
Baseline Price [*****] Shipsets
|
Baseline
|
[*****]
|
Fabrication dollars, these dollars include aluminum, titanium, composites and other. Other includes such elements as sealant, fasteners, coatings and other miscellaneous
|
Total Fabrication Dollars
|
[*****]
|
|
|
|
Total Assembly and Support dollars. This includes such elements as recurring assembly, Eng, ME, IE and other support functions
|
Assembly and Support
|
[*****]
|
|
|
|
Amortized Non-recurring included in baseline below
|
NR Amortization
|
[*****]
|
|
|
|
Baseline Price [*****] Shipsets
|
Baseline
|
[*****]
|
Fabrication dollars, these dollars include aluminum, titanium, composites and other. Other includes such elements as sealant, fasteners, coatings and other miscellaneous
|
Total Fabrication Dollars
|
[*****]
|
|
|
|
Total Assembly and Support dollars. This includes such elements as recurring assembly, Eng, ME, IE and other support functions
|
Assembly and Support
|
[*****]
|
|
|
|
Amortized Non-recurring included in baseline below
|
NR Amortization
|
[*****]
|
|
|
|
Baseline Price [*****] Shipsets
|
Baseline
|
[*****]
|
A. Baseline weights used to establish baseline pricing.
(Excludes PMI)
|
Material Type
|
Baseline Weights
Summary
Level (lbs)
|
Material Type
Detailed
Level (lbs)
|
Baseline Weights
Detailed
Level (lbs)
|
Section 41
|
Aluminum
|
[*****]
|
|
[*****]
|
Titanium
|
[*****]
|
|
[*****]
|
|
Composite
|
[*****]
|
|
[*****]
|
|
Other
|
[*****]
|
|
[*****]
|
|
Total
|
[*****]
|
|
[*****]
|
|
Wing Leading Edge
|
Aluminum
|
[*****]
|
|
[*****]
|
Titanium*
(*Includes splice straps and roller bolts)
|
[*****]
|
|
[*****]
|
|
Composite
|
[*****]
|
|
[*****]
|
|
Other
|
[*****]
|
Steel
|
[*****]
|
|
Remaining Other
|
[*****]
|
|||
Total
|
[*****]
|
|
[*****]
|
|
Pylon
(simple average of [*****] and [*****])
|
Aluminum
|
[*****]
|
|
[*****]
|
Titanium
|
[*****]
|
Ti 5-5-5-3
|
[*****]
|
|
All other Ti
|
[*****]
|
|||
Composite
|
[*****]
|
CFRP
|
[*****]
|
|
All other Comp
|
[*****]
|
|||
Other
|
[*****]
|
Steel
|
[*****]
|
|
Remaining Other
|
[*****]
|
|||
Total
|
[*****]
|
|
[*****]
|
B. Cost factors for the materials that make up the baseline weights in order to allocate the fabrication dollars. These cost factors reflect relative associated complexity ($ per lb) of each material.
|
Material Types
Detailed
Level
|
Relative Cost Factors
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Other
|
[*****]
|
|
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
|
Pylon
|
Aluminum
|
[*****]
|
Ti-5553
|
[*****]
|
|
All other Ti
|
[*****]
|
|
CFRP
|
[*****]
|
|
All other Comp
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
C. Resulting baseline $ per pound as a result of the factors used above.
|
Material Type
Detailed
Level
|
Dollars per pound
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Other
|
[*****]
|
|
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
|
Pylon
|
Aluminum
|
[*****]
|
Ti 5-5-5-3
|
[*****]
|
|
All other Ti
|
[*****]
|
|
CFRP
|
[*****]
|
|
All other Comp
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
A. Baseline values used to establish baseline pricing.
|
Total Assembly & Support $
|
Total In-House Assembled/Installed Part Count
|
$ per Part
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
Wing Leading Edge
|
[*****]
|
[*****]
|
[*****]
|
Pylon
(simple average of [*****]and [*****])
|
[*****]
|
[*****]
|
[*****]
|
|
2006 Baseline Burdened Rate
|
Engineering
|
[*****]
|
Tool Fabrication
|
[*****]
|
Operations
|
[*****]
|
|
|
Non Labor (includes travel, raw material and any special parts not addressed by Spare Parts provisions of contract
|
Non-labor $ +
[*****]
% of Non-labor $
|
[*****]
|
|||||
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
A. Baseline weights used to establish baseline pricing.
(Excludes PMI)
|
Material Type
|
Baseline Weights
Summary
Level (lbs)
|
Material Type
Detailed
Level (lbs)
|
Baseline Weights
Detailed
Level (lbs)
|
Section 41
|
Aluminum
|
[*****]
|
|
[*****]
|
Titanium
|
[*****]
|
|
[*****]
|
|
Composite
|
[*****]
|
|
[*****]
|
|
Other
|
[*****]
|
|
[*****]
|
|
Total
|
[*****]
|
|
[*****]
|
|
Wing Leading Edge
|
Aluminum
|
[*****]
|
|
[*****]
|
Titanium*
(*Includes splice straps and roller bolts)
|
[*****]
|
|
[*****]
|
|
Composite
|
[*****]
|
|
[*****]
|
|
Other
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|||
Total
|
[*****]
|
|
[*****]
|
|
Pylon
(simple average of [*****] and [*****])
|
Aluminum
|
[*****]
|
|
[*****]
|
Titanium
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|||
Composite
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|||
Other
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|||
Total
|
[*****]
|
|
[*****]
|
B. Cost factors for the materials that make up the baseline weights in order to allocate the fabrication dollars. These cost factors reflect relative associated complexity ($ per lb) of each material.
|
Material Types
Detailed
Level
|
Relative Cost Factors
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Other
|
[*****]
|
|
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
|
Pylon
|
Aluminum
|
[*****]
|
Ti-5553
|
[*****]
|
|
All other Ti
|
[*****]
|
|
CFRP
|
[*****]
|
|
All other Comp
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
C. Resulting baseline $ per pound as a result of the factors used above.
|
Material Type
Detailed
Level
|
Dollars per pound
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Other
|
[*****]
|
|
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
[*****]
|
|
Composite
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
|
Pylon
|
Aluminum
|
[*****]
|
Ti 5-5-5-3
|
[*****]
|
|
All other Ti
|
[*****]
|
|
CFRP
|
[*****]
|
|
All other Comp
|
[*****]
|
|
Steel
|
[*****]
|
|
All other Other
|
[*****]
|
A. Baseline values used to establish baseline pricing.
|
Total Assembly & Support $
|
Total In-House Assembled/Installed Part Count
|
$ per Part
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
Wing Leading Edge
|
[*****]
|
[*****]
|
[*****]
|
Pylon
(simple average of [*****] and [*****])
|
[*****]
|
[*****]
|
[*****]
|
Fixed Hours Per Tool
|
||
|
New Make
|
|
Tool Code
|
Design Hours
|
Fab Hours
|
AJ
|
[*****]
|
[*****]
|
BAJ
|
[*****]
|
[*****]
|
BOF
|
[*****]
|
[*****]
|
CP
|
[*****]
|
[*****]
|
DFT
|
[*****]
|
[*****]
|
DJ
|
[*****]
|
[*****]
|
FAJ
|
[*****]
|
[*****]
|
FME
|
[*****]
|
[*****]
|
FMHF
|
[*****]
|
[*****]
|
LJ
|
[*****]
|
[*****]
|
LM
|
[*****]
|
[*****]
|
ME
|
[*****]
|
[*****]
|
MF
|
[*****]
|
[*****]
|
MHF
|
[*****]
|
[*****]
|
MIT
|
[*****]
|
[*****]
|
MOLD
|
[*****]
|
[*****]
|
NCMIT
|
[*****]
|
[*****]
|
OHME
|
[*****]
|
[*****]
|
PME
|
[*****]
|
[*****]
|
PRE
|
[*****]
|
[*****]
|
SME
|
[*****]
|
[*****]
|
TME
|
[*****]
|
[*****]
|
|
Fixed Hours Per Tool
|
Tool Design
|
[*****]
|
Tool Fabrication
|
[*****]
|
|
2006 Baseline Burdened Rate
|
Engineering (Includes Engineering, Tool Engineering, M.E., Operations and NC)
|
$
[*****]
/hour
|
Tool Fabrication
|
$
[*****]
/hour
|
|
[*****]
|
[*****]
|
Fabrication Factor
|
$[*****]
(example 1)
|
-$[*****]
(example 2) |
Assembly Factor
|
$[*****]
(example 1)
|
-$[*****]
(example 2) |
Nonrecurring Factor
|
|
$[*****]
|
Result
|
$[*****]
|
$[*****]
|
|
[*****]
|
[*****]
|
Fabrication Factor
|
-$[*****]j
(example 2) |
$[*****]
(example 1)
|
Assembly Factor
|
-$[*****]
(example 2) |
$[*****]
(example 1)
|
Nonrecurring Factor
|
$[*****]
|
$[*****]
|
Result
|
-$[*****]
|
$[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
1.
|
Shipset Prices will be adjusted for Abnormal Escalation as provided below. In the event that escalation, as forecast by a composite of the identified below indices, exceeds
[*****]
for any given calendar year (“Abnormal Escalation”), the Shipset Prices, as applicable, for the subsequent calendar year shall be adjusted by that percentage value which exceeds
[*****]
. Abnormal Escalation is calculated each year against the Shipset Prices, as applicable, effective for that year and is not cumulative. The adjusted Shipset Prices will revert back to the SBP Attachment 1 Shipset Prices at the beginning of the subsequent calendar year.
|
2.
|
Adjustments to the Shipset Prices will be determined by the following economic indices:
|
3.
|
Special Notes:
|
4.
|
Abnormal Escalation Formula:
|
5.
|
Example: Abnormal Escalation Price Increase
|
A20.1
|
Boeing Furnished Material
|
A20.2
|
Storage and Handling
|
A20.3
|
Withdrawal of Materials
|
A20.4
|
Title to Materials
|
A20.6
|
Records
|
A20.6.1
|
Access
|
A20.6.2
|
Quarterly Certified Boeing Furnished Material
|
A20.7
|
Nonconforming Materials
|
A.
|
Spirit shall promptly identify and control nonconforming Boeing Furnished Material in accordance with Spirit’s documented procedures;
|
B.
|
Spirit shall have delegated authority to disposition nonconforming product provided that Spirit has concurrence of supporting supplier of such Boeing Furnished Material;
|
C.
|
For dispositions requiring rework or repair, Spirit and supporting supplier of such Boeing Furnished Material shall concur on which parties shall perform the work. All costs and expenses associated with such rework or repair shall be the responsibility of Boeing;
|
D.
|
Spirit shall maintain accurate records relating to receipt and disposition of nonconforming Boeing Furnished Material in accordance with 787 Program data requirements;
|
E.
|
Spirit shall promptly notify Boeing’s Procurement Representative if concurrence with supporting supplier cannot be reached, disposition exceeds Spirit’s scope of delegated MRB authority, or nonconformance involves more than two parties.
|
a.
|
The Parties understand and agree that Spirit is allocated the sole responsibility to manage, fund, and otherwise satisfy the obligations of the owner and operator of the facilities and operations used in its performance of this Agreement (including but not limited to materials storage and handling, manufacturing, waste handling, maintenance, inventory storage, and distribution facilities and operations) (“the Facilities and Operations”) under the local, state, and federal environmental laws.
|
b.
|
Spirit responsibility includes, but is not limited to, the requirement to apply for and hold in Spirit individual name all required orders, permits and approvals legally required under environmental laws for the Facilities and Operations.
|
c.
|
Boeing shall not be obligated to manage, fund, or otherwise satisfy any such obligations related to the Facilities and Operations.
|
d.
|
Should any environmental regulatory agency assert that Boeing is the owner and/or operator of any of the Facilities and Operations or is responsible for compliance with any such obligations, unless Boeing’s environmental obligations that result from this regulatory action are required by the Allocated Environmental Responsibilities, Spirit will continue to bear the sole cost to comply, and at its sole cost will take affirmative steps to shift the status of owner and operator and sole responsibility for compliance with any such obligations to itself
|
e.
|
In any regulatory proceeding in which an environmental regulatory agency asserts or seeks to impose joint or shared regulatory obligations under environmental laws on Spirit and Boeing with respect to the Facilities and Operations, unless Boeing’s environmental obligations that result from this regulatory action are required by the Allocated Environmental Responsibilities, the Parties will cooperate with one another diligently to establish Partner’s sole responsibility for such obligations.
|
f.
|
Where necessary to comply in an instance in which an environmental agency has asserted or imposed owner and/or operator status, or responsibility for such obligations, on Boeing, Spirit will cooperate to provide Boeing with relevant, objective, and verifiable evidence of the compliance status of those Facilities and Operations.
|
A.
|
This D&MI PtP process will apply to Nonrecurring Work included in Spirit’s D&MI statement of work. For the avoidance of doubt, only those D&MI activities contained in the One Plan Documents listed in Exhibit E of this Attachment 23 shall qualify for treatment under this PtP process.
|
B.
|
The PtP process shall be used to plan D&MI Nonrecurring Work for a period of performance that extends through each [*****] and through the [*****].
|
C.
|
All Recurring Work necessary to support the entry into service schedule of the MI changes and the Derivative Aircraft will be performed in accordance with the GTA and SBP.
|
A.
|
Phase Definition
The detail planning process will be broken in to logical phases that align to the Program D&MI development schedule. Each phase will incorporate required deliverables defined by the Parties as necessary to meet specific D&MI requirements. These phases may be subdivided as necessary to facilitate Program planning and requirements.
|
B.
|
One Plan Documents -
The
Parties shall develop and maintain One Plan Documents for D&MI requirements on each Spirit work package covered by this SBP. The One Plan Documents will be the PtP baseline used for monthly PtP performance reviews. The Parties shall perform the activities of the One Plan Document in accordance with the following:
|
1.
|
The Parties shall each support all long lead activities required to meet D&MI requirements and schedule including but not limited to configuration development and trade studies as set forth in the One Plan Document.
|
2.
|
After Work Share Agreements and Resource Plans have been agreed, Boeing and Spirit will each select its personnel required to meet Program and One Plan Document requirements.
|
3.
|
When agreed Resource Plans include Spirit personnel working at Boeing or some other agreed location, Spirit will designate an employee to be a focal for each location.
|
C.
|
Monthly Review and Update
- The Parties shall participate in a monthly joint PtP review process, including weekly status reviews (process flow example in Exhibit A hereto)
.
