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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2017
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Or
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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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For the transition period from to
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Delaware
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20-2436320
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(State of Incorporation)
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(I.R.S. Employer
Identification Number)
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3801 South Oliver
Wichita, Kansas 67210
(Address of principal executive offices and zip code)
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Registrant’s telephone number, including area code:
(316) 526-9000
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, $0.01 par value
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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Large accelerated filer
þ
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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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•
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our ability to continue to grow our business and execute our growth strategy, including the timing, execution, and profitability of new and maturing programs;
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•
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our ability to perform our obligations under our new and maturing commercial, business aircraft, and military development programs, and the related recurring production;
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•
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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;
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•
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margin pressures and the potential for additional forward losses on new and maturing programs;
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•
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our ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft;
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•
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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;
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•
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customer cancellations or deferrals as a result of global economic uncertainty or otherwise;
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•
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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;
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•
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the success and timely execution of key milestones such as the receipt of necessary regulatory approvals and customer adherence to their announced schedules;
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•
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our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers;
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•
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our ability to enter into profitable supply arrangements with additional customers;
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•
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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;
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•
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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, domestic or international hostilities, or acts of terrorism;
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•
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any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks;
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•
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our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions;
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•
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returns on pension plan assets and the impact of future discount rate changes on pension obligations;
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•
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our ability to borrow additional funds or refinance debt;
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•
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competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers;
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•
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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;
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•
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the effect of changes in tax law, such as the effect of the Tax Cuts and Jobs Act (the ‘TCJA”) that was enacted on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company’s ability to accurately calculate and estimate the effect of such changes;
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•
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our ability to effectively assess, manage, and integrate acquisitions that we pursue;
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•
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our ability to continue selling certain of our receivables through our supplier financing program;
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•
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any reduction in our credit ratings;
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•
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our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components;
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•
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our ability to recruit and retain a critical mass of highly-skilled employees and our relationships with the unions representing many of our employees;
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•
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spending by the U.S. and other governments on defense;
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•
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the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest on and principal of our indebtedness;
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•
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our exposure under our revolver to higher interest payments should interest rates increase substantially;
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•
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the risks of doing business internationally, including fluctuations in foreign current exchange rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies, among other things;
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•
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the effectiveness of any interest rate hedging programs;
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•
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the effectiveness of our internal control over financial reporting;
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•
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the outcome or impact of ongoing or future litigation, claims, and regulatory actions; and
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•
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our exposure to potential product liability and warranty claims.
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Segment
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Percentage of Net Revenues for the Twelve Months Ended December 31, 2017
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Locations
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Commercial Programs
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Non-Classified Defense Programs
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Fuselage Systems
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53%
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Wichita, KS; Kinston, NC; St.-Nazaire, France
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B737, B747, B767, B777, B787, A350 XWB
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Sikorsky CH-53K, Bell Helicopter V280
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Propulsion Systems
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24%
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Wichita, KS
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B737, B747, B767, B777, B787, Rolls-Royce BR725 Engine, Mitsubishi Regional Jet, Bombardier CSeries
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Wing Systems
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23%
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Tulsa and McAlester, Oklahoma; Prestwick, Scotland; Subang, Malaysia and Kinston, North Carolina
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B737, B747, B767, B777, B787, A320 family, A330, A350 XWB, A380
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Various
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•
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The forward section of the aerostructure, which houses the flight deck, passenger cabin, and cargo area;
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•
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The mid and rear fuselage sections;
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•
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Other structure components of the fuselage, including floor beams; and
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•
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Related spares and maintenance, repair, and overhaul (“MRO”) services.
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•
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Nacelles (including thrust reversers) - aerodynamic structure surrounding engines;
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•
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Struts/pylons - structure that connects the engine to the wing;
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•
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Other structural engine components; and
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•
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Related spares and MRO services.
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•
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Flaps and slats - flight control surfaces:
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•
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Wing structures - framework that consists mainly of spars, ribs, fixed leading edge, stringers, trailing edges, and flap track beams; and
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•
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Related spares and MRO services.
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Product
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Description
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Aircraft Program
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MRO
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Certified repair stations that provide complete on-site repair and overhaul; maintains global partnerships to support MRO services
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B737, B747, B767, B777, B787 and Rolls-Royce BR725
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Rotable Assets
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Maintain a pool of rotable assets for sale, exchange, and/or lease
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B737, B747, B767, B777
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Engineering Services
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Engineering, tooling, and measurement services. On-call field service representatives.
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Multiple programs
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Product
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Applicable Segment
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Description
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Military Program
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Low Observables
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Wing Systems
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Radar absorbent and translucent materials
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Various
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Rotorcraft
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Fuselage Systems
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Forward cockpit and cabin, fuselage
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Sikorsky CH-53K Development Program, Bell Helicopter V280 Development Program
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Other Military
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Wing Systems
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Fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training
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Various
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Fabrication
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Description
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Machine Fabrication
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5-axis machining capabilities: high-speed aluminum fabrication up to 23 feet, seat track machining, and extensive hard metal capabilities.
3- and 4-axis machining capabilities: range of hard metal capabilities, multi-spindle machines, and manufactured parts
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Sheet Metal Fabrication
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Includes stretch and hydro forming, roll, hammer, profiling, gauge reduction of extrusions and aluminum heat treat, as well as subassemblies
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Chemical Processing
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Includes a range of hard and soft metals with one of the largest automated lines in the industry
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Skin Fabrication
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Include skin stretch forming up to 1,500 tons, laser scribe, trim and drill and chemical milling
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(1)
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fails to deliver products;
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(2)
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fails to provide certain “assurances of performance”;
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(3)
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breaches the provisions of the Sustaining Agreement relating to intellectual property and proprietary information;
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(4)
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participates in the sale, purchase, or manufacture of airplane parts without the required approval of the Federal Aviation Administration (“FAA”) or appropriate foreign regulatory agency;
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(5)
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fails to maintain the required system of quality assurance;
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(6)
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fails to comply with other obligations under the Sustaining Agreement (which breach continues for more than 10 days after notice is received from Boeing);
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(7)
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is unable to pay its debts as they become due, dissolves, or declares bankruptcy; or
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(8)
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breaches the assignment provisions of the Sustaining Agreement (which breach continues for more than 10 days after notice is received from Boeing).
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(1)
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fails to deliver products;
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(2)
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breaches the provisions of the B787 Agreement relating to intellectual property and proprietary information;
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(3)
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participates in the sale, purchase, or manufacture of airplane parts without the required approval of the FAA or appropriate foreign regulatory agency;
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(4)
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fails to maintain the required system of quality assurance;
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(5)
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fails to comply with other obligations under the B787 Agreement (which breach continues for more than 15 days after notice is received from Boeing);
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(6)
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is unable to pay its debts as they become due, dissolves, or declares bankruptcy;
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(7)
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fails to comply with U.S. export control laws; or
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(8)
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breaches the assignment provisions of the B787 Agreement.
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Union
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Percent of our U.S. Employees Represented
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Status of the Agreements with Major Union
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The International Association of Machinists and Aerospace Workers (IAM)
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58%
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We have two major agreements - one expires in June 2020 and one expires in December 2024.
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The Society of Professional Engineering Employees in Aerospace (SPEEA)
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19%
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We have two major agreements - one expires in December 2018 and one expires in January 2021.
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The International Union, Automobile, Aerospace and Agricultural Implement Workers of America (UAW)
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9%
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We have one major agreement expiring in December 2025.
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The International Brotherhood of Electrical Workers (IBEW)
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1%
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We have one major agreement expiring in September 2020.
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•
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demands on management related to the increase in size after the transaction;
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•
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the diversion of management’s attention from the management of daily operations to the integration of operations;
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•
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difficulties in the assimilation and retention of employees;
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•
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difficulties in the assimilation of different cultures and practices, as well as in the assimilation of geographically dispersed operations and personnel, who may speak different languages;
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•
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difficulties combining operations that use different currencies or operate under different legal structures and laws;
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•
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difficulties in the integration of departments, systems (including accounting, production, ERP, and IT systems), technologies, books and records and procedures, as well as in maintaining uniform standards, controls (including internal accounting controls), procedures, and policies;
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•
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compliance with applicable competition laws;
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•
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compliance with the Foreign Corrupt Practices Act, the U.K. Bribery Act and other applicable anti-bribery laws;
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•
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and constraints (contractual or otherwise) limiting our ability to consolidate, rationalize and/or leverage supplier arrangements to achieve integration.
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•
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difficulties in the separation of operations, services, products, and personnel;
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•
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diversion of resources and management’s attention from the operation of our business;
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•
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loss of key employees;
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•
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damage to our existing customer, supplier, and other business relationships;
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•
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negative effects on our reported results of operations from disposition-related charges, amortization expenses related to intangibles, and/or charges for impairment of long-term assets;
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•
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the need to agree to retain or assume certain current or future liabilities in order to complete the divestiture; and
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•
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the expenditure of substantial legal and other fees, which may be incurred whether or not a transaction is consummated.
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•
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changes in regulatory requirements;
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•
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domestic and foreign government policies, including requirements to expend a portion of program funds locally and governmental industrial cooperation requirements;
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•
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fluctuations in foreign currency exchange rates;
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•
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the complexity and necessity of using foreign representatives and consultants;
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•
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uncertainties and restrictions concerning the availability of funding credit or guarantees;
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•
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imposition of tariffs and embargos, export controls, and other trade restrictions;
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•
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the difficulty of management and operation of an enterprise spread over various countries;
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•
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compliance with a variety of foreign laws, as well as U.S. laws affecting the activities of U.S. companies abroad, including the Foreign Corrupt Practices Act, the U.K. Bribery Act and other applicable anti-bribery laws; and
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•
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economic and geopolitical developments and conditions, including domestic or international hostilities, acts of terrorism and governmental reactions, inflation, trade relationships, and military and political alliances.
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•
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the destruction of or damage to our suppliers’ facilities or their distribution infrastructure;
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•
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embargoes, force majeure events, domestic or international acts of hostility, terrorism, or other events impacting our suppliers’ ability to perform;
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•
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a work stoppage or strike by our suppliers’ employees;
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•
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the failure of our suppliers to provide materials of the requisite quality or in compliance with specifications;
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•
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the failure of essential equipment at our suppliers’ plants;
|
•
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the failure of our suppliers to satisfy U.S. and international import and export control laws for goods that we purchase from such suppliers;
|
•
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the failure of our suppliers to meet regulatory standards;
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•
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the failure, shortage or delay in the delivery of raw materials to our suppliers;
|
•
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contractual amendments and disputes with our suppliers; and
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•
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inability of our suppliers to perform as a result of global economic conditions or otherwise.
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•
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advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and
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•
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the authority of the board of directors to issue, without stockholder approval, up to 10 million shares of preferred stock with such terms as the board of directors may determine.
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Location
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Primary Use
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Approximate
Square Footage
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Owned/Leased
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United States
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|
|
|
|
|
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Wichita, Kansas
(1)
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Primary Manufacturing
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11.9 million
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|
Owned/Leased
|
|
|
Facility/Offices/Warehouse
|
|
|
|
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Tulsa, Oklahoma
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Manufacturing Facility
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1.8 million
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|
Leased
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McAlester, Oklahoma
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Manufacturing Facility
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139,600
|
|
Owned
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Kinston, North Carolina
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Primary Manufacturing/Office/Warehouse
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840,000
|
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Leased
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United Kingdom
|
|
|
|
|
|
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Prestwick, Scotland
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|
Manufacturing Facility
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976,000
|
|
Owned
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Malaysia
|
|
|
|
|
|
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Subang, Malaysia
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Manufacturing
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|
325,000
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|
Owned/Leased
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France
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|
|
|
|
|
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Saint-Nazaire, France
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|
Primary Manufacturing/Office
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58,800
|
|
Leased
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(1)
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91% of the Wichita facility is owned.
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|
2017
|
|
|
2016
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||||||||||||||||
Fiscal Quarter
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High
|
|
Low
|
Dividends Paid per Common Share
|
|
High
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Low
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Dividends Paid per Common Share
|
||||||||||||
1
st
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$
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61.69
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|
|
$
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54.44
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|
$
|
0.10
|
|
|
$
|
50.70
|
|
|
$
|
40.50
|
|
$
|
—
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|
2
nd
|
$
|
58.11
|
|
|
$
|
52.80
|
|
$
|
0.10
|
|
|
$
|
48.98
|
|
|
$
|
41.74
|
|
$
|
—
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|
3
rd
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$
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78.90
|
|
|
$
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57.86
|
|
$
|
0.10
|
|
|
$
|
46.13
|
|
|
$
|
41.61
|
|
$
|
—
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|
4
th
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$
|
87.25
|
|
|
$
|
77.67
|
|
$
|
0.10
|
|
|
$
|
61.26
|
|
|
$
|
44.54
|
|
$
|
—
|
|
Plan Category
|
Number of Securities
to be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available
for Future Issuances
Under the Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
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||||
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(a)
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(b)
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|
||||
Restricted Stock Awards
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|
|
|
|
|
|
||||
Equity compensation plans approved by security holders
(1)(2)
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381,602
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|
(3)
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N/A
|
|
|
6,118,273
|
|
|
|
Equity compensation plans not approved by security holders
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
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381,602
|
|
(3)
|
$
|
—
|
|
|
6,118,273
|
|
|
(1)
|
On April 30, 2014, the Company’s Board of Directors approved an Omnibus Incentive Plan (the “Omnibus Plan”), which replaced the previous long-term incentive plan (the “Prior Plan”). The Omnibus Plan was approved by the Company’s stockholders at the Company’s 2014 annual stockholder’s meeting. No new awards will be granted under the Prior Plan. Our equity compensation plan provides for the issuance of incentive awards to officers, directors, employees, and consultants in the form of stock appreciation rights, restricted stock, restricted stock units and deferred stock, in lieu of cash compensation.
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(2)
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Represents time-based and performance-based long-term incentives that may be issued under the Omnibus Plan. For outstanding performance-based awards, the amount shown reflects the maximum payout. The amount of shares that could be paid out under the performance-based awards ranges from 0-200% based on actual performance. On the initial grant dates for these performance-based awards, the Company grants shares of restricted stock in the amount that would vest if the Company achieves the award target.
|
|
INDEXED RETURNS
Years Ending
|
||||||||||||||||
Company/Index
|
Base
Period
12/31/12
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
||||||
Spirit AeroSystems Holdings, Inc
.
|
100
|
|
|
200.83
|
|
|
253.62
|
|
|
295.05
|
|
|
344.43
|
|
|
518.06
|
|
S&P 500 Index
|
100
|
|
|
132.39
|
|
|
150.51
|
|
|
152.59
|
|
|
170.84
|
|
|
208.14
|
|
S&P 500 Aerospace & Defense Index
|
100
|
|
|
154.92
|
|
|
172.63
|
|
|
182.01
|
|
|
216.42
|
|
|
305.97
|
|
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)
|
||||||||||||
|
|
|
|
|
|
|
|
||||||
September 29, 2017 - November 2, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$597.9
|
|
|
November 3, 2017 - November 30, 2017
|
487,916
|
|
|
|
$81.8287
|
|
|
487,916
|
|
|
|
$558.0
|
|
December 1, 2017 - December 31, 2017
|
705,960
|
|
|
|
$85.1299
|
|
|
705,960
|
|
|
|
$497.9
|
|
Total
|
1,193,876
|
|
|
|
$83.7807
|
|
|
1,193,876
|
|
|
|
$497.9
|
|
(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, November 2, 2017 was the last day of our October 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. On January 24, 2018, the Board of Directors approved an increase to the program of approximately $500 million. As a result, the total amount remaining in the authorization is approximately $1.0 billion.
|
|
Spirit Holdings
|
||||||||||||||||||
|
Twelve Months Ended
|
||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||
|
(Dollars in millions, except per share data)
|
||||||||||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
|
$
|
6,799.2
|
|
|
$
|
5,961.0
|
|
Cost of sales
(1)
|
6,162.5
|
|
|
5,803.6
|
|
|
5,532.3
|
|
|
5,711.0
|
|
|
6,059.5
|
|
|||||
Selling, general and administrative expenses
(2)
|
200.3
|
|
|
228.3
|
|
|
220.8
|
|
|
233.8
|
|
|
200.8
|
|
|||||
Impact of severe weather events
|
19.9
|
|
|
12.1
|
|
|
—
|
|
|
—
|
|
|
30.3
|
|
|||||
Research and development
|
31.2
|
|
|
23.8
|
|
|
27.8
|
|
|
29.3
|
|
|
34.7
|
|
|||||
Loss on divestiture of programs
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
471.1
|
|
|
—
|
|
|||||
Operating income (loss)
|
569.1
|
|
|
725.1
|
|
|
863.0
|
|
|
354.0
|
|
|
(364.3
|
)
|
|||||
Interest expense and financing fee amortization
|
(41.7
|
)
|
|
(57.3
|
)
|
|
(52.7
|
)
|
|
(88.1
|
)
|
|
(70.1
|
)
|
|||||
Other (expense) income, net
|
7.2
|
|
|
(7.3
|
)
|
|
(2.2
|
)
|
|
(3.5
|
)
|
|
3.6
|
|
|||||
Income (loss) before income taxes and equity in net income (loss) of affiliates
|
534.6
|
|
|
660.5
|
|
|
808.1
|
|
|
262.4
|
|
|
(430.8
|
)
|
|||||
Income tax (provision) benefit
|
(180.0
|
)
|
|
(192.1
|
)
|
|
(20.6
|
)
|
|
95.9
|
|
|
(191.1
|
)
|
|||||
Equity in net income (loss) of affiliates
|
0.3
|
|
|
1.3
|
|
|
1.2
|
|
|
0.5
|
|
|
0.5
|
|
|||||
Net income (loss)
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
|
$
|
358.8
|
|
|
$
|
(621.4
|
)
|
Net income (loss) per share, basic
|
$
|
3.04
|
|
|
$
|
3.72
|
|
|
$
|
5.69
|
|
|
$
|
2.55
|
|
|
$
|
(4.40
|
)
|
Shares used in per share calculation, basic
|
116.8
|
|
|
126.1
|
|
|
138.4
|
|
|
140.0
|
|
|
141.3
|
|
|||||
Net income (loss) per share, diluted
|
$
|
3.01
|
|
|
$
|
3.70
|
|
|
$
|
5.66
|
|
|
$
|
2.53
|
|
|
$
|
(4.40
|
)
|
Shares used in per share calculation, diluted
|
117.9
|
|
|
127.0
|
|
|
139.4
|
|
|
141.6
|
|
|
141.3
|
|
|||||
Dividends declared per common share
|
$
|
0.40
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Spirit Holdings
|
||||||||||||||||||
|
Twelve Months Ended
|
||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flow provided by operating activities
|
$
|
573.7
|
|
|
$
|
716.9
|
|
|
$
|
1,289.7
|
|
|
$
|
361.6
|
|
|
$
|
260.6
|
|
Cash flow used in investing activities
|
$
|
(272.8
|
)
|
|
$
|
(253.4
|
)
|
|
$
|
(357.4
|
)
|
|
$
|
(239.6
|
)
|
|
$
|
(268.2
|
)
|
Cash flow used in financing activities
|
$
|
(580.9
|
)
|
|
$
|
(718.7
|
)
|
|
$
|
(351.1
|
)
|
|
$
|
(164.2
|
)
|
|
$
|
(13.9
|
)
|
Capital expenditures
|
$
|
(273.1
|
)
|
|
$
|
(254.0
|
)
|
|
$
|
(360.1
|
)
|
|
$
|
(220.2
|
)
|
|
$
|
(234.2
|
)
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
423.3
|
|
|
$
|
697.7
|
|
|
$
|
957.3
|
|
|
$
|
377.9
|
|
|
$
|
420.7
|
|
Accounts receivable, net
|
$
|
722.2
|
|
|
$
|
660.5
|
|
|
$
|
537.0
|
|
|
$
|
605.6
|
|
|
$
|
550.8
|
|
Inventories, net
|
$
|
1,449.9
|
|
|
$
|
1,515.3
|
|
|
$
|
1,774.4
|
|
|
$
|
1,753.0
|
|
|
$
|
1,842.6
|
|
Property, plant & equipment, net
|
$
|
2,105.3
|
|
|
$
|
1,991.6
|
|
|
$
|
1,950.7
|
|
|
$
|
1,783.6
|
|
|
$
|
1,803.3
|
|
Total assets
|
$
|
5,267.8
|
|
|
$
|
5,405.2
|
|
|
$
|
5,764.5
|
|
|
$
|
5,162.7
|
|
|
$
|
5,107.2
|
|
Total debt
|
$
|
1,151.0
|
|
|
$
|
1,086.7
|
|
|
$
|
1,120.2
|
|
|
$
|
1,153.5
|
|
|
$
|
1,167.3
|
|
Long-term debt
|
$
|
1,119.9
|
|
|
$
|
1,060.0
|
|
|
$
|
1,085.3
|
|
|
$
|
1,144.1
|
|
|
$
|
1,150.5
|
|
Total equity
|
$
|
1,801.5
|
|
|
$
|
1,928.8
|
|
|
$
|
2,120.0
|
|
|
$
|
1,622.0
|
|
|
$
|
1,481.0
|
|
(1)
|
Included in 2017 costs of sales are net forward loss charges of
$327.3 million
. Included in 2016 costs of sales are net forward loss charges of $118.2 million. Included in 2015 costs of sales are net favorable changes in estimates on loss programs totaling $10.8 million. Included in 2014 costs of sales are net favorable changes in estimates on loss programs totaling $26.1 million. Included in 2013 cost of sales are forward loss charges of $1,133.3 million. Includes cumulative catch-up adjustments of $31.2 million, $36.6 million, $41.6 million, $60.4 million, and $95.5 million for periods prior to the twelve months ended December 31, 2017, 2016, 2015, 2014, and 2013, respectively.
