|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
20-2436320
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
Class A common stock, par value $0.01 per share
|
SPR
|
New York Stock Exchange
|
Large accelerated filer
|
|
Accelerated filer
|
|
Non-accelerated filer
|
|
Smaller reporting company
|
|
Emerging Growth Company
|
☒
|
|
☐
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☐
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☐
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☐
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Page
|
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|||
57
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|
||
76
|
|
||
76
|
|
||
|
|
|
|
|
|
|
|
78
|
|
||
78
|
|
||
82
|
|
||
83
|
|
||
|
86
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
|
($ in millions, except per share data)
|
||||||||||||||
Revenue
|
$
|
644.6
|
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
|
$
|
3,983.9
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales
|
925.1
|
|
|
1,723.2
|
|
|
2,037.6
|
|
|
3,381.5
|
|
||||
Selling, general and administrative
|
49.0
|
|
|
56.4
|
|
|
126.4
|
|
|
120.0
|
|
||||
Restructuring costs
|
6.3
|
|
|
—
|
|
|
48.9
|
|
|
—
|
|
||||
Research and development
|
8.3
|
|
|
10.5
|
|
|
20.6
|
|
|
23.4
|
|
||||
Loss on Disposal of Assets
|
22.9
|
|
|
—
|
|
|
22.9
|
|
|
—
|
|
||||
Total operating costs and expenses
|
1,011.6
|
|
|
1,790.1
|
|
|
2,256.4
|
|
|
3,524.9
|
|
||||
Operating (loss) income
|
(367.0
|
)
|
|
226.0
|
|
|
(534.5
|
)
|
|
459.0
|
|
||||
Interest expense and financing fee amortization
|
(48.6
|
)
|
|
(23.7
|
)
|
|
(80.8
|
)
|
|
(42.5
|
)
|
||||
Other expense, net
|
(6.4
|
)
|
|
8.6
|
|
|
(55.4
|
)
|
|
(2.4
|
)
|
||||
(Loss) income before income taxes and equity in net (loss) income of affiliate
|
(422.0
|
)
|
|
210.9
|
|
|
(670.7
|
)
|
|
414.1
|
|
||||
Income tax benefit (provision)
|
167.6
|
|
|
(42.9
|
)
|
|
254.8
|
|
|
(83.0
|
)
|
||||
(Loss) income before equity in net (loss) income of affiliate
|
(254.4
|
)
|
|
168.0
|
|
|
(415.9
|
)
|
|
331.1
|
|
||||
Equity in net loss of affiliate
|
(1.5
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
||||
Net (loss) income
|
$
|
(255.9
|
)
|
|
$
|
168.0
|
|
|
$
|
(418.9
|
)
|
|
$
|
331.1
|
|
(Loss) earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(2.46
|
)
|
|
$
|
1.62
|
|
|
$
|
(4.04
|
)
|
|
$
|
3.19
|
|
Diluted
|
$
|
(2.46
|
)
|
|
$
|
1.61
|
|
|
$
|
(4.04
|
)
|
|
$
|
3.16
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
|
($ in millions)
|
||||||||||||||
Net (loss) income
|
$
|
(255.9
|
)
|
|
$
|
168.0
|
|
|
$
|
(418.9
|
)
|
|
$
|
331.1
|
|
Changes in other comprehensive (loss) gain, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||
Pension, SERP, and Retiree medical adjustments, net of tax effect of ($20.5) and $0.1 for the three months ended, respectively, and $8.3 and $0.2 for the six months ended, respectively
|
66.4
|
|
|
(0.3
|
)
|
|
(26.8
|
)
|
|
(0.6
|
)
|
||||
Unrealized foreign exchange (loss) gain on intercompany loan, net of tax effect of ($0.1) and $0.3 for the three months ended, respectively, and $0.8 and $0.1 for the six months ended, respectively
|
0.3
|
|
|
(1.1
|
)
|
|
(2.6
|
)
|
|
(0.2
|
)
|
||||
Unrealized (loss) gain on interest rate swaps, net of tax effect of $0.0 and $0.0 for the three months ended, respectively, and $3.0 and $0.0 for the six months ended, respectively
|
(1.3
|
)
|
|
—
|
|
|
(11.2
|
)
|
|
—
|
|
||||
Reclassification of loss on interest rate swaps to earnings
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
Foreign currency translation adjustments
|
$
|
2.9
|
|
|
$
|
(13.3
|
)
|
|
$
|
(32.9
|
)
|
|
$
|
(3.9
|
)
|
Total other comprehensive (loss) gain
|
69.6
|
|
|
(14.7
|
)
|
|
(72.1
|
)
|
|
(4.7
|
)
|
||||
Total comprehensive (loss) income
|
$
|
(186.3
|
)
|
|
$
|
153.3
|
|
|
$
|
(491.0
|
)
|
|
$
|
326.4
|
|
|
July 2, 2020
|
|
December 31, 2019
|
||||
|
($ in millions)
|
||||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,947.1
|
|
|
$
|
2,350.5
|
|
Restricted cash
|
0.3
|
|
|
0.3
|
|
||
Accounts receivable, net
|
306.0
|
|
|
546.4
|
|
||
Contract assets, short-term
|
321.6
|
|
|
528.3
|
|
||
Inventory, net
|
1,225.9
|
|
|
1,118.8
|
|
||
Other current assets
|
99.3
|
|
|
98.7
|
|
||
Total current assets
|
3,900.2
|
|
|
4,643.0
|
|
||
Property, plant and equipment, net
|
2,180.7
|
|
|
2,271.7
|
|
||
Right of use assets
|
45.9
|
|
|
48.9
|
|
||
Contract assets, long-term
|
4.9
|
|
|
6.4
|
|
||
Pension assets
|
362.6
|
|
|
449.1
|
|
||
Deferred income taxes
|
162.2
|
|
|
106.5
|
|
||
Goodwill
|
78.3
|
|
|
2.4
|
|
||
Intangible assets, net
|
30.1
|
|
|
1.2
|
|
||
Other assets
|
278.4
|
|
|
76.8
|
|
||
Total assets
|
$
|
7,043.3
|
|
|
$
|
7,606.0
|
|
Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
512.0
|
|
|
$
|
1,058.3
|
|
Accrued expenses
|
245.4
|
|
|
240.2
|
|
||
Profit sharing
|
24.1
|
|
|
84.5
|
|
||
Current portion of long-term debt
|
352.8
|
|
|
50.2
|
|
||
Operating lease liabilities, short-term
|
5.6
|
|
|
6.0
|
|
||
Advance payments, short-term
|
16.2
|
|
|
21.6
|
|
||
Contract liabilities, short-term
|
121.8
|
|
|
158.3
|
|
||
Forward loss provision, short-term
|
108.8
|
|
|
83.9
|
|
||
Deferred revenue and other deferred credits, short-term
|
13.0
|
|
|
14.8
|
|
||
Other current liabilities
|
41.0
|
|
|
42.9
|
|
||
Total current liabilities
|
1,440.7
|
|
|
1,760.7
|
|
||
Long-term debt
|
3,050.6
|
|
|
2,984.1
|
|
||
Operating lease liabilities, long-term
|
40.4
|
|
|
43.0
|
|
||
Advance payments, long-term
|
328.8
|
|
|
333.3
|
|
||
Pension/OPEB obligation
|
48.1
|
|
|
35.7
|
|
||
Contract Liabilities, long-term
|
389.4
|
|
|
356.3
|
|
||
Forward loss provision, long-term
|
287.5
|
|
|
163.5
|
|
||
Deferred revenue and other deferred credits, long-term
|
37.7
|
|
|
34.4
|
|
||
Deferred grant income liability — non-current
|
27.1
|
|
|
29.0
|
|
||
Deferred income taxes
|
7.6
|
|
|
8.3
|
|
||
Other non-current liabilities
|
115.9
|
|
|
95.8
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Common Stock, Class A par value $0.01, 200,000,000 shares authorized, 105,624,828 and 104,882,379 shares issued and outstanding, respectively
|
1.1
|
|
|
1.1
|
|
||
Additional paid-in capital
|
1,125.9
|
|
|
1,125.0
|
|
||
Accumulated other comprehensive loss
|
(181.3
|
)
|
|
(109.2
|
)
|
||
Retained earnings
|
2,780.0
|
|
|
3,201.3
|
|
||
Treasury stock, at cost (41,523,470 shares each period, respectively)
|
(2,456.7
|
)
|
|
(2,456.8
|
)
|
||
Total stockholders' equity
|
1,269.0
|
|
|
1,761.4
|
|
||
Noncontrolling interest
|
0.5
|
|
|
0.5
|
|
||
Total equity
|
1,269.5
|
|
|
1,761.9
|
|
||
Total liabilities and equity
|
$
|
7,043.3
|
|
|
$
|
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
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255.9
|
)
|
|
(255.9
|
)
|
||||||
Dividends Declared(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||||
Employee equity awards
|
236,536
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||||
Stock forfeitures
|
(3,905
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(7,337
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
||||||
ESPP shares issued
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69.6
|
|
|
—
|
|
|
69.6
|
|
||||||
Balance — July 2, 2020
|
105,624,828
|
|
|
$
|
1.1
|
|
|
$
|
1,125.9
|
|
|
$
|
(2,456.7
|
)
|
|
$
|
(181.3
|
)
|
|
$
|
2,780.0
|
|
|
$
|
1,269.0
|
|
|
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, 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 ASU 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(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
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168.0
|
|
|
168.0
|
|
||||||
Dividends Declared(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.6
|
)
|
|
(12.6
|
)
|
||||||
Employee equity awards
|
41,474
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
||||||
Stock forfeitures
|
(69,550
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net shares settled
|
(14,372
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
||||||
ESPP shares issued
|
14,617
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
SERP shares issued
|
6,214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.7
|
)
|
|
—
|
|
|
(14.7
|
)
|
||||||
Balance — June 27, 2019
|
104,855,210
|
|
|
$
|
1.0
|
|
|
$
|
1,105.5
|
|
|
$
|
(2,456.0
|
)
|
|
$
|
(209.6
|
)
|
|
$
|
3,027.3
|
|
|
$
|
1,468.2
|
|
|
For the Six Months Ended
|
||||||
|
July 2, 2020
|
|
June 27, 2019
|
||||
Operating activities
|
($ in millions)
|
||||||
Net (loss) income
|
$
|
(418.9
|
)
|
|
$
|
331.1
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
|
|
|
|
|
|||
Depreciation and amortization expense
|
135.4
|
|
|
123.5
|
|
||
Amortization of deferred financing fees
|
5.5
|
|
|
1.7
|
|
||
Accretion of customer supply agreement
|
1.2
|
|
|
2.3
|
|
||
Employee stock compensation expense
|
10.8
|
|
|
15.1
|
|
||
Loss from derivative instruments
|
0.1
|
|
|
7.8
|
|
||
Gain from foreign currency transactions
|
(3.1
|
)
|
|
(0.1
|
)
|
||
Loss on disposition of assets
|
23.6
|
|
|
(0.2
|
)
|
||
Deferred taxes
|
(51.3
|
)
|
|
24.5
|
|
||
Pension and other post-retirement benefits, net
|
65.9
|
|
|
2.2
|
|
||
Grant liability amortization