The monthly PtP review process will include, but not be limited to, identification of revisions in the One Plan Documents that may result in Boeing adjusting the agreed PtP baseline to ensure the objectives of the Program are being met. Spirit will perform the activities set forth in the adjusted One Plan Documents.
|
D.
|
Planning of Subsequent Phases -
The Parties agree to establish schedules for completing the requirements of the One Plan Document for the next Phase that allows reasonable time to conclude a D&MI NR Value agreement as contemplated in Section III.A.
|
E.
|
Administrative
- In accordance with the Administrative Agreement, Boeing will authorize D&MI SOW by written direction. For proposal and pricing purposes, at the beginning of each Phase Boeing will issue a Contract Change Notice (CCN) referring to the relevant One Plan Document. This CCN will be revised as necessary to facilitate monthly updates. Prices and Performance Based Payments and Performance Based Advance Payments reflecting the agreed D&MI NR Value shall be updated in accordance with Section III of this Attachment 23.
|
A.
|
Negotiation of Phase Baseline
- The Parties will reach agreement on a D&MI NR Value for each Phase subsequent to Spirit’s submittal of a
[*****]
proposal based on the signed One Plan Document for each work package, the methodology described in Section III.D of this Attachment 23 and as otherwise in accordance with this Section III of this Attachment 23. This [*****] proposal will utilize estimates of [*****] agreed upon between the respective technical teams as appropriate and will include any [*****] not specifically addressed by the respective technical teams that are necessary to complete the activities specified in the One Plan Document.
|
B.
|
Monthly Update
- In accordance with Section II.C of this Attachment 23, the PtP baseline will be reviewed monthly and the agreed D&MI NR Value will be modified (up or down), as necessary to reflect revisions in the One Plan Document as mutually agreed. In the event the Parties are unable to reach agreement, the process set forth in Section III.G of this Attachment 23 will apply.
|
C.
|
Negotiation of Subsequent Phases
- The Parties will negotiate in good faith regarding the D&MI NR Value for subsequent Phases at the conclusion of each Phase utilizing the process and pricing elements as described in this Section II.
|
D.
|
D&MI NR Value Methodology
- Excluding those One Plan Document tasks which will be paid in accordance with Section III.G of this Attachment 23, the D&MI NR Value for each Phase shall be based on the
[*****]
. For the avoidance of doubt, sub-contracted tooling is considered [*****]. The D&MI NR Value does not include any Incentive Payment.
|
F.
|
Wrap Rates
-
[*****]
.
|
2.
|
$
[*****]
per hour for tooling fabrication tasks as specified in the CCNs issued pursuant to Section II.E. above. This rate will be escalated from 2006 to the midpoint of the performance of the specific D&MI Nonrecurring Work using the
[*****]
index as developed in accordance with Attachment 23, Section H. The resultant wrap rate will be applied to the agreed value for either: i) Spirit’s internal direct charged Basic Factory Labor hours; or ii) In the case of Spirit’s AeroStructures Business Unit, the equivalent of internal direct charged Basic Factory Labor hours.
|
G.
|
Dispute Resolution
- In the event the Parties are unable to reach agreement on the D&MI NR Value, the Parties agree to utilize the process specified in this Section III.G to determine the D&MI NR Value.
|
1.
|
If the difference in each Party’s valuation of each disputed task is less than
[*****]
% of the lower value, the Parties will agree to settle the D&MI NR Value by splitting the difference between the Party’s positions equally.
|
2.
|
If the difference in each Party’s valuation of each disputed task is greater that
[*****]
% of the lower value, the Party’s technical and business teams will convene a special meeting to discuss the Parties respective positions and attempt to reach an agreement. In addition, Boeing will provide Spirit with written direction to either continue or delay work on specified tasks. If the Parties close the difference to within
[*****]
% of the lower value the process in Section III.G.1 of this Attachment 23 will be used to settle the D&MI NR Value. If the difference in the Party’s’ positions remains greater than
[*****]
% of the lower value, and the difference is greater than $
[*****]
the parties will elevate the issues to the leadership of the Procurement Representative and the LCPT organizations, or their designees, in the case of Boeing and to the leadership of the Contracts and applicable Business Unit organizations, or their designees, in the case of Spirit, for resolution. If the leadership teams are unable to totally resolve the issue, but the remaining difference is within
[*****]
% of the lower value, the process in Section III.G.1 of this Attachment 23 will be used to settle the D&MI NR Value.
|
3.
|
If the difference in each Party’s valuation is greater than
[*****]
% of the lower value but less than $
[*****]
or if subsequent to the process specified in Section III.G.2 of this Attachment 23, the remaining difference in each Party’s valuation of each disputed task is greater than
[*****]
% of the lower value, the Parties agree that notwithstanding any other provision of this SBP, Boeing has the right to perform the disputed tasks itself or hire a third party to perform such tasks at its sole discretion. Boeing will provide Spirit with written direction to continue, delay or stop work on specified tasks. If Boeing chooses not to perform such tasks, the Parties will separate the disputed tasks from tasks not in dispute and group these disputed tasks into discrete, identifiable, traceable tasks for reporting and tracking purposes.
|
4.
|
If the Parties do not reach agreement under Sections III.G.1 or III.G.2 and/or if Boeing does not elect to perform the disputed tasks pursuant to Section III.G.3 of this Attachment 23, the following process will be utilized. In the case of disputed labor D&MI Nonrecurring Work tasks, Spirit will provide data as agreed between the Parties on a monthly basis regarding the actual hours expended for the disputed task. Boeing will work with Spirit to validate the data provided by Spirit. Upon validation of the data by Boeing, the hours will be multiplied by the following wrap rates to determine the D&MI NR Value:
|
b)
|
$
[*****]
per hour for tooling fabrication tasks specified in the CCNs issued pursuant to Section II.E. above. This rate will be escalated from 2006 using the
[*****]
index as developed in accordance with Attachment 23, Section H.
[*****]
|
5.
|
Notwithstanding the foregoing, the final D&MI NR Value for any disputed task shall not exceed Spirit's valuation at the time of entering the dispute process of this Section III.G.4, or be less than Boeing's valuation at the time of entering the dispute process of this Section III.G.4.
|
6.
|
Throughout this process the Parties will continue to work in good faith to resolve the disputed issues and nothing shall prohibit the Parties from reaching agreement at any time and upon such agreement, removing the disputed tasks from the process specified in this Section (example in Exhibit C hereto).
|
H.
|
Application of Rate Escalation Methodology
|
a.
|
For the purpose of establishing the midpoint per Sections III.F.1, III.F.2, III.G.4.a, and III.G.4.b, the specific D&MI Nonrecurring Work is the non-recurring SOW for a particular MI Blockpoint or Derivatives Phase including all CNs/PDDMs associated with that Blockpoint or Derivatives Phase (Examples: 787-9 Phase as mutually agreed by the Parties or BP-34 or BP-55 or BP-90 etc.).
|
b.
|
The midpoint for the specific D&MI Non-recurring Work will be determined as follows:
|
i.
|
In the case of MI Changes - The year that contains the month that lies halfway between the month nonrecurring work began on the first CN authorized for the Blockpoint and the month that the Blockpoint line number is scheduled to be delivered.
|
ii.
|
In the Case of Derivative Changes - The year that contains the month that lies halfway between the month nonrecurring work under that Phase begins and the month that non-recurring work under that Phase ends.
|
a.
|
Non-recurring Work on MI changes prior to an authorized CN (including Trade Study (TS) and Change Request (CR) activities) will not be included to determine the midpoint but will be paid in accordance with the yearly escalation index forecast value (for the year the work is scheduled to be performed) in effect at the time the work is negotiated.
|
I.
|
Cost Estimating Relationship (CER) Development
- The Parties will cooperate in good faith to streamline the D&MI Nonrecurring Work value estimating processes, using cost history and other cost estimating methodologies. The Parties will establish standard D&MI NR Values with each Party reserving the right to develop a discrete D&MI NR Value for CRs and CNs that require significantly more or less work. For the activities in each Phase, the Parties agree that CERs will be utilized to establish D&MI NR Value agreements. After CERs are established, the Parties shall utilize CERs to estimate the cost impact of revisions, as provided in Section III.B, and reach agreement on an adjusted D&MI NR Value
|
J.
|
Research and Development
- The Price for Research and Development (reference Attachment 23 Sections III.A and III.D) is incorporated into SBP Attachment 1 "Work Statement and Pricing" and shall be subject to Performance Based Payments in accordance with SBP Section 5.6 "Performance Based Payments for Research and Development.”
|
K.
|
Other D&MI Nonrecurring Work
- The value of Other D&MI Nonrecurring Work (reference Attachment 23 Sections III.A and III.D) is incorporated into SBP Attachment 1 "Work Statement and Pricing" and shall be subject to Performance Based Payments and Performance Based Advance Payments in accordance with SBP Section 5.8 "Performance Based Payments and Performance Based Advance Payments for Other D&MI Nonrecurring Work.
|
L.
|
Rework
- Any claim for the costs associated with re-working partially completed or completed tooling and Products to be compliant with MI configuration changes identified in the One Plan Document, and which were incurred by Spirit using “reasonable ordering and scheduling practices” in relation to Boeing’s master schedule will be promptly negotiated upon receipt of a fully supported proposal from Spirit. Such proposal shall contain sufficient detail to explain the proposed amount. For purposes of this provision, “reasonable ordering and scheduling practices” include placing timely orders using reasonable lead times based on the delivery schedules in effect at the time of initial order placement. It also includes making appropriate and timely modifications in accordance with Spirit sub-tier supplier contract terms as subsequent delivery schedules are issued. Spirit will use
[*****]
efforts to mitigate the impact of any Spirit sub-tier supplier contract terms which would result in higher re-work costs. Boeing will issue a priced purchase order within [*****] of completing negotiations. This purchase order will be paid by Boeing in accordance with SBP Section 5.0.
|
M.
|
Obsolescence
- Notwithstanding Section 7.7 of SBP, any claim for the cost of obsolete tooling, Products, and material specifically authorized in accordance with the terms of this Attachment 23 resulting from MI configuration changes identified in the One Plan Document, and which were incurred by Spirit using “reasonable ordering and scheduling practices” in relation to Boeing’s master schedule will be promptly negotiated upon receipt of a fully supported claim from Spirit. Such claim shall contain sufficient detail to explain the claimed amount. For purposes of this provision, “reasonable ordering and scheduling practices” include placing timely orders and reasonable lead times based on the delivery schedules in effect at the time of initial order placement. It also includes making appropriate and timely modifications in accordance with Spirit sub-tier supplier contract terms as subsequent delivery schedules are issued. Spirit will use
[********]
efforts to mitigate the impact of any Spirit sub-tier supplier contract terms which would result in higher costs and apply obsolete parts to other production requirements where possible. Boeing will issue a priced purchase order within [*****] of completing negotiations. This purchase order will be paid by Boeing in accordance with SBP Section 5.0
|
N.
|
Other Claims
- All costs or claims for changes relating to Spirit’s D&MI Nonrecurring Work, Recurring Work and other activities, other than those changes specified and mutually agreed in the One Plan Document, are subject to the change process specified in SBP Sections 6.0 and 7.0.
|
A.
|
Spirit shall be entitled to payment of a Performance Based Payment for Research and Development upon the successful accomplishment of the event or performance criterion ("Performance Event") for which payment is specified. The Parties shall mutually determine whether the event or performance criterion for which payment is requested has been successfully accomplished in accordance with Exhibit D of this Attachment 23.
|
B.
|
Spirit shall be entitled to a Performance Based Payment and Performance Based Advance Payment for Other D&MI Nonrecurring Work upon the successful accomplishment of the event or performance criterion for which payment is specified. The Parties shall mutually determine whether the event or performance criterion for which payment is requested has been successfully accomplished in accordance with Exhibit D of this Attachment 23
|
PtP Cycle - Notional Process Flow
|
|||||
Tier 1
|
|
|
|
|
|
|
|
|
|
|
|
[*****]
|
|||||
|
|
|
|
|
|
Workshop results support Performance Assessment and Value Determination
|
|
||
|
|
|
|
|
[*****]
|
|||||
Event No.
|
Performance Event
|
Completion Criteria
|
Verification
|
*Amount (as of 06/19/2012 and Amendment 19)
(Paid in accordance with SBP 5.6)
|
1.
|
Section 41 Preliminary Layouts [*****]% Complete
|
i) [*****]% of Section 41 Preliminary Layouts
ii) all other Section 41 R&D events scheduled prior to or concurrent to planned Section 41 [**]% milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
|
Events closed in ETAC
|
$[*****]
|
2.
|
CDR complete for [*****] Pylon
|
i) CDR completed for Sec 41 and [*****]
Pylon
ii) all Section 41 R&D events and all Pylon R&D events and all WLE R&D events scheduled prior to or concurrent to planned [*****] Pylon CDR
|
When all actions items are closed following CDR and applicable events are closed in ETAC
|
[*****]
|
3.
|
Sec 41 Approved Layouts [*****] % Complete
|
i) [*****]% of Section 41 Approved Layouts
ii) all other Section 41 R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
|
Events closed in ETAC
|
[*****]
|
4.