|
(2)
|
Includes non-cash stock compensation expenses of
$22.1 million
,
$42.5 million
,
$26.0 million
, $16.4 million, and $19.6 million for the respective periods starting with the twelve months ended December 31, 2017.
|
(3)
|
On December 8, 2014, Spirit entered into an Asset Purchase Agreement with Triumph Aerostructures - Tulsa, LLC, a wholly-owned subsidiary of Triumph Group Inc. (“Triumph”), to sell Spirit’s G280 and G650 programs, consisting of the design, manufacture and support of structural components for the Gulfstream G280 and G650 aircraft in Spirit’s facilities in Tulsa, Oklahoma to Triumph. The transaction closed on December 30, 2014. In connection with the closing of the transaction, we recorded a loss on divestiture of programs of $471.1 million, representing the difference between the sale proceeds and the book value of the assets sold.
|
|
Twelve Months Ended
|
||||||||||
|
December 31, 2017
(1)
|
|
December 31, 2016
(1)(2)
|
|
December 31, 2015
(2)
|
||||||
|
($ in millions)
|
||||||||||
Net revenues
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
Cost of sales
|
6,162.5
|
|
|
5,803.6
|
|
|
5,532.3
|
|
|||
Gross profit
|
820.5
|
|
|
989.3
|
|
|
1,111.6
|
|
|||
Selling, general and administrative expenses
|
200.3
|
|
|
228.3
|
|
|
220.8
|
|
|||
Impact of severe weather event
|
19.9
|
|
|
12.1
|
|
|
—
|
|
|||
Research and development
|
31.2
|
|
|
23.8
|
|
|
27.8
|
|
|||
Operating income
|
569.1
|
|
|
725.1
|
|
|
863.0
|
|
|||
Interest expense and financing fee amortization
|
(41.7
|
)
|
|
(57.3
|
)
|
|
(52.7
|
)
|
|||
Other income (expense), net
|
7.2
|
|
|
(7.3
|
)
|
|
(2.2
|
)
|
|||
Income before income taxes and equity in net income of affiliate
|
534.6
|
|
|
660.5
|
|
|
808.1
|
|
|||
Income tax provision
|
(180.0
|
)
|
|
(192.1
|
)
|
|
(20.6
|
)
|
|||
Income before equity in net income of affiliate
|
354.6
|
|
|
468.4
|
|
|
787.5
|
|
|||
Equity in net income of affiliate
|
0.3
|
|
|
1.3
|
|
|
1.2
|
|
|||
Net income
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
(1)
|
See “Twelve Months Ended December 31, 2017 as Compared to Twelve Months Ended December 31, 2016” for detailed discussion of operating data.
|
(2)
|
See “Twelve Months Ended December 31, 2016 as Compared to Twelve Months Ended December 31, 2015” for detailed discussion of operating data.
|
|
Twelve Months Ended
|
|||||||
Model
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2015
|
|||
B737
|
532
|
|
|
500
|
|
|
502
|
|
B747
|
6
|
|
|
8
|
|
|
15
|
|
B767
|
28
|
|
|
25
|
|
|
18
|
|
B777
|
70
|
|
|
96
|
|
|
102
|
|
B787
|
136
|
|
|
127
|
|
|
126
|
|
Total Boeing
|
772
|
|
|
756
|
|
|
763
|
|
A320 Family
|
608
|
|
|
574
|
|
|
494
|
|
A330/340
|
80
|
|
|
74
|
|
|
77
|
|
A350
|
90
|
|
|
69
|
|
|
37
|
|
A380
|
13
|
|
|
22
|
|
|
24
|
|
Total Airbus
|
791
|
|
|
739
|
|
|
632
|
|
Business/Regional Jets
|
88
|
|
|
88
|
|
|
62
|
|
Total
|
1,651
|
|
|
1,583
|
|
|
1,457
|
|
|
Twelve Months Ended
|
||||||||||
Prime Customer
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2015
|
||||||
|
($ in millions)
|
||||||||||
Boeing
|
$
|
5,527.5
|
|
|
$
|
5,502.6
|
|
|
$
|
5,596.6
|
|
Airbus
|
1,123.5
|
|
|
992.7
|
|
|
760.5
|
|
|||
Other
|
332.0
|
|
|
297.6
|
|
|
286.8
|
|
|||
Total net revenues
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
|
Twelve Months Ended
|
||||||||||
|
December 31,
2017
|
|
December 31,
2016
|
|
December 31,
2015
|
||||||
|
($ in millions)
|
||||||||||
Segment Revenues
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
3,730.8
|
|
|
$
|
3,498.8
|
|
|
$
|
3,447.0
|
|
Propulsion Systems
|
1,666.2
|
|
|
1,777.3
|
|
|
1,750.7
|
|
|||
Wing Systems
|
1,578.8
|
|
|
1,508.7
|
|
|
1,437.7
|
|
|||
All Other
|
7.2
|
|
|
8.1
|
|
|
8.5
|
|
|||
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
Segment Operating Income
(1)
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
347.7
|
|
|
$
|
468.6
|
|
|
$
|
607.3
|
|
Propulsion Systems
|
275.1
|
|
|
325.9
|
|
|
378.2
|
|
|||
Wing Systems
|
212.4
|
|
|
223.6
|
|
|
178.5
|
|
|||
All Other
|
2.0
|
|
|
1.6
|
|
|
1.3
|
|
|||
|
837.2
|
|
|
1,019.7
|
|
|
1,165.3
|
|
|||
Corporate SG&A
|
(200.3
|
)
|
|
(228.3
|
)
|
|
(220.8
|
)
|
|||
Unallocated impact of severe weather event
(2)
|
(19.9
|
)
|
|
(12.1
|
)
|
|
—
|
|
|||
Research and development
|
(31.2
|
)
|
|
(23.8
|
)
|
|
(27.8
|
)
|
|||
Unallocated cost of sales
(3)
|
(16.7
|
)
|
|
(30.4
|
)
|
|
(53.7
|
)
|
|||
Total operating income
|
$
|
569.1
|
|
|
$
|
725.1
|
|
|
$
|
863.0
|
|
(1)
|
Inclusive of forward losses, changes in estimates on loss programs, and cumulative catch-up adjustments. These changes in estimates for the periods ended December 31, 2017, 2016, and 2015 are further detailed in the segment discussions below and in Note 3 to the Consolidated Financial Statements,
Changes in Estimates
.
|
(2)
|
See Note 25 to the Consolidated Financial Statements,
Impact of Severe Weather Event
.
|
(3)
|
For 2017, includes charges of
$1.8
million and
$12.7
million, related to warranty reserve and charges for excess purchases and purchase commitments, respectively. For 2016, includes charges of $13.8 million and $23.6 related to warranty reserve and early retirement incentives, respectively, offset by $7.9 million for the settlement of historical claims with suppliers. For 2015, includes charges of
$40.7
million,
$0.8
million, and
$6.4
million related to warranty reserve, reduction in workforce, and unallocated inventory write-offs, respectively.
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||
|
($ in millions)
|
||||||||||
Net income
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
Adjustments to reconcile net income
|
241.3
|
|
|
283.7
|
|
|
31.0
|
|
|||
Changes in working capital
|
(23.5
|
)
|
|
(36.5
|
)
|
|
470.0
|
|
|||
Net cash provided by operating activities
|
572.7
|
|
|
716.9
|
|
|
1,289.7
|
|
|||
Net cash used in investing activities
|
(272.8
|
)
|
|
(253.4
|
)
|
|
(357.4
|
)
|
|||
Net cash used in financing activities
|
(580.9
|
)
|
|
(718.7
|
)
|
|
(351.1
|
)
|
|||
Effect of exchange rate change on cash and cash equivalents
|
5.6
|
|
|
(4.4
|
)
|
|
(1.8
|
)
|
|||
Net increase (decrease) in cash and cash equivalents for the period
|
(275.4
|
)
|
|
(259.6
|
)
|
|
579.4
|
|
|||
Cash and cash equivalents, beginning of period
|
697.7
|
|
|
957.3
|
|
|
377.9
|
|
|||
Cash and cash equivalents, end of period
|
$
|
422.3
|
|
|
$
|
697.7
|
|
|
$
|
957.3
|
|
Contractual Obligations
(
1)(2)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and
After
|
|
Total
|
||||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||||
Principal payment on term loan
|
$
|
6.3
|
|
|
$
|
6.3
|
|
|
$
|
6.3
|
|
|
$
|
387.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
406.4
|
|
Interest on debt
(3)
|
20.9
|
|
|
21.7
|
|
|
21.0
|
|
|
11.0
|
|
|
4.6
|
|
|
4.3
|
|
|
35.6
|
|
|
119.1
|
|
||||||||
Long-term bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300.0
|
|
|
—
|
|
|
300.0
|
|
|
600.0
|
|
||||||||
Interest on long-term bonds
|
27.3
|
|
|
27.3
|
|
|
27.3
|
|
|
27.3
|
|
|
19.4
|
|
|
11.6
|
|
|
28.9
|
|
|
169.1
|
|
||||||||
Non-cancelable capital lease payments
|
5.2
|
|
|
5.5
|
|
|
5.7
|
|
|
5.8
|
|
|
5.9
|
|
|
5.3
|
|
|
3.2
|
|
|
36.6
|
|
||||||||
Non-cancelable operating lease payments
|
8.3
|
|
|
7.4
|
|
|
6.0
|
|
|
4.8
|
|
|
3.9
|
|
|
2.7
|
|
|
12.5
|
|
|
45.6
|
|
||||||||
Other
|
1.0
|
|
|
1.1
|
|
|
1.1
|
|
|
1.2
|
|
|
1.3
|
|
|
1.6
|
|
|
51.4
|
|
|
58.7
|
|
||||||||
Transition tax
(4)
|
3.4
|
|
|
3.4
|
|
|
3.4
|
|
|
3.4
|
|
|
3.4
|
|
|
6.3
|
|
|
18.7
|
|
|
42.0
|
|
||||||||
Purchase obligations
(5)
|
190.1
|
|
|
27.3
|
|
|
8.3
|
|
|
8.2
|
|
|
7.2
|
|
|
1.9
|
|
|
—
|
|
|
243.0
|
|
||||||||
Total
|
$
|
262.5
|
|
|
$
|
100.0
|
|
|
$
|
79.1
|
|
|
$
|
449.2
|
|
|
$
|
345.7
|
|
|
$
|
33.7
|
|
|
$
|
450.3
|
|
|
$
|
1,720.5
|
|
(1)
|
Does not include repayment of
$515.6 million
of B787 advances or deferred revenue credits to Boeing, or
$2.0 million
of Airbus advances or deferred revenue credits, which are reflected in our balance sheet as short-term and long-term liabilities. See Note 8 to the Consolidated Financial Statements,
Advance Payments and Deferred Revenue/Credits
.
|
(2)
|
The
$6.7 million
of unrecognized tax benefit liability for uncertain tax positions has been excluded from this table due to uncertainty involving the ultimate settlement period. See Note 16 to the Consolidated Financial Statements,
Income Taxes
.
|
(3)
|
Interest on our Term Loan was calculated for all years using the three-month LIBOR yield curve as of December 31, 2017 plus applicable margin.
|
(4)
|
Provisional amount for our one-time transition tax liability for all of our operating foreign subsidiaries, which we will elect to pay over a period of eight years as provided for in the TCJA. The state income tax effect of the transition tax will be offset by state income tax credit carryforwards.
|
(5)
|
Purchase obligations represent computing, tooling, and property, plant and equipment commitments as of December 31, 2017.
|
|
Page
|
Consolidated Financial Statements of Spirit AeroSystems Holdings, Inc. for the periods ended December 31, 2017, December 2016, an December 31, 2015
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
|
($ in millions, except per share data)
|
||||||||||
Net Revenues
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
Operating costs and expenses
|
|
|
|
|
|
||||||
Cost of sales
|
6,162.5
|
|
|
5,803.6
|
|
|
5,532.3
|
|
|||
Selling, general and administrative
|
200.3
|
|
|
228.3
|
|
|
220.8
|
|
|||
Impact of severe weather event
|
19.9
|
|
|
12.1
|
|
|
—
|
|
|||
Research and development
|
31.2
|
|
|
23.8
|
|
|
27.8
|
|
|||
Total operating costs and expenses
|
6,413.9
|
|
|
6,067.8
|
|
|
5,780.9
|
|
|||
Operating income
|
569.1
|
|
|
725.1
|
|
|
863.0
|
|
|||
Interest expense and financing fee amortization
|
(41.7
|
)
|
|
(57.3
|
)
|
|
(52.7
|
)
|
|||
Other income (expense), net
|
7.2
|
|
|
(7.3
|
)
|
|
(2.2
|
)
|
|||
Income before income taxes and equity in net income of affiliates
|
534.6
|
|
|
660.5
|
|
|
808.1
|
|
|||
Income tax provision
|
(180.0
|
)
|
|
(192.1
|
)
|
|
(20.6
|
)
|
|||
Income before equity in net income of affiliates
|
354.6
|
|
|
468.4
|
|
|
787.5
|
|
|||
Equity in net income of affiliates
|
0.3
|
|
|
1.3
|
|
|
1.2
|
|
|||
Net income
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
3.04
|
|
|
$
|
3.72
|
|
|
$
|
5.69
|
|
Diluted
|
$
|
3.01
|
|
|
$
|
3.70
|
|
|
$
|
5.66
|
|
Dividends declared per common share
|
$
|
0.40
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
|
($ in millions)
|
||||||||||
Net income
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Settlement of swap, net of tax effect of zero, zero, and ($0.4), respectively
|
—
|
|
|
—
|
|
|
0.7
|
|
|||
Pension, SERP, and Retiree medical adjustments, net of tax effect of ($6.0), ($20.8), and ($7.7), respectively
|
19.8
|
|
|
36.9
|
|
|
12.5
|
|
|||
Unrealized foreign exchange income (loss) on intercompany loan, net of tax effect of ($1.2), $2.5, and $0.9, respectively
|
4.9
|
|
|
(9.9
|
)
|
|
(3.5
|
)
|
|||
Foreign currency translation adjustments
|
33.7
|
|
|
(53.4
|
)
|
|
(16.4
|
)
|
|||
Total other comprehensive income (loss)
|
58.4
|
|
|
(26.4
|
)
|
|
(6.7
|
)
|
|||
Total comprehensive income
|
$
|
413.3
|
|
|
$
|
443.3
|
|
|
$
|
782.0
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
|
($ in millions)
|
||||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
423.3
|
|
|
$
|
697.7
|
|
Restricted cash
|
2.2
|
|
|
—
|
|
||
Accounts receivable, net
|
722.2
|
|
|
660.5
|
|
||
Inventory, net
|
1,449.9
|
|
|
1,515.3
|
|
||
Other current assets
|
53.5
|
|
|
36.9
|
|
||
Total current assets
|
2,651.1
|
|
|
2,910.4
|
|
||
Property, plant and equipment, net
|
2,105.3
|
|
|
1,991.6
|
|
||
Pension assets
|
347.1
|
|
|
282.3
|
|
||
Other assets
|
164.3
|
|
|
220.9
|
|
||
Total assets
|
$
|
5,267.8
|
|
|
$
|
5,405.2
|
|
Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
693.1
|
|
|
$
|
579.7
|
|
Accrued expenses
|
269.3
|
|
|
216.2
|
|
||
Profit sharing
|
109.5
|
|
|
101.4
|
|
||
Current portion of long-term debt
|
31.1
|
|
|
26.7
|
|
||
Advance payments, short-term
|
100.0
|
|
|
199.3
|
|
||
Deferred revenue and other deferred credits, short-term
|
64.6
|
|
|
312.1
|
|
||
Deferred grant income liability — current
|
21.6
|
|
|
14.4
|
|
||
Other current liabilities
|
331.8
|
|
|
94.4
|
|
||
Total current liabilities
|
1,621.0
|
|
|
1,544.2
|
|
||
Long-term debt
|
1,119.9
|
|
|
1,060.0
|
|
||
Advance payments, long-term
|
231.7
|
|
|
342.0
|
|
||
Pension/OPEB obligation
|
40.8
|
|
|
43.9
|
|
||
Deferred revenue and other deferred credits
|
161.0
|
|
|
146.8
|
|
||
Deferred grant income liability — non-current
|
39.3
|
|
|
63.4
|
|
||
Other liabilities
|
252.6
|
|
|
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, 114,447,605 and 121,642,556 shares issued and outstanding, respectively
|
1.1
|
|
|
1.2
|
|
||
Additional paid-in capital
|
1,086.9
|
|
|
1,078.9
|
|
||
Accumulated other comprehensive loss
|
(128.5
|
)
|
|
(186.9
|
)
|
||
Retained earnings
|
2,422.4
|
|
|
2,113.9
|
|
||
Treasury stock, at cost (31,467,709 and 23,936,092 shares, respectively)
|
(1,580.9
|
)
|
|
(1,078.8
|
)
|
||
Total stockholders' equity
|
1,801.0
|
|
|
1,928.3
|
|
||
Noncontrolling interest
|
0.5
|
|
|
0.5
|
|
||
Total equity
|
1,801.5
|
|
|
1,928.8
|
|
||
Total liabilities and equity
|
$
|
5,267.8
|
|
|
$
|
5,405.2
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
