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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
|
20-2436320
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
Class A common stock, par value $0.01 per share
|
SPR
|
New York Stock Exchange
|
Large accelerated filer
|
|
Accelerated filer
|
|
Non-accelerated filer
|
|
Smaller reporting company
|
|
Emerging Growth Company
|
☒
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☐
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☐
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☐
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☐
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|
|
|
|
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Page
|
|
|
|
|
|
For the Three
Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
|
($ in millions, except per share data)
|
||||||
Revenue
|
$
|
1,077.3
|
|
|
$
|
1,967.8
|
|
Operating costs and expenses
|
|
|
|
|
|
||
Cost of sales
|
1,112.5
|
|
|
1,658.3
|
|
||
Selling, general and administrative
|
77.4
|
|
|
63.6
|
|
||
Restructuring costs
|
42.6
|
|
|
—
|
|
||
Research and development
|
12.3
|
|
|
12.9
|
|
||
Total operating costs and expenses
|
1,244.8
|
|
|
1,734.8
|
|
||
Operating (loss) income
|
(167.5
|
)
|
|
233.0
|
|
||
Interest expense and financing fee amortization
|
(32.2
|
)
|
|
(18.8
|
)
|
||
Other expense, net
|
(49.0
|
)
|
|
(11.0
|
)
|
||
(Loss) income before income taxes and equity in net (loss) income of affiliate
|
(248.7
|
)
|
|
203.2
|
|
||
Income tax benefit (provision)
|
87.2
|
|
|
(40.1
|
)
|
||
(Loss) income before equity in net (loss) income of affiliate
|
(161.5
|
)
|
|
163.1
|
|
||
Equity in net loss of affiliate
|
(1.5
|
)
|
|
—
|
|
||
Net (loss) income
|
$
|
(163.0
|
)
|
|
$
|
163.1
|
|
(Loss) earnings per share
|
|
|
|
|
|
||
Basic
|
$
|
(1.57
|
)
|
|
$
|
1.57
|
|
Diluted
|
$
|
(1.57
|
)
|
|
$
|
1.55
|
|
|
For the Three
Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
|
($ in millions)
|
||||||
Net (loss) income
|
$
|
(163.0
|
)
|
|
$
|
163.1
|
|
Changes in other comprehensive (loss) gain, net of tax:
|
|
|
|
|
|
||
Pension, SERP, and Retiree medical adjustments, net of tax effect of $28.8 and $0.1 for the three months ended, respectively
|
(93.2
|
)
|
|
(0.3
|
)
|
||
Unrealized foreign exchange (loss) gain on intercompany loan, net of tax effect of $0.9 and ($0.2) for the three months ended, respectively
|
(2.9
|
)
|
|
0.9
|
|
||
Unrealized loss on interest rate swaps, net of tax effect of $3.0 for the three months ended
|
(9.8
|
)
|
|
—
|
|
||
Foreign currency translation adjustments
|
$
|
(35.8
|
)
|
|
$
|
9.4
|
|
Total other comprehensive (loss) gain
|
(141.7
|
)
|
|
10.0
|
|
||
Total comprehensive (loss) income
|
$
|
(304.7
|
)
|
|
$
|
173.1
|
|
|
April 2, 2020
|
|
December 31, 2019
|
||||
|
($ in millions)
|
||||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,833.6
|
|
|
$
|
2,350.5
|
|
Restricted cash
|
0.3
|
|
|
0.3
|
|
||
Accounts receivable, net
|
508.6
|
|
|
546.4
|
|
||
Contract assets, short-term
|
380.9
|
|
|
528.3
|
|
||
Inventory, net
|
1,168.7
|
|
|
1,118.8
|
|
||
Other current assets
|
134.0
|
|
|
98.7
|
|
||
Total current assets
|
4,026.1
|
|
|
4,643.0
|
|
||
Property, plant and equipment, net
|
2,253.2
|
|
|
2,271.7
|
|
||
Right of use assets
|
47.5
|
|
|
48.9
|
|
||
Contract assets, long-term
|
10.4
|
|
|
6.4
|
|
||
Pension assets
|
282.6
|
|
|
449.1
|
|
||
Deferred income taxes
|
192.6
|
|
|
106.5
|
|
||
Goodwill
|
78.5
|
|
|
2.4
|
|
||
Intangible assets, net
|
30.6
|
|
|
1.2
|
|
||
Other assets
|
79.6
|
|
|
76.8
|
|
||
Total assets
|
$
|
7,001.1
|
|
|
$
|
7,606.0
|
|
Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
740.7
|
|
|
$
|
1,058.3
|
|
Accrued expenses
|
286.1
|
|
|
240.2
|
|
||
Profit sharing
|
17.6
|
|
|
84.5
|
|
||
Current portion of long-term debt
|
52.7
|
|
|
50.2
|
|
||
Operating lease liabilities, short-term
|
5.9
|
|
|
6.0
|
|
||
Advance payments, short-term
|
17.8
|
|
|
21.6
|
|
||
Contract liabilities, short-term
|
166.9
|
|
|
158.3
|
|
||
Forward loss provision, short-term
|
91.5
|
|
|
83.9
|
|
||
Deferred revenue and other deferred credits, short-term
|
17.9
|
|
|
14.8
|
|
||
Other current liabilities
|
37.0
|
|
|
42.9
|
|
||
Total current liabilities
|
1,434.1
|
|
|
1,760.7
|
|
||
Long-term debt
|
2,978.2
|
|
|
2,984.1
|
|
||
Operating lease liabilities, long-term
|
41.7
|
|
|
43.0
|
|
||
Advance payments, long-term
|
327.3
|
|
|
333.3
|
|
||
Pension/OPEB obligation
|
50.9
|
|
|
35.7
|
|
||
Contract Liabilities, long-term
|
388.9
|
|
|
356.3
|
|
||
Forward loss provision, long-term
|
146.9
|
|
|
163.5
|
|
||
Deferred revenue and other deferred credits, long-term
|
36.8
|
|
|
34.4
|
|
||
Deferred grant income liability — non-current
|
27.4
|
|
|
29.0
|
|
||
Deferred income taxes
|
8.2
|
|
|
8.3
|
|
||
Other non-current liabilities
|
104.3
|
|
|
95.8
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Common Stock, Class A par value $0.01, 200,000,000 shares authorized, 105,399,855 and 104,882,379 shares issued and outstanding, respectively
|
1.1
|
|
|
1.1
|
|
||
Additional paid-in capital
|
1,125.6
|
|
|
1,125.0
|
|
||
Accumulated other comprehensive loss
|
(250.9
|
)
|
|
(109.2
|
)
|
||
Retained earnings
|
3,036.9
|
|
|
3,201.3
|
|
||
Treasury stock, at cost (41,523,470 shares each period, respectively)
|
(2,456.8
|
)
|
|
(2,456.8
|
)
|
||
Total stockholders' equity
|
1,455.9
|
|
|
1,761.4
|
|
||
Noncontrolling interest
|
0.5
|
|
|
0.5
|
|
||
Total equity
|
1,456.4
|
|
|
1,761.9
|
|
||
Total liabilities and equity
|
$
|
7,001.1
|
|
|
$
|
7,606.0
|
|
|
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, 2019
|
104,882,379
|
|
|
$
|
1.1
|
|
|
$
|
1,125.0
|
|
|
$
|
(2,456.8
|
)
|
|
$
|
(109.2
|
)
|
|
$
|
3,201.3
|
|
|
$
|
1,761.4
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(163.0
|
)
|
|
(163.0
|
)
|
||||||
Dividends Declared(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|
(1.4
|
)
|
||||||
Employee equity awards
|
736,078
|
|
|
—
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
||||||
Stock forfeitures
|
(83,998
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(190,581
|
)
|
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.0
|
)
|
||||||
ESPP shares issued
|
55,977
|
|
|
—
|
|
|
1.3
|
|
|
|
|
|
|
|
|
1.3
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141.7
|
)
|
|
—
|
|
|
(141.7
|
)
|
||||||
Balance — April 2, 2020
|
105,399,855
|
|
|
$
|
1.1
|
|
|
$
|
1,125.6
|
|
|
$
|
(2,456.8
|
)
|
|
$
|
(250.9
|
)
|
|
$
|
3,036.9
|
|
|
$
|
1,455.9
|
|
|
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, 2018
|
105,461,817
|
|
|
$
|
1.1
|
|
|
$
|
1,100.9
|
|
|
$
|
(2,381.0
|
)
|
|
$
|
(196.6
|
)
|
|
$
|
2,713.2
|
|
|
$
|
1,237.6
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
163.1
|
|
|
163.1
|
|
||||||
Adoption of ASC 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.3
|
)
|
|
8.3
|
|
|
—
|
|
||||||
Dividends Declared(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.7
|
)
|
|
(12.7
|
)
|
||||||
Employee equity awards
|
351,459
|
|
|
—
|
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||||
Stock forfeitures
|
(27,604
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(112,436
|
)
|
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
||||||
Treasury shares
|
(796,409
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
(75.1
|
)
|
||||||
Other comprehensive gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
10.0
|
|
||||||
Balance — March 28, 2019
|
104,876,827
|
|
|
$
|
1.0
|
|
|
$
|
1,098.6
|
|
|
$
|
(2,456.0
|
)
|
|
$
|
(194.9
|
)
|
|
$
|
2,871.9
|
|
|
$
|
1,320.6
|
|
|
For the Three Months Ended
|
||||||
|
April 2, 2020
|
|
March 28, 2019
|
||||
Operating activities
|
($ in millions)
|
||||||
Net (loss) income
|
$
|
(163.0
|
)
|
|
$
|
163.1
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
|
|
|
|
|
|||
Depreciation expense
|
66.8
|
|
|
60.5
|
|
||
Amortization expense
|
0.5
|
|
|
—
|
|
||
Amortization of deferred financing fees
|
1.9
|
|
|
0.8
|
|
||
Accretion of customer supply agreement
|
1.1
|
|
|
1.1
|
|
||
Employee stock compensation expense
|
9.8
|
|
|
7.7
|
|
||
Loss from derivative instruments
|
—
|
|
|
9.6
|
|
||
Gain from foreign currency transactions
|
(6.5
|
)
|
|
(0.1
|
)
|
||
Loss (gain) on disposition of assets
|
0.2
|
|
|
(0.1
|
)
|
||
Deferred taxes
|
(61.5
|
)
|
|
8.1
|
|
||
Pension and other post-retirement benefits, net
|
59.9
|
|
|
(6.4
|
)
|
||
Grant liability amortization
|
(2.4
|
)
|
|
(5.7
|
)
|
||
Forward loss provision
|
(9.0
|
)
|
|
(11.3
|
)
|
||
Changes in assets and liabilities
|
|
|
|
||||
Accounts receivable, net
|
36.1
|
|
|
(68.8
|
)
|
||
Inventory, net
|
(59.4
|
)
|
|
23.5
|
|
||
Contract assets
|
144.5
|
|
|
(57.6
|
)
|
||
Accounts payable and accrued liabilities
|
(278.6
|
)
|
|
129.9
|
|
||
