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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, 2018
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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
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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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Segment
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Percentage of Net Revenues for the Twelve Months Ended December 31, 2018
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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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55%
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Wichita, KS; Kinston, NC; St.-Nazaire, France; Subang, Malaysia
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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, A220 (formerly Bombardier CSeries)
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Wing Systems
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21%
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Tulsa and McAlester, Oklahoma; Prestwick, Scotland; Subang, Malaysia; 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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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
|
|
Description
|
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Aircraft Program
|
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
|
|
Applicable Segment
|
|
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, 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
|
|
Various
|
Fabrication
|
|
Description
|
Machine Fabrication
|
|
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
|
|
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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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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61%
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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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18%
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We have two major agreements - one expires in January 2021 and one expires in December 2024.
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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%
|
We have one major agreement expiring in September 2020.
|
•
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the destruction of or damage to our suppliers’ facilities or their distribution infrastructure;
|
•
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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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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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the failure of essential equipment at our suppliers’ plants;
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•
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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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•
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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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•
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imposition of tariffs and similar import limitations on us or our suppliers;
|
•
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contractual amendments and disputes with our suppliers; and
|
•
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the inability of our suppliers to perform as a result of global economic conditions or otherwise.
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•
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demands on management related to the increase in size after the transaction;
|
•
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the diversion of management’s attention from the management of daily operations to the integration of operations;
|
•
|
difficulties in the assimilation and retention of employees;
|
•
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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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difficulties combining operations that use different currencies or operate under different legal structures and laws;
|
•
|
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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compliance with applicable competition laws;
|
•
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compliance with 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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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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we may not obtain required regulatory approvals or receipt of regulatory approvals may take longer than expected or may impose conditions to the proposed acquisition that are not presently anticipated or cannot be met;
|
•
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conditions to the proposed acquisition may not be fulfilled in a timely manner or at all; or
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•
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unforeseen events and those beyond our control.
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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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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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the expenditure of substantial legal and other fees, which may be incurred whether or not a transaction is consummated.
|
•
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changes in regulatory requirements;
|
•
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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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fluctuations in foreign currency exchange rates;
|
•
|
the complexity and necessity of using foreign representatives and consultants;
|
•
|
uncertainties and restrictions concerning the availability of funding credit or guarantees;
|
•
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tariffs (imposed or threatened) on imports, including tariffs imposed in a retaliatory manner on U.S. exports, embargoes, export controls, and other trade restrictions;
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•
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potential or actual withdrawal or modification of international trade agreements;
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•
|
modifications to sanctions imposed on other countries;
|
•
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changes to immigration policies that may present risks to companies that rely on foreign employees or contractors;
|
•
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differences in business practices;
|
•
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the difficulty of management and operation of an enterprise spread over various countries;
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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
|
•
|
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.
|
Interest Coverage Ratio
|
|
Shall not be less than 4.0:1.0
|
Total Leverage Ratio
|
|
Shall not exceed 3.5:1.0
|
•
|
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
|
•
|
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.
|
Location
|
|
Primary Use
|
|
Approximate
Square Footage
|
|
Owned/Leased
|
United States
|
|
|
|
|
|
|
Wichita, Kansas
(1)
|
|
Primary Manufacturing
|
|
12.0 million
|
|
Owned/Leased
|
|
|
Facility/Offices/Warehouse
|
|
|
|
|
Tulsa, Oklahoma
|
|
Manufacturing Facility
|
|
1.75 million
|
|
Leased
|
McAlester, Oklahoma
|
|
Manufacturing Facility
|
|
142,000
|
|
Owned
|
Kinston, North Carolina
|
|
Primary Manufacturing/Office/Warehouse
|
|
851,000
|
|
Leased
|
United Kingdom
|
|
|
|
|
|
|
Prestwick, Scotland
|
|
Manufacturing Facility
|
|
974,000
|
|
Owned
|
Malaysia
|
|
|
|
|
|
|
Subang, Malaysia
|
|
Manufacturing
|
|
386,000
|
|
Owned/Leased
|
France
|
|
|
|
|
|
|
Saint-Nazaire, France
|
|
Primary Manufacturing/Office
|
|
58,800
|
|
Leased
|
(1)
|
90% of the Wichita facility is owned.
|
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))
|
|
|||
|
(a)
|
|
(b)
|
|
|
|
|||
Restricted Stock Awards
|
|
|
|
|
|
|
|||
Equity compensation plans approved by security holders
(1)(2)
|
410,655
|
|
|
N/A
|
|
|
5,632,192
|
|
|
Equity compensation plans not approved by security holders
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
410,655
|
|
|
—
|
|
|
5,632,192
|
|
|
(1)
|
On April 30, 2014, the Company’s Board of Directors approved the Omnibus Incentive Plan of 2014 (as amended, the “Omnibus Plan”). The Omnibus Plan was approved by the Company’s stockholders at the Company’s 2014 annual stockholder’s meeting. The Omnibus Plan provides for the issuance of incentive awards to officers, directors, employees, and consultants in the form of restricted stock, restricted stock units, stock appreciation rights, and other equity compensation, in lieu of cash compensation.
|
(2)
|
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
12/31/13
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
||||||
Spirit AeroSystems Holdings, Inc
.
|
100
|
|
|
126.29
|
|
|
146.92
|
|
|
171.51
|
|
|
257.97
|
|
|
214.33
|
|
S&P 500 Index
|
100
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
S&P 500 Aerospace & Defense Index
|
100
|
|
|
111.43
|
|
|
117.49
|
|
|
139.70
|
|
|
197.50
|
|
|
181.56
|
|
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 28, 2018 - November 1, 2018
|
510,160
|
|
|
N/A
(3)
|
|
|
510,160
|
|
|
|
$1,000.0
|
|
November 2, 2018 - November 29, 2018
|
584,242
|
|
|
N/A
(3)
|
|
|
584,242
|
|
|
|
$1,000.0
|
|
November 30, 2018 - December 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$1,000.0
|
|
Total
|
1,094,402
|
|
|
—
|
|
|
1,094,402
|
|
|
|
$1,000.0
|
|
(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 1, 2018 was the last day of our October 2018 fiscal month.
|
(2)
|
In May 2018, the Company entered into two Accelerated Share Repurchase Agreements (the “ASRs”) to repurchase in total $725.0 million of Common Stock. After repurchases made under the ASRs, the Company had approximately $200.0 million remaining in its share repurchase program. On October 24, 2018, the Board of Directors approved an increase to its existing share repurchase program of approximately $800.0 million, resulting in total program authorization of $1.0 billion.
|
(3)
|
Shares received in October and November 2018, respectively, upon settlement of the ASRs, which were determined by the average daily volume weighted-average share price of Common Stock during the term of the ASRs. Final average price of all the shares delivered from the ASRs was $86.46.
|
|
Spirit Holdings
|
||||||||||||||||||
|
Twelve Months Ended
|
||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
|
(Dollars in millions, except per share data)
|
||||||||||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
$
|
7,222.0
|
|
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
$
|
6,643.9
|
|
|
$
|
6,799.2
|
|
Cost of sales
(1)
|
6,135.9
|
|
|
6,195.3
|
|
|
5,800.3
|
|
|
5,532.3
|
|
|
5,711.0
|
|
|||||
Selling, general and administrative expenses
(2)
|
210.4
|
|
|
204.7
|
|
|
230.9
|
|
|
220.8
|
|
|
233.8
|
|
|||||
Impact of severe weather events
|
(10.0
|
)
|
|
19.9
|
|
|
12.1
|
|
|
—
|
|
|
—
|
|
|||||
Research and development
|
42.5
|
|
|
31.2
|
|
|
23.8
|
|
|
27.8
|
|
|
29.3
|
|
|||||
Loss on divestiture of programs
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
471.1
|
|
|||||
Operating income
|
843.2
|
|
|
531.9
|
|
|
725.8
|
|
|
863.0
|
|
|
354.0
|
|
|||||
Interest expense and financing fee amortization
|
(80.0
|
)
|
|
(41.7
|
)
|
|
(57.3
|
)
|
|
(52.7
|
)
|
|
(88.1
|
)
|
|||||
Other (expense) income, net
|
(7.0
|
)
|
|
44.4
|
|
|
(8.0
|
)
|
|
(2.2
|
)
|
|
(3.5
|
)
|
|||||
Income before income taxes and equity in net income of affiliates
|
756.2
|
|
|
534.6
|
|
|
660.5
|
|
|
808.1
|
|
|
262.4
|
|
|||||
Income tax (provision) benefit
|
(139.8
|
)
|
|
(180.0
|
)
|
|
(192.1
|
)
|
|
(20.6
|
)
|
|
95.9
|
|
|||||
Equity in net income of affiliates
|
0.6
|
|
|
0.3
|
|
|
1.3
|
|
|
1.2
|
|
|
0.5
|
|
|||||
Net income
|
$
|
617.0
|
|
|
$
|
354.9
|
|
|
$
|
469.7
|
|
|
$
|
788.7
|
|
|
$
|
358.8
|
|
Net income per share, basic
|
$
|
5.71
|
|
|
$
|
3.04
|
|
|
$
|
3.72
|
|
|
$
|
5.69
|
|
|
$
|
2.55
|
|
Shares used in per share calculation, basic
|
108.0
|
|
|
116.8
|
|
|
126.1
|
|
|
138.4
|
|
|
140.0
|
|
|||||
Net income per share, diluted
|
$
|
5.65
|
|
|
$
|
3.01
|
|
|
$
|
3.70
|
|
|
$
|
5.66
|
|
|
$
|
2.53
|
|
Shares used in per share calculation, diluted
|
109.1
|
|
|
117.9
|
|
|
127.0
|
|
|
139.4
|
|
|
141.6
|
|
|||||
Dividends declared per common share
|
$
|
0.46
|
|
|
$
|
0.40
|
|
|
$
|
0.10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Included in 2018 costs of sales are net favorable changes in estimates on loss programs of
$3.9 million
. 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 cost of sales are net favorable changes in estimates on loss programs totaling $26.1 million. Includes cumulative catch-up adjustments of $(3.8) million, $31.2 million, $36.6 million, $41.6 million, and $60.4 million for periods prior to the twelve months ended December 31, 2018, 2017, 2016, 2015, and 2014, respectively.
|
(2)
|
Includes non-cash stock compensation expenses of
$27.4 million
,
$22.1 million
,
$42.5 million
, $26.0 million, and $16.4 million for the respective periods starting with the twelve months ended December 31, 2018, 2017, 2016, 2015, and 2014, respectively.
|
(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 Sub”), 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 Sub. 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.
|
|
Spirit Holdings
|
||||||||||||||||||
|
Twelve Months Ended
|
||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flow provided by operating activities
|
$
|
769.9
|
|
|
$
|
573.7
|
|
|
$
|
716.9
|
|
|
$
|
1,289.7
|
|
|
$
|
361.6
|
|
Cash flow used in investing activities
|
$
|
(267.8
|
)
|
|
$
|
(272.8
|
)
|
|
$
|
(253.4
|
)
|
|
$
|
(357.4
|
)
|
|
$
|
(239.6
|
)
|
Cash flow used in financing activities
|
$
|
(153.5
|
)
|
|
$
|
(578.7
|
)
|
|
$
|
(718.7
|
)
|
|
$
|
(351.1
|
)
|
|
$
|
(164.2
|
)
|
Capital expenditures
|
$
|
(271.2
|
)
|
|
$
|
(273.1
|
)
|
|
$
|
(254.0
|
)
|
|
$
|
(360.1
|
)
|
|
$
|
(220.2
|
)
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
773.6
|
|
|
$
|
423.3
|
|
|
$
|
697.7
|
|
|
$
|
957.3
|
|
|
$
|
377.9
|
|
Accounts receivable, net
|
$
|
545.1
|
|
|
$
|
722.2
|
|
|
$
|
660.5
|
|
|
$
|
537.0
|
|
|
$
|
605.6
|
|
Inventories, net
|
$
|
1,012.6
|
|
|
$
|
1,449.9
|
|
|
$
|
1,515.3
|
|
|
$
|
1,774.4
|
|
|
$
|
1,753.0
|
|
Property, plant & equipment, net
|
$
|
2,167.6
|
|
|
$
|
2,105.3
|
|
|
$
|
1,991.6
|
|
|
$
|
1,950.7
|
|
|
$
|
1,783.6
|
|
Total assets
|
$
|
5,685.9
|
|
|
$
|
5,267.8
|
|
|
$
|
5,405.2
|
|
|
$
|
5,764.5
|
|
|
$
|
5,162.7
|
|
Total debt
|
$
|
1,895.4
|
|
|
$
|
1,151.0
|
|
|
$
|
1,086.7
|
|
|
$
|
1,120.2
|
|
|
$
|
1,153.5
|
|
Long-term debt
|
$
|
1,864.0
|
|
|
$
|
1,119.9
|
|
|
$
|
1,060.0
|
|
|
$
|
1,085.3
|
|
|
$
|
1,144.1
|
|
Total equity
|
$
|
1,238.1
|
|
|
$
|
1,801.5
|
|
|
$
|
1,928.8
|
|
|
$
|
2,120.0
|
|
|
$
|
1,622.0
|
|
|
Twelve Months Ended
|
||||||||||
|
December 31, 2018
(1)
|
|
December 31, 2017
(1)(2)
|
|
December 31, 2016
(2)
|
||||||
|
($ in millions)
|
||||||||||
Net revenues
|
$
|
7,222.0
|
|
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
Cost of sales
|
6,135.9
|
|
|
6,195.3
|
|
|
5,800.3
|
|
|||
Gross profit
|
1,086.1
|
|
|
787.7
|
|
|
992.6
|
|
|||
Selling, general and administrative expenses
|
210.4
|
|
|
204.7
|
|
|
230.9
|
|
|||
Impact of severe weather event
|
(10.0
|
)
|
|
19.9
|
|
|
12.1
|
|
|||
Research and development
|
42.5
|
|
|
31.2
|
|
|
23.8
|
|
|||
Operating income
|
843.2
|
|
|
531.9
|
|
|
725.8
|
|
|||
Interest expense and financing fee amortization
|
(80.0
|
)
|
|
(41.7
|
)
|
|
(57.3
|
)
|
|||
Other (expense) income, net
|
(7.0
|
)
|
|
44.4
|
|
|
(8.0
|
)
|
|||
Income before income taxes and equity in net income of affiliate
|
756.2
|
|
|
534.6
|
|
|
660.5
|
|
|||
Income tax provision
|
(139.8
|
)
|
|
(180.0
|
)
|
|
(192.1
|
)
|
|||
Income before equity in net income of affiliate
|
616.4
|
|
|
354.6
|
|
|
468.4
|
|
|||
Equity in net income of affiliate
|
0.6
|
|
|
0.3
|
|
|
1.3
|
|
|||
Net income
|
$
|
617.0
|
|
|
$
|
354.9
|
|
|
$
|
469.7
|
|
(1)
|
See “Twelve Months Ended December 31, 2018 as Compared to Twelve Months Ended December 31, 2017” for detailed discussion of operating data.
|
(2)
|
See “Twelve Months Ended December 31, 2017 as Compared to Twelve Months Ended December 31, 2016” for detailed discussion of operating data.
|
|
Twelve Months Ended
|
|||||||
Model
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2016
|
|||
B737
|
605
|
|
|
532
|
|
|
500
|
|
B747
|
6
|
|
|
6
|
|
|
8
|
|
B767
|
30
|
|
|
28
|
|
|
25
|
|
B777
|
44
|
|
|
70
|
|
|
96
|
|
B787
|
143
|
|
|
136
|
|
|
127
|
|
Total Boeing
|
828
|
|
|
772
|
|
|
756
|
|
A220
(1)
|
12
|
|
|
—
|
|
|
—
|
|
A320 Family
|
657
|
|
|
608
|
|
|
574
|
|
A330
|
62
|
|
|
80
|
|
|
74
|
|
A350
|
98
|
|
|
90
|
|
|
69
|
|
A380
|
6
|
|
|
13
|
|
|
22
|
|
Total Airbus
|
835
|
|
|
791
|
|
|
739
|
|
Business and Regional Jets
(1)
|
71
|
|
|
88
|
|
|
88
|
|
Total
|
1,734
|
|
|
1,651
|
|
|
1,583
|
|
(1)
|
Airbus acquired majority ownership in the C-Series program (subsequently renamed as the A220 program) in July 2018; all C-Series deliveries prior to the third quarter of 2018 are included in Business and Regional Jets and all A220 deliveries subsequent to the acquisition are included in A220.
|
|
Twelve Months Ended
|
||||||||||
Prime Customer
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2016
|
||||||
|
($ in millions)
|
||||||||||
Boeing
|
$
|
5,677.7
|
|
|
$
|
5,527.5
|
|
|
$
|
5,502.6
|
|
Airbus
|
1,180.8
|
|
|
1,123.5
|
|
|
992.7
|
|
|||
Other
|
363.5
|
|
|
332.0
|
|
|
297.6
|
|
|||
Total net revenues
|
$
|
7,222.0
|
|
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
|
Twelve Months Ended
|
||||||||||
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2016
|
||||||
|
($ in millions)
|
||||||||||
Segment Revenues
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
4,000.8
|
|
|
$
|
3,730.8
|
|
|
$
|
3,498.8
|
|
Propulsion Systems
|
1,702.5
|
|
|
1,666.2
|
|
|
1,777.3
|
|
|||
Wing Systems
|
1,513.0
|
|
|
1,578.8
|
|
|
1,508.7
|
|
|||
All Other
|
5.7
|
|
|
7.2
|
|
|
8.1
|
|
|||
|
$
|
7,222.0
|
|
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
Segment Operating Income
(1, 2)
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
576.1
|
|
|
$
|
329.6
|
|
|
$
|
470.4
|
|
Propulsion Systems
|
283.5
|
|
|
267.7
|
|
|
326.7
|
|
|||
Wing Systems
|
226.4
|
|
|
205.1
|
|
|
224.3
|
|
|||
All Other
|
0.3
|
|
|
2.0
|
|
|
1.6
|
|
|||
|
1,086.3
|
|
|
804.4
|
|
|
1,023.0
|
|
|||
Corporate SG&A
(2)
|
(210.4
|
)
|
|
(204.7
|
)
|
|
(230.9
|
)
|
|||
Unallocated impact of severe weather event
|
10.0
|
|
|
(19.9
|
)
|
|
(12.1
|
)
|
|||
Research and development
|
(42.5
|
)
|
|
(31.2
|
)
|
|
(23.8
|
)
|
|||
Unallocated cost of sales
(3)
|
(0.2
|
)
|
|
(16.7
|
)
|
|
(30.4
|
)
|
|||
Total operating income
|
$
|
843.2
|
|
|
$
|
531.9
|
|
|
$
|
725.8
|
|
(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, 2018, 2017, and 2016 are further detailed in the segment discussions below and in Note 5 to the Consolidated Financial Statements,
Changes in Estimates
.
|
(2)
|
Prior period information has been reclassified as a result of the Company's adoption of ASU 2017-07 on a retrospective basis in 2018. In accordance with the adoption of this guidance, prior year amounts related to the components of net periodic pension and postretirement benefit cost other than service costs have been reclassified from cost of sales and selling, general, and administrative expense to other income (expense) within the consolidated statement of operation for all periods presented. Accordingly, expenses of $18.1 million, $7.4 million, and $7.3 million attributable to the Fuselage Systems segment, Propulsion Systems segment, and Wing Systems segment, respectively, were reclassified into segment operating income for the twelve months ended December 31, 2017, and expenses of $1.8 million, $0.8 million, and $0.7 million attributable to the Fuselage Systems segment, Propulsion Systems segment, and Wing Systems segment, respectively, were reclassified out of segment operating income for the twelve months ended December 31, 2016.
|
(3)
|
For 2018, includes charges of $1.1 million related to warranty reserves. 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 $7.9 million for the settlement of historical claims with suppliers.