|
|||||||||||||||
|
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Total
|
|||||||||||||||||||
|
($ in millions, except share data)
|
|||||||||||||||||||||||||
Balance — December 31, 2014
|
141,089,123
|
|
|
$
|
1.4
|
|
|
$
|
1,035.6
|
|
|
$
|
(129.2
|
)
|
|
$
|
(153.8
|
)
|
|
$
|
867.5
|
|
|
$
|
1,621.5
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
788.7
|
|
|
788.7
|
|
||||||
Employee equity awards
|
653,011
|
|
|
—
|
|
|
26.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26.0
|
|
||||||
Stock forfeitures
|
(170,789
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(395,447
|
)
|
|
—
|
|
|
(20.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.7
|
)
|
||||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
—
|
|
|
10.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
||||||
SERP shares issued
|
133,677
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares
|
(5,691,865.0
|
)
|
|
—
|
|
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|
—
|
|
|
(300.0
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
|
—
|
|
|
(6.7
|
)
|
||||||
Balance — December 31, 2015
|
135,617,710
|
|
|
$
|
1.4
|
|
|
$
|
1,051.6
|
|
|
$
|
(429.2
|
)
|
|
$
|
(160.5
|
)
|
|
$
|
1,656.2
|
|
|
$
|
2,119.5
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
469.7
|
|
|
469.7
|
|
||||||
Dividends Declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.0
|
)
|
|
(12.0
|
)
|
||||||
Employee equity awards
|
856,232
|
|
|
—
|
|
|
42.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42.5
|
|
||||||
Stock forfeitures
|
(280,349
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(335,436
|
)
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.2
|
)
|
||||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||||
SERP shares issued
|
28,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares
|
(14,244,227
|
)
|
|
(0.2
|
)
|
|
0.2
|
|
|
(649.6
|
)
|
|
—
|
|
|
—
|
|
|
(649.6
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.4
|
)
|
|
—
|
|
|
(26.4
|
)
|
||||||
Balance — December 31, 2016
|
121,642,556
|
|
|
$
|
1.2
|
|
|
$
|
1,078.9
|
|
|
$
|
(1,078.8
|
)
|
|
$
|
(186.9
|
)
|
|
$
|
2,113.9
|
|
|
$
|
1,928.3
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
354.9
|
|
|
354.9
|
|
||||||
Dividends Declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.4
|
)
|
|
(46.4
|
)
|
||||||
Employee equity awards
|
667,845
|
|
|
—
|
|
|
22.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.1
|
|
||||||
Stock forfeitures
|
(92,482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(250,066
|
)
|
|
—
|
|
|
(14.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.2
|
)
|
||||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
SERP shares issued
|
11,369
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares
|
(7,531,617
|
)
|
|
(0.1
|
)
|
|
0.1
|
|
|
(502.1
|
)
|
|
—
|
|
|
—
|
|
|
(502.1
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58.4
|
|
|
—
|
|
|
58.4
|
|
||||||
Balance — December 31, 2017
|
114,447,605
|
|
|
$
|
1.1
|
|
|
$
|
1,086.9
|
|
|
$
|
(1,580.9
|
)
|
|
$
|
(128.5
|
)
|
|
$
|
2,422.4
|
|
|
$
|
1,801.0
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
|
($ in millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation expense
|
214.1
|
|
|
208.6
|
|
|
180.5
|
|
|||
Amortization expense
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|||
Amortization of deferred financing fees
|
3.4
|
|
|
19.3
|
|
|
6.9
|
|
|||
Accretion of customer supply agreement
|
2.6
|
|
|
4.9
|
|
|
2.6
|
|
|||
Employee stock compensation expense
|
22.1
|
|
|
42.5
|
|
|
26.0
|
|
|||
Excess tax benefit of share-based payment arrangements
|
—
|
|
|
0.1
|
|
|
(10.7
|
)
|
|||
Gain from interest rate swaps
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|||
Loss from hedge contracts
|
—
|
|
|
—
|
|
|
1.6
|
|
|||
(Gain) loss from foreign currency transactions
|
(8.1
|
)
|
|
17.4
|
|
|
8.6
|
|
|||
Loss on disposition of assets
|
9.5
|
|
|
0.4
|
|
|
14.7
|
|
|||
Deferred taxes
|
52.4
|
|
|
0.9
|
|
|
(162.2
|
)
|
|||
Pension and other post retirement benefits, net
|
(34.7
|
)
|
|
3.5
|
|
|
(26.0
|
)
|
|||
Grant liability amortization
|
(19.0
|
)
|
|
(11.9
|
)
|
|
(10.4
|
)
|
|||
Equity in net income of affiliates
|
(0.3
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(48.5
|
)
|
|
(139.1
|
)
|
|
62.2
|
|
|||
Inventory, net
|
319.6
|
|
|
207.8
|
|
|
(44.2
|
)
|
|||
Accounts payable and accrued liabilities
|
160.3
|
|
|
(34.3
|
)
|
|
(89.1
|
)
|
|||
Profit sharing/deferred compensation
|
7.6
|
|
|
40.5
|
|
|
(50.0
|
)
|
|||
Advance payments
|
(209.6
|
)
|
|
(144.4
|
)
|
|
(113.3
|
)
|
|||
Income taxes receivable/payable
|
25.7
|
|
|
(3.3
|
)
|
|
251.9
|
|
|||
Deferred revenue and other deferred credits
|
(231.2
|
)
|
|
12.4
|
|
|
407.3
|
|
|||
Other
|
(46.4
|
)
|
|
23.0
|
|
|
45.2
|
|
|||
Net cash provided by operating activities
|
573.7
|
|
|
716.9
|
|
|
1,289.7
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
(273.1
|
)
|
|
(254.0
|
)
|
|
(360.1
|
)
|
|||
Proceeds from sale of assets
|
0.4
|
|
|
0.6
|
|
|
2.7
|
|
|||
Other
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(272.8
|
)
|
|
(253.4
|
)
|
|
(357.4
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of debt
|
—
|
|
|
—
|
|
|
535.0
|
|
|||
Proceeds from issuance of bonds
|
—
|
|
|
299.8
|
|
|
—
|
|
|||
Principal payments of debt
|
(2.8
|
)
|
|
(36.4
|
)
|
|
(36.5
|
)
|
|||
Payments on term loan
|
(25.0
|
)
|
|
—
|
|
|
(534.9
|
)
|
|||
Payments on bonds
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|||
Taxes paid related to net share settlement awards
|
(14.2
|
)
|
|
(15.2
|
)
|
|
(20.7
|
)
|
|||
Excess tax benefit of share-based payment arrangements
|
—
|
|
|
(0.1
|
)
|
|
10.7
|
|
|||
Debt issuance and financing costs
|
(0.9
|
)
|
|
(17.2
|
)
|
|
(4.7
|
)
|
|||
Proceeds from financing under the New Markets Tax Credit Program
|
7.6
|
|
|
—
|
|
|
—
|
|
|||
Purchase of treasury stock
|
(496.3
|
)
|
|
(649.6
|
)
|
|
(300.0
|
)
|
|||
Change in restricted cash
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(47.1
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in financing activities
|
(580.9
|
)
|
|
(718.7
|
)
|
|
(351.1
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
5.6
|
|
|
(4.4
|
)
|
|
(1.8
|
)
|
|||
Net (decrease) increase in cash and cash equivalents for the period
|
(274.4
|
)
|
|
(259.6
|
)
|
|
579.4
|
|
|||
Cash and cash equivalents, beginning of period
|
697.7
|
|
|
957.3
|
|
|
377.9
|
|
|||
Cash and cash equivalents, end of period
|
$
|
423.3
|
|
|
$
|
697.7
|
|
|
$
|
957.3
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||
|
($ in millions)
|
||||||||||
Supplemental information
|
|
|
|
|
|
||||||
Interest paid
|
$
|
43.6
|
|
|
$
|
45.2
|
|
|
$
|
51.5
|
|
Income taxes paid (refunded)
|
$
|
101.9
|
|
|
$
|
191.4
|
|
|
$
|
(69.7
|
)
|
|
Estimated Useful Life
|
Land improvements
|
20 years
|
Buildings
|
45 years
|
Machinery and equipment
|
3-20 years
|
Tooling — Airplane program — B787, Rolls-Royce
|
5-20 years
|
Tooling — Airplane program — all others
|
2-10 years
|
Capitalized software
|
3-7 years
|
Opening Balance Sheet Impact
:
|
|
|
|
Pretax Retained Earnings Decrease
|
$350.0
|
-
|
$370.0
|
Net Estimated Tax Benefit
|
$75.0
|
-
|
$85.0
|
Changes in Estimates
|
December 31, 2017
|
December 31, 2016
|
December 31, 2015
|
|||
Favorable (Unfavorable) Cumulative Catch-up Adjustments by Segment
|
|
|
|
|||
Fuselage
|
4.0
|
|
13.6
|
|
16.1
|
|
Propulsion
|
3.8
|
|
(0.4
|
)
|
22.8
|
|
Wing
|
23.4
|
|
23.4
|
|
2.7
|
|
Total Favorable Cumulative Catch-up Adjustment
|
31.2
|
|
36.6
|
|
41.6
|
|
|
|
|
|
|||
(Forward Loss) and Changes in Estimates on Loss Programs by Segment
|
|
|
|
|||
Fuselage
|
(223.2
|
)
|
(133.4
|
)
|
8.7
|
|
Propulsion
|
(40.2
|
)
|
10.1
|
|
2.4
|
|
Wing
|
(63.9
|
)
|
5.1
|
|
(0.3
|
)
|
Total (Forward Loss) and Change in Estimate on Loss Program
|
(327.3
|
)
|
(118.2
|
)
|
10.8
|
|
|
|
|
|
|||
Total Change in Estimate
|
(296.1
|
)
|
(81.6
|
)
|
52.4
|
|
EPS Impact (diluted per share based on statutory rates)
|
(1.58
|
)
|
(0.40
|
)
|
0.24
|
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Trade receivables
|
$
|
710.5
|
|
|
$
|
647.3
|
|
Other
|
13.0
|
|
|
18.4
|
|
||
Less: allowance for doubtful accounts
|
(1.3
|
)
|
|
(5.2
|
)
|
||
Accounts receivable, net
|
$
|
722.2
|
|
|
$
|
660.5
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
321.0
|
|
|
$
|
281.9
|
|
Work-in-process
|
854.4
|
|
|
790.7
|
|
||
Finished goods
|
35.8
|
|
|
30.9
|
|
||
Product inventory
|
1,211.2
|
|
|
1,103.5
|
|
||
Capitalized pre-production
(1)
|
78.9
|
|
|
103.5
|
|
||
Deferred production
(2)
|
640.3
|
|
|
717.4
|
|
||
Forward loss provision
(3)
|
(480.5
|
)
|
|
(409.1
|
)
|
||
Total inventory, net
|
$
|
1,449.9
|
|
|
$
|
1,515.3
|
|
(1)
|
For the period ended December 31, 2017,
$69.7
and
$5.6
on the A350 XWB and Rolls-Royce BR725 programs, respectively. For the period ended December 31, 2016,
$83.7
and
$15.2
on the A350 XWB and Rolls-Royce BR725 programs, respectively.
|
(2)
|
For the period ended December 31, 2017
$632.8
and
$129.3
on the A350 XWB and Rolls-Royce BR725 programs, respectively. For the period ended December 31, 2016,
$657.2
and
$114.6
on the A350 XWB and Rolls-Royce BR725 programs, respectively.
|
(3)
|
For the period ended December 31, 2017,
($275.5)
,
($137.4)
, and
($57.2)
on A350 XWB, Rolls-Royce BR725, and B787 programs, respectively. For the period ended December 31, 2016,
($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
$254.5
as of December 31, 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
|
223
|
|
|
800
|
|
Rolls-Royce BR725
|
316
|
|
|
350
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Land
|
$
|
15.9
|
|
|
$
|
14.9
|
|
Buildings (including improvements)
|
764.1
|
|
|
642.5
|
|
||
Machinery and equipment
(1)
|
1,529.9
|
|
|
1,373.9
|
|
||
Tooling
|
1,013.9
|
|
|
982.4
|
|
||
Capitalized software
(1)
|
263.3
|
|
|
261.9
|
|
||
Construction-in-progress
|
213.4
|
|
|
193.7
|
|
||
Total
|
3,800.5
|
|
|
3,469.3
|
|
||
Less: accumulated depreciation
|
(1,695.2
|
)
|
|
(1,477.7
|
)
|
||
Property, plant and equipment, net
|
$
|
2,105.3
|
|
|
$
|
1,991.6
|
|
|
|
December 31,
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
|
(4.6
|
)
|
|
(4.2
|
)
|
||
Intangible assets, net
|
1.8
|
|
|
2.2
|
|
||
Deferred financing
|
|
|
|
||||
Deferred financing costs
|
39.5
|
|
|
38.5
|
|
||
Less: Accumulated amortization-deferred financing costs
|
(33.7
|
)
|
|
(32.2
|
)
|
||
Deferred financing costs, net
(1)
|
5.8
|
|
|
6.3
|
|
||
Other
|
|
|
|
||||
Goodwill — Europe
|
2.5
|
|
|
2.3
|
|
||
Equity in net assets of affiliates
|
4.7
|
|
|
4.4
|
|
||
Supply agreement
(1)
|
19.9
|
|
|
17.0
|
|
||
Restricted Cash
|
20.0
|
|
|
19.9
|
|
||
Deferred Tax Asset - non-current
|
72.5
|
|
|
128.8
|
|
||
Other
|
37.1
|
|
|
40.0
|
|
||
Total
|
$
|
164.3
|
|
|
$
|
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.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
B787
|
$
|
515.6
|
|
|
$
|
834.8
|
|
Boeing — All other programs
|
12.6
|
|
|
18.6
|
|
||
A350 XWB
|
2.0
|
|
|
116.7
|
|
||
Airbus — All other programs
|
1.3
|
|
|
2.2
|
|
||
Other
|
25.8
|
|
|
27.9
|
|
||
Total advance payments and deferred revenue/credits
|
$
|
557.3
|
|
|
$
|
1,000.2
|
|
|
2017
|
|
2016
|
||||
Balance, January 1
|
$
|
77.8
|
|
|
$
|
94.2
|
|
Grant liability amortized
|
(19.0
|
)
|
|
(11.9
|
)
|
||
Exchange rate
|
2.1
|
|
|
(4.5
|
)
|
||
Total liability related to deferred grant income, December 31
|
$
|
60.9
|
|
|
$
|
77.8
|
|
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.
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
|
Carrying
Amount |
|
Fair
Value |
|
||||||||
Senior secured term loan A (including current portion)
|
$
|
460.7
|
|
|
$
|
461.9
|
|
(2)
|
|
$
|
485.2
|
|
|
$
|
484.8
|
|
(2)
|
Senior unsecured notes due 2022
|
294.8
|
|
|
304.6
|
|
(1)
|
|
293.8
|
|
|
307.0
|
|
(1)
|
||||
Senior unsecured notes due 2026
|
297.2
|
|
|
301.0
|
|
(1)
|
|
296.9
|
|
|
292.4
|
|
(1)
|
||||
Malaysian loan
|
—
|
|
|
—
|
|
(2)
|
|
1.0
|
|
|
0.9
|
|
(2)
|
||||
Total
|
$
|
1,052.7
|
|
|
$
|
1,067.5
|
|
|
|
$
|
1,076.9
|
|
|
$
|
1,085.1
|
|
|
(1)
|
Level 1 Fair Value hierarchy
|
(2)
|
Level 2 Fair Value hierarchy
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
|
Current
|
Noncurrent
|
|
Current
|
Noncurrent
|
||||||||
Senior unsecured term loan A
|
$
|
24.9
|
|
$
|
435.8
|
|
|
$
|
24.9
|
|
$
|
460.3
|
|
Senior notes due 2022
|
—
|
|
294.8
|
|
|
—
|
|
293.8
|
|
||||
Senior notes due 2026
|
—
|
|
297.2
|
|
|
—
|
|
296.9
|
|
||||
Malaysian term loan
|
—
|
|
—
|
|
|
1.0
|
|
—
|
|
||||
Present value of capital lease obligations
|
5.2
|
|
33.6
|
|
|
0.8
|
|
9.0
|
|
||||
Other
|
1.0
|
|
58.5
|
|
|
—
|
|
—
|
|
||||
Total
|
$
|
31.1
|
|
$
|
1,119.9
|
|
|
$
|
26.7
|
|
$
|
1,060.0
|
|
Pricing Tier
|
Credit Rating (S&P/Moody's)
|
|
Commitment
Fee
|
|
Letter of
Credit
Fee
|
|
LIBOR Loans
|
|
Base Rate
Loans
|
1
|
≥BBB+/Baa1
|
|
0.125%
|
|
1.125%
|
|
1.125%
|
|
0.125%
|
2
|
BBB/Baa2
|
|
0.175%
|
|
1.250%
|
|
1.250%
|
|
0.250%
|
3
|
BBB-/Baa3
|
|
0.225%
|
|
1.500%
|
|
1.500%
|
|
0.500%
|
4
|
BB+/Ba1
|
|
0.275%
|
|
1.750%
|
|
1.750%
|
|
0.750%
|
5
|
≤BB/Ba2
|
|
0.350%
|
|
2.000%
|
|
2.000%
|
|
1.000%
|
Interest Coverage Ratio
|
|
Shall not be less than 4.0:1.0
|
Total Leverage Ratio
|
|
Shall not exceed 3.5:1.0
|
1.
|
Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.
|
2.
|
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
3.