Profit sharing/deferred compensation
|
(66.7
|
)
|
|
(48.0
|
)
|
||
Advance payments
|
(19.8
|
)
|
|
(2.2
|
)
|
||
Income taxes receivable/payable
|
(32.8
|
)
|
|
29.4
|
|
||
Contract liabilities
|
39.1
|
|
|
4.9
|
|
||
Deferred revenue and other deferred credits
|
6.3
|
|
|
11.6
|
|
||
Other
|
2.2
|
|
|
(7.8
|
)
|
||
Net cash (used in) provided by operating activities
|
(331.3
|
)
|
|
242.2
|
|
||
Investing activities
|
|
|
|
|
|
||
Purchase of property, plant and equipment
|
(31.0
|
)
|
|
(40.8
|
)
|
||
Equity in assets of affiliates
|
1.5
|
|
|
—
|
|
||
Acquisition, net of cash acquired
|
(118.1
|
)
|
|
—
|
|
||
Other
|
0.3
|
|
|
0.1
|
|
||
Net cash used in investing activities
|
(147.3
|
)
|
|
(40.7
|
)
|
||
Financing activities
|
|
|
|
|
|
||
Proceeds from issuance of debt
|
—
|
|
|
250.0
|
|
||
Proceeds from revolving credit facility
|
—
|
|
|
100.0
|
|
||
Customer financing
|
10.0
|
|
|
—
|
|
||
Principal payments of debt
|
(7.3
|
)
|
|
(2.6
|
)
|
||
Payments on term loan
|
(5.7
|
)
|
|
—
|
|
||
Taxes paid related to net share settlement awards
|
(13.1
|
)
|
|
(10.0
|
)
|
||
Proceeds from issuance of ESPP stock
|
1.3
|
|
|
—
|
|
||
Debt issuance and financing costs
|
(4.8
|
)
|
|
—
|
|
||
Purchase of treasury stock
|
—
|
|
|
(75.0
|
)
|
||
Dividends paid
|
(12.4
|
)
|
|
(12.7
|
)
|
||
Net cash (used in) provided by financing activities
|
(32.0
|
)
|
|
249.7
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(6.2
|
)
|
|
(0.3
|
)
|
||
Net (decrease) increase in cash, cash equivalents, and restricted cash for the period
|
(516.8
|
)
|
|
450.9
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
2,367.2
|
|
|
794.1
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
1,850.4
|
|
|
$
|
1,245.0
|
|
Reconciliation of Cash, Cash Equivalents, and Restricted Cash:
|
|
|
|
||||
|
For the Three Months Ended
|
||||||
|
April 2, 2020
|
|
March 28, 2019
|
||||
Cash and cash equivalents, beginning of the period
|
$
|
2,350.5
|
|
|
$
|
773.6
|
|
Restricted cash, short-term, beginning of the period
|
0.3
|
|
|
0.3
|
|
||
Restricted cash, long-term, beginning of the period
|
16.4
|
|
|
20.2
|
|
||
Cash, cash equivalents, and restricted cash, beginning of the period
|
$
|
2,367.2
|
|
|
$
|
794.1
|
|
|
|
|
|
||||
Cash and cash equivalents, end of the period
|
$
|
1,833.6
|
|
|
$
|
1,228.4
|
|
Restricted cash, short-term, end of the period
|
0.3
|
|
|
0.3
|
|
||
Restricted cash, long-term, end of the period
|
16.5
|
|
|
16.3
|
|
||
Cash, cash equivalents, and restricted cash, end of the period
|
$
|
1,850.4
|
|
|
$
|
1,245.0
|
|
|
|
For the Three Months Ended
|
||||||
Changes in Estimates
|
|
April 2, 2020
|
|
March 28, 2019
|
||||
(Unfavorable) Favorable Cumulative Catch-up Adjustment by Segment
|
|
|
|
|
||||
Fuselage
|
|
$
|
(4.0
|
)
|
|
$
|
(1.2
|
)
|
Propulsion
|
|
(1.5
|
)
|
|
(2.8
|
)
|
||
Wing
|
|
(2.7
|
)
|
|
(0.2
|
)
|
||
Total (Unfavorable) Favorable Cumulative Catch-up Adjustment
|
|
$
|
(8.2
|
)
|
|
$
|
(4.2
|
)
|
|
|
|
|
|
||||
Changes in Estimates on Loss Programs (Forward Loss) by Segment
|
|
|
|
|
||||
Fuselage
|
|
$
|
(13.2
|
)
|
|
$
|
3.7
|
|
Propulsion
|
|
(3.1
|
)
|
|
0.5
|
|
||
Wing
|
|
(3.4
|
)
|
|
0.5
|
|
||
Total Changes in Estimates (Forward Loss) on Loss Programs
|
|
$
|
(19.7
|
)
|
|
$
|
4.7
|
|
|
|
|
|
|
||||
Total Change in Estimate
|
|
$
|
(27.9
|
)
|
|
$
|
0.5
|
|
EPS Impact (diluted per share based upon 2020 forecasted effective tax rate)
|
|
$
|
(0.17
|
)
|
|
$
|
—
|
|
|
April 2,
2020 |
|
December 31,
2019 |
||||
Trade receivables
|
$
|
481.4
|
|
|
$
|
515.2
|
|
Other
|
28.1
|
|
|
32.6
|
|
||
Less: allowance for doubtful accounts
|
(0.9
|
)
|
|
(1.4
|
)
|
||
Accounts receivable, net
|
$
|
508.6
|
|
|
$
|
546.4
|
|
|
April 2, 2020
|
|
December 31, 2019
|
|
Change
|
|
|||
Contract assets
|
$
|
391.3
|
|
$
|
534.7
|
|
$
|
(143.4
|
)
|
Contract liabilities
|
(555.8
|
)
|
(514.6
|
)
|
(41.2
|
)
|
|||
Net contract assets (liabilities)
|
$
|
(164.5
|
)
|
$
|
20.1
|
|
$
|
(184.6
|
)
|
|
March 28, 2019
|
|
December 31, 2018
|
|
Change
|
|
|||
Contract assets
|
$
|
582.2
|
|
$
|
523.5
|
|
$
|
58.7
|
|
Contract liabilities
|
(532.4
|
)
|
(527.7
|
)
|
(4.7
|
)
|
|||
Net contract assets (liabilities)
|
$
|
49.8
|
|
$
|
(4.2
|
)
|
$
|
54.0
|
|
|
|
For the Three
Months Ended
|
|||||
Revenue
|
|
April 2,
2020 |
March 28,
2019 |
||||
Contracts with performance obligations satisfied over time
|
|
$
|
605.9
|
|
$
|
1,479.7
|
|
Contracts with performance obligations satisfied at a point in time
|
|
471.4
|
|
488.1
|
|
||
Total Revenue
|
|
$
|
1,077.3
|
|
$
|
1,967.8
|
|
|
|
For the Three
Months Ended
|
|||||
Location
|
|
April 2,
2020 |
March 28,
2019 |
||||
United States
|
|
$
|
782.5
|
|
$
|
1,627.9
|
|
International
|
|
|
|
||||
United Kingdom
|
|
184.1
|
|
209.5
|
|
||
Other
|
|
110.7
|
|
130.4
|
|
||
Total International
|
|
294.8
|
|
339.9
|
|
||
Total Revenue
|
|
$
|
1,077.3
|
|
$
|
1,967.8
|
|
|
Remaining in 2020
|
|
2021
|
|
2022
|
|
2023 and After
|
|
||||
Unsatisfied performance obligations
|
$
|
2,955.1
|
|
$
|
4,716.9
|
|
$
|
4,806.7
|
|
$
|
2,767.4
|
|
|
April 2,
2020 |
|
December 31,
2019 |
||||
Raw materials
|
$
|
321.0
|
|
|
$
|
253.1
|
|
Work-in-process(1)
|
803.1
|
|
|
822.8
|
|
||
Finished goods
|
16.8
|
|
|
14.5
|
|
||
Product inventory
|
1,140.9
|
|
|
1,090.4
|
|
||
Capitalized pre-production
|
27.8
|
|
|
28.4
|
|
||
Total inventory, net
|
$
|
1,168.7
|
|
|
$
|
1,118.8
|
|
(1)
|
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 periods ended April 2, 2020 and December 31, 2019, work-in-process inventory includes $158.2 and $157.2, respectively, of costs incurred in anticipation of specific contracts and no impairments were recorded in the period.
|
|
April 2,
2020 |
|
December 31,
2019 |
||||
Land
|
$
|
17.2
|
|
|
$
|
15.9
|
|
Buildings (including improvements)
|
926.5
|
|
|
924.0
|
|
||
Machinery and equipment
|
1,989.9
|
|
|
1,941.5
|
|
||
Tooling
|
1,051.3
|
|
|
1,047.4
|
|
||
Capitalized software
|
277.3
|
|
|
277.8
|
|
||
Construction-in-progress
|
178.3
|
|
|
192.8
|
|
||
Total
|
4,440.5
|
|
|
4,399.4
|
|
||
Less: accumulated depreciation
|
(2,187.3
|
)
|
|
(2,127.7
|
)
|
||
Property, plant and equipment, net
|
$
|
2,253.2
|
|
|
$
|
2,271.7
|
|
|
For the Three Months Ended
|
For the Three Months Ended
|
||||
|
April 2, 2020
|
March 28, 2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||||
Operating cash flows from operating leases
|
$
|
2.2
|
|
$
|
2.2
|
|
Operating cash flows from finance leases
|
$
|
1.6
|
|
$
|
0.4
|
|
Financing cash flows from finance leases
|
$
|
6.7
|
|
$
|
1.8
|
|
|
|
|
||||
ROU assets obtained in exchange for lease obligations:
|
|
|
||||
Operating leases
|
$
|
0.2
|
|
$
|
0.1
|
|
|
April 2, 2020
|
December 31, 2019
|
||||
Finance leases:
|
|
|
||||
Property and equipment, gross
|
$
|
194.8
|
|
$
|
165.5
|
|
Accumulated amortization
|
(28.9
|
)
|
(23.5
|
)
|
||
Property and equipment, net
|
$
|
165.9
|
|
$
|
142.0
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
|
Total Lease Payments
|
|
Less: Imputed Interest
|
Total Lease Obligations
|
|
||||||||||
Operating Leases
|
$
|
6.4
|
|
$
|
7.5
|
|
$
|
7.1
|
|
$
|
6.1
|
|
$
|
5.6
|
|
$
|
30.3
|
|
$
|
63.0
|
|
$
|
(15.4
|
)
|
$
|
47.6
|
|
Financing Leases
|
$
|
25.3
|
|
$
|
33.4
|
|
$
|
29.6
|
|
$
|
25.5
|
|
$
|
20.0
|
|
$
|
37.1
|
|
$
|
170.9
|
|
$
|
(21.1
|
)
|
$
|
149.8
|
|
|
April 2,
2020 |
|
December 31,
2019 |
||||
Deferred financing
|
|
|
|
|
|
||
Deferred financing costs
|
45.1
|
|
|
41.7
|
|
||
Less: Accumulated amortization - deferred financing costs
|
(37.5
|
)
|
|
(36.9
|
)
|
||
Deferred financing costs, net
|
7.6
|
|
|
4.8
|
|
||
Other
|
|
|
|
|
|
||
Supply agreements(1)
|
10.1
|
|
|
11.5
|
|
||
Equity in net assets of affiliates
|
6.2
|
|
|
7.7
|
|
||
Restricted cash - collateral requirements
|
16.5
|
|
|
16.4
|
|
||
Other
|
39.2
|
|
|
36.4
|
|
||
Total
|
$
|
79.6
|
|
|
$
|
76.8
|
|
|
(1)
|
Certain payments accounted for as consideration paid by the Company to a customer are being amortized as reductions to net revenues.
|
|
April 2,
2020 |
|
December 31,
2019 |
||||
Goodwill - United Kingdom
|
2.3
|
|
|
2.4
|
|
||
Goodwill - United States(1)
|
76.2
|
|
|
—
|
|
||
Total
|
$
|
78.5
|
|
|
$
|
2.4
|
|
|
April 2,
2020 |
|
December 31,
2019 |
||||
Intangible assets
|
|
|
|
|
|
||
Patents
|
$
|
2.0
|
|
|
$
|
2.0
|
|
Favorable leasehold interests
|
2.8
|
|
|
2.8
|
|
||
Developed technology asset(1)
|
30.0
|
|
|
—
|
|
||
Total intangible assets
|
34.8
|
|
|
4.8
|
|
||
Less: Accumulated amortization - patents
|
(2.0
|
)
|
|
(1.9
|
)
|
||
Accumulated amortization - favorable leasehold interest
|
(1.7
|
)
|
|
(1.7
|
)
|
||
Accumulated amortization - developed technology asset
|
(0.5
|
)
|
|
—
|
|
||
Intangible assets, net
|
30.6
|
|
|
1.2
|
|
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.