|
All Products On Dock to the Delivery Point
|
i) Delivery of all products to Boeing
ii) all Section 41 R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete
|
Section 41 on dock at Boeing and applicable events are closed in ETAC
|
[*****]
|
5.
|
Final Payment
|
|
Airplane Certification
|
[*****]
|
Event No.
|
Performance Event
|
Completion Criteria
|
Verification
|
* Amount (as of 06/19/2012 and Amendment 19)
(Paid in accordance with SBP 5.8)
|
1.
|
BP [*****] Tooling & Birdstrike Forging
|
Line Unit [*****] delivered & Birdstrike forgings on dock Spirit
|
Line Unit [*****] loaded in LCF & FAI complete on forgings
|
[*****]
|
2.
|
BP [*****] Tooling
|
Line Unit [*****] delivered
|
Line Unit [*****] loaded in LCF
|
[*****]
|
3.
|
BP [*****] Tooling
|
Line Unit [*****] delivered
|
Line Unit [*****] loaded in LCF
|
[*****]
|
4.
|
Begin spinning of 1
st
787-9 Sec 41 barrel
|
Planned Other D&MI NR Work completed prior to the beginning of spinning of 1
st
787-9 Sec 41 barrel
|
Load of barrel in to AFP cell
|
[*****]
|
5.
|
787-9
|
First 787-9 Delivered
|
First 787-9 on LCF
|
[*****]
|
6.
|
Final Payment
|
|
|
[*****]
|
*
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Summary, Revision New, dated 01-15-09
|
*
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
*
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
*
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
*
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan 787-9, Revision New, 01-15-09
|
*
|
Spirit-Tulsa One Plan Grand Total, dated 4/16/09
|
*
|
787-9 One-Plan Spirit Pylon April 7-8, 2009
|
*
|
787-9 One-Plan Spirit S41 April 1, 2010
|
*
|
787-9 One-Plan Spirit WLE (Interim Agreement) May 21, 2010
|
*
|
787-9 One-Plan Spirit Pylon March 4, 2010
|
*
|
787-9 & MI Phase 2 One-Plan - Wing LE (WP 10 & 12)” (Interim Agreement) dated 09/22/10
|
*
|
“787 Pylon Derivatives & Mission Improvement Phase II ONE PLAN UPDATE 2
nd
QUARTER - 2010” dated 7/1/2010
|
*
|
787 Section 41 IPT Derivatives & Mission Improvement Phase II ONE PLAN dated 6/30/2010
|
*
|
787 Section 41 IPT Derivatives & Mission Improvement Phase II ONE PLAN dated 8/26/2010
|
*
|
787 Pylon Derivatives & Mission Improvement Phase IIIa ONE PLAN - November 2010 - August 2011 dated 11/4/2010
|
*
|
787-9 & MI One-Plan; PtP Plan, Wing Leading Edge, dated 12/13, 2010, Rev 14
|
*
|
787 Phase III PtP Negotiation Status Between Spirit Wichita and Boeing as of March 11, 2011
|
*
|
787 Phase III PtP Negotiation Status Between Spirit Wichita and Boeing as of April 21, 2011
|
*
|
787 Section 41 D&MI Improvement “Sec 41 Tooling One Plan Agreements March and April 2011”
|
*
|
787 Section 41 D&MI Improvement “CN 22067 - Sec 41 [*****] dated June 1, 2011
|
*
|
787 One Plan - Section 41 | SOW Hours Agreement “D_MI Sec 41 Engineering One Plan Agreements 6_9_11”
|
*
|
787 Section 41 D&MI Improvement “787 D_MI Sec 41 Tooling One Plan Agreements 6_7_11”
|
*
|
787 Pylon Derivatives & Mission Improvement Phase IIIa ONE PLAN Rev. B - November 2010 - June 2011 dated 7/7/2011
|
*
|
787-9 One-Plan Phase IIIb; PtP Plan, Wing Leading Edge, dated 7/1/2011
|
*
|
787-9 Section 41 D/MI PtP Phase IIIb One Plan Updates for the following NR changes: CN21389-[*****], dated 11-4-11, CN26217-[*****], dated 12-22-11, CN27164-ME Impact, dated 2-1-12, CN28726-[*****], dated 12-22-11, CN29139-[*****] dated 12-1-11, LMA CN643-[*****] dated 12-1-11, LMA CN646, dated 11-16-11, LMA CN647-[*****], dated 11-17-11, LMA CN648-[*****], dated 11-16-11, LMA CN651-[*****], dated 11-17-11, LMA CN655, dated 11-17-11, LMA CN659-[*****], dated 11-17-11, LMA CN665-dated 11-17-11, LMA CN671-[*****], dated 12-1-11, LMA CN677-[*****], dated 12-1-11, LMA CN688-[*****], dated 1-12-12, LMA CN705- [*****], dated 1-12-12, LMA CN727-[*****], dated 1-12-12, LMA CN689-[*****], dated 1-12-12, LMA CN690-[*****], dated 12-15-11, LMA CN691-[*****], dated 1-12-12
|
*
|
787-9 Section 41 D/MI Tooling Phase IIIb One Plan Updates for non-recurring activities for the following changes: CN 22067, [*****], dated 6-1-11, CN 25334, [*****], dated 11-1-11, 787-9 [*****], dated 11-8-11
|
*
|
787-9 Pylon Derivatives & Mission Improvement Phase IIIb One Plan -- July 2011 - [*****], dated 12/19/2011
|
*
|
787-9 One Plan Phase IIIb, PTP Plan, Wing Leading Edge, Spirit AeroSystems, Tulsa, Dated 7/1/2011
|
Subject:
|
Ex-Im Bank Credit No. _______ - [Name of Country]
|
Period
|
Dates
|
Amount
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
Period
|
Dates
|
Amount
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
1.0
|
Introduction
|
2.0
|
Cost Saving Categories
|
3.0
|
Boeing and Spirit Engagement Processes
|
3.1
|
Identify, Prioritize and Provide Business Case Information
|
3.1.1
|
Identify and Prioritize - The parties shall generate, prioritize and present ideas for review. Generating and prioritizing ideas for further review may be done independently or in collaboration with the other party when requested.
|
3.1.2
|
For ideas selected for further consideration, a business case shall be developed in accordance with the template provided in paragraph 5.0 below. Notwithstanding anything to the contrary herein, the Parties do not intend to modify or waive Boeing’s right to request information or Spirit’s obligation to provide information as set forth in other provisions of this SBP or the GTA, including without limitation SBP Section 7.2.1
|
3.2
|
Evaluate and Authorize TCM Ideas
|
3.2.1
|
For TCM ideas intended to be incorporated into the program approved baseline configuration of each Aircraft (pre-firm configuration), the Parties will use 787 trade study management product development processes including, but not limited to, airplane level studies, preliminary design decision memos, and configuration descriptions memos to evaluate, authorize, and implement such TCM ideas.
|
3.2.2
|
For TCM ideas intended to be incorporated after the program declares firm configuration for each Aircraft (post-firm configuration), the Parties will use the 787 common change process including, but not limited to, technical studies, change requests and change notices to evaluate, authorize and implement such TCM ideas.
|
3.2.3
|
For TCM ideas not related to Aircraft configuration, the Parties shall evaluate and authorize such TCM ideas in a manner consistent with the objectives of TCM and their respective RAA’s.
|
3.3
|
Pricing and Contract Amendment
|
4.0
|
Changes Determined Not to Support Cost Reduction
|
5.0
|
Business Case Development
|
I.
|
Introduction
|
A.
|
The Prices for Shipsets set forth in SBP Attachment 1 are subject to an annual risk sharing supplemental payment or credit as set forth in this Attachment 27. The evaluation of a supplemental payment or credit shall take place beginning in the second calendar quarter of the year following the delivery of Shipset [*****] and in each second calendar quarter annually thereafter. The final evaluation of a supplemental payment or credit shall be made in the second calendar quarter of the year following Spirit’s delivery to Boeing of Shipset [*****].
|
B.
|
The evaluation of Spirit’s cost and any supplemental payment or credit hereunder shall begin upon receipt of Spirit’s costs in accordance with the templates in this SBP Attachment 27, Section VI (the “Cost Templates”), which shall be submitted no later than [*****], and conclude no later than the [*****].
|
C.
|
An annual supplemental payment or credit shall be determined based on the combined result of 2 evaluations: 1) the Price effect of all change as calculated annually in accordance with SBP Section 7.2 and Attachment 16; and 2) a risk sharing calculation when certain Spirit cost conditions exist as specified and calculated in this Attachment 27.
|
D.
|
Notwithstanding the above provisions, for purposes of evaluating risk and identifying opportunity, Spirit shall provide its costs to Boeing on or about [*****] utilizing the templates in this SBP Attachment 27, Section VI (the “Cost Templates”).
|
I.
|
Baseline Prices and Risk Sharing Control Limits
|
A.
|
The annual supplemental payment or credit process contained in this Attachment 27 shall utilize the following baseline prices and risk sharing control limits. All prices and calculations shall be made on a total Shipset basis and not at an individual Work Package basis. Upon the establishment of Pricing for a Derivative, a table applicable to such Derivative shall be established and used. Prior to each annual calculation of the supplemental payment or credit, Column (A) shall be updated to reflect the Shipset Prices as determined in each first calendar quarter update in accordance with SBP Section 7.2 and Attachment 16:
|
787-8 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****]- [*****]
|
$[*****]
|
+ [*****]%
|
-[*****]%
|
Shipsets [*****]-[*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****]- [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****]- [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
III.
|
Annual Supplemental Payment or Credit
|
A.
|
Process Flow
|
[*****]
|
|||||
B.
|
No later than [*****] of each year, Spirit shall submit its costs to Boeing in accordance with the templates in this SBP Attachment 27, Section VI (the “Cost Templates”).
|
C.
|
The average Shipset Prices for Shipsets delivered in the prior calendar year shall be compared to these costs and result in a risk sharing calculation.
|
D.
|
Risk Sharing Calculation - The risk sharing supplemental payment or credit shall be determined on the basis of Spirit’s cost condition as follows:
|
1.
|
Spirit costs exceed the updated average Shipset Price for the prior calendar year but are less than the Upper Limit (B)
|
a.
|
Supplemental payment calculation: [*****]
|
b.
|
Example: [*****].
|
2.
|
Spirit costs for the prior calendar year are greater than the average Upper Limit (B)
|
a.
|
Supplemental payment calculation: [*****]
|
b.
|
Example: [*****].
|
3.
|
Spirit costs are less than the updated average Shipset Price for the prior calendar year but are greater than the Lower Limit (C)
|
a.
|
Supplemental credit calculation:[*****]
|
b.
|
Example: [*****].
|
4.
|
Spirit costs for the prior calendar year are less than the Lower Limit (C)
|
a.
|
Supplemental credit calculation: [*****]
|
b.
|
Example: [*****].
|
A.
|
In the event Boeing determines in good faith, using standards that are commercially reasonable, that Spirit has not provided adequate data, records or support for its Cost Template in a manner to support the conclusion of the Annual Review set forth in Section I.B, Boeing shall notify Spirit of this determination in writing as soon as possible, but in any event, prior to the conclusion of the Annual Review period. In such notice, Boeing shall identify with specificity the reason it believes that Spirit has not provided adequate data, records or support. Spirit shall have [*****] days following the scheduled conclusion of such Annual Review to address any issues identified by Boeing in such notice. In the event Spirit does not adequately address the issues during this [*****] day cure period, Boeing shall be entitled to a supplemental credit payment
|
V.
|
Validation and Audit process
|
VI.
|
Cost Review Cost Templates
|
A.
|
Spirit will provide several reports. These reports will support both the annual risk sharing adjustment as well as provide information to further guide cost reduction activities. The Parties agree that reports provided by Spirit shall meet the following general requirements: (1) data included in the reports shall allow for direct comparison to the contract price, (2) report formats shall be established to be consistent with Spirit's existing systems for tracking costs and to minimize the amount of data translation required by Spirit, and (3) data provided in the reports shall be auditable.
|
1.
|
All costs, including recurring and nonrecurring, associated with production end items (exclude spares/POA’s/-9 NR)
|
2.
|
Data can be summarized to total line unit for comparison to Total Spirit Contract Price.
|
3.
|
Detail available at the end item level.
|
4.
|
Capability to drill down as necessary (reference Paragraph V)
|
B.
|
Templates and Descriptions
|
a)
|
Assigned Value Template - primary function: support annual risk sharing adjustment. The actual annual risk sharing adjustment shall be calculated from the values in this report. The template will include the following (Example templates are in the noted Exhibits to this Attachment 27):
|
Section 41 (Exhibit A)
|
Pylon (Exhibit B)
|
Wing Leading Edge (Exhibit C)
|
|
[*****]
|
|||
b)
|
Incurred Value Templates - primary functions: i) aid in validating the Assigned Value Template, and ii) guide cost reduction activities.
|
Section 41 and Pylon (
Exhibit D
)
|
Sect 41 and Pylon Costing Rate Templates
(Exhibit L)
[*****]
|
|
[*****]
|
[*****]
|
|
|
||
Sect 41 and Pylon Purchased Parts Extract
(Exhibit M)
|
||
[*****]
|
||
|
|
|
787 Sec 41 Control Station to Cost Center Matrix
(Exhibit J)
|
|
|
|
|
Wing Leading Edge Equivalent Personnel (
Exhibit E
)
|
Wing Leading Edge Incurred Hours by Line Number (
Exhibit F
)
|
|
[*****]
|
[*****]
|
|
|
||
Wing Leading Edge Incurred Work In Process (
Exhibit G
)
|
||
[*****]
|
||
787 WLE Program Cost
(Exhibit H)
|
||
[*****]
|
||
787 WLE Rate Flow Template
(Exhibit I)
|
||
[*****]
|
||
787 WLE Costing Rate Templates
(Exhibit K)
[*****]
|
||
[*****]
|
||
787 WLE Purchased Parts Extract
(Exhibit M)
|
||
[*****]
|
||
•
|
787 WLE Equivalent Personnel
|
•
|
787 FLE Equivalent Personnel
|
•
|
787 MLE Equivalent Personnel
|
[*****]
|
|||||
[*****]
|
|||||
Factory
|
Factory
|
Factory
|
Factory
|
|
Composite Fabrication
|
Structure
|
System
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
[*****]
|
||||
•
|
NPV Calculation:
If n is the number of cash flows in the list of values, the formula for NPV is:
|
1.
