Spirit AeroSystems Holdings Inc.
10/31/2025 | Press release | Distributed by Public on 10/31/2025 14:26
Quarterly Report for Quarter Ending October 2, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Unless the context otherwise indicates or requires, as used in this Quarterly Report on Form 10-Q (this "Quarterly Report"), references to "we," "us," "our," and the "Company" refer to Spirit AeroSystems Holdings, Inc. and its consolidated subsidiaries. References to "Spirit" refer only to our subsidiary, Spirit AeroSystems, Inc., and references to "Holdings" refer only to Spirit AeroSystems Holdings, Inc.
Global Economic and Trade Conditions
Global economic and trade conditions impact our results of operations. Our business operations depend on, among other things, sufficient OEM orders (without suspension) from airlines and the financial resources of airlines, our suppliers, other companies and individuals.
Energy, freight, raw material and other costs have been impacted by, and may continue to be impacted by, the war in Ukraine. Prolonged global inflationary pressures have also impacted these costs in addition to increased interest costs and labor costs. In certain situations, we have the ability to recover certain abnormal inflationary impacts through contractual agreements with our customers; however, we anticipate that we will experience reduced levels of profitability related to inflationary impacts until such time as the rate of inflation subsides to normal historical levels. Our associated estimates of such costs, where applicable, use the most recent information available. The economic impact of inflation, together with the impact of increases in interest rates and actions taken to attempt to reduce inflation, or changes in trade policies, including the imposition of new or increased tariffs and actions taken in response, may have a significant effect on the global economy, air travel, our supply chain and our customers, and, as a result, on our business.
In addition, Russia's invasion of Ukraine, the resultant sanctions and other measures imposed by the U.S. and other governments, and other related impacts have resulted in economic and political uncertainty and risks. In response to the Russian invasion of Ukraine, and the associated U.S. sanctions, the Company suspended all sanctioned activities relating to Russia, primarily consisting of sales and service activities. The suspended activities' impacts to prospective revenues, net income, net assets, cash flow from operations, and the Company's Consolidated Financial Position are not material. Continuation or significant expansion of economic disruption or escalation of the conflict, or other geopolitical events of a similar nature, such as the conflict in the Middle East, could have a material adverse effect on orders from our customers, the public's ability or willingness to continue to travel, the availability and timeliness of certain elements of parts procured from our supply chain, and/or our results of operations.
The trade environment is and may remain volatile as the United States and several other countries have announced varying degrees of tariffs on the import of goods and certain raw materials, including aluminum and steel. We anticipate we will experience reduced levels of profitability related to the tariffs announced if the levels of tariffs are not reduced or agreements between nations to reduce the impact of baseline or reciprocal tariffs are not reached.
We expect that our operating environment will continue to remain dynamic and evolve through 2025. We continue to monitor and evaluate related risks and uncertainties relating to macroeconomic conditions, including the items discussed in Item 1A. "Risk Factors" in our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 28, 2025 (the "2024 Form 10-K").
Agreement and Plan of Merger with The Boeing Company
On June 30, 2024, Holdings entered into an Agreement and Plan of Merger (the "Merger Agreement") with The Boeing Company ("Boeing") and Sphere Acquisition Corp., a wholly owned subsidiary of Boeing ("Merger Sub"). The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Holdings (the "Merger"), with Holdings surviving the Merger and becoming a wholly owned subsidiary of Boeing.
On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each share of Holdings Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of Holdings Common Stock owned by Boeing, Merger Sub, any other wholly owned subsidiary of Boeing, Holdings, or any wholly owned subsidiary of Holdings, in each case, not held on behalf of third parties) will be automatically cancelled and cease to exist and will be converted into the right to receive a number of shares of Holdings Common Stock, of the par value of $5 each, of Boeing ("Boeing Common Stock") equal to (a) if the volume-weighted average price per share of Boeing Common Stock on the New York Stock Exchange for the 15 consecutive trading days ending on and including the second full trading day prior to the Effective Time (the "Boeing Stock Price"), is greater than $149.00 but less than $206.94, the quotient obtained by dividing $37.25 by the Boeing Stock Price, rounded to four decimal places or (b) if the Boeing Stock Price
is greater than or equal to $206.94, 0.1800 or (c) if the Boeing Stock Price is equal to or less than $149.00, 0.2500 (such number of shares of Boeing Common Stock, the "Per Share Merger Consideration").