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
|
($ in millions)
|
||||||||||
Net income
|
$
|
617.0
|
|
|
$
|
354.9
|
|
|
$
|
469.7
|
|
Adjustments to reconcile net income
|
2.6
|
|
|
241.3
|
|
|
283.7
|
|
|||
Changes in working capital
|
150.3
|
|
|
(22.5
|
)
|
|
(36.5
|
)
|
|||
Net cash provided by operating activities
|
769.9
|
|
|
573.7
|
|
|
716.9
|
|
|||
Net cash used in investing activities
|
(267.8
|
)
|
|
(272.8
|
)
|
|
(253.4
|
)
|
|||
Net cash used in financing activities
|
(153.5
|
)
|
|
(578.7
|
)
|
|
(718.7
|
)
|
|||
Effect of exchange rate change on cash and cash equivalents
|
—
|
|
|
5.6
|
|
|
(4.4
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash for the period
|
348.6
|
|
|
(272.2
|
)
|
|
(259.6
|
)
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
445.5
|
|
|
717.7
|
|
|
977.3
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
794.1
|
|
|
$
|
445.5
|
|
|
$
|
717.7
|
|
Contractual Obligations
(
1)(2)
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and
After
|
|
Total
|
||||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||||
Principal payments on term loan
|
$
|
22.8
|
|
|
$
|
22.8
|
|
|
$
|
22.8
|
|
|
$
|
22.8
|
|
|
$
|
365.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
456.2
|
|
Interest on debt
(3)
|
21.3
|
|
|
23.3
|
|
|
22.1
|
|
|
20.7
|
|
|
12.1
|
|
|
4.0
|
|
|
33.5
|
|
|
137.0
|
|
||||||||
Long-term bonds
|
—
|
|
|
—
|
|
|
300.0
|
|
|
—
|
|
|
300.0
|
|
|
—
|
|
|
1,000.0
|
|
|
1,600.0
|
|
||||||||
Interest on long-term bonds
|
66.3
|
|
|
66.3
|
|
|
61.0
|
|
|
55.6
|
|
|
49.7
|
|
|
43.8
|
|
|
173.8
|
|
|
516.5
|
|
||||||||
Non-cancelable capital lease payments
|
8.1
|
|
|
8.5
|
|
|
8.8
|
|
|
9.0
|
|
|
8.4
|
|
|
4.8
|
|
|
51.7
|
|
|
99.3
|
|
||||||||
Non-cancelable operating lease payments
|
8.9
|
|
|
8.0
|
|
|
7.4
|
|
|
7.0
|
|
|
5.9
|
|
|
5.4
|
|
|
31.3
|
|
|
73.9
|
|
||||||||
Other
|
2.2
|
|
|
2.1
|
|
|
2.1
|
|
|
1.6
|
|
|
0.8
|
|
|
—
|
|
|
3.7
|
|
|
12.5
|
|
||||||||
Purchase obligations
(4)
|
107.2
|
|
|
6.8
|
|
|
0.8
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114.9
|
|
||||||||
Total
|
$
|
236.8
|
|
|
$
|
137.8
|
|
|
$
|
425.0
|
|
|
$
|
116.8
|
|
|
$
|
741.9
|
|
|
$
|
58.0
|
|
|
$
|
1,294.0
|
|
|
$
|
3,010.3
|
|
(1)
|
Does not include repayment of $233.9 million of B787 advances or deferred revenue credits to Boeing. See Note 12 to the Consolidated Financial Statements,
Advance Payments
.
|
(2)
|
The
$7.2 million
of unrecognized tax benefit liability for uncertain tax positions has been excluded from this table due to uncertainty involving the ultimate settlement period. See Note 19 to the Consolidated Financial Statements,
Income Taxes
.
|
(3)
|
Interest on our Term Loan was calculated for all years using the three-month LIBOR yield curve as of December 31, 2018 plus applicable margin.
|
(4)
|
Purchase obligations represent computing, tooling, and property, plant and equipment commitments as of December 31, 2018.
|
|
Page
|
Consolidated Financial Statements of Spirit AeroSystems Holdings, Inc. for the periods ended December 31, 2018, December 2017, and December 31, 2016
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2016 |
||||||
|
($ in millions, except per share data)
|
||||||||||
Net Revenues
|
$
|
7,222.0
|
|
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
Operating costs and expenses
|
|
|
|
|
|
||||||
Cost of sales
|
6,135.9
|
|
|
6,195.3
|
|
|
5,800.3
|
|
|||
Selling, general and administrative
|
210.4
|
|
|
204.7
|
|
|
230.9
|
|
|||
Impact of severe weather event
|
(10.0
|
)
|
|
19.9
|
|
|
12.1
|
|
|||
Research and development
|
42.5
|
|
|
31.2
|
|
|
23.8
|
|
|||
Total operating costs and expenses
|
6,378.8
|
|
|
6,451.1
|
|
|
6,067.1
|
|
|||
Operating income
|
843.2
|
|
|
531.9
|
|
|
725.8
|
|
|||
Interest expense and financing fee amortization
|
(80.0
|
)
|
|
(41.7
|
)
|
|
(57.3
|
)
|
|||
Other income (expense), net
|
(7.0
|
)
|
|
44.4
|
|
|
(8.0
|
)
|
|||
Income before income taxes and equity in net income of affiliates
|
756.2
|
|
|
534.6
|
|
|
660.5
|
|
|||
Income tax provision
|
(139.8
|
)
|
|
(180.0
|
)
|
|
(192.1
|
)
|
|||
Income before equity in net income of affiliates
|
616.4
|
|
|
354.6
|
|
|
468.4
|
|
|||
Equity in net income of affiliates
|
0.6
|
|
|
0.3
|
|
|
1.3
|
|
|||
Net income
|
$
|
617.0
|
|
|
$
|
354.9
|
|
|
$
|
469.7
|
|
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
5.71
|
|
|
$
|
3.04
|
|
|
$
|
3.72
|
|
Diluted
|
$
|
5.65
|
|
|
$
|
3.01
|
|
|
$
|
3.70
|
|
Dividends declared per common share
|
$
|
0.46
|
|
|
$
|
0.40
|
|
|
$
|
0.10
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2016 |
||||||
|
($ in millions)
|
||||||||||
Net income
|
$
|
617.0
|
|
|
$
|
354.9
|
|
|
$
|
469.7
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Pension, SERP, and Retiree medical adjustments, net of tax effect of $12.7, ($6.0), and ($20.8), respectively
|
(41.0
|
)
|
|
19.8
|
|
|
36.9
|
|
|||
Unrealized foreign exchange income (loss) on intercompany loan, net of tax effect of $0.8, ($1.2), and $2.5, respectively
|
(3.2
|
)
|
|
4.9
|
|
|
(9.9
|
)
|
|||
Foreign currency translation adjustments
|
(23.9
|
)
|
|
33.7
|
|
|
(53.4
|
)
|
|||
Total other comprehensive income (loss)
|
(68.1
|
)
|
|
58.4
|
|
|
(26.4
|
)
|
|||
Total comprehensive income
|
$
|
548.9
|
|
|
$
|
413.3
|
|
|
$
|
443.3
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
($ in millions)
|
||||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
773.6
|
|
|
$
|
423.3
|
|
Restricted cash
|
0.3
|
|
|
2.2
|
|
||
Accounts receivable, net
|
545.1
|
|
|
722.2
|
|
||
Contract assets, short-term
|
469.4
|
|
|
—
|
|
||
Inventory, net
|
1,012.6
|
|
|
1,449.9
|
|
||
Other current assets
|
48.3
|
|
|
53.5
|
|
||
Total current assets
|
2,849.3
|
|
|
2,651.1
|
|
||
Property, plant and equipment, net
|
2,167.6
|
|
|
2,105.3
|
|
||
Contract assets, long-term
|
54.1
|
|
|
—
|
|
||
Pension assets
|
326.7
|
|
|
347.1
|
|
||
Other assets
|
288.2
|
|
|
164.3
|
|
||
Total assets
|
$
|
5,685.9
|
|
|
$
|
5,267.8
|
|
Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
902.6
|
|
|
$
|
693.1
|
|
Accrued expenses
|
313.1
|
|
|
269.3
|
|
||
Profit sharing
|
68.3
|
|
|
109.5
|
|
||
Current portion of long-term debt
|
31.4
|
|
|
31.1
|
|
||
Advance payments, short-term
|
2.2
|
|
|
100.0
|
|
||
Contract liabilities, short-term
|
157.9
|
|
|
—
|
|
||
Forward loss provision, short-term
|
12.4
|
|
|
—
|
|
||
Deferred revenue and other deferred credits, short-term
|
20.0
|
|
|
64.6
|
|
||
Deferred grant income liability — current
|
16.0
|
|
|
21.6
|
|
||
Other current liabilities
|
58.2
|
|
|
331.8
|
|
||
Total current liabilities
|
1,582.1
|
|
|
1,621.0
|
|
||
Long-term debt
|
1,864.0
|
|
|
1,119.9
|
|
||
Advance payments, long-term
|
231.9
|
|
|
231.7
|
|
||
Pension/OPEB obligation
|
34.6
|
|
|
40.8
|
|
||
Contract Liabilities, long-term
|
369.8
|
|
|
—
|
|
||
Forward loss provision, long-term
|
170.6
|
|
|
—
|
|
||
Deferred revenue and other deferred credits
|
31.2
|
|
|
161.0
|
|
||
Deferred grant income liability — non-current
|
28.0
|
|
|
39.3
|
|
||
Other liabilities
|
135.6
|
|
|
252.6
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Preferred stock, par value $0.01, 10,000,000 shares authorized, no shares issued
|
—
|
|
|
—
|
|
||
Common Stock, par value $0.01, 200,000,000 shares authorized, 105,461,817 and 114,447,605 shares issued and outstanding, respectively
|
1.1
|
|
|
1.1
|
|
||
Additional paid-in capital
|
1,100.9
|
|
|
1,086.9
|
|
||
Accumulated other comprehensive loss
|
(196.6
|
)
|
|
(128.5
|
)
|
||
Retained earnings
|
2,713.2
|
|
|
2,422.4
|
|
||
Treasury stock, at cost (40,719,438 and 31,467,709 shares, respectively)
|
(2,381.0
|
)
|
|
(1,580.9
|
)
|
||
Total stockholders' equity
|
1,237.6
|
|
|
1,801.0
|
|
||
Noncontrolling interest
|
0.5
|
|
|
0.5
|
|
||
Total equity
|
1,238.1
|
|
|
1,801.5
|
|
||
Total liabilities and equity
|
$
|
5,685.9
|
|
|
$
|
5,267.8
|
|
|
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, 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
|
)
|
||||||
SERP shares issued
|
11,369
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares
|
(7,531,617
|
)
|
|
(0.1
|
)
|
|
0.1
|
|
|
(502.1
|
)
|
|
—
|
|
|
—
|
|
|
(502.1
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
617.0
|
|
|
617.0
|
|
||||||
Adoption of ASC 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(277.0
|
)
|
|
(277.0
|
)
|
||||||
Dividends Declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49.2
|
)
|
|
(49.2
|
)
|
||||||
Employee equity awards
|
466,719
|
|
|
—
|
|
|
27.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.4
|
|
||||||
Stock forfeitures
|
(47,962
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(177,812
|
)
|
|
—
|
|
|
(15.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15.6
|
)
|
||||||
ESPP shares issued
|
24,996
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
||||||
Treasury shares
|
(9,251,729
|
)
|
|
—
|
|
|
0.1
|
|
|
(800.1
|
)
|
|
—
|
|
|
—
|
|
|
(800.0
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68.1
|
)
|
|
—
|
|
|
(68.1
|
)
|
||||||
Balance — December 31, 2018
|
105,461,817
|
|
|
$
|
1.1
|
|
|
$
|
1,100.9
|
|
|
$
|
(2,381.0
|
)
|
|
$
|
(196.6
|
)
|
|
$
|
2,713.2
|
|
|
$
|
1,237.6
|
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
|
($ in millions)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
617.0
|
|
|
$
|
354.9
|
|
|
$
|
469.7
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||||||
Depreciation expense
|
230.6
|
|
|
214.1
|
|
|
208.6
|
|
|||
Amortization expense
|
0.4
|
|
|
0.2
|
|
|
0.2
|
|
|||
Amortization of deferred financing fees
|
17.9
|
|
|
3.4
|
|
|
19.3
|
|
|||
Accretion of customer supply agreement
|
4.1
|
|
|
2.6
|
|
|
4.9
|
|
|||
Employee stock compensation expense
|
27.4
|
|
|
22.1
|
|
|
42.5
|
|
|||
Excess tax benefit of share-based payment arrangements
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
(Gain) from derivative instruments
|
(7.2
|
)
|
|
(0.9
|
)
|
|
—
|
|
|||
(Gain) loss from foreign currency transactions
|
(0.3
|
)
|
|
(8.1
|
)
|
|
17.4
|
|
|||
Loss on impairment and disposition of assets
|
1.8
|
|
|
9.5
|
|
|
0.4
|
|
|||
Deferred taxes
|
(38.0
|
)
|
|
52.4
|
|
|
0.9
|
|
|||
Pension and other post retirement benefits, net
|
(33.4
|
)
|
|
(34.7
|
)
|
|
3.5
|
|
|||
Grant liability amortization
|
(21.6
|
)
|
|
(19.0
|
)
|
|
(11.9
|
)
|
|||
Equity in net income of affiliates
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(1.3
|
)
|
|||
Forward loss provision
|
(170.9
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(47.9
|
)
|
|
(48.5
|
)
|
|
(139.1
|
)
|
|||
Inventory, net
|
(61.3
|
)
|
|
319.6
|
|
|
207.8
|
|
|||
Contract asset
|
(8.5
|
)
|
|
—
|
|
|
—
|
|
|||
Contract liability
|
208.3
|
|
|
—
|
|
|
—
|
|
|||
Accounts payable and accrued liabilities
|
244.5
|
|
|
160.3
|
|
|
(34.3
|
)
|
|||
Profit sharing/deferred compensation
|
(40.9
|
)
|
|
7.6
|
|
|
40.5
|
|
|||
Advance payments
|
(98.3
|
)
|
|
(209.6
|
)
|
|
(144.4
|
)
|
|||
Income taxes receivable/payable
|
(28.4
|
)
|
|
25.7
|
|
|
(3.3
|
)
|
|||
Deferred revenue and other deferred credits
|
16.9
|
|
|
(231.2
|
)
|
|
12.4
|
|
|||
Other
|
(41.7
|
)
|
|
(46.4
|
)
|
|
23.0
|
|
|||
Net cash provided by operating activities
|
769.9
|
|
|
573.7
|
|
|
716.9
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
(271.2
|
)
|
|
(273.1
|
)
|
|
(254.0
|
)
|
|||
Proceeds from sale of assets
|
3.4
|
|
|
0.4
|
|
|
0.6
|
|
|||
Other
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(267.8
|
)
|
|
(272.8
|
)
|
|
(253.4
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of bonds
|
1,300.0
|
|
|
—
|
|
|
299.8
|
|
|||
Principal payments of debt
|
(6.7
|
)
|
|
(2.8
|
)
|
|
(36.4
|
)
|
|||
Payments on term loan
|
(256.3
|
)
|
|
(25.0
|
)
|
|
—
|
|
|||
Payments on bonds
|
(300.0
|
)
|
|
—
|
|
|
(300.0
|
)
|
|||
Taxes paid related to net share settlement awards
|
(15.6
|
)
|
|
(14.2
|
)
|
|
(15.2
|
)
|
|||
Proceeds from issuance of ESPP stock
|
2.1
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit of share-based payment arrangements
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Debt issuance and financing costs
|
(23.2
|
)
|
|
(0.9
|
)
|
|
(17.2
|
)
|
|||
Proceeds from financing under the New Markets Tax Credit Program
|
—
|
|
|
7.6
|
|
|
—
|
|
|||
Purchase of treasury stock
|
(805.8
|
)
|
|
(496.3
|
)
|
|
(649.6
|
)
|
|||
Dividends paid
|
(48.0
|
)
|
|
(47.1
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(153.5
|
)
|
|
(578.7
|
)
|
|
(718.7
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
5.6
|
|
|
(4.4
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash for the period
|
348.6
|
|
|
(272.2
|
)
|
|
(259.6
|
)
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
445.5
|
|
|
717.7
|
|
|
977.3
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
794.1
|
|
|
$
|
445.5
|
|
|
$
|
717.7
|
|
Supplemental information
|
|
|
|
|
|
||||||
Interest paid
|
$
|
70.4
|
|
|
$
|
43.6
|
|
|
$
|
45.2
|
|
Income taxes paid
|
$
|
202.3
|
|
|
$
|
101.9
|
|
|
$
|
191.4
|
|
Property acquired through capital leases
|
$
|
26.8
|
|
|
$
|
29.3
|
|
|
$
|
1.8
|
|
|
For the Twelve
Months Ended |
||||||||||
|
As Reported
|
|
Impact of Adoption of
|
|
As Adjusted
|
||||||
|
December 31,
2018 |
|
ASC Topic 606
|
|
December 31,
2018 |
||||||
Revenue
|
$
|
7,222.0
|
|
|
133.8
|
|
|
$
|
7,355.8
|
|
|
Cost of sales
|
6,135.9
|
|
|
277.5
|
|
|
6,413.4
|
|
|||
Income tax provision
|
(139.8
|
)
|
|
32.3
|
|
|
(107.5
|
)
|
|||
Net income
|
617.0
|
|
|
(111.5
|
)
|
|
505.5
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
5.71
|
|
|
$
|
(1.03
|
)
|
|
$
|
4.68
|
|
Diluted
|
$
|
5.65
|
|
|
$
|
(1.02
|
)
|
|
$
|
4.63
|
|
|
As Reported
|
|
Impact of Adoption of
|
|
As Adjusted
|
||||||
|
December 31,
2018 |
|
ASC Topic 606
|
|
December 31,
2018 |
||||||
Assets
|
|
|
|
|
|
|
|
||||
Accounts receivable, net
|
$
|
545.1
|
|
|
$
|
102.8
|
|
|
$
|
647.9
|
|
Contract assets, short-term
|
469.4
|
|
|
(469.4
|
)
|
|
—
|
|
|||
Inventory, net
|
1,012.6
|
|
|
378.9
|
|
|
1,391.5
|
|
|||
Other current assets
|
48.3
|
|
|
41.7
|
|
|
90.0
|
|
|||
Contract assets, long-term
|
54.1
|
|
|
(54.1
|
)
|
|
—
|
|
|||
Other assets
|
288.2
|
|
|
(70.5
|
)
|
|
217.7
|
|
|||
Total assets
|
5,685.9
|
|
|
(70.6
|
)
|
|
5,615.3
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
||||
Accrued expenses
|
313.1
|
|
|
(5.8
|
)
|
|
307.3
|
|
|||
Contract liabilities, short-term
|
157.9
|
|
|
(157.9
|
)
|
|
—
|
|
|||
Forward loss provision, short-term
|
12.4
|
|
|
(12.4
|
)
|
|
—
|
|
|||
Deferred revenue and other deferred credits, short-term
|
20.0
|
|
|
130.3
|
|
|
150.3
|
|
|||
Other current liabilities
|
58.2
|
|
|
259.8
|
|
|
318.0
|
|
|||
Contract liabilities, long-term
|
369.8
|
|
|
(369.8
|
)
|
|
—
|
|
|||
Forward loss provision, long-term
|
170.6
|
|
|
(170.6
|
)
|
|
—
|
|
|||
Deferred revenue and other deferred credits
|
31.2
|
|
|
93.6
|
|
|
124.8
|
|
|||
Stockholders' Equity
|
|
|
|
|
|
|
|
||||
Accumulated other comprehensive loss
|
(196.6
|
)
|
|
(3.4
|
)
|
|
(200.0
|
)
|
|||
Retained earnings
|
2,713.2
|
|
|
165.5
|
|
|
2,878.7
|
|
|||
Total liabilities and equity
|
5,685.9
|
|
|
(70.6
|
)
|
|
5,615.3
|
|
|
For the Twelve Months Ended
|
|
For the Twelve Months Ended
|
||||||||||||||||||||
|
As Reported
|
|
Impact of Adoption of
|
|
As Adjusted
|
|
As Reported
|
|
Impact of Adoption of
|
|
As Adjusted
|
||||||||||||
|
December 31,
2017 |
|
ASU 2017-07
|
|
December 31,
2017 |
|
December 31,
2016 |
|
ASU 2017-07
|
|
December 31,
2016 |
||||||||||||
Cost of sales
|
$
|
6,162.5
|
|
|
$
|
32.8
|
|
|
$
|
6,195.3
|
|
|
$
|
5,803.6
|
|
|
$
|
(3.3
|
)
|
|
$
|
5,800.3
|
|
Selling, general and administrative
|
200.3
|
|
|
4.4
|
|
|
204.7
|
|
|
228.3
|
|
|
2.6
|
|
|
230.9
|
|
||||||
Other income, net
|
7.2
|
|
|
37.2
|
|
|
44.4
|
|
|
(7.3
|
)
|
|
(0.7
|
)
|
|
(8.0
|
)
|
Reconciliation of Cash, Cash Equivalents, and Restricted Cash:
|
|
|
|
||||
|
For the Twelve Months Ended
|
||||||
|
December 31,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents, beginning of the period
|
$
|
423.3
|
|
|
$
|