|
[*****]
baseline calculation example per Attachment 29, paragraphs D.1.1 and D.1.2. Calculated in the
[*****]
|
2.
|
Quality Incentive Payment Calculation - Notional Calculations for
[*****]
. Calculated in the
[*****]
|
2.1
|
Scenario 1
|
2.2
|
Scenario 2
|
2.3
|
Scenario 3
|
2.4
|
Scenario 4
|
1.
|
Incorporation of signed One Plan Documents and their associated settlement values (as defined in SBP Attachment 23).
|
1.
|
SBP Attachment 1, “Work Statement and Pricing” is hereby amended as set forth in Exhibit 1 hereto to incorporate revisions to the following sections: “Recurring Shipset Price -8”, “Recurring Shipset Net Payment (not inclusive of Boeing Cost Recovery)”, “APAP LN [*****] Summary through [*****]”, “Non-Recurring Value Agreements”, “Advance Payments for Remaining Other D/MI NR Balance”, “Incentive Plan Payments” .
|
2.
|
SBP Attachment 2, “Production Article Definition and Contract Change Notices” is hereby amended in its entirety as set forth in Exhibit 2 hereto to incorporate revisions to Section B “Contract Change Notices”.
|
3.
|
SBP Attachment 3, “Price Status and Summary Tables” is hereby amended to revise “Price Status and Summary Tables- Non Recurring Prices” as set forth in Exhibit 3 hereto.
|
4.
|
SBP Attachment 16, “Pricing Methodologies” is hereby amended to revise Table A.1 of Section A “Boeing Performed Repair and Rework”as set forth in Exhibit 4 hereto.
|
5.
|
SBP Attachment 16, “Pricing Methodologies” is hereby amended to revise
Section 41
, Fabrication Table C, and Assembly and Support Table A of Section B “Derivative Pricing” as set forth in Exhibit 4 hereto.
|
6.
|
SBP Attachment 16, “Pricing Methodologies” is hereby amended to revise Section 41 Base Values, Fabrication Table C, and Assembly and Support Table A of Section D.3.1.1 “Recurring Price Factor” as set forth in Exhibit 4 hereto.
|
7.
|
SBP Attachment 23, “Derivatives and Mission Improvement Performance to Plan” is hereby amended to revise Exhibit D - “Criteria for Performance Based R&D Payments and Advance Payments”, Sections 1 and 2 and Exhibit E - “One Plan Document Record” as set forth in Exhibit 5 hereto.
|
8.
|
SBP Attachment 25, “Incentive Payment” is hereby amended to revise Section B “Incentive Payment Pool” and Section F “Incentive Payments Granted”, 1 and 2 as set forth in Exhibit 6 hereto.
|
The Boeing Company
|
|
|
Spirit AeroSystems Inc.
|
|
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeff Loomis
|
|
By:
|
/s/ Clint Cotner
|
|
|
|
|
|
Name:
|
Jeff Loomis
|
|
Name:
|
Clint Cotner
|
|
|
|
|
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Administrator
|
|
|
|
|
|
Date:
|
6/15/13
|
|
Date:
|
6/28/13
|
Number
17
18
19
20
|
Description
MOA Dated 12-21-10 (Blockpoint 20 Settlement)
Amended or added: SBP Table of Contents, Sections 1.0, 3.1.1, 3.2.1, 3.3.1, 3.3.2.2, 3.3.4.3 and 3.3.4.8, 3.3.7, 3.3.7.1, 3.3.7.2, 3.3.7.3, 3.4.2.1, 3.4.5, 4.1.1, 4.1.3, 4.2, 4.3.1, 4.3.1.1, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 5.5, 5.6, 5.7, 5.8, 5.8.1, 5.8.2, 6.1, 6.2, 6.3, 7.1, 7.2, 7.2.1, 7.2.2, 7.2.3, 7.5, 7.5.1, 7.5.2, 7.8, 7.8.1, 7.8.2, 11.2
Deleted SBP Sections 3.3.2.3.I, 3.4.2.3, 7.9, 7.10
Amended or added SBP Attachments 1, 2, 3, 4, 7, 14, 16, 23, 25, 26, 27, 28, 29
Deleted SBP Attachments 13 and 19
Throughout SBP, various references to: “SBP Attachment 7 Indentured Parts Price List and Spare Parts Pricing” are revised to “the SPPC”.
D&MI One Plan Update
Updated SBP Attachments 1, 3, 23, 25
Amended: SBP Section 7.4 per Amendment 3
D&MI One Plan Update
Updated SBP Attachments 1, 2, 3, 16, 23, 25
D&MI One Plan Update
Updated SBP Attachments 1, 2, 3, 16, 23, 25
MOA Dated July 10, 2012 (Blockpoint
[*****]
Settlement)
1. Updated SBP Attachments 1, 2, 3, 16, 23, 25, 27
|
Date
5/12/11
8/24/11
7/30/12
6/5/13
|
Approval
R. Parks
M. Kurimsky
M. Guillen
M. Kurimsky
A. Mauldin
M. Kurimsky
Jeff Loomis
C. Cotner
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
B.1
|
Non-D/MI Contract Change Notices
:
|
B.2
|
D/MI PtP Contract Change Notices:
|
Table A.1
|
|
Traveled Work Nomenclature
|
Price Per Unit
|
SOI-A
|
$ [*****]
|
SOI-B
|
$ [*****]
|
Non-conformance EPD
|
$ [*****]
|
Section 41
|
|
|
Fabrication dollars include aluminumitanium,composites and other. Other includes such elements as sealant, fasteners, coatings and other miscellaneous.
|
Total Fabrication Dollars
|
$ [*****]
|
|
|
|
Total Assembly and Support dollars. This includes such elements as recurring assembly,Eng, ME, IE and other support functions.
|
Assembly and Support
|
$ [*****]
|
|
|
|
Amortized Non-recurring included in the baseline below.
|
NR Amortization
|
$ [*****]
|
|
|
|
Baseline Price [*****] shipsets
|
Baseline
|
$ [*****]
|
C. Resulting baseline $ per pound as a result of the factors used above.
|
Material Type
Detailed
Level
|
Dollars per pound
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
||
Composite
|
||
Other
|
||
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
||
Composite
|
||
Steel
|
||
All other Other
|
||
Pylon
|
Aluminum
|
[*****]
|
Ti 5-5-5-3
|
||
All other Ti
|
||
CFRP
|
||
All other Comp
|
||
Steel
|
||
All other Other
|
A. Baseline values used to establish baseline pricing.
|
Total Assembly & Support $
|
Total In-House Assembled/Installed Part Count
|
$ per Part
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
Wing Leading Edge
|
[*****]
|
[*****]
|
[*****]
|
Pylon
(simple average of
[*****]
and
[*****]
)
|
[*****]
|
[*****]
|
[*****]
|
Section 41
|
|
|
Fabrication dollars include aluminumitanium,composites and other. Other includes such elements as sealant, fasteners, coatings and other miscellaneous.
|
Total Fabrication Dollars
|
$ [*****]
|
|
|
|
Total Assembly and Support dollars. This includes such elements as recurring assembly,Eng, ME, IE and other support functions.
|
Assembly and Support
|
$ [*****]
|
|
|
|
Amortized Non-recurring included in the baseline below.
|
NR Amortization
|
$ [*****]
|
|
|
|
Baseline Price
[*****]
shipsets
|
Baseline
|
$ [*****]
|
C. Resulting baseline $ per pound as a result of the factors used above.
|
Material Type
Detailed
Level
|
Dollars per pound
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
||
Composite
|
||
Other
|
||
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
||
Composite
|
||
Steel
|
||
All other Other
|
||
Pylon
|
Aluminum
|
[*****]
|
Ti 5-5-5-3
|
||
All other Ti
|
||
CFRP
|
||
All other Comp
|
||
Steel
|
||
All other Other
|
A. Baseline values used to establish baseline pricing.
|
Total Assembly & Support $
|
Total In-House Assembled/Installed Part Count
|
$ per Part
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
Wing Leading Edge
|
[*****]
|
[*****]
|
[*****]
|
Pylon
(simple average of
[*****]
and
[*****]
)
|
[*****]
|
[*****]
|
[*****]
|
Event No.
|
Performance Event
|
Completion Criteria
|
Verification
|
*Amount (as of 5/20/13 and Amendment 20)
(Paid in accordance with SBP 5.6)
|
1.
|
Section 41 Preliminary Layouts [*****]% Complete
|
i) [*****]% of Section 41 Preliminary Layouts
ii) all other Section 41 R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
|
Events closed in ETAC
|
[*****]
|
2.
|
CDR complete for [*****] Pylon
|
i) CDR completed for Sec 41 and [*****] Pylon
ii) all Section 41 R&D events and all Pylon R&D events and all WLE R&D events scheduled prior to or concurrent to planned [*****] Pylon CDR
|
When all actions items are closed following CDR and applicable events are closed in ETAC
|
[*****]
|
3.
|
Sec 41 Approved Layouts 95% Complete
|
i) [*****]% of Section 41 Approved Layouts
ii) all other Section 41 R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
|
Events closed in ETAC
|
[*****]
|
4.
|
All Products On Dock to the Delivery Point
|
i) Delivery of all products to Boeing
ii) all Section 41 R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete
|
Section 41 on dock at Boeing and applicable events are closed in ETAC
|
[*****]
|
5.
|
Final Payment
|
|
Airplane Certification
|
[*****]
|
Event No.
|
Performance Event
|
Completion Criteria
|
Verification
|
* Amount (as of 5/20/13 and Amendment20)
(Paid in accordance with SBP 5.8)
|
1.
|
BP [*****] Tooling & Birdstrike Forging
|
Line Unit [*****] delivered & Birdstrike forgings on dock Spirit
|
Line Unit [*****] loaded in LCF & FAI complete on forgings
|
[*****]
|
2.
|
BP [*****] Tooling
|
Line Unit [*****] delivered
|
Line Unit [*****] loaded in LCF
|
[*****]
|
3.
|
BP [*****] Tooling
|
Line Unit [*****] delivered
|
Line Unit [*****] loaded in LCF
|
[*****]
|
4.
|
Begin spinning of 1
st
787-9 Sec 41 barrel
|
Planned Other D&MI NR Work completed prior to the beginning of spinning of 1
st
787-9 Sec 41 barrel
|
Load of barrel in to AFP cell
|
[*****]
|
5.
|
787-9
|
First 787-9 Delivered
|
First 787-9 on LCF
|
[*****]
|
6.
|
Final Payment
|
|
|
[*****]
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Summary, Revision New, dated 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan 787-9, Revision New, 01-15-09
|
•
|
Spirit-Tulsa One Plan Grand Total, dated 4/16/09
|
•
|
787-9 One-Plan Spirit Pylon April 7-8, 2009
|
•
|
787-9 One-Plan Spirit S41 April 1, 2010
|
•
|
787-9 One-Plan Spirit WLE (Interim Agreement) May 21, 2010
|
•
|
787-9 One-Plan Spirit Pylon March 4, 2010
|
•
|
787-9 & MI Phase 2 One-Plan - Wing LE (WP 10 & 12)” (Interim Agreement) dated 09/22/10
|
•
|
“787 Pylon Derivatives & Mission Improvement Phase II ONE PLAN UPDATE 2
nd
QUARTER - 2010” dated 7/1/2010
|
•
|
787 Section 41 IPT Derivatives & Mission Improvement Phase II ONE PLAN dated 6/30/2010
|
•
|
787 Section 41 IPT Derivatives & Mission Improvement Phase II ONE PLAN dated 8/26/2010
|
•
|
787 Pylon Derivatives & Mission Improvement Phase IIIa ONE PLAN - November 2010 - August 2011 dated 11/4/2010
|
•
|
787-9 & MI One-Plan; PtP Plan, Wing Leading Edge, dated 12/13, 2010, Rev 14
|
•
|
787 Phase III PtP Negotiation Status Between Spirit Wichita and Boeing as of March 11, 2011
|
•
|
787 Phase III PtP Negotiation Status Between Spirit Wichita and Boeing as of April 21, 2011
|
•
|
787 Section 41 D&MI Improvement “Sec 41 Tooling One Plan Agreements March and April 2011”
|
•
|
787 Section 41 D&MI Improvement “CN 22067 - Sec 41 [*****]” dated June 1, 2011
|
•
|
787 One Plan - Section 41 | SOW Hours Agreement “D_MI Sec 41 Engineering One Plan Agreements 6_9_11”
|
•
|
787 Section 41 D&MI Improvement “787 D_MI Sec 41 Tooling One Plan Agreements 6_7_11”
|
•
|
787 Pylon Derivatives & Mission Improvement Phase IIIa ONE PLAN Rev. B - November 2010 - June 2011 dated 7/7/2011
|
•
|
787-9 One-Plan Phase IIIb; PtP Plan, Wing Leading Edge, dated 7/1/2011
|
•
|
787-9 Section 41 D/MI PtP Phase IIIb One Plan Updates for the following NR changes: CN21389-[*****], dated 11-4-11, CN26217-[*****], dated 12-22-11, CN27164-ME Impact, dated 2-1-12, CN28726-[*****], dated 12-22-11, CN29139-[*****], dated 12-1-11, LMA CN643-[*****], dated 12-1-11, LMA CN646, dated 11-16-11, LMA CN647-[*****], dated 11-17-11, LMA CN648-[*****], dated 11-16-11, LMA CN651-[*****], dated 11-17-11, LMA CN655, dated 11-17-11, LMA CN659-[*****], dated 11-17-11, LMA CN665-dated 11-17-11, LMA CN671-[*****], dated 12-1-11, LMA CN677-SCN Package Updates, dated 12-1-11, LMA CN688-[*****] SCN Packages, dated 1-12-12, LMA CN705-[*****], dated 1-12-12, LMA CN727-[*****], dated 1-12-12, LMA CN689-SCN Updates, dated 1-12-12, LMA CN690-[*****], dated 12-15-11, LMA CN691-[*****], dated 1-12-12
|
•
|
787-9 Section 41 D/MI Tooling Phase IIIb One Plan Updates for non-recurring activities for the following changes: CN 22067, [*****], dated 6-1-11, CN 25334, [*****], dated 11-1-11, [*****], dated 11-8-11
|
•
|
787-9 Pylon Derivatives & Mission Improvement Phase IIIb One Plan -- July 2011 - [*****], dated 12/19/2011
|
•
|
787-9 One Plan Phase IIIb, PTP Plan, Wing Leading Edge, Spirit AeroSystems, Tulsa, Dated 7/1/2011
|
•
|
787-9 One Plan for Section 41 and Wing documented in CCN 2170R2 , Attachment A
|
•
|
787-9 One Plan for Pylon [*****], dated January , 2012.