|
(2.8
|
)
|
|
(11.4
|
)
|
||
Equity in net loss of affiliate
|
3.0
|
|
|
—
|
|
||
Forward loss provision
|
149.0
|
|
|
(25.3
|
)
|
||
Changes in assets and liabilities
|
|
|
|
||||
Accounts receivable, net
|
244.4
|
|
|
(50.1
|
)
|
||
Inventory, net
|
(115.4
|
)
|
|
39.0
|
|
||
Contract assets
|
209.7
|
|
|
(101.4
|
)
|
||
Accounts payable and accrued liabilities
|
(551.8
|
)
|
|
157.2
|
|
||
Profit sharing/deferred compensation
|
(60.1
|
)
|
|
(30.4
|
)
|
||
Advance payments
|
(19.8
|
)
|
|
(2.2
|
)
|
||
Income taxes receivable/payable
|
(211.8
|
)
|
|
(9.6
|
)
|
||
Contract liabilities
|
(5.5
|
)
|
|
(5.5
|
)
|
||
Deferred revenue and other deferred credits
|
3.0
|
|
|
9.0
|
|
||
Other
|
29.2
|
|
|
(5.5
|
)
|
||
Net cash (used in) provided by operating activities
|
(559.7
|
)
|
|
471.7
|
|
||
Investing activities
|
|
|
|
|
|
||
Purchase of property, plant and equipment
|
(51.2
|
)
|
|
(77.9
|
)
|
||
Equity in assets of affiliates
|
—
|
|
|
—
|
|
||
Acquisition, net of cash acquired
|
(117.9
|
)
|
|
—
|
|
||
Other
|
2.7
|
|
|
0.1
|
|
||
Net cash used in investing activities
|
(166.4
|
)
|
|
(77.8
|
)
|
||
Financing activities
|
|
|
|
|
|
||
Proceeds from issuance of debt
|
1,200.0
|
|
|
250.0
|
|
||
Proceeds from revolving credit facility
|
—
|
|
|
100.0
|
|
||
Customer financing
|
10.0
|
|
|
—
|
|
||
Principal payments of debt
|
(14.8
|
)
|
|
(4.9
|
)
|
||
Payments on term loan
|
(11.4
|
)
|
|
(2.6
|
)
|
||
Payments on revolving credit facility
|
(800.0
|
)
|
|
(100.0
|
)
|
||
Taxes paid related to net share settlement awards
|
(13.8
|
)
|
|
(11.8
|
)
|
||
Proceeds from issuance of ESPP stock
|
1.3
|
|
|
1.3
|
|
||
Debt issuance and financing costs
|
(24.5
|
)
|
|
—
|
|
||
Purchase of treasury stock
|
0.1
|
|
|
(75.0
|
)
|
||
Dividends paid
|
(13.4
|
)
|
|
(25.4
|
)
|
||
Net cash provided by financing activities
|
333.5
|
|
|
131.6
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(7.7
|
)
|
|
(1.5
|
)
|
||
Net (decrease) increase in cash, cash equivalents, and restricted cash for the period
|
(400.3
|
)
|
|
524.0
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period
|
2,367.2
|
|
|
794.1
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
1,966.9
|
|
|
$
|
1,318.1
|
|
Reconciliation of Cash, Cash Equivalents, and Restricted Cash:
|
|
|
|
||||
|
For the Six Months Ended
|
||||||
|
July 2, 2020
|
|
June 27, 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
|
$
|
1,947.1
|
|
|
$
|
1,301.4
|
|
Restricted cash, short-term, end of the period
|
0.3
|
|
|
0.3
|
|
||
Restricted cash, long-term, end of the period
|
19.5
|
|
|
16.4
|
|
||
Cash, cash equivalents, and restricted cash, end of the period
|
$
|
1,966.9
|
|
|
$
|
1,318.1
|
|
•
|
On April 12, 2019, Boeing and the Company executed a Memorandum of Agreement (the “2019 MOA”) providing that the Company was to maintain its delivery rate of 52 shipsets per month with respect to the B737 MAX. Previously, the Company was expecting to increase production to a rate of 57 shipsets per month;
|
•
|
On December 19, 2019, Boeing directed the Company to stop all B737 MAX deliveries to Boeing effective January 1, 2020. Accordingly, Spirit suspended all B737 MAX production beginning on January 1, 2020;
|
•
|
On February 6, 2020, Boeing and Spirit entered into a Memorandum of Agreement (the “2020 MOA”) largely superseding the 2019 MOA and providing for Spirit to deliver to Boeing 216 B737 MAX shipsets in 2020;
|
•
|
On May 4, 2020, Boeing and the Company agreed that Spirit would deliver 125 B737 MAX shipsets to Boeing in 2020; and
|
•
|
On June 19, 2020, Boeing directed Spirit to reduce its 2020 B737 production plan from 125 to 72 shipsets.
|
•
|
Reduced pay for all U.S.-based executives by 20 percent until further notice;
|
•
|
Reduced 2020-2021 term non-employee director compensation by 15 percent;
|
•
|
Reduced planned capital expenditures and operating expenses;
|
•
|
Suspended its share repurchase program;
|
•
|
Reduced quarterly dividends to one penny per share;
|
•
|
Initiated multiple production worker furloughs;
|
•
|
Implemented a four-day work week for its salaried workforce at its Wichita, Kansas facility until further notice;
|
•
|
Reduced ~5,500 employees globally including voluntary retirement;
|
•
|
Amended our 2018 Credit Agreement for covenant relief;
|
•
|
Issued $1.2 billion in senior secured second-lien notes in April 2020; and
|
•
|
Elected to defer the payment of $15.9 in employer payroll taxes incurred through July 2, 2020, as provided by the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), of which 50% is required to be deposited by December 2021 and the remaining 50% by December 2022. In addition, as of July 2, 2020 the Company has recorded a deferral of $28.5 of VAT payments until March 2021 under the United Kingdom deferral scheme.
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
Changes in Estimates
|
|
July 2, 2020
|
|
June 27, 2019
|
|
July 2, 2020
|
|
June 27, 2019
|
||||||||
(Unfavorable) Favorable Cumulative Catch-up Adjustment by Segment
|
|
|
|
|
|
|
|
|
||||||||
Fuselage
|
|
$
|
(31.1
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(24.6
|
)
|
|
$
|
(5.3
|
)
|
Propulsion
|
|
(5.1
|
)
|
|
(6.6
|
)
|
|
(5.6
|
)
|
|
(3.5
|
)
|
||||
Wing
|
|
(1.6
|
)
|
|
1.7
|
|
|
(3.3
|
)
|
|
1.7
|
|
||||
Other
|
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total (Unfavorable) Favorable Cumulative Catch-up Adjustment
|
|
$
|
(37.7
|
)
|
|
$
|
(13.2
|
)
|
|
$
|
(33.5
|
)
|
|
$
|
(7.1
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Changes in Estimates on Loss Programs (Forward Loss) by Segment
|
|
|
|
|
|
|
|
|
||||||||
Fuselage
|
|
$
|
(155.1
|
)
|
|
$
|
1.3
|
|
|
$
|
(168.3
|
)
|
|
$
|
5.0
|
|
Propulsion
|
|
(16.2
|
)
|
|
0.4
|
|
|
(19.3
|
)
|
|
0.9
|
|
||||
Wing
|
|
(22.8
|
)
|
|
0.6
|
|
|
(26.2
|
)
|
|
1.1
|
|
||||
Total Changes in Estimates (Forward Loss) on Loss Programs
|
|
$
|
(194.1
|
)
|
|
$
|
2.3
|
|
|
$
|
(213.8
|
)
|
|
$
|
7.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Change in Estimate
|
|
$
|
(231.8
|
)
|
|
$
|
(10.9
|
)
|
|
$
|
(247.3
|
)
|
|
$
|
(0.1
|
)
|
EPS Impact (diluted per share based upon 2020 forecasted effective tax rate)
|
|
$
|
(1.45
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.55
|
)
|
|
$
|
—
|
|
|
July 2,
2020 |
|
December 31,
2019 |
||||
Trade receivables
|
$
|
282.0
|
|
|
$
|
515.2
|
|
Other
|
26.1
|
|
|
32.6
|
|
||
Less: allowance for doubtful accounts
|
(2.1
|
)
|
|
(1.4
|
)
|
||
Accounts receivable, net
|
$
|
306.0
|
|
|
$
|
546.4
|
|
|
July 2, 2020
|
|
December 31, 2019
|
|
Change
|
|
|||
Contract assets
|
$
|
326.5
|
|
$
|
534.7
|
|
$
|
(208.2
|
)
|
Contract liabilities
|
(511.2
|
)
|
(514.6
|
)
|
3.4
|
|
|||
Net contract assets (liabilities)
|
$
|
(184.7
|
)
|
$
|
20.1
|
|
$
|
(204.8
|
)
|
|
June 27, 2019
|
|
December 31, 2018
|
|
Change
|
|
|||
Contract assets
|
$
|
624.6
|
|
$
|
523.5
|
|
$
|
101.1
|
|
Contract liabilities
|
(522.1
|
)
|
(527.7
|
)
|
5.6
|
|
|||
Net contract assets (liabilities)
|
$
|
102.5
|
|
$
|
(4.2
|
)
|
$
|
106.7
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||
Revenue
|
|
July 2,
2020 |
June 27,
2019 |
|
July 2,
2020 |
June 27,
2019 |
||||||||
Contracts with performance obligations satisfied over time
|
|
$
|
395.4
|
|
$
|
1,542.0
|
|
|
$
|
1,001.3
|
|
$
|
3,024.9
|
|
Contracts with performance obligations satisfied at a point in time
|
|
249.2
|
|
474.1
|
|
|
720.6
|
|
959.0
|
|
||||
Total Revenue
|
|
$
|
644.6
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
$
|
3,983.9
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||
Customer
|
|
July 2,
2020 |
June 27,
2019 |
|
July 2,
2020 |
June 27,
2019 |
||||||||
Boeing
|
|
$
|
370.0
|
|
$
|
1,614.7
|
|
|
$
|
1,046.1
|
|
$
|
3,163.1
|
|
Airbus
|
|
128.0
|
|
320.1
|
|
|
415.1
|
|
649.9
|
|
||||
Other
|
|
146.6
|
|
81.3
|
|
|
260.7
|
|
170.9
|
|
||||
Total Revenue
|
|
$
|
644.6
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
$
|
3,983.9
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||
Location
|
|
July 2,
2020 |
June 27,
2019 |
|
July 2,
2020 |
June 27,
2019 |
||||||||
United States
|
|
$
|
511.9
|
|
$
|
1,686.8
|
|
|
$
|
1,294.4
|
|
$
|
3,315.7
|
|
International
|
|
|
|
|
|
|
||||||||
United Kingdom
|
|
70.5
|
|
191.2
|
|
|
254.5
|
|
399.7
|
|
||||
Other
|
|
62.2
|
|
138.1
|
|
|
173.0
|
|
268.5
|
|
||||
Total International
|
|
132.7
|
|
329.3
|
|
|
427.5
|
|
668.2
|
|
||||
Total Revenue
|
|
$
|
644.6
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
$
|
3,983.9
|
|
|
Remaining in 2020
|
|
2021
|
|
2022
|
|
2023 and After
|
|
||||
Unsatisfied performance obligations
|
$
|
1,251.4
|
|
$
|
2,970.1
|
|
$
|
3,668.8
|
|
$
|
4,583.8
|
|
|
July 2,
2020 |
|
December 31,
2019 |
||||
Raw materials
|
$
|
314.1
|
|
|
$
|
253.1
|
|
Work-in-process(1)
|
869.4
|
|
|
822.8
|
|
||
Finished goods
|
15.4
|
|
|
14.5
|
|
||
Product inventory
|
1,198.9
|
|
|
1,090.4
|
|
||
Capitalized pre-production
|
27.0
|
|
|
28.4
|
|
||
Total inventory, net
|
$
|
1,225.9
|
|
|
$
|
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 July 2, 2020 and December 31, 2019, work-in-process inventory includes $181.0 and $157.2, respectively, of costs incurred in anticipation of specific contracts and no impairments were recorded in the period.