Under the terms of the Merger Agreement, the closing of the Merger is subject to various conditions, including: (a) the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Holdings Common Stock entitled to vote thereon (the "Holdings Stockholder Approval"); (b) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the receipt of other specified regulatory approvals (collectively, including the expiration or termination of any such waiting periods, the "Regulatory Approvals"); (c) the absence of any law or order issued by a governmental entity prohibiting the consummation of the Merger; (d) the approval for listing on the New York Stock Exchange of, and the effectiveness of a registration statement on Form S-4 relating to, the shares of Boeing Common Stock to be issued in the Merger; (e) solely with respect to the obligations of Boeing and Merger Sub to effect the closing of the Merger, (1) the accuracy (subject to materiality qualifiers in certain cases) of the representations and warranties of Holdings contained in the Merger Agreement, (2) Holdings having performed in all material respects the obligations required to be performed by it under the Merger Agreement at or prior to the closing of the Merger, (3) the Regulatory Approvals having been obtained without the imposition of a Burdensome Condition (as defined in the Merger Agreement), (4) the absence of a Material Adverse Effect (as defined in the Merger Agreement) or any event that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect since the date of the Merger Agreement and (5) Holdings having completed the divestiture of certain portions of the Company's business related to the performance by the Company of its obligations under supply contracts with Airbus SE and its affiliates (the "Spirit Airbus Business"); and (f) solely with respect to the obligation of Holdings to effect the closing of the Merger, (1) the accuracy (subject to materiality qualifiers in certain cases) of the representations and warranties of Boeing and Merger Sub contained in the Merger Agreement, (2) each of Boeing and Merger Sub having performed in all material respects the obligations required to be performed by it under the Merger Agreement at or prior to the closing of the Merger and (3) the absence of a Parent Material Adverse Effect (as defined in the Merger Agreement) or any event that would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect since the date of the Merger Agreement.
The Merger Agreement includes customary representations, warranties and covenants of Holdings, Boeing and Merger Sub, including covenants restricting Holdings from soliciting alternative acquisition proposals, governing the conduct of the Company's business during the period between the date of the Merger Agreement and completion of the Merger and relating to the parties' efforts to consummate the Merger as promptly as reasonably practicable. The Merger Agreement includes provisions to facilitate the disposition by the Company to Airbus SE and its affiliates ("Airbus") of the Spirit Airbus Business, as contemplated by the stock and asset purchase agreement between Spirit and Airbus SE described below under the sub-heading Stock and Asset Purchase Agreement with Airbus, and also includes provisions, which are consistent with provisions in such stock and asset purchase agreement, to facilitate the potential sale, subject to certain Boeing consent rights, by the Company to other third parties of specified assets and businesses.
The Merger Agreement includes termination provisions under which either Holdings or Boeing may terminate the Merger Agreement in various circumstances, including if the Merger has not been consummated by March 31, 2025, subject to three automatic three-month extensions if on each such date all of the closing conditions except those relating to regulatory approvals or the disposition of the Spirit Airbus Business have been satisfied or waived (such date, as so extended (if applicable), the "Outside Date"). Upon termination of the Merger Agreement in specified circumstances, Boeing would be required to pay to Holdings a termination fee of $300.0 million reduced (but not to less than zero) by the aggregate then-outstanding amount of cash advances to be repaid by the Company to Boeing, whether or not then due and payable, pursuant to the applicable agreements governing cash advances by Boeing to the Company.
Subject to satisfaction of the closing conditions in the Merger Agreement, the closing of the Merger is expected to occur in the fourth quarter of 2025.
In connection with the proposed merger, Spirit and Boeing have each received a request for additional information ("second request") from the Federal Trade Commission as part of the regulatory review process under the HSR Act. The second request extends the waiting period imposed by the HSR Act until 30 days after Spirit and Boeing have substantially complied with the requests or the waiting period is terminated sooner by the Federal Trade Commission.
Other than transaction expenses associated with the Merger of $27.1 million and $28.8 million for the three months ended October 2, 2025 and September 26, 2024, respectively, and $72.1 million and $46.8 million for the nine months ended October 2, 2025 and September 26, 2024, respectively, recorded within Selling, general and administrativeexpense in our Condensed Consolidated Statements of Operations, the Merger Agreement did not affect the Company's consolidated financial statements for the three and nine months ended October 2, 2025 and September 26, 2024, respectively.
Stock and Asset Purchase Agreement with Airbus
On April 27, 2025, Spirit and Airbus SE entered into a Stock and Asset Purchase Agreement (the "Purchase Agreement") providing for, among other things, the acquisition by Airbus SE of the Spirit Airbus Business, except, in the case of specified parts of the Spirit Airbus Business, to the extent such parts of the Spirit Airbus Business are acquired by one or more third parties other than Airbus.