|
Period
|
Dates
|
Amount
|
[*****]
|
Period
|
Dates
|
Amount
|
[*****]
|
787-8 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
1.
|
Incorporation of signed One Plans Document and associated settlement values (as defined in SBP Attachment 23).
|
1. SBP 8.5
|
“Retention of Quality Records
”
is herby deleted in its entirety and replaced with the text set forth in Exhibit 1 hereto.
|
3.
|
SBP Attachment 2, “Production Article Definition and Contract Change Notices” is hereby amended in its entirety as set forth in Exhibit 3 hereto to incorporate revisions to Section B “Contract Change Notices”.
|
4.
|
SBP Attachment 3, “Price Status and Summary Tables” is hereby amended to revise “Price Status and Summary Tables- Non Recurring Prices” as set forth in Exhibit 4 hereto.
|
5.
|
SBP Attachment 16, “Pricing Methodologies” is hereby amended to revise Table A.1 of Section A.1 “Boeing Performed Repair and Rework” as set forth in Exhibit 5 hereto.
|
The Boeing Company
|
|
|
Spirit AeroSystems Inc.
|
|
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Crystal Francois
|
|
By:
|
/s/ Leanna Hampton
|
|
|
|
|
|
Name:
|
Crystal Francois
|
|
Name:
|
Leanna Hampton
|
|
|
|
|
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Administrator
|
|
|
|
|
|
Date:
|
7/1/2014
|
|
Date:
|
7/1/2014
|
Number
17
18
19
20
21
|
Description
MOA Dated 12-21-10 (Blockpoint 20 Settlement)
Amended or added: SBP Table of Contents, Sections 1.0, 3.1.1, 3.2.1, 3.3.1, 3.3.2.2, 3.3.4.3 and 3.3.4.8, 3.3.7, 3.3.7.1, 3.3.7.2, 3.3.7.3, 3.4.2.1, 3.4.5, 4.1.1, 4.1.3, 4.2, 4.3.1, 4.3.1.1, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 5.5, 5.6, 5.7, 5.8, 5.8.1, 5.8.2, 6.1, 6.2, 6.3, 7.1, 7.2, 7.2.1, 7.2.2, 7.2.3, 7.5, 7.5.1, 7.5.2, 7.8, 7.8.1, 7.8.2, 11.2
Deleted SBP Sections 3.3.2.3.I, 3.4.2.3, 7.9, 7.10
Amended or added SBP Attachments 1, 2, 3, 4, 7, 14, 16, 23, 25, 26, 27, 28, 29
Deleted SBP Attachments 13 and 19
Throughout SBP, various references to: “SBP Attachment 7 Indentured Parts Price List and Spare Parts Pricing” are revised to “the SPPC”.
D&MI One Plan Update
Updated SBP Attachments 1, 3, 23, 25
Amended: SBP Section 7.4 per Amendment 3
D&MI One Plan Update
Updated SBP Attachments 1, 2, 3, 16, 23, 25
D&MI One Plan Update
1.
Updated SBP Attachments 1, 2, 3, 16, 23, 25, 27
D&MI One Plan Update
1. Amended: SBP Section 8.5
2. Updated SBP Attachments 1, 2, 3, 16, 23, 25, 27, 29
|
Date
5/12/11
8/24/11
7/30/12
6/5/13
7/1/14
|
Approval
R. Parks
M. Kurimsky
M. Guillen
M. Kurimsky
A. Mauldin
M. Kurimsky
Jeff Loomis
C. Cotner
C. Francois
L. Hampton
|
8.5
|
Retention of Quality Records
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
B.1
|
Non-D/MI Contract Change Notices
:
|
Traveled Work Nomenclature
|
Price Per Unit
|
SOI-A
|
$
[*****]
|
SOI-B
|
$
[*****]
|
Non-conformance EPD
|
$
[*****]
|
Event No.
|
Performance Event
|
Completion Criteria
|
Verification
|
*Amount (as of 2/21/14 and Amendment 21)
(Paid in accordance with SBP 5.6)
|
1.
|
Section 41 Preliminary Layouts [*****]% Complete
|
i) [*****]% of Section 41 Preliminary Layouts
ii) all other Section 41 R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
|
Events closed in ETAC
|
$[*****]
|
2.
|
CDR complete for [*****] Pylon
|
i) CDR completed for Sec 41 and [*****] Pylon
ii) all Section 41 R&D events and all Pylon R&D events and all WLE R&D events scheduled prior to or concurrent to planned [*****] Pylon CDR
|
When all actions items are closed following CDR and applicable events are closed in ETAC
|
$[*****]
|
3.
|
Sec 41 Approved Layouts [*****]% Complete
|
i) [*****]% of Section 41 Approved Layouts
ii) all other Section 41 R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 [*****]% milestone are complete
|
Events closed in ETAC
|
$[*****]
|
4.
|
All Products On Dock to the Delivery Point
|
i) Delivery of all products to Boeing
ii) all Section 41 R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete and
iii) all Pylon R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete
iv) all WLE R&D events scheduled prior to or concurrent to planned Section 41 delivery milestone are complete
|
Section 41 on dock at Boeing and applicable events are closed in ETAC
|
$[*****]
|
5.
|
Final Payment
|
|
Airplane Certification
|
$[*****]
|
Event No.
|
Performance Event
|
Completion Criteria
|
Verification
|
* Amount (as of 2/11/14 and Amendment 21)
(Paid in accordance with SBP 5.8)
|
1.
|
BP [*****] Tooling & Birdstrike Forging
|
Line Unit [*****] delivered & Birdstrike forgings on dock Spirit
|
Line Unit [*****] loaded in LCF & FAI complete on forgings
|
$[*****]
|
2.
|
BP [*****] Tooling
|
Line Unit [*****] delivered
|
Line Unit [*****] loaded in LCF
|
$[*****]
|
3.
|
BP [*****] Tooling
|
Line Unit [*****] delivered
|
Line Unit [*****] loaded in LCF
|
$[*****]
|
4.
|
Begin spinning of 1
st
787-9 Sec 41 barrel
|
Planned Other D&MI NR Work completed prior to the beginning of spinning of 1
st
787-9 Sec 41 barrel
|
Load of barrel in to AFP cell
|
$[*****]
|
5.
|
787-9
|
First 787-9 Delivered
|
First 787-9 on LCF
|
$[*****]
|
6.
|
Final Payment
|
|
Airplane Certification
|
$[*****]
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Summary, Revision New, dated 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan Line [*****], Revision New, 01-15-09
|
•
|
787 Section 41 IPT Derivatives and Mission Improvement One Plan 787-9, Revision New, 01-15-09
|
•
|
Spirit-Tulsa One Plan Grand Total, dated 4/16/09
|
•
|
787-9 One-Plan Spirit Pylon April 7-8, 2009
|
•
|
787-9 One-Plan Spirit S41 April 1, 2010
|
•
|
787-9 One-Plan Spirit WLE (Interim Agreement) May 21, 2010
|
•
|
787-9 One-Plan Spirit Pylon March 4, 2010
|
•
|
787-9 & MI Phase 2 One-Plan - Wing LE (WP 10 & 12)” (Interim Agreement) dated 09/22/10
|
•
|
“787 Pylon Derivatives & Mission Improvement Phase II ONE PLAN UPDATE 2
nd
QUARTER - 2010” dated 7/1/2010
|
•
|
787 Section 41 IPT Derivatives & Mission Improvement Phase II ONE PLAN dated 6/30/2010
|
•
|
787 Section 41 IPT Derivatives & Mission Improvement Phase II ONE PLAN dated 8/26/2010
|
•
|
787 Pylon Derivatives & Mission Improvement Phase IIIa ONE PLAN - November 2010 - August 2011 dated 11/4/2010
|
•
|
787-9 & MI One-Plan; PtP Plan, Wing Leading Edge, dated 12/13, 2010, Rev 14
|
•
|
787 Phase III PtP Negotiation Status Between Spirit Wichita and Boeing as of March 11, 2011
|
•
|
787 Phase III PtP Negotiation Status Between Spirit Wichita and Boeing as of April 21, 2011
|
•
|
787 Section 41 D&MI Improvement “Sec 41 Tooling One Plan Agreements March and April 2011”
|
•
|
787 Section 41 D&MI Improvement “CN 22067 - Sec 41 [*****]” dated June 1, 2011
|
•
|
787 One Plan - Section 41 | SOW Hours Agreement “D_MI Sec 41 Engineering One Plan Agreements 6_9_11”
|
•
|
787 Section 41 D&MI Improvement “787 D_MI Sec 41 Tooling One Plan Agreements 6_7_11”
|
•
|
787 Pylon Derivatives & Mission Improvement Phase IIIa ONE PLAN Rev. B - November 2010 - June 2011 dated 7/7/2011
|
•
|
787-9 One-Plan Phase IIIb; PtP Plan, Wing Leading Edge, dated 7/1/2011
|
•
|
787-9 Section 41 D/MI PtP Phase IIIb One Plan Updates for the following NR changes: CN21389-[*****], dated 11-4-11, CN26217-[*****], dated 12-22-11, CN27164-ME Impact, dated 2-1-12, CN28726-[*****], dated 12-22-11, CN29139-[*****], dated 12-1-11, LMA CN643-[*****], dated 12-1-11, LMA CN646, dated 11-16-11, LMA CN647-[*****], dated 11-17-11, LMA CN648-[*****], dated 11-16-11, LMA CN651-[*****], dated 11-17-11, LMA CN655, dated 11-17-11, LMA CN659-[*****], dated 11-17-11, LMA CN665-dated 11-17-11, LMA CN671-[*****], dated 12-1-11, LMA CN677-SCN Package Updates, dated 12-1-11, LMA CN688-[*****], dated 1-12-12, LMA CN705-[*****], dated 1-12-12, LMA CN727-[*****], dated 1-12-12, LMA CN689-SCN Updates, dated 1-12-12, LMA CN690-[*****], dated 12-15-11, LMA CN691-[*****], dated 1-12-12
|
•
|
787-9 Section 41 D/MI Tooling Phase IIIb One Plan Updates for non-recurring activities for the following changes: CN 22067, [*****], dated 6-1-11, CN 25334, [*****], dated 11-1-11, 787-9 [*****], dated 11-8-11
|
•
|
787-9 Pylon Derivatives & Mission Improvement Phase IIIb One Plan -- July 2011 - [*****], dated 12/19/2011
|
•
|
787-9 One Plan Phase IIIb, PTP Plan, Wing Leading Edge, Spirit AeroSystems, Tulsa, Dated 7/1/2011
|
•
|
787-9 One Plan for Section 41 and Wing documented in CCN 2170R2 , Attach A
|
•
|
787-9 One Plan for Pylon [*****], CN 32338 and CN 32339, dated January , 2012.
|
•
|
787-9 One Plans for Section 41 and Pylon documented in CCN 2179 Attachment A dated 2/11/14
|
Period
|
Dates
|
Amount
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Period
|
Dates
|
Amount
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
787-8 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
1.
|
[*****]
baseline calculation example per Attachment 29, paragraphs D.1.1 and D.1.2. Calculated in the
[*****]
|
2.
|
Quality Incentive Payment Calculation - Notional Calculations for
[*****].
Calculated in the
[*****]
|
2.1
|
Scenario 1
|
2.2
|
Scenario 2
|
2.3
|
Scenario 3
|
2.4
|
Scenario 4
|
The Boeing Company
|
|
|
Spirit AeroSystems Inc.
|
|
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Sarena Garcia-Deleone
|
|
By:
|
/s/ Leanna Hampton
|
|
|
|
|
|
Name:
|
Sarena Garcia-Deleone
|
|
Name:
|
Leanna Hampton
|
|
|
|
|
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Administrator
|
|
|
|
|
|
Date:
|
12/8/14
|
|
Date:
|
12/04/14
|
Number
17
18
19
20
21
22
(VOID)
22R1
|
Description
MOA Dated 12-21-10 (Blockpoint 20 Settlement)
Amended or added: SBP Table of Contents, Sections 1.0, 3.1.1, 3.2.1, 3.3.1, 3.3.2.2, 3.3.4.3 and 3.3.4.8, 3.3.7, 3.3.7.1, 3.3.7.2, 3.3.7.3, 3.4.2.1, 3.4.5, 4.1.1, 4.1.3, 4.2, 4.3.1, 4.3.1.1, 4.4, 4.7, 4.8, 4.9, 4.10, 4.11, 5.5, 5.6, 5.7, 5.8, 5.8.1, 5.8.2, 6.1, 6.2, 6.3, 7.1, 7.2, 7.2.1, 7.2.2, 7.2.3, 7.5, 7.5.1, 7.5.2, 7.8, 7.8.1, 7.8.2, 11.2
Deleted SBP Sections 3.3.2.3.I, 3.4.2.3, 7.9, 7.10
Amended or added SBP Attachments 1, 2, 3, 4, 7, 14, 16, 23, 25, 26, 27, 28, 29
Deleted SBP Attachments 13 and 19
Throughout SBP, various references to: “SBP Attachment 7 Indentured Parts Price List and Spare Parts Pricing” are revised to “the SPPC”.