|
|
July 2,
2020 |
|
December 31,
2019 |
||||
Land
|
$
|
17.2
|
|
|
$
|
15.9
|
|
Buildings (including improvements)
|
930.7
|
|
|
924.0
|
|
||
Machinery and equipment
|
1,966.0
|
|
|
1,941.5
|
|
||
Tooling
|
1,019.3
|
|
|
1,047.4
|
|
||
Capitalized software
|
277.4
|
|
|
277.8
|
|
||
Construction-in-progress
|
182.1
|
|
|
192.8
|
|
||
Total
|
4,392.7
|
|
|
4,399.4
|
|
||
Less: accumulated depreciation
|
(2,212.0
|
)
|
|
(2,127.7
|
)
|
||
Property, plant and equipment, net
|
$
|
2,180.7
|
|
|
$
|
2,271.7
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
Operating lease cost
|
$
|
2.2
|
|
|
$
|
2.2
|
|
|
$
|
4.4
|
|
|
$
|
4.4
|
|
Finance lease cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of assets
|
4.4
|
|
|
2.4
|
|
|
10.3
|
|
|
4.2
|
|
||||
Interest on lease liabilities
|
1.5
|
|
|
0.5
|
|
|
3.1
|
|
|
0.9
|
|
||||
Total net lease cost
|
$
|
8.1
|
|
|
$
|
5.1
|
|
|
$
|
17.8
|
|
|
$
|
9.5
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
|
|
||||||||
Operating cash flows from operating leases
|
$
|
2.2
|
|
|
$
|
2.1
|
|
|
$
|
4.4
|
|
|
$
|
4.3
|
|
Operating cash flows from finance leases
|
$
|
1.5
|
|
|
$
|
0.5
|
|
|
$
|
3.1
|
|
|
$
|
0.9
|
|
Financing cash flows from finance leases
|
$
|
7.0
|
|
|
$
|
2.0
|
|
|
$
|
13.7
|
|
|
$
|
3.8
|
|
|
|
|
|
|
|
|
|
||||||||
ROU assets obtained in exchange for lease obligations:
|
|
|
|
|
|
|
|
||||||||
Operating leases
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
0.2
|
|
|
$
|
0.7
|
|
|
July 2, 2020
|
December 31, 2019
|
||||
Finance leases:
|
|
|
||||
Property and equipment, gross
|
$
|
207.2
|
|
$
|
165.5
|
|
Accumulated amortization
|
(33.8
|
)
|
(23.5
|
)
|
||
Property and equipment, net
|
$
|
173.4
|
|
$
|
142.0
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
|
Total Lease Payments
|
|
Less: Imputed Interest
|
Total Lease Obligations
|
|
||||||||||
Operating Leases
|
$
|
4.2
|
|
$
|
7.4
|
|
$
|
7.2
|
|
$
|
6.1
|
|
$
|
5.6
|
|
$
|
30.2
|
|
$
|
60.7
|
|
$
|
(14.7
|
)
|
$
|
46.0
|
|
Financing Leases
|
$
|
17.1
|
|
$
|
34.0
|
|
$
|
30.2
|
|
$
|
25.8
|
|
$
|
20.0
|
|
$
|
36.9
|
|
$
|
164.0
|
|
$
|
(19.4
|
)
|
$
|
144.6
|
|
|
July 2,
2020 |
|
December 31,
2019 |
||||
Deferred financing
|
|
|
|
|
|
||
Deferred financing costs
|
46.7
|
|
|
41.7
|
|
||
Less: Accumulated amortization - deferred financing costs
|
(39.0
|
)
|
|
(36.9
|
)
|
||
Deferred financing costs, net
|
7.7
|
|
|
4.8
|
|
||
Other
|
|
|
|
|
|
||
Long term income tax receivable (1)
|
197.1
|
|
|
—
|
|
||
Supply agreements (2)
|
11.3
|
|
|
11.5
|
|
||
Equity in net assets of affiliates
|
4.7
|
|
|
7.7
|
|
||
Restricted cash - collateral requirements
|
19.5
|
|
|
16.4
|
|
||
Other
|
38.1
|
|
|
36.4
|
|
||
Total
|
$
|
278.4
|
|
|
$
|
76.8
|
|
|
(1)
|
Increase in income tax receivable not expected to be received within 12 months and is an increase over the prior year as a result of the carryback provisions included in the CARES Act.
|
(2)
|
Certain payments accounted for as consideration paid by the Company to a customer are being amortized as reductions to net revenues.
|
|
July 2,
2020 |
|
December 31,
2019 |
||||
Goodwill - United Kingdom
|
2.3
|
|
|
2.4
|
|
||
Goodwill - United States(1)
|
76.0
|
|
|
—
|
|
||
Total
|
$
|
78.3
|
|
|
$
|
2.4
|
|
|
July 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
|
(1.0
|
)
|
|
—
|
|
||
Intangible assets, net
|
30.1
|
|
|
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.
|
|
July 2, 2020
|
|
December 31, 2019
|
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
||||||||
2018 Term Loan (including current portion)
|
$
|
426.7
|
|
|
$
|
401.6
|
|
(2)
|
$
|
438.5
|
|
|
$
|
440.1
|
|
(2)
|
2018 Revolver
|
—
|
|
|
—
|
|
(2)
|
800.0
|
|
|
800.0
|
|
(2)
|
||||
Senior unsecured floating rate notes due 2021
|
299.4
|
|
|
282.1
|
|
(1)
|
299.1
|
|
|
298.4
|
|
(1)
|
||||
Senior unsecured notes due 2023
|
298.6
|
|
|
253.6
|
|
(1)
|
298.3
|
|
|
307.2
|
|
(1)
|
||||
Senior secured notes due 2026
|
298.0
|
|
|
272.9
|
|
(1)
|
297.8
|
|
|
305.6
|
|
(1)
|
||||
Senior unsecured notes due 2028
|
694.3
|
|
|
564.2
|
|
(1)
|
694.1
|
|
|
734.4
|
|
(1)
|
||||
Senior secured notes due 2025
|
1,183.3
|
|
|
1,188.6
|
|
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
||
Total
|
$
|
3,200.3
|
|
|
$
|
2,963.0
|
|
|
$
|
2,827.8
|
|
|
$
|
2,885.7
|
|
|
|
(1)
|
Level 1 Fair Value hierarchy
|
(2)
|
Level 2 Fair Value hierarchy
|
|
July 2, 2020
|
|
December 31, 2019
|
||||||||||
|
Current
|
Noncurrent
|
|
Current
|
Noncurrent
|
||||||||
2018 Term Loan
|
$
|
22.7
|
|
$
|
404.0
|
|
|
$
|
22.8
|
|
$
|
415.7
|
|
2018 Revolver
|
—
|
|
—
|
|
|
—
|
|
800.0
|
|
||||
Senior unsecured floating rate notes due 2021
|
299.4
|
|
—
|
|
|
—
|
|
299.1
|
|
||||
Senior unsecured notes due 2023
|
—
|
|
298.6
|
|
|
—
|
|
298.3
|
|
||||
Senior secured notes due 2026
|
—
|
|
298.0
|
|
|
—
|
|
297.8
|
|
||||
Senior unsecured notes due 2028
|
—
|
|
694.3
|
|
|
—
|
|
694.1
|
|
||||
Senior secured notes due 2025
|
—
|
|
1,183.3
|
|
|
—
|
|
—
|
|
||||
Present value of finance lease obligations
|
28.9
|
|
115.7
|
|
|
25.8
|
|
121.3
|
|
||||
Other
|
1.8
|
|
56.7
|
|
|
1.6
|
|
57.8
|
|
||||
Total
|
$
|
352.8
|
|
$
|
3,050.6
|
|
|
$
|
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,
|
•
|
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%
|
•
|
First Lien Leverage Ratio: The ratio of first lien senior secured debt to consolidated EBITDA over the last twelve months shall not be tested in the fourth fiscal quarter of 2020 and the first fiscal quarter of 2021 and shall not, as of the end of the applicable fiscal quarter, be more than: (i) 6.50:1.00, with respect to the third fiscal quarter of 2020; (ii) 4.50:1.00, with respect to the second fiscal quarter of 2021; (iii) 3.50:1.00, with respect to the third fiscal quarter of 2021; and (iv) 3.00:1.00 thereafter through the fourth quarter of 2022.
|
•
|
Interest Coverage Ratio: The interest coverage ratio shall not be tested in the fourth fiscal quarter of 2020 and the first fiscal quarter of 2021 and shall not, as of the end of the applicable fiscal quarter, be less than: (i) 1.25:1.00, with respect to the third fiscal quarter of 2020; (ii) 1.15:1.00, with respect to the second fiscal quarter of 2021; (iii) 1.35:1.00, with respect to the third fiscal quarter of 2021; (iv) 1.50:1.00, with respect to the fourth fiscal quarter of 2021; (v) 2.00:1.00, with respect to the first fiscal quarter of 2022; (vi) 2.75:1.00, with respect to the second fiscal quarter of 2022; (vii) 3.25:1.00 with respect to the third fiscal quarter of 2022; (viii) 3.75:1.00 with respect to the fourth fiscal quarter of 2022; and (ix) 4.00:1.00 thereafter.
|
•
|
Total Leverage Ratio: The ratio of indebtedness to consolidated EBITDA over the last twelve months shall not be tested in the first fiscal quarter of 2022 and shall not, as of the end of the applicable fiscal quarter, be greater than (i) 6.00:1:00,
|
•
|
Minimum Liquidity: As of the end of each fiscal month, until the end of the ninth fiscal month of 2022, the Company shall have minimum liquidity of not less than $750.