|
If the Company chooses to stop participating in the multi-employer plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
|
|
|
Pension Protection Act Zone Status
|
|
|
|
|
|
|
|
|
|
|
|
Expiration
Date of
Collective-
Bargaining
Agreement
|
||||||||
|
|
|
|
FIP/RP
Status
Pending/
Implemented
|
|
Contributions of the Company
|
|
|
|
||||||||||||||
|
EIN/Pension
Plan Number
|
|
|
Surcharge
Imposed
|
|
||||||||||||||||||
Pension Fund
|
2016
|
|
2017
|
|
2015
|
|
2016
|
|
2017
|
|
|||||||||||||
IAM National Pension Fund
|
51-60321295
|
|
Green
|
|
Green
|
|
No
|
|
$
|
29.8
|
|
|
$
|
26.9
|
|
|
$
|
30.3
|
|
|
No
|
|
IAM June 27, 2020
UAW December 7, 2025
|
Pension Fund
|
Year Company Contributions to Plan Exceeded More Than 5 Percent of
Total Contributions (as of December 31 of the Plan
’
s Year-End)
|
||||||||||||||||||||||
IAM National Pension Fund
|
2015, 2016, 2017
|
|
Pension Benefits
|
|
Other
Post-Retirement
Benefits
|
||||||||||||
|
Periods Ended
December 31,
|
|
Periods Ended
December 31,
|
||||||||||||
U.S. Plans
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
1,036.0
|
|
|
$
|
1,011.1
|
|
|
$
|
51.5
|
|
|
$
|
73.3
|
|
Service cost
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.8
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
1.1
|
|
|
0.8
|
|
||||
Interest cost
|
35.6
|
|
|
42.8
|
|
|
1.2
|
|
|
2.1
|
|
||||
Actuarial losses (gains)
|
80.0
|
|
|
12.9
|
|
|
1.0
|
|
|
(16.7
|
)
|
||||
Special Termination Benefits
|
—
|
|
|
23.6
|
|
|
—
|
|
|
3.1
|
|
||||
Plan Amendments
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.2
|
)
|
||||
Benefits paid
|
(67.2
|
)
|
|
(54.4
|
)
|
|
(8.8
|
)
|
|
(5.7
|
)
|
||||
Projected benefit obligation at the end of the period
|
$
|
1,084.4
|
|
|
$
|
1,036.0
|
|
|
$
|
47.2
|
|
|
$
|
51.5
|
|
Assumptions used to determine benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.59
|
%
|
|
4.15
|
%
|
|
3.03
|
%
|
|
3.21
|
%
|
||||
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||
Medical assumptions:
|
|
|
|
|
|
|
|
||||||||
Trend assumed for the year
|
N/A
|
|
|
N/A
|
|
|
6.59
|
%
|
|
6.93
|
%
|
||||
Ultimate trend rate
|
N/A
|
|
|
N/A
|
|
|
4.50
|
%
|
|
4.50
|
%
|
||||
Year that ultimate trend rate is reached
|
N/A
|
|
|
N/A
|
|
|
2038
|
|
|
2038
|
|
||||
Change in fair value of plan assets:
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
1,302.9
|
|
|
$
|
1,243.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on assets
|
174.5
|
|
|
114.1
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions to plan
|
0.1
|
|
|
—
|
|
|
7.7
|
|
|
4.9
|
|
||||
Employee contributions to plan
|
—
|
|
|
—
|
|
|
1.1
|
|
|
0.8
|
|
||||
Benefits paid
|
(67.2
|
)
|
|
(54.4
|
)
|
|
(8.8
|
)
|
|
(5.7
|
)
|
||||
Expenses paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
$
|
1,410.3
|
|
|
$
|
1,302.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reconciliation of funded status to net amounts recognized:
|
|
|
|
|
|
|
|
||||||||
Funded status (deficit)
|
$
|
325.9
|
|
|
$
|
266.8
|
|
|
$
|
(47.2
|
)
|
|
$
|
(51.5
|
)
|
Net amounts recognized
|
$
|
325.9
|
|
|
$
|
266.8
|
|
|
$
|
(47.2
|
)
|
|
$
|
(51.5
|
)
|
Amounts recognized in the balance sheet:
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
327.2
|
|
|
$
|
268.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
—
|
|
|
—
|
|
|
(7.7
|
)
|
|
(8.9
|
)
|
||||
Noncurrent liabilities
|
(1.3
|
)
|
|
(1.3
|
)
|
|
(39.5
|
)
|
|
(42.6
|
)
|
||||
Net amounts recognized
|
$
|
325.9
|
|
|
$
|
266.8
|
|
|
$
|
(47.2
|
)
|
|
$
|
(51.5
|
)
|
Amounts not yet reflected in net periodic benefit cost and included in AOCI:
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive (loss) income
|
$
|
(89.6
|
)
|
|
$
|
(114.4
|
)
|
|
$
|
28.3
|
|
|
$
|
32.5
|
|
Cumulative employer contributions in excess of net periodic benefit cost
|
415.5
|
|
|
381.2
|
|
|
(75.5
|
)
|
|
(84.0
|
)
|
||||
Net amount recognized in the balance sheet
|
$
|
325.9
|
|
|
$
|
266.8
|
|
|
$
|
(47.2
|
)
|
|
$
|
(51.5
|
)
|
Information for pension plans with benefit obligations in excess of plan assets:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation/APBO
|
$
|
1.3
|
|
|
$
|
1.2
|
|
|
$
|
47.2
|
|
|
$
|
51.5
|
|
Accumulated benefit obligation
|
1.3
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
Pension Benefits
|
||||||
|
Periods Ended
December 31,
|
||||||
U.K. Plans
|
2017
|
|
2016
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Beginning balance
|
$
|
82.1
|
|
|
$
|
82.8
|
|
Service cost
|
1.3
|
|
|
1.0
|
|
||
Interest cost
|
2.0
|
|
|
2.9
|
|
||
Actuarial (gains) losses
|
(1.1
|
)
|
|
17.4
|
|
||
Benefits paid
|
(0.8
|
)
|
|
(0.8
|
)
|
||
Expense paid
|
(1.3
|
)
|
|
(1.0
|
)
|
||
Plan settlements
|
(12.5
|
)
|
|
(5.5
|
)
|
||
Exchange rate changes
|
7.2
|
|
|
(14.7
|
)
|
||
Projected benefit obligation at the end of the period
|
$
|
76.9
|
|
|
$
|
82.1
|
|
Assumptions used to determine benefit obligation:
|
|
|
|
||||
Discount rate
|
2.60
|
%
|
|
2.70
|
%
|
||
Rate of compensation increase
|
3.35
|
%
|
|
3.20
|
%
|
||
Change in fair value of plan assets:
|
|
|
|
||||
Beginning balance
|
$
|
96.2
|
|
|
$
|
96.4
|
|
Actual return on assets
|
8.7
|
|
|
25.3
|
|
||
Plan settlements
|
(14.7
|
)
|
|
(6.5
|
)
|
||
Expenses paid
|
(1.3
|
)
|
|
(1.0
|
)
|
||
Benefits paid
|
(0.8
|
)
|
|
(0.8
|
)
|
||
Exchange rate changes
|
8.7
|
|
|
(17.2
|
)
|
||
Ending balance
|
$
|
96.8
|
|
|
$
|
96.2
|
|
Reconciliation of funded status to net amounts recognized:
|
|
|
|
||||
Funded status
|
19.9
|
|
|
14.2
|
|
||
Net amounts recognized
|
$
|
19.9
|
|
|
$
|
14.2
|
|
Amounts recognized in the balance sheet:
|
|
|
|
||||
Noncurrent assets
|
$
|
19.9
|
|
|
$
|
14.2
|
|
Net amounts recognized
|
$
|
19.9
|
|
|
$
|
14.2
|
|
Amounts not yet reflected in net periodic benefit cost and included in AOCI:
|
|
|
|
||||
Accumulated other comprehensive income (loss)
|
4.3
|
|
|
(0.2
|
)
|
||
Prepaid pension cost
|
15.6
|
|
|
14.4
|
|
||
Net amount recognized in the balance sheet
|
$
|
19.9
|
|
|
$
|
14.2
|
|
Information for pension plans with benefit obligations in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation/APBO
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated benefit obligation
|
—
|
|
|
—
|
|
||
Fair value of assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Pension Benefits
|
|
Other
Post-Retirement
Benefits
|
||||||||||||||||||||
|
Periods Ended
December 31,
|
|
Periods Ended
December 31,
|
||||||||||||||||||||
U.S. Plans
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
1.8
|
|
|
$
|
2.2
|
|
Interest cost
|
35.7
|
|
|
42.7
|
|
|
44.4
|
|
|
1.2
|
|
|
2.1
|
|
|
2.2
|
|
||||||
Expected return on plan assets
|
(69.8
|
)
|
|
(74.9
|
)
|
|
(78.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
—
|
|
|
5.7
|
|
|
3.7
|
|
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
—
|
|
||||||
Special Termination Benefits
|
—
|
|
|
23.6
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
||||||
Net periodic benefit (income) cost
|
(34.1
|
)
|
|
(2.9
|
)
|
|
(30.0
|
)
|
|
(0.7
|
)
|
|
6.1
|
|
|
4.4
|
|
||||||
Other changes recognized in OCI:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total recognized in OCI (income) loss
|
$
|
(24.8
|
)
|
|
$
|
(31.8
|
)
|
|
$
|
(15.5
|
)
|
|
$
|
4.2
|
|
|
$
|
(23.0
|
)
|
|
$
|
(6.1
|
)
|
Total recognized in net periodic benefit cost and OCI
|
$
|
(58.9
|
)
|
|
$
|
(34.7
|
)
|
|
$
|
(45.5
|
)
|
|
$
|
3.5
|
|
|
$
|
(16.9
|
)
|
|
$
|
(1.7
|
)
|
Assumptions used to determine net periodic benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
4.15
|
%
|
|
4.38
|
%
|
|
3.99
|
%
|
|
3.21
|
%
|
|
3.43
|
%
|
|
3.14
|
%
|
||||||
Expected return on plan assets
|
5.50
|
%
|
|
6.00
|
%
|
|
6.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||||
Salary increases
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||||
Medical Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trend assumed for the year
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
6.93
|
%
|
|
7.27
|
%
|
|
7.62
|
%
|
||||||
Ultimate trend rate
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
||||||
Year that ultimate trend rate is reached
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
2038
|
|
|
2038
|
|
|
2030
|
|
|
Pension Benefits
|
||||||||||
|
Periods Ended
December 31,
|
||||||||||
U.K. Plans
|
2017
|
|
2016
|
|
2015
|
||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
||||||
Service cost
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
$
|
1.2
|
|
Interest cost
|
2.0
|
|
|
2.9
|
|
|
3.3
|
|
|||
Expected return on plan assets
|
(2.9
|
)
|
|
(3.6
|
)
|
|
(4.9
|
)
|
|||
Settlement gain
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|||
Net periodic benefit cost (income)
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
$
|
(0.4
|
)
|
Other changes recognized in OCI:
|
|
|
|
|
|
||||||
Total (income) loss recognized in OCI
|
$
|
(6.7
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
1.5
|
|
Total recognized in net periodic benefit cost and OCI
|
$
|
(6.6
|
)
|
|
$
|
(4.3
|
)
|
|
$
|
1.1
|
|
Assumptions used to determine net periodic benefit costs:
|
|
|
|
|
|
||||||
Discount rate
|
2.70
|
%
|
|
4.00
|
%
|
|
3.80
|
%
|
|||
Expected return on plan assets
|
3.20
|
%
|
|
4.30
|
%
|
|
4.80
|
%
|
|||
Salary increases
|
3.20
|
%
|
|
3.10
|
%
|
|
3.05
|
%
|
Equities
|
20 - 50%
|
Fixed income
|
50 - 80%
|
Real estate
|
0 - 7%
|
|
2017
|
|
2016
|
||
Asset Category — U.S.
|
|
|
|
||
Equity securities — U.S.
|
24
|
%
|
|
29
|
%
|
Equity securities — International
|
4
|
%
|
|
4
|
%
|
Debt securities
|
70
|
%
|
|
65
|
%
|
Real estate
|
2
|
%
|
|
2
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
Equity securities
|
35
|
%
|
Debt securities
|
60
|
%
|
Property
|
5
|
%
|
U.S.
|
Pension Plans
|
|
Other
Post-Retirement
Benefit Plans
|
||||
2018
|
$
|
34.7
|
|
|
$
|
7.7
|
|
2019
|
$
|
38.1
|
|
|
$
|
6.8
|
|
2020
|
$
|
41.7
|
|
|
$
|
5.4
|
|
2021
|
$
|
45.2
|
|
|
$
|
5.1
|
|
2022
|
$
|
49.0
|
|
|
$
|
4.7
|
|
2023-2026
|
$
|
287.0
|
|
|
$
|
19.9
|
|
U.K.
|
Pension Plans
|
||
2018
|
$
|
0.8
|
|
2019
|
$
|
0.8
|
|
2020
|
$
|
0.9
|
|
2021
|
$
|
0.9
|
|
2022
|
$
|
0.9
|
|
2023-2026
|
$
|
4.8
|
|
|
|
|
At December 31, 2017 Using
|
||||||||||||
Description
|
December 31, 2017 Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Temporary Cash Investments
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collective Investment Trusts
|
96.5
|
|
|
—
|
|
|
90.6
|
|
|
5.9
|
|
||||
Commingled Equity and Bond Funds
|
1,410.3
|
|
|
—
|
|
|
1,410.3
|
|
|
—
|
|
||||
|
$
|
1,507.1
|
|
|
$
|
0.3
|
|
|
$
|
1,500.9
|
|
|
$
|
5.9
|
|
|
|
|
At December 31, 2016 Using
|
||||||||||||
Description
|
December 31, 2016 Total
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Temporary Cash Investments
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collective Investment Trusts
|
96
|
|
|
—
|
|
|
91.2
|
|
|
4.8
|
|
||||
Commingled Equity and Bond Funds
|
1,302.9
|
|
|
—
|
|
|
1,302.9
|
|
|
—
|
|
||||
|
$
|
1,399.1
|
|
|
$
|
0.2
|
|
|
$
|
1,394.1
|
|
|
$
|
4.8
|
|
|
December 31, 2017
|
||||||||||||||||||||||
Description
|
Beginning
Fair Value
|
|
Purchases
|
|
Gain (Loss)
|
|
Sales,
Maturities,
Settlements, Net
|
|
Exchange
rate
|
|
Ending Fair
Value
|
||||||||||||
Collective Investment Trusts
|
$
|
4.8
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
5.9
|
|
|
$
|
4.8
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
5.9
|
|
|
December 31, 2016
|
||||||||||||||||||||||
Description
|
Beginning
Fair Value
|
|
Purchases
|
|
Gain (Loss)
|
|
Sales,
Maturities,
Settlements, Net
|
|
Exchange
rate
|
|
Ending Fair
Value
|
||||||||||||
Collective Investment Trusts
|
$
|
5.6
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
4.8
|
|
|
$
|
5.6
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
4.8
|
|
|
Shares
|
Value
(1)
|
|||||
|
Class A
|
|
Class A
|
|
|||
|
(Thousands)
|
|
|
||||
Board of Directors Stock Grants
|
|
|
|
|
|||
Nonvested at December 31, 2014
|
30
|
|
|
$
|
1.1
|
|
|
Granted during period
|
21
|
|
|
1.1
|
|
|
|
Vested during period
|
(27
|
)
|
|
(1.0
|
)
|
|
|
Forfeited during period
|
(3
|
)
|
|
(0.1
|
)
|
|
|
Nonvested at December 31, 2015
|
21
|
|
|
1.1
|
|
|
|
Granted during period
|
26
|
|
|
1.2
|
|
|
|
Vested during period
|
(21
|
)
|
|
(1.1
|
)
|
|
|
Forfeited during period
|
—
|
|
|
—
|
|
|
|
Nonvested at December 31, 2016
|
26
|
|
|
1.2
|
|
|
|
Granted during period
|
24
|
|
|
1.2
|
|
|
|
Vested during period
|
(26
|
)
|
|
(1.2
|
)
|
|
|
Forfeited during period
|
—
|
|
|
—
|
|
|
|
Nonvested at December 31, 2017
|
24
|
|
|
$
|
1.2
|
|
|
(1)
|
Value represents grant date fair value.
|
•
|
60% of the award consists of time-based, service-condition restricted stock that vests in equal installments over a three-year period (the “RS Award”). Values for these awards are based on the value of Holdings’ class A common stock on the grant date.
|
•
|
20% of the award consists of performance-based, market-condition restricted stock that vests on the three-year anniversary of the grant date contingent upon TSR compared to the Company’s peers (the “TSR Award”). Values for these awards are initially measured on the grant date using estimated payout levels derived from a Monte Carlo valuation model.
|
•
|
20% of the award consists of performance-based, (performance-condition) restricted stock that vests on the three-year anniversary of the grant date contingent upon the Company’s cumulative three-year free cash flow as a percentage of the Company’s cumulative three-year revenues meeting certain pre-established goals (the “FCF Percentage Award”). Values for these awards are based on the dividend adjusted value of Holdings’ class A common stock on the grant date.
|
|
Shares
|
|
Value
(1)
|
|
|||
|
Class A
|
|
Class A
|
|
|||
|
(Thousands)
|
|
|
|
|||
Long-Term Incentive Plan/Long-Term Incentive Award under Omnibus Plan
|
|
|
|
|
|||
Nonvested at December 31, 2014
|
2,255
|
|
|
$
|
58.3
|
|
|
Granted during period
|
632
|
|
|
32.8
|
|
|
|
Vested during period
|
(879
|
)
|
|
(21.6
|
)
|
|
|
Forfeited during period
|
(171
|
)
|
|
(5.1
|
)
|
|
|
Nonvested at December 31, 2015
|
1,837
|
|
|
64.4
|
|
|
|
Granted during period
|
830
|
|
|
38.3
|
|
|
|
Vested during period
|
(830
|
)
|
|
(24.5
|
)
|
|
|
Forfeited during period
|
(280
|
)
|
|
(10.9
|
)
|
|
|
Nonvested at December 31, 2016
|
1,557
|
|
|
67.3
|
|
|
|
Granted during period
|
644
|
|
|
35.5
|
|
|
|
Vested during period
|
(655
|
)
|
|
(25.0
|
)
|
|
|
Forfeited during period
|
(93
|
)
|
|
(4.4
|
)
|
|
|
Nonvested at December 31, 2017
|
1,453
|
|
|
$
|
73.4
|
|
|
(1)
|
Value represents grant date fair value.
|
|
2017
|
|
2016
|
|
2015
|
||||||
U.S.
|
$
|
426.6
|
|
|
$
|
593.3
|
|
|
$
|
739.4
|
|
International
|
108.0
|
|
|
67.2
|
|
|
68.7
|
|
|||
Total (before equity earnings)
|
$
|
534.6
|
|
|
$
|
660.5
|
|
|
$
|
808.1
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
107.3
|
|
|
$
|
158.0
|
|
|
$
|
175.5
|
|
State
|
0.7
|
|
|
3.6
|
|
|
3.5
|
|
|||
Foreign
|
20.0
|
|
|
29.2
|
|
|
5.5
|
|
|||
Total current
|
$
|
128.0
|
|
|
$
|
190.8
|
|
|
$
|
184.5
|
|
Deferred
|
|
|
|
|
|
||||||
Federal
|
$
|
53.6
|
|
|
$
|
20.0
|
|
|
$
|
(119.1
|
)
|
State
|
(0.2
|
)
|
|
(1.0
|
)
|
|
(48.9
|
)
|
|||
Foreign
|
(1.4
|
)
|
|
(17.7
|
)
|
|
4.1
|
|
|||
Total deferred
|
52.0
|
|
|
1.3
|
|
|
(163.9
|
)
|
|||
Total tax provision
|
$
|
180.0
|
|
|
$
|
192.1
|
|
|
$
|
20.6
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|||||||||
Tax at U.S. Federal statutory rate
|
$
|
187.1
|
|
|
35.0
|
%
|
|
$
|
231.2
|
|
|
35.0
|
%
|
|
$
|
283.3
|
|
|
35.0
|
%
|
State income taxes, net of Federal benefit
|
8.8
|
|
|
1.6
|
|
|
11.6
|
|
|
1.8
|
|
|
15.0
|
|
|
1.9
|
|
|||
State income tax credits, net of Federal benefit
|
(9.7
|
)
|
|
(1.8
|
)
|
|
(9.4
|
)
|
|
(1.4
|
)
|
|
(4.1
|
)
|
|
(0.5
|
)
|
|||
Foreign rate differences
|
(20.6
|
)
|
|
(3.8
|
)
|
|
(13.5
|
)
|
|
(2.0
|
)
|
|
(13.5
|
)
|
|
(1.7
|
)
|
|||
Research and Experimentation
|
(2.6
|
)
|
|
(0.5
|
)
|
|
(3.6
|
)
|
|
(0.6
|
)
|
|
(3.3
|
)
|
|
(0.4
|
)
|
|||
Domestic Production Activities Deduction
|
(7.1
|
)
|
|
(1.3
|
)
|
|
(16.4
|
)
|
|
(2.5
|
)
|
|
(17.8
|
)
|
|
(2.2
|
)
|
|||
Interest on assessments
|
(0.1
|
)
|
|
—
|
|
|
0.6
|
|
|
0.1
|
|
|
(1.0
|
)
|
|
(0.1
|
)
|
|||
Excess tax benefits
|
(4.8
|
)
|
|
(0.9
|
)
|
|
(4.6
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|||
Valuation Allowance - U.S. Deferred Tax Asset
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(241.9
|
)
|
|
(29.9
|
)
|
|||
Transition Tax
|
44.9
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Re-measurement of Deferred Taxes
|
(16.2
|
)
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
0.3
|
|
|
—
|
|
|
(3.8
|
)
|
|
(0.6
|
)
|
|
3.9
|
|
|
0.5
|
|
|||
Total provision for income taxes
|
$
|
180.0
|
|
|
33.7
|
%
|
|
$
|
192.1
|
|
|
29.1
|
%
|
|
$
|
20.6
|
|
|
2.6
|
%
|
|
2017
|
|
2016
|
||||
Long-term contracts
|
$
|
69.0
|
|
|
$
|
127.7
|
|
Post-retirement benefits other than pensions
|
11.2
|
|
|
19.1
|
|
||
Pension and other employee benefit plans
|
(65.1
|
)
|
|
(77.5
|
)
|
||
Employee compensation accruals
|
33.8
|
|
|
68.0
|
|
||
Depreciation and amortization
|
(104.4
|
)
|
|
(154.4
|
)
|
||
Inventory
|
1.9
|
|
|
1.7
|
|
||
State income tax credits
|
89.8
|
|
|
71.7
|
|
||
Accruals and reserves
|
58.3
|
|
|
91.7
|
|
||
Deferred production
|
(1.7
|
)
|
|
(3.7
|
)
|
||
Net operating loss carryforward
|
0.3
|
|
|
3.7
|
|
||
Other
|
(5.9
|
)
|
|
(5.7
|
)
|
||
Net deferred tax asset
|
87.2
|
|
|
142.3
|
|
||
Valuation allowance
|
(15.0
|
)
|
|
(13.6
|
)
|
||
Net deferred tax asset
|
$
|
72.2
|
|
|
$
|
128.7
|
|
|
2017
|
|
2016
|
||||
Non-current deferred tax assets
|
72.5
|
|
|
128.8
|
|
||
Non-current deferred tax liabilities
|
(0.3
|
)
|
|
(0.1
|
)
|
||
Net non-current deferred tax assets
|
$
|
72.2
|
|
|
$
|
128.7
|
|
Total deferred tax asset
|
$
|
72.2
|
|
|
$
|
128.7
|
|
Deferred Tax Asset Valuation Allowance
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, January 1
|
$
|
13.5
|
|
|
$
|
15.1
|
|
|
$
|
257.3
|
|
U.S. deferred tax asset
|
—
|
|
|
—