D&MI One Plan Update
Updated SBP Attachments 1, 3, 23, 25
Amended: SBP Section 7.4 per Amendment 3
D&MI One Plan Update
Updated SBP Attachments 1, 2, 3, 16, 23, 25
D&MI One Plan Update
1. Updated SBP Attachments 1, 2, 3, 16, 23, 25, 27
D&MI One Plan Update
1. Amended: SBP Section 8.5
2. Updated SBP Attachments 1, 2, 3, 16, 23, 25, 27, 29
MOA Dated 4-8-14 (2015 Sustaining Pricing Agreement)
Amended SBP Section 5.5
Updated SBP Attachment 1
MOA Dated 4-8-14 (2015 Sustaining Pricing Agreement)
Amended SBP Section 5.5
Updated SBP Attachment 1
|
Date
5/12/11
8/24/11
7/30/12
6/5/13
6/2/14
11/12/14
12/4/14
|
Approval
R. Parks
M. Kurimsky
M. Guillen
M. Kurimsky
A. Mauldin
M. Kurimsky
Jeff Loomis
C. Cotner
C. Francois
L. Hampton
S. Garcia - Deleone
C. Green
S. Garcia - Deleone
L. Hampton
|
Work Package
|
First Line Unit Subject to Suspension
|
Section 41
|
[*****]
|
Pylon
|
[*****]
|
Wing - FLE
|
[*****]
|
Wing - MLE
|
[*****]
|
A.
|
The Parties have entered into the General Terms Agreement, GTA BCA-65520-0032, dated June 16, 2005 as amended from time to time (the “GTA”), the Special Business Provisions, BCA-MS-65530-0019, dated June 16, 2005 as amended from time to time (the "SBP"), the Memorandum of Agreement: 737 / 747 / 767 / 777 Pricing Agreement Through 2015, dated April 8, 2014 (“2015 Sustaining Pricing Agreement”), and the Memorandum of Agreement: 787 Interim Price Agreements, dated November 21, 2014, and now desire to again modify the SBP.
|
B.
|
The 787 Program includes designing and building the Program Airplane and Derivatives and Mission Improvement work as identified by the Parties. This Amendment No. 23 updates the SBP to incorporate the outcome of the Annual Price Adjustment for changes committed on and before December 31, 2013 and which are effective on or before Shipset Line Number [*****] and to incorporate the annual update of the traveled work cost estimating relationship values.
|
1.
|
Page 4 of the table of Amendments to the SBP is hereby added as set forth in Exhibit 1 hereto to list this Amendment No. 23 in such table.
|
2.
|
Attachment 1 “Work Statement and Pricing” is hereby deleted and replaced in its entirety as set forth in Exhibit 2 hereto to incorporate the outcome of the Annual Price Adjustment for changes committed on and before December 31, 2013 and which are effective on or before Shipset Line Number [*****].
|
3.
|
Attachment 2 “Production Article Definition and Contract Change Notices” Section B.1 “
Non-D/MI Contract Change Notices
” is hereby amended to add the following:
|
4.
|
Attachment 2 “Production Article Definition and Contract Change Notices” Section B.2 “
D/MI PtP Contract Change Notices
” is hereby deleted and replaced in its entirety with the following:
|
5.
|
Attachment 16 “Pricing Methodologies” Table A.1 is hereby deleted and replaced in its entirety with the following:
|
Traveled Work Nomenclature
|
Price Per Unit
|
SOI-A
|
$[*****]
|
SOI-B
|
$[*****]
|
Non-conformance EPD
|
$[*****]
|
6.
|
Attachment 27 “Risk Sharing” Section II. “
Baseline Prices and Risk Sharing Control Limits
” Section A. is hereby deleted and replaced in its entirety as set forth in Exhibit 3 hereto to update the 787-8 Attachment 1 Price to incorporate the outcome of the Annual Price Adjustment for changes committed on and before December 31, 2013 and which are effective on or before Shipset Line Number [*****].
|
The Boeing Company
|
|
|
Spirit AeroSystems Inc.
|
|
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeff Loomis
|
|
By:
|
/s/ Leanna Hampton
|
|
|
|
|
|
Name:
|
Jeff Loomis
|
|
Name:
|
Leanna Hampton
|
|
|
|
|
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Administrator
|
|
|
|
|
|
Date:
|
8/18/15
|
|
Date:
|
8/3/15
|
Number
23
|
Description
Annual Price Adjustment thru Line Number
[*****]
Updated SBP Attachments 1, 2, and 27
Boeing Performed Rework and Repair
Updated SBP Attachment 16 Table A.1
|
Date
8/3/15
|
Approval
J. Loomis
L. Hampton
|
787-8 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
A.
|
The Parties have entered into the General Terms Agreement, GTA BCA-65520-0032, dated June 16, 2005 as amended from time to time (the “GTA”), the Special Business Provisions, BCA-MS-65530-0019, dated June 16, 2005 as amended from time to time (the "SBP") and the Memorandum of Agreement: 787 Interim Price Agreements, dated November 21, 2014, and now desire to again modify the SBP.
|
B.
|
The 787 Program includes designing and building the Program Airplane and Derivatives and Mission Improvement work as identified by the Parties. This Amendment No. 24 updates the SBP to incorporate the outcome of the Annual Price Adjustment for changes committed on and before December 31, 2014 and which are effective on or before Shipset Line Number [*****] and to incorporate the annual update of the traveled work cost estimating relationship values.
|
1.
|
Page 4 of the table of Amendments to the SBP is hereby deleted and replaced in its entirety as set forth in Exhibit 1 hereto.
|
2.
|
SBP Attachment 1 “Work Statement and Pricing” is hereby deleted and replaced in its entirety as set forth in Exhibit 2 hereto to incorporate the outcome of the Annual Price Adjustment for changes committed on and before December 31, 2014 and which are effective on or before Shipset Line Number [*****].
|
3.
|
SBP Attachment 2 “Production Article Definition and Contract Change Notices” Section B. “
Contract Change Notices
” is hereby deleted and replaced in its entirety as set forth in Exhibit 3 hereto to.
|
4.
|
SBP Attachment 3 “Price Status and Summary Tables” is hereby deleted and replaced in its entirety as set forth in Exhibit 4 hereto to incorporate the outcome of the Annual Price Adjustments completed to date, which includes changes committed on and before December 31, 2014 and which are effective on or before Shipset Line Number [*****].
|
5.
|
SBP Attachment 16 “Pricing Methodologies” Table A.1 is hereby deleted and replaced in its entirety with the following:
|
6.
|
SBP Attachment 27 “Risk Sharing” Section II. “
Baseline Prices and Risk Sharing Control Limits
” Section A. is hereby deleted and replaced in its entirety as set forth in Exhibit 5 hereto to update the 787-8 SBP Attachment 1 Price to incorporate the outcome of the Annual Price Adjustment for changes committed on and before December 31, 2014 and which are effective on or before Shipset Line Number [*****].
|
The Boeing Company
|
|
|
Spirit AeroSystems Inc.
|
|
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeff Loomis
|
|
By:
|
/s/ Leanna Hampton
|
|
|
|
|
|
Name:
|
Jeff Loomis
|
|
Name:
|
Leanna Hampton
|
|
|
|
|
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Administrator
|
|
|
|
|
|
Date:
|
12/16/15
|
|
Date:
|
11/17/15
|
Number
23
24
|
Description
Annual Price Adjustment thru Line Number [*****]
Updated SBP Attachments 1, 2, and 27
Boeing Performed Rework and Repair
Updated SBP Attachment 16 Table A.1
Annual Price Adjustment thru Line Number [*****]
Updated SBP Attachments 1, 2, 3 and 27
Boeing Performed Rework and Repair
Updated SBP Attachment 16 Table A.1
|
Date
8/3/15
12/16/15
|
Approval
J. Loomis
L. Hampton
J. Loomis
L. Hampton
|
B.1
|
Non-D/MI Contract Change Notices
:
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****]
|
Total Recurring Price for Shipsets
[*****]
|
Recurring Unit Price Adjustment for
[*****]
|
Recurring Unit Price for [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 6
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 11
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 12
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 13
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 14
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 15
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 16
|
Section 41
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
Total [*****]
|
Total [*****]
|
|
|
|
|
Amend 17
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 18
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 19
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 20
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 21
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 22
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 23
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
Amend 24
|
Section 41
|
[*****]
|
[*****]
|
|
|
|
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****]
|
Total Recurring Price for Shipsets
[*****]
|
Recurring Unit Price Adjustment for
[*****]
|
Recurring Unit Price for [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 8
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 9
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 11
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 12
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 13
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 14
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 15
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 16
|
Pylon
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
Total [*****]
|
Total [*****]
|
|
|
|
|
Amend 17
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 18
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 19
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 20
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 21
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 22
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 23
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
Amend 24
|
Pylon
|
[*****]
|
[*****]
|
|
|
|
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****]
|
Total Recurring Price for Shipsets
[*****]
|
Recurring Unit Price Adjustment for
[*****]
|
Recurring Unit Price for [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 9
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 11
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 12
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 13
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 14
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 15
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 16
|
Wing LE
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
Total [*****]
|
Total [*****]
|
|
|
|
|
Amend 17
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 18
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 19
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 20
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 21
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 22
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 23
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
Amend 24
|
Wing LE
|
[*****]
|
[*****]
|
|
|
|
|
|
Work Package
|
Total Recurring Price Adjustment for Shipsets
[*****]
|
Total Recurring Price for Shipsets
[*****]
|
Recurring Unit Price Adjustment for
[*****]
|
Recurring Unit Price for [*****]
|
Recurring Unit Price Adjustment for [*****] thru yr [*****]
|
Recurring Unit Price for [*****] thru yr [*****]
|
Contract Award
|
Nose LG
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Amend 17
|
Nose LG
|
[*****]
|
|||||
Amend 18
|
Nose LG
|
[*****]
|
|||||
Amend 19
|
Nose LG
|
[*****]
|
787-8 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
[*****]
|
+[*****]%
|
-[*****]%
|
A.
|
The Parties have entered into the General Terms Agreement, GTA BCA-65520-0032, dated June 16, 2005 as amended from time to time (the “GTA”), the Special Business Provisions, BCA-MS-65530-0019, dated June 16, 2005 as amended from time to time (the "SBP"), the Memorandum of Agreement: 787 Interim Price Agreements, dated November 21, 2014, and the Collective Resolution Memorandum of Understanding, dated August 1, 2017, and now desire to again amend the SBP.
|
B.
|
This Amendment No. 25 incorporates the agreements set forth in the Collective Resolution Memorandum of Understanding dated August 1, 2017; the CY2015 Annual Shipset Price Adjustment for changes committed on and before December 31, 2015 and which are effective on or before Shipset Line Number [*****]; the CY2016 Annual Shipset Price Adjustment for changes committed on and before December 31, 2016 and which are effective on or before Shipset Line Number [*****] (limited to the [*****] percent ([*****]%) nonrecurring allocation resulting from the CY2016 Annual Shipset Price Adjustment Change list due at Line Number [*****] under Attachment 16 Section C.3.1.2); and the annual update of the traveled work cost estimating relationship values.
|
1.
|
The SBP is hereby amended by deleting the SBP Table of Contents listing of Attachments and replacing it in its entirety with a new Table of Contents listing of Attachments, attached hereto as Exhibit 1.
|
2.
|
The SBP is hereby amended by deleting the SBP Table of Amendments Page 4 and replacing it in its entirety with a new Table of Amendments Page 4, attached hereto as Exhibit 2.
|
3.
|
The SBP is hereby amended by deleting SBP Section 3.2.1 “Production Rates” and replacing it in its entirety with the new SBP Section 3.2.1, attached hereto as Exhibit 3.
|
4.
|
The SBP is hereby amended by deleting SBP Section 4.1.3 “Shipset Price for Shipsets [*****] Through Year End [*****]” and replacing it in its entirety with a new SBP Section 4.1.3, attached hereto as Exhibit 4.
|
5.
|
The SBP is hereby amended by deleting SBP Section 4.2 “Derivative Pricing” and replacing it in its entirety with a new SBP Section 4.2, attached hereto as Exhibit 5.
|
6.
|
The SBP is hereby amended by deleting SBP Section 4.3.1.1 “[*****] Prices for Spare Parts Not Listed in SPPC” and replacing it in its entirety with a new SBP Section 4.3.1.1, attached hereto as Exhibit 6.
|
7.
|
The SBP is hereby amended by deleting SBP Section 4.10 “Risk Sharing” and replacing it in its entirety with a new SBP Section 4.10, attached hereto as Exhibit 7.
|
8.
|
The SBP is hereby amended by adding a new SBP Section 4.12 “Cost Reduction Achievement Credit”, attached hereto as Exhibit 8.
|
9.
|
The SBP is hereby amended by deleting SBP Section 5.2.1 “Payment Due Date” and replacing it in its entirety with a new SBP Section 5.2.1, attached hereto as Exhibit 9.
|
10.
|
The SBP is hereby amended by deleting SBP Section 7.2.1 “Changes” and replacing it in its entirety with a new SBP Section 7.2.1, attached hereto as Exhibit 10.
|
11.
|
The SBP is hereby amended by deleting SBP Section 7.2.2 “Annual Price Adjustments” and replacing it in its entirety with a new SBP Section 7.2.2, attached hereto as Exhibit 11.