|
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
|
≥ BBB- / Baa3
|
|
0.325%
|
|
3.375%
|
|
2.375%
|
II
|
BB+ / Ba1
|
|
0.425%
|
|
3.625%
|
|
2.625%
|
III
|
BB / Ba2
|
|
0.500%
|
|
3.875%
|
|
2.875%
|
IV
|
BB- / Ba3
|
|
0.625%
|
|
4.125%
|
|
3.125%
|
V
|
B+ / B1
|
|
0.675%
|
|
4.500%
|
|
3.500%
|
VI
|
≤ B / B2
|
|
0.725%
|
|
4.875%
|
|
3.875%
|
|
|
Defined Benefit Plans
|
||||||||||||||
|
|
For the Three
Months Ended
|
|
For the Six
Months Ended
|
||||||||||||
Components of Net Periodic Pension Expense/(Income)
|
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
Service cost
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
0.6
|
|
Interest cost
|
|
6.7
|
|
|
10.0
|
|
|
14.7
|
|
|
20.1
|
|
||||
Expected return on plan assets
|
|
(15.6
|
)
|
|
(16.7
|
)
|
|
(32.9
|
)
|
|
(33.3
|
)
|
||||
Amortization of net loss
|
|
0.2
|
|
|
(0.1
|
)
|
|
0.2
|
|
|
0.3
|
|
||||
Curtailment loss (gain) (2)
|
|
0.9
|
|
|
—
|
|
|
33.9
|
|
|
—
|
|
||||
Settlement loss (gain) (3)
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
|
—
|
|
||||
Special termination benefits (1)
|
|
8.3
|
|
|
15.2
|
|
|
33.0
|
|
|
15.2
|
|
||||
Net periodic pension expense (income)
|
|
$
|
5.9
|
|
|
$
|
8.7
|
|
|
$
|
54.5
|
|
|
$
|
2.9
|
|
|
|
Other Benefits
|
||||||||||||||
|
|
For the Three
Months Ended
|
|
For the Six
Months Ended
|
||||||||||||
Components of Other Benefit Expense
|
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
Service cost
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
Interest cost
|
|
0.3
|
|
|
0.3
|
|
|
0.5
|
|
|
0.6
|
|
||||
Amortization of prior service cost
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
||||
Amortization of net gain
|
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(1.2
|
)
|
||||
Curtailment (gain) loss (2)
|
|
0.1
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Special termination benefits (1)
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
12.0
|
|
|
$
|
—
|
|
Net periodic other benefit expense (income)
|
|
$
|
0.1
|
|
|
$
|
(0.3
|
)
|
|
$
|
11.4
|
|
|
$
|
(0.5
|
)
|
•
|
60% of the award consisted of time-based, service-condition restricted Common Stock that vests in equal installments over a three-year period (the “RS Award”). Values for these awards are based on the value of Common Stock on the grant date;
|
•
|
20% of the award consisted of performance-based, market-condition restricted Common Stock that vests on the three-year anniversary of the grant date contingent upon TSR compared to the Company’s peers (the “TSR Award”). Values for these awards are initially measured on the grant date using estimated payout levels derived from a Monte Carlo valuation model; and
|
•
|
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
|
||||||||||||||||||||
|
July 2, 2020
|
|
June 27, 2019
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income available to common stockholders
|
$
|
(255.9
|
)
|
|
103.9
|
|
|
$
|
(2.46
|
)
|
|
$
|
167.9
|
|
|
103.4
|
|
|
$
|
1.62
|
|
Income allocated to participating securities
|
—
|
|
|
—
|
|
|
|
|
|
0.1
|
|
|
0.1
|
|
|
|
|
||||
Net (loss) income
|
$
|
(255.9
|
)
|
|
|
|
|
|
|
|
$
|
168.0
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted potential common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0
|
|
|
|
|
||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income
|
$
|
(255.9
|
)
|
|
103.9
|
|
|
$
|
(2.46
|
)
|
|
$
|
168.0
|
|
|
104.5
|
|
|
$
|
1.61
|
|
|
For the Six Months Ended
|
||||||||||||||||||||
|
July 2, 2020
|
|
June 27, 2019
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) income available to common stockholders
|
$
|
(418.9
|
)
|
|
103.8
|
|
|
$
|
(4.04
|
)
|
|
$
|
330.9
|
|
|
103.7
|
|
|
$
|
3.19
|
|
Income allocated to participating securities
|
—
|
|
|
—
|
|
|
|
|
|
0.2
|
|
|
0.1
|
|
|
|
|
||||
Net (loss) income
|
$
|
(418.9
|
)
|
|
|
|
|
|
|
|
$
|
331.1
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted potential common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0
|
|
|
|
|
||||
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income
|
$
|
(418.9
|
)
|
|
103.8
|
|
|
$
|
(4.04
|
)
|
|
$
|
331.1
|
|
|
104.8
|
|
|
$
|
3.16
|
|
|
As of
|
|
As of
|
||||
|
July 2, 2020
|
|
December 31, 2019
|
||||
Pension
|
$
|
(77.3
|
)
|
|
$
|
(53.1
|
)
|
Interest swaps
|
(10.4
|
)
|
|
(0.6
|
)
|
||
SERP/Retiree medical
|
14.2
|
|
|
17.1
|
|
||
Foreign currency impact on long term intercompany loan
|
(15.7
|
)
|
|
(13.1
|
)
|
||
Currency translation adjustment
|
(92.1
|
)
|
|
(59.5
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(181.3
|
)
|
|
$
|
(109.2
|
)
|
Balance, December 31, 2019
|
$
|
64.7
|
|
Charges to costs and expenses
|
2.9
|
|
|
Payouts
|
(1.0
|
)
|
|
Exchange rate
|
(0.2
|
)
|
|
Balance, July 2, 2020
|
$
|
66.4
|
|
|
For the Three
Months Ended
|
|
For the Six
Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
Kansas Development Finance Authority bond
|
$
|
0.6
|
|
|
$
|
0.8
|
|
|
$
|
1.7
|
|
|
$
|
2.0
|
|
Rental and miscellaneous income
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
||||
Interest income
|
1.2
|
|
|
3.0
|
|
|
8.1
|
|
|
6.2
|
|
||||
Foreign currency (losses) gains (1)
|
(0.6
|
)
|
|
10.0
|
|
|
4.8
|
|
|
8.0
|
|
||||
(Loss) gain on foreign currency contract and interest rate swaps
|
—
|
|
|
(2.4
|
)
|
|
0.1
|
|
|
(17.8
|
)
|
||||
Litigation settlement
|
—
|
|
|
13.5
|
|
|
—
|
|
|
13.5
|
|
||||
Loss on sale of accounts receivable
|
(1.6
|
)
|
|
(7.6
|
)
|
|
(4.7
|
)
|
|
(12.3
|
)
|
||||
Pension loss (2)
|
(5.8
|
)
|
|
(8.7
|
)
|
|
(65.4
|
)
|
|
(2.2
|
)
|
||||
ASC 326 credit loss reserve
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
Total
|
$
|
(6.4
|
)
|
|
$
|
8.6
|
|
|
$
|
(55.4
|
)
|
|
$
|
(2.4
|
)
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
July 2,
2020 |
|
June 27,
2019 |
||||||||
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems
|
$
|
327.1
|
|
|
$
|
1,096.8
|
|
$
|
878.6
|
|
|
$
|
2,166.4
|
|
Propulsion Systems
|
169.6
|
|
|
518.9
|
|
394.8
|
|
|
1,004.6
|
|
||||
Wing Systems
|
122.5
|
|
|
398.5
|
|
413.9
|
|
|
806.4
|
|
||||
All Other
|
25.4
|
|
|
1.9
|
|
34.6
|
|
|
6.5
|
|
||||
|
$
|
644.6
|
|
|
$
|
2,016.1
|
|
$
|
1,721.9
|
|
|
$
|
3,983.9
|
|
Segment Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
||||
Fuselage Systems(1)
|
$
|
(251.5
|
)
|
|
$
|
135.8
|
|
$
|
(337.9
|
)
|
|
$
|
274.7
|
|
Propulsion Systems(2)
|
(17.3
|
)
|
|
97.7
|
|
(22.6
|
)
|
|
193.2
|
|
||||
Wing Systems(3)
|
(42.5
|
)
|
|
57.4
|
|
(28.9
|
)
|
|
123.2
|
|
||||
All Other
|
8.0
|
|
|
—
|
|
9.8
|
|
|
1.2
|
|
||||
|
$
|
(303.3
|
)
|
|
$
|
290.9
|
|
$
|
(379.6
|
)
|
|
$
|
592.3
|
|
SG&A
|
(49.0
|
)
|
|
(56.4
|
)
|
(126.4
|
)
|
|
(120.0
|
)
|
||||
Research and development
|
(8.3
|
)
|
|
(10.5
|
)
|
(20.6
|
)
|
|
(23.4
|
)
|
||||
Unallocated cost of sales
|
(6.4
|
)
|
|
2.0
|
|
(7.9
|
)
|
|
10.1
|
|
||||
Total operating income
|
$
|
(367.0
|
)
|
|
$
|
226.0
|
|
$
|
(534.5
|
)
|
|
$
|
459.0
|
|
•
|
Single-aisle average production volume of 40 APM
|
•
|
A350 average production volume of 6 APM
|
•
|
A330 average production volume of 2 APM
|
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
|
76.0
|
|
|
Other noncurrent assets
|
0.2
|
|
|
Total assets acquired
|
$
|
135.3
|
|
|
|
||
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
|
$
|
121.4
|
|
|
Amount
|
Amortization Period
|
||
|
|
(in years)
|
||
Developed technology asset
|
$
|
30.0
|
|
15
|
Total intangible assets
|
$
|
30.0
|
|
15
|
|
For the Three Months Ended
|
For the Six Months Ended
|
||||||||||||
|
July 2,
2020 |
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
Revenue - as reported
|
$
|
644.6
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
|
$
|
3,983.9
|
|
Revenue - pro forma
|
644.6
|
|
2,023.8
|
|
|
1,722.7
|
|
|
3,999.4
|
|
||||
Net (loss) income - as reported
|
$
|
(255.9
|
)
|
$
|
168.0
|
|
|
$
|
(418.9
|
)
|
|
$
|
331.1
|
|
Net (loss) income - pro forma
|
(255.9
|
)
|
169.2
|
|
|
(418.8
|
)
|
|
332.1
|
|
||||
Earnings Per Share - Diluted - as reported
|
$
|
(2.46
|
)
|
1.61
|
|
|
$
|
(4.04
|
)
|
|
3.16
|
|
||
Earnings Per Share - Diluted - pro forma
|
(2.46
|
)
|
1.62
|
|
|
(4.03
|
)
|
|
3.17
|
|
(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
|
$
|
—
|
|
|
$
|
577.4
|
|
|
$
|
56.3
|
|
|
$
|
95.2
|
|
|
$
|
(84.3
|
)
|
|
$
|
644.6
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of sales
|
—
|
|
|
853.7
|
|
|
54.2
|
|
|
101.5
|
|
|
(84.3
|
)
|
|
925.1
|
|
||||||
Selling, general and administrative
|
5.0
|
|
|
39.6
|
|
|
0.5
|
|
|
3.9
|
|
|
—
|
|
|
49.0
|
|
||||||
Restructuring cost
|
—
|
|
|
4.5
|
|
|
0.4
|
|
|
1.4
|
|
|
—
|
|
|
6.3
|
|
||||||
Research and development
|
—
|
|
|
7.0
|
|
|
0.1
|
|
|
1.2
|
|
|
—
|
|
|
8.3
|
|
||||||
Loss on Disposal of Assets
|
—
|
|
|
19.2
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
22.9
|
|
||||||
Total operating costs and expenses
|
5.0
|
|
|
924.0
|
|
|
58.9
|
|
|
108.0
|
|
|
(84.3
|
)
|
|
1,011.6
|
|
||||||
Operating (loss) income
|
(5.0
|
)
|
|
(346.6
|
)
|
|
(2.6
|
)
|
|
(12.8
|
)
|
|
—
|
|
|
(367.0
|
)
|
||||||
Interest expense and financing fee amortization
|
—
|
|
|
(48.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
0.6
|
|
|
(48.6
|
)
|
||||||
Other (expense) income, net
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
(0.6
|
)
|
|
(6.4
|
)
|
||||||
(Loss) income before income taxes and equity in net (loss) income of affiliate and subsidiaries
|
(5.0
|
)
|
|
(399.7
|
)
|
|
(2.6
|
)
|
|
(14.7
|
)
|
|
—
|
|
|
(422.0
|
)
|
||||||
Income tax benefit (provision)
|
2.0
|
|
|
161.5
|
|
|
0.6
|
|
|
3.5
|
|
|
—
|
|
|
167.6
|
|
||||||
(Loss) income before equity in net (loss) income of affiliate and subsidiaries
|
(3.0
|
)
|
|
(238.2
|
)
|
|
(2.0
|
)
|
|
(11.2
|
)
|
|
—
|
|
|
(254.4
|
)
|
||||||
Equity in net (loss) income of affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
||||||
Equity in net (loss) income of subsidiaries
|
(252.9
|
)
|
|
(14.7
|
)
|
|
—
|
|
|
—
|
|
|
267.6
|
|
|
—
|
|
||||||
Net (loss) income
|
(255.9
|
)
|
|
(252.9
|
)
|
|
(2.0
|
)
|
|
(12.7
|
)
|
|
267.6
|
|
|
(255.9
|
)
|
||||||
Other comprehensive (loss) income
|
69.6
|
|
|
69.6
|
|
|
—
|
|
|
3.2
|
|
|
(72.8
|
)
|
|
69.6
|
|
||||||
Comprehensive (loss) income
|
$
|
(186.3
|
)
|
|
$
|
(183.3
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(9.5
|
)
|
|
$
|
194.8
|
|
|
$
|
(186.3
|
)
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,833.9
|
|
|
129.5
|
|
|
$
|
244.7
|
|
|
$
|
(192.0
|
)
|
|
$
|
2,016.1
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
—
|
|
|
1,580.6
|
|
|
125.5
|
|
|
209.1
|
|
|
(192.0
|
)
|
|
1,723.2
|
|
||||||
Selling, general and administrative
|
4.7
|
|
|
46.6
|
|
|
0.7
|
|
|
4.4
|