|
|
|
(109.3
|
)
|
|||
Income tax credits
|
1.6
|
|
|
(0.9
|
)
|
|
(57.4
|
)
|
|||
Depreciation and amortization
|
0.1
|
|
|
(0.1
|
)
|
|
119.6
|
|
|||
Long-term contracts
|
—
|
|
|
—
|
|
|
(194.6
|
)
|
|||
Other
|
(0.2
|
)
|
|
(0.6
|
)
|
|
(0.5
|
)
|
|||
Balance, December 31
|
$
|
15.0
|
|
|
$
|
13.5
|
|
|
$
|
15.1
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Beginning balance
|
$
|
6.3
|
|
|
$
|
6.2
|
|
|
$
|
5.9
|
|
Gross increases related to current period tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Gross increases related to prior period tax positions
|
0.4
|
|
|
0.1
|
|
|
0.3
|
|
|||
Gross decreases related to prior period tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Statute of limitations' expiration
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
$
|
6.7
|
|
|
$
|
6.3
|
|
|
$
|
6.2
|
|
|
For the Twelve Months Ended
|
|||||||||||||||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|||||||||||||||||||||||||||
|
Income
|
|
Shares
|
|
Per
Share
Amount
|
|
Income
|
|
Shares
|
|
Per
Share
Amount
|
|
Loss
|
|
Shares
|
|
Per
Share
Amount
|
|||||||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income available to common shareholders
|
$
|
354.7
|
|
|
116.8
|
|
|
$
|
3.04
|
|
|
$
|
469.4
|
|
|
126.1
|
|
|
$
|
3.72
|
|
|
$
|
788.0
|
|
|
138.4
|
|
|
$
|
5.69
|
|
Income allocated to participating securities
|
0.2
|
|
|
0.1
|
|
|
|
|
|
0.3
|
|
|
0.1
|
|
|
|
|
|
0.7
|
|
|
0.1
|
|
|
|
|
||||||
Net income
|
$
|
354.9
|
|
|
|
|
|
|
|
|
$
|
469.7
|
|
|
|
|
|
|
|
|
$
|
788.7
|
|
|
|
|
|
|
|
|||
Diluted potential common shares
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
||||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
$
|
354.9
|
|
|
117.9
|
|
|
$
|
3.01
|
|
|
$
|
469.7
|
|
|
127.0
|
|
|
$
|
3.70
|
|
|
$
|
788.7
|
|
|
139.4
|
|
|
$
|
5.66
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Pension
|
$
|
(75.9
|
)
|
|
$
|
(98.5
|
)
|
SERP/ Retiree medical
|
17.7
|
|
|
20.5
|
|
||
Foreign currency impact on long term intercompany loan
|
(14.2
|
)
|
|
(19.1
|
)
|
||
Currency translation adjustment
|
(56.1
|
)
|
|
(89.8
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(128.5
|
)
|
|
$
|
(186.9
|
)
|
|
|
|
Capital
|
|
|
||||||||||
|
Operating
|
|
Present
Value
|
|
Interest
|
|
Total
|
||||||||
2018
|
$
|
8.3
|
|
|
$
|
5.2
|
|
|
$
|
1.5
|
|
|
$
|
15.0
|
|
2019
|
$
|
7.4
|
|
|
$
|
5.5
|
|
|
$
|
1.3
|
|
|
$
|
14.2
|
|
2020
|
$
|
6.0
|
|
|
$
|
5.7
|
|
|
$
|
1.0
|
|
|
$
|
12.7
|
|
2021
|
$
|
4.8
|
|
|
$
|
5.8
|
|
|
$
|
1.1
|
|
|
$
|
11.7
|
|
2022
|
$
|
3.9
|
|
|
$
|
5.9
|
|
|
$
|
0.6
|
|
|
$
|
10.4
|
|
2023 and thereafter
|
$
|
15.2
|
|
|
$
|
8.5
|
|
|
$
|
0.5
|
|
|
$
|
24.2
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Minimum rentals
|
$
|
14.1
|
|
|
$
|
15.4
|
|
|
$
|
17.8
|
|
Total
|
$
|
14.1
|
|
|
$
|
15.4
|
|
|
$
|
17.8
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, January 1
|
$
|
163.7
|
|
|
$
|
158.7
|
|
|
$
|
119.9
|
|
Charges to costs and expenses
|
5.8
|
|
|
16.7
|
|
|
43.8
|
|
|||
Payouts
|
(4.0
|
)
|
|
(9.5
|
)
|
|
(4.8
|
)
|
|||
Exchange rate
|
0.9
|
|
|
(2.2
|
)
|
|
(0.2
|
)
|
|||
Balance, December 31
|
$
|
166.4
|
|
|
$
|
163.7
|
|
|
$
|
158.7
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||
Kansas Development Finance Authority bond
|
$
|
3.2
|
|
|
$
|
3.4
|
|
|
$
|
3.9
|
|
Rental and miscellaneous income (expense)
|
1.2
|
|
|
0.3
|
|
|
(2.0
|
)
|
|||
Interest Income
|
6.4
|
|
|
3.6
|
|
|
2.1
|
|
|||
Loss on sale of accounts receivable (see Note 4,
Accounts Receivable, net
)
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign currency losses
|
(0.3
|
)
|
|
(14.6
|
)
|
|
(6.2
|
)
|
|||
Total
|
$
|
7.2
|
|
|
$
|
(7.3
|
)
|
|
$
|
(2.2
|
)
|
|
December 31,
2017
|
|
December 31,
2016 |
||||
Accrued expenses
|
|
|
|
||||
Accrued wages and bonuses
|
$
|
40.8
|
|
|
$
|
32.9
|
|
Accrued fringe benefits
|
116.3
|
|
|
117.5
|
|
||
Accrued interest
|
5.8
|
|
|
5.3
|
|
||
Workers' compensation
|
8.1
|
|
|
6.7
|
|
||
Property and sales tax
|
24.7
|
|
|
15.5
|
|
||
Warranty/extraordinary rework reserve — current
|
2.2
|
|
|
2.9
|
|
||
Other
|
71.4
|
|
|
35.4
|
|
||
Total
|
$
|
269.3
|
|
|
$
|
216.2
|
|
Other liabilities
|
|
|
|
||||
Deferred tax liability — non-current
|
$
|
0.3
|
|
|
$
|
0.1
|
|
Warranty/extraordinary rework reserve — non-current
|
164.2
|
|
|
160.8
|
|
||
Customer cost recovery
|
22.9
|
|
|
40.7
|
|
||
Other
|
65.2
|
|
|
74.5
|
|
||
Total
|
$
|
252.6
|
|
|
$
|
276.1
|
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
|
Twelve Months Ended December 31, 2015
|
||||||
Segment Revenues
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
3,730.8
|
|
|
$
|
3,498.8
|
|
|
$
|
3,447.0
|
|
Propulsion Systems
|
1,666.2
|
|
|
1,777.3
|
|
|
1,750.7
|
|
|||
Wing Systems
|
1,578.8
|
|
|
1,508.7
|
|
|
1,437.7
|
|
|||
All Other
|
7.2
|
|
|
8.1
|
|
|
8.5
|
|
|||
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
Segment Operating Income
(1)
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
347.7
|
|
|
$
|
468.6
|
|
|
$
|
607.3
|
|
Propulsion Systems
|
275.1
|
|
|
325.9
|
|
|
378.2
|
|
|||
Wing Systems
|
212.4
|
|
|
223.6
|
|
|
178.5
|
|
|||
All Other
|
2.0
|
|
|
1.6
|
|
|
1.3
|
|
|||
|
837.2
|
|
|
1,019.7
|
|
|
1,165.3
|
|
|||
Corporate SG&A
|
(200.3
|
)
|
|
(228.3
|
)
|
|
(220.8
|
)
|
|||
Unallocated impact of severe weather event (see Note 25)
|
(19.9
|
)
|
|
(12.1
|
)
|
|
—
|
|
|||
Research and development
|
(31.2
|
)
|
|
(23.8
|
)
|
|
(27.8
|
)
|
|||
Unallocated cost of sales
(2)
|
(16.7
|
)
|
|
(30.4
|
)
|
|
(53.7
|
)
|
|||
Total operating income
|
$
|
569.1
|
|
|
$
|
725.1
|
|
|
$
|
863.0
|
|
(1)
|
Inclusive of forward losses, changes in estimate on loss programs and cumulative catch-up adjustments. These changes in estimates for the periods ended December 31, 2017, 2016 and 2015 are further detailed in Note 3,
Changes in Estimates
.
|
(2)
|
For 2017, includes charges of
$1.8
and
$12.7
, related to warranty reserve and charges for excess purchases and purchase commitments, respectively. For 2016, includes charges of
$13.8
and
$23.6
related to warranty reserve and early retirement incentives, respectively, offset by
$7.9
for the settlement of historical claims with suppliers. In 2015, includes charges of
$40.7
,
$0.8
, and
$6.4
related to warranty reserve, reduction in workforce and unallocated inventory write-offs, respectively.
|
(1)
|
Net Revenues are attributable to countries based on destination where goods are delivered.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
|||||||||||||||
Asset Location
|
Total
Long-Lived Assets
|
|
Percent of
Total
Long-Lived Assets
|
|
Total
Long-Lived Assets
|
|
Percent of
Total
Long-Lived Assets
|
|
Total
Long-Lived Assets
|
|
Percent of
Total
Long-Lived Assets
|
|||||||||
United States
|
$
|
1,939.0
|
|
|
92
|
%
|
|
$
|
1,828.2
|
|
|
92
|
%
|
|
$
|
1,755.6
|
|
|
90
|
%
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United Kingdom
|
82.5
|
|
|
4
|
%
|
|
80.0
|
|
|
4
|
%
|
|
95.0
|
|
|
5
|
%
|
|||
Other
|
83.8
|
|
|
4
|
%
|
|
83.4
|
|
|
4
|
%
|
|
100.1
|
|
|
5
|
%
|
|||
Total International
|
166.3
|
|
|
8
|
%
|
|
163.4
|
|
|
8
|
%
|
|
195.1
|
|
|
10
|
%
|
|||
Total Long-Lived Assets
|
$
|
2,105.3
|
|
|
100
|
%
|
|
$
|
1,991.6
|
|
|
100
|
%
|
|
$
|
1,950.7
|
|
|
100
|
%
|
|
Quarter Ended
|
||||||||||||||
2017
|
December 31,
2017
(1)
|
|
September 28,
2017
(2)
|
|
June 29,
2017
(3)
|
|
March 30,
2017
(4)
|
||||||||
Revenues
|
$
|
1,714.6
|
|
|
$
|
1,748.2
|
|
|
$
|
1,826.1
|
|
|
$
|
1,694.1
|
|
Gross profit (loss)
|
$
|
290.4
|
|
|
$
|
269.7
|
|
|
$
|
(20.9
|
)
|
|
$
|
281.3
|
|
Operating income (loss)
|
$
|
226.9
|
|
|
$
|
211.4
|
|
|
$
|
(82.8
|
)
|
|
$
|
213.6
|
|
Net income (loss)
|
$
|
122.8
|
|
|
$
|
147.2
|
|
|
$
|
(56.8
|
)
|
|
$
|
141.7
|
|
Earnings (loss) per share, basic
|
$
|
1.08
|
|
|
$
|
1.27
|
|
|
$
|
(0.48
|
)
|
|
$
|
1.19
|
|
Earnings (loss) per share, diluted
|
$
|
1.07
|
|
|
$
|
1.26
|
|
|
$
|
(0.48
|
)
|
|
$
|
1.17
|
|
Dividends declared per common share
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
Quarter Ended
|
||||||||||||||
2016
|
December 31,
2016 (5) |
|
September 29,
2016(6) |
|
June 30,
2016(7) |
|
March 31,
2016(8) |
||||||||
Revenues
|
$
|
1,570.0
|
|
|
$
|
1,711.4
|
|
|
$
|
1,829.9
|
|
|
$
|
1,681.6
|
|
Gross profit
|
$
|
236.8
|
|
|
$
|
272.0
|
|
|
$
|
157.9
|
|
|
$
|
322.6
|
|
Operating income
|
$
|
160.9
|
|
|
$
|
214.4
|
|
|
$
|
83.3
|
|
|
$
|
266.5
|
|
Net income
|
$
|
108.2
|
|
|
$
|
145.1
|
|
|
$
|
44.8
|
|
|
$
|
171.6
|
|
Earnings per share, basic
|
$
|
0.90
|
|
|
$
|
1.16
|
|
|
$
|
0.35
|
|
|
$
|
1.30
|
|
Earnings per share, diluted
|
$
|
0.89
|
|
|
$
|
1.16
|
|
|
$
|
0.35
|
|
|
$
|
1.29
|
|
Dividends declared per common share
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Fourth quarter 2017 earnings include the impact of net favorable changes in estimate of
$12.9
.
|
(2)
|
Third quarter 2017 earnings include the impact of net unfavorable changes in estimate of
$4.8
.
|
(3)
|
Second quarter 2017 earnings include the impact of net unfavorable changes in estimate of
$329.2
.
|
(4)
|
First quarter 2017 earnings include the impact of net favorable changes in estimate of
$5.2
.
|
(5)
|
Fourth quarter 2016 earnings include the impact of net favorable changes in estimate of
$7.5
, as well as $11.8 related to early retirement incentives.
|
(6)
|
Third quarter 2016 earnings include the impact of net favorable changes in estimate of
$5.5
.
|
(7)
|
Second quarter 2016 earnings include the impact of net unfavorable changes in estimate of
$134.7
.
|
(8)
|
First quarter 2016 earnings include the impact of net favorable changes in estimate of
$47.2
, as well as $11.8 related to early retirement incentives.
|
(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, as well as the 2020 Notes which were outstanding through July 1, 2016;
|
(iii)
|
The Company’s subsidiaries, (the “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
|
$
|
—
|
|
|
$
|
6,236.4
|
|
|
$
|
1,362.3
|
|
|
$
|
(615.7
|
)
|
|
$
|
6,983.0
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
5,559.4
|
|
|
1,218.8
|
|
|
(615.7
|
)
|
|
6,162.5
|
|
|||||
Selling, general and administrative
|
12.4
|
|
|
173.1
|
|
|
14.8
|
|
|
—
|
|
|
200.3
|
|
|||||
Impact of severe weather event
|
—
|
|
|
19.9
|
|
|
—
|
|
|
—
|
|
|
19.9
|
|
|||||
Research and development
|
—
|
|
|
27.8
|
|
|
3.4
|
|
|
—
|
|
|
31.2
|
|
|||||
Total operating costs and expenses
|
12.4
|
|
|
5,780.2
|
|
|
1,237.0
|
|
|
(615.7
|
)
|
|
6,413.9
|
|
|||||
Operating (loss) income
|
(12.4
|
)
|
|
456.2
|
|
|
125.3
|
|
|
—
|
|
|
569.1
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(41.6
|
)
|
|
(5.7
|
)
|
|
5.6
|
|
|
(41.7
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
12.4
|
|
|
0.4
|
|
|
(5.6
|
)
|
|
7.2
|
|
|||||
(Loss) income before income taxes and equity in net income of affiliates and subsidiaries
|
(12.4
|
)
|
|
427.0
|
|
|
120.0
|
|
|
—
|
|
|
534.6
|
|
|||||
Income tax benefit (provision)
|
4.7
|
|
|
(161.7
|
)
|
|
(23.0
|
)
|
|
—
|
|
|
(180.0
|
)
|
|||||
(Loss) income before equity in net income of affiliates and subsidiaries
|
(7.7
|
)
|
|
265.3
|
|
|
97.0
|
|
|
—
|
|
|
354.6
|
|
|||||
Equity in net income of affiliates
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.3
|
|
|||||
Equity in net income of subsidiaries
|
362.3
|
|
|
97.0
|
|
|
—
|
|
|
(459.3
|
)
|
|
—
|
|
|||||
Net income
|
354.9
|
|
|
362.3
|
|
|
97.3
|
|
|
(459.6
|
)
|
|
354.9
|
|
|||||
Other comprehensive loss
|
58.4
|
|
|
58.4
|
|
|
42.2
|
|
|
(100.6
|
)
|
|
58.4
|
|
|||||
Comprehensive income
|
$
|
413.3
|
|
|
$
|
420.7
|
|
|
$
|
139.5
|
|
|
$
|
(560.2
|
)
|
|
$
|
413.3
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net Revenues
|
$
|
—
|
|
|
$
|
6,124.6
|
|
|
$
|
1,284.2
|
|
|
$
|
(615.9
|
)
|
|
$
|
6,792.9
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
5,255.0
|
|
|
1,164.5
|
|
|
(615.9
|
)
|
|
5,803.6
|
|
|||||
Selling, general and administrative
|
8.7
|
|
|
203.6
|
|
|
16.0
|
|
|
—
|
|
|
228.3
|
|
|||||
Impact of severe weather event
|
—
|
|
|
12.1
|
|
|
—
|
|
|
—
|
|
|
12.1
|
|
|||||
Research and development
|
—
|
|
|
20.8
|
|
|
3.0
|
|
|
—
|
|
|
23.8
|
|
|||||
Total operating costs and expenses
|
8.7
|
|
|
5,491.5
|
|
|
1,183.5
|
|
|
(615.9
|
)
|
|
6,067.8
|
|
|||||
Operating (loss) income
|
(8.7
|
)
|
|
633.1
|
|
|
100.7
|
|
|
—
|
|
|
725.1
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(57.0
|
)
|
|
(7.8
|
)
|
|
7.5
|
|
|
(57.3
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
14.9
|
|
|
(14.7
|
)
|
|
(7.5
|
)
|
|
(7.3
|
)
|
|||||
(Loss) income before income taxes and equity in net income of affiliates and subsidiaries
|
(8.7
|
)
|
|
591.0
|
|
|
78.2
|
|
|
—
|
|
|
660.5
|
|
|||||
Income tax benefit (provision)
|
2.6
|
|
|
(179.2
|
)
|
|
(15.5
|
)
|
|
|
|
|
(192.1
|
)
|
|||||
(Loss) income before equity in net income of affiliates and subsidiaries
|
(6.1
|
)
|
|
411.8
|
|
|
62.7
|
|
|
—
|
|
|
468.4
|
|
|||||
Equity in net income of affiliates
|
1.3
|
|
|
—
|
|
|
1.3
|
|
|
(1.3
|
)
|
|
1.3
|
|
|||||
Equity in net income of subsidiaries
|
474.5
|
|
|
62.6
|
|
|
—
|
|
|
(537.1
|
)
|
|
—
|
|
|||||
Net income
|
469.7
|
|
|
474.4
|
|
|
64.0
|
|
|
(538.4
|
)
|
|
469.7
|
|
|||||
Other comprehensive loss
|
(26.4
|
)
|
|
(26.4
|
)
|
|
(61.3
|
)
|
|
87.7
|
|
|
(26.4
|
)
|
|||||
Comprehensive income
|
$
|
443.3
|
|
|
$
|
448.0
|
|
|
$
|
2.7
|
|
|
$
|
(450.7
|
)
|
|
$
|
443.3
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net Revenues
|
$
|
—
|
|
|
$
|
6,096.1
|
|
|
$
|
1,030.6
|
|
|
$
|
(482.8
|
)
|
|
$
|
6,643.9
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
5,095.4
|
|
|
919.7
|
|
|
(482.8
|
)
|
|
5,532.3
|
|
|||||
Selling, general and administrative
|
7.1
|
|
|
194.9
|
|
|
18.8
|
|
|
—
|
|
|
220.8
|
|
|||||
Research and development
|
—
|
|
|
25.7
|
|
|
2.1
|
|
|
—
|
|
|
27.8
|
|
|||||
Total operating costs and expenses
|
7.1
|
|
|
5,316.0
|
|
|
940.6
|
|
|
(482.8
|
)
|
|
5,780.9
|
|
|||||
Operating (loss) income
|
(7.1
|
)
|
|
780.1
|
|
|
90.0
|
|
|
—
|
|
|
863.0
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(52.2
|
)
|
|
(7.8
|
)
|
|
7.3
|
|
|
(52.7
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
11.3
|
|
|
(6.3
|
)
|
|
(7.2
|
)
|
|
(2.2
|
)
|
|||||
(Loss) income before income taxes and equity in net income of affiliates and subsidiaries
|
(7.1
|
)
|
|
739.2
|
|
|
75.9
|
|
|
0.1
|
|
|
808.1
|
|
|||||
Income tax (provision) benefit
|
0.1
|
|
|
(8.4
|
)
|
|
(12.3
|
)
|
|
|
|
|
(20.6
|
)
|
|||||
(Loss) income before equity in net income of affiliates and subsidiaries
|
(7.0
|
)
|
|
730.8
|
|
|
63.6
|
|
|
0.1
|
|
|
787.5
|
|
|||||
Equity in net income of affiliates
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
(1.2
|
)
|
|
1.2
|
|
|||||
Equity in net income of subsidiaries
|
794.5
|
|
|
63.6
|
|
|
—
|
|
|
(858.1
|
)
|
|
—
|
|
|||||
Net income
|
788.7
|
|
|
794.4
|
|
|
64.8
|
|
|
(859.2
|
)
|
|
788.7
|
|
|||||
Other comprehensive loss
|
(6.7
|
)
|
|
(6.7
|
)
|
|
(21.1
|
)
|
|
27.8
|
|
|
(6.7
|
)
|
|||||
Comprehensive income
|
$
|
782.0
|
|
|
$
|
787.7
|
|
|
$
|
43.7
|
|
|
$
|
(831.4
|
)
|
|
$
|
782.0
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
365.1
|
|
|
$
|
58.2
|
|
|
$
|
—
|
|
|
$
|
423.3
|
|
Restricted cash
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
Accounts receivable, net
|
—
|
|
|
752.6
|
|
|
330.9
|
|
|
(361.3
|
)
|
|
722.2
|
|
|||||
Inventory, net
|
—
|
|
|
1,010.0
|
|
|
439.9
|
|
|
—
|
|
|
1,449.9
|
|
|||||
Other current assets
|
—
|
|
|
50.3
|
|
|
3.2
|
|
|
—
|
|
|
53.5
|
|
|||||
Total current assets
|
—
|
|
|
2,180.2
|
|
|
832.2
|
|
|
(361.3
|
)
|
|
2,651.1
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,585.8
|
|
|
519.5
|
|
|
—
|
|
|
2,105.3
|
|
|||||
Pension assets
|
—
|
|
|
327.2
|
|
|
19.9
|
|
|
—
|
|
|
347.1
|
|
|||||
Investment in subsidiary
|
1,801.5
|
|
|
704.4
|
|
|
—
|
|
|
(2,505.9
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
298.2
|
|
|
124.5
|
|
|
(258.4
|
)
|
|
164.3
|
|
|||||
Total assets
|
$
|
1,801.5
|
|
|
$
|
5,095.8
|
|
|
$
|
1,496.1
|
|
|
$
|
(3,125.6
|
)
|
|
$
|
5,267.8
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
629.0
|
|
|
$
|
425.4
|
|
|
$
|
(361.3
|
)
|
|
$
|
693.1
|
|
Accrued expenses
|
—
|
|
|
239.5
|
|
|
29.8
|
|
|
—
|
|
|
269.3
|
|
|||||
Profit sharing
|
—
|
|
|
103.4
|
|
|
6.1
|
|
|
—
|
|
|
109.5
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
30.2
|
|
|
0.9
|
|
|
—
|
|
|
31.1
|
|
|||||
Advance payments, short-term
|
—
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
|||||
Deferred revenue, short-term
|
—
|
|
|
63.6
|
|
|
1.0
|
|
|
—
|
|
|
64.6
|
|
|||||
Deferred grant income liability — current
|
—
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
|
21.6
|
|
|||||
Other current liabilities
|
—
|
|
|
324.3
|
|
|
7.5
|
|
|
—
|
|
|
331.8
|
|
|||||
Total current liabilities
|
—
|
|
|
1,490.0
|
|
|
492.3
|
|
|
(361.3
|
)
|
|
1,621.0
|
|
|||||
Long-term debt
|
—
|
|
|
1,110.6
|
|
|
167.1
|
|
|
(157.8
|
)
|
|
1,119.9
|
|
|||||
Advance payments, long-term
|
—
|
|
|
231.7
|
|
|
—
|
|
|
—
|
|
|
231.7
|
|
|||||
Pension/OPEB obligation
|
—
|
|
|
40.8
|
|
|
—
|
|
|
—
|
|
|
40.8
|
|
|||||
Deferred grant income liability — non-current
|
—
|
|
|
—
|
|
|
39.3
|
|
|
—
|
|
|
39.3
|
|
|||||
Deferred revenue and other deferred credits
|
—
|
|
|
158.2
|
|
|
2.8
|
|
|
—
|
|
|
161.0
|
|
|||||
Other liabilities
|
—
|
|
|
343.1
|
|
|
10.1
|
|
|
(100.6
|
)
|
|
252.6
|
|
|||||
Total equity
|
1,801.5
|
|
|
1,721.4
|
|
|
784.5
|
|
|
(2,505.9
|
)
|
|
1,801.5
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,801.5
|
|
|
$
|
5,095.8
|
|
|
$
|
1,496.1
|
|
|
$
|
(3,125.6
|
)
|
|
$
|
5,267.8
|
|
|
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
|
—
|
|
|
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, 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 shareholders’ 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
|
$
|
—
|
|
|
$
|
450.5
|
|
|
$
|
123.2
|
|
|
$
|
—
|
|
|
$
|
573.7
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
—
|
|
|
(241.4
|
)
|
|
(31.7
|
)
|
|
|
|
|
(273.1