697.7
|
|
Restricted cash, short-term, beginning of the period
|
2.2
|
|
|
—
|
|
||
Restricted cash, long-term, beginning of the period
|
20.0
|
|
|
20.0
|
|
||
Cash, cash equivalents, and restricted cash, beginning of the period
|
$
|
445.5
|
|
|
$
|
717.7
|
|
|
|
|
|
||||
Cash and cash equivalents, end of the period
|
$
|
773.6
|
|
|
$
|
423.3
|
|
Restricted cash, short-term, end of the period
|
0.3
|
|
|
2.2
|
|
||
Restricted cash, long-term, end of the period
|
20.2
|
|
|
20.0
|
|
||
Cash, cash equivalents, and restricted cash, end of the period
|
$
|
794.1
|
|
|
$
|
445.5
|
|
|
For the Twelve Months Ended
|
||
Revenue
|
December 31,
2018 |
||
Contracts with performance obligations satisfied over time
|
$
|
5,628.5
|
|
Contracts with performance obligations satisfied at a point in time
|
1,593.5
|
|
|
Total Revenue
|
$
|
7,222.0
|
|
|
For the Twelve Months Ended
|
||
Customer
|
December 31,
2018
|
||
Boeing
|
$
|
5,677.7
|
|
Airbus
|
1,180.8
|
|
|
Other
|
363.5
|
|
|
Total net revenues
|
$
|
7,222.0
|
|
|
For the Twelve Months Ended
|
||
Location
|
December 31,
2018 |
||
United States
|
$
|
5,967.1
|
|
International
|
|
||
United Kingdom
|
763.3
|
|
|
Other
|
491.6
|
|
|
Total International
|
1,254.9
|
|
|
Total Revenue
|
$
|
7,222.0
|
|
|
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
|
Changes in Estimates
|
December 31, 2018
|
December 31, 2017
|
December 31, 2016
|
|||
(Unfavorable) Favorable Cumulative Catch-up Adjustments by Segment
|
|
|
|
|||
Fuselage
|
(5.3
|
)
|
4.0
|
|
13.6
|
|
Propulsion
|
(0.2
|
)
|
3.8
|
|
(0.4
|
)
|
Wing
|
1.7
|
|
23.4
|
|
23.4
|
|
Total (Unfavorable) Favorable Cumulative Catch-up Adjustment
|
(3.8
|
)
|
31.2
|
|
36.6
|
|
|
|
|
|
|||
(Forward Loss) and Changes in Estimates on Loss Programs by Segment
|
|
|
|
|||
Fuselage
|
3.4
|
|
(223.2
|
)
|
(133.4
|
)
|
Propulsion
|
(0.7
|
)
|
(40.2
|
)
|
10.1
|
|
Wing
|
1.2
|
|
(63.9
|
)
|
5.1
|
|
Total (Forward Loss) and Change in Estimate on Loss Program
|
3.9
|
|
(327.3
|
)
|
(118.2
|
)
|
|
|
|
|
|||
Total Change in Estimate
|
0.1
|
|
(296.1
|
)
|
(81.6
|
)
|
EPS Impact (diluted per share based on statutory rates)
|
0.00
|
|
(1.58
|
)
|
(0.40
|
)
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Trade receivables
|
$
|
527.9
|
|
|
$
|
710.5
|
|
Other
|
17.9
|
|
|
13.0
|
|
||
Less: allowance for doubtful accounts
|
(0.7
|
)
|
|
(1.3
|
)
|
||
Accounts receivable, net
|
$
|
545.1
|
|
|
$
|
722.2
|
|
|
January 1, 2018
|
|
December 31, 2018
|
|
Change
|
|
|||
Contract assets
|
$
|
517.8
|
|
$
|
523.5
|
|
$
|
5.7
|
|
Contract liabilities
|
(319.4
|
)
|
(527.7
|
)
|
(208.3
|
)
|
|||
Net contract assets (liabilities)
|
$
|
198.4
|
|
$
|
(4.2
|
)
|
$
|
(202.6
|
)
|
|
2019
|
2020
|
2021
|
2022 and After
|
Unsatisfied performance obligations
|
$6,640.1
|
$6,398.3
|
$1,319.1
|
$596.3
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Raw materials
|
$
|
240.4
|
|
|
$
|
321.0
|
|
Work-in-process
(1)
|
727.8
|
|
|
854.4
|
|
||
Finished goods
|
7.1
|
|
|
35.8
|
|
||
Product inventory
|
975.3
|
|
|
1,211.2
|
|
||
Capitalized pre-production
(2)
|
37.3
|
|
|
78.9
|
|
||
Deferred production
(3)
|
—
|
|
|
640.3
|
|
||
Forward loss provision
(4)
|
—
|
|
|
(480.5
|
)
|
||
Total inventory, net
|
$
|
1,012.6
|
|
|
$
|
1,449.9
|
|
(1)
|
For the period ended December 31, 2018, work-in-process inventory includes direct labor, direct material, overhead, and purchases on contracts for which revenue is recognized at a point in time, as well as sub-assembly parts that have not been issued to production on contracts for which revenue is recognized using the input method. For the period ended December 31, 2017, work-in-process included direct labor, direct material, overhead, and purchases on all contracts that were accounted for using the units-of-delivery method. For the period ended December 31, 2018, work-in-process inventory includes
$151.6
of costs incurred in anticipation of specific contracts and no impairments were recorded in the period.
|
(2)
|
As part of the Transition Adjustment,
$43.0
(pretax) of pre-production costs on the A350 XWB were eliminated.
|
(3)
|
As part of the Transition Adjustment,
$640.3
(pretax) of deferred production was eliminated. For the period ended December 31, 2017, the balance contained
$632.8
and
$129.3
on the A350 XWB and Rolls-Royce BR725 programs, respectively.
|
(4)
|
For the period ended December 31, 2018, forward loss reserves of
$183.0
have been classified as a liability on the consolidated balance sheet. For the period ended December 31, 2017, the forward loss reserve for the B787 program exceeded the program's inventory balance. This excess was classified as a liability and reported in other current liabilities on the balance sheet in the amount of
$254.5
as of December 31, 2017.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Land
|
$
|
15.0
|
|
|
$
|
15.9
|
|
Buildings (including improvements)
|
822.7
|
|
|
764.1
|
|
||
Machinery and equipment
|
1,697.0
|
|
|
1,529.9
|
|
||
Tooling
|
1,032.3
|
|
|
1,013.9
|
|
||
Capitalized software
|
269.2
|
|
|
263.3
|
|
||
Construction-in-progress
|
227.8
|
|
|
213.4
|
|
||
Total
|
4,064.0
|
|
|
3,800.5
|
|
||
Less: accumulated depreciation
|
(1,896.4
|
)
|
|
(1,695.2
|
)
|
||
Property, plant and equipment, net
|
$
|
2,167.6
|
|
|
$
|
2,105.3
|
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Intangible assets
|
|
|
|
||||
Patents
|
$
|
2.0
|
|
|
$
|
1.9
|
|
Favorable leasehold interests
|
6.2
|
|
|
6.3
|
|
||
Total intangible assets
|
8.2
|
|
|
8.2
|
|
||
Less: Accumulated amortization-patents
|
(1.9
|
)
|
|
(1.8
|
)
|
||
Accumulated amortization-favorable leasehold interest
|
(4.9
|
)
|
|
(4.6
|
)
|
||
Intangible assets, net
|
1.4
|
|
|
1.8
|
|
||
Deferred financing
|
|
|
|
||||
Deferred financing costs
|
41.7
|
|
|
39.5
|
|
||
Less: Accumulated amortization-deferred financing costs
|
(35.6
|
)
|
|
(33.7
|
)
|
||
Deferred financing costs, net
|
6.1
|
|
|
5.8
|
|
||
Other
|
|
|
|
||||
Goodwill — Europe
|
2.4
|
|
|
2.5
|
|
||
Equity in net assets of affiliates
|
—
|
|
|
4.7
|
|
||
Supply agreement
(1)
|
14.6
|
|
|
19.9
|
|
||
Restricted Cash
|
20.2
|
|
|
20.0
|
|
||
Deferred Tax Asset - non-current
|
205.0
|
|
|
72.5
|
|
||
Other
|
38.5
|
|
|
37.1
|
|
||
Total
|
$
|
288.2
|
|
|
$
|
164.3
|
|
(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.
|
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.
|
(1)
|
Level 1 Fair Value hierarchy
|
(2)
|
Level 2 Fair Value hierarchy
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Current
|
Noncurrent
|
|
Current
|
Noncurrent
|
||||||||
Senior unsecured term loan A
|
$
|
22.7
|
|
$
|
182.0
|
|
|
$
|
24.9
|
|
$
|
435.8
|
|
Senior notes due 2021
|
—
|
|
298.5
|
|
|
—
|
|
—
|
|
||||
Senior notes due 2022
|
—
|
|
—
|
|
|
—
|
|
294.8
|
|
||||
Senior notes due 2023
|
—
|
|
297.9
|
|
|
—
|
|
—
|
|
||||
Senior notes due 2026
|
—
|
|
297.5
|
|
|
—
|
|
297.2
|
|
||||
Senior notes due 2028
|
—
|
|
693.5
|
|
|
—
|
|
—
|
|
||||
Present value of capital lease obligations
|
7.1
|
|
35.3
|
|
|
5.2
|
|
33.6
|
|
||||
Other
|
1.6
|
|
59.3
|
|
|
1.0
|
|
58.5
|
|
||||
Total
|
$
|
31.4
|
|
$
|
1,864.0
|
|
|
$
|
31.1
|
|
$
|
1,119.9
|
|
Pricing Tier
|
Credit Rating (S&P/Moody's)
|
|
Commitment
Fee
|
|
Letter of
Credit
Fee
|
|
Eurodollar Rate Loans
|
|
Base Rate
Loans
|
1
|
≥BBB+/Baa1
|
|
0.125%
|
|
1.125%
|
|
1.125%
|
|
0.125%
|
2
|
BBB/Baa2
|
|
0.150%
|
|
1.250%
|
|
1.250%
|
|
0.250%
|
3
|
BBB-/Baa3
|
|
0.200%
|
|
1.375%
|
|
1.375%
|
|
0.375%
|
4
|
BB+/Ba1
|
|
0.250%
|
|
1.625%
|
|
1.625%
|
|
0.625%
|
5
|
≤BB/Ba2
|
|
0.300%
|
|
1.875%
|
|
1.875%
|
|
0.875%
|
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
|
2017
|
|
2018
|
|
2016
|
|
2017
|
|
2018
|
|
|||||||||||||
IAM National Pension Fund
|
51-60321295
|
|
Green
|
|
Green
|
|
No
|
|
$
|
26.9
|
|
|
$
|
30.3
|
|
|
$
|
35.0
|
|
|
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
|
2016, 2017, 2018
|
|
Pension Benefits
|
|
Other
Post-Retirement
Benefits
|
||||||||||||
|
Periods Ended
December 31,
|
|
Periods Ended
December 31,
|
||||||||||||
U.S. Plans
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in projected benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
1,084.4
|
|
|
$
|
1,036.0
|
|
|
$
|
47.2
|
|
|
$
|
51.5
|
|
Service cost
|
—
|
|
|
—
|
|
|
1.1
|
|
|
1.2
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.1
|
|
||||
Interest cost
|
34.7
|
|
|
35.6
|
|
|
1.0
|
|
|
1.2
|
|
||||
Actuarial losses (gains)
|
(91.7
|
)
|
|
80.0
|
|
|
(2.4
|
)
|
|
1.0
|
|
||||
Special Termination Benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Plan Amendments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(30.4
|
)
|
|
(67.2
|
)
|
|
(7.6
|
)
|
|
(8.8
|
)
|
||||
Projected benefit obligation at the end of the period
|
$
|
997.0
|
|
|
$
|
1,084.4
|
|
|
$
|
40.3
|
|
|
$
|
47.2
|
|
Assumptions used to determine benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
4.21
|
%
|
|
3.59
|
%
|
|
3.74
|
%
|
|
3.03
|
%
|
||||
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||
Medical assumptions:
|
|
|
|
|
|
|
|
||||||||
Trend assumed for the year
|
N/A
|
|
|
N/A
|
|
|
6.24
|
%
|
|
6.59
|
%
|
||||
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
|
$
|
1,410.3
|
|
|
$
|
1,302.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual (loss) return on assets
|
(77.1
|
)
|
|
174.5
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions to plan
|
0.1
|
|
|
0.1
|
|
|
6.6
|
|
|
7.7
|
|
||||
Employee contributions to plan
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.1
|
|
||||
Benefits paid
|
(30.5
|
)
|
|
(67.2
|
)
|
|
(7.6
|
)
|
|
(8.8
|
)
|
||||
Expenses paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
$
|
1,302.8
|
|
|
$
|
1,410.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reconciliation of funded status to net amounts recognized:
|
|
|
|
|
|
|
|
||||||||
Funded status (deficit)
|
$
|
305.8
|
|
|
$
|
325.9
|
|
|
$
|
(40.3
|
)
|
|
$
|
(47.2
|
)
|
Net amounts recognized
|
$
|
305.8
|
|
|
$
|
325.9
|
|
|
$
|
(40.3
|
)
|
|
$
|
(47.2
|
)
|
Amounts recognized in the balance sheet:
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
307.0
|
|
|
$
|
327.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
(7.7
|
)
|
||||
Noncurrent liabilities
|
(1.2
|
)
|
|
(1.3
|
)
|
|
(33.4
|
)
|
|
(39.5
|
)
|
||||
Net amounts recognized
|
$
|
305.8
|
|
|
$
|
325.9
|
|
|
$
|
(40.3
|
)
|
|
$
|
(47.2
|
)
|
Amounts not yet reflected in net periodic benefit cost and included in AOCI:
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive (loss) income
|
$
|
(141.9
|
)
|
|
$
|
(89.6
|
)
|
|
$
|
27.5
|
|
|
$
|
28.3
|
|
Cumulative employer contributions in excess of net periodic benefit cost
|
447.7
|
|
|
415.5
|
|
|
(67.8
|
)
|
|
(75.5
|
)
|
||||
Net amount recognized in the balance sheet
|
$
|
305.8
|
|
|
$
|
325.9
|
|
|
$
|
(40.3
|
)
|
|
$
|
(47.2
|
)
|
Information for pension plans with benefit obligations in excess of plan assets:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
1.2
|
|
|
$
|
1.3
|
|
|
$
|
40.3
|
|
|
$
|
47.2
|
|
Accumulated benefit obligation
|
1.2
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
Pension Benefits
|
||||||
|
Periods Ended
December 31,
|
||||||
U.K. Plans
|
2018
|
|
2017
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Beginning balance
|
$
|
76.9
|
|
|
$
|
82.1
|
|
Service cost
|
1.3
|
|
|
1.3
|
|
||
Interest cost
|
1.7
|
|
|
2.0
|
|
||
Actuarial (gains) losses
|
(6.9
|
)
|
|
(1.1
|
)
|
||
Benefits paid
|
(0.6
|
)
|
|
(0.8
|
)
|
||
Expense paid
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Plan settlements
|
(7.5
|
)
|
|
(12.5
|
)
|
||
Exchange rate changes
|
(3.7
|
)
|
|
7.2
|
|
||
Projected benefit obligation at the end of the period
|
$
|
59.9
|
|
|
$
|
76.9
|
|
Assumptions used to determine benefit obligation:
|
|
|
|
||||
Discount rate
|
3.00
|
%
|
|
2.60
|
%
|
||
Rate of compensation increase
|
3.40
|
%
|
|
3.35
|
%
|
||
Change in fair value of plan assets:
|
|
|
|
||||
Beginning balance
|
$
|
96.8
|
|
|
$
|
96.2
|
|
Actual (loss) return on assets
|
(3.0
|
)
|
|
8.7
|
|
||
Company contributions
|
1.7
|
|
|
—
|
|
||
Plan settlements
|
(9.1
|
)
|
|
(14.7
|
)
|
||
Expenses paid
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Benefits paid
|
(0.6
|
)
|
|
(0.8
|
)
|
||
Exchange rate changes
|
(4.9
|
)
|
|
8.7
|
|
||
Ending balance
|
$
|
79.6
|
|
|
$
|
96.8
|
|
Reconciliation of funded status to net amounts recognized:
|
|
|
|
||||
Funded status
|
19.7
|
|
|
19.9
|
|
||
Net amounts recognized
|
$
|
19.7
|
|
|
$
|
19.9
|
|
Amounts recognized in the balance sheet:
|
|
|
|
||||
Noncurrent assets
|
$
|
19.7
|
|
|
$
|
19.9
|
|
Noncurrent liabilities
|
—
|
|
|
—
|
|
||
Net amounts recognized
|
$
|
19.7
|
|
|
$
|
19.9
|
|
Amounts not yet reflected in net periodic benefit cost and included in AOCI:
|
|
|
|
||||
Accumulated other comprehensive income (loss)
|
3.1
|
|
|
4.3
|
|
||
Prepaid pension cost
|
16.6
|
|
|
15.6
|
|
||
Net amount recognized in the balance sheet
|
$
|
19.7
|
|
|
$
|
19.9
|
|
Information for pension plans with benefit obligations in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated benefit obligation
|
—
|
|
|
—
|
|
||
Fair value of assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Pension Benefits
|
|
Other
Post-Retirement
Benefits
|
||||||||||||||||||||
|
Periods Ended
December 31,
|
|
Periods Ended
December 31,
|
||||||||||||||||||||
U.S. Plans
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
1.2
|
|
|
$
|
1.8
|
|
Interest cost
|
34.7
|
|
|
35.7
|
|
|
42.7
|
|
|
1.1
|
|
|
1.2
|
|
|
2.1
|
|
||||||
Expected return on plan assets
|
(66.9
|
)
|
|
(69.8
|
)
|
|
(74.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
—
|
|
|
—
|
|
|
5.7
|
|
|
(2.3
|
)
|
|
(2.2
|
)
|
|
—
|
|
||||||
Amortization of prior service costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||||
Special Termination Benefits
|
—
|
|
|
—
|
|
|
23.6
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
||||||
Net periodic benefit (income) cost
|
(32.2
|
)
|
|
(34.1
|
)
|
|
(2.9
|
)
|
|
(1.0
|
)
|
|
(0.7
|
)
|
|
6.1
|
|
||||||
Other changes recognized in OCI:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total recognized in OCI (income) loss
|
$
|
52.3
|
|
|
$
|
(24.8
|
)
|
|
$
|
(31.8
|
)
|
|
$
|
0.8
|
|
|
$
|
4.2
|
|
|
$
|
(23.0
|
)
|
Total recognized in net periodic benefit cost and OCI
|
$
|
20.1
|
|
|
$
|
(58.9
|
)
|
|
$
|
(34.7
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
3.5
|
|
|
$
|
(16.9
|
)
|
Assumptions used to determine net periodic benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Discount rate
|
3.59
|
%
|
|
4.15
|
%
|
|
4.38
|
%
|
|
3.03
|
%
|
|
3.21
|
%
|
|
3.43
|
%
|
||||||
Expected return on plan assets
|
4.80
|
%
|
|
5.50
|
%
|
|
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
|
|
|
6.59
|
%
|
|
6.93
|
%
|
|
7.27
|
%
|
||||||
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
|
|
|
2038
|
|
|
Pension Benefits
|
||||||||||
|
Periods Ended
December 31,
|
||||||||||
U.K. Plans
|
2018
|
|
2017
|
|
2016
|
||||||
Components of net periodic benefit cost (income):
|
|
|
|
|
|
||||||
Service cost
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
1.0
|
|
Interest cost
|
1.7
|
|
|
2.0
|
|
|
2.9
|
|
|||
Expected return on plan assets
|
(2.8
|
)
|
|
(2.9
|
)
|
|
(3.6
|
)
|
|||
Settlement gain
|
(0.4
|
)
|
|
(0.3
|
)
|
|
—
|
|
|||
Net periodic benefit cost (income)
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
Other changes recognized in OCI:
|
|
|
|
|
|
||||||
Total (income) recognized in OCI
|
$
|
(0.5
|
)
|
|
$
|
(6.7
|
)
|
|
$
|
(4.6
|
)
|
Total recognized in net periodic benefit cost and OCI
|
$
|
(0.7
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
(4.3
|
)
|
Assumptions used to determine net periodic benefit costs:
|
|
|
|
|
|
||||||
Discount rate
|
2.60
|
%
|
|
2.70
|
%
|
|
4.00
|
%
|
|||
Expected return on plan assets
|
3.10
|
%
|
|
3.20
|
%
|
|
4.30
|
%
|
|||
Salary increases
|
3.35
|
%
|
|
3.20
|
%
|
|
3.10
|
%
|
Equities
|
20 - 50%
|
Fixed income
|
50 - 80%
|
Real estate
|
0 - 7%
|
|
2018
|
|
2017
|
||
Asset Category — U.S.