|
12.
|
The SBP is hereby amended by deleting SBP Section 7.5.1 “Total Cost Management” and replacing it in its entirety with a new SBP Section 7.5.1, attached hereto as Exhibit 12.
|
13.
|
The SBP is hereby amended by deleting SBP Section 7.8.2 “SBP Amendment” and replacing it in its entirety with a new SBP Section 7.8.2, attached hereto as Exhibit 13.
|
14.
|
The SBP is hereby amended by deleting SBP Section 8.1 “Quality Assurance Requirements” and replacing it in its entirety with a new SBP Section 8.1, attached hereto as Exhibit 14.
|
15.
|
The SBP is hereby amended by deleting SBP Section 11.2 “Reimbursement for Repairs” and replacing it in its entirety with a new SBP Section 11.2, attached hereto as Exhibit 15.
|
16.
|
The SBP is hereby amended by deleting SBP Section 12.6 “Source Selection” and replacing it in its entirety with a new SBP Section 12.6, attached hereto as Exhibit 16.
|
17.
|
The SBP is hereby amended by deleting SBP Section 12.8.1 “Boeing Furnished Material; Bonded Stores Requirements” and replacing it in its entirety with a new SBP Section 12.8.1, attached hereto as Exhibit 17.
|
18.
|
The SBP is hereby amended by deleting SBP Attachment 1 “Work Statement and Pricing” and replacing it in its entirety with a new SBP Attachment 1, attached hereto as Exhibit 18.
|
19.
|
The SBP is hereby amended by deleting SBP Attachment 2 “Production Article Definition and Contract Change Notices” and replacing it in its entirety with a new SBP Attachment 2, attached hereto as Exhibit 19.
|
20.
|
The SBP is hereby amended by deleting SBP Attachment 3 “Price Status and Summary Tables” and marking it as “Reserved”, attached hereto as Exhibit 20.
|
21.
|
The SBP is hereby amended by deleting SBP Attachment 7 “Priced Parts List and Spares Pricing” and replacing it in its entirety with a new SBP Attachment 7, attached hereto as Exhibit 21.
|
22.
|
The SBP is hereby amended by deleting SBP Attachment 10 Section A10.3.1 “Relocation/Subcontract Notification” and replacing it in its entirety with a new SBP Attachment 10 Section A10.3.1, attached hereto as Exhibit 22.
|
23.
|
The SBP is hereby amended by deleting SBP Attachment 16 “Pricing Methodologies” and replacing it in its entirety with a new SBP Attachment 16, attached hereto as Exhibit 23.
|
24.
|
The SBP is hereby amended by deleting SBP Attachment 26 “Total Cost Management” and replacing it in its entirety with a new SBP Attachment 26, attached hereto as Exhibit 24.
|
25.
|
The SBP is hereby amended by deleting SBP Attachment 27 “Risk Sharing” and replacing it in its entirety with a new SBP Attachment 27, attached hereto as Exhibit 25.
|
26.
|
The SBP is hereby amended by deleting SBP Attachment 28 “Business Case for Rates Greater Than [*****] Shipsets Per Month” and replacing it in its entirety with a new SBP Attachment 28, attached hereto as Exhibit 26.
|
27.
|
The SBP is hereby amended by adding a new SBP Attachment 30 “Cost Reduction Achievement Credit”, attached hereto as Exhibit 27.
|
28.
|
Within [*****] days following the Effective Date Spirit shall pay Boeing a net amount of $[*****], inclusive of 2015 and 2016 risk
sharing payments. No other adjustments shall be made to the prices previously paid by Boeing to Spirit for Shipsets prior to line unit [*****].
|
29.
|
Within [*****] days following the Effective Date, the Parties shall determine the amount by which the aggregate price paid by Boeing to Spirit for line unit [*****] through the last line unit delivered by Spirit to Boeing on or before October 1, 2017 exceeds the aggregate price for such line units calculated pursuant to the pricing set forth in SBP Attachment 1. Spirit shall pay such excess amount no later than October 31, 2017. The Parties shall also make such a determination and make such payment no later than November 30, 2017 for line units delivered after October 1, 2017.
|
30.
|
Entire Agreement.
Except as otherwise indicated in this Amendment No. 25, all terms defined in the GTA or SBP shall have the same meanings when used in this Amendment No. 25. This Amendment No. 25 constitutes the complete and exclusive agreement between the Parties with respect to the subject matter of this Amendment No. 25, and this Amendment No. 25 supersedes all previous agreements between the Parties relating to the subject matter of Amendment No. 25, whether written or oral, including, but not limited to, the Memorandum of Agreement: 787 Interim Price Agreements, dated November 21, 2014, and the Collective Resolution Memorandum of Understanding, dated August 1, 2017. The GTA and SBP shall remain in full force and effect and are not modified, revoked, or superseded except as specifically stated in this Amendment No. 25.
|
31.
|
No Admission of Liability. No Precedential Value.
The Parties acknowledge that this Amendment No. 25 reflects a compromise resolution by the Parties of certain claims and that nothing contained in this Amendment No. 25 constitutes or will be construed as an acknowledgement or admission of liability or absence of liability in any way on the part of the Parties, each of which expressly denies any liability or wrongdoing in connection with such claims, and the Parties agree not to issue any public statement or comment to the contrary. The Parties agree that this Amendment No. 25, and the terms and conditions hereof, including without limitation the figures used to reach all pricing and payment figures herein, will have no precedential value and therefore will not be used in support or defense of any other claim arising from the Parties’ contracts.
|
32.
|
Governing Law.
This Amendment No. 25 will be governed by the laws of the state of Washington exclusive of Washington’s conflict of laws principles.
|
33.
|
Order of Precedence.
In the event of a conflict between the terms of this Amendment No. 25 and either the SBP or GTA, the terms of this Amendment No. 25 shall have precedence with respect to the subject matter of this Amendment No. 25.
|
The Boeing Company
|
|
|
Spirit AeroSystems Inc.
|
|
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeff Will
|
|
By:
|
/s/ Mike Kurimsky
|
|
|
|
|
|
Name:
|
Jeff Will
|
|
Name:
|
Mike Kurimsky
|
|
|
|
|
|
Title:
|
Procurement Agent
|
|
Title:
|
Sr. Manager, 787 Contracts
|
|
|
|
|
|
Date:
|
9-22-17
|
|
Date:
|
9-22-17
|
Number
23
24
25
|
Description
Annual Price Adjustment thru Line Number
[*****]
Updated SBP Attachments 1, 2, and 27
Boeing Performed Rework and Repair
Updated SBP Attachment 16 Table A.1
Annual Price Adjustment thru Line Number
[*****]
Updated SBP Attachments 1, 2, 3, and 27
Boeing Performed Rework and Repair
Updated SBP Attachment 16 Table A.1
MOU Dated 8-1-17 (Collective Resolution)
Amended SBP Sections 3.2.1, 4.1.3, 4.2, 4.3.1.1, 4.10, 4.12, 5.2.1, 7.2.1, 7.2.2, 7.5.1, 7.8.2, 8.1, 11.2, 12.6, and 12.8.1
Updated SBP Attachments 1, 2, 3, 7, 10, 16, 26, 27, 28, and 30
Annual Shipset Price Adjustment thru Line Number
[*****]
Updated SBP Attachments 1, 2, and 27
Annual Shipset Price Adjustment thru Line Number
[*****]
Updated SBP Attachments 1 and 2
Boeing Performed Rework and Repair
Updated SBP Attachment 16 Table A.1
|
Date
8/3/15
12/16/15
9/22/17
|
Approval
J. Loomis
L. Hampton
J. Loomis
L. Hampton
J. Will
M. Kurimsky
|
3.2.1
|
Production Rates
|
4.1.3
|
Shipset Price for Shipsets 1406 and Beyond
|
4.2
|
Derivative Pricing
|
4.10
|
Risk Sharing
|
4.12
|
Cost Reduction Achievement Credit
|
5.2.1
|
Payment Due Date
|
7.2.1
|
Changes
|
7.2.2
|
Annual Shipset Price Adjustments
|
7.5.1
|
Total Cost Management
|
7.8.2
|
SBP Amendment
|
8.1
|
Quality Assurance Requirements
|
11.2
|
Reimbursement for Repairs
|
12.6
|
Source Selection
|
12.8.1
|
Boeing Furnished Material; Bonded Stores Requirements
|
Type
|
Product Number
|
Name
|
Manufacturing Change Level
|
Current Mfg Frozen LN
|
Extended Eff (Usage)
|
[*****]
|
B.1
|
Non-D/MI Contract Change Notices
:
|
A.
|
Template for Creation of IPPL and Spare Parts Price Catalog (SPPC) as defined in SBP Section 3.5
|
IPPL Outline and Criteria
|
|
|
|
|
|||
Indentured Parts list will be priced to a spareable part level.
|
|||
IPPL pricing will be equivalent to the detail part pricing reflective of the
[*****]
Price based on an
[*****]
units. (The Parties shall mutually agree on the projected model mix to calculate the
[*****]
.)
|
|||
IPPL Pricing does not include Standards. Parties will establish a separate pricing list for Standards using
[*****]
methodology.
|
|||
IPPL Pricing to be updated with the
[*****]
activity if necessary.
IPPL Document to list
[*****]
prices for part families.
|
|||
IPPL Document to list
[*****]
price for details and for assemblies (not including
[*****]
)
|
A10.3.1
|
Relocation/Subcontract Notification
|
A.1
|
Price for non-conformance and traveled work identified in Spirit Generated Line Unit OSSN EPD (Open Ship Short Notification Emergent Process Document)
|
Traveled Work Nomenclature
|
Price Per Unit
|
SOI-A
|
$[*****]
|
SOI-B
|
$[*****]
|
Non-conformance EPD
|
$[*****]
|
A.2
|
Price for non-conformance, repair or rework identified at Boeing
|
|
2006 Baseline Burdened Rate
|
Engineering
|
$[*****]
|
Tool Fabrication
|
$[*****]
|
Operations
|
$[*****]
|
|
|
Non Labor (includes travel, raw material and any special parts not addressed by Spare Parts provisions of contract
|
Non-labor $ + [*****]% of Non-labor $
|
[*****]
|
|||||
|
Material Type
Detailed
Level
|
Dollars per pound
Detailed
Level
|
Section 41
|
Aluminum
|
[*****]
|
Titanium
|
||
Composite
|
||
Other
|
||
Wing Leading Edge
|
Aluminum
|
[*****]
|
Titanium
|
||
Composite
|
||
Steel
|
||
All other Other
|
||
Pylon
|
Aluminum
|
[*****]
|
Ti 5-5-5-3
|
||
All other Ti
|
||
CFRP
|
||
All other Comp
|
||
Steel
|
||
All other Other
|
|
$ per Part
|
Section 41
|
$
[*****]
|
Wing Leading Edge
|
$
[*****]
|
Pylon
(simple average of
[*****]
and
[*****]
)
|
$
[*****]
|
|
Hours per Part Card - New and revised
(Eng, ME, Ops, NC)
|
Section 41
|
[*****]
|
Wing Leading Edge
|
[*****]
|
Pylon
(applicable to
[*****]
and
[*****]
)
|
[*****]
|
WHIDs
|
[*****]
|
Fixed Hours Per Tool
|
||
|
New Make
|
|
Tool Code
|
Design Hours
|
Fab Hours
|
AJ
|
[*****]
|
[*****]
|
BAJ
|
[*****]
|
[*****]
|
BOF
|
[*****]
|
[*****]
|
CP
|
[*****]
|
[*****]
|
DFT
|
[*****]
|
[*****]
|
DJ
|
[*****]
|
[*****]
|
FAJ
|
[*****]
|
[*****]
|
FME
|
[*****]
|
[*****]
|
FMHF
|
[*****]
|
[*****]
|
LJ
|
[*****]
|
[*****]
|
LM
|
[*****]
|
[*****]
|
ME
|
[*****]
|
[*****]
|
MF
|
[*****]
|
[*****]
|
MHF
|
[*****]
|
[*****]
|
MIT
|
[*****]
|
[*****]
|
MOLD
|
[*****]
|
[*****]
|
NCMIT
|
[*****]
|
[*****]
|
OHME
|
[*****]
|
[*****]
|
PME
|
[*****]
|
[*****]
|
PRE
|
[*****]
|
[*****]
|
SME
|
[*****]
|
[*****]
|
TME
|
[*****]
|
[*****]
|
|
Fixed Hours Per Tool
|
Tool Design
|
[*****]
|
Tool Fabrication
|
[*****]
|
|
2006 Baseline Burdened Rate
|
Engineering (Includes Engineering, Tool Engineering, M.E., Operations and NC)
|
$[*****]/hour
|
Tool Fabrication
|
$[*****]/hour
|
|
[*****]
|
[*****]
|
Fabrication Factor
|
$
[*****]
(example 1)
|
-$
[*****]
(example 2) |
Assembly Factor
|
$
[*****]
(example 1)
|
-$
[*****]
(example 2) |
Nonrecurring Factor
|
|
$
[*****]
|
Result
|
$
[*****]
|
$
[*****]
|
|
[*****]
|
[*****]
|
Fabrication Factor
|
-$ [*****]
(example 2) |
$
[*****]
(example 1)
|
Assembly Factor
|
-$
[*****]
(example 2) |
$
[*****]
(example 1)
|
Nonrecurring Factor
|
$
[*****]
|
$
[*****]
|
Result
|
-$
[*****]
|
$
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
•
|
[*****]
|
1.0
|
Introduction
|
2.0
|
Cost Saving Categories
|
3.0
|
Boeing and Spirit Engagement Processes
|
3.1
|
Identify, Prioritize and Provide Business Case Information
|
3.1.1
|
Identify and Prioritize - The parties shall generate, prioritize and present ideas for review. Generating and prioritizing ideas for further review may be done independently or in collaboration with the other party when requested.