Under the terms of the Purchase Agreement, Airbus SE would acquire from Spirit and its subsidiaries the Spirit Airbus Business, excluding any portions thereof to be acquired by third parties, and cash payments totaling $580.9 million inclusive of adjustments for certain specified advances as defined in the Purchase Agreement, for nominal consideration of one U.S. dollar, subject to working capital and other purchase price adjustments and specified additional downward adjustments in the event (i) certain assets primarily related to the A220 mid-fuselage production in Belfast, Northern Ireland are to be acquired by a third party instead of Airbus SE and/or (ii) certain assets primarily related to the Airbus SE work packages operated in Spirit's facilities in Subang, Malaysia are to be acquired by Airbus SE rather than by other third parties. Under the terms of the Purchase Agreement, the assets to be acquired by Airbus SE include the assets primarily related to A220 pylon production in Wichita, Kansas, and the assets primarily related to the Airbus SE work packages operated in the following facilities of Spirit: St. Nazaire, France; Kinston, North Carolina; Casablanca, Morocco; and the A220 wing manufacturing and assembly facility located in Belfast, Northern Ireland. Additionally, under the terms of the Purchase Agreement, Airbus SE would also acquire the assets primarily related to the A220 mid-fuselage production in Belfast, Northern Ireland, and the assets primarily related to the Airbus SE work packages operated in Spirit's facilities in Prestwick, Scotland, and Subang, Malaysia, in each case, to the extent such assets and facilities are not acquired by one or more third parties.
On April 27, 2025, Spirit provided notice to Airbus SE under the Purchase Agreement indicating it was abandoning the sale process of the assets primarily related to the Airbus SE work packages operated in Spirit's facilities in Prestwick, Scotland, and, accordingly, under the Purchase Agreement, such assets will be included in the assets to be acquired by Airbus SE at the Airbus Closing (as defined below), subject to the terms and conditions of the Purchase Agreement.
On June 27, 2025, Spirit provided notice to Airbus SE under the Purchase Agreement indicating it was abandoning the sale process of the assets primarily related to the Airbus A220 mid-fuselage work packages operated in Spirit's facilities in Belfast, Northern Ireland, and, accordingly, under the Purchase Agreement, such assets will be included in the assets to be acquired by Airbus SE at the Airbus Closing (as defined below), subject to the terms and conditions of the Purchase Agreement.
The Purchase Agreement provides for, among other things, the payment in full by Spirit to Airbus SE of any loans, advance payments, similar arrangements and undisputed liquidated damages owing from Spirit to Airbus SE as of the closing of the transactions contemplated by the Purchase Agreement (the "Airbus Transactions," and such closing, the "Airbus Closing"), with any disputed liquidated damages to be resolved and paid in accordance with a mutually agreed dispute resolution process; transitional arrangements with respect to specified real estate; obtaining third-party consents; segregation of Spirit's business conducted primarily for the benefit of Airbus SE from the remainder of Spirit's business and treatment of vendor and supply contracts, employees, intellectual property, pensions and unfunded employee liabilities in connection with the separation of those portions of Spirit's business; mutual indemnification and releases; customary representations, warranties and covenants; and transitional and other arrangements to be entered into by the parties at the Airbus Closing.
Under the terms of the Purchase Agreement, the Airbus Closing is conditioned upon, among other things, the receipt of applicable governmental and regulatory consents, approvals and clearances; the absence of any order, legal prohibition or injunction preventing the consummation of the Airbus Transactions; compliance by the parties with their pre-closing covenants in all material respects; the closing under the Merger Agreement having occurred (or Spirit and Boeing having delivered a joint written notice to Airbus SE that they are ready, willing and able and intend to consummate the closing under the Merger Agreement within three business days following delivery of such notice, subject to the consummation of the Airbus Closing); there being no material adverse change after the date of the Purchase Agreement and before the Airbus Closing in the business operations to be acquired by Airbus SE at the Airbus Closing; and Spirit's implementation in all material respects of technical measures and policies to segregate the Spirit Airbus Business (including confidential data of Airbus SE) from the remainder of Spirit's businesses.
Under the terms of the Purchase Agreement, the term sheet entered into on June 30, 2024, between Spirit and Airbus SE (the "Airbus Term Sheet"), providing for the parties to negotiate in good faith definitive agreements for the acquisition by Airbus SE or its affiliates of the Spirit Airbus Business on the terms set forth in the Airbus Term Sheet, was terminated effective April 27, 2025.