|
|
—
|
|
|
56.4
|
|
||||||
Research and development
|
—
|
|
|
8.9
|
|
|
0.2
|
|
|
1.4
|
|
|
—
|
|
|
10.5
|
|
||||||
Total operating costs and expenses
|
4.7
|
|
|
1,636.1
|
|
|
126.4
|
|
|
214.9
|
|
|
(192.0
|
)
|
|
1,790.1
|
|
||||||
Operating income (loss)
|
(4.7
|
)
|
|
197.8
|
|
|
3.1
|
|
|
29.8
|
|
|
—
|
|
|
226.0
|
|
||||||
Interest expense and financing fee amortization
|
—
|
|
|
(23.6
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
0.9
|
|
|
(23.7
|
)
|
||||||
Other income (expense), net
|
—
|
|
|
6.8
|
|
|
—
|
|
|
2.7
|
|
|
(0.9
|
)
|
|
8.6
|
|
||||||
Income (loss) before income taxes and equity in net income of affiliate and subsidiaries
|
(4.7
|
)
|
|
181.0
|
|
|
3.1
|
|
|
31.5
|
|
|
—
|
|
|
210.9
|
|
||||||
Income tax (provision) benefit
|
1.0
|
|
|
(38.5
|
)
|
|
(0.7
|
)
|
|
(4.7
|
)
|
|
—
|
|
|
(42.9
|
)
|
||||||
Income (loss) before equity in net income of affiliate and subsidiaries
|
(3.7
|
)
|
|
142.5
|
|
|
2.4
|
|
|
26.8
|
|
|
—
|
|
|
168.0
|
|
||||||
Equity in net income of affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Equity in net income (loss) of subsidiaries
|
171.7
|
|
|
29.2
|
|
|
—
|
|
|
—
|
|
|
(200.9
|
)
|
|
—
|
|
||||||
Net income
|
168.0
|
|
|
171.7
|
|
|
2.4
|
|
|
26.8
|
|
|
(200.9
|
)
|
|
168.0
|
|
||||||
Other comprehensive income (loss)
|
(14.7
|
)
|
|
(14.7
|
)
|
|
—
|
|
|
(14.4
|
)
|
|
29.1
|
|
|
(14.7
|
)
|
||||||
Comprehensive income (loss)
|
$
|
153.3
|
|
|
$
|
157.0
|
|
|
$
|
2.4
|
|
|
$
|
12.4
|
|
|
$
|
(171.8
|
)
|
|
$
|
153.3
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
1,476.7
|
|
|
$
|
167.5
|
|
|
$
|
326.0
|
|
|
$
|
(248.3
|
)
|
|
$
|
1,721.9
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of sales
|
—
|
|
|
1,816.4
|
|
|
161.6
|
|
|
307.9
|
|
|
(248.3
|
)
|
|
2,037.6
|
|
||||||
Selling, general and administrative
|
8.5
|
|
|
107.7
|
|
|
1.3
|
|
|
8.9
|
|
|
—
|
|
|
126.4
|
|
||||||
Restructuring cost
|
—
|
|
|
47.2
|
|
|
0.4
|
|
|
1.3
|
|
|
—
|
|
|
48.9
|
|
||||||
Research and development
|
—
|
|
|
18.7
|
|
|
0.2
|
|
|
1.7
|
|
|
—
|
|
|
20.6
|
|
||||||
Loss on Disposal of Assets
|
—
|
|
|
19.2
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
22.9
|
|
||||||
Total operating costs and expenses
|
8.5
|
|
|
2,009.2
|
|
|
167.2
|
|
|
319.8
|
|
|
(248.3
|
)
|
|
2,256.4
|
|
||||||
Operating (loss) income
|
(8.5
|
)
|
|
(532.5
|
)
|
|
0.3
|
|
|
6.2
|
|
|
—
|
|
|
(534.5
|
)
|
||||||
Interest expense and financing fee amortization
|
—
|
|
|
(80.7
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
1.4
|
|
|
(80.8
|
)
|
||||||
Other (expense) income, net
|
—
|
|
|
(58.8
|
)
|
|
—
|
|
|
4.8
|
|
|
(1.4
|
)
|
|
(55.4
|
)
|
||||||
(Loss) income before income taxes and equity in net (loss) income of affiliate and subsidiaries
|
(8.5
|
)
|
|
(672.0
|
)
|
|
0.3
|
|
|
9.5
|
|
|
—
|
|
|
(670.7
|
)
|
||||||
Income tax benefit (provision)
|
3.2
|
|
|
251.8
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
254.8
|
|
||||||
(Loss) income before equity in net (loss) income of affiliate and subsidiaries
|
(5.3
|
)
|
|
(420.2
|
)
|
|
0.2
|
|
|
9.4
|
|
|
—
|
|
|
(415.9
|
)
|
||||||
Equity in net (loss) income of affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
|
(3.0
|
)
|
||||||
Equity in net (loss) income of subsidiaries
|
(413.6
|
)
|
|
6.6
|
|
|
—
|
|
|
—
|
|
|
407.0
|
|
|
—
|
|
||||||
Net (loss) income
|
(418.9
|
)
|
|
(413.6
|
)
|
|
0.2
|
|
|
6.4
|
|
|
407.0
|
|
|
(418.9
|
)
|
||||||
Other comprehensive (loss) income
|
(72.1
|
)
|
|
(72.1
|
)
|
|
—
|
|
|
(35.2
|
)
|
|
107.3
|
|
|
(72.1
|
)
|
||||||
Comprehensive (loss) income
|
$
|
(491.0
|
)
|
|
$
|
(485.7
|
)
|
|
$
|
0.2
|
|
|
$
|
(28.8
|
)
|
|
$
|
514.3
|
|
|
$
|
(491.0
|
)
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
3,599.1
|
|
|
245.9
|
|
|
$
|
501.5
|
|
|
$
|
(362.6
|
)
|
|
$
|
3,983.9
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of sales
|
—
|
|
|
3,080.9
|
|
|
238.3
|
|
|
424.9
|
|
|
(362.6
|
)
|
|
3,381.5
|
|
||||||
Selling, general and administrative
|
7.0
|
|
|
103.1
|
|
|
1.6
|
|
|
8.3
|
|
|
—
|
|
|
120.0
|
|
||||||
Research and development
|
—
|
|
|
20.3
|
|
|
0.6
|
|
|
2.5
|
|
|
—
|
|
|
23.4
|
|
||||||
Total operating costs and expenses
|
7.0
|
|
|
3,204.3
|
|
|
240.5
|
|
|
435.7
|
|
|
(362.6
|
)
|
|
3,524.9
|
|
||||||
Operating income (loss)
|
(7.0
|
)
|
|
394.8
|
|
|
5.4
|
|
|
65.8
|
|
|
—
|
|
|
459.0
|
|
||||||
Interest expense and financing fee amortization
|
—
|
|
|
(42.4
|
)
|
|
—
|
|
|
(2.0
|
)
|
|
1.9
|
|
|
(42.5
|
)
|
||||||
Other (expense) income, net
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|
1.1
|
|
|
(1.9
|
)
|
|
(2.4
|
)
|
||||||
Income (loss) before income taxes and equity in net income of affiliate and subsidiaries
|
(7.0
|
)
|
|
350.8
|
|
|
5.4
|
|
|
64.9
|
|
|
—
|
|
|
414.1
|
|
||||||
Income tax (provision) benefit
|
1.5
|
|
|
(73.2
|
)
|
|
(1.3
|
)
|
|
(10.0
|
)
|
|
—
|
|
|
(83.0
|
)
|
||||||
Income (loss) before equity in net income of affiliate and subsidiaries
|
(5.5
|
)
|
|
277.6
|
|
|
4.1
|
|
|
54.9
|
|
|
—
|
|
|
331.1
|
|
||||||
Equity in net income of affiliate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Equity in net income of subsidiaries
|
336.6
|
|
|
59.0
|
|
|
—
|
|
|
—
|
|
|
(395.6
|
)
|
|
—
|
|
||||||
Net income
|
331.1
|
|
|
336.6
|
|
|
4.1
|
|
|
54.9
|
|
|
(395.6
|
)
|
|
331.1
|
|
||||||
Other comprehensive (loss) income
|
(4.7
|
)
|
|
(4.7
|
)
|
|
—
|
|
|
(4.0
|
)
|
|
8.7
|
|
|
(4.7
|
)
|
||||||
Comprehensive income (loss)
|
$
|
326.4
|
|
|
$
|
331.9
|
|
|
$
|
4.1
|
|
|
$
|
50.9
|
|
|
$
|
(386.9
|
)
|
|
$
|
326.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
1,721.8
|
|
|
$
|
—
|
|
|
$
|
225.3
|
|
|
$
|
—
|
|
|
$
|
1,947.1
|
|
Restricted cash
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Accounts receivable, net
|
—
|
|
|
490.1
|
|
|
57.0
|
|
|
121.4
|
|
|
(362.5
|
)
|
|
306.0
|
|
||||||
Contract assets, short-term
|
—
|
|
|
269.2
|
|
|
—
|
|
|
52.4
|
|
|
—
|
|
|
321.6
|
|
||||||
Inventory, net
|
—
|
|
|
856.6
|
|
|
161.2
|
|
|
208.1
|
|
|
—
|
|
|
1,225.9
|
|
||||||
Other current assets
|
—
|
|
|
92.5
|
|
|
—
|
|
|
6.8
|
|
|
—
|
|
|
99.3
|
|
||||||
Total current assets
|
—
|
|
|
3,430.5
|
|
|
218.2
|
|
|
614.0
|
|
|
(362.5
|
)
|
|
3,900.2
|
|
||||||
Property, plant and equipment, net
|
—
|
|
|
1,714.7
|
|
|
282.3
|
|
|
183.7
|
|
|
—
|
|
|
2,180.7
|
|
||||||
Right of use assets
|
—
|
|
|
38.5
|
|
|
7.2
|
|
|
0.2
|
|
|
—
|
|
|
45.9
|
|
||||||
Contract assets, long-term
|
—
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
||||||
Pension assets, net
|
—
|
|
|
338.5
|
|
|
—
|
|
|
24.1
|
|
|
—
|
|
|
362.6
|
|
||||||
Deferred income taxes
|
—
|
|
|
162.0
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
162.2
|
|
||||||
Goodwill
|
—
|
|
|
76.0
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
78.3
|
|
||||||
Intangible assets, net
|
—
|
|
|
30.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.1
|
|
||||||
Investment in subsidiary
|
1,269.5
|
|
|
809.6
|
|
|
—
|
|
|
—
|
|
|
(2,079.1
|
)
|
|
—
|
|
||||||
Other assets
|
—
|
|
|
352.5
|
|
|
—
|
|
|
112.7
|
|
|
(186.8
|
)
|
|
278.4
|
|
||||||
Total assets
|
$
|
1,269.5
|
|
|
$
|
6,957.3
|
|
|
$
|
507.7
|
|
|
$
|
937.2
|
|
|
$
|
(2,628.4
|
)
|
|
$
|
7,043.3
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Accounts payable
|
$
|
—
|
|
|
$
|
516.3
|
|
|
$
|
234.6
|
|
|
$
|
123.6
|
|
|
$
|
(362.5
|
)
|
|
$
|
512.0
|
|
Accrued expenses
|
—
|
|
|
203.4
|
|
|
1.4
|
|
|
40.6
|
|
|
—
|
|
|
245.4
|
|
||||||
Profit sharing
|
—
|
|
|
20.9
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
24.1
|
|
||||||
Current portion of long-term debt
|
—
|
|
|
350.9
|
|
|
0.2
|
|
|
1.7
|
|
|
—
|
|
|
352.8
|
|
||||||
Operating lease liabilities, short-term
|
—
|
|
|
5.0
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
||||||
Advance payments, short-term
|
—
|
|
|
16.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.2
|
|
||||||
Contract liabilities, short-term
|
—
|
|
|
121.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121.8
|
|
||||||
Forward loss provision, long-term
|
—
|
|
|
108.2
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
108.8
|
|
||||||
Deferred revenue and other deferred credits, short-term
|
—
|
|
|
12.7
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
13.0
|
|
||||||
Other current liabilities
|
—
|
|
|
31.3
|
|
|
—
|
|
|
9.7
|
|
|
—
|
|
|
41.0
|
|
||||||
Total current liabilities
|
—
|
|
|
1,386.7
|
|
|
236.8
|
|
|
179.7
|
|
|
(362.5
|
)
|
|
1,440.7
|
|
||||||
Long-term debt
|
—
|
|
|
3,041.5
|
|
|
0.8
|
|
|
94.5
|
|
|
(86.2
|
)
|
|
3,050.6
|
|
||||||
Operating lease liabilities, long-term
|
—
|
|
|
33.7
|
|
|
6.6
|
|
|
0.1
|
|
|
—
|
|
|
40.4
|
|
||||||
Advance payments, long-term
|
—
|
|
|
328.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328.8
|
|
||||||
Pension/OPEB obligation
|
—
|
|
|
48.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48.1
|
|
||||||
Contract liabilities, long-term
|
—
|
|
|
389.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
389.4
|
|
||||||
Forward loss provision, long-term
|
—
|
|
|
287.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
287.5
|
|
||||||
Deferred grant income liability - non-current
|
—
|
|
|
9.0
|
|
|
—
|
|
|
18.1
|
|
|
—
|
|
|
27.1
|
|
||||||
Deferred revenue and other deferred credits
|
—
|
|
|
32.4
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
37.7
|
|
||||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
|
7.6
|
|
||||||
Other liabilities
|
—
|
|
|
210.6
|
|
|
—
|
|
|
5.9
|
|
|
(100.6
|
)
|
|
115.9
|
|
||||||
Total equity
|
1,269.5
|
|
|
1,189.6
|
|
|
263.5
|
|
|
626.0
|
|
|
(2,079.1
|
)
|
|
1,269.5
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,269.5
|
|
|
$
|
6,957.3
|
|
|
$
|
507.7
|
|
|
$
|
937.2
|
|
|
$
|
(2,628.4
|
)
|
|
$
|
7,043.3
|
|
|
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
|
$
|
—
|
|
|
$
|
(620.8
|
)
|
|
$
|
(19.1
|
)
|
|
$
|
80.2
|
|
|
|
|
|
$
|
(559.7
|
)
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Purchase of property, plant and equipment
|
—
|
|
|
(39.7
|
)
|
|
(1.1
|
)
|
|
(10.4
|
)
|
|
|
|
(51.2
|
)
|
|||||||
Acquisition, net of cash acquired
|
—
|
|
|
(117.9
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(117.9
|
)
|
|||||||
Other
|
—
|
|
|
0.3
|
|
|
—
|
|
|
2.4
|
|
|
|
|
2.7
|
|
|||||||
Net cash used in investing activities
|
—
|
|
|
(157.3
|
)
|
|
(1.1
|
)
|
|
(8.0
|
)
|
|
—
|
|
|
(166.4
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Proceeds from issuance of debt
|
—
|
|
|
1,200.0
|
|
|
—
|
|
|
—
|
|
|
|
|
1,200.0
|
|
|||||||
Customer financing
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
||||||
Principal payments of debt
|
—
|
|
|
(13.9
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(14.8