|
3.1.2
|
For ideas selected for further consideration, a business case shall be developed in accordance with the template provided in paragraph 5.0 below. Notwithstanding anything to the contrary herein, the Parties do not intend to modify or waive Boeing’s right to request information or Spirit’s obligation to provide information as set forth in other provisions of this SBP or the GTA, including without limitation SBP Section 7.2.1 and GTA Section 5.0. The template provided in paragraph 5.0 is an initial definition of the appropriate level of detail intended to accomplish the objectives of SBP Section 7.5 and this Attachment 26. Either party may request reasonable adjustments to the template to better support these objectives.
|
3.2
|
Evaluate and Authorize TCM Ideas
|
3.2.1
|
For TCM ideas intended to be incorporated into the program approved baseline configuration of each Aircraft (pre-firm configuration), the Parties will use 787 trade study management product development processes including, but not limited to, airplane level studies, preliminary design decision memos, and configuration descriptions memos to evaluate, authorize, and implement such TCM ideas.
|
3.2.2
|
For TCM ideas intended to be incorporated after the program declares firm configuration for each Aircraft (post-firm configuration), the Parties will use the 787 common change process including, but not limited to, technical studies, change requests and change notices to evaluate, authorize and implement such TCM ideas.
|
3.2.3
|
For TCM ideas not related to Aircraft configuration, the Parties shall evaluate and authorize such TCM ideas in a manner consistent with the objectives of TCM and their respective RAA’s.
|
3.3
|
Pricing and Contract Amendment
|
4.0
|
Changes Determined Not to Support Cost Reduction
|
5.0
|
Business Case Development
|
I.
|
Introduction
|
A.
|
The Prices for Shipsets [*****] and [*****] set forth in SBP Attachment 1 are subject to an annual risk sharing supplemental payment or credit as set forth in this Attachment 27. The evaluation of a supplemental payment or credit shall take place beginning in the second calendar quarter of the year following the delivery of Shipset [*****] and in each second calendar quarter annually thereafter, if applicable. The final evaluation of a supplemental payment or credit shall be made in the second calendar quarter of the year following Spirit’s delivery to Boeing of Shipset [*****].
|
B.
|
The evaluation of Spirit’s costs for Shipsets [*****] and [*****] and any supplemental payment or credit hereunder shall begin upon receipt of Spirit’s costs in accordance with the templates in this SBP Attachment 27, Section VI (the “Cost Templates”), which shall be submitted no later than [*****], and conclude no later than the [*****].
|
C.
|
An annual supplemental payment or credit shall be determined based on the combined result of 2 evaluations: 1) the Price effect of all change as calculated annually in accordance with SBP Section 7.2 and Attachment 16; and 2) a risk sharing calculation when certain Spirit cost conditions exist as specified and calculated in this Attachment 27, if applicable.
|
D.
|
Notwithstanding the above provisions, for purposes of evaluating risk and identifying opportunity, Spirit shall provide its costs to Boeing on or about [*****] utilizing the templates in this SBP Attachment 27, Section VI (the “Cost Templates”).
|
E.
|
For the avoidance of doubt, Spirit shall provide its costs to Boeing for Shipsets
[*****]
in accordance with Section I.D above. These Shipset costs shall not be subject to an Annual Review as set forth in this SBP Attachment 27 Section IV or the validation and audit process as set forth in this SBP Attachment 27 Section V. Spirit agrees to address any inquiries as reasonably requested by Boeing for the purposes of understanding Spirit's costs for Shipsets
[*****]
.
|
II.
|
Baseline Prices and Risk Sharing Control Limits
|
A.
|
The annual supplemental payment or credit process contained in this Attachment 27 shall utilize the following baseline prices and risk sharing control limits. All prices and calculations shall be made on a total Shipset basis and not at an individual Work Package basis. Upon the establishment of Pricing for a Derivative, a table applicable to such Derivative shall be established and used. Prior to each annual calculation of the supplemental payment or credit, Column (A) shall be updated to reflect the Shipset Prices as determined in each first calendar quarter update in accordance with SBP Section 7.2 and Attachment 16:
|
787-8 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
[*****]
|
[*****]
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
787-9 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
[*****]
|
[*****]
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
787-10 Model
|
(A)
|
(B)
|
(C)
|
|
Attachment 1 Price
|
Upper Limit
|
Lower Limit
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
Shipsets [*****] - [*****]
|
$[*****]
|
[*****]
|
[*****]
|
Shipsets [*****] - [*****]
|
$[*****]
|
+[*****]%
|
-[*****]%
|
III.
|
Annual Supplemental Payment or Credit
|
[*****]
|
|||||
B.
|
No later than [*****] of each year, Spirit shall submit its costs to Boeing in accordance with the templates in this SBP Attachment 27, Section VI (the “Cost Templates”).
|
C.
|
The average Shipset Prices for Shipsets delivered in the prior calendar year shall be compared to these costs and result in a risk sharing calculation.
|
D.
|
Risk Sharing Calculation - The risk sharing supplemental payment or credit shall be determined on the basis of Spirit’s cost condition as follows:
|
1.
|
Spirit costs exceed the updated average Shipset Price for the prior calendar year but are less than the Upper Limit (B)
|
a.
|
Supplemental payment calculation: [*****]
|
b.
|
Example: [*****]
|
2.
|
Spirit costs for the prior calendar year are greater than the average Upper Limit (B)
|
a.
|
Supplemental payment calculation: [*****]
|
b.
|
Example: [*****]
|
3.
|
Spirit costs are less than the updated average Shipset Price for the prior calendar year but are greater than the Lower Limit (C)
|
a.
|
Supplemental credit calculation:[*****]
|
b.
|
Example: [*****]
|
4.
|
Spirit costs for the prior calendar year are less than the Lower Limit (C)
|
a.
|
Supplemental credit calculation: [*****]
|
b.
|
Example: [*****]
|
A.
|
In the event Boeing determines in good faith, using standards that are commercially reasonable, that Spirit has not provided adequate data, records or support for its Cost Template in a manner to support the conclusion of the Annual Review set forth in Section I.B, Boeing shall notify Spirit of this determination in writing as soon as possible, but in any event, prior to the conclusion of the Annual Review period. In such notice, Boeing shall identify with specificity the reason it believes that Spirit has not provided adequate data, records or support. Spirit shall have [*****] days following the scheduled conclusion of such Annual Review to address any issues identified by Boeing in such notice. In the event Spirit does not adequately address the issues during this [*****] day cure period, Boeing shall be entitled to a supplemental credit payment for Shipsets delivered in the prior calendar year in the amount of [*****] of the Prices paid for such Shipsets. In no event shall Boeing take action on the supplemental credit during the [*****] day cure period.
|
V.
|
Validation and Audit process
|
VI.
|
Cost Review Cost Templates
|
A.
|
Spirit will provide several reports. These reports will support both the annual risk sharing adjustment as well as provide information to further guide cost reduction activities. The Parties agree that reports provided by Spirit shall meet the following general requirements: (1) data included in the reports shall allow for direct comparison to the [*****], (2) report formats shall be established to be consistent with Spirit's existing systems for[*****] and to minimize the amount of data translation required by Spirit, and (3) data provided in the reports shall be auditable.
|
1.
|
All costs, including recurring and nonrecurring, associated with production end items (exclude spares, POA’s, -9 NR, -10 NR, and [*****]% of the depreciation expense in Spirit’s line unit costs for equipment and tooling purchased to achieve the rate increase from [*****] Airplanes per Month to [*****] Airplanes per Month)
|
2.
|
Data can be summarized to total line unit for comparison to Total Spirit Contract Price.
|
3.
|
Detail available at the end item level.
|
4.
|
Capability to drill down as necessary (reference Paragraph V)
|
A.
|
Templates and Descriptions
|
a)
|
Assigned Value Template - primary function: support annual risk sharing adjustment. The actual annual risk sharing adjustment shall be calculated from the values in this report. The template will include the following (Example templates are in the noted Exhibits to this Attachment 27):
|
Section 41 (
Exhibit A
)
|
Pylon (
Exhibit B
)
|
[*****]
|
[*****]
|
Movable Leading Edge (
Exhibit C1
)
|
Fixed Leading Edge Leading (Exhibit C2)
|
[*****]
|
[*****]
|
b)
|
Incurred Value Templates - primary functions: i) aid in validating the Assigned Value Template, and ii) guide cost reduction activities.
|
Section 41, Pylon, and Movable Leading Edge (
Exhibit D
)
|
Section 41, Pylon, and Movable Leading Edge Costing Rate Templates
(Exhibit L)
|
[*****]
|
[*****]
|
Section 41, Pylon, and Fixed/Movable Leading Edge Purchased Parts Extract
(Exhibit M)
|
|
[*****]
|
|
Section 41, Pylon, and Fixed/Movable Leading Edge [*****] for production rate increase from
[*****]
APM to
[*****]
APM (Exhibit N)
|
|
[*****]
|
|
787 Section 41 Control Station to Cost Center Matrix
(Exhibit J)
|
|
•
|
NPV Calculation:
If n is the number of cash flows in the list of values, the formula for NPV is:
|
[*****]
|
|||||
I.
|
Shipsets
[*****]
shall be subject to an annual cost reduction achievement credit evaluation as set forth in this SBP Attachment 30. The provisions set forth herein shall apply to only 787-[*****] Shipsets and shall not apply to 787-
[*****]
Shipsets. Following the completion of the risk sharing activity set forth in SBP Attachment 27 (if applicable), the evaluation shall take place beginning in the third calendar quarter of the year following the delivery of Shipset
[*****]
and in each third calendar quarter annually thereafter. The final evaluation shall be made in the third calendar quarter of the year following Spirit’s delivery of Shipset
[*****]
. For the avoidance of doubt, all calculations shall be made on a total Shipset basis and not at an individual work package basis. The Shipsets to be included in the annual evaluation shall be based on the Section 41 units delivered by Spirit to Boeing in a given calendar year.
|
II.
|
The credit shall be calculated using Spirit’s Shipset costs provided to Boeing in accordance with SBP Attachment 27 and the cost figures identified in Table A below. Notwithstanding the foregoing and for the purpose of clarity, Spirit’s Shipset costs shall not be adjusted downward for (a)
[*****]
or (b)
[*****]
for purposes of determining the credit as set forth in this SBP Attachment 30. In the event Spirit’s statement of work is modified due to work transfers in accordance with the SBP, the Parties shall determine whether an adjustment to the cost figures is appropriate and modify the cost figures in Table A below accordingly.
|
Model
|
Shipsets
|
Annual
Production Rate
|
Cost Figure
|
787-9/-10
|
Shipsets [*****]-[*****]
|
<[*****] APM
|
No credit evaluation
|
787-9/-10
|
Shipsets [*****]-[*****]
|
[*****] APM
|
$[*****]
|
787-9/-10
|
Shipsets [*****]-[*****]
|
Between [*****] & [*****] APM
|
[*****] calculated per paragraph IV below
|
787-9/10
|
Shipsets [*****]-[*****]
|
[*****] APM
|
$[*****]
|
787-9/-10
|
Shipsets [*****]-[*****]
|
>[*****] APM
|
No credit evaluation
|
III.
|
For any resulting credit, Boeing shall submit an invoice to Spirit for the mutually agreed amount and Spirit shall pay the invoiced amount within
[*****]
days after receipt of a correct and accurate invoice.
|
IV.
|
In the event the production rate is not constant at
[*****]
Shipsets per month or
[*****]
Shipsets per month in a given year, the Parties will utilize a
[*****]
based on the production rate break(s) and the cost figures identified in the table above to determine the appropriate cost figure to complete the evaluation. In the event the production rate is decreased to less than
[*****]
Shipsets per month or increased to greater than
[*****]
Shipsets per month, the provisions set forth in this SBP Attachment 30 shall not apply.
|
V.
|
In the event Spirit’s average annual Shipset cost is less than the applicable cost figure identified in Table A above and the Parties reasonably determine that the associated cost reductions were proposed and initiated by Spirit, the Parties shall mutually agree on an appropriate substitute method in lieu of the foregoing to share such savings below the applicable cost figure that reflects the relative participation of the Parties in achieving such cost reduction. For the avoidance of doubt, Boeing’s share shall not exceed
[*****]
percent (
[*****]
) for any such substitute method.
|
1.
|
For Shipsets
[*****]
-
[*****]
(
[*****]
APM), the
[*****]
Shipset
[*****]
is less than the applicable
[*****]
figure.
|
2.
|
For Shipsets
[*****]
-
[*****]
(
[*****]
Shipsets at
[*****]
APM and
[*****]
Shipsets at
[*****]
APM), the
[*****]
Shipset
[*****]
is less than the applicable
[*****]
figure.
|
3.
|
For Shipsets
[*****]
-
[*****]
(
[*****]
APM), the
[*****]
Shipset
[*****]
is less than the applicable
[*****]
figure but greater than the
[*****]
limit as set forth in SBP Attachment 27.
|
4.
|
For Shipsets
[*****]
-
[*****]
(
[*****]
APM), the
[*****]
Shipset
[*****]
is less than the applicable
[*****]
figure and the
[*****]
limit as set forth in SBP Attachment 27 Section II.A.. The provisions set forth in this SBP Attachment 30 shall not apply and no credit will be paid.
|
|
/s/ Thomas C. Gentile III
|
|
Thomas C. Gentile III
|
|
President and Chief Executive Officer
|
|
/s/ Sanjay Kapoor
|
|
Sanjay Kapoor
|
|
Executive Vice President and Chief Financial Officer
|
|
/s/ Thomas C. Gentile III
|
|
Thomas C. Gentile III
|
|
President and Chief Executive Officer
|
|
/s/ Sanjay Kapoor
|
|
Sanjay Kapoor
|
|
Executive Vice President and Chief Financial Officer
|