Stock and Asset Purchase Agreement with Composites Technology Research Malaysia Sdn. Bhd. ("CTRM")
On August 8, 2025, Spirit and CTRM, a Malaysian private limited company, and, solely for the purposes set forth therein, DRB-HICOM Berhad, a Malaysian public limited company ("Parent"), entered into a Stock and Asset Purchase Agreement (the "Agreement") providing for, among other things, CTRM to acquire from Spirit all of the outstanding equity interests in Spirit AeroSystems Malaysia Sdn. Bhd., a Malaysian private limited company ("Spirit Malaysia," and such transaction, the "Transaction").
Pursuant to the Agreement, the aggregate purchase price to be paid by CTRM in the Transaction is $95.2 million in cash, subject to specified adjustments as set forth in the Agreement.
The closing of the Transaction (the "Malaysia Closing") is subject to the approval of CTRM as a purchaser of the business of Spirit Malaysia by (i) the European Commission, either as part of its conditional approval decision of the acquisition of Spirit by Boeing or following its conditional approval decision of Boeing's acquisition of Spirit pursuant to Boeing's commitment vis-à-vis the European Commission to seek purchaser approval for the divestiture of the business of the Spirit Malaysia and (ii) the United States Federal Trade Commission, in each case, in their review of the transactions contemplated by the June 30, 2024 merger agreement between Spirit AeroSystems Holdings, Inc. and Boeing and the ancillary agreements in connection therewith (the "Purchaser Approval Condition"). The Malaysia Closing is also subject to certain customary closing conditions, including (a) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and, if applicable, the receipt of other specified governmental approvals necessary for the consummation of the Transaction (the "Regulatory Condition"), (b) the absence of any law or order issued by a governmental entity that prohibits the Malaysia Closing (a "Closing Legal Impediment"), (c) subject to qualifications as to materiality, the accuracy of the representations and warranties made by Spirit and CTRM, respectively, (d) the performance in all material respects by each Spirit and CTRM of their respective obligations under the Agreement (subject to specified exceptions) and (e) the approval by the shareholders of Parent of CTRM's and Parent's entering into, and performing their respective obligations under, the Agreement and other specified transaction documents and consummating the transactions contemplated by the Agreement and such other transaction documents (the "Parent Shareholder Approval").
The Agreement contains customary representations, warranties and covenants related to Spirit Malaysia, Spirit and CTRM. Between the date of the Agreement and the Malaysia Closing, subject to specified exceptions, Spirit has agreed to cause Spirit Malaysia to (a) use commercially reasonable efforts to operate the Spirit Malaysia's business in the ordinary course of business in all material respects, and (b) not to take specified actions with respect to the business of Spirit Malaysia without the written consent of CTRM.
The Agreement includes termination provisions in favor of Spirit and CTRM, including that (a) either Spirit or CTRM may terminate the Agreement if the Transaction has not been consummated by December 31, 2025, subject to one automatic 90-day extension if, on such date, all of the closing conditions except the Regulatory Condition have been satisfied (or are capable of being satisfied) or waived (such date, as so extended (if applicable), the "Outside Date"), (b) Spirit may terminate the Agreement if the Parent Shareholder Approval is not obtained at the meeting of Parent shareholders at which the applicable matters relating to the Transaction have been voted upon or Parent fails to perform or comply with its obligations under the Agreement relating to such meeting of Parent shareholders (and, in the event of such a termination by Spirit, CTRM would be required to pay Spirit a termination fee of $7.0 million) and (c) Spirit may terminate the Agreement if the Purchaser Approval Condition has not been satisfied by December 31, 2025 or the applicable governmental authority has issued an order or provided a communication opposing or rejecting CTRM as the purchaser of Spirit Malaysia or the business of Spirit Malaysia (and, in the event of such a termination by Spirit, Spirit would be required to pay CTRM a termination fee of $7.0 million unless a breach by CTRM or its affiliates of obligations under specified provisions of the Agreement relating to governmental approvals caused Spirit to have such right to terminate the Agreement).
Disposition of Fiber Materials, Inc.
On November 17, 2024, the Company entered into a definitive agreement to sell Fiber Materials, Inc. ("FMI"), a fully owned subsidiary of Spirit AeroSystems, Inc., for $165.0 million, subject to customary purchase price adjustments and closing conditions as set forth in the definitive agreement. The transaction closed on January 13, 2025. For additional information, see Note 26 Dispositions to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report.