|
|
April 2, 2020
|
|
December 31, 2019
|
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
||||||||
2018 Term Loan (including current portion)
|
$
|
432.4
|
|
|
$
|
404.9
|
|
(2)
|
$
|
438.5
|
|
|
$
|
440.1
|
|
(2)
|
2018 Revolver
|
800.0
|
|
|
800.0
|
|
(2)
|
800.0
|
|
|
800.0
|
|
(2)
|
||||
Senior unsecured floating rate notes due 2021
|
299.3
|
|
|
286.3
|
|
(1)
|
299.1
|
|
|
298.4
|
|
(1)
|
||||
Senior unsecured notes due 2023
|
298.4
|
|
|
254.0
|
|
(1)
|
298.3
|
|
|
307.2
|
|
(1)
|
||||
Senior secured notes due 2026
|
297.9
|
|
|
257.1
|
|
(1)
|
297.8
|
|
|
305.6
|
|
(1)
|
||||
Senior unsecured notes due 2028
|
694.2
|
|
|
576.3
|
|
(1)
|
694.1
|
|
|
734.4
|
|
(1)
|
||||
Total
|
$
|
2,822.2
|
|
|
$
|
2,578.6
|
|
|
$
|
2,827.8
|
|
|
$
|
2,885.7
|
|
|
|
(1)
|
Level 1 Fair Value hierarchy
|
(2)
|
Level 2 Fair Value hierarchy
|
|
April 2, 2020
|
|
December 31, 2019
|
||||||||||
|
Current
|
Noncurrent
|
|
Current
|
Noncurrent
|
||||||||
2018 Term Loan
|
$
|
22.7
|
|
$
|
409.7
|
|
|
$
|
22.8
|
|
$
|
415.7
|
|
2018 Revolver
|
—
|
|
800.0
|
|
|
—
|
|
800.0
|
|
||||
Senior unsecured floating rate notes due 2021
|
—
|
|
299.3
|
|
|
—
|
|
299.1
|
|
||||
Senior unsecured notes due 2023
|
—
|
|
298.4
|
|
|
—
|
|
298.3
|
|
||||
Senior secured notes due 2026
|
—
|
|
297.9
|
|
|
—
|
|
297.8
|
|
||||
Senior unsecured notes due 2028
|
—
|
|
694.2
|
|
|
—
|
|
694.1
|
|
||||
Present value of finance lease obligations
|
28.2
|
|
121.6
|
|
|
25.8
|
|
121.3
|
|
||||
Other
|
1.8
|
|
57.1
|
|
|
1.6
|
|
57.8
|
|
||||
Total
|
$
|
52.7
|
|
$
|
2,978.2
|
|
|
$
|
50.2
|
|
$
|
2,984.1
|
|
Pricing Tier
|
Credit Rating (S&P/Moody's)
|
|
Revolving Commitment
Fee
|
|
Applicable Rate For LIBOR Loans and Letter of Credit Fees
|
|
Applicable Rate for Base Rate Loans
|
I
|
Greater than or equal to BBB+ / Baa1
|
|
0.125%
|
|
1.125%
|
|
0.125%
|
II
|
BBB / Baa2
|
|
0.150%
|
|
1.250%
|
|
0.250%
|
III
|
BBB- / Baa3
|
|
0.200%
|
|
1.375%
|
|
0.375%
|
IV
|
BB+ / Ba1
|
|
0.300%
|
|
1.625%
|
|
0.625%
|
V
|
BB / Ba2
|
|
0.375%
|
|
1.875%
|
|
0.875%
|
•
|
Senior Secured Leverage Ratio: Commencing with the first fiscal quarter of 2020, the ratio of senior secured debt to consolidated EBITDA over the last twelve months shall not, as of the end of the applicable fiscal quarter, be greater than: (i) 3.00:1.00, with respect to the first fiscal quarter of 2020; (ii) 4.25:1.00, with respect to the second fiscal quarter of 2020; (iii) 5.50:1.00, with respect to the third fiscal quarter of 2020; (iv) 5.00:1.00, with respect to the fourth fiscal quarter of 2020; and (v) 3.00:1.00, with respect to the first fiscal quarter of 2021.
|
•
|
Interest Coverage Ratio: Commencing with the first fiscal quarter of 2020, the interest coverage ratio as of the end of the applicable fiscal quarter shall not be less than: (i) 4.00:1.00, with respect to the first fiscal quarter of 2020; (ii) 3.75:1.00, with respect to the second fiscal quarter of 2020; (iii) 2.50:1.00, with respect to the third fiscal quarter of 2020; (iv) 2.25:1.00, with respect to the fourth fiscal quarter of 2020; and (v) 3.75:1.00, with respect to the first fiscal quarter of 2021.
|
•
|
Minimum Liquidity: As of the end of each fiscal month, commencing with the first fiscal month after entering into the 2020 Amendment, the Company shall have minimum liquidity of not less than: (i) $1,000 through, and including, the last fiscal month ending in the third fiscal quarter of 2020; (ii) $850, as of the end of each fiscal month ending in the fourth fiscal quarter of 2020; and (iii) $750 , as of the end of each fiscal month ending in the first fiscal quarter of 2021; provided, however, that if the Company receives proceeds of at least $750 from the issuance of indebtedness before the Reversion Date, the minimum liquidity requirement shall remain at $1,000. Liquidity includes cash and cash equivalents and amounts available to be drawn under the 2018 Revolver and the 2020 DDTL.
|
Pricing Tier
|
Credit Rating (S&P/Moody's)
|
|
Revolving Commitment
Fee
|
|
Applicable Rate For LIBOR Loans and Letter of Credit Fees
|
|
Applicable Rate for Base Rate Loans
|
I
|
Greater than or equal to BBB+ / Baa1
|
|
0.125%
|
|
1.625%
|
|
0.625%
|
II
|
BBB / Baa2
|
|
0.150%
|
|
1.750%
|
|
0.750%
|
III
|
BBB- / Baa3
|
|
0.200%
|
|
1.875%
|
|
0.875%
|
IV
|
BB+ / Ba1
|
|
0.300%
|
|
2.125%
|
|
1.125%
|
V
|
BB / Ba2
|
|
0.375%
|
|
2.375%
|
|
1.375%
|
VI
|
Less than or equal to BB- / Ba3
|
|
0.500%
|
|
2.625%
|
|
1.625%
|
•
|
First Lien Leverage Ratio: Commencing with the first fiscal quarter of 2020, the ratio of first lien senior secured debt to consolidated EBITDA over the last twelve months shall not, as of the end of the applicable fiscal quarter, be greater than: (i) 3.00:1.00, with respect to the first fiscal quarter of 2020; (ii) 4.50:1.00, with respect to the second fiscal quarter of 2020; (iii) 6.50:1.00, with respect to the third fiscal quarter of 2020; (iv) 6.75:1.00, with respect to the fourth fiscal quarter of 2020; (v) 5.00:1.00, with respect to the first fiscal quarter of 2021; (vi) 4.50:1.00, with respect to the second fiscal quarter of 2021; (vii) 3.50:1.00, with respect to the third fiscal quarter of 2021; and (viii) 3.00:1.00 thereafter through the fourth fiscal quarter of 2022.
|
•
|
Interest Coverage Ratio: Commencing with the first fiscal quarter of 2020, the interest coverage ratio shall not, as of the end of the applicable fiscal quarter, be less than: (i) 4.00:1.00, with respect to the first fiscal quarter of 2020; (ii) 2.25:1.00, with respect to the second fiscal quarter of 2020; (iii) 1.25:1.00, with respect to the third fiscal quarter of 2020; (iv) 1.25:1.00, with respect to the fourth fiscal quarter of 2020; (v) 1.75:1.00, with respect to the first fiscal quarter of 2021; (vi) 2.25:1.00, with respect to the second fiscal quarter of 2021; (vii) 2.50:1.00, with respect to the third fiscal quarter of 2021; (viii) 2.75:1.00, with respect to the fourth fiscal quarter of 2021; (ix) 3.00:1.00, with respect to the first fiscal quarter of 2022; (x) 3.25:1.00, with respect to the second fiscal quarter of 2022; (xi) 3.75:1.00 with respect to the third fiscal quarter of 2022; (xii) 3.75:1.00 with respect to the fourth fiscal quarter of 2022; and (xiii) 4.00:1.00 thereafter.
|
•
|
Total Leverage Ratio: Testing of the total leverage ratio will be suspended until the first fiscal quarter of 2022. Commencing with the first fiscal quarter of 2022, the ratio of indebtedness to consolidated EBIDTA over the last twelve months, shall not, as of the end of the applicable fiscal quarter, be greater than (i) 5.50:1.00, with respect to the first fiscal quarter of 2022; (ii) 5.00:1:00, with respect to the second fiscal quarter of 2022; (iii) 4.75:1.00, with respect to the third fiscal quarter of 2022; (iv) 4.50:1.00, with respect to the fourth fiscal quarter of 2022; and (v) 3.50:1.00 thereafter.
|
•
|
Minimum Liquidity: As of the end of each fiscal month, commencing with the first fiscal month until the end of the fourth fiscal quarter of 2021, the Company shall have minimum liquidity of not less than $1,000.
|
Pricing Tier
|
Credit Rating (S&P/Moody's)
|
|
Revolving Commitment
Fee
|
|
Applicable Rate For LIBOR Loans and Letter of Credit Fees
|
|
Applicable Rate for Base Rate Loans
|
I
|
Greater than or equal to BBB+ / Baa1
|
|
0.250%
|
|
3.125%
|
|
2.125%
|
II
|
BBB / Baa2
|
|
0.275%
|
|
3.250%
|
|
2.250%
|
III
|
BBB- / Baa3
|
|
0.325%
|
|
3.375%
|
|
2.375%
|
IV
|
BB+ / Ba1
|
|
0.425%
|
|
3.625%
|
|
2.625%
|
V
|
BB / Ba2
|
|
0.500%
|
|
3.875%
|
|
2.875%
|
VI
|
Less than or equal to BB- / Ba3
|
|
0.625%
|
|
4.125%
|
|
3.125%
|
Pricing Tier
|
Credit Rating (S&P/Moody's)
|
|
Revolving Commitment
Fee
|
|
Applicable Rate For LIBOR Loans and Letter of Credit Fees
|
|
Applicable Rate for Base Rate Loans
|
I
|
Greater than or equal to BBB+ / Baa1
|
|
0.250%
|
|
2.625%
|
|
1.625%
|
II
|
BBB / Baa2
|
|
0.275%
|
|
2.750%
|
|
1.750%
|
III
|
BBB- / Baa3
|
|
0.325%
|
|
2.875%
|
|
1.875%
|
IV
|
BB+ / Ba1
|
|
0.375%
|
|
3.125%
|
|
2.125%
|
V
|
BB / Ba2
|
|
0.425%
|
|
3.325%
|
|
2.375%
|
|
|
Defined Benefit Plans
|
||||||
|
|
For the Three
Months Ended
|
||||||
Components of Net Periodic Pension Expense/(Income)
|
|
April 2,
2020 |
|
March 28,
2019 |
||||
Service cost
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
Interest cost
|
|
8.0
|
|
|
10.1
|
|
||
Expected return on plan assets
|
|
(17.3
|
)
|
|
(16.7
|
)
|
||
Amortization of net loss
|
|
—
|
|
|
0.4
|
|
||
Curtailment loss (gain) (2)
|
|
33.0
|
|
|
—
|
|
||
Special termination benefits (1)
|
|
24.7
|
|
|
—
|
|
||
Net periodic pension expense (income)
|
|
$
|
48.6
|
|
|
$
|
(5.9
|
)
|
|
|
Other Benefits
|
||||||
|
|
For the Three
Months Ended
|
||||||
Components of Other Benefit Expense
|
|
April 2,
2020 |
|
March 28,
2019 |
||||
Service cost
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
Interest cost
|
|
0.2
|
|
|
0.3
|
|
||
Amortization of prior service cost
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||
Amortization of net gain
|
|
(0.5
|
)
|
|
(0.6
|
)
|
||
Curtailment (gain) loss
|
|
(0.3
|
)
|
|
—
|
|
||
Special termination benefits (1)
|
|
$
|
11.8
|
|
|
$
|
—
|
|
Net periodic other benefit expense (income)
|
|
$
|
11.3
|
|
|
$
|
(0.3
|
)
|
•
|
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
|
•
|
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.