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Other
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(241.1
|
)
|
|
(31.7
|
)
|
|
—
|
|
|
(272.8
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Principal payments of debt
|
—
|
|
|
(1.2
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
(2.8
|
)
|
|||||
Collection on (repayment of) intercompany debt
|
—
|
|
|
54.9
|
|
|
(54.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Payments on term loan
|
—
|
|
|
(25.0
|
)
|
|
—
|
|
|
—
|
|
|
(25.0
|
)
|
|||||
Debt issuance and financing costs
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|||||
Taxes paid related to net share settlement awards
|
—
|
|
|
(14.2
|
)
|
|
—
|
|
|
—
|
|
|
(14.2
|
)
|
|||||
Proceeds from financing under New Markets Tax Credit Program
|
—
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
496.3
|
|
|
(496.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(496.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(496.3
|
)
|
|||||
Proceeds (payments) from subsidiary for dividends paid
|
47.1
|
|
|
(47.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends paid
|
(47.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.1
|
)
|
|||||
Change in restricted cash
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|||||
Net cash used in financing activities
|
—
|
|
|
(524.4
|
)
|
|
(56.5
|
)
|
|
—
|
|
|
(580.9
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|||||
Net (decrease) increase in cash and cash equivalents for the period
|
—
|
|
|
(315.0
|
)
|
|
40.6
|
|
|
—
|
|
|
(274.4
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
680.1
|
|
|
17.6
|
|
|
—
|
|
|
697.7
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
365.1
|
|
|
$
|
58.2
|
|
|
$
|
—
|
|
|
$
|
423.3
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
645.9
|
|
|
$
|
71.0
|
|
|
$
|
—
|
|
|
$
|
716.9
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
—
|
|
|
(206.4
|
)
|
|
(47.6
|
)
|
|
|
|
|
(254.0
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Other
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(205.4
|
)
|
|
(48.0
|
)
|
|
—
|
|
|
(253.4
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of bonds
|
—
|
|
|
299.8
|
|
|
—
|
|
|
—
|
|
|
299.8
|
|
|||||
Principal payments of debt
|
—
|
|
|
(33.9
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
(36.4
|
)
|
|||||
Collection on (repayment of) intercompany debt
|
—
|
|
|
61.6
|
|
|
(61.6
|
)
|
|
—
|
|
|
—
|
|
|||||
Payments on term loan
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|
—
|
|
|
(300.0
|
)
|
|||||
Debt issuance and financing costs
|
—
|
|
|
(17.2
|
)
|
|
—
|
|
|
—
|
|
|
(17.2
|
)
|
|||||
Taxes paid related to net share settlement awards
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
—
|
|
|
(15.2
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
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
|
—
|
|
|
(654.6
|
)
|
|
(64.1
|
)
|
|
—
|
|
|
(718.7
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
(4.4
|
)
|
|||||
Net decrease in cash and cash equivalents for the period
|
—
|
|
|
(214.1
|
)
|
|
(45.5
|
)
|
|
—
|
|
|
(259.6
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
894.2
|
|
|
63.1
|
|
|
—
|
|
|
957.3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
680.1
|
|
|
$
|
17.6
|
|
|
$
|
—
|
|
|
$
|
697.7
|
|
|
Holdings
|
|
Spirit
|
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Total
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
1,167.5
|
|
|
$
|
122.2
|
|
|
$
|
—
|
|
|
$
|
1,289.7
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
—
|
|
|
(273.3
|
)
|
|
(86.8
|
)
|
|
|
|
|
(360.1
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|||||
Other
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(270.8
|
)
|
|
(86.6
|
)
|
|
—
|
|
|
(357.4
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
—
|
|
|
535.0
|
|
|
—
|
|
|
—
|
|
|
535.0
|
|
|||||
Principal payments of debt
|
—
|
|
|
(33.4
|
)
|
|
(3.1
|
)
|
|
—
|
|
|
(36.5
|
)
|
|||||
Collection on (repayment of) intercompany debt
|
—
|
|
|
(8.9
|
)
|
|
8.9
|
|
|
—
|
|
|
—
|
|
|||||
Payments on term loan
|
—
|
|
|
(534.9
|
)
|
|
—
|
|
|
—
|
|
|
(534.9
|
)
|
|||||
Debt issuance and financing costs
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|||||
Taxes paid related to net share settlement awards
|
—
|
|
|
(20.7
|
)
|
|
—
|
|
|
—
|
|
|
(20.7
|
)
|
|||||
Excess tax benefits from share-based payment arrangements
|
—
|
|
|
10.5
|
|
|
0.2
|
|
|
—
|
|
|
10.7
|
|
|||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
300.0
|
|
|
(300.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(300.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300.0
|
)
|
|||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(357.1
|
)
|
|
6.0
|
|
|
—
|
|
|
(351.1
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||||
Net increase in cash and cash equivalents for the period
|
—
|
|
|
539.6
|
|
|
39.8
|
|
|
—
|
|
|
579.4
|
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
354.6
|
|
|
23.3
|
|
|
—
|
|
|
377.9
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
894.2
|
|
|
$
|
63.1
|
|
|
$
|
—
|
|
|
$
|
957.3
|
|
•
|
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.
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
2.1
|
|
Asset Purchase Agreement, dated as of February 22, 2005, between Spirit AeroSystems, Inc. (f/k/a Mid-Western Aircraft Systems, Inc.) and The Boeing Company
|
|
|
2.2
|
|
First Amendment to Asset Purchase Agreement, dated June 15, 2005, between Spirit AeroSystems, Inc. (f/k/a Mid-Western Aircraft Systems, Inc.) and The Boeing Company
|
|
|
2.3
|
|
Asset Purchase Agreement, between Spirit AeroSystems Inc., Triumph Aerostructures - Tulsa LLC and Triumph Group, Inc., dated as of December 8, 2014
|
|
|
2.4
|
|
Amendment No. 1 to Asset Purchase Agreement, between Spirit AeroSystems, Inc., Triumph Aerostructures - Tulsa, LLC and Triumph Group, Inc., dated as of December 30, 2014
|
|
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation of Spirit AeroSystems Holdings, Inc.
|
|
|
3.2
|
|
Sixth Amended and Restated By Laws of Spirit AeroSystems Holdings, Inc.
|
|
|
4.1
|
|
Form of Class A Common Stock Certificate
|
|
|
4.4
|
|
Indenture dated as of March 18, 2014, governing the 5¼ Senior Notes due 2022, by and among Spirit, the guarantors identified therein and the Bank of New York Mellon Trust Company, N.A.
|
|
|
4.5
|
|
Form of 5 ¼% Senior Note due 2022
|
|
|
4.7
|
|
Indenture dated as of June 1, 2016, governing the 3.850% Senior Notes due 2026, by and among Spirit, the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
|
|
|
4.8
|
|
Form of 3.850% Senior Note due 2026
|
|
|
4.9
|
|
Supplemental Indenture, dated December 5, 2016, governing the 3.850% Senior Notes due 2026
|
|
|
4.10
|
|
Supplemental Indenture, dated December 5, 2016, governing the 5 1/4% Senior Notes due 2022
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.1
|
|
Form of Indemnification Agreement
|
|
|
10.2†
|
|
Spirit AeroSystems Holdings, Inc. Amended and Restated Deferred Compensation Plan, As Amended
|
|
|
10.3†
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Sanjay Kapoor, effective as of August 23, 2013
|
|
|
10.4†
|
|
Form of Executive Compensation Letter
|
|
|
10.5†
|
|
Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan
|
|
|
10.6†
|
|
Amendment to the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, dated January 25, 2017
|
|
|
10.7†
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Samantha Marnick, effective as of February 22, 2006 and annual Executive Compensation Letter, dated May 3, 2013
|
|
|
10.8†
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Duane Hawkins, effective as of June 17, 2013
|
|
|
10.9†
|
|
Amendment to Employment Agreement between Spirit Aerosystems, Inc. and Duane Hawkins, effective as of June 17, 2013
|
|
|
10.10†
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Michelle Lohmeier, effective as of June 10, 2015
|
|
|
10.11†
|
|
Employment Agreement, dated as of February 13, 2016, between Spirit AeroSystems, Inc. and Thomas C. Gentile III
|
|
|
10.12†
|
|
Executive Compensation Letter between Spirit AeroSystems, Inc. and Samantha Marnick, dated June 1, 2016
|
|
|
10.13†
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Krisstie Kondrotis, effective as of December 10, 2014
|
|
|
10.14†
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Ron Rabe, effective as of June 9, 2015
|
|
|
10.15†
|
|
Annual Executive Compensation Letter between Spirit AeroSystems, Inc. and John Pilla, dated February 7, 2014
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.16†
|
|
Employment Agreement between Spirit AeroSystems, Inc., and Stacy Cozad, effective as of January 4, 2016
|
|
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Bill Brown, effective as of May 5, 2014
|
|
*
|
|
10.18†
|
|
Long-Term Incentive Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, effective April 30, 2014
|
|
|
10.19†
|
|
Long-Term Incentive Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, as amended and restated effective January 25, 2017
|
|
|
10.20†
|
|
Short-Term Incentive Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, as amended and restated effective January 25, 2017
|
|
|
10.21†
|
|
Director Stock Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, effective January 27, 2016
|
|
|
10.22†
|
|
Spirit AeroSystems Holdings, Inc. Supplemental Executive Retirement Plan, as amended and restated effective January 25, 2017 (filed as Exhibit 10.5 to the Annual Report on Form 10-K (File No. 001-33160), filed with the Securities and Exchange Commission on February 10, 2017)
|
|
|
10.23
|
|
Employee Stock Purchase Plan
|
|
|
10.24†
|
|
Time-Based Restricted Stock Award Agreement
|
|
|
|
Performance-Based Restricted Stock Award Agreement
|
|
*
|
|
10.26†
|
|
Retirement and Consulting Agreement and General Release, dated June 7, 2016, between Spirit AeroSystems, Inc. and Larry A. Lawson
|
|
|
10.27
|
|
Amended and Restated Credit Agreement, dated as of June 6, 2016, among Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc., the other guarantors party thereto, Bank of America, N.A. and the other agents and lenders party thereto
|
|
|
10.28
|
|
Amendment No. 1 to Credit Agreement, dated September 22, 2017, between Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc., the lenders party thereto, and Bank of America, N.A., as Administrative Agent
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.29
|
|
Inducement Agreement between Spirit AeroSystems, Inc. and The North Carolina Global TransPark Authority, dated May 14, 2008
|
|
|
10.30
|
|
Lease Agreement between Spirit AeroSystems, Inc. and The North Carolina Global TransPark Authority, dated May 14, 2008
|
|
|
10.31
|
|
Construction Agency Agreement between Spirit AeroSystems, Inc. and The North Carolina Global TransPark Authority, dated May 14, 2008
|
|
|
10.32††
|
|
General Terms Agreement (Sustaining and others), dated as of June 16, 2005, between The Boeing Company and Spirit AeroSystems, Inc. (f/k/a Mid-Western Aircraft Systems, Inc.)
|
|
|
10.33††
|
|
Hardware Material Services General Terms Agreement, dated as of June 16, 2005, between The Boeing Company and Spirit AeroSystems, Inc. (f/k/a Mid-Western Aircraft Systems, Inc.)
|
|
|
10.34††
|
|
Ancillary Know-How Supplemental License Agreement, dated as of June 16, 2005, between The Boeing Company and Spirit AeroSystems, Inc. (f/k/a Mid-Western Aircraft Systems, Inc.)
|
|
|
10.35
|
|
Sublease Agreement, dated as of June 16, 2005, among The Boeing Company, Boeing IRB Asset Trust and Spirit AeroSystems, Inc. (f/k/a Mid-Western Aircraft Systems, Inc.)
|
|
|
10.36††
|
|
Special Business Provisions (Sustaining), as amended through February 6, 2013, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.37††
|
|
Amendment No. 9 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems Inc., dated as of September 4, 2014
|
|
|
10.38††
|
|
Amendment No. 10 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems Inc., dated as of September 26, 2014
|
|
|
10.39
|
|
Amendment No. 2, dated March 4, 2011, to General Terms Agreement (Sustaining and Others) between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.40††
|
|
Memorandum of Agreement, between The Boeing Company and Spirit AeroSystems, Inc., made as of March 9, 2012, amending Special Business Provisions (Sustaining)
|
|
|
|
|
|
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.41††
|
|
Memorandum of Agreement (737 MAX Non-Recurring Agreement), between The Boeing Company and Spirit AeroSystems, Inc., made as of April 7, 2014, amending Spirit’s long-term supply agreement with Boeing
|
|
|
10.42††
|
|
Memorandum of Agreement (Pricing Agreement), between The Boeing Company and Spirit AeroSystems, Inc., made as of April 8, 2014, amending Spirit’s long-term supply agreement with Boeing
|
|
|
10.43
|
|
Amendment No. 11 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of March 10, 2015
|
|
|
10.44
|
|
Amendment No. 12 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of April 9, 2015
|
|
|
10.45
|
|
Amendment No. 13 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of January 4, 2016
|
|
|
10.46
|
|
Amendment No. 14 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of April 21, 2015
|
|
|
10.47††
|
|
Amendment No. 17 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of December 23, 2015
|
|
|
10.48††
|
|
Amendment No. 20 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of November 1, 2015
|
|
|
10.49††
|
|
Amendment No. 21 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of May 9, 2016
|
|
|
10.50††
|
|
Amendment No. 22 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of November 2, 2016
|
|
|
10.51††
|
|
Amendment No. 23 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of December 16, 2016
|
|
|
10.52††
|
|
Amendment No. 24 to Special Business Provisions, between The Boeing Company and Spirit AeroSystems, Inc., dated as of December 20, 2016
|
|
|
10.53††
|
|
Amendment 25 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of March 16, 2017
|
|
|
10.54††
|
|
Amendment 26 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of March 23, 2017
|
|
|
10.55††
|
|
Amendment 27 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of March 31, 2017
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.56††
|
|
Amendment 28 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of June 22, 2017
|
|
|
10.57††
|
|
Amendment 29 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of July 20, 2017
|
|
|
10.58††
|
|
Amendment No. 30 to Special Business Provisions (SBP) MS-65530-0016, dated September 22, 2017, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
|
Amendment No. 31 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of October 18, 2017
|
|
*
|
|
|
Amendment No. 32 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of November 15, 2017
|
|
*
|
|
|
Amendment No. 33 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of November 30, 2017
|
|
*
|
|
10.62††
|
|
Collective Resolution Memorandum of Understanding between the Boeing Company and Spirit AeroSystems, Inc., dated as of August 1, 2017
|
|
10.63††
|
|
B787 General Terms Agreement BCA-65520-0032between The Boeing Company and Spirit AeroSystems, Inc., conformed to incorporate the General Terms Agreement, dated June 16, 2005, Amendment No. 1 thereto, dated June 19, 2009, and Amendment No. 2 thereto, dated May 12, 2011
|
|
|
10.64††
|
|
B787 Special Business Provisions BCA-MS-65530-0019, dated August 20, 2012, between The Boeing Company and Spirit AeroSystems, Inc., conformed to incorporate the Special Business Provisions, dated June 16, 2005, and Amendments 1 through 19 thereto
|
|
|
10.65††
|
|
Amendment No. 20 to B787 Special Business Provisions BCA-MS-65530-0019, dated June 5, 2013, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.66††
|
|
Amendment No. 21 to B787 Special Business Provisions BCA-MS-65530-0019, dated July 1, 2014, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.67††
|
|
Amendment No. 22 Revision 1 to B787 Special Business Provisions BCA-MS-65530-0019, dated December 4, 2014, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.68††
|
|
Amendment No. 23 to B787 Special Business Provisions BCA-MS-65530-0019, dated August 3, 2015, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
|
|
|
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.69††
|
|
Amendment No. 24 to B787 Special Business Provisions BCA-MS-65530-0019, dated December 16, 2015, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.70††
|
|
Amendment No. 25 to B787 Special Business Provisions (SBP) BCA-MS-65530-0019, dated September 22, 2017, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
|
Amendment No. 26 to B787 Special Business Provisions (SBP) BCA-MS-65530-0019, dated December 14, 2017, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
*
|
|
|
Ratio of Earnings to Fixed Charges
|
|
*
|
|
14.1
|
|
Code of Ethics
|
|
|
|
|
(i) Spirit AeroSystems Holdings, Inc. Code of Ethics and Business Conduct, as amended
|
|
|
|
|
(ii) Spirit AeroSystems Holdings, Inc. Code of Conduct for Finance Employees
|
|
|
|
|
(iii) Spirit AeroSystems Holdings, Inc. Code of Ethics and Business Conduct, as amended
|
|
|
|
Subsidiaries of Spirit AeroSystems Holdings, Inc.
|
|
*
|
|
|
Consent of Ernst & Young LLP
|
|
*
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002
|
|
**
|
|
|
Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002
|
|
**
|
|
101.INS@
|
|
XBRL Instance Document
|
|
*
|
101.SCH@
|
|
XBRL Taxonomy Extension Schema Document
|
|
*
|
101.CAL@
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
*
|
101.DEF@
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
*
|
101.LAB@
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
*
|
101.PRE@
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
†
|
Indicates management contract or compensation plan or arrangement
|
††
|
Indicates that portions of the exhibit have been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
|
|
SPIRIT AEROSYSTEMS HOLDINGS, INC.