|
)
|
||||||
Payments on term loan
|
—
|
|
|
(11.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.4
|
)
|
||||||
Payments on revolving credit facility
|
—
|
|
|
(800.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(800.0
|
)
|
||||||
Proceeds (payments) from intercompany debt
|
—
|
|
|
(25.2
|
)
|
|
20.3
|
|
|
4.9
|
|
|
|
|
—
|
|
|||||||
Taxes paid related to net share settlement of awards
|
—
|
|
|
(13.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.8
|
)
|
||||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
(0.1
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Proceeds (payments) from subsidiary for dividends paid
|
13.4
|
|
|
(13.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends paid
|
(13.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.4
|
)
|
||||||
Proceeds from issuance of ESPP stock
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
Debt issuance costs
|
—
|
|
|
(24.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
309.2
|
|
|
20.2
|
|
|
4.1
|
|
|
—
|
|
|
333.5
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
0.5
|
|
|
—
|
|
|
(8.2
|
)
|
|
—
|
|
|
(7.7
|
)
|
||||||
Net decrease in cash and cash equivalents for the period
|
—
|
|
|
(468.4
|
)
|
|
—
|
|
|
68.1
|
|
|
—
|
|
|
(400.3
|
)
|
||||||
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
|
$
|
—
|
|
|
$
|
1,741.6
|
|
|
$
|
—
|
|
|
$
|
225.3
|
|
|
$
|
—
|
|
|
$
|
1,966.9
|
|
|
Holdings
|
|
Spirit
|
|
Spirit NC
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
$
|
—
|
|
|
$
|
279.1
|
|
|
$
|
5.1
|
|
|
$
|
187.5
|
|
|
$
|
—
|
|
|
$
|
471.7
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Purchase of property, plant and equipment
|
—
|
|
|
(63.1
|
)
|
|
(5.0
|
)
|
|
(9.8
|
)
|
|
—
|
|
|
(77.9
|
)
|
||||||
Other
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Net cash used in investing activities
|
—
|
|
|
(63.0
|
)
|
|
(5.0
|
)
|
|
(9.8
|
)
|
|
—
|
|
|
(77.8
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Proceeds from issuance of debt
|
—
|
|
|
250.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250.0
|
|
||||||
Proceeds from revolving credit facility
|
—
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100.0
|
|
||||||
Principal payments of debt
|
—
|
|
|
(4.5
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(4.9
|
)
|
||||||
Payments on term loan
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
||||||
Payments on revolving credit facility
|
—
|
|
|
(100.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
||||||
Proceeds (payments) from intercompany debt
|
—
|
|
|
60.4
|
|
|
—
|
|
|
(60.4
|
)
|
|
—
|
|
|
—
|
|
||||||
Taxes paid related to net share settlement of awards
|
—
|
|
|
(11.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.8
|
)
|
||||||
Proceeds (payments) from subsidiary for dividends paid
|
25.4
|
|
|
(25.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
||||||
Dividends paid
|
(25.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.4
|
)
|
||||||
Proceeds (payments) from subsidiary for purchase of treasury stock
|
75.0
|
|
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchase of treasury stock
|
(75.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75.0
|
)
|
||||||
Proceeds from issuance of ESPP stock
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
192.6
|
|
|
(0.1
|
)
|
|
(60.9
|
)
|
|
—
|
|
|
131.6
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|
(1.5
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents for the period
|
—
|
|
|
408.7
|
|
|
—
|
|
|
115.3
|
|
|
—
|
|
|
524.0
|
|
||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
—
|
|
|
725.5
|
|
|
—
|
|
|
68.6
|
|
|
—
|
|
|
794.1
|
|
||||||
Cash, cash equivalents, and restricted cash, end of period
|
—
|
|
|
1,134.2
|
|
|
—
|
|
|
183.9
|
|
|
—
|
|
|
1,318.1
|
|
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 ability to retain the skilled work force necessary for production and development and generally on our ability to effectively manage the impacts of the COVID-19 pandemic on our business operations;
|
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, 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 renegotiate, 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; and
|
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.
|
•
|
deployed global teams to monitor the situation and recommend appropriate actions;
|
•
|
implemented travel restrictions for our employees;
|
•
|
implemented social-distancing standards throughout the workplace and mandated mask use;
|
•
|
initiated consistent and ongoing cleaning of high-touch areas;
|
•
|
conducted deep cleaning and sanitization of work spaces potentially exposed to the virus;
|
•
|
established processes aligned with CDC guidelines to work with any exposed individual on the necessary quarantine period and the process to return to work; and
|
•
|
implemented working from home to minimize potential exposure to the virus.
|
•
|
reduced pay for all U.S.-based executives by 20 percent until further notice. The company has reduced non-U.S. executive pay in accordance with local law and statutory requirements;
|
•
|
reduced 2020-2021 term non-employee director compensation by 15 percent;
|
•
|
reduced planned capital expenditures and operating expenses;
|
•
|
suspended its share repurchase program;
|
•
|
reduced quarterly dividends to one penny per share;
|
•
|
initiated multiple production worker furloughs;
|
•
|
implemented a four-day work week for its salaried workforce at its Wichita, Kansas facility until further notice;
|
•
|
reduced ~5500 employees globally;
|
•
|
amended our 2018 Credit Agreement for covenant relief;
|
•
|
issued $1.2 billion in 2025 Notes; and
|
•
|
elected to defer the payment of $15.9 million in employer payroll taxes incurred through July 2, 2020, as provided by the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), of which 50% is required to be deposited by December 2021 and the remaining 50% by December 2022. In addition, as of July 2, 2020 the Company has recorded a deferral of $28.5 million of VAT payments until March 2021 under the United Kingdom deferral scheme.
|
•
|
B737 MAX including P-8 to 72 shipsets for 2020
|
•
|
B787 average production volume of 10 APM in 2020, and gradually decrease to 7 APM by 2022
|
•
|
B777 average production volume will be reduced from 3.6 APM to 3 APM in 2021
|
•
|
Single-aisle average production volume of 40 APM
|
•
|
A350 average production volume of 6 APM
|
•
|
A330 average production volume of 2 APM
|
•
|
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.
|
•
|
actions taken by governments and municipalities to contain the disease or treat its impact, including travel restrictions and bans, bans on public gatherings, closures of non-essential businesses and aid and economic stimulus efforts;
|
•
|
the speed and extent of the recovery across the broader travel ecosystem, including how long the public will continue to be concerned about the pandemic and avoid aircraft travel; and
|
•
|
any economic recession resulting from the pandemic.
|
•
|
On April 12, 2019, Boeing and the Company executed a Memorandum of Agreement (the “2019 MOA”) providing that the Company was to maintain its delivery rate of 52 shipsets per month with respect to the B737 MAX. Previously, the Company was expecting to increase production to a rate of 57 shipsets per month;
|
•
|
On December 19, 2019, Boeing directed the Company to stop all B737 MAX deliveries to Boeing effective January 1, 2020. Accordingly, Spirit suspended all B737 MAX production beginning on January 1, 2020;
|
•
|
On February 6, 2020, Boeing and Spirit entered into a Memorandum of Agreement (the “2020 MOA”) largely superseding the 2019 MOA and providing for Spirit to deliver to Boeing 216 B737 MAX shipsets in 2020;
|
•
|
On May 4, 2020, Boeing and the Company agreed that Spirit would deliver 125 B737 MAX shipsets to Boeing in 2020; and
|
•
|
On June 19, 2020, Boeing directed Spirit to reduce its 2020 B737 production plan from 125 to 72 shipsets.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
|
($ in millions)
|
|
($ in millions)
|
||||||||||||
Revenue
|
$
|
644.6
|
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
|
$
|
3,983.9
|
|
Cost of sales
|
925.1
|
|
|
1,723.2
|
|
|
2,037.6
|
|
|
3,381.5
|
|
||||
Gross (loss) profit
|
(280.5
|
)
|
|
292.9
|
|
|
(315.7
|
)
|
|
602.4
|
|
||||
Selling, general and administrative
|
49.0
|
|
|
56.4
|
|
|
126.4
|
|
|
120.0
|
|
||||
Restructuring costs
|
6.3
|
|
|
—
|
|
|
$
|
48.9
|
|
|
—
|
|
|||
Research and development
|
8.3
|
|
|
10.5
|
|
|
20.6
|
|
|
23.4
|
|
||||
(Gain)/loss on disposal of assets
|
$
|
22.9
|
|
|
—
|
|
|
$
|
22.9
|
|
|
—
|
|
||
Operating (loss) income
|
(367.0
|
)
|
|
226.0
|
|
|
(534.5
|
)
|
|
459.0
|
|
||||
Interest expense and financing fee amortization
|
(48.6
|
)
|
|
(23.7
|
)
|
|
(80.8
|
)
|
|
(42.5
|
)
|
||||
Other (expense) income, net
|
(6.4
|
)
|
|
8.6
|
|
|
(55.4
|
)
|
|
(2.4
|
)
|
||||
(Loss) income before income taxes and equity in net (loss) income of affiliate
|
(422.0
|
)
|
|
210.9
|
|
|
(670.7
|
)
|
|
414.1
|
|
||||
Income tax benefit (provision)
|
167.6
|
|
|
(42.9
|
)
|
|
254.8
|
|
|
(83.0
|
)
|
||||
(Loss) income before equity in net (loss) income of affiliate
|
(254.4
|
)
|
|
168.0
|
|
|
(415.9
|
)
|
|
331.1
|
|
||||
Equity in net (loss) income of affiliate
|
(1.5
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
—
|
|
||||
Net (loss) income
|
$
|
(255.9
|
)
|
|
$
|
168.0
|
|
|
$
|
(418.9
|
)
|
|
$
|
331.1
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
Model
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||
B737
|
19
|
|
|
147
|
|
|
37
|
|
|
299
|
|
B747
|
1
|
|
|
2
|
|
|
3
|
|
|
3
|
|
B767
|
5
|
|
|
8
|
|
|
11
|
|
|
16
|
|
B777
|
7
|
|
|
16
|
|
|
16
|
|
|
29
|
|
B787
|
22
|
|
|
42
|
|
|
62
|
|
|
84
|
|
Total Boeing
|
54
|
|
|
215
|
|
|
129
|
|
|
431
|
|
A220
|
8
|
|
|
10
|
|
|
23
|
|
|
18
|
|
A320 Family
|
69
|
|
|
172
|
|
|
257
|
|
|
350
|
|
A330
|
5
|
|
|
9
|
|
|
13
|
|
|
18
|
|
A350
|
13
|
|
|
30
|
|
|
39
|
|
|
58
|
|
A380
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total Airbus
|
95
|
|
|
221
|
|
|
332
|
|
|
445
|
|
Business and Regional Jets (1)
|
10
|
|
|
13
|
|
|
22
|
|
|
26
|
|
Total
|
159
|
|
|
449
|
|
|
483
|
|
|
902
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Prime Customer
|
July 2,
2020 |
|
June 27,
2019 |
|
July 2,
2020 |
|
June 27,
2019 |
||||||||
|
($ in millions)
|
|
($ in millions)
|
||||||||||||
Boeing
|
$
|
370.0
|
|
|
$
|
1,614.7
|
|
|
$
|
1,046.1
|
|
|
$
|
3,163.1
|
|
Airbus
|
128.0
|
|
|
320.1
|
|
|
415.1
|
|
|
649.9
|
|
||||
Other
|