|
|
For the Three Months Ended
|
||||||||||||||||||||
|
April 2, 2020
|
|
March 28, 2019
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income available to common stockholders
|
$
|
(162.9
|
)
|
|
103.7
|
|
|
$
|
(1.57
|
)
|
|
$
|
163.0
|
|
|
104.0
|
|
|
$
|
1.57
|
|
(Loss) income allocated to participating securities
|
(0.1
|
)
|
|
—
|
|
|
|
|
|
0.1
|
|
|
0.1
|
|
|
|
|
||||
Net (loss) income
|
$
|
(163.0
|
)
|
|
|
|
|
|
|
|
$
|
163.1
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted potential common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
1.2
|
|
|
|
|
||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income
|
$
|
(163.0
|
)
|
|
103.7
|
|
|
$
|
(1.57
|
)
|
|
$
|
163.1
|
|
|
105.3
|
|
|
$
|
1.55
|
|
|
As of
|
|
As of
|
||||
|
April 2, 2020
|
|
December 31, 2019
|
||||
Pension
|
$
|
(142.5
|
)
|
|
$
|
(53.1
|
)
|
Interest swaps
|
(10.4
|
)
|
|
(0.6
|
)
|
||
SERP/Retiree medical
|
13.0
|
|
|
17.1
|
|
||
Foreign currency impact on long term intercompany loan
|
(16.0
|
)
|
|
(13.1
|
)
|
||
Currency translation adjustment
|
(95.0
|
)
|
|
(59.5
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(250.9
|
)
|
|
$
|
(109.2
|
)
|
Balance, December 31, 2019
|
$
|
64.7
|
|
Charges to costs and expenses
|
1.3
|
|
|
Payouts
|
(0.4
|
)
|
|
Exchange rate
|
(0.4
|
)
|
|
Balance, April 2, 2020
|
$
|
65.2
|
|
|
For the Three
Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
Kansas Development Finance Authority bond
|
$
|
1.1
|
|
|
$
|
1.2
|
|
Rental and miscellaneous income
|
—
|
|
|
0.1
|
|
||
Interest income
|
6.9
|
|
|
3.2
|
|
||
Foreign currency gains (losses) (1)
|
5.4
|
|
|
(2.0
|
)
|
||
Gain (loss) on foreign currency contract and interest rate swaps
|
0.1
|
|
|
(15.4
|
)
|
||
Loss on sale of accounts receivable
|
(3.1
|
)
|
|
(4.6
|
)
|
||
Pension (loss) income (2)
|
(59.6
|
)
|
|
6.5
|
|
||
Other
|
0.2
|
|
|
—
|
|
||
Total
|
$
|
(49.0
|
)
|
|
$
|
(11.0
|
)
|
|
Three Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
Segment Revenues
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
551.5
|
|
|
$
|
1,069.6
|
|
Propulsion Systems
|
225.2
|
|
|
485.7
|
|
||
Wing Systems
|
291.4
|
|
|
407.9
|
|
||
All Other
|
9.2
|
|
|
4.6
|
|
||
|
$
|
1,077.3
|
|
|
$
|
1,967.8
|
|
Segment Operating Income (Loss)
|
|
|
|
|
|
||
Fuselage Systems(1)
|
$
|
(86.4
|
)
|
|
$
|
138.9
|
|
Propulsion Systems(2)
|
(5.3
|
)
|
|
95.5
|
|
||
Wing Systems(3)
|
13.6
|
|
|
65.8
|
|
||
All Other
|
1.8
|
|
|
1.2
|
|
||
|
(76.3
|
)
|
|
301.4
|
|
||
SG&A
|
(77.4
|
)
|
|
(63.6
|
)
|
||
Research and development
|
(12.3
|
)
|
|
(12.9
|
)
|
||
Unallocated cost of sales
|
(1.5
|
)
|
|
8.1
|
|
||
Total operating income
|
$
|
(167.5
|
)
|
|
$
|
233.0
|
|
At January 10, 2020
|
|
||
Cash and cash equivalents
|
$
|
3.5
|
|
Accounts receivable
|
5.3
|
|
|
Inventory
|
1.9
|
|
|
Contract Assets, short-term
|
5.6
|
|
|
Prepaid and other current assets
|
0.5
|
|
|
Equipment and leasehold improvements
|
12.3
|
|
|
Intangible assets
|
30.0
|
|
|
Goodwill
|
76.2
|
|
|
Other noncurrent assets
|
0.2
|
|
|
Total assets acquired
|
$
|
135.5
|
|
|
|
||
Accounts payable and accrued liabilities
|
1.8
|
|
|
Income Tax Payable
|
1.4
|
|
|
Contract liabilities, short-term
|
2.2
|
|
|
Accrued payroll and employee benefits
|
0.6
|
|
|
Other current liabilities
|
0.2
|
|
|
Deferred income taxes, non-current
|
7.5
|
|
|
Other noncurrent liabilities
|
0.2
|
|
|
Total liabilities assumed
|
13.9
|
|
|
Net assets acquired
|
$
|
121.6
|
|
|
Amount
|
Amortization Period
|
||
|
|
(in years)
|
||
Developed technology asset
|
$
|
30.0
|
|
15
|
Total intangible assets
|
$
|
30.0
|
|
15
|
|
For the Three
Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
Revenue - as reported
|
$
|
1,077.3
|
|
|
$
|
1,967.8
|
|
Revenue - pro forma
|
1,078.1
|
|
|
1,975.6
|
|
||
Net (loss) income - as reported
|
$
|
(163.0
|
)
|
|
$
|
163.1
|
|
Net (loss) income - pro forma
|
(162.9
|
)
|
|
163.0
|
|
||
Earnings Per Share - Diluted - as reported
|
$
|
(1.57
|
)
|
|
$
|
1.55
|
|
Earnings Per Share - Diluted - pro forma
|
(1.57
|
)
|
|
1.55
|
|
(i)
|
Holdings, as the parent guarantor of the Existing Notes, as further detailed in Note 15, Debt;
|
(ii)
|
Spirit, as issuer of the Existing Notes;
|
(iii)
|
Spirit NC, as a guarantor of the 2026 Notes on a secured senior and second lien basis and 2025 Notes on a secured second lien basis;
|
(iv)
|
The Company’s other subsidiaries (the “Non-Guarantor Subsidiaries”), on a combined basis;
|
(v)
|
Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Holdings, Spirit NC, and the Non-Guarantor Subsidiaries, (b) eliminate the investments in the Company’s subsidiaries, and (c) record consolidating entries; and
|
(vi)
|
Holdings and its subsidiaries on a consolidated basis.
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
899.2
|
|
|
$
|
111.2
|
|
|
$
|
230.9
|
|
|
$
|
(164.0
|
)
|
|
$
|
1,077.3
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of sales
|
—
|
|
|
962.7
|
|
|
107.4
|
|
|
206.4
|
|
|
(164.0
|
)
|
|
1,112.5
|
|
||||||
Selling, general and administrative
|
3.5
|
|
|
68.1
|
|
|
0.8
|
|
|
5.0
|
|
|
—
|
|
|
77.4
|
|
||||||
Restructuring cost
|
—
|
|
|
42.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42.6
|
|
||||||
Research and development
|
—
|
|
|
11.6
|
|
|
0.1
|
|
|
0.6
|
|
|
—
|
|
|
12.3
|
|
||||||
Total operating costs and expenses
|
3.5
|
|
|
1,085.0
|
|
|
108.3
|
|
|
212.0
|
|
|
(164.0
|
)
|
|
1,244.8
|
|
||||||
Operating (loss) income
|
(3.5
|
)
|
|
(185.8
|
)
|
|
2.9
|
|
|
18.9
|
|
|
—
|
|
|
(167.5
|
)
|
||||||
Interest expense and financing fee amortization
|
—
|
|
|
(32.1
|
)
|
|
—
|
|
|
(0.9
|
)
|
|
0.8
|
|
|
(32.2
|
)
|
||||||
Other (expense) income, net
|
—
|
|
|
(54.3
|
)
|
|
—
|
|
|
6.1
|
|
|
(0.8
|
)
|
|
(49.0
|
)
|
||||||
(Loss) income before income taxes and equity in net (loss) income of affiliate and subsidiaries
|
(3.5
|
)
|
|
(272.2
|
)
|
|
2.9
|
|
|
24.1
|
|
|
—
|
|
|
(248.7
|
)
|
||||||
Income tax benefit (provision)
|
1.2
|
|
|
90.3
|
|
|
(0.7
|
)
|
|
(3.6
|
)
|
|
—
|
|
|
87.2
|
|
||||||
(Loss) income before equity in net (loss) income of affiliate and subsidiaries
|
(2.3
|
)
|
|
(181.9
|
)
|
|
2.2
|
|
|
20.5
|
|
|
—
|
|
|
(161.5
|
)
|
||||||
Equity in net (loss) income of affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
||||||
Equity in net (loss) income of subsidiaries
|
(160.7
|
)
|
|
21.2
|
|
|
—
|
|
|
—
|
|
|
139.5
|
|
|
—
|
|
||||||
Net (loss) income
|
(163.0
|
)
|
|
(160.7
|
)
|
|
2.2
|
|
|
19.0
|
|
|
139.5
|
|
|
(163.0
|
)
|
||||||
Other comprehensive (loss) income
|
(141.7
|
)
|
|
(141.7
|
)
|
|
—
|
|
|
24.5
|
|
|
117.2
|
|
|
(141.7
|
)
|
||||||
Comprehensive (loss) income
|
$
|
(304.7
|
)
|
|
$
|
(302.4
|
)
|
|
$
|
2.2
|
|
|
$
|
43.5
|
|
|
$
|
256.7
|
|
|
$
|
(304.7
|
)
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
|||||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,765.2
|
|
|
116.4
|
|
|
$
|
256.8
|
|
|
$
|
(170.6
|
)
|
|
$
|
1,967.8
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of sales
|
—
|
|
|
1,500.3
|
|
|
112.7
|
|
|
215.9
|
|
|
(170.6
|
)
|
|
1,658.3
|
|
|||||
Selling, general and administrative
|
2.3
|
|
|
56.5
|
|
|
0.8
|
|
|
4.0
|
|
|
—
|
|
|
63.6
|
|
|||||
Research and development
|
—
|
|
|
11.4
|
|
|
0.4
|
|
|
1.1
|
|
|
—
|
|
|
12.9
|
|
|||||
Total operating costs and expenses
|
2.3
|
|
|
1,568.2
|
|
|
113.9
|
|
|
221.0
|
|
|
(170.6
|
)
|
|
1,734.8
|
|
|||||
Operating income (loss)
|
(2.3
|
)
|
|
197.0
|
|
|
2.5
|
|
|
35.8
|
|
|
—
|
|
|
233.0
|
|
|||||
Interest expense and financing fee amortization
|
—
|
|
|
(18.8
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
1.0
|
|
|
(18.8
|
)
|
|||||
Other (expense) income, net
|
—
|
|
|
(8.4
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
(1.0
|
)
|
|
(11.0
|
)
|
|||||
Income (loss) before income taxes and equity in net income of affiliate and subsidiaries
|
(2.3
|
)
|
|
169.8
|
|
|
2.5
|
|
|
33.2
|
|
|
—
|
|
|
203.2
|
|
|||||
Income tax (provision) benefit
|
0.5
|
|
|
(34.7
|
)
|
|
(0.6
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
(40.1
|
)
|
|||||
Income (loss) before equity in net income of affiliate and subsidiaries
|
(1.8
|
)
|
|
135.1
|
|
|
1.9
|
|
|
27.9
|
|
|
—
|
|
|
163.1
|
|
|||||
Equity in net income of affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity in net income of subsidiaries
|
164.9
|
|
|
29.8
|
|
|
—
|
|
|
—
|
|
|
(194.7
|
)
|
|
—
|
|
|||||
Net income
|
163.1
|
|
|
164.9
|
|
|
1.9
|
|
|
27.9
|
|
|
(194.7
|
)
|
|
163.1
|
|
|||||
Other comprehensive income (loss)
|
10.0
|
|
|
10.0
|
|
|
—
|
|
|
10.4
|
|
|
(20.4
|
)
|
|
10.0
|
|
|||||
Comprehensive income (loss)
|
$
|
173.1
|
|
|
$
|
174.9
|
|
|
1.9
|
|
|
$
|
38.3
|
|
|
$
|
(215.1
|
)
|
|
$
|
173.1
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,717.0
|
|
|
$
|
—
|
|
|
$
|
116.6
|
|
|
$
|
—
|
|
|
$
|
1,833.6
|
|
Restricted cash
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Accounts receivable, net
|
—
|
|
|
480.1
|
|
|
52.6
|
|
|
301.2
|
|
|
(325.3
|
)
|
|
508.6
|
|
||||||
Contract assets, short-term
|
—
|
|
|
328.2
|
|
|
—
|
|
|
52.7
|
|
|
—
|
|
|
380.9
|
|
||||||
Inventory, net
|
—
|
|
|
832.8
|
|
|
145.0
|
|
|
190.9
|
|
|
—
|
|
|
1,168.7
|
|
||||||
Other current assets
|
—
|
|
|
129.7
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
134.0
|
|
||||||
Total current assets
|
—
|
|
|
3,488.1
|
|
|
197.6
|
|
|
665.7