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ Sanjay Kapoor
|
|
|
|
|
Sanjay Kapoor Executive Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Thomas C. Gentile III
|
|
Director, President and Chief Executive
|
|
February 9, 2018
|
Thomas C. Gentile III
|
|
Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Sanjay Kapoor
|
|
Executive Vice President and Chief Financial
|
|
February 9, 2018
|
Sanjay Kapoor
|
|
Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Mark J. Suchinski
|
|
Vice President and Corporate Controller
|
|
February 9, 2018
|
Mark J. Suchinski
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Robert Johnson
|
|
Director, Chairman of the Board
|
|
February 9, 2018
|
Robert Johnson
|
|
|
|
|
|
|
|
|
|
/s/ Charles Chadwell
|
|
Director
|
|
February 9, 2018
|
Charles Chadwell
|
|
|
|
|
|
|
|
|
|
/s/ Irene M. Esteves
|
|
Director
|
|
February 9, 2018
|
Irene M. Esteves
|
|
|
|
|
|
|
|
|
|
/s/ Paul Fulchino
|
|
Director
|
|
February 9, 2018
|
Paul Fulchino
|
|
|
|
|
|
|
|
|
|
/s/ Richard Gephardt
|
|
Director
|
|
February 9, 2018
|
Richard Gephardt
|
|
|
|
|
|
|
|
|
|
/s/ Ronald Kadish
|
|
Director
|
|
February 9, 2018
|
Ronald Kadish
|
|
|
|
|
|
|
|
|
|
/s/ John L. Plueger
|
|
Director
|
|
February 9, 2018
|
John L. Plueger
|
|
|
|
|
|
|
|
|
|
/s/ Francis Raborn
|
|
Director
|
|
February 9, 2018
|
Francis Raborn
|
|
|
|
|
|
|
|
SPIRIT AEROSYSTEMS, INC.
|
||
|
|
|
|
|
|
Date:
|
May 5, 2014
|
|
By:
|
/s/ Suzanne Scott
|
|
|
|
|
|
|
|
|
|
|
Name:
|
Suzanne Scott
|
|
|
|
|
|
|
|
|
|
|
Title:
|
Director - Global HR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 5, 2014
|
|
/s/ Bill Brown
|
||
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Award.
Pursuant to the Plan and the LTIP, the Company hereby awards to the Grantee the Target Award of Restricted Stock. The number of Shares that the Grantee will vest in will be determined based on the conditions and Performance Measures contained in Paragraph 2. Subject to the restrictions set forth in the Plan, the Grantee will have the rights and privileges of a stockholder as to the Restricted Stock, including without limitation the right to vote such Restricted Stock.
|
2.
|
Vesting and Expiration of Restricted Period.
|
(a)
|
For purposes of this Agreement, the “
Performance Period
” shall be the three-year period beginning on January 1, 2018 and ending on December 31, 2020.
|
(b)
|
The Restricted Stock is subject to forfeiture until it vests. Except as otherwise provided herein or in the Plan, the Restricted Stock will vest and the Restricted Period will expire on the last day of the Performance Period, subject to the Grantee’s continuous service to the Company from the Grant Date through the last day of the Performance Period.
|
(c)
|
The percentage of Restricted Stock that will actually vest will range from 0% to 200% and be based, in equal parts, on the achievement of the following Performance Measures:
|
i.
|
Total shareholder return over the Performance Period as compared to the Company’s Peer Group, as determined pursuant to
Exhibit A
attached hereto; and
|
i.
|
Free Cash Flow as Percentage of Revenue, as determined pursuant to
Exhibit B
attached hereto.
|
(d)
|
Following the end of the Performance Period, the Committee will determine in its sole discretion and certify in writing whether, and to what extent, the Performance Measures were achieved for the Performance Period (“
Actual Performance
”). Based on Actual Performance, the Committee will then calculate and certify in writing the percentage of the Restricted Stock that the Grantee will vest in (the “
Actual Award
”). Any Restricted Stock outstanding and unvested at the end of the Performance Period will be forfeited. The determination of Actual Performance will be in the sole discretion of the Committee and will be final, conclusive, binding and unappealable.
|
(e)
|
Except as otherwise provided herein, upon vesting, the restrictions set forth in the Plan or in this Award Agreement will be of no further force or effect with respect to vested Restricted Stock.
|
3.
|
Delivery.
The Shares underlying the Restricted Stock will be held by the Company in the Grantee’s name and will be delivered promptly following the date on which the Restricted Stock vests.
|
4.
|
Dividends.
No dividends payable on the Restricted Stock will be paid or accumulated by the Company until such Restricted Stock vests and the restrictions on such Restricted Stock expire.
|
5.
|
Forfeiture.
Except as provided in Paragraph 6 or 7 and Sections 13.1 and 15.7 of the Plan, or as otherwise determined by the Committee, upon the Grantee’s Termination prior to vesting and the expiration of the Restricted Period, any outstanding, unvested Restricted Stock will be forfeited.
|
6.
|
Death or Disability.
Notwithstanding any other provision of this Award Agreement or the Plan, upon the Grantee’s Termination due to death or Disability prior to vesting and the expiration of the Restricted Period, the Grantee will vest in a prorated portion of his or her Target Award, prorated based on the number of days continuously employed during the Performance Period, and the Shares underlying the Restricted Stock will be delivered promptly following the Grantee’s Termination.
|
7.
|
Retirement.
Notwithstanding any other provision of this Award Agreement or the Plan, upon the Grantee’s Termination due to Retirement prior to vesting and the expiration of the Restricted Period, the Grantee will vest in a prorated portion of his
|
8.
|
Clawback Policy/Recoupment
.
The Award of Restricted Stock is subject to the clawback provisions of Section 15.20 of the Plan, any applicable law and any Company policy on the recovery of compensation, as it exists now or as later adopted and as amended and in effect from time to time.
|
9.
|
Transferability and Resale Restrictions.
Prior to vesting and the expiration of the Restricted Period, the Restricted Stock may not be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by the Grantee other than by will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer, or encumbrance will be void and unenforceable against the Company or any Affiliate. Any Shares delivered pursuant to this Award Agreement will be subject to such conditions and restrictions on transfer (if any) as are set forth in the Company’s certificate of incorporation and bylaws, as well as any stockholders agreement and any other agreement entered into with respect to such Shares.
|
10.
|
Tax Representations and Tax Withholding.
The Grantee has had an opportunity to review with his or her own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Award Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee will be required to pay to the Company or any Affiliate, and the Company or any Affiliate will have the right to withhold, from any cash or shares deliverable under this Award or from any compensation or other amounts owing to the Grantee, the amount of any required withholding taxes in respect of this Award, its exercise, or any payment or transfer under this Award and to take such other action as may be necessary in the opinion of the Committee or the Company to satisfy all obligations for the payment of such withholding and taxes.
|
11.
|
83(b) Elections.
The grant of Restricted Stock in this Award Agreement is intended to constitute a transfer of such Restricted Stock within the meaning of Code Section 83. Accordingly, the Grantee is eligible to make an election under Code Section 83(b) with respect to the Restricted Stock, subject to complying with all applicable requirements for making such an election, including, but not limited to, the requirement that such election be made within 30 days after the Grant Date. If the Grantee makes an election under Code Section 83(b), the Grantee will notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to Code Section 83(b) or other applicable provision.
|
12.
|
Entire Agreement.
The Plan and the LTIP are incorporated herein by reference. This Award Agreement, the Plan and the LTIP constitute the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior understandings and agreements with respect to such subject matter. Except as otherwise set forth herein, this Award Agreement shall be construed in accordance with the provisions of the Plan and if and to the extent that this Award Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control. Any action taken or decision made by the Committee arising out of or in connection with the construction, administration, interpretation or effect of this Award Agreement shall lie within its sole discretion, as the case may be, and shall be final, conclusive and binding on the Grantee and all persons claiming under or through the Grantee.
|
13.
|
Severability
. If any provision of this Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or entity or Award, or would disqualify the Award under any law deemed applicable by the Committee, such provision will be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Award Agreement, such provision will be construed or deemed stricken as to such jurisdiction, person or entity or Award and the remainder of the Award Agreement will remain in full force and effect.
|
14.
|
Amendment.
The Committee may, to the extent consistent with the terms of this Award Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel, or terminate, this Award or this Award Agreement, prospectively or retroactively, except that any such waiver, amendment, alteration, suspension, discontinuance, cancellation, or termination that would materially and adversely affect the rights of the Grantee under this Award Agreement will not be effective without consent of the Grantee. Except as provided in Section 14.1 of the Plan, the Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time.
|
15.
|
No Obligation to Employ.
Nothing in this Award Agreement or the Plan will be construed as giving the Grantee any right to be retained in the employ or service of the Company or any Affiliate. The Company or any Affiliate may at any time dismiss the Grantee from employment or discontinue any consulting relationship, free from any liability or any claim under this Award Agreement and the Plan, unless otherwise expressly provided in this Award Agreement or the Plan. By accepting this Award, the Grantee will be deemed to have waived any claim to continued exercise or vesting of this Award or to damages or severance entitlement related to non-continuation of this Award beyond the period provided under this Award Agreement or the Plan, except to the extent of any provision to the contrary in any written employment contract or other agreement between the Company or any Affiliate and the Grantee, whether any such agreement is executed before, on, or after the Grant Date.
|
16.
|
Notices and Information.
Any notice required to be given or delivered to the Company under the terms of this Award Agreement shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices. Any notice required to be given or delivered to the Grantee shall be in writing and addressed to the Grantee at the Grantee’s last known address on file with the Company. All notices shall be deemed to have been given or delivered upon: (i) personal delivery; (ii) three (3) days after deposit in the United States mail by certified or registered mail (return receipt requested); (iii) one (1) business day after deposit with any return receipt express courier (prepaid); or (iv) one (1) business day after transmission by facsimile. For additional information regarding this Award Agreement, the LTIP, the Plan or the administrators of the Plan, please contact the Company’s Corporate Secretary at 3801 South Oliver, Wichita, Kansas 67210, (316) 526-9000.
|
17.
|
Successors.
The Company may assign any of its rights under this Award Agreement. This Award Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.
|
18.
|
GOVERNING LAW.
THIS AWARD AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
|
19.
|
Headings.
The headings in this Award Agreement are for convenience of reference only, and in the event of any conflict, the text of this Award Agreement, rather than such headings will control.
|
|
|
|
|
|
|
|
By:
|
_________________________________
|
|
|
SPIRIT AEROSYSTEMS HOLDINGS, INC.
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
By:
|
_________________________________
|
|
|
GRANTEE
Name:
|
Threshold
|
Target
|
Maximum
|
|
The Company’s rank among Peer Group
|
25
th
percentile
|
50
th
percentile
|
90
th
percentile
|
Percentage of Restricted Stock that will vest
|
25%
|
100%
|
200%
|
Threshold
|
Target
|
Maximum
|
|
FCF %
|
7.0%
|
7.75%
|
9.0%
|
Percentage of Restricted Stock that will vest
|
25%
|
100%
|
200%
|
A.
|
Boeing and Seller are Parties to the Administrative Agreement (AA) AA-65530-0010, General Terms Agreements (GTA) BCA-65530-0016 and Special Business Provisions (SBP) MS-65530-0016, together with all Amendments thereto (collectively, the “Supply Contract”).
|
B.
|
Boeing and Seller herein memorialize (i) a final incurred cost for the 737-8 Rate Tooling, and (ii) a final 737-8 Rate Tooling Incentive payment (“Incentive”), all in accordance with SBP Attachment 27.
|
C.
|
For purposes of this Amendment No. 31, “737-8 Rate Tooling” is defined as such Rate Tooling as is necessary to support a build rate of up to [*****] APM for the 737-8, in accordance with SBP Attachment 27.
|
1.
|
Pricing Agreement for 737-8 Rate Tooling:
|
a.
|
The Parties are in agreement that the total incurred costs for 737-8 Rate Tooling, including the Incentive amount as specified in Table 1 below, are $[*****]. Of this total, Boeing agrees to pay Seller $[*****] as settlement for the Incentive award earned for tooling incurred cost underruns to the [*****] amount listed in Exhibit A of SBP Attachment 27.
|
|
|
|
|
|
Agreed Adjusted 737-8 Rate Tooling Incentive Amount
|
$
|
[*****]
|
||
|
|
|
|
|
|
|
|
|
|
Agreed 737-8 Rate Tooling Incurred Costs
|
$
|
|||
|
|
|
|
|
|
|
|
|
|
Total Amount for 737-8 Rate Tools (Incurred Costs + Incentive)
|
$
|
|||
|
|
|
|
|
|
|
|
|
|
b.
|
Exhibit A to this Amendment No. 31 spreads the costs of the Incentive amount to the costs for each of the 737-8 Rate tools for the adjusted tool costs. The Parties are in agreement that the adjusted tool costs will be the amounts entered by Boeing Tools & Accountability into the Boeing’s Certified Tool Tracking Log (“CTOL”) System upon acceptance of the final Certified Tool Lists (“CTL”) as described in section 6.4.1 of SBP Attachment 27.
|
c.
|
The following provisions are further agreed between the Parties:
|
i.
|
The Tools listed in Exhibit A as “Pending Tools” are additional Rate Tools needed for the production of the 737-8 airplane supporting a [*****] Airplane Per Month (“APM”) production rate which have not been manufactured as of the Effective Date of this Amendment No. 31. Costs for these tools will not be subject to reimbursement nor incentive payment by Boeing for costs incurred by Spirit. Spirit will submit a zero-cost ($0) CTL to Boeing pursuant to the process guidelines set forth in the Suppliers Tooling Document, D33200-1, upon tool build completion.
|
ii.
|
All 737-8 Rate Tooling and Incentive payments for up to [*****] APM are hereby closed in accordance with the requirements of this Amendment No. 31. For purposes of clarity, the payments required from Boeing to Seller under this Amendment No. 31 are separate and apart from those payments required by Section 8 of SBP Attachment 1.
|
iii.
|
If additional 737-8 Rate Tooling is needed to support a build rate of up to [*****] APM for the 737-8 beyond that Rate Tooling already identified within this Amendment No. 31, Seller will submit a zero dollar CTL for such additional Rate Tools pursuant to the process guidelines set forth in D33200-1.
|
iv.
|
If Product non-conformances result from a defective Seller-procured/fabricated 737-8 Rate Tool, Seller will rework or replace such defective 737-8 Rate Tools at no cost to Boeing and Seller will submit a no cost CTL.
|
v.
|
Any changes to the Rate Tooling on the 737-8, directed post Amended Type Certification (“ATC”), will be processed in accordance with the terms and conditions of the SBP.
|
2.
|
Final CTLs:
The Parties agree that all 737-8 Rate Tooling CTLs representing the above-referenced 737-8 Rate Tooling incurred costs of $[*****] have been submitted to Boeing by Seller and approved by Boeing. The Parties further agree to adjust the values on these CTLs pursuant to paragraph 1b to represent the total cost to Boeing of $[*****] (see Table 1 - 737-8 Rate Tooling Incentive Settlement).
|
3.
|
Invoicing and Payment:
Upon notification from Boeing (via purchase order) Spirit shall submit invoicing pursuant to the purchase order numbers and purchase order values noted in the table in section 2 above. Payment shall be authorized pursuant to the terms of the SBP Attachment 27 Section 6.1.2 upon submittal of an acceptable CTL received from Spirit. The Parties agree that Boeing will provide a Purchase Order(s) inclusive of the 737-8 Rate Tooling Incentive within [*****] calendar days of the Effective Date and Seller will submit an invoice shortly thereafter. Payment terms shall be net [*****] calendar days after receipt of a correct and valid invoice, pursuant to SBP Section 5.2.1.
|
1.
|
The SBP is hereby amended to include the following Purchase Orders within SBP Attachment 27 Section 6.3:
|
2.
|
The SBP is hereby amended by replacing the 737-8 Rate Tooling list within Attachment 27 Exhibit C with the 737-8 Rate Tooling list contained within Exhibit A to this Amendment No. 31. For avoidance of doubt, the Initial Tools listed in SBP Attachment 27 Exhibit C remain unchanged.
|
A.
|
Except as specifically set forth herein, all provisions of the SBP shall remain unchanged and in full force and effect.
|
B.
|
In the event of a conflict between the terms of this Amendment No. 31 and provisions of the SBP, GTA, or the Administrative Agreement, this Amendment No. 31 shall take precedence.
|
C.
|
This Amendment No. 31 shall be governed by the internal laws of the State of Washington without reference to any rules governing conflict of laws.
|
THE BOEING COMPANY
|
|
SPIRIT AEROSYSTEMS, INC.
|
||
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Blaylock
|
|
By:
|
/s/ Eric S. Bossler
|
Name:
|
David Blaylock
|
|
Name:
|
Eric S. Bossler
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Specialist
|
Date:
|
October 18, 2017
|
|
Date:
|
October 16, 2017
|
|
|
|
|
|
|
|
|
|
|
A.
|
Boeing and Seller are Parties to the Administrative Agreement (AA) AA-65530-0010, General Terms Agreements (GTA) BCA-65530-0016 and Special Business Provisions (SBP) MS-65530-0016, together with all Amendments thereto (collectively, the “Supply Contract”).
|
B.
|
Boeing and Seller herein memorialize (i) a final incurred cost for the 737-8 Rate Tooling, and (ii) a final 737-8 Rate Tooling Incentive payment (“Incentive”), all in accordance with SBP Attachment 27.
|
C.
|
For purposes of this Amendment No. 32, “737-8 Rate Tooling” is defined as such Rate Tooling as is necessary to support a build rate of up to [*****] APM for the 737-8, in accordance with SBP Attachment 27.
|
D.
|
This Amendment No. 32 is entered into in order to correct certain oversights and discrepancies pertaining to distribution of tool costs contained within SBP Amendment No. 31, which is superseded in its entirety by this Amendment No. 32
|
1.
|
Pricing Agreement for 737-8 Rate Tooling:
|
a.
|
The Parties are in agreement that the total incurred costs for 737-8 Rate Tooling, including the Incentive amount as specified in Table 1 below, are $[*****]. Of this total, Boeing agrees to pay Seller $[*****] as settlement for the Incentive award earned for tooling incurred cost underruns to the [*****] amount listed in Exhibit A of SBP Attachment 27.
|
|
|
|
|
|
Agreed Adjusted 737-8 Rate Tooling Incentive Amount
|
$
|
[*****]
|
||
|
|
|
|
|
|
|
|
|
|
Agreed 737-8 Rate Tooling Incurred Costs
|
$
|
|||
|
|
|
|
|
|
|
|
|
|
Total Amount for 737-8 Rate Tools (Incurred Costs + Incentive)
|
$
|
|||
|
|
|
|
|
|
|
|
|
|
b.
|
Exhibit A to this Amendment No. 32 spreads the costs of the Incentive amount to the costs for each of the 737-8 Rate tools for the adjusted tool costs. The Parties are in agreement that the adjusted tool costs will be the amounts entered by Boeing Tools & Accountability into the Boeing’s Certified Tool Tracking Log (“CTOL”) System upon acceptance of the final Certified Tool Lists (“CTL”) as described in section 6.4.1 of SBP Attachment 27.