146.6
|
|
|
81.3
|
|
|
260.7
|
|
|
170.9
|
|
||||
Total net revenues
|
$
|
644.6
|
|
|
$
|
2,016.1
|
|
|
$
|
1,721.9
|
|
|
$
|
3,983.9
|
|
|
Three Months Ended
|
||||||
|
July 2,
2020 |
|
June 27,
2019 |
||||
|
($ in millions)
|
||||||
Segment Revenues
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
327.1
|
|
|
$
|
1,096.8
|
|
Propulsion Systems
|
169.6
|
|
|
518.9
|
|
||
Wing Systems
|
122.5
|
|
|
398.5
|
|
||
All Other
|
25.4
|
|
|
1.9
|
|
||
|
$
|
644.6
|
|
|
$
|
2,016.1
|
|
Segment Operating (Loss) Income
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
(251.5
|
)
|
|
$
|
135.8
|
|
Propulsion Systems
|
(17.3
|
)
|
|
97.7
|
|
||
Wing Systems
|
(42.5
|
)
|
|
57.4
|
|
||
All Other
|
8.0
|
|
|
—
|
|
||
|
(303.3
|
)
|
|
290.9
|
|
||
SG&A
|
(49.0
|
)
|
|
(56.4
|
)
|
||
Research and development
|
(8.3
|
)
|
|
(10.5
|
)
|
||
Unallocated cost of sales (1)
|
(6.4
|
)
|
|
2.0
|
|
||
Total operating (loss) income
|
$
|
(367.0
|
)
|
|
$
|
226.0
|
|
|
|
Six Months Ended
|
||||||
|
July 2,
2020 |
|
June 27,
2019 |
||||
|
($ in millions)
|
||||||
Segment Revenues
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
878.6
|
|
|
$
|
2,166.4
|
|
Propulsion Systems
|
394.8
|
|
|
1,004.6
|
|
||
Wing Systems
|
413.9
|
|
|
806.4
|
|
||
All Other
|
34.6
|
|
|
6.5
|
|
||
|
$
|
1,721.9
|
|
|
$
|
3,983.9
|
|
Segment Operating (Loss) Income
|
|
|
|
|
|
||
Fuselage Systems
|
$
|
(337.9
|
)
|
|
$
|
274.7
|
|
Propulsion Systems
|
(22.6
|
)
|
|
193.2
|
|
||
Wing Systems
|
(28.9
|
)
|
|
123.2
|
|
||
All Other
|
9.8
|
|
|
1.2
|
|
||
|
(379.6
|
)
|
|
592.3
|
|
||
SG&A
|
(126.4
|
)
|
|
(120.0
|
)
|
||
Research and development
|
(20.6
|
)
|
|
(23.4
|
)
|
||
Unallocated cost of sales (1)
|
(7.9
|
)
|
|
10.1
|
|
||
Total operating (loss) income
|
$
|
(534.5
|
)
|
|
$
|
459.0
|
|
|
|
For the Six Months Ended
|
||||||
|
July 2, 2020
|
|
June 27, 2019
|
||||
|
($ in millions)
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(559.7
|
)
|
|
$
|
471.7
|
|
Net cash used in investing activities
|
(166.4
|
)
|
|
(77.8
|
)
|
||
Net cash provided by financing activities
|
333.5
|
|
|
131.6
|
|
||
Effect of exchange rate change on cash and cash equivalents
|
(7.7
|
)
|
|
(1.5
|
)
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash for the period
|
(400.3
|
)
|
|
524.0
|
|
||
Cash, cash equivalents, and restricted cash beginning of period
|
2,367.2
|
|
|
794.1
|
|
||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
1,966.9
|
|
|
$
|
1,318.1
|
|
•
|
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;
|
•
|
potential failure or reduced capacity of third parties on which the Company relies, including suppliers, lenders, and other business partners, to meet the Company’s obligations and needs;
|
•
|
the impact on our contracts with our customers and suppliers, including force majeure provisions;
|
•
|
the impacts on the financial markets and the availability and cost of credit to the Company;
|
•
|
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 demand for the Company's products, and the public’s demand and ability to pay for future airline travel, whether or not vaccines or effective treatments for COVID-19 become available.
|
•
|
the severity, extent, and duration of the pandemic and its impact on the aircraft industry;
|
•
|
actions taken by governments and municipalities to contain the disease or treat its impact, including travel restrictions and bans, bans on public gatherings, closures of non-essential businesses and aid and economic stimulus efforts;
|
•
|
the speed and extent of the recovery across the industry, including how long the public will continue to be concerned about the pandemic and avoid aircraft travel; and
|
•
|
any economic recession resulting from the pandemic.
|
Exhibit
Number
|
|
Exhibit
|
|
Incorporated by Reference to the Following Documents
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
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.
|
|
Quarterly Report on Form 10-Q (File No. 001-33160), filed May 6, 2020, Exhibit 10.9
|
|
|
|
|
|
|
|
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.
|
|
Quarterly Report on Form 10-Q (File No. 001-33160), filed May 6, 2020, Exhibit 10.12
|
|
|
|
|
|
|
|
Sixth Amendment, dated as of July 31, 2020, to the Second Amended and Restated Credit Agreement among Spirit AeroSystems, Inc., as borrower, Spirit AeroSystems Holdings, Inc., as parent guarantor, Spirit AeroSystems North Carolina, Inc., as a 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 August 3, 2020, Exhibit 10.1
|
|
|
|
|
|
|
|
737 Production Rate Adjustment and Other Settlements Memorandum of Agreement, dated May 5, 2020, between The Boeing Company and Spirit AeroSystems, Inc.
|
|
*
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Mark J. Suchinski
|
|
Senior Vice President and Chief Financial
|
|
August 4, 2020
|
Mark J. Suchinski
|
|
Officer (Principal Financial Officer)
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Damon Ward
|
|
Vice President, Corporate Controller and (Principal Accounting Officer)
|
|
August 4, 2020
|
Damon Ward
|
|
|
|
|
A.
|
The Parties entered into the 737 Production Rate Adjustment and Other Settlements Memorandum of Agreement (“February 2020 MOA”) on February 6, 2020.
|
B.
|
The Parties also wish to amend the February 2020 MOA to modify the 737 Production Rate table, add a credit towards the production [*****] Price, and modify the timing of the Recalculated Pre-Payment Comparison.
|
C.
|
The Parties wish to memorialize their agreement on these matters in this Amendment to the February 2020 MOA, in accordance with the terms set forth below.
|
1.
|
Capitalized Terms. Capitalized terms used and not otherwise defined in this Amendment 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”), Master Program Contract FZ-247827-8901N (“767 MPC”), and February 2020 MOA (collectively, the "Contracts").
|
2.
|
Production Rates. February 2020 MOA Section 3 is hereby amended and restated, in its entirety, 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 agree on i) all associated incremental costs, and ii) how such costs will be allocated between the Parties.
|
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.”
|
3.
|
Recalculated Pre-Payment. The Pre-Payment was an estimate [*****] that would have been due given the projected build rate in the February 2020 MOA, as illustrated in Attachment A of the February 2020 MOA. February 2020 MOA Sub-Section 4.4 is hereby amended and restated, in its entirety, as follows:
|
a.
|
The Parties agree that Seller will provide Boeing thirty million U.S. dollars ($30,000,000) in credit [*****] that apply to Products produced in 2021 (“Credit”).
|
b.
|
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. If Boeing owes Seller
|
4.
|
Recalculated Pre-Payment Comparison. February 2020 MOA Sub-Section 4.5 is hereby amended and restated, in its entirety, as follows:
|
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 August 31, 2022. If Boeing owes Seller a Recalculated Pre-Payment Comparison payment, then any remaining balance of the Credit will be applied toward the Recalculated Pre-Payment Comparison payment.”
|
5.
|
[*****] Production Stabilization. February 2020 MOA Sub-Section 6.1.b. is hereby amended and restated, in its entirety, as follows:
|
6.
|
Amendments. The Parties will execute amendments to the Contracts to incorporate the February 2020 MOA and this Amendment thereto, 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.
|
7.
|
Complete Agreement. This Amendment 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. Except as otherwise amended by this Amendment, the February 2020 MOA remains in full force and effect.
|
8.
|
Governing Law and Jurisdiction. This Amendment is governed by the laws of the state of Washington, exclusive of Washington's conflict of laws principles. This Amendment 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 Amendment. 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 the jurisdiction of the above-named courts, (b) the suit, action or proceeding is brought in an inconvenient forum or (c) the venue of the suit, action or proceeding is improper.
|
9.
|
Confidential Treatment. The information contained herein is confidential business information. The Parties will limit the disclosure of this Amendment’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 Amendment 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.
|
10.
|
Interpretation. Each Party has had the opportunity to draft, review, and edit this Amendment. Accordingly, no presumption for or against either Party arising out of drafting all or any part of this
|
A.
|
The Parties entered into Special Business Provisions MS-65530-0016, dated June 16, 2005, (the “SBP”) and the General Terms Agreement BCA-65530-0016, dated June 16, 2005, (the “GTA”), and including any amendments to the SBP and GTA (collectively the “Sustaining Agreement”).
|
B.
|
The most recent amendment to the SBP is Amendment 45, entered into on October 10, 2019.
|
C.
|
Boeing and Seller wish to modify the 777 discount payment schedule and certain 737 Rate [*****] Non-Recurring language, as specified herein.
|
D.
|
The Parties wish to memorialize their agreement on these matters in this Amendment to the SBP, in accordance with the terms set forth below.
|
1.
|
The list of “AMENDMENTS” within the Sustaining SBP is hereby deleted and replaced in its entirety as follows:
|
Amendment Number
|
Description
|
Date
|
Approval
|
|
1
|
Revise Company name from Mid-Western Aircraft Systems Incorporated to Spirit AeroSystems throughout document. Update attachments 1, 2, 4, 14 and 16.
|
2/23/2006
|
H. McCormick
|
|
R. Stone
|
||||
2
|
Incorporate CCNs as listed in Amendment 2, Attachment A, includes addition of new section 12.19, modification to sections 3.4.9, 12.16 and 32.0. Updates to attachments 1, 2, 6, 7, 15, 16, 19 and 20.
|
4/11/2007
|
H. McCormick
|
|
J. Edwards
|
||||
3
|
Incorporate CCNs as listed in Amendment 3, Attachment A. Updates to attachments 1, 2, 7, 14, 15, 16 and 22.
|
11/28/2007
|
H. McCormick
|
|
J. Edwards
|
||||
4
|
Incorporate CCNs as listed in Amendment 4, Attachment A. Updates to Attachments 1, 2, 7, 14, 15, 16. Incorporate Attachment 1A per CCN 508, 1328.
|
7/8/2008
|
S.Hu
|
|
W. Wallace
|
||||
5
|
Incorporate CCNs as listed in Amendment 5, Attachment A, includes addition of new section 12.3.1.1 Updates to Attachments 1, 2, 7, 14, 15, 16, 20.
|
6/22/2009
|
S. Hu
|
|
R. Stone
|
||||
6
|
Incorporate CCNs as listed in Amendment 6, Attachment A. Updates to Attachments 1, 2, 4, 7, 9, 10, 14, and 16. Incorporate Attachment 9 per CCN 2385.