|
|
|
(325.3
|
)
|
|
4,026.1
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,773.9
|
|
|
295.7
|
|
|
183.6
|
|
|
—
|
|
|
2,253.2
|
|
||||||
Right of use assets
|
—
|
|
|
40.0
|
|
|
7.3
|
|
|
0.2
|
|
|
—
|
|
|
47.5
|
|
||||||
Contract assets, long-term
|
—
|
|
|
3.6
|
|
|
—
|
|
|
6.8
|
|
|
—
|
|
|
10.4
|
|
||||||
Pension assets, net
|
—
|
|
|
259.0
|
|
|
—
|
|
|
23.6
|
|
|
—
|
|
|
282.6
|
|
||||||
Deferred income taxes
|
—
|
|
|
192.4
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
192.6
|
|
||||||
Goodwill
|
—
|
|
|
76.2
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
78.5
|
|
||||||
Intangible assets, net
|
—
|
|
|
30.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.6
|
|
||||||
Investment in subsidiary
|
1,456.4
|
|
|
821.0
|
|
|
—
|
|
|
—
|
|
|
(2,277.4
|
)
|
|
—
|
|
||||||
Other assets
|
—
|
|
|
152.7
|
|
|
—
|
|
|
113.7
|
|
|
(186.8
|
)
|
|
79.6
|
|
||||||
Total assets
|
$
|
1,456.4
|
|
|
$
|
6,837.5
|
|
|
$
|
500.6
|
|
|
$
|
996.1
|
|
|
$
|
(2,789.5
|
)
|
|
$
|
7,001.1
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Accounts payable
|
$
|
—
|
|
|
$
|
660.4
|
|
|
$
|
225.6
|
|
|
$
|
180.0
|
|
|
$
|
(325.3
|
)
|
|
$
|
740.7
|
|
Accrued expenses
|
—
|
|
|
251.0
|
|
|
1.1
|
|
|
34.0
|
|
|
—
|
|
|
286.1
|
|
||||||
Profit sharing
|
—
|
|
|
15.4
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
17.6
|
|
||||||
Current portion of long-term debt
|
—
|
|
|
50.8
|
|
|
0.2
|
|
|
1.7
|
|
|
—
|
|
|
52.7
|
|
||||||
Operating lease liabilities, short-term
|
—
|
|
|
5.3
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
||||||
Advance payments, short-term
|
—
|
|
|
17.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.8
|
|
||||||
Contract liabilities, short-term
|
—
|
|
|
166.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166.9
|
|
||||||
Forward loss provision, long-term
|
—
|
|
|
91.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91.5
|
|
||||||
Deferred revenue and other deferred credits, short-term
|
—
|
|
|
17.6
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
17.9
|
|
||||||
Other current liabilities
|
—
|
|
|
27.2
|
|
|
—
|
|
|
9.8
|
|
|
—
|
|
|
37.0
|
|
||||||
Total current liabilities
|
—
|
|
|
1,303.9
|
|
|
227.5
|
|
|
228.0
|
|
|
(325.3
|
)
|
|
1,434.1
|
|
||||||
Long-term debt
|
—
|
|
|
2,968.9
|
|
|
0.8
|
|
|
94.7
|
|
|
(86.2
|
)
|
|
2,978.2
|
|
||||||
Operating lease liabilities, long-term
|
—
|
|
|
34.9
|
|
|
6.7
|
|
|
0.1
|
|
|
—
|
|
|
41.7
|
|
||||||
Advance payments, long-term
|
—
|
|
|
327.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
327.3
|
|
||||||
Pension/OPEB obligation
|
—
|
|
|
50.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.9
|
|
||||||
Contract liabilities, long-term
|
—
|
|
|
388.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
388.9
|
|
||||||
Forward loss provision, long-term
|
—
|
|
|
146.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146.9
|
|
||||||
Deferred grant income liability - non-current
|
—
|
|
|
9.1
|
|
|
—
|
|
|
18.3
|
|
|
—
|
|
|
27.4
|
|
||||||
Deferred revenue and other deferred credits
|
—
|
|
|
31.4
|
|
|
—
|
|
|
5.4
|
|
|
—
|
|
|
36.8
|
|
||||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
|
—
|
|
|
8.2
|
|
||||||
Other liabilities
|
—
|
|
|
199.0
|
|
|
—
|
|
|
5.9
|
|
|
(100.6
|
)
|
|
104.3
|
|
||||||
Total equity
|
1,456.4
|
|
|
1,376.3
|
|
|
265.6
|
|
|
635.5
|
|
|
(2,277.4
|
)
|
|
1,456.4
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,456.4
|
|
|
$
|
6,837.5
|
|
|
$
|
500.6
|
|
|
$
|
996.1
|
|
|
$
|
(2,789.5
|
)
|
|
$
|
7,001.1
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
2,193.3
|
|
|
$
|
—
|
|
|
$
|
157.2
|
|
|
$
|
—
|
|
|
$
|
2,350.5
|
|
Restricted cash
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Accounts receivable, net
|
—
|
|
|
565.4
|
|
|
50.5
|
|
|
250.7
|
|
|
(320.2
|
)
|
|
546.4
|
|
||||||
Inventory, net
|
—
|
|
|
786.8
|
|
|
136.8
|
|
|
195.2
|
|
|
—
|
|
|
1,118.8
|
|
||||||
Contract assets, short-term
|
—
|
|
|
458.8
|
|
|
—
|
|
|
69.5
|
|
|
—
|
|
|
528.3
|
|
||||||
Other current assets
|
—
|
|
|
93.5
|
|
|
—
|
|
|
5.2
|
|
|
—
|
|
|
98.7
|
|
||||||
Total current assets
|
—
|
|
|
4,098.1
|
|
|
187.3
|
|
|
677.8
|
|
|
(320.2
|
)
|
|
4,643.0
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,773.0
|
|
|
306.3
|
|
|
192.4
|
|
|
—
|
|
|
2,271.7
|
|
||||||
Right of use assets
|
—
|
|
|
41.2
|
|
|
7.5
|
|
|
0.2
|
|
|
—
|
|
|
48.9
|
|
||||||
Contract assets, long-term
|
—
|
|
|
6.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.4
|
|
||||||
Pension assets, net
|
—
|
|
|
424.2
|
|
|
—
|
|
|
24.9
|
|
|
—
|
|
|
449.1
|
|
||||||
Deferred income taxes
|
—
|
|
|
106.3
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
106.5
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
||||||
Intangible assets, net
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||||
Investment in subsidiary
|
1,761.9
|
|
|
838.4
|
|
|
—
|
|
|
—
|
|
|
(2,600.3
|
)
|
|
—
|
|
||||||
Other assets
|
—
|
|
|
147.6
|
|
|
—
|
|
|
116.0
|
|
|
(186.8
|
)
|
|
76.8
|
|
||||||
Total assets
|
$
|
1,761.9
|
|
|
$
|
7,436.4
|
|
|
$
|
501.1
|
|
|
$
|
1,013.9
|
|
|
$
|
(3,107.3
|
)
|
|
$
|
7,606.0
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Accounts payable
|
$
|
—
|
|
|
$
|
977.1
|
|
|
$
|
226.3
|
|
|
$
|
175.1
|
|
|
$
|
(320.2
|
)
|
|
$
|
1,058.3
|
|
Accrued expenses
|
—
|
|
|
210.0
|
|
|
0.8
|
|
|
29.4
|
|
|
—
|
|
|
240.2
|
|
||||||
Profit sharing
|
—
|
|
|
76.9
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
|
84.5
|
|
||||||
Current portion of long-term debt
|
—
|
|
|
48.4
|
|
|
0.2
|
|
|
1.6
|
|
|
—
|
|
|
50.2
|
|
||||||
Operating lease liabilities, short-term
|
—
|
|
|
5.3
|
|
|
0.6
|
|
|
0.1
|
|
|
—
|
|
|
6.0
|
|
||||||
Advance payments, short-term
|
—
|
|
|
21.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.6
|
|
||||||
Contract liabilities, short-term
|
—
|
|
|
158.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158.3
|
|
||||||
Forward loss provision, long-term
|
—
|
|
|
83.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.9
|
|
||||||
Deferred revenue and other deferred credits, short-term
|
—
|
|
|
14.5
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
14.8
|
|
||||||
Other current liabilities
|
—
|
|
|
29.3
|
|
|
2.1
|
|
|
11.5
|
|
|
—
|
|
|
42.9
|
|
||||||
Total current liabilities
|
—
|
|
|
1,625.3
|
|
|
230.0
|
|
|
225.6
|
|
|
(320.2
|
)
|
|
1,760.7
|
|
||||||
Long-term debt
|
—
|
|
|
2,974.7
|
|
|
0.9
|
|
|
94.7
|
|
|
(86.2
|
)
|
|
2,984.1
|
|
||||||
Operating lease liabilities, long-term
|
—
|
|
|
36.0
|
|
|
6.9
|
|
|
0.1
|
|
|
—
|
|
|
43.0
|
|
||||||
Advance payments, long-term
|
—
|
|
|
333.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
333.3
|
|
||||||
Pension/OPEB obligation
|
—
|
|
|
35.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.7
|
|
||||||
Contract liabilities, long-term
|
—
|
|
|
356.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356.3
|
|
||||||
Forward loss provision, long-term
|
—
|
|
|
163.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
163.5
|
|
||||||
Deferred grant income liability - non-current
|
—
|
|
|
9.2
|
|
|
—
|
|
|
19.8
|
|
|
—
|
|
|
29.0
|
|
||||||
Deferred revenue and other deferred credits
|
—
|
|
|
30.4
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
|
34.4
|
|
||||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
8.3
|
|
|
—
|
|
|
8.3
|
|
||||||
Other liabilities
|
—
|
|
|
190.1
|
|
|
—
|
|
|
6.3
|
|
|
(100.6
|
)
|
|
95.8
|
|
||||||
Total equity
|
1,761.9
|
|
|
1,681.9
|
|
|
263.3
|
|
|
655.1
|
|
|
(2,600.3
|
)
|
|
1,761.9
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,761.9
|
|
|
$
|
7,436.4
|
|
|
$
|
501.1
|
|
|
$
|
1,013.9
|
|
|
$
|
(3,107.3
|
)
|
|
$
|
7,606.0
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash used in operating activities
|
$
|
—
|
|
|
$
|
(312.5
|
)
|
|
$
|
9.8
|
|
|
$
|
(28.6
|
)
|
|
|
|
|
$
|
(331.3
|
)
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Purchase of property, plant and equipment
|
—
|
|
|
(23.4
|
)
|
|
(0.4
|
)
|
|
(7.2
|
)
|
|
—
|
|
|
(31.0
|
)
|
||||||
Acquisition, net of cash acquired
|
—
|
|
|
(118.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(118.1
|
)
|
||||||
Other
|
—
|
|
|
0.3
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.8
|
|
||||||
Net cash used in investing activities
|
—
|
|
|
(141.2
|
)
|
|
(0.4
|
)
|
|
(5.7
|
)
|
|
—
|
|
|
(147.3
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Customer financing
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
||||||
Principal payments of debt
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(7.3
|
)
|
||||||
Payments on term loan
|
—
|
|
|
(5.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.7
|
)
|
||||||
Proceeds (payments) from intercompany debt
|
—
|
|
|
9.1
|
|
|
(9.4
|
)
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||||
Taxes paid related to net share settlement of awards
|
—
|
|
|
(13.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.1
|
)
|
||||||
Proceeds (payments) from subsidiary for dividends paid
|
12.4
|
|
|
(12.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends Paid
|
(12.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.4
|
)
|
||||||
Proceeds from issuance of ESPP stock
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
Debt issuance costs
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
(22.6
|
)
|
|
(9.4
|