|
|
|
|
||
Equity securities — U.S.
|
24
|
%
|
|
24
|
%
|
Equity securities — International
|
3
|
%
|
|
4
|
%
|
Debt securities
|
71
|
%
|
|
70
|
%
|
Real estate
|
2
|
%
|
|
2
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
Equity securities
|
35
|
%
|
Debt securities
|
60
|
%
|
Property
|
5
|
%
|
U.S.
|
Pension Plans
|
|
Other
Post-Retirement
Benefit Plans
|
||||
2019
|
$
|
36.7
|
|
|
$
|
6.9
|
|
2020
|
$
|
40.4
|
|
|
$
|
5.9
|
|
2021
|
$
|
44.2
|
|
|
$
|
5.0
|
|
2022
|
$
|
48.1
|
|
|
$
|
4.6
|
|
2023
|
$
|
51.4
|
|
|
$
|
4.6
|
|
2024-2028
|
$
|
297.3
|
|
|
$
|
17.5
|
|
U.K.
|
Pension Plans
|
||
2019
|
$
|
0.6
|
|
2020
|
$
|
0.6
|
|
2021
|
$
|
0.6
|
|
2022
|
$
|
0.7
|
|
2023
|
$
|
0.7
|
|
2024-2028
|
$
|
3.6
|
|
|
|
|
At December 31, 2018 Using
|
||||||||||||
Description
|
December 31, 2018 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
|
79.4
|
|
|
—
|
|
|
76.2
|
|
|
3.2
|
|
||||
Commingled Equity and Bond Funds
|
1,302.8
|
|
|
—
|
|
|
1,302.8
|
|
|
—
|
|
||||
|
$
|
1,382.4
|
|
|
$
|
0.2
|
|
|
$
|
1,379.0
|
|
|
$
|
3.2
|
|
|
|
|
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
|
|
|
December 31, 2018
|
||||||||||||||||||||||
Description
|
Beginning
Fair Value
|
|
Purchases
|
|
Gain (Loss)
|
|
Sales,
Maturities,
Settlements, Net
|
|
Exchange
rate
|
|
Ending Fair
Value
|
||||||||||||
Collective Investment Trusts
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
(2.8
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
3.2
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
(2.8
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
3.2
|
|
|
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
|
|
|
Shares
|
Value
(1)
|
|||||
|
Class A
|
|
Class A
|
|
|||
|
(Thousands)
|
|
|
||||
Board of Directors Stock Grants
|
|
|
|
|
|||
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
|
|
|
|
Granted during period
|
17
|
|
|
1.4
|
|
|
|
Vested during period
|
(19
|
)
|
|
(1.0
|
)
|
|
|
Forfeited during period
|
—
|
|
|
—
|
|
|
|
Nonvested at December 31, 2018
|
22
|
|
|
$
|
1.6
|
|
|
(1)
|
Value represents grant date fair value.
|
•
|
60% of the award consisted of time-based, service-condition restricted Common Stock that vests in equal installments over a three-year period (the “RS Award”). Values for these awards are based on the value of Common Stock on the grant date.
|
•
|
20% of the award consisted of performance-based, market-condition restricted Common 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 consisted of performance-based, (performance-condition) restricted Common 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 Common Stock on the grant date.
|
|
Shares
|
|
Value
(1)
|
|
|||
|
Common Stock
|
|
Common Stock
|
|
|||
|
(Thousands)
|
|
|
|
|||
Long-Term Incentive Plan/Long-Term Incentive Award under Omnibus Plan
|
|
|
|
|
|||
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
|
|
|
|
Granted during period
|
451
|
|
|
39.7
|
|
|
|
Vested during period
|
(465
|
)
|
|
(24.1
|
)
|
|
|
Forfeited during period
|
(48
|
)
|
|
(3.0
|
)
|
|
|
Nonvested at December 31, 2018
|
1,391
|
|
|
$
|
86.0
|
|
|
(1)
|
Value represents grant date fair value.
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S.
|
$
|
655.0
|
|
|
$
|
426.6
|
|
|
$
|
593.3
|
|
International
|
101.2
|
|
|
108.0
|
|
|
67.2
|
|
|||
Total (before equity earnings)
|
$
|
756.2
|
|
|
$
|
534.6
|
|
|
$
|
660.5
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
159.4
|
|
|
$
|
107.3
|
|
|
$
|
158.0
|
|
State
|
4.1
|
|
|
0.7
|
|
|
3.6
|
|
|||
Foreign
|
11.4
|
|
|
20.0
|
|
|
29.2
|
|
|||
Total current
|
$
|
174.9
|
|
|
$
|
128.0
|
|
|
$
|
190.8
|
|
Deferred
|
|
|
|
|
|
||||||
Federal
|
$
|
(27.8
|
)
|
|
$
|
53.6
|
|
|
$
|
20.0
|
|
State
|
(12.8
|
)
|
|
(0.2
|
)
|
|
(1.0
|
)
|
|||
Foreign
|
5.5
|
|
|
(1.4
|
)
|
|
(17.7
|
)
|
|||
Total deferred
|
(35.1
|
)
|
|
52.0
|
|
|
1.3
|
|
|||
Total tax provision
|
$
|
139.8
|
|
|
$
|
180.0
|
|
|
$
|
192.1
|
|
|
2018
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|||||||||
Tax at U.S. Federal statutory rate
|
$
|
158.8
|
|
|
21.0
|
%
|
|
$
|
187.1
|
|
|
35.0
|
%
|
|
$
|
231.2
|
|
|
35.0
|
%
|
State income taxes, net of Federal benefit
|
18.1
|
|
|
2.4
|
|
|
8.8
|
|
|
1.6
|
|
|
11.6
|
|
|
1.8
|
|
|||
State income tax credits, net of Federal benefit
|
(22.7
|
)
|
|
(3.0
|
)
|
|
(9.7
|
)
|
|
(1.8
|
)
|
|
(9.4
|
)
|
|
(1.4
|
)
|
|||
Foreign rate differences
|
(6.2
|
)
|
|
(0.8
|
)
|
|
(20.6
|
)
|
|
(3.8
|
)
|
|
(13.5
|
)
|
|
(2.0
|
)
|
|||
Research and Experimentation
|
(5.4
|
)
|
|
(0.7
|
)
|
|
(2.6
|
)
|
|
(0.5
|
)
|
|
(3.6
|
)
|
|
(0.6
|
)
|
|||
Domestic Production Activities Deduction
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
|
(1.3
|
)
|
|
(16.4
|
)
|
|
(2.5
|
)
|
|||
Interest on assessments
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.6
|
|
|
0.1
|
|
|||
Excess tax benefits
|
(4.0
|
)
|
|
(0.5
|
)
|
|
(4.8
|
)
|
|
(0.9
|
)
|
|
(4.6
|
)
|
|
(0.7
|
)
|
|||
Non-deductible expenses
|
4.6
|
|
|
0.6
|
|
|
2.4
|
|
|
0.5
|
|
|
1.0
|
|
|
0.1
|
|
|||
Transition Tax
|
(5.4
|
)
|
|
(0.7
|
)
|
|
44.9
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|||
Re-measurement of Deferred Taxes
|
—
|
|
|
—
|
|
|
(16.2
|
)
|
|
(3.0
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
2.0
|
|
|
0.2
|
|
|
(2.1
|
)
|
|
(0.5
|
)
|
|
(4.8
|
)
|
|
(0.7
|
)
|
|||
Total provision for income taxes
|
$
|
139.8
|
|
|
18.5
|
%
|
|
$
|
180.0
|
|
|
33.7
|
%
|
|
$
|
192.1
|
|
|
29.1
|
%
|
|
2018
|
|
2017
|
||||
Long-term contracts
|
$
|
210.2
|
|
|
$
|
69.0
|
|
Post-retirement benefits other than pensions
|
9.5
|
|
|
11.2
|
|
||
Pension and other employee benefit plans
|
(60.4
|
)
|
|
(65.1
|
)
|
||
Employee compensation accruals
|
36.1
|
|
|
33.8
|
|
||
Depreciation and amortization
|
(115.1
|
)
|
|
(104.4
|
)
|
||
Inventory
|
0.5
|
|
|
1.9
|
|
||
State income tax credits
|
94.1
|
|
|
89.8
|
|
||
Accruals and reserves
|
46.2
|
|
|
58.3
|
|
||
Deferred production
|
(1.8
|
)
|
|
(1.7
|
)
|
||
Net operating loss carryforward
|
0.4
|
|
|
0.3
|
|
||
Other
|
(2.3
|
)
|
|
(5.9
|
)
|
||
Net deferred tax asset
|
217.4
|
|
|
87.2
|
|
||
Valuation allowance
|
(13.2
|
)
|
|
(15.0
|
)
|
||
Net deferred tax asset
|
$
|
204.2
|
|
|
$
|
72.2
|
|
|
2018
|
|
2017
|
||||
Non-current deferred tax assets
|
205.0
|
|
|
72.5
|
|
||
Non-current deferred tax liabilities
|
(0.8
|
)
|
|
(0.3
|
)
|
||
Net non-current deferred tax assets
|
$
|
204.2
|
|
|
$
|
72.2
|
|
Total deferred tax asset
|
$
|
204.2
|
|
|
$
|
72.2
|
|
Deferred Tax Asset Valuation Allowance
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, January 1
|
$
|
15.0
|
|
|
$
|
13.5
|
|
|
$
|
15.1
|
|
U.S. deferred tax asset
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income tax credits
|
(2.2
|
)
|
|
1.6
|
|
|
(0.9
|
)
|
|||
Depreciation and amortization
|
0.1
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Long-term contracts
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
0.3
|
|
|
(0.2
|
)
|
|
(0.6
|
)
|
|||
Balance, December 31
|
$
|
13.2
|
|
|
$
|
15.0
|
|
|
$
|
13.5
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
$
|
6.7
|
|
|
$
|
6.3
|
|
|
$
|
6.2
|
|
Gross increases related to current period tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Gross increases related to prior period tax positions
|
0.5
|
|
|
0.4
|
|
|
0.1
|
|
|||
Gross decreases related to prior period tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Statute of limitations' expiration
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
$
|
7.2
|
|
|
$
|
6.7
|
|
|
$
|
6.3
|
|
|
For the Twelve Months Ended
|
|||||||||||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||||||||||||||
|
Income
|
|
Shares
|
|
Per
Share
Amount
|
|
Income
|
|
Shares
|
|
Per
Share
Amount
|
|
Loss
|
|
Shares
|
|
Per
Share
Amount
|
|||||||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income available to common shareholders
|
$
|
616.5
|
|
|
108.0
|
|
|
$
|
5.71
|
|
|
$
|
354.7
|
|
|
116.8
|
|
|
$
|
3.04
|
|
|
$
|
469.4
|
|
|
126.1
|
|
|
$
|
3.72
|
|
Income allocated to participating securities
|
0.5
|
|
|
0.1
|
|
|
|
|
|
0.2
|
|
|
0.1
|
|
|
|
|
|
0.3
|
|
|
0.1
|
|
|
|
|
||||||
Net income
|
$
|
617.0
|
|
|
|
|
|
|
|
|
$
|
354.9
|
|
|
|
|
|
|
|
|
$
|
469.7
|
|
|
|
|
|
|
|
|||
Diluted potential common shares
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
||||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
$
|
617.0
|
|
|
109.1
|
|
|
$
|
5.65
|
|
|
$
|
354.9
|
|
|
117.9
|
|
|
$
|
3.01
|
|
|
$
|
469.7
|
|
|
127.0
|
|
|
$
|
3.70
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Pension
|
$
|
(116.7
|
)
|
|
$
|
(75.9
|
)
|
SERP/ Retiree medical
|
17.2
|
|
|
17.7
|
|
||
Foreign currency impact on long term intercompany loan
|
(17.4
|
)
|
|
(14.2
|
)
|
||
Currency translation adjustment
|
(79.7
|
)
|
|
(56.1
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(196.6
|
)
|
|
$
|
(128.5
|
)
|
|
|
|
Capital
|
|
|
||||||||||
|
Operating
|
|
Present
Value
|
|
Interest
|
|
Total
|
||||||||
2019
|
$
|
8.9
|
|
|
$
|
8.1
|
|
|
$
|
5.0
|
|
|
$
|
22.0
|
|
2020
|
$
|
8.0
|
|
|
$
|
8.5
|
|
|
$
|
4.8
|
|
|
$
|
21.3
|
|
2021
|
$
|
7.4
|
|
|
$
|
8.8
|
|
|
$
|
4.6
|
|
|
$
|
20.8
|
|
2022
|
$
|
7.0
|
|
|
$
|
9.0
|
|
|
$
|
4.4
|
|
|
$
|
20.4
|
|
2023
|
$
|
5.9
|
|
|
$
|
8.4
|
|
|
$
|
4.2
|
|
|
$
|
18.5
|
|
2024 and thereafter
|
$
|
36.7
|
|
|
$
|
56.5
|
|
|
$
|
37.6
|
|
|
$
|
130.8
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Minimum rentals
|
$
|
14.3
|
|
|
$
|
14.1
|
|
|
$
|
15.4
|
|
Total
|
$
|
14.3
|
|
|
$
|
14.1
|
|
|
$
|
15.4
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, January 1
|
$
|
166.4
|
|
|
$
|
163.7
|
|
|
$
|
158.7
|
|
Charges to costs and expenses
|
3.2
|
|
|
5.8
|
|
|
16.7
|
|
|||
Payouts
|
(1.2
|
)
|
|
(4.0
|
)
|
|
(9.5
|
)
|
|||
Impact of 2018 MOA
(1)
|
(63.8
|
)
|
|
—
|
|
|
—
|
|
|||
Exchange rate
|
0.2
|
|
|
0.9
|
|
|
(2.2
|
)
|
|||
Balance, December 31
|
$
|
104.8
|
|
|
$
|
166.4
|
|
|
$
|
163.7
|
|
(1)
|
As part of the 2018 MOA, $63.8 of warranty provision was released, settled against previously held Accounts Receivable, net with no impact to earnings. For further information, see Note 28,
Boeing Collective Resolution
.