|
c.
|
The following provisions are further agreed between the Parties:
|
i.
|
The Tools listed in Exhibit A as “Pending Tools” are additional Rate Tools needed for the production of the 737-8 airplane supporting a [*****] Airplane Per Month (“APM”) production rate which have not been manufactured as of the Effective Date of this Amendment No. 32. Costs for these tools will not be subject to reimbursement nor incentive payment by Boeing for costs incurred by Spirit. Spirit will submit a zero-cost ($0) CTL to Boeing pursuant to the process guidelines set forth in the Suppliers Tooling Document, D33200-1, upon tool build completion.
|
ii.
|
All 737-8 Rate Tooling and Incentive payments for up to [*****] APM are hereby closed in accordance with the requirements of this Amendment No. 32. For purposes of clarity, the payments required from Boeing to Seller under this Amendment No. 32 are separate and apart from those payments required by Section 8 of SBP Attachment 1.
|
iii.
|
If additional 737-8 Rate Tooling is needed to support a build rate of up to [*****] APM for the 737-8 beyond that Rate Tooling already identified within this Amendment No. 32, Seller will submit a zero dollar CTL for such additional Rate Tools pursuant to the process guidelines set forth in D33200-1.
|
iv.
|
If Product non-conformances result from a defective Seller-procured/fabricated 737-8 Rate Tool, Seller will rework or replace such defective 737-8 Rate Tools at no cost to Boeing and Seller will submit a no cost CTL.
|
v.
|
Any changes to the Rate Tooling on the 737-8, directed post Amended Type Certification (“ATC”), will be processed in accordance with the terms and conditions of the SBP.
|
2.
|
Final CTLs:
The Parties agree that all 737-8 Rate Tooling CTLs representing the above-referenced 737-8 Rate Tooling incurred costs of $[*****] have been submitted to Boeing by Seller and approved by Boeing. The Parties further agree to adjust the values on these CTLs pursuant to paragraph 1b to represent the total cost to Boeing of $[*****] (see Table 1 - 737-8 Rate Tooling Incentive Settlement).
|
3.
|
Invoicing and Payment:
Upon notification from Boeing (via purchase order) Spirit shall submit invoicing pursuant to the purchase order numbers and purchase order values noted in the table in section 2 above. Payment shall be authorized pursuant to the terms of the SBP Attachment 27 Section 6.1.2 upon submittal of an acceptable CTL received from Spirit. The Parties agree that Boeing will provide a Purchase Order(s) inclusive of the 737-8 Rate Tooling Incentive within [*****] calendar days of the Effective Date and Seller will submit an invoice shortly thereafter. Payment terms shall be net [*****] calendar days after receipt of a correct and valid invoice, pursuant to SBP Section 5.2.1.
|
1.
|
The SBP is hereby amended to include the following Purchase Orders within SBP Attachment 27 Section 6.3:
|
2.
|
The SBP is hereby amended by replacing the 737-8 Rate Tooling list within Attachment 27 Exhibit C with the 737-8 Rate Tooling list contained within Exhibit A to this Amendment No. 32. For avoidance of doubt, the Initial Tools listed in SBP Attachment 27 Exhibit C remain unchanged.
|
A.
|
Except as specifically set forth herein, all provisions of the SBP shall remain unchanged and in full force and effect.
|
B.
|
In the event of a conflict between the terms of this Amendment No. 32 and provisions of the SBP, GTA, or the Administrative Agreement, this Amendment No. 32 shall take precedence.
|
C.
|
This Amendment No. 32 shall be governed by the internal laws of the State of Washington without reference to any rules governing conflict of laws.
|
THE BOEING COMPANY
|
|
SPIRIT AEROSYSTEMS, INC.
|
||
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Blaylock
|
|
By:
|
/s/ Eric Stanley Bossler
|
Name:
|
David Blaylock
|
|
Name:
|
Eric Stanley Bossler
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Specialist
|
Date:
|
November 15, 2017
|
|
Date:
|
November 15, 2017
|
|
|
|
|
|
|
|
|
|
|
A.
|
Boeing and Seller are Parties to the Administrative Agreement AA-65530-0010 (“AA”), General Terms Agreement BCA-65530-0016 (“GTA”), and Special Business Provisions MS-65530-0016 (“SBP”), together with all Amendments thereto (collectively, the “Supply Contract”).
|
B.
|
Boeing has authorized Seller to be reimbursed $[*****] for 737 MAX CIW [*****] APM Rate Tooling, equivalent to [*****]% of Seller’s incurred costs for the period ending [*****].This Authorization to Proceed (“ATP”) was provided in Boeing Contracts letter number [*****] dated [*****]. Upon the Effective Date, this ATP is superseded and is replaced by this Amendment No. 33.
|
C.
|
Boeing and Seller herein memorialize (i) a [*****] amount for the 737 MAX Composite Inner Wall (“CIW”) [*****] Airplane Per Month (“[*****] APM”) Rate Tooling, and (ii) an incentive payment cap for the 737 MAX CIW [*****] APM Rate Tooling, all in accordance with SBP Attachment 27.
|
D.
|
For purposes of this Amendment No. 33, “737 MAX CIW [*****] APM Rate Tooling” is defined as such Rate Tooling as is necessary to support a build rate of up to and including [*****] APM for the 737 MAX CIW, in accordance with SBP Attachment 27.
|
1.
|
[*****] Agreement for 737 MAX CIW Rate Tooling:
|
a.
|
The Parties agree to a [*****] value of $[*****] for the 737 MAX CIW [*****] APM Rate Tooling.
|
2.
|
Agreement for Cost Overruns to the
[*****]
:
|
a.
|
The Parties agree that Boeing will pay Seller for all costs for the 737 MAX CIW [*****] APM Rate Tooling [*****] value. In the event that actual incurred costs are in excess of the [*****] value of $[*****], the [*****] value will be adjusted upward to reflect actual costs. Any upward adjustment of the [*****] value will be subject to validation by Boeing; otherwise the adjustment will be in accordance with SBP Attachment 27 Section 6.7.1.
|
3.
|
Agreement for Capped Incentive:
|
a.
|
The Parties agree that Seller will receive no more than a $[*****] incentive fee, in accordance with SBP Attachment 27 Section 6.4.6 (added to the SBP by this Amendment No. 33).
|
1.
|
The list of “Amendments” within the Sustaining SBP is hereby deleted and replaced in its entirety as follows:
|
AMENDMENTS
|
|||
Amend Number
|
Description
|
Effective Date
|
Approval
|
1
|
Revise Company name from Mid-Western Aircraft Systems Incorporated to Spirit AeroSystems throughout document. Update Attachments 1, 2, 4, 14 and 16.
|
2/23/2006
|
H. McCormick
R. Stone
|
|
|
|
|
2
|
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.
|
4/11/2007
|
H. McCormick
J. Edwards
|
|
|
|
|
3
|
Incorporate CCNs as listed in Amendment 3 Attachment A, updates to Attachments 1, 2, 7, 14, 15, 16 and 22.
|
11/28/2007
|
H. McCormick
J. Edwards
|
|
|
|
|
4
|
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.
|
7/8/2008
|
S.Hu
W. Wallace
|
|
|
|
|
5
|
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.
|
6/22/2009
|
S. Hu
R. Stone
|
|
|
|
|
6
|
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.
|
11/23/2010
|
S. Hu
M. Milan
|
|
|
|
|
21
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
5/9/2016
|
D. Blaylock
R.Grant
|
|
|
|
|
22
|
737 MAX Composite Inner Wall Line Movement
|
11/2/2016
|
D. Blaylock
E. Bossler
|
|
|
|
|
23
|
737 MAX 9 INITIAL and CIW Line [*****]
Tooling Incentive AGREEMENT
|
12/16/2016
|
D. Blaylock
E. Bossler
|
|
|
|
|
24
|
Incorporate CCNs as listed in Amendment 23 Attachment A, updates to Attachments 1, 2, 7, 9, and 14.
|
12/20/2016
|
L. Taylor
K. Leyba
|
|
|
|
|
25
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
3/17/2017
|
D. Blaylock
E. Bossler
|
26
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
3/23/2017
|
D. Blaylock
E. Bossler
|
27
|
Incorporate Attachment 30, 737 NG / MAX Vapor Barrier Agreement, updates to Attachments 1 and 9
|
3/31/2017
|
B. Edwards
K. Clark
|
|
|
|
|
28
|
Revisions to Attachment 29, 777X NRE Agreement
|
6/22/2017
|
K. O'Connell
C. Green
|
|
|
|
|
29
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
7/20/2017
|
D. Blaylock
E. Bossler
|
|
|
|
|
30
|
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.)
|
9/22/2017
|
B. Edwards
B. Wilson
|
31
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
10/18/17
|
D. Blaylock
E. Bossler
|
32
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
11/15/2017
|
D. Blaylock
E. Bossler
|
33
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement
|
11/29/2017
|
D. Blaylock
E. Bossler
|
|
|
|
|
2.
|
The SBP is hereby amended to include the following Purchase Order within SBP Attachment 27 Section 6.3:
|
3.
|
The SBP is hereby amended by adding SBP Attachment 27 Section 6.4.6, as follows:
|
“6.4.6
|
For the purposes of 737 MAX CIW [*****] APM Rate Tooling, Boeing shall pay to Seller an incentive fee of no more than $[*****] (“Capped CIW [*****] Underrun Incentive Amount”). The total incentive fee will be calculated in accordance with Section 6.4.1 of this SBP Attachment 27, subject to the Capped CIW [*****] Underrun Incentive Amount. The Parties agree that nothing in this Section 6.4.6 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.”
|
4.
|
The SBP is hereby amended by replacing the 737 MAX CIW [*****] table within SBP Attachment 27 Exhibit A with the table listed below. For the avoidance of doubt, the [*****] tables within SBP Attachment 27 Exhibit A for the 737-8, 737-9, 737-7 (7150), 737-8200, and 737-10 are unchanged by this Amendment No. 33.
|
737 MAX CIW
[*****]
|
Composite Inner Wall (CIW)
|
|
Line Unit [*****] Amount
|
$
|
[*****]
|
Rate Tooling [*****] Amount to support up to and including [*****] APM
|
$
|
[*****]
|
5.
|
The SBP is hereby amended by adding the tool list for 737 MAX CIW [*****] APM Rate Tooling to SBP Attachment 27 Exhibit C (Tooling Lists) as set forth within Exhibit 1 to this Amendment No. 33. For the avoidance of doubt, any tool lists already contained in SBP Attachment 27 Exhibit C are unchanged by this Amendment No. 33.
|
a.
|
Except as specifically set forth herein, all provisions of the SBP shall remain unchanged and in full force and effect.
|
b.
|
In the event of a conflict between the terms of this Amendment No. 33 and provisions of the SBP, GTA or the AA, this Amendment No. 33 and the Exhibit hereto shall take precedence.
|
c.
|
This Amendment No. 33 shall be governed by the internal laws of the State of Washington without reference to any rules governing conflict of laws.
|
THE BOEING COMPANY
|
|
Spirit AeroSystems Inc.
|
||
by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David Blaylock
|
|
By:
|
/s/ Eric S. Bossler
|
Name:
|
David Blaylock
|
|
Name:
|
Eric S. Bossler
|
Title:
|
Procurement Agent
|
|
Title:
|
Contracts Specialist
|
Date:
|
November 30, 2017
|
|
Date:
|
November 30, 2017
|
|
|
|
|
|
|
|
|
|
|
Sort
|
Type Tool
|
Tool Type
|
Tool Number
|
Tool Code
|
Ln [*****] Rate Tooling
|
New/ Rework
|
Qty
|
|
[*****]
|
||||||||
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”) and the Special Business Provisions, BCA-MS-65530-0019, dated June 16, 2005 as amended from time to time (the "SBP") and now desire to again amend the SBP.
|
B.
|
This Amendment No. 26 incorporates the Parties’ agreement to transfer procurement responsibility for certain Partner Managed Inventory (“PMI”) parts from Boeing to Spirit as specified below.
|
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 adding a new SBP Section 12.8.6 “Partner Managed Inventory De-Implementation”, attached hereto as Exhibit 3.
|
4.
|
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 4.
|
5.
|
The SBP is hereby amended by deleting SBP Attachment 27 “Risk Sharing” Section II “Baseline Prices and Risk Sharing Control Limits” Subsection A and replacing it in its entirety with a new SBP Attachment 27 Section II Subsection A, attached hereto as Exhibit 5.
|
6.
|
The SBP is hereby amended by adding a new SBP Attachment 31 “Partner Managed Inventory De-Implementation”, attached hereto as Exhibit 6.
|
7.
|
Entire Agreement.
Except as otherwise indicated in this Amendment No. 26, all terms defined in the GTA or SBP shall have the same meanings when used in this Amendment No. 26. This Amendment No. 26 constitutes the complete and exclusive agreement between the Parties with respect to the subject matter of this Amendment No. 26, and this Amendment No. 26 supersedes all previous agreements between the Parties relating to the subject matter of Amendment No. 26, 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. 26.
|
The Boeing Company
|
|
Spirit AeroSystems Inc.
|
||
Acting by and through its division
|
|
|
|
|
Boeing Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ronald Satterthwaite
|
|
By:
|
/s/ Leanna Hampton
|
Name:
|
Ronald Satterthwaite
|
|
Name:
|
Leanna Hampton
|
Title:
|
Procurement Agent
|
|
Title:
|
Contract Administrator
|
Date:
|
December 14, 2017
|
|
Date:
|
December 14, 2017
|
|
|
|
|
|
|
|
|
|
|
Number
|
Description
|
Date
|
Approval
|
23
|
Annual Price Adjustment thru Line Number [*****]
1.
Updated SBP Attachments 1, 2, and 27
Boeing Performed Rework and Repair
1.
Updated SBP Attachment 16 Table A.1
|
8/3/15
|
J. Loomis
L. Hampton
|
24
|
Annual Price Adjustment thru Line Number [*****]
1.
Updated SBP Attachments 1, 2, 3, and 27
Boeing Performed Rework and Repair
1.
Updated SBP Attachment 16 Table A.1
|
12/16/15
|
J. Loomis
L. Hampton |
25
|
MOU Dated 8-1-17 (Collective Resolution)
1.
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
2.
Updated SBP Attachments 1, 2, 3, 7, 10, 16, 26, 27, 28, and 30
Annual Shipset Price Adjustment thru Line Number [*****]
1.
Updated SBP Attachments 1, 2, and 27
Annual Shipset Price Adjustment thru Line Number [*****]
1.
Updated SBP Attachments 1 and 2
|
9/22/17
|
J. Will
M. Kurimsky
|
26
|
Boeing Performed Rework and Repair
1.
Updated SBP Attachment 16 Table A.1
PMI De-Implementation
1.
Updated SBP Attachments 1 and 27
2.
Added SBP Section 12.8.6 and Attachment 31
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12/14/17
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R. Satterthwaite
L. Hampton
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I.
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Baseline Prices and Risk Sharing Control Limits
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A.
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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:
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787-8 Model
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(A)
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(B)
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(C)
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Attachment 1 Price
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Upper Limit
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Lower Limit
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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[*****]
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[*****]
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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787-9 Model
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(A)
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(B)
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(C)
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Attachment 1 Price
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Upper Limit
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Lower Limit
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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[*****]
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[*****]
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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787-10 Model
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(A)
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(B)
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(C)
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Attachment 1 Price less Attachment 31 Exhibit B Recurring Supplemental Payment
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Upper Limit
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Lower Limit
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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Shipsets [*****] - [*****]
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$[*****]
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[*****]
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[*****]
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Shipsets [*****] - [*****]
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$[*****]
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+[*****]%
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-[*****]%
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I.
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Spirit shall directly contract with sub-tier suppliers for the provision of certain Partner Managed Inventory (“PMI”) parts (identified in Exhibit A hereto) and any part rolls thereto (“Parts”), which are currently purchased by Boeing, and Boeing shall pay Spirit a supplemental amount for these Parts, all as further specified herein. Such supplemental amounts, which are set forth in Exhibit B hereto, are incorporated into the SBP Attachment 1 pricing and shall be subject to adjustment to reflect any changes pertaining to the design or specifications of the Parts.
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II.
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The procurement responsibility for the Parts shall be transferred from Boeing to Spirit at the incorporation points identified in Exhibit A hereto. The Parties have mutually agreed on the initial sub-tier suppliers of the Parts as set forth in Exhibit A.
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III.
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Boeing shall retain engineering responsibility for the Parts. The Parties acknowledge that the Parts are build-to-print to Boeing’s design specifications and drawings. Spirit and its suppliers shall have no design responsibility for the Parts.
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IV.
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Upon mutual agreement, the Parties may amend this SBP Attachment 31 to modify the Parts listing and supplemental amounts.
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V.
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The provisions set forth in SBP Section 3.3.4 “Tooling” shall apply to this SBP Attachment 31. For the avoidance of doubt, except as provided in GTA Section 7.2.E “Termination Instructions”, GTA Section 8.2.F “Tooling and Other Materials”, and GTA Section 9.3 “Transfer of Certain Property”, Spirit or its subcontractors shall retain legal title to the Tooling used to manufacture the Parts.
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VI.
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For purposes of calculating the annual risk sharing supplemental payment or credit as provided in SBP Attachment 27, the supplemental amounts set forth in Exhibit B hereto shall be excluded when calculating the average Shipset Price and control limits as set forth in SBP Attachment 27 Section II.A and the amounts set forth in Exhibit C hereto shall be excluded when calculating Spirit’s average Shipset cost.
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Part Number
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Quantity per Shipset
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Models
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Incorp. LN
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Initial
Supplier
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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Work Package
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Line Numbers
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Recurring Supplemental Payment
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||
787-8
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787-9
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787-10
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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Work Package
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Line Numbers
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Established Transfer Cost
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787-8
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787-9
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787-10
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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Spirit Holdings
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||||||||||||||||||
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Twelve Months Ended
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||||||||||||||||||
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December 31, 2017
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December 31, 2016
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December 31, 2015
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December 31, 2014
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December 31, 2013
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||||||||||
Earnings:
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||||||||||
Income (loss) before income taxes and equity in net income (loss) of affiliates
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$
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534.6
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$
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660.5
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$
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808.2
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$
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262.4
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$
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(430.8
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)
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Add: Fixed charges (from below)
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52.3
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69.2
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64.6
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99.0
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81.9
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|||||
Add: Amortization of capitalized interest
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5.1
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4.8
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4.2
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4.1
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3.8
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Add: Distributed income of equity investee
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0.3
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1.2
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1.2
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0.5
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0.5
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Subtract: Capitalized interest expense
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5.9
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6.7
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6.0
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4.0
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5.8
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|||||
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$
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586.4
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$
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729.0
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$
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872.2
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$
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362.0
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$
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(350.4
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)
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Fixed charges:
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||||||||||
Interest expense (including amortization of debt issuance costs, debt discounts and premiums)
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$
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41.7
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$
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57.3
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$
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52.7
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$
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88.1
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$
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70.1
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Add: Capitalized interest expense
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5.9
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6.7
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6.0
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4.0
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5.8
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|||||
Add: Portion of rentals representing interest (1/3 of Operating Lease Payments)
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4.7
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5.1
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5.9
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6.9
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6.0
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|||||
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$
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52.3
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$
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69.1
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$
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64.6
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$
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99.0
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$
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81.9
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|
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||||||||||
Ratio of earnings to fixed charges
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11.2
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10.5
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13.5
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3.7
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(4.3
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)
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|||||
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(1)
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Registration Statement (Form S-3 No. 333-196516) of Spirit Aerosystems Holdings, Inc. and
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(2)
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Registration Statement (Form S-8 Nos. 333-146112 and 333-195790);
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/s/ Thomas C. Gentile III
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Thomas C. Gentile III
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President and Chief Executive Officer
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Date: February 9, 2018
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/s/ Sanjay Kapoor
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Sanjay Kapoor
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Executive Vice President and Chief Financial Officer
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Date: February 9, 2018
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/s/ Thomas C. Gentile III
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Thomas C. Gentile III
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President and Chief Executive Officer
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Date: February 9, 2018
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/s/ Sanjay Kapoor
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Sanjay Kapoor
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Executive Vice President and Chief Financial Officer
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Date: February 9, 2018
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