)
|
|
—
|
|
|
—
|
|
|
(32.0
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.2
|
)
|
|
|
|
|
(6.2
|
)
|
||||||
Net decrease in cash and cash equivalents for the period
|
—
|
|
|
(476.3
|
)
|
|
—
|
|
|
(40.5
|
)
|
|
—
|
|
|
(516.8
|
)
|
||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
—
|
|
|
2,210.0
|
|
|
—
|
|
|
157.2
|
|
|
—
|
|
|
2,367.2
|
|
||||||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
—
|
|
|
$
|
1,733.7
|
|
|
$
|
—
|
|
|
$
|
116.7
|
|
|
$
|
—
|
|
|
$
|
1,850.4
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
197.4
|
|
|
$
|
3.3
|
|
|
$
|
41.5
|
|
|
$
|
—
|
|
|
$
|
242.2
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Purchase of property, plant and equipment
|
—
|
|
|
(29.3
|
)
|
|
(3.3
|
)
|
|
(8.2
|
)
|
|
—
|
|
|
(40.8
|
)
|
||||||
Acquisition, net of cash acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Net cash used in investing activities
|
—
|
|
|
(29.2
|
)
|
|
(3.3
|
)
|
|
(8.2
|
)
|
|
—
|
|
|
(40.7
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Proceeds from issuance of debt
|
—
|
|
|
250.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250.0
|
|
||||||
Proceeds from revolving credit facility
|
—
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
||||||
Principal payments of debt
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(2.6
|
)
|
||||||
Proceeds (payments) from intercompany debt
|
—
|
|
|
34.0
|
|
|
—
|
|
|
(34.0
|
)
|
|
—
|
|
|
—
|
|
||||||
Taxes paid related to net share settlement of awards
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
||||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
75.0
|
|
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75.0
|
)
|
||||||
Proceeds (payments) from subsidiary for dividends paid
|
12.7
|
|
|
(12.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends Paid
|
(12.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.7
|
)
|
||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
283.9
|
|
|
—
|
|
|
(34.2
|
)
|
|
—
|
|
|
249.7
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents for the period
|
—
|
|
|
452.1
|
|
|
—
|
|
|
(1.2
|
)
|
|
—
|
|
|
450.9
|
|
||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
—
|
|
|
725.5
|
|
|
—
|
|
|
68.6
|
|
|
—
|
|
|
794.1
|
|
||||||
Cash, cash equivalents, and restricted cash, end of period
|
—
|
|
|
1,177.6
|
|
|
—
|
|
|
67.4
|
|
|
—
|
|
|
1,245.0
|
|
•
|
B737 MAX resume at low rates in 2020, and gradually increase to 31 APM during 2021
|
•
|
B787 average production volume of 10 APM in 2020, and gradually decrease to 7 APM by 2022
|
•
|
B777 average production volume will be reduced to 3 APM in 2021
|
1)
|
the timing and conditions surrounding the return to service of the B737 MAX, future demand for the aircraft, and any residual impacts of the grounding on production rates for the aircraft;
|
2)
|
our reliance on Boeing for a significant portion of our revenues;
|
3)
|
our ability to continue to grow our business and execute our growth strategy including our ability to enter into profitable supply arrangements with additional customers;
|
4)
|
the business condition and liquidity of Boeing and Airbus and their ability to satisfy their contractual obligations to the Company;
|
5)
|
demand for our products and services and the effect of economic or geopolitical conditions, or other events, such as pandemics, in the industries and markets in which we operate in the U.S. and globally;
|
6)
|
the impact of the COVID-19 pandemic on our business and operations, including on the demand for our and our customers’ products and services, on trade and transport restrictions, on the global aerospace supply chain, on our
|
7)
|
the certainty of our backlog, including the ability of customers to cancel or delay orders prior to shipment;
|
8)
|
our ability to accurately estimate and manage performance, cost, margins, and revenue under our contracts, and the potential for additional forward losses on new and maturing programs;
|
9)
|
our ability and our suppliers’ ability to accommodate, and the cost of accommodating, announced increases in the build rates of certain aircraft;
|
10)
|
competitive conditions in the markets in which we operate, including in-sourcing by commercial aerospace original equipment manufacturers;
|
11)
|
our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing, Airbus and other customers;
|
12)
|
the success and timely execution of key milestones, such as the receipt of necessary regulatory approvals and satisfaction of closing conditions, in our announced acquisitions of Asco and select Bombardier assets, and our ability to effectively assess, manage, close, and integrate such acquisitions along with others that we pursue, and generate synergies and other cost savings therefrom, while avoiding unexpected costs, charges, expenses, and adverse changes to business relationships and business disruptions;
|
13)
|
the possibility that our cash flows may not be adequate for our additional capital needs;
|
14)
|
our ability to avoid or recover from cyber-based or other security attacks and other operations disruptions;
|
15)
|
legislative or regulatory actions, both domestic and foreign, impacting our operations;
|
16)
|
the effect of changes in tax laws and the Company’s ability to accurately calculate and estimate the effect of such changes;
|
17)
|
any reduction in our credit ratings;
|
18)
|
our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components;
|
19)
|
our ability to recruit and retain a critical mass of highly skilled employees;
|
20)
|
our relationships with the unions representing many of our employees, including our ability to avoid labor disputes and work stoppages with respect to our union employees;
|
21)
|
spending by the U.S. and other governments on defense;
|
22)
|
pension plan assumptions and future contributions;
|
23)
|
the effectiveness of our internal control over financial reporting; and any difficulties or delays that could affect the Company’s ability to effectively implement the remediation plan, in whole or in part, to address the material weakness identified in the Company’s internal control over financial reporting, as described in Item 9A. “Controls and Procedures” of the Annual Report on Form 10-K for 2019;
|
24)
|
the outcome or impact of ongoing or future litigation, claims, and regulatory actions, including our exposure to potential product liability and warranty claims;
|
25)
|
our ability to continue selling certain receivables through our supplier financing programs;
|
26)
|
our ability to access the capital markets to fund our liquidity needs, and the costs and terms of any additional financing;
|
27)
|
any regulatory or legal action arising from the review of our accounting processes;
|
28)
|
the risks of doing business internationally, including fluctuations in foreign currency exchange rates, impositions of tariffs or embargoes, trade restrictions, compliance with foreign laws, and domestic and foreign government policies.
|
•
|
Reduced pay for all U.S.-based executives by 20 percent until further notice. The company will address non-U.S. executive pay in accordance with local law and statutory requirements
|
•
|
Initiated a 21 calendar-day furlough of production workers and managers supporting Boeing programs in Wichita, Kansas and Oklahoma
|
•
|
Implemented a four-day work week for its salaried workforce at its Wichita, Kansas facility until further notice
|
•
|
Announced reduction of 1,450 employees in Wichita, KS and additional reductions at other Spirit locations to align to lower production levels
|
•
|
whether there will be additional production suspensions or production rate reductions relating to the COVID-19 pandemic and the resulting impact on our financial performance, liquidity and our cash flows;
|
•
|
if we will have significant employee absenteeism due to fear of COVID-19 infection;
|
•
|
if we may experience lawsuits or regulatory actions due to COVID-19 spread in the workplace;
|
•
|
reputational risk we may experience due to COVID-19 spread in the workplace;
|
•
|
the effect of significant salary cuts across our workforce, which may result in critical employee departures;
|
•
|
the impact remote working arrangements, salary reductions, and shortened work weeks for salaried employees will have on the health and productivity of management and our employees, and our ability to maintain our financial reporting processes and related controls and manage the complex accounting issues presented by the COVID-19 pandemic such as excess cost accounting, impairment analysis and business combination controls;
|
•
|
the impact on the Company’s vendors and outsourced business processes and their process and controls documentation;
|
•
|
the impact on our suppliers, including whether they will be able to meet our future needs;
|
•
|
the impact on our contracts with our customers and suppliers, including force majeure provisions;
|
•
|
our ability to withstand and recover from any cyberattacks as a result of a remote working environment, and potential reputational impacts or loss of customer contracts as a result of such cyberattacks; and
|
•
|
the impact on the public’s demand and ability to pay for future airline travel, whether or not vaccines or effective treatments for COVID-19 become available.