|
|
For the Twelve Months Ended
|
||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Kansas Development Finance Authority bond
|
$
|
3.8
|
|
|
$
|
3.2
|
|
|
$
|
3.4
|
|
Rental and miscellaneous income
|
0.2
|
|
|
1.2
|
|
|
0.3
|
|
|||
Pension Income (Expense)
|
34.3
|
|
|
37.2
|
|
|
(0.7
|
)
|
|||
Interest Income
|
8.0
|
|
|
6.4
|
|
|
3.6
|
|
|||
Other
|
0.4
|
|
|
—
|
|
|
—
|
|
|||
Loss on foreign currency forward contract, net of settlement
|
(35.3
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on sale of accounts receivable (see Note 6,
Accounts Receivable, net
)
|
(16.5
|
)
|
|
(3.3
|
)
|
|
—
|
|
|||
Foreign currency losses
|
(1.9
|
)
|
|
(0.3
|
)
|
|
(14.6
|
)
|
|||
Total Other Income (Expense), net
|
$
|
(7.0
|
)
|
|
$
|
44.4
|
|
|
$
|
(8.0
|
)
|
|
December 31,
2018
|
|
December 31,
2017 |
||||
Accrued expenses
|
|
|
|
||||
Accrued wages and bonuses
|
$
|
48.3
|
|
|
$
|
40.8
|
|
Accrued fringe benefits
|
125.0
|
|
|
116.3
|
|
||
Accrued interest
|
3.5
|
|
|
5.8
|
|
||
Workers' compensation
|
8.3
|
|
|
8.1
|
|
||
Property and sales tax
|
25.2
|
|
|
24.7
|
|
||
Warranty/extraordinary rework reserve — current
|
1.3
|
|
|
2.2
|
|
||
Other
|
101.5
|
|
|
71.4
|
|
||
Total
|
$
|
313.1
|
|
|
$
|
269.3
|
|
Other liabilities
|
|
|
|
||||
Deferred tax liability — non-current
|
$
|
0.8
|
|
|
$
|
0.3
|
|
Warranty/extraordinary rework reserve — non-current
|
103.6
|
|
|
164.2
|
|
||
Customer cost recovery
|
2.4
|
|
|
22.9
|
|
||
Other
|
28.8
|
|
|
65.2
|
|
||
Total
|
$
|
135.6
|
|
|
$
|
252.6
|
|
|
Twelve Months Ended December 31, 2018
|
|
Twelve Months Ended December 31, 2017
|
|
Twelve Months Ended December 31, 2016
|
||||||
Segment Revenues
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
4,000.8
|
|
|
$
|
3,730.8
|
|
|
$
|
3,498.8
|
|
Propulsion Systems
|
1,702.5
|
|
|
1,666.2
|
|
|
1,777.3
|
|
|||
Wing Systems
|
1,513.0
|
|
|
1,578.8
|
|
|
1,508.7
|
|
|||
All Other
|
5.7
|
|
|
7.2
|
|
|
8.1
|
|
|||
|
$
|
7,222.0
|
|
|
$
|
6,983.0
|
|
|
$
|
6,792.9
|
|
Segment Operating Income
(1, 2)
|
|
|
|
|
|
||||||
Fuselage Systems
|
$
|
576.1
|
|
|
$
|
329.6
|
|
|
$
|
470.4
|
|
Propulsion Systems
|
283.5
|
|
|
267.7
|
|
|
326.7
|
|
|||
Wing Systems
|
226.4
|
|
|
205.1
|
|
|
224.3
|
|
|||
All Other
|
0.3
|
|
|
2.0
|
|
|
1.6
|
|
|||
|
1,086.3
|
|
|
804.4
|
|
|
1,023.0
|
|
|||
Corporate SG&A
(2)
|
(210.4
|
)
|
|
(204.7
|
)
|
|
(230.9
|
)
|
|||
Unallocated impact of severe weather event
|
10.0
|
|
|
(19.9
|
)
|
|
(12.1
|
)
|
|||
Research and development
|
(42.5
|
)
|
|
(31.2
|
)
|
|
(23.8
|
)
|
|||
Unallocated cost of sales
(3)
|
(0.2
|
)
|
|
(16.7
|
)
|
|
(30.4
|
)
|
|||
Total operating income
|
$
|
843.2
|
|
|
$
|
531.9
|
|
|
$
|
725.8
|
|
(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, 2018, 2017, and 2016 are further detailed in Note 5,
Changes in Estimates
.
|
(2)
|
Prior period information has been reclassified as a result of the Company's adoption of ASU 2017-07 on a retrospective basis in 2018. In accordance with the adoption of this guidance, prior year amounts related to the components of net periodic pension and postretirement benefit cost other than service costs have been reclassified from cost of sales and selling, general, and
|
(3)
|
For 2018, includes charges of
$1.1
related to warranty reserves. For 2017, includes charges of
$1.8
and
$12.7
, related to warranty reserves and charges for excess purchases and purchase commitments, respectively. For 2016, includes charges of
$13.8
and
$23.6
related to warranty reserves and early retirement incentives, respectively, offset by
$7.9
for the settlement of historical claims with suppliers.
|
(1)
|
Net Revenues are attributable to countries based on destination where goods are delivered.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|||||||||||||||
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
|
$
|
2,003.9
|
|
|
92
|
%
|
|
$
|
1,939.0
|
|
|
92
|
%
|
|
$
|
1,828.2
|
|
|
92
|
%
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United Kingdom
|
82.1
|
|
|
4
|
%
|
|
82.5
|
|
|
4
|
%
|
|
80.0
|
|
|
4
|
%
|
|||
Other
|
81.6
|
|
|
4
|
%
|
|
83.8
|
|
|
4
|
%
|
|
83.4
|
|
|
4
|
%
|
|||
Total International
|
163.7
|
|
|
8
|
%
|
|
166.3
|
|
|
8
|
%
|
|
163.4
|
|
|
8
|
%
|
|||
Total Long-Lived Assets
|
$
|
2,167.6
|
|
|
100
|
%
|
|
$
|
2,105.3
|
|
|
100
|
%
|
|
$
|
1,991.6
|
|
|
100
|
%
|
|
Quarter Ended
|
||||||||||||||
|
December 31,
2018
(1)
|
|
September 27,
2018
(2)
|
|
June 28,
2018
(3)
|
|
March 29,
2018
(4)
|
||||||||
Revenues
|
$
|
1,835.3
|
|
|
$
|
1,813.7
|
|
|
$
|
1,836.9
|
|
|
$
|
1,736.1
|
|
Gross profit
|
$
|
300.7
|
|
|
$
|
270.6
|
|
|
$
|
289.7
|
|
|
$
|
225.1
|
|
Operating income
|
$
|
243.6
|
|
|
$
|
222.5
|
|
|
$
|
217.6
|
|
|
$
|
159.5
|
|
Net income
|
$
|
177.6
|
|
|
$
|
168.8
|
|
|
$
|
145.2
|
|
|
$
|
125.4
|
|
Earnings per share, basic
|
$
|
1.70
|
|
|
$
|
1.61
|
|
|
$
|
1.32
|
|
|
$
|
1.11
|
|
Earnings per share, diluted
|
$
|
1.68
|
|
|
$
|
1.59
|
|
|
$
|
1.31
|
|
|
$
|
1.10
|
|
Dividends declared per common share
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.10
|
|
|
Quarter Ended
|
||||||||||||||
|
December 31,
2017
(5)
|
|
September 28,
2017
(6)
|
|
June 29,
2017
(7)
|
|
March 30,
2017
(8)
|
||||||||
Revenues
|
$
|
1,714.6
|
|
|
$
|
1,748.2
|
|
|
$
|
1,826.1
|
|
|
$
|
1,694.1
|
|
Gross profit (loss)
|
$
|
282.1
|
|
|
$
|
261.6
|
|
|
$
|
(29.1
|
)
|
|
$
|
273.1
|
|
Operating income (loss)
|
$
|
217.3
|
|
|
$
|
202.3
|
|
|
$
|
(92.1
|
)
|
|
$
|
204.4
|
|
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
|
|
(1)
|
Fourth quarter 2018 earnings include the impact of net favorable changes in estimate of
$3.5
.
|
(2)
|
Third quarter 2018 earnings include the impact of net unfavorable changes in estimate of
$13.5
.
|
(3)
|
Second quarter 2018 earnings include the impact of net favorable changes in estimate of
$24.9
.
|
(4)
|
First quarter 2018 earnings include the impact of net unfavorable changes in estimate of
$22.6
.
|
(5)
|
Fourth quarter 2017 earnings include the impact of net favorable changes in estimate of
$12.9
|
(6)
|
Third quarter 2017 earnings include the impact of net unfavorable changes in estimate of
$4.8
.
|
(7)
|
Second quarter 2017 earnings include the impact of net unfavorable changes in estimate of
$329.2
.
|
(8)
|
First quarter 2017 earnings include the impact of net favorable changes in estimate of
$5.2
|
(i)
|
Holdings, as the parent company and parent guarantor of the Notes as further detailed in Note 15,
Debt
;
|
(ii)
|
Spirit, as the subsidiary issuer of the Notes;
|
(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
|
$
|
—
|
|
|
$
|
6,487.3
|
|
|
$
|
1,361.2
|
|
|
$
|
(626.5
|
)
|
|
$
|
7,222.0
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
5,541.4
|
|
|
1,221.0
|
|
|
(626.5
|
)
|
|
6,135.9
|
|
|||||
Selling, general and administrative
|
10.4
|
|
|
182.6
|
|
|
17.4
|
|
|
—
|
|
|
210.4
|
|
|||||
Impact of severe weather event
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|||||
Research and development
|
—
|
|
|
37.5
|
|
|
5.0
|
|
|
—
|
|
|
42.5
|
|
|||||
Total operating costs and expenses
|
10.4
|
|
|
5,751.5
|
|
|
1,243.4
|
|
|
(626.5
|
)
|
|
6,378.8
|
|
|||||
Operating (loss) income
|
(10.4
|
)
|
|
735.8
|
|
|
117.8
|
|
|
—
|
|
|
843.2
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(79.7
|
)
|
|
(5.2
|
)
|
|
4.9
|
|
|
(80.0
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
(4.9
|
)
|
|
(7.0
|
)
|
|||||
(Loss) income before income taxes and equity in net income of affiliates and subsidiaries
|
(10.4
|
)
|
|
656.1
|
|
|
110.5
|
|
|
—
|
|
|
756.2
|
|
|||||
Income tax benefit (provision)
|
1.9
|
|
|
(122.3
|
)
|
|
(19.4
|
)
|
|
—
|
|
|
(139.8
|
)
|
|||||
(Loss) income before equity in net income of affiliates and subsidiaries
|
(8.5
|
)
|
|
533.8
|
|
|
91.1
|
|
|
—
|
|
|
616.4
|
|
|||||
Equity in net income of affiliates
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
(0.6
|
)
|
|
0.6
|
|
|||||
Equity in net income of subsidiaries
|
624.9
|
|
|
91.0
|
|
|
—
|
|
|
(715.9
|
)
|
|
—
|
|
|||||
Net income
|
617.0
|
|
|
624.8
|
|
|
91.7
|
|
|
(716.5
|
)
|
|
617.0
|
|
|||||
Other comprehensive loss
|
(68.1
|
)
|
|
(68.1
|
)
|
|
(26.3
|
)
|
|
94.4
|
|
|
(68.1
|
)
|
|||||
Comprehensive income
|
$
|
548.9
|
|
|
$
|
556.7
|
|
|
$
|
65.4
|
|
|
$
|
(622.1
|
)
|
|
$
|
548.9
|
|
|
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
|
—
|
|
|
5,592.2
|
|
|
1,218.8
|
|
|
(615.7
|
)
|
|
6,195.3
|
|
|||||
Selling, general and administrative
|
12.4
|
|
|
177.5
|
|
|
14.8
|
|
|
—
|
|
|
204.7
|
|
|||||
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
|
|
|
5,817.4
|
|
|
1,237.0
|
|
|
(615.7
|
)
|
|
6,451.1
|
|
|||||
Operating (loss) income
|
(12.4
|
)
|
|
419.0
|
|
|
125.3
|
|
|
—
|
|
|
531.9
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(41.6
|
)
|
|
(5.7
|
)
|
|
5.6
|
|
|
(41.7
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
49.6
|
|
|
0.4
|
|
|
(5.6
|
)
|
|
44.4
|
|
|||||
(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
|
—
|
|
|
5,251.7
|
|
|
1,164.5
|
|
|
(615.9
|
)
|
|
5,800.3
|
|
|||||
Selling, general and administrative
|
8.7
|
|
|
206.2
|
|
|
16.0
|
|
|
—
|
|
|
230.9
|
|
|||||
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
|
|
|
5,490.8
|
|
|
1,183.5
|
|
|
(615.9
|
)
|
|
6,067.1
|
|
|||||
Operating (loss) income
|
(8.7
|
)
|
|
633.8
|
|
|
100.7
|
|
|
—
|
|
|
725.8
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(57.0
|
)
|
|
(7.8
|
)
|
|
7.5
|
|
|
(57.3
|
)
|
|||||
Other income (expense), net
|
—
|
|
|
14.2
|
|
|
(14.7
|
)
|
|
(7.5
|
)
|
|
(8.0
|
)
|
|||||
(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
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
705.0
|
|
|
$
|
68.6
|
|
|
$
|
—
|
|
|
$
|
773.6
|
|
Restricted cash
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Accounts receivable, net
|
—
|
|
|
593.0
|
|
|
310.2
|
|
|
(358.1
|
)
|
|
545.1
|
|
|||||
Inventory, net
|
—
|
|
|
696.0
|
|
|
316.6
|
|
|
—
|
|
|
1,012.6
|
|
|||||
Contract assets, short-term
|
—
|
|
|
420.8
|
|
|
48.6
|
|
|
—
|
|
|
469.4
|
|
|||||
Other current assets
|
—
|
|
|
45.3
|
|
|
3.0
|
|
|
—
|
|
|
48.3
|
|
|||||
Total current assets
|
—
|
|
|
2,460.4
|
|
|
747.0
|
|
|
(358.1
|
)
|
|
2,849.3
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,670.8
|
|
|
496.8
|
|
|
—
|
|
|
2,167.6
|
|
|||||
Contract assets, long-term
|
—
|
|
|
54.1
|
|
|
—
|
|
|
—
|
|
|
54.1
|
|
|||||
Pension assets
|
—
|
|
|
307.0
|
|
|
19.7
|
|
|
—
|
|
|
326.7
|
|
|||||
Investment in subsidiary
|
1,238.0
|
|
|
699.0
|
|
|
—
|
|
|
(1,937.0
|
)
|
|
—
|
|
|||||
Other assets
|
—
|
|
|
357.1
|
|
|
127.5
|
|
|
(196.4
|
)
|
|
288.2
|
|
|||||
Total assets
|
$
|
1,238.0
|
|
|
$
|
5,548.4
|
|
|
$
|
1,391.0
|
|
|
$
|
(2,491.5
|
)
|
|
$
|
5,685.9
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
855.2
|
|
|
$
|
405.6
|
|
|
$
|
(358.2
|
)
|
|
$
|
902.6
|
|
Accrued expenses
|
—
|
|
|
276.7
|
|
|
36.3
|
|
|
0.1
|
|
|
313.1
|
|
|||||
Profit sharing
|
—
|
|
|
62.6
|
|
|
5.7
|
|
|
—
|
|
|
68.3
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
30.5
|
|
|
0.9
|
|
|
—
|
|
|
31.4
|
|
|||||
Advance payments, short-term
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|||||
Contract liabilities, short-term
|
—
|
|
|
157.3
|
|
|
0.6
|
|
|
—
|
|
|
157.9
|
|
|||||
Forward loss provision, short-term
|
—
|
|
|
12.4
|
|
|
—
|
|
|
—
|
|
|
12.4
|
|
|||||
Deferred revenue, short-term
|
—
|
|
|
19.5
|
|
|
0.5
|
|
|
—
|
|
|
20.0
|
|
|||||
Deferred grant income liability — current
|
—
|
|
|
—
|
|
|
16.0
|
|
|
—
|
|
|
16.0
|
|
|||||
Other current liabilities
|
—
|
|
|
52.4
|
|
|
5.8
|
|
|
—
|
|
|
58.2
|
|
|||||
Total current liabilities
|
—
|
|
|
1,468.8
|
|
|
471.4
|
|
|
(358.1
|
)
|
|
1,582.1
|
|
|||||
Long-term debt
|
—
|
|
|
1,856.6
|
|
|
103.2
|
|
|
(95.8
|
)
|
|
1,864.0
|
|
|||||
Advance payments, long-term
|
—
|
|
|
231.9
|
|
|
—
|
|
|
—
|
|
|
231.9
|
|
|||||
Pension/OPEB obligation
|
—
|
|
|
34.6
|
|
|
—
|
|
|
—
|
|
|
34.6
|
|
|||||
Contract liabilities, long-term
|
—
|
|
|
369.8
|
|
|
—
|
|
|
—
|
|
|
369.8
|
|
|||||
Forward loss provision, long-term
|
—
|
|
|
170.6
|
|
|
—
|
|
|
—
|
|
|
170.6
|
|
|||||
Deferred grant income liability — non-current
|
—
|
|
|
5.9
|
|
|
22.1
|
|
|
—
|
|
|
28.0
|
|
|||||
Deferred revenue and other deferred credits
|
—
|
|
|
28.8
|
|
|
2.4
|
|
|
—
|
|
|
31.2
|
|
|||||
Other liabilities
|
—
|
|
|
223.3
|
|
|
12.9
|
|
|
(100.6
|
)
|
|
135.6
|
|
|||||
Total equity
|
1,238.0
|
|
|
1,158.1
|
|
|
779.0
|
|
|
(1,937.0
|
)
|
|
1,238.1
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,238.0
|
|
|
$
|
5,548.4
|
|
|
$
|
1,391.0
|
|
|
$
|
(2,491.5
|
)
|
|
$
|
5,685.9
|
|
|
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
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
643.1
|
|
|
$
|
126.8
|
|
|
$
|
—
|
|
|
$
|
769.9
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
—
|
|
|
(230.5
|
)
|
|
(40.7
|
)
|
|
|
|
|
(271.2
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
2.8
|
|
|
0.6
|
|
|
—
|
|
|
3.4
|
|
|||||
Other
|
—
|
|
|
(0.5
|
)
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
(228.2
|
)
|
|
(39.6
|
)
|
|
—
|
|
|
(267.8
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
—
|
|
|
1,300.0
|
|
|
—
|
|
|
—
|
|
|
1,300.0
|
|
|||||
Principal payments of debt
|
—
|
|
|
(5.8
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(6.7
|
)
|
|||||
Collection on (repayment of) intercompany debt
|
—
|
|
|
75.9
|
|
|
(75.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Payments on term loan
|
—
|
|
|
(256.3
|
)
|
|
—
|
|
|
—
|
|
|
(256.3
|
)
|
|||||
Payments on debt
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|
—
|
|
|
(300.0
|
)
|
|||||
Debt issuance and financing costs
|
—
|
|
|
(23.2
|
)
|
|
—
|
|
|
—
|
|
|
(23.2
|
)
|
|||||
Taxes paid related to net share settlement awards
|
—
|
|
|
(15.6
|
)
|
|
—
|
|
|
—
|
|
|
(15.6
|
)
|
|||||
Proceeds from issuance of ESPP stock
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
805.8
|
|
|
(805.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of treasury stock
|
(805.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(805.8
|
)
|
|||||
Proceeds (payments) from subsidiary for dividends paid
|
48.0
|
|
|
(48.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends paid
|
(48.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48.0
|
)
|
|||||
Net cash used in financing activities
|
—
|
|
|
(76.7
|
)
|
|
(76.8
|
)
|
|
—
|
|
|
(153.5
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|||||
Net (decrease) increase in cash, cash equivalents, and restricted cash for the period
|
—
|
|
|
338.2
|
|
|
10.4
|
|
|
—
|
|
|
348.6
|
|
|||||
Cash, cash equivalents, and restricted cash, beginning of period
|
—
|
|
|
387.3
|
|
|
58.2
|
|
|
—
|
|
|
445.5
|
|
|||||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
—
|
|
|
$
|
725.5
|
|
|
$
|
68.6
|
|
|
$
|
—
|
|
|
$
|
794.1
|
|
|
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 for 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
|
)
|
|||||
Net cash used in financing activities
|
—
|
|
|
(522.2
|
)
|
|
(56.5
|
)
|
|
—
|
|
|
(578.7
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|||||
Net decrease in cash and cash equivalents for the period
|
—
|
|
|
(312.8
|
)
|
|
40.6
|
|
|
—
|
|
|
(272.2
|
)
|
|||||
Cash, cash equivalents, and restricted cash, beginning of period
|
—
|
|
|
700.1
|
|
|
17.6
|
|
|
—
|
|
|
717.7
|
|
|||||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
—
|
|
|
$
|
387.3
|
|
|
$
|
58.2
|
|
|
$
|
—
|
|
|
$
|
445.5
|
|
|
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, cash equivalents, and restricted cash, beginning of period
|
—
|
|
|
914.2
|
|
|
63.1
|
|
|
—
|
|
|
977.3
|
|
|||||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
—
|
|
|
$
|
700.1
|
|
|
$
|
17.6
|
|
|
$
|
—
|
|
|
$
|
717.7
|
|
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
|
|
Seventh Amended and Restated By Laws of Spirit AeroSystems Holdings, Inc.