|
11/23/2010
|
S. Hu
|
|
M. Milan
|
||||
7
|
Incorporate CCNs as listed in Amendment 7, Attachment A, includes addition of new section 12.13.3.1. Updates to Attachments 1, 2, 4, 7, 9, 14, and 16. Incorporate Attachment 1B per CCN 4212 and Attachment 23 per the 767-2C MOA.
|
7/28/2011
|
S. Hu
|
|
M. Milan
|
||||
8
|
Incorporate CCNs as listed in Amendment 8, Attachment A, includes revisions to section 7.9 and 12.13.1.1. Updates to Attachments 1, 2, 4, 7, 9, 14, 15, and 16.
|
8/16/2013
|
C. Howell
|
|
M. Milan
|
||||
9
|
Incorporate Attachment 25 - 737 Max Titanium Inner Wall Agreement.
|
9/4/2014
|
E. Flagel
|
|
M. Milan
|
||||
10
|
Incorporate Attachment 26-737 Derailment.
|
9/26/2014
|
B. Folden
|
|
R. Ast
|
||||
11
|
Incorporate Attachment 27 -737-MAX Non-Recurring Agreement, and Attachment 28 737/747/767/777 Pricing Agreement. Updates Section 4.1 Attachment 4, Section B.1, Attachments 9 and 15.
|
3/10/2015
|
C. Howell
|
|
R. Ast
|
||||
12
|
Delete and replace Attachment 25, Section 3.0.
|
4/9/2015
|
K. Drawsky
|
|
R. Ast
|
||||
13
|
Incorporate CCNs as listed in Amendment 13, Attachment A. Updates to Attachments 1, 2, 7, 9, 14, and 16.
|
1/4/2016
|
L. Taylor
|
|
K. Leyba
|
14
|
Incorporate Attachment 25, Addendum 1.
|
4/21/2015
|
D. Blaylock
|
R. Grant
|
|||
15
|
NULL
|
NULL
|
NULL
|
16
|
NULL
|
NULL
|
NULL
|
17
|
Incorporate Attachment 29 - 777X Non-Recurring Agreement.
|
12/23/2015
|
A. Lucker
|
E. Bauer
|
|||
18
|
NULL
|
NULL
|
NULL
|
19
|
NULL
|
NULL
|
NULL
|
20
|
737 MAX Inner Wall.
|
12/17/2015
|
S. Garcia
Deleone
|
J. Reed
|
|||
21
|
Revisions to Attachment 27. 737 MAX Non-Recurring Agreement.
|
5/9/2016
|
D. Blaylock
|
R. Grant
|
|||
22
|
737 Max Composite Inner Wall Line Movement.
|
11/2/2016
|
D. Blaylock
|
E. Bossler
|
|||
23
|
737 MAX 9 INITIAL and CIW Line [*****] Tooling Incentive Agreement.
|
12/16/2016
|
D. Blaylock
|
E. Bossler
|
|||
24
|
Incorporate CCNs as listed in Amendment 23, Attachment A. Updates to Attachments 1,2,7,9, and 14.
|
12/20/2016
|
L. Taylor
|
K. Leyba
|
|||
25
|
Revisions to Attachment 27, 737 MAX Non-Recurring.
|
3/16/2017
|
D. Blaylock
|
E. Bossler
|
|||
26
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement.
|
3/23/2017
|
D. Blaylock
|
E. Bossler
|
|||
27
|
Incorporate Attachment 30, “737 NG / MAX Vapor Barrier Agreement”, updates to Attachment 1 and 9.
|
3/31/2017
|
B. Edwards
|
K. Clark
|
|||
28
|
Revisions to Attachment 29, 777X NRE Agreement.
|
6/22/2017
|
K. O’Connell
|
C. Green
|
|||
29
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement.
|
7/20/2017
|
D. Blaylock
|
E. Bossler
|
|||
30
|
Delete and Replace SBP Sections 4.1, 4.1.1, 5.1.1, 5.2.1, 7.2, 8.0, 12.11, and 12.13.1.1 and SBP Attachments 1, 1B, 10 Section A10.2.10, 15, 16, 22, 27, and 29. Delete and Reserve SBP Attachments 1C, 20, and 28. Incorporate SBP Attachment 1D and 31.
|
9/22/2017
|
B. Edwards
|
W. Wilson
|
|||
31
|
Revisions to Attachment 27, 737-8 Rate Tooling Incentive Agreement.
|
10/18/2017
|
D. Blaylock
|
E. Bossler
|
|||
32
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement.
|
11/15/2017
|
D. Blaylock
|
E. Bossler
|
|||
33
|
Revisions to Attachment 27, 737 MAX Non-Recurring Agreement.
|
11/30/2017
|
D. Blaylock
|
E. Bossler
|
|||
34
|
Revisions to Attachment 27, 737-10 Non-Recurring Non-Tooling.
|
2/23/2018
|
D. Blaylock
|
E. Bossler
|
35
|
Revisions to Attachment 27, 737-9 Rate Tooling [*****].
|
4/18/2018
|
D. Blaylock
|
J. O'Crowley
|
|||
36
|
Revisions to Attachment 27, 737-10 Wing NRE.
|
6/20/2018
|
D. Blaylock
|
E. Bossler
|
|||
37
|
Incorporation of new Sections: 3.3.4.10 767 One Piece SOW Tooling, 3.3.7 767 One Piece SOW Non Recurring Pricing, 3.4.2.2 Delivery Point and Schedule for 767 One Piece SOW and 3.8 767 One Piece Statement of Work Special Provisions. Updates to Sections 7.1, Attachment 1 and 9.
|
8/17/2018
|
H. Langowski
|
R. Grant
|
|||
38
|
Revisions to Attachment 27, 737 MAX BBJ8, BBJ7, and 737-10 SOW
|
11/1/2018
|
T. Willis
|
E. Bossler
|
|||
39
|
4.1.1 is altered. A new section 4.7 is added. Attachment 1 (excluding the Exhibits) is deleted and replaced in its entirety. A new Attachment 32 “737 Value Engineering Cost Sharing” is added. Attachment 1 Exhibits B, B.1, B.2, C, C.1, C.2, D, D.1, D.2, E.1, E.2, F, F.1, and F.2 are deleted and replaced in their entirety. A new Attachment 1 Exhibit C.3 is added. Attachment 1B is deleted in its entirety.
|
11/2/2018
|
K. Shipley
|
E. Bossler
|
|||
40
|
SBP Section 4.7 is deleted and replaced in its entirety.
SBP Section 7.2 is deleted and replaced in its entirety.
A new SBP Section 7.5.3 is added.
SBP Attachment 1 (including Exhibits B, B.1, B,2, D, D.1, D.2, F, F.1, F.2, and G) is deleted and replaced in its entirety.
SBP Attachment 1B is added and marked “Reserved”.
SBP Attachment 15 is deleted and replaced in its entirety.
SBP Attachment 16 (including its Exhibit) is deleted and replaced in its entirety.
SBP Attachment 31 is deleted, replaced in its entirety, and marked “Reserved”.
SBP Attachment 32 (including its Exhibit A) is deleted and replaced in its entirety.
All of the above is accordance with the agreements as set forth in the Collective Resolution 2.0 Memorandum of Agreement (the “CR 2.0 MOA”), dated December 21, 2018
Concurrently with the CR 2.0 MOA, the Parties also executed that certain Settlement and Release Agreement, dated December 21, 2018, pertaining to the release and settlement of warranty and various other claims
|
1/29/2019
|
T. McGuigan
|
E. Bossler
|
|||
41
|
Revisions to Attachment 29 777-9 Rate Tooling
|
3/27/2019
|
R. Velau
D. Currie
|
42
|
Reserved
|
TBD
|
TBD
TBD
|
43
|
Revisions to Attachment 1 Product Pricing
|
5/22/2019
|
K. Doolin
R. Grant
|
44
|
Section 12.13.2 is deleted and replaced in its entirety
|
7/19/2019
|
B. Nix
E. Bossler
|
45
|
Delete and Replace:
-Section 6.3.8.b
-Attachment 1, Exhibits D.1 and E.2
|
10/10/2019
|
K. Doolin
R. Grant
|
46
|
Section 24.0 deleted and replaced
Section 24.1 incorporated
|
10/3/2019
|
K. Doolin
E. Bossler
|
47
|
SBP Attachment 1 Section 7.b) is deleted and replaced in its entirety
SBP Attachment 1 Section 8.c) is deleted and replaced in its entirety
|
5/5/2020
|
A. Klotz
L. Hampton
|
2.
|
777 Discount for 777 300ER, 200LR, and 200F Aircraft. SBP Attachment 1 Section 7.b) is amended and restated, in its entirety, as follows:
|
3.
|
Non-Recurring Pricing. SBP Attachment 1 Section 8.c) is amended to add the bold text and restated, in its entirety, as follows:
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
•
|
$[*****] *** paid no later than [*****] days following the [*****] Letter
|
i.
|
Boeing shall issue purchase orders no later than [*****] prior to the above dates in this Section 8.c).
|
a.
|
After the [*****] Letter is provided by Boeing to Seller, the Parties will amend this Section with actual calendar dates.
|
ii.
|
Seller will submit CTLs for rate [*****] Tooling. The above payments (including payments for long-lead items) in this Section 8.c) are not contingent upon CTL submittal by Seller or CTL approval by Boeing. Seller will determine the allocation of the [*****] between capital equipment and tooling for rate [*****] APM, and provide it to Boeing within [*****] days of the [*****] Letter.
|
iii.
|
Payment will be made by Boeing to Seller in accordance with SBP Section 5.2.1. Upon completion of all CTLs, Seller will notify Boeing that all CTLs have been submitted.
|
4.
|
This Amendment constitutes the complete and exclusive agreement between the Parties with respect to the subject matter hereof and cancels and supersedes all previous agreements between the Parties relating thereto, whether written or oral.
|
5.
|
This Amendment shall be governed by the internal laws of the State of Washington without reference to any rules governing conflict of laws.
|
A.
|
The Parties have entered into the General Terms Agreement, GTA BCA-65520-0032, dated June 16, 2005, as amended from time to time (the “GTA”) and the Special Business Provisions, BCA-MS-65530-0019, dated June 16, 2005, as amended from time to time (the "SBP") and now desire to again amend the SBP.
|
B.
|
The Parties have expressed a mutual interest in pursuing the developing and qualification of a new material that will be purchased by Spirit from [*****] and used to perform its contracts with Boeing. The purpose of this activity is to reduce Spirit’s manufacturing costs and support shipset cost reduction between Boeing and Spirit.
|
C.
|
This Amendment No. 32 updates SBP Section 12.8 “Supply Chain Integration”.
|
1.
|
The SBP is hereby amended by deleting the existing SBP Table of Amendments Page 5 in its entirety and replacing it with a new Table of Amendments Page 5, attached hereto as Exhibit 1.
|
2.
|
SBP Section 12.8 “Supply Chain Integration” is deleted in its entirety and replaced with a new SBP Section 12.8, attached hereto as Exhibit 2.
|
3.
|
Entire Agreement. Except as otherwise indicated in this Amendment No. 32, all terms defined in the GTA or SBP shall have the same meanings when used in this Amendment No. 32. This Amendment No. 32 constitutes the complete and exclusive agreement between the Parties with respect to the subject matter of this Amendment No. 32, and this Amendment No. 32 supersedes all previous agreements between the Parties relating to the subject matter of Amendment No. 32, whether written or oral. The GTA and SBP shall remain in full force and effect and are not modified, revoked, or superseded except as specifically stated in this Amendment No. 32.
|
Number
30
31
32
|
Description
Annual Shipset Price Adjustment thru Line Number [*****]
Updated SBP Section 7.2.1 and SBP Attachments 1 and 2
Configuration Control
Updated SBP Section 21
Added new Section 21.1 Boeing Authorization
Supply Chain Integration
Updated SBP Section 12.8
Added new Section 12.8.8 [*****]
|
Date
8/12/19
9/25/19
4/15/20
|
Approval
H. Langowski
R. Grant
H. Langowski
E. Bosler
H. Langowski
R. Grant
|
|
/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
|