|
|
Three Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
|
($ in millions)
|
||||||
Revenue
|
$
|
1,077.3
|
|
|
$
|
1,967.8
|
|
Cost of sales
|
1,112.5
|
|
|
1,658.3
|
|
||
Gross profit
|
(35.2
|
)
|
|
309.5
|
|
||
Selling, general and administrative
|
77.4
|
|
|
63.6
|
|
||
Restructuring costs
|
42.6
|
|
|
—
|
|
||
Research and development
|
12.3
|
|
|
12.9
|
|
||
Operating (loss) income
|
(167.5
|
)
|
|
233.0
|
|
||
Interest expense and financing fee amortization
|
(32.2
|
)
|
|
(18.8
|
)
|
||
Other (expense) income, net
|
(49.0
|
)
|
|
(11.0
|
)
|
||
(Loss) income before income taxes and equity in net (loss) income of affiliate
|
(248.7
|
)
|
|
203.2
|
|
||
Income tax benefit (provision)
|
87.2
|
|
|
(40.1
|
)
|
||
(Loss) income before equity in net (loss) income of affiliate
|
(161.5
|
)
|
|
163.1
|
|
||
Equity in net (loss) income of affiliate
|
(1.5
|
)
|
|
—
|
|
||
Net (loss) income
|
$
|
(163.0
|
)
|
|
$
|
163.1
|
|
|
|
Three Months Ended
|
||||
Model
|
|
April 2,
2020 |
|
March 28,
2019 |
||
B737
|
|
18
|
|
|
152
|
|
B747
|
|
2
|
|
|
1
|
|
B767
|
|
6
|
|
|
8
|
|
B777
|
|
9
|
|
|
13
|
|
B787
|
|
40
|
|
|
42
|
|
Total Boeing
|
|
75
|
|
|
216
|
|
A220
|
|
15
|
|
|
8
|
|
A320 Family
|
|
188
|
|
|
178
|
|
A330
|
|
8
|
|
|
9
|
|
A350
|
|
26
|
|
|
28
|
|
A380
|
|
—
|
|
|
1
|
|
Total Airbus
|
|
237
|
|
|
224
|
|
Business and Regional Jets (1)
|
|
12
|
|
|
13
|
|
Total
|
|
324
|
|
|
453
|
|
|
|
Three Months Ended
|
||||||
|
April 2,
2020 |
|
March 28,
2019 |
||||
|
($ in millions)
|
||||||
Segment Revenues
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
551.5
|
|
|
$
|
1,069.6
|
|
Propulsion Systems
|
225.2
|
|
|
485.7
|
|
||
Wing Systems
|
291.4
|
|
|
407.9
|
|
||
All Other
|
9.2
|
|
|
4.6
|
|
||
|
$
|
1,077.3
|
|
|
$
|
1,967.8
|
|
Segment Operating (Loss) Income
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
(86.4
|
)
|
|
$
|
138.9
|
|
Propulsion Systems
|
(5.3
|
)
|
|
95.5
|
|
||
Wing Systems
|
13.6
|
|
|
65.8
|
|
||
All Other
|
1.8
|
|
|
1.2
|
|
||
|
(76.3
|
)
|
|
301.4
|
|
||
SG&A
|
(77.4
|
)
|
|
(63.6
|
)
|
||
Research and development
|
(12.3
|
)
|
|
(12.9
|
)
|
||
Unallocated cost of sales (1)
|
(1.5
|
)
|
|
8.1
|
|
||
Total operating (loss) income
|
$
|
(167.5
|
)
|
|
$
|
233.0
|
|
|
|
For the Three Months Ended
|
||||||
|
April 2, 2020
|
|
March 28, 2019
|
||||
|
($ in millions)
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(331.3
|
)
|
|
$
|
242.2
|
|
Net cash used in investing activities
|
(147.3
|
)
|
|
(40.7
|
)
|
||
Net cash (used in) provided by financing activities
|
(32.0
|
)
|
|
249.7
|
|
||
Effect of exchange rate change on cash and cash equivalents
|
(6.2
|
)
|
|
(0.3
|
)
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash for the period
|
(516.8
|
)
|
|
450.9
|
|
||
Cash, cash equivalents, and restricted cash beginning of period
|
2,367.2
|
|
|
794.1
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
1,850.4
|
|
|
$
|
1,245.0
|
|
•
|
whether there will be additional production suspensions relating to the COVID-19 pandemic and the resulting impact on our financial performance, liquidity and our cash flows;
|
•
|
if we will have significant employee absenteeism due to infection or fear of COVID-19 infection;
|
•
|
if we may experience lawsuits or regulatory actions due to COVID-19 spread in the workplace;
|
•
|
reputational risk we may experience due to COVID-19 spread in the workplace;
|
•
|
the effect of significant salary cuts across our workforce, which may result in critical employee departures;
|
•
|
the impact remote working arrangements, salary reductions, and shortened work weeks for salaried employees will have on the health and productivity of management and our employees, and our ability to maintain our compliance practices and procedures, financial reporting processes and related controls, and manage the complex accounting issues presented by the COVID-19 pandemic such as excess cost accounting, impairment analysis and business combination controls;
|
•
|
the impact on the Company’s vendors and outsourced business processes and their process and controls documentation;
|
•
|
the impact on our suppliers, including whether they will be able to meet our future needs;
|
•
|
the impact on our contracts with our customers and suppliers, including force majeure provisions;
|
•
|
our customers’ ability to pay for our products and services;
|
•
|
our ability to withstand and recover from any cyberattacks or operation interruptions as a result of a remote working environment, and potential reputational impacts or loss of customer contracts as a result of such cyberattacks and interruptions; and
|
•
|
the impact on the public’s demand and ability to pay for future airline travel, whether or not vaccines or effective treatments for COVID-19 become available.
|
Exhibit
Number
|
|
Exhibit
|
|
Incorporated by Reference to the Following Documents
|
|
|
|
|
|
|
Second Supplemental Indenture, dated as of February 24, 2020, among Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc., Spirit AeroSystems North Carolina, Inc., and The Bank of New York Mellon Trust Company, N.A., as Trustee.
|
|
Current Report on Form 8-K (File No. 001-33160), filed February 25, 2020, Exhibit 4.1
|
|
|
|
|
|
|
|
Indenture, dated as of April 17, 2020, among Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc., Spirit AeroSystems North Carolina, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent.
|
|
Current Report on Form 8-K (File No. 001-33160), filed April 17, 2020, Exhibit 4.1
|
|
|
|
|
|
|
|
Form of 7.500% Senior Secured Second Lien Note due 2025.
|
|
Current Report on Form 8-K (File No. 001-33160), filed April 17, 2020, Exhibit 4.2 (included as Exhibit A to Exhibit 4.1 thereto)
|
|
|
|
|
|
|
|
Third Supplemental Indenture, dated as of April 17, 2020, among Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc., Spirit AeroSystems North Carolina, Inc., and The Bank of New York Mellon Trust Company, N.A., as Trustee.
|
|
Current Report on Form 8-K (File No. 001-33160), filed April 17, 2020, Exhibit 4.3
|
|
|
|
|
|
|
|
Stockholder Protection Rights Agreement, dated April 22, 2020, between Spirit AeroSystems Holdings, Inc. and Computershare Inc.
|
|
Current Report on Form 8-K (File No. 001-33160), filed April 23, 2020, Exhibit 4.1
|
|
|
|
|
|
|
|
Employment Agreement, dated January 29, 2020, between Spirit AeroSystems, Inc. and Mark Suchinski.
|
|
Current Report on Form 8-K (File No. 001-33160), filed January 30, 2020, Exhibit 10.1
|
|
|
|
|
|
|
|
Agreement and General Release, dated January 31, 2020, between Spirit AeroSystems Holdings, Inc., Spirit AeroSystems, Inc. and Jose Garcia.
|
|
Current Report on Form 8-K (File No. 001-33160), filed January 31, 2020, Exhibit 10.1
|
|
|
|
|
|
|
|
First Amendment to the Second Amended and Restated Credit Agreement, dated as of February 24, 2020, 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 collateral agent.
|
|
Current Report on Form 8-K (File No. 001-33160), filed February 25, 2020, Exhibit 10.1
|
|
|
|
|
|
|
|
Delayed Draw Term Loan Credit Agreement, dated as of February 24, 2020, among Spirit AeroSystems, Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, Spirit AeroSystems North Carolina, Inc., as subsidiary guarantor, and the lenders party thereto, Bank of America, N.A., as administrative agent.
|
|
Current Report on Form 8-K (File No. 001-33160), filed February 25, 2020, Exhibit 10.2
|
|
|
|
|
|
|
|
Letter Agreement, dated January 29, 2020, RE; Agreement for the Sale and Purchase of Shares of S.R.I.F. N.V.(as amended), by and between Christian Boas, Emilie Boas, DREDA, Sylvie Boas, Spirit AeroSystems Belgium Holdings BVBA, and Spirit AeroSystems Holdings, Inc.
|
|
Annual Report on Form 10-K (File No. 001-33160), filed February 28, 2020, Exhibit 10.93
|
|
|
|
|
|
|
|
Amended and Restated Employee Stock Purchase Plan, effective January 21, 2020.
|
|
Annual Report on Form 10-K (File No. 001-33160), filed February 28, 2020, Exhibit 10.19
|
|
|
|
|
|
|
|
Resignation and General Release, dated April 3, 2020, among Spirit AeroSystems, Inc., Spirit AeroSystems Holdings, Inc. , and John Gilson.
|
|
Current Report on Form 8-K (File No. 001-33160), filed April 8, 2020, Exhibit 10.1
|
|
|
|
|
|
|
|
Second Amendment, dated as of March 30, 2020, to the Second Amended and Restated Credit Agreement among Spirit AeroSystems, Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent.
|
|
*
|
|
|
|
|
|
|
|
Third Amendment, dated as of April 10, 2020, to the Second Amended and Restated Credit Agreement among Spirit AeroSystems, Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent.
|
|
*
|
|
|
|
|
|
|
|
Fourth Amendment, dated as of April 13, 2020, to the Second Amended and Restated Credit Agreement among Spirit AeroSystems, Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent.
|
|
Current Report on Form 8-K (File No. 001-33160), filed April 17, 2020, Exhibit 10.1
|
|
|
|
|
|
|
|
Fifth Amendment, dated as of April 20, 2020, to the Second Amended and Restated Credit Agreement among Spirit AeroSystems, Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent.
|
|
*
|
|
|
|
|
|
|
10.13††
|
|
Memorandum of Agreement, dated February 6, 2020, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
*
|
|
|
|
|
|
|
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*
|
|
Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
*
|
|
|
|
|
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
*
|
|
|
|
|
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
*
|
|
|
|
|
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
*
|
|
|
|
|
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
*
|
|
|
|
|
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
|
|
†
|
|
Indicates management contract or compensation plan or arrangement.
|
|
|
|
|
|
|
|
††
|
|
Indicates that confidential portions of the exhibit have been omitted in accordance with the rules of the Securities and Exchange Commission.
|
|
|
|
|
|
|
|
*
|
|
Filed herewith.
|
|
|
|
|
|
|
|
**
|
|
Furnished herewith.
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Mark J. Suchinski
|
|
Senior Vice President and Chief Financial
|
|
May 6, 2020
|
Mark J. Suchinski
|
|
Officer (Principal Financial Officer)
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Damon Ward
|
|
Interim Corporate Controller (Principal Accounting Officer)
|
|
May 6, 2020
|
Damon Ward
|
|
|
|
|
A.
|
In December of 2019, Boeing announced a temporary suspension of the 737 MAX production necessitated by the grounding of the 737 MAX. Given the potential disruption caused by the temporary suspension of production, the Parties wish to increase the near-term and long-term stability of the Parties’ respective production systems; plan for resumption of production and subsequent rate ramp; as well as reduce excess inventory following the ungrounding of the 737 MAX.
|
B.
|
The Parties wish to memorialize their agreement on these matters in this MOA, in accordance with the terms set forth below.
|
C.
|
The discussions surrounding and agreements reached in this MOA do not relate to the [*****].
|
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"), GTA BCA-65530-0016 ("Sustaining GTA"), AA-65530-0010 (“Sustaining AA”), SBP MS-65530-0019 (“787 SBP”), GTA BCA-65520-0032 (“787 GTA”), AA-65520-0026 (“787 AA”), and Master Program Contract FZ-247827-8901N (“767 MPC”) (collectively, the "Contracts").
|
2.
|
Memorandum of Agreement Superseded. The certain Memorandum of Agreement entitled 737 Production Rate Adjustment, executed between the Parties April 12, 2019
|
3.
|
Production Rates. Unless otherwise directed by Boeing, Seller’s production rate for 737 Program Airplane, its Derivatives and the P-8 (“Build Rate”), starting in January 2020 will be as follows:
|
Month(s)
|
Seller Build Rate -
Airplanes per Month (“APM”)*
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
3.1
|
Delivery Point, Title Transfer, and Risk of Loss. Seller is obligated to build Products in support of the Sustaining SBP. Seller’s Build Rate may differ from Boeing’s 737 production rate. Notwithstanding Seller’s different Build Rate, all 737 Products will be delivered F.O.B. carrier’s transport at Seller’s plant. For the purposes of this MOA, the meaning of carrier’s transport, with respect to 737 Products, will be mutually agreed by the Parties given the expectation that some 737 Products may be stored after delivery to the above described F.O.B. point ("Ship in Place”) rather than shipped immediately to Boeing. Products stored as a result of a Ship in Place are referred to herein as “Stored Products”.
|
a.
|
Title to and risk of any loss of or damage to the Products will transfer to Boeing at the above described F.O.B. point, except to the extent loss or damage results from the Seller’s fault or negligence. If requested by Boeing, Seller will store the Products at the locations that Seller is using for such storage as of the Effective Date (“Current Storage Location”). Seller will be responsible for any incremental costs associated with such Stored Products at Current Storage Location;
|
b.
|
Seller will provide status and records related to Stored Products. The number of Stored Products will not exceed one hundred and sixty (160) Shipsets. The number of Stored Products will not be fewer than eighteen (18) Shipsets, unless otherwise directed by Boeing; and
|
c.
|
Seller will support efforts to optimize the location of the Stored Products to minimize Boeing’s insurance risks. If the Parties mutually agree on another location for Stored Products, then the Parties will also mutually
|
3.2
|
Fourteen Shipsets. Notwithstanding the Build Rates set forth in the above table, in February 2020, Seller will Ship in Place up to fourteen (14) completed 737 Shipsets (“February Shipsets”). The Price for the February Shipsets is stated in Section 4.6.