|
|
|
4.1
|
|
Form of Class A Common Stock Certificate
|
|
|
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
|
|
Indenture, dated as of May 30, 2018, among Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc. and the Bank of New York Mellon Trust Company,.
|
|
|
4.11
|
|
Form of Senior Floating Rate Note due 2021
|
|
|
4.12
|
|
Form of 3.950% Senior Note due 2023
|
|
|
4.13
|
|
Form of 4.600% Senior Note due 2028
|
|
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 Ron Rabe, effective as of June 9, 2015
|
|
|
10.14†
|
|
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
|
10.15†
|
|
Employment Agreement between Spirit AeroSystems, Inc., and Stacy Cozad, effective as of January 4, 2016
|
|
|
10.16
|
|
Employment Agreement between Spirit AeroSystems, Inc. and Bill Brown, effective as of May 5, 2014
|
|
|
10.17†
|
|
Long-Term Incentive Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, effective April 30, 2014
|
|
|
10.18†
|
|
Long-Term Incentive Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, as amended and restated effective January 25, 2017
|
|
|
10.19†
|
|
Short-Term Incentive Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, as amended and restated effective January 25, 2017
|
|
|
|
Director Stock Program under the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, effective April 25, 2018
|
|
*
|
|
10.21†
|
|
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)
|
|
|
10.22
|
|
Employee Stock Purchase Plan
|
|
|
10.23†
|
|
Time-Based Restricted Stock Award Agreement
|
|
|
10.24†
|
|
Performance-Based Restricted Stock Award Agreement
|
|
|
10.25†
|
|
Retirement and Consulting Agreement and General Release, dated June 7, 2016, between Spirit AeroSystems, Inc. and Larry A. Lawson
|
|
|
|
Retirement and Consulting Agreement and General Release, dated November 20, 2018, between Spirit AeroSystems, Inc. and Sanjay Kapoor
|
|
*
|
|
|
Employment Agreement between Spirit AeroSystems, Inc., and Jose Garcia, effective as of January 9, 2019
|
|
*
|
|
Article I. Exhibit
Number
|
|
Section 1.01 Exhibit
|
|
Incorporated by
Reference to the
Following Documents
|
10.28
|
|
Second Amended and Restated Credit Agreement, dated as of July 12, 2018, among Spirit AeroSystems Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, the lenders party thereto, Bank of America, N.A., as administrative agent, and the other agents named therein
|
|
|
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.
|
|
|
10.59††
|
|
Amendment No. 31 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of October 18, 2017
|
|
|
10.60††
|
|
Amendment No. 32 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of November 15, 2017
|
|
|
10.61††
|
|
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††
|
|
Amendment 34 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of February 23, 2018
|
|
|
10.63††
|
|
Amendment 35 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of April 18, 2018
|
|
|
10.64††
|
|
Amendment 36 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of June 20, 2018
|
|
|
10.65††
|
|
Amendment 37 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of August 17, 2018
|
|
|
10.66††
|
|
Collective Resolution Memorandum of Understanding between the Boeing Company and Spirit AeroSystems, Inc., dated as of August 1, 2017
|
|
|
Amendment 38 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of November 1, 2018
|
|
*
|
|
|
Amendment 39 to Special Business Provisions MS-65530-0016, between the Boeing Company and Spirit AeroSystems, Inc., dated as of November 2, 2018
|
|
*
|
|
Collective Resolution 2.0 Memorandum of Agreement between the Boeing Company and Spirit AeroSystems, Inc., dated as of December 21, 2018
|
|
*
|
|
10.70††
|
|
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
|
|
|
10.71††
|
|
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
|
|
|
10.72††
|
|
Amendment No. 20 to B787 Special Business Provisions BCA-MS-65530-0019, dated June 5, 2013, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.73††
|
|
Amendment No. 21 to B787 Special Business Provisions BCA-MS-65530-0019, dated July 1, 2014, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.74††
|
|
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.
|
|
|
10.75††
|
|
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
|
10.76††
|
|
Amendment No. 24 to B787 Special Business Provisions BCA-MS-65530-0019, dated December 16, 2015, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
|
10.77††
|
|
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.
|
|
|
10.78††
|
|
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.
|
|
10.79††
|
|
Amendment 27 to B787 Special Business Provisions BCA-MS-65530-0019, between The Boeing Company and Spirit AeroSystems, Inc., dated as of August 17, 2018
|
|
|
10.80
|
|
Agreement for the Sale and Purchase of Shares of S.R.I.F. N.V., dated May 1, 2018, by and between Christian Boas, Emile Boas, DREDA, Sylvie Boas, Spirit AeroSystems Belgium Holdings BVBA and Spirit AeroSystems Holdings, Inc.
|
|
|
10.81
|
|
Confirmation - Accelerated Share Repurchase Agreement, dated May 30, 2018, between Spirit AeroSystems Holdings, Inc. and Goldman Sachs & Co. LLC.
|
|
|
10.82
|
|
Confirmation - Accelerated Share Repurchase Agreement, dated May 30, 2018, between Spirit AeroSystems Holdings, Inc. and Morgan Stanley & Co. LLC.
|
|
|
|
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/ Jose Garcia
|
|
|
|
|
Jose Garcia Executive Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Thomas C. Gentile III
|
|
Director, President and Chief Executive
|
|
February 8, 2019
|
Thomas C. Gentile III
|
|
Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jose Garcia
|
|
Executive Vice President and Chief Financial
|
|
February 8, 2019
|
Jose Garcia
|
|
Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ John Gilson
|
|
Vice President and Corporate Controller
|
|
February 8, 2019
|
John Gilson
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Robert Johnson
|
|
Director, Chairman of the Board
|
|
February 8, 2019
|
Robert Johnson
|
|
|
|
|
|
|
|
|
|
/s/ Charles Chadwell
|
|
Director
|
|
February 8, 2019
|
Charles Chadwell
|
|
|
|
|
|
|
|
|
|
/s/ Irene M. Esteves
|
|
Director
|
|
February 8, 2019
|
Irene M. Esteves
|
|
|
|
|
|
|
|
|
|
/s/ Paul Fulchino
|
|
Director
|
|
February 8, 2019
|
Paul Fulchino
|
|
|
|
|
|
|
|
|
|
/s/ Richard Gephardt
|
|
Director
|
|
February 8, 2019
|
Richard Gephardt
|
|
|
|
|
|
|
|
|
|
/s/ Ronald Kadish
|
|
Director
|
|
February 8, 2019
|
Ronald Kadish
|
|
|
|
|
|
|
|
|
|
/s/ John L. Plueger
|
|
Director
|
|
February 8, 2019
|
John L. Plueger
|
|
|
|
|
|
|
|
|
|
/s/ Laura Wright
|
|
Director
|
|
February 8, 2019
|
Laura Wright
|
|
|
|
|
1.
|
Continuation of Program.
The director stock program (“DSP”) previously established under the Spirit AeroSystems Holdings, Inc. Omnibus Incentive Plan (“OIP”), pursuant to Section 2.4 of the OIP is hereby continued, subject to any modifications in the terms and provisions of the DSP described below. In addition to the generally applicable terms of the OIP, the following terms, conditions, and provisions will apply to Awards of Restricted Stock or Restricted Stock Units made to Participants as part of the DSP. Capitalized terms not specifically defined in this Exhibit will have the meanings set forth in the OIP.
|
2.
|
Eligibility.
Each Eligible Person who is a Nonemployee Director of the Company will be eligible to participate in the DSP upon commencement of the individual’s term as a Director of the Company.
|
3.
|
Mandatory Grant of Restricted Stock or RSUs.
$125,000 of a Nonemployee Director’s annual director compensation (or such higher or lower amount as may, in the future, be designated by the Board or Committee) will be paid in the form of an Award of Restricted Stock or RSUs, as elected by the Participant at the time and in the manner provided in this Exhibit (a “Mandatory Grant”). If no timely election is made by a Nonemployee Director, a Mandatory Grant will be made in the form of Restricted Stock.
|
4.
|
Elective Grant of Restricted Stock or RSUs.
A Nonemployee Director may elect, at the time and in the manner provided in this Exhibit, to have all or any portion of the Participant’s annual director compensation that is not required to be paid in the form of a Mandatory Grant paid in cash or in the form of a grant of Shares and/or RSUs. A grant of Shares or RSUs made pursuant to an election described in this paragraph is referred to in this Exhibit as an “Elective Grant.” If no timely election is made by a Nonemployee Director, the compensation described in this paragraph will be paid in the form of cash.
|
5.
|
Number of Shares or RSUs.
The number of Shares of Restricted Stock or RSUs granted to a Nonemployee Director in a Mandatory Grant or an Elective Grant will be determined under such conventions and rules as the Board or the Committee may adopt, in its sole discretion.
|
6.
|
Vesting Schedule.
Unless otherwise provided in an Award Agreement, the Restricted Stock or RSUs granted in a Mandatory Grant will be subject to a service condition. A Nonemployee Director must remain continuously in service for the term to which the Mandatory Grant relates. If a Nonemployee Director incurs a Termination for any reason before the end of the term to which the Mandatory Grant relates (i.e., before the annual meeting of the shareholders of the Company immediately following the grant date of the Mandatory Grant), the Nonemployee Director will not satisfy the service condition, and the Restricted Stock and/or RSUs granted to the Nonemployee Director in that Mandatory Grant will be forfeited without any payment therefor. The Board may, in its sole discretion, waive this one-year service condition (in whole or in part) with respect to a Nonemployee Director if it deems it appropriate and in the best interests of the Company to do so. Any Elective Grant will be fully vested at the time of grant; however, in the event of the Participant’s Termination for
|
7.
|
Elections.
An election by a Nonemployee Director in connection with a Mandatory Grant or an Elective Grant must be made in writing and in such form as the Committee may prescribe (which may include, but is not limited to, making the election as part of an Award Agreement).
|
8.
|
83(b) Elections.
Although an Award of Restricted Stock pursuant to a Mandatory Grant may be subject to certain lapse restrictions and may be substantially nonvested upon transfer, any such Award is intended to constitute a transfer of such Restricted Stock within the meaning of Code Section 83 upon grant. Accordingly, Nonemployee Directors who are awarded Restricted Stock will be eligible to make an election under Code Section 83(b) with respect to those Shares at the time such Award is made, 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 date of transfer.
|
Vesting Date
|
Unvested Shares as of November 20, 2018
|
2/7/2019; 2/7/2020; 2/7/2021
|
13,099
|
2/7/2019; 2/7/2020
|
12,982
|
2/9/2019
|
7,607
|
2/9/2019
|
6,076
|
2/7/2020
|
6,625
|
2/7/2020
|
6,553
|
2/7/2021
|
4,374
|
2/7/2021
|
3,466
|
Years of Service
After the Grant Date
|
Vested Percentage
|
Less than 1
|
0%
|
1 but less than 2
|
33-1/3%
|
2 but less than 3
|
66-2/3%
|
3 or more
|
100%
|
A.
|
Boeing and Seller (hereinafter “Parties”) are parties to the Special Business Provisions MS-65530-0016, dated June 16, 2005 (the "SBP"), and the General Terms Agreement BCA-65530-0016, dated June 17, 2005 (the "GTA") (collectively, the "Sustaining Agreement"), and including any Amendments to the GTA and the SBP.
|
B.
|
The Parties have executed SBP Amendment Number’s 21 and 29 for BBJ8 and BBJ7/BBJ9 and Amendment 34 for 737-10 Non-Recurring Non-Tooling into SBP Attachment 27.
|
C.
|
The Parties now wish to amend SBP Attachment 27, as contemplated below, to include the
|
1.
|
The list of “Amendments” within the sustaining SBP is hereby deleted and replaced in its entirety as follows:
|
Amendment Number
|
Description
|
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, and 16. Incorporate Attachment 9 per CCN 2385.
|
11/23/2010
|
S. Hu
|
M. Milan
|
|||
7
|
Incorporate CCNs as listed in Amendment 7, Attachment A, includes addition of new section 12.13.3.1. Updates to Attachments 1, 2, 4, 7, 9, 14, and 16. Incorporate Attachment 1B per CCN 4212 and Attachment 23 per the 767-2C MOA.
|
7/28/2011
|
S. Hu
|
M. Milan
|
|||
8
|
Incorporate CCNs as listed in Amendment 8, Attachment A, includes revisions to section 7.9 and 12.13.1.1. Updates to Attachments 1, 2, 4, 7, 9, 14, 15, and 16.
|
8/16/2013
|
C. Howell
|
M. Milan
|
|||
9
|
Incorporate Attachment 25 - 737 Max Titanium Inner Wall Agreement.
|
9/4/2014
|
E. Flagel
|
M. Milan
|
|||
10
|
Incorporate Attachment 26-737 Derailment.
|
9/26/2014
|
B. Folden
|
R. Ast
|
|||
11
|
Incorporate Attachment 27 -737 MAX Non-Recurring Agreement, and Attachment 28 737/747/767/777 Pricing Agreement. Updates Section 4.1 Attachment 4, Section B.1, Attachments 9 and 15.
|
3/10/2015
|
C. Howell
|
R. Ast
|
|||
12
|
Delete and replace Attachment 25, Section 3.0.
|
4/9/2015
|
K. Drawsky
|
R. Ast
|
|||
13
|
Incorporate CCNs as listed in Amendment 13, Attachment A. Updates to Attachments 1, 2, 7, 9, 14, and 16.
|
1/4/2016
|
L. Taylor
|
K. Leyba
|
|||
14
|
Incorporate Attachment 25, Addendum 1.
|
4/21/2015
|
D. Blaylock
|
R. Grant
|
|||
15
|
NULL
|
NULL
|
NULL
|
16
|
NULL
|
NULL
|
NULL
|
17
|
Incorporate Attachment 29 - 777X Non-Recurring Agreement.
|
12/23/2015
|
A. Lucker
|
E. Bauer
|
|||
18
|
NULL
|
NULL
|
NULL
|
19
|
NULL
|
NULL
|
NULL
|
20
|
737 MAX Inner Wall.
|
12/17/2015
|
S. Garcia-Deleone
|
J. Reed
|
|||
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.
|
3/16/2017
|
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 Attachment 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
|
Delete and Replace SBP Sections 4.1, 4.1.1, 5.1.1, 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.
|
9/22/2017
|
B. Edwards
|
|
Delete and Reserve SBP Attachments 1C, 20, and 28.
|
W. Wilson
|
|||
Incorporate SBP Attachment 1D and 31.
|
|
|||
31
|
Revisions to Attachment 27, 737-8 Rate Tooling Incentive Agreement.
|
10/18/2017
|
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.
|
11/30/2017
|
D. Blaylock
|
|
E. Bossler
|
||||
34
|
Revisions to Attachment 27, 737-10 Non-Recurring Non-Tooling.
|
2/23/2018
|
D. Blaylock
|
|
E. Bossler
|
||||
35
|
Revisions to Attachment 27, 737-9 Rate Tooling [*****].
|
4/18/2018
|
D. Blaylock
|
|
J. O'Crowley
|
||||
36
|
Revisions to Attachment 27, 737-10 Wing NRE.
|
6/20/2018
|
D. Blaylock
|
|
E. Bossler
|
||||
37
|
Incorporation of new Sections: 3.3.4.10 767 One Piece SOW Tooling, 3.3.7 767 One Piece SOW Non-Recurring Pricing, 3.4.2.2 Delivery Point and Schedule for 767 One Piece SOW and 3.8 767 One Piece Statement of Work Special Provisions. Updates to Sections 7.1, Attachment 1 and 9.
|
8/17/2018
|
H. Langowski
|
|
R. Grant
|
||||
38
|
Revisions to Attachment 27, 737 MAX BBJ8, BBJ7, and 737-10 SOW
|
10/30/2018
|
T. Willis
E. Bossler
|
|
2.
|
Paragraph 1.2.9 is added to SBP Attachment 27 to define SRM as follows:
|
3.
|
Paragraph 3.3 of SBP Attachment 27 is amended in its entirety and is replaced with the following:
|
4.
|
Paragraph 5.1.1.1 is added in its entirety to SBP Attachment 27 as follows:
|
5.
|
Paragraph 5.2.1.1 is added in its entirety to SBP Attachment 27 as follows:
|
•
|
737-10 SRM Fuselage Non-Recurring Non-Tooling PO 282640 item 01
|
•
|
737-8 BBJ SRM Fuselage Non-Recurring Non-Tooling PO 282640 item 02
|
•
|
737-7 BBJ SRM Fuselage Non-Recurring Non-Tooling PO 282640 item 04”
|
6.
|
SBP Attachment 27 Exhibit E is amended in its entirety and is replaced with revised Exhibit E to include SRM activity (attached hereto as Attachment 1)
|
7.
|
SBP Attachment 9 is updated to include reference to this Amendment No. 38.
|
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. 38 and provisions of the SBP, GTA or the Administrative Agreement, this Amendment No. 38 hereto shall take precedence.
|
C.
|
This Amendment No. 38 shall be governed by the internal laws of the State of Washington without reference to any rules governing conflict of laws.
|
Exhibit E: Non-Recurring Non-Tooling Cost Submittal Form
|
|
|
||||
|
|
|||||
|
|
|
|
|
|
|
Summary Totals Page
|
|
|
|
|
|
|
737 MAX Non-Recurring Actuals
|
|
|
|
|
||
Cumulative through Date (Month/Year)
|
|
|
|
|
||
|
|
|
|
|
|
|
Hours
|
Fuselage
|
Pylon
|
TR
|
Wing
|
Total
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Hours
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg Rate
|
Fuselage
|
Pylon
|
TR
|
Wing
|
Total
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
Fuselage
|
Pylon
|
TR
|
Wing
|
Total
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals by Month
|
|
|
|
|
|
|
737 MAX Non-Recurring Actuals - Total
|
|
|
|
|
||
Date (Month/Year)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hours
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Hours
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg Rate
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals by IPT
|
|
|
|
|
|
|
737 MAX Non-Recurring Actuals - (By IPT)
|
|
|
|
|
||
Date (Month/Year)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hours
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Hours
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg Rate
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuals by IPT
|
|
|
|
|
|
|
737 MAX Non-Recurring Actuals - (By IPT)
|
|
|
|
|
||
Date (Month/Year)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hours
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Fuselage Hours
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Fuselage Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
|
Dollars with G& A
|
Month
|
Month
|
Month
|
Month
|
|
|
Design Eng
|
|
|
|
|
|
|
Stress Eng
|
|
|
|
|
|
|
Project ME
|
|
|
|
|
|
|
Design Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - Subcontract
|
|
|
|
|
|
|
Stress Eng - SRM
|
|
|
|
|
|
|
Process ME
|
|
|
|
|
|
|
NC
|
|
|
|
|
|
|
IPT
|
|
|
|
|
|
|
QA
|
|
|
|
|
|
|
Total Fuselage Dollars with G&A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.
|
The Parties entered into Special Business Provisions MS-65530-0016, dated June 16, 2005, (the “
SBP
”) and the General Terms Agreement BCA-65530-0016, dated June 17, 2005, (the “
GTA
”), and including any amendments to the SBP and GTA (collectively the “
Sustaining Agreement
”).
|
B.
|
The most recent amendment to the SBP is Amendment 38, entered into November 1, 2018.
|
C.
|
The Parties wish to amend the SBP to reflect the Parties’ recent agreement regarding recurring pricing, inter alia, as specifically set forth herein.
|
1.
|
The list of “AMENDMENTS” within the Sustaining SBP is hereby deleted and replaced in its entirety as follows:
|
Amendment Number
|
Description
|
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, and 16. Incorporate Attachment 9 per CCN 2385.
|
11/23/2010
|
S. Hu
|
M. Milan
|
|||
7
|
Incorporate CCNs as listed in Amendment 7, Attachment A, includes addition of new section 12.13.3.1. Updates to Attachments 1, 2, 4, 7, 9, 14, and 16. Incorporate Attachment 1B per CCN 4212 and Attachment 23 per the 767-2C MOA.
|
7/28/2011
|
S. Hu
|
M. Milan
|
|||
8
|
Incorporate CCNs as listed in Amendment 8, Attachment A, includes revisions to section 7.9 and 12.13.1.1. Updates to Attachments 1, 2, 4, 7, 9, 14, 15, and 16.
|
8/16/2013
|
C. Howell
|
M. Milan
|
|||
9
|
Incorporate Attachment 25 - 737 Max Titanium Inner Wall Agreement.
|
9/4/2014
|
E. Flagel
|
M. Milan
|
|||
10
|
Incorporate Attachment 26-737 Derailment.
|
9/26/2014
|
B. Folden
|
R. Ast
|
|||
11
|
Incorporate Attachment 27 -737-MAX Non Recurring Agreement, and Attachment 28 737/747/767/777 Pricing Agreement. Updates Section 4.1 Attachment 4, Section B.1, Attachments 9 and 15.
|
3/10/2015
|
C. Howell
|
R. Ast
|
|||
12
|
Delete and replace Attachment 25, Section 3.0.
|
4/9/2015
|
K. Drawsky
|
R. Ast
|
|||
13
|
Incorporate CCNs as listed in Amendment 13, Attachment A. Updates to Attachments 1, 2, 7, 9, 14, and 16.
|
1/4/2016
|
L. Taylor
|
K. Leyba
|
|||
14
|
Incorporate Attachment 25, Addendum 1.
|
4/21/2015
|
D. Blaylock
|
R. Grant
|
|||
15
|
NULL
|
NULL
|
NULL
|
16
|
NULL
|
NULL
|
NULL
|
17
|
Incorporate Attachment 29 - 777X Non-Recurring Agreement.
|
12/23/2015
|
A. Lucker
|
E. Bauer
|
|||
18
|
NULL
|
NULL
|
NULL
|
19
|
NULL
|
NULL
|
NULL
|
20
|
737 MAX Inner Wall.
|
12/17/2015
|
S. Garcia-Deleone
|
J. Reed
|
|||
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.
|
3/16/2017
|
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 Attachment 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
|
Delete and Replace SBP Sections 4.1, 4.1.1, 5.1.1, 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.
|
9/22/2017
|
B. Edwards
|
Delete and Reserve SBP Attachments 1C, 20, and 28.
|
W. Wilson
|
||
Incorporate SBP Attachment 1D and 31.
|
|
||
31
|
Revisions to Attachment 27, 737-8 Rate Tooling Incentive Agreement.
|
10/18/2017
|
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.
|
11/30/2017
|
D. Blaylock
|
|
E. Bossler
|
||||
34
|
Revisions to Attachment 27, 737-10 Non-Recurring Non-Tooling.
|
2/23/2018
|
D. Blaylock
|
|
E. Bossler
|
||||
35
|
Revisions to Attachment 27, 737-9 Rate Tooling [*****].
|
4/18/2018
|
D. Blaylock
|
|
J. O'Crowley
|
||||
36
|
Revisions to Attachment 27, 737-10 Wing NRE.
|
6/20/2018
|
D. Blaylock
|
|
E. Bossler
|
||||
37
|
Incorporation of new Sections: 3.3.4.10 767 One Piece SOW Tooling, 3.3.7 767 One Piece SOW NonRecurring Pricing, 3.4.2.2 Delivery Point and Schedule for 767 One Piece SOW and 3.8 767 One Piece Statement of Work Special Provisions. Updates to Sections 7.1, Attachment 1 and 9.
|
8/17/2018
|
H. Langowski
|
|
R. Grant
|
||||
38
|
Revisions to Attachment 27, 737 MAX BBJ8, BBJ7, and 737-10 SOW
|
11/01/2018
|
T. Willis
E. Bossler
|
|
39
|
4.1.1 is altered. A new section 4.7 is added. Attachment 1 (excluding the Exhibits) is deleted and replaced in its entirety. A new Attachment 32 “737 Value Engineering Cost Sharing” is added. Attachment 1 Exhibits B, B.1, B.2, C, C.1, C.2, D, D.1, D.2, E.1, E.2, F, F.1, and F.2 are deleted and replaced in their entirety. A new Attachment 1 Exhibit C.3 is added. Attachment 1B is deleted in its entirety.
|
11/01/2018
|
K. Shipley
|
|
E. Bossler
|
2.
|
The SBP is hereby amended by deleting the list of “Attachments” within the Sustaining SBP and replacing it in its entirety with a new SBP list of Attachments as follows:
|
Attachment 1D
|
MAX Composite Inner Wall SOW
|
Attachment 23
|
767-2C SOW
|
Attachment 24
|
Anti-Lobbying Certificate
|
Attachment 25
|
737 Max Titanium Inner-Wall Work Transfer SOW
|
Attachment 26
|
737 Derailment
|
Attachment 27
|
737 MAX Non-Recurring Agreement
|
Attachment 28
|
Reserved
|
Attachment 29
|
777X Non-Recurring Agreement
|
Attachment 30
|
737 NG / MAX Vapor Barrier Agreement
|
Attachment 31
|
Annual Shipset Production Rate-Based Adjustment
|
Attachment 32
|
737 Value Engineering Cost Sharing”
|
3.
|
The first sentence in SBP Section 4.1.1 “Interim Extension Pricing Indices” is deleted in its entirety and replaced with the following:
|
4.
|
A new SBP Section 4.7 is added:
|
5.
|
SBP Attachment 1, not including its Exhibits, is deleted in its entirety and replaced with a revised SBP Attachment 1 (attached hereto as Attachment A). The Exhibits to the existing SBP Attachment 1 remain unchanged except as expressly amended herein.
|
6.
|
Exhibits B, B.1, B.2, C, C.1, C.2, D, D.1, D.2, E.1, E.2, F, F.1, and F.2 of SBP Attachment 1 are deleted in their entirety and replaced with revised Exhibits B, B.1, B.2, C, C.1, C.2, D, D.1, D.2, E.1, E.2, F, F.1, and F.2 of SBP Attachment 1 (attached hereto as Attachment B).
|
7.
|
SBP Attachment 1B is deleted in its entirety and marked “Reserved.”
|
8.
|
A new SBP Attachment 1 Exhibit C.3 (attached hereto as Attachment C) is added to SBP Attachment 1.
|
9.
|
A new SBP Attachment 32 “737 Value Engineering Cost Sharing” (attached hereto as Attachment D) is added to the SBP.
|
10.
|
All other provisions of the SBP shall remain unchanged and in full force and effect.
|
11.
|
This Amendment constitutes the complete and exclusive agreement between the Parties with respect to the subject matter set forth herein and supersedes all previous agreements between the Parties relating thereto, whether written or oral.
|
12.
|
This Amendment shall be governed by the internal laws of the State of Washington without reference to any rules governing conflict of laws.
|
1.
|
RECURRING PRICING PERIOD
|
a)
|
Non-Discounted Price means the pricing prior to application of production rate-based discounts, if such discounts are applicable. Non-Discounted Prices are subject to Changes in accordance with SBP Section 7.0. Non-Discounted Prices are listed in SBP Attachment 1 Exhibit(s) B.1, B.2, C.1, C.2, C.3, D.1, D.2, F.1 and F.2.
|
i.
|
In the event there is an error in the calculation of Prices contained in this SBP Attachment 1, the Parties shall correct said Prices.
|
b)
|
The pricing as set forth in sections 2, 5, and 7 (for 777 other than 300ER and 200LR) is for the pricing period January 1, 2016, through December 31, 2022. . The pricing as set forth in sections 4 and 7 (for 777 300ER and 200LR only) is for life of each respective Program Airplane so long as such models remain in continuous production. The periods specified in this subsection b) are referred to as the “Pricing Period” for the applicable Program Airplane.
|
c)
|
The pricing on and after January 1, 2023, for sections 2, 5, and 7 (for 777 other than 300ER and 200LR)will be negotiated by the Parties, and the Parties will begin negotiating twenty-four (24) months prior to those respective dates.
|
i.
|
Pricing on and after January 1, 2023 for 737 NG / MAX will take into account market dynamics, productivity improvements and other cost reductions resulting from increases in rates above
[*****]
APM, if Boeing is then producing at such rates.
|
d)
|
In the event the Parties are unable to agree on follow-on pricing prior to the end of the Pricing Period, interim pricing will take effect and continue thereafter until the earlier of such time as: (i) the Parties agree to follow-on pricing; or (ii) pricing is established in accordance with GTA Section 33.0 and this SBP Attachment 1. The period between the end of the Pricing Period and the establishment of follow-on pricing shall be defined as the “Interim Pricing Period”.
|
e)
|
Interim Pricing Reconciliation:
|
i.
|
Boeing and Seller will validate and agree on phase i amounts for Seller shipments from January 1, 2016 through October 1, 2017. The applicable Party shall make payment within
[*****]
days of validating the reconciled amount.
|
ii.
|
Boeing and Seller will validate and agree on phase ii amounts for Seller shipments from October 2, 2017 through December 31, 2017. The applicable Party shall make payment within
[*****]
days of validating the reconciled amount.
|
f)
|
Annual Shipset Production Rate-Based Adjustment:
|
i.
|
All Shipsets (excluding 767-2C) delivered by Seller to Boeing during the Pricing Period and any subsequent Interim Pricing Period shall be subject to the calculation set forth in SBP Attachment 31.
|
2.
|
737 NG / MAX and P-8 RECURRING PRICING
|
a)
|
737 NG / MAX and P8 Pricing
|
Table 1 - 737 NG / MAX Discount Structure
|
||||
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
[*****]% discount*
|
[*****]% discount*
|
[*****]% discount*
|
[*****]% discount*
|
[*****]% discount*
|
*discount applicable to Non-Discounted Price
|
i.
|
The pricing referenced in Table 2 (737 Pricing Reference Table) shall take effect for deliveries on and after January 1
st
of each year following the year in which the applicable rate is achieved and held, except as noted in sections 2.a)vi and 2.a)vii below.
|
ii.
|
In the event Boeing does not achieve and hold rate
[*****]
in 2018, pricing listed in Column B of SBP Attachment 1 Exhibit B.1 and B.2 shall apply for the remainder of the Pricing Period (starting January 1, 2018) until Boeing does so.
|
iii.
|
In the event Boeing achieves and holds rate
[*****]
but does not achieve and hold rate
[*****]
, pricing in Column C of SBP Attachment 1 Exhibit B.1 and B.2 shall apply for the remainder of the Pricing Period until Boeing does so; provided, if rates drop below rate
[*****]
, pricing in Column B of SBP Attachment 1 Exhibit B.1 and B.2 shall apply until such time as rate
[*****]
is achieved again and held. Further, if rates drop to between rate
[*****]
and rate
[*****]
, after initially achieving rate
[*****]
, pricing in Column C of SBP Attachment 1 Exhibit B.1 and B.2 shall apply until such time as rate
[*****]
is achieved again and held.
|
iv.
|
In the event a new or adjusted Master Schedule is released in accordance with the SBP, which slides implementation of production rate
[*****]
beyond 2018 or production rate of
[*****]
beyond 2019 or requires any production rate reductions, the Parties agree to update SBP Attachment 1 Exhibit A and determine applicable Prices.
|
v.
|
Should an update to Prices be required as set forth in the preceding clause (iv), the Parties shall use the appropriate pricing column from SBP Attachment 1 Table 2 to determine the correct Price within
[*****]
calendar
|
vi.
|
In the event 737 production rates increase to
[*****]
after calendar year 2018, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column B until the month after rate
[*****]
is achieved. At that time, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column C, except as provided in SBP Attachment 1 Section 2.a)iii.
|
vii.
|
In the event 737 production rates increase to
[*****]
after calendar year 2019, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column C until the month after rate
[*****]
is achieved. At that time, the pricing for 737 Products will be the pricing referenced in SBP Attachment 1 Exhibit B.1 and B.2 Column D (if the then current year is 2020) or SBP Attachment 1 Exhibit B.1 and B.2 Column E (if the then current year is 2021 or 2022), except as provided in SBP Attachment 1 Section 2.a)iii.
|
viii.
|
Examples:
|
|
2019
|
Achieving rate
[*****]
in 2019
|
||||||||||
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
737 Fuselage Deliveries
|
[*****]
|
|||||||||||
Column
|
C
|
C
|
C
|
C
|
C
|
C
|
C
|
C
|
C
|
C
|
C
|
C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
Holding rate
[*****]
throughout 2020 (assumes rate
[*****]
achieved in 2019)
|
||||||||||
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
737 Fuselage Deliveries
|
[*****]
|
|||||||||||
Column
|
D
|
D
|
D
|
D
|
D
|
D
|
D
|
D
|
D
|
D
|
D
|
D
|
b)
|
737 Interim Pricing
|
i.
|
If the Parties are unable to reach agreement on follow-on pricing before January 1, 2023, Boeing will pay interim pricing from January 1, 2023 as defined within Table 3 737 Interim Pricing Reference Table. The Non-Discounted Price and the Prices in columns A, B, and C in SBP Attachment 1 Exhibits B.1 and B.2 shall be escalated or de-escalated using the indices and methodology provided in SBP Section 4.1.1 (for clarity, columns D and E of said Exhibits are not applicable during the Interim Pricing Period). The 737 P-8 will be included in 737 production rates, however, Table 3 below does not apply to the 737 P-8 Products (reference SBP Attachment 1 Section 3) or 737 MAX CIW (reference SBP Attachment 1D), which is included within the 737 MAX Thrust Reverser Prices listed in SBP Attachment 1 Exhibit B.1.
|
ii.
|
In addition, Boeing agrees to pay Seller $
[*****]
per year escalated or de-escalated according to the indices with a base year of 2017 (including the weighting and timing of the indices) provided in SBP Section 4.1.1. This payment shall be made annually on
[*****]
, starting the first year of interim pricing, or a pro rata portion of this payment will be made on or about the date of determination of pricing. These payments will not be subject to any reconciliation or retroactive adjustment.
|
iii.
|
Notwithstanding the interim pricing set forth in this Section, the Parties will use the dispute resolution process in GTA Section 33.0 to determine reasonable pricing if pricing is not agreed upon by December 31, 2023.
|
iv.
|
At the earlier of such time as: (i) the Parties agree to follow-on pricing; or (ii) pricing is established in accordance with GTA Section 33.0 and this SBP Attachment 1, the Parties will reconcile interim pricing with the follow-
|
c)
|
Additional 737 MAX Pricing
|
i.
|
The Parties agree to negotiate a delta price for the 737-8200 MAX based on the 737-8 MAX configuration through Post Rev
[*****]
as defined in SBP Attachment 1 Section 2.d)i and 2.d)ii, and the Prices listed in Attachment 1 Exhibit(s) B.1 and B.2 . Until such price is negotiated, the agreed interim pricing is the then current pricing for the 737-8 MAX. The Parties agree pricing will be negotiated and agreed upon within
[*****]
days after the first Seller delivery of the 737-8200 fuselage to Boeing. At such time as a subsequent pricing agreement has been achieved, the Parties will reconcile interim pricing with the agreed-upon pricing, and a corresponding debit or credit as applicable will be made.
|
ii.
|
The Parties agree to negotiate a delta price for the 737-10 MAX based on the 737-9 MAX configuration through 737-9 Post Rev
[*****]
as defined in SBP Attachment 1 Section 2.d)iii and 2.d)iv below and the Prices listed in Attachment 1 Exhibit B.1 and B.2. Until such price is negotiated, the agreed interim pricing is the then current pricing for the 737-9 MAX. The Parties agree pricing will be negotiated and agreed upon within
[*****]
days after the first Seller delivery of the 737-10 fuselage to Boeing. At such time as a subsequent pricing agreement has been achieved, the Parties will reconcile interim pricing with the agreed-upon pricing, and a corresponding debit or credit as applicable will be made.
|
iii.
|
The Parties agree, pricing for all 737 MAX minor models shall utilize the same production rate-based discount methodology as described in SBP Attachment 1 Section 2.a) and 2.b).
|
d)
|
Changes to 737 MAX Pricing prior to respective ATCs:
|
•
|
Boeing will issue updated recurring Orders no later than November 7, 2018 for Production Articles delivered on and after November 8, 2018; such Orders will include the Price adjustments for Post Rev
[*****]
contained in Exhibits B and B.1 of SBP Attachment 1 as amended by SBP Amendment 39.