|
3.3
|
Work on Stored Products.
|
a.
|
Rework. If Stored Products require rework due to the fault of Seller, then Seller will perform the rework without additional cost to Boeing while Seller is storing the Stored Products. If the Parties determine it is not feasible to perform the rework while the Seller is storing the Stored Product given reasonably available time, materials, tooling, equipment, and labor, then the Parties will coordinate and determine where, when, and how the rework will be performed pursuant to the applicable provisions of the Sustaining SBP and Sustaining GTA; and
|
b.
|
Changes. The Parties will utilize the existing Change incorporation process within the Sustaining SBP for Changes to the Stored Products. Seller is obligated to complete all directed Changes to Stored Products, with no additional cost to Boeing arising from the fact that such 737 Products are Stored Products.
|
4.
|
[*****].
|
4.1
|
[*****];
|
4.2
|
[*****];
|
4.3
|
[*****], Boeing will make an advance payment of one hundred fifty-five million, ninety-one thousand, and five hundred U.S. dollars ($155,091,500) (“Pre-Payment”). [*****].
|
4.4
|
The Pre-Payment is an estimate [*****] that would be due given the projected Build Rate herein, as illustrated in Attachment A. Within sixty calendar (60) days following the U.S. Federal Aviation Administration 737 MAX ungrounding, the Parties will recalculate the Pre-Payment (“Recalculated Pre-Payment”) by using the i) planned Build Rate, ii) the planned quantity of each minor model defined in the latest F.O.B. master schedule, and iii) minor model pricing assumptions stated in Attachment A.
|
a.
|
The Parties will compare the Pre-Payment to the Recalculated Pre-Payment (“Comparison”). If the Comparison identifies a gap, either over or under the Pre-Payment amount, then the respective Party will make any such payment to address the gap, no later than one hundred and twenty (120) calendar days following the 737 MAX ungrounding.
|
4.5
|
Furthermore, once Boeing provides a CCN that incorporates a master schedule with quantities of [*****] APM, or on May 31, 2022, whichever occurs sooner, the Parties will calculate any difference between the Recalculated Pre-Payment
|
a.
|
The Parties will compare this actual value to the Recalculated Pre-Payment (“Recalculated Pre-Payment Comparison”). If the Recalculated Pre-Payment Comparison identifies a gap, either over or under the Recalculated Pre-Payment amount, then the respective Party will make any such payment to address the gap, no later than July 31, 2022.
|
4.6
|
[*****].
|
5.
|
Payment Terms. All payments due from Boeing to Seller under the Contracts, as of the Effective Date, will be paid net [*****] calendar days. The net [*****] payment terms will be in effect for the duration of the Contracts, regardless of Pricing Periods.
|
6.
|
[*****] and Production Stabilization. [*****]:
|
6.1
|
No later than February 28, 2020, Boeing will pay a cash advance [*****] to Seller in the fixed amount of seventy million U.S. dollars ($70,000,000) [*****]. The [*****].
|
a.
|
[*****].
|
b.
|
The [*****] Advance includes sixty million U.S. dollars ($60,000,000) for production stabilization efforts throughout 2020 (“Production Stabilization Fee”). [*****].
|
6.2
|
Seller will repay the [*****] Advance less the Production Stabilization Fee. Seller agrees to four (4) equal wire transfers of two-million, five hundred-thousand U.S. dollars ($2,500,000) each, paid to Boeing in accordance with the following schedule:
|
•
|
$2,500,000 paid no later than February 15, 2021
|
•
|
$2,500,000 paid no later than May 15, 2021
|
•
|
$2,500,000 paid no later than August 15, 2021
|
•
|
$2,500,000 paid no later than November 15, 2021
|
6.3
|
[*****].
|
7.
|
Advance Repayment. Seller acknowledges the cash advance provided by Boeing under the Prior MOA, in 2019, of one hundred twenty-three million U.S. dollars ($123,000,000). Seller to align the repayment plan to coincide with deliveries and will offset payments utilizing the formula of number of units delivered in the quarter-to-date based on the schedule below, times average shipset price, until the amount is fully offset for each respective quarter. Any variability to this calculation based on the offset of units, or average shipset price will be trued up in the fourth quarter of 2022. Seller will repay Boeing in four (4) equal wire transfers in accordance with the following schedule:
|
•
|
$30,750,000 paid no later than February 15, 2022
|
•
|
$30,750,000 paid no later than May 15, 2022
|
•
|
$30,750,000 paid no later than August 15, 2022
|
•
|
$30,750,000 paid no later than November 15, 2022
|
8.
|
[*****].
|
8.1
|
[*****]
|
8.2
|
[*****]
|
8.3
|
[*****]
|
9.
|
Additional Business Considerations.
|
9.1
|
737 Pricing Period. The Pricing Period of the Sustaining SBP and Sustaining GTA, for all 737 Program Airplanes including the P-8, is extended through December 31, 2033. The Parties will reconvene in 2031 to negotiate 737 Price beyond 2033.
|
9.2
|
Seller Assertions Settled and Released.
|
a.
|
737MAX-10 Price. The Sustaining SBP Attachment 1 reflects the [*****] Price of 737MAX-9. Boeing agrees that the recurring [*****] Price of the 737MAX-10 will be [*****] per Shipset more than the [*****] Price of 737MAX-9 per Shipset and [*****]. This Price is inclusive of all changes to the 737MAX-10 for which engineering has been released through the Effective Date. The Parties will determine the Price allocation among the associated work packages. Reconciliation for deliveries made on and before the Effective Date will be completed within thirty (30) calendar days after the Effective Date.
|
b.
|
777X Initial Tooling [*****] Adjustment. The Sustaining SBP reflects an [*****] Amount of [*****] for the 777X Initial Tooling. The Parties agree to revise the 777X Initial Tooling to [*****] for all such 777X Initial Tooling for which Seller has submitted actuals prior to the Effective Date (“[*****] Price”). Seller assertions submitted to Boeing on or after [*****] are not included in the [*****] Price.
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i.
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Boeing will pay Seller an additional [*****], the difference between the [*****] amount already paid and the agreed to [*****] Price reflected above.
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ii.
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Seller will provide Certified Tool Lists (CTL) to Boeing. Payment of the [*****] Price is contingent upon Seller providing a complete list of the 777X Initial Tooling.
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iii.
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The Parties agree that the Sustaining SBP Attachment 29 Section 10.1.1, Initial Tooling Incentive associated with the 777X Initial Tooling [*****], is null and void as of the Effective Date.
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iv.
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Boeing will submit a purchase order to Seller, with a net [*****] payment term, within fifteen (15) calendar days from receipt of the complete list of 777X Initial Tooling from Seller and approve an acceptable invoice within seven (7) calendar days.
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c.
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[*****].
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i.
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Seller’s Assertions and Rework. As a result of Boeing directed [*****], Seller has submitted assertions to Boeing due to non-recurring rework efforts related to [*****].
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i.
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[*****] Assembly Recurring Price. Seller will incorporate [*****] on affected Shipsets. For affected Shipsets, the Sustaining SBP Attachment 1 Price for the 777X [*****] will include i) [*****] per Shipset Price [*****] for the [*****] Shipsets, and ii) [*****] per Shipset Price [*****] for Shipset [*****] and on. For avoidance of doubt, the aforementioned [*****] will be incorporated in line with the final line unit incorporation of [*****].
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ii.
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Non-Recurring Rework. Boeing will pay Seller a [*****] amount of [*****]. Boeing will submit a purchase order to Seller, with a net [*****] payment term, within thirty (30) calendar days of the Effective Date and approve an acceptable invoice within seven (7) calendar days.
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d.
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Seller Release of Boeing. Except as to such rights or claims as may be created by this MOA, Seller, for itself and for its successors, predecessors, assigns, affiliates, parents, divisions, and subsidiaries, and their respective employees, agents, representatives, officers, directors, attorneys, sureties, and insurers, hereby releases and forever discharges Boeing and its successors, predecessors, affiliates, parents, divisions, and subsidiaries, and their respective employees, agents, representatives, officers, directors, attorneys, sureties, and insurers, from any and all present, past, and future claims, demands, debts, losses, obligations, costs, expenses, rights of action, and causes of action, whether based in contract, tort, statutory, or other legal or equitable theory of recovery, known or unknown, suspected or unsuspected, foreseen or unforeseen, or existing or claimed to exist, relating to or arising from the disputes identified in this Section 9.2. For the avoidance of doubt, warranty claims and claims by Seller against Boeing for contribution (or, if otherwise provided for, indemnity) toward third-party injury, damage, or loss are not limited, waived, released, or disclaimed. The foregoing is defined as a “Seller Release” for the purposes of this MOA.
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9.3
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737 Cost Recovery Claims Settled and Released.
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a.
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Boeing agrees that the following cost recovery claims are hereby settled: [*****]. Any items not specifically listed above (for example and without limitation: [*****]) are not closed.
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b.
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Boeing Release of Seller. Except as to such rights or claims as may be created by this MOA, Boeing, for itself and for its successors, predecessors, assigns, affiliates, parents, divisions, and subsidiaries, and
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10.
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New Bid Opportunity. Boeing will provide Seller an opportunity to bid on [*****] work.
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11.
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Raw Material Support. In addition to the requirements stated in the Sustaining SBP Section 12.13.2, Seller will provide its reconciled raw material forecast and demand requirements to Boeing.
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12.
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[*****] and [*****] Claims Support. Boeing is aware that Seller has made certain assertions against [*****] and [*****]. Seller has requested and Boeing has agreed to engage in discussions with [*****] and [*****] regarding such assertions to the extent they relate to the Contracts.
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13.
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[*****].
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14.
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Amendments. The Parties will execute amendments to the Contracts to incorporate this MOA, including without limitation any Bonded Stores Agreement, as required, on or before sixty calendar (60) days following the 737 MAX U.S. Federal Aviation Administration ungrounding.
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15.
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Complete Agreement. This MOA constitutes a binding 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. The Parties agree to have further conversations if Boeing makes revisions to its currently planned production scenario.
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16.
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Governing Law and Jurisdiction. This MOA is governed by the laws of the state of Washington, exclusive of Washington's conflict of laws principles. This MOA excludes the application of the 1980 United Nations Convention on Contracts for the International Sale of Goods. Boeing and Seller hereby irrevocably consent to and submit themselves exclusively to the jurisdiction of the applicable courts of King County, Washington and the federal courts of Washington State for the purpose of any suit, action or other judicial proceeding arising out of or connected with this MOA. Boeing and Seller hereby waive and agree not to assert by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that (a) Boeing and Seller are not personally subject to
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17.
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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 twenty-four (24) hours advance notice and will omit confidential information as permitted by applicable law 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.
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18.
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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.
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Month
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Spirit Build Rate
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Expected Units Produced (A)
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Contracted Price (B)
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Invoiced Price (C)
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Pre-Payment*
(B - C) x A
|
||
Applicable Discount
|
Per Unit Price ($)
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Invoice Discount
|
Per Unit Price ($)
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||||
[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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|
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|
|
|
Price Discount Pre-Payment
|
[*****]
|
|
Minor Model Assumptions (Assumed Mix and Pricing)
|
[*****]
|
|
|
|
|||
Model
|
Unit Mix
|
Discountable
|
Non-Discountable
|
Discount
|
S/S Price
|
|
|
[*****]
|
[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
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[*****]
|
[*****]
|
|
|
|
|
Weighted Average
|
[*****]
|
[*****]
|
|
|
|
||
Average Shipset Price
|
[*****]
|
|
|
|
|
/s/ Thomas C. Gentile III
|
|
Thomas C. Gentile III
|
|
President and Chief Executive Officer
|
|
/s/ Mark J. Suchinski
|
|
Mark J. Suchinski
|
|
Senior Vice President and Chief Financial Officer
|
|
/s/ Thomas C. Gentile III
|
|
Thomas C. Gentile III
|
|
President and Chief Executive Officer
|
|
/s/ Mark J. Suchinski
|
|
Mark J. Suchinski
|
|
Senior Vice President and Chief Financial Officer
|