|
•
|
Boeing will issue a reconciliation Order no later than November 15, 2018
|
•
|
Spirit will submit the reconciliation invoice to Boeing no later than November 19, 2018
|
•
|
Boeing will approve the reconciliation invoice no later than December 1, 2018
|
i.
|
737-8 Pricing:
|
ii.
|
Post Rev
[*****]
:
|
iii.
|
737-9 Pricing:
|
iv.
|
737-9 Post Rev
[*****]
:
|
v.
|
737-7 (7150) Pricing:
|
vi.
|
737-7 Post Rev
[*****]
:
|
vii.
|
Any other 737 MAX minor models will follow the same approach as specified in this Section 2.d) and added to SBP Attachment 1 Exhibit(s) B.1 and B.2.
|
e)
|
Changes to 737 MAX Pricing Post ATC
|
i.
|
737-8 Pricing
|
a.
|
Seller will submit a separate change proposal for Changes directed subsequent to 737-8 ATC through
[*****]
by no later than
[*****]
. The Parties agree to negotiate the proposal within 90 days of submittal.
|
b.
|
The Parties agree SBP Attachment 27 shall not apply to Changes directed post ATC for the 737-8.
|
c.
|
The Parties agree all Changes directed post 737-8 ATC will be in accordance with SBP Section 7.0.
|
ii.
|
737-9 Pricing
|
a.
|
The Parties agree SBP Attachment 27 shall not apply for 737-9 Changes directed post ATC for the 737-9.
|
b.
|
The Parties agree all Changes directed post 737-9 ATC will be in accordance with SBP Section 7.0.
|
iii.
|
737-7 (7150) Pricing
|
a.
|
The Parties agree SBP Attachment 27 shall not apply for 737-7 (7150) Changes directed post ATC for the 737-7 (7150).
|
b.
|
The Parties agree all Changes directed post 737-7 (7150) ATC will be in accordance with SBP Section 7.0.
|
iv.
|
Any other 737 MAX minor models will follow the same approach as specified in this Section and added to SBP Attachment 1 Exhibit(s) B.1 and B.2.
|
3.
|
737 P-8 INTERIM PRICING
|
4.
|
747 RECURRING PRICING
|
a)
|
747 Pricing Period
|
5.
|
767 RECURRING PRICING (EXCLUDING 767-2C)
|
a)
|
767 Pricing Period
|
6.
|
767-2C RECURRING PRICING
|
7.
|
777 RECURRING PRICING (EXCLUDES 777X)
|
a)
|
777 Pricing Period
|
•
|
$
[*****]
to be paid on or about
[*****]
*
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
**
|
•
|
$
[*****]
to be paid on or about
[*****]
***
|
8.
|
NON-RECURRING PRICING:
|
a)
|
Boeing agrees to pay Seller a fixed sum of $
[*****]
to support 737 rate
[*****]
APM
[*****]
expenditures by Seller, as follows:
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
i.
|
Boeing shall issue purchase orders no later than
[*****]
days prior to the above dates.
|
ii.
|
Payment will be made by Boeing to Seller in accordance with SBP Section 5.2.1.
|
b)
|
Boeing agrees to pay Seller a fixed sum of $
[*****]
to support 737 rate
[*****]
APM
[*****]
expenditures, which the Parties agree includes 737-8 rate tooling* (only from rate
[*****]
up to and including
[*****]
), 737-9 rate tooling* (only from rate
[*****]
up to and including
[*****]
), 737 CIW rate tooling* (only from rate
[*****]
up to and including
[*****]
), 737-8200 rate tooling* (only up to and including rate
[*****]
), 737-7 (7150) rate tooling* (only up to and including rate
[*****]
), and 737-10 rate tooling* (only up to and including rate
[*****]
). Payments shall be made as follows:
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
•
|
$
[*****]
paid no later than
[*****]
|
i.
|
Boeing shall issue purchase orders no later than
[*****]
days prior to the above dates.
|
ii.
|
Seller will submit CTLs for rate
[*****]
tooling, starting
[*****]
. The above payments in this section are not contingent upon CTL submittal by Seller or approval by Boeing.
|
iii.
|
Payment will be made by Boeing to Seller in accordance with SBP Section 5.2.1.
|
iv.
|
SBP Attachment 1 Exhibit G identifies the rate tooling settlements that are and are not included within the $
[*****]
fixed sum payment set forth in this Section 8.b). For the avoidance of doubt, SBP Attachment 27 does not apply to the $
[*****]
fixed sum payment set forth in this Section 8.b).
|
1.
|
The Parties agree to cooperate and work together to implement cost reduction ideas agreed to by both Boeing and Seller. This Attachment supersedes SBP Sections 7.6 and 7.6.1 for the 737 Program Airplane while this SBP Attachment 32 is effective. For each agreed-to cost reduction project, the Parties will enter into a written agreement in substantially the same form as Exhibit A attached hereto (each, a "Cost Reduction Project Agreement") which will, at a minimum, set forth the following: (a) a detailed description of the cost reduction idea; (b) the steps required to implement such idea; (c) the Party responsible for each step; (d) the timeline associated with such implementation; (e) equal allocation of non-recurring costs between the Parties (50% each) and the documentation reasonably necessary to substantiate the non-recurring costs of each Party; (f) the method for defining and measuring the cost savings; (g) the process for recapture of each Party's non-recurring costs; (h) equal allocation of the cost savings between the Parties (50% each); and (i) the process for terminating a Cost Reduction Project Agreement.
|
2.
|
In order to track the progress of cost reduction implementation efforts, the Parties agree to conduct, at least once per calendar quarter starting in the first quarter of 2019: (1) executive reviews; and (2) cost reduction symposia to jointly discuss, brainstorm, and identify potential cost reduction projects. These reviews will track progress of jointly-agreed items including, but not limited to, total number of cost reduction ideas, total number of implemented ideas, and total savings captured by both Parties to-date. For clarity, any potential projects or ideas conceived by either Party prior to the effective date of SBP Amendment 39 (and which were not included in the December 2017 cost reduction symposium list identified as “Boeing_Symposium_Ideas_Capture_All.xlsx”) will not be considered to be covered by this SBP Attachment 32 unless otherwise jointly agreed by the Parties.
|
3.
|
The sum of the nonrecurring costs of the Parties required to implement cost reduction ideas, as set forth in the applicable Cost Reduction Project Agreement, will be shared equally by the Parties. The wrap rates contained in SBP Attachment 5 will be utilized for calculating Seller’s nonrecurring costs, and $
|
4.
|
Any cost reductions resulting from incorporation of joint Boeing and Seller cost reduction initiatives will result in a reduction in the Attachment 1 [*****] in a mutually agreed manner that equitably preserves, or enhances if market conditions allow, the anticipated economics for both Boeing and Seller. The wrap rates contained in SBP Attachment 5 will be utilized for calculating Seller’s recurring cost savings.
|
A.
|
The Parties have been in discussions regarding, among other things, pricing and other terms and conditions pertaining to all Derivatives and models of the 737, 747, 767, 777, and 787 programs (the "Programs").
|
B.
|
The Parties wish to memorialize their agreement on these matters in this MOA, in accordance with the terms set forth below.
|
1.
|
Capitalized Terms
. Capitalized terms used and not otherwise defined in this MOA will have the meanings ascribed thereto in SBP MS-65530-0016 ("Sustaining SBP"), SBP MS-65530- 0019 ("787 SBP"), GTA BCA-65530-0016 ("Sustaining GTA"), GTA BCA-65520-0032 ("787 GTA”), AA-65530-0010 (“Sustaining AA”), AA-65520-0026 (“787 AA”), and other related agreements or documents, as applicable (collectively, the "Contracts").
|
2.
|
Definitive Documentation
. The Parties will negotiate and execute, in good faith, on or before January 31, 2019, such amendments to the Contracts and other documents (the "Definitive Documentation") as are necessary or desirable to carry out the agreements set forth in this MOA.
|
3.
|
Pricing Periods
. The Parties are modifying the Pricing Periods for the models set forth in Table 1 below. The Parties will reconvene in 2028 to negotiate pricing beyond 2030.
|
Program
|
Models
|
Pricing Period End Date
|
737NG/MAX
|
all Derivatives, including P8
|
12/31/2030
|
767
|
all Derivatives except 767-2C
|
12/31/2030
|
777
|
Freighters
|
12/31/2030
|
777X
|
all Derivatives
|
12/31/2030
|
4.
|
737 Pricing for Various Production Rates
. 737 Prices, to be documented in SBP Attachment 1, will be discounted or increased depending upon the monthly production rate, per Table 2, below. The 737 P-8 will be used to calculate 737 production rates; however, the production rate-based discounts or increased pricing specified in Table 2 below do not apply to the 737 P-8 Products. In addition, the production rate-based discounts or increased pricing specified in Table 2 below do not apply to the 737 MAX Composite Inner Wall (CIW; reference Sustaining SBP Attachment 1D), which is included within the 737 MAX Thrust Reverser Prices listed in Sustaining SBP Attachment 1 Exhibit B.1.
|
5.
|
737MAX -8200 Delta Price to 737MAX -8
. Attachment 1 will be updated to include the recurring Price of the 737MAX -8200 by adding [*****] ($[*****]) to the Non-Discounted Price of 737MAX-8 and will be subject to rate discounts, in complete settlement of, and based upon the configuration contained within, Spirit’s proposal ref# LET-18-11080 dated October 17, 2018. Reconciliation for 2018 deliveries will be completed by January 31, 2019.
|
6.
|
737 Rate [*****] Tooling and Capital Expenditures
. Boeing will provide Spirit a fixed sum of [*****] dollars ($[*****]) for Spirit’s implementation of tooling and capital expenditures necessary to increase and maintain 737 production rates up to, and including, [*****] Shipsets per month. Commencing in [*****], Spirit will request authority to proceed (ATP) for appropriate amounts for long-lead items to protect the [*****] Shipsets rate. Upon approval, Boeing will issue the ATP(s) and Boeing will pay appropriate amounts for such long-lead items. The adjusted balance of the $[*****] will be paid in [*****] payments post Boeing’s Rate [*****] decision. Both parties will mutually work together to establish a reasonable rate [*****] incorporation timeline. Spirit will determine the allocation of the [*****] ($[*****]) between [*****] for rate [*****] APM. Spirit will submit CTLs to Boeing for all associated Tooling. The above payments are not contingent upon CTL submittal by Spirit or approval by Boeing.
|
7.
|
777X Recurring Price
. Boeing will pay Spirit a recurring Price of $[*****] per Shipset for [*****] combined 777-8 and 777-9 Shipsets. Boeing will pay Spirit a recurring Price of $[*****] from Shipset [*****] and all subsequent 777-9 Shipsets through December 31, 2030. These Prices are inclusive of all changes to the 777-9 for which engineering has been released through the Effective Date. The Parties agree to negotiate a delta price for the 777-8 from the 777-9 non-discounted price
|
8.
|
777X Recurring Price Discounts
. All 777X minor models will be utilized to calculate production rates. The Prices will be discounted by [*****] percent ([*****]%), per Shipset, for all 777X minor models, excluding 777X Freighter, once the production rate exceeds [*****] 777X Shipsets per month. Application of price adjustments will be consistent with the applicable 737 methodology relative to rate measurements and when the discounts take effect. Such discount will not apply to the [*****] 777X Shipsets. Pricing and discounts for 777X Freighters will be negotiated at a later date. Sustaining SBP Attachment 15 will be amended to add 777X Derivatives, as applicable.
|
9.
|
777X Joint Cost Reduction
. The Parties will identify cost reduction ideas and implement a cost reduction program for the 777X minor models that will be administered in a mutually agreed form similar to Attachment 32 of the Sustaining SBP. The Parties will share nonrecurring costs and savings equally.
|
10.
|
787 Recurring Price
. Boeing will pay Spirit 787 recurring Product Prices of $[*****] per Shipset for Shipsets LN 1004 through [*****] and $[*****] per Shipset for Shipsets LN [*****] through 2205. These Prices are applicable to 787-8, -9, and -10 models. In addition to the aforementioned Prices, Boeing will pay Spirit a supplemental amount of $[*****] per 787-10 Shipset for 787-10 Shipsets LN 1004 through and including 2205 for the statement of work set forth in 787 SBP Attachment 31. There will be no risk sharing provisions following Shipset LN [*****]. The Parties will determine the pricing allocation among the associated end item deliverables and incorporate it into the Definitive Documentation.
|
11.
|
787 Joint Cost Reduction
. The Parties will identify cost reduction ideas and implement a joint cost reduction program for the 787 that will begin no earlier than Shipset LN [*****] and after Spirit’s costs are below $[*****] per 787-8/-9 Shipset, and $[*****] per 787-10 Shipset. The 787 cost reduction program will be administered in a form to be mutually agreed by the Parties. Cost visibility data will be agreed as part of the Definitive Documentation. The Parties will share nonrecurring costs and savings equally.
|
12.
|
787 Advance Repayments
. Spirit will suspend repaying Boeing $700,000 per Shipset, for repayment of advanced payments, beginning with Shipset LN 818. Spirit will resume the advance repayments at $450,319, per Shipset, beginning with Shipset LN 1135 and continuing through Shipset LN 1605. The Parties will determine the repayment allocation among the end item deliverables and incorporate into the Definitive Documentation.
|
13.
|
737MAX, 777X, and 787 Abnormal Escalation
. The 787 SBP and Sustaining SBP Attachments 18 and 22, respectively (“Attachments”), will be updated for the 737MAX, 777X, and 787, to define Abnormal Escalation per the below, for the period beginning January 1, 2023 and ending December 31, 2030. Prior to January 1, 2023, the Attachments will remain unchanged. Beginning January 1,
|
13.1.
|
Beginning January 1, 2023, Recurring Product Prices for the 737MAX, 777X, and 787, will be adjusted for Abnormal Escalation as follows. In the event that escalation, as determined by a composite of the identified below indices, exceeds [*****] (“Abnormal Escalation”), the Prices for Recurring Products for the subsequent calendar year shall be adjusted by [*****]. Abnormal Escalation is calculated each year against the Prices for Recurring Products effective for that year and [*****]. The adjusted Prices for Recurring Products will [*****]
|
13.2.
|
Adjustments to the 737MAX, 777X, and 787 Product Prices for Recurring Products will be determined by the following economic indices:
|
A.
|
Material
- [*****]
|
B.
|
Labor
- [*****]
|
13.3.
|
Composite - Composite of [*****]% Labor and [*****]% Material.
|
13.4.
|
Special Notes:
|
14.
|
[*****]
|
15.
|
ASCO Acquisition
. Spirit AeroSystems Belgium Holdings BVBA and its (ultimate) parent company, Spirit AeroSystems Holdings, Inc., intends to acquire ASCO Industries NV (the “Transaction”). Boeing is a party to supply contracts with ASCO Industries NV (inclusive of its affiliates and subsidiaries) that require Boeing’s consent to a change of control. Boeing will provide all required consent(s) upon the Effective Date, to be contingent upon the Transaction closing on or before June 30, 2020.
|
16.
|
Attachment 31: Annual Shipset Production Rate-Based Adjustment
. Attachment 31 of the Sustaining SBP is deleted and marked “Reserved”.
|
17.
|
Complete Agreement.
This MOA constitutes the complete and exclusive agreement between the Parties with respect to the subject matter set forth herein and supersedes all previous agreements between the Parties relating thereto, whether written or oral.
|
18.
|
Governing Law
. This MOA is governed by the laws of the state of Washington, exclusive of Washington's conflict of laws principles.
|
19.
|
No Inducement
. The Parties acknowledge and affirm that no promise or inducement that is not herein contained, other than as set forth in the Settlement and Release Agreement between the Parties made effective December 21, 2018, has been made or received, and that they have not relied upon
|
20.
|
No Admission of Liability; No Precedential Value.
The Parties acknowledge that this MOA reflects a compromise resolution by the Parties of certain claims and that nothing contained in this MOA constitutes or will be construed as an acknowledgement or admission of liability or absence of liability in any way on the part of the Parties, each of which expressly denies any liability or wrongdoing in connection with such claims, and the Parties agree not to issue any public statement or comment to the contrary. The Parties agree that this MOA and the terms and conditions hereof, including without limitation the figures used to reach all pricing and payment figures herein, will have no precedential value and therefore will not be used in support or defense of any other claim arising from the Parties' contracts.
|
21.
|
Confidential Treatment
. The information contained herein is confidential business information. The Parties will limit the disclosure of this MOA's contents to employees with a need to know and who understand that they are not to disclose its contents to any other person or entity without the prior written consent of the other Party. Notwithstanding the above, the Parties may file this MOA with the SEC, if legally required to do so, but must give the other Party 24 hours advance notice and seek confidential treatment as appropriate after providing such Party the opportunity to provide comments. Nothing in this section will prevent either Party from making reasonable disclosures during the course of its earnings calls.
|
22.
|
Investigation
. Each Party has made such investigation of the facts pertaining to this MOA and of all the matters pertaining hereto as it deems necessary. Each Party has read this MOA and understands its contents.
|
23.
|
Interpretation
. Each Party has had the opportunity to draft, review, and edit this MOA. Accordingly, no presumption for or against either Party arising out of drafting all or any part of this MOA will be applied in any action relating to or arising from this MOA; and the Parties hereby waive the benefit of any statute or common law rule providing that in cases of uncertainty language of a contract should be interpreted against the Party who caused the uncertainty to exist.
|
24.
|
Express Agreement
. Except as expressly provided in this MOA, all other terms and conditions of the Contracts remain in full force and effect.
|
BOEING
|
|
|
SELLER
|
|
Boeing Commercial Airplanes
|
|
|
Spirit AeroSystems, Inc.
|
|
Name: Thomas F. McGuigan
|
|
|
Name: Joseph Bolmarcich
|
|
Title: Sr. Manager, Contract
|
|
|
Title: Contracts Director
|
|
Date: 12/21/2018
|
|
|
Date: 12/21/2018
|
|
/s/ Thomas F. McGuigan
|
|
|
/s/ Joseph Bolmarcich
|
|
|
(1) Registration Statement (Form S-3 No. 333-211423) of Spirit AeroSystems Holdings, Inc.;
|
|
(2) Registration Statement (Form S-8 No. 333-146112) of Spirit AeroSystems Holdings, Inc.;
|
|
(3) Registration Statement (Form S-8 No. 333-195790) of Spirit AeroSystems Holdings, Inc.; and
|
|
(4) Registration Statement (Form S-8 No. 333-220358) of Spirit AeroSystems Holdings, Inc.
|
|
/s/ Thomas C. Gentile III
|
|
Thomas C. Gentile III
|
|
President and Chief Executive Officer
|
Date: February 8, 2019
|
|
|
/s/ Jose Garcia
|
|
Jose Garcia
|
|
Senior Vice President and Chief Financial Officer
|
Date: February 8, 2019
|
|
|
/s/ Thomas C. Gentile III
|
|
Thomas C. Gentile III
|
|
President and Chief Executive Officer
|
Date: February 8, 2019
|
|
|
/s/ Jose Garcia
|
|
Jose Garcia
|
|
Senior Vice President and Chief Financial Officer
|
Date: February 8, 2019
|
|