B737 Program
The B737 MAX program is a critical program to the Company. For the twelve months ended December 31, 2024, 2023, and 2022 approximately 39%, 45%, and 45% of our net revenues, respectively, were generated from sales of components to Boeing for the B737 aircraft, as compared to 53% for the twelve months ended December 31, 2019, which was the most recent period to exclude impacts from the B737 MAX grounding and the COVID-19 pandemic. While we have entered into long-term supply agreements with Boeing to continue to provide components for the B737 for the life of the aircraft program, including commercial and military P-8 derivatives, Boeing does not have any obligation to purchase components from us for any replacement for the B737 that is not a commercial derivative model as defined by the Special Business Provisions and the General Terms Agreement (collectively, the "Sustaining Agreement") between Spirit and Boeing. The Sustaining Agreement is a requirements contract and Boeing can reduce the purchase volume at any time.
In March 2019, the B737 MAX fleet was grounded in the U.S. and internationally following the 2018 and 2019 accidents involving two B737 MAX aircraft. In November 2020, the FAA issued an order rescinding the grounding of the B737 MAX and published an Airworthiness Directive specifying design changes to be made before the aircraft returned to service. Boeing's deliveries of the B737 MAX resumed in the fourth quarter of 2020. Since November 2020, regulators from Brazil, Canada, China, the EU, U.K., India, and other countries have taken similar actions to unground the B737 MAX and permit return to service. During the nine months ended October 2, 2025, Boeing continued to announce orders for the B737 MAX.
We expect that the B737 MAX and other narrowbody production rates will recover to pre-pandemic levels before widebody production rates.
For the quarter ended October 2, 2025, we recognized forward losses of $243.7 million on the B737 program primarily related to the impact of schedule changes, increases in supply chain costs and increased production costs through the currently estimated forecast horizon.
The B737 MAX 7 and MAX 10 models are currently going through Federal Aviation Administration ("FAA") certification activities. In early 2024, Boeing communicated that it has pledged to develop new engine inlets for the B737 MAX to rectify overheating issues observed with the current engine inlets when the anti-ice system is activated under specific conditions. Boeing anticipates this activity will be completed in 2026. If Boeing is unable to achieve certification of these models or the entry into service is inconsistent with current assumptions, future revenues, earnings and cash flows are likely to be adversely impacted.
The B737 MAX 9 derivative fleet was temporarily grounded by the FAA while certain safety inspections were completed and to allow the FAA time to review any required maintenance actions following the January 5, 2024 in-flight incident on a B737 MAX 9 aircraft flown by Alaska Airlines. The B737 MAX 9 fleet returned to service on January 26, 2024 after mandatory inspections were completed. We are participating in investigations relating to this incident. For additional information, see Note 20 Commitments, Contingencies and Guarantees to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report.
Certain changes made to the production and delivery process implemented by Boeing have had an immediate impact to our results of operations and cash flows. On March 2, 2024, Boeing announced they would no longer accept deliveries of product that required out of sequence assembly or incremental quality re-work. A new product verification process has been implemented by Boeing at our factory in Wichita, KS.
B787 Program
During the year ended December 31, 2022, our estimates for further production rate decreases and build schedule changes, supply chain costs, and other costs, including costs of rework, drove additional forward loss charges of $93.5 million. During the year ended December 31, 2023, our estimates related to the impact of the IAM agreement, additional labor and supply chain cost growth drove additional forward loss charges of $93.0 million recognized through the quarter ended September 29, 2023. On October 12, 2023, we executed a memorandum of agreement with Boeing (the "2023 MOA"), where among other items, we established recurring shipset price increases effective for line unit 1164 through line unit 1605 with a mutual goal of concluding good faith pricing negotiations, other interests and considerations 12 months prior to the delivery of line unit 1605. As a result, we reversed previously recognized forward loss charges of $205.6 million and also reversed a previously recognized material right obligation of $154.6 million in the quarter ended December 31, 2023. During the year ended December 31, 2024, our updated estimates drove an additional$483.3 million offorward loss primarily related to schedule changes, additional labor and supply chain cost growth. For the nine months ended October 2, 2025, our updated estimates drove an additional $197.4 million of forward loss primarily related to schedule changes and production and supply chain cost growth, which includes our latest estimate for tariffs. Additional production rate changes, changes in cost assessments, claims, labor work stoppages, supply
chain cost changes, or changes to the scope of quality issues and any associated rework, could result in an incremental loss provision.
Airbus Programs
During the year ended December 31, 2022, the A350 program recorded additional forward loss charges of $105.7 million related to estimated quality-related costs, non-recurring engineering and tooling costs, and additional labor, freight, and other cost requirements driven by parts shortages, production and quality issues, and customer production rate changes. The A350 program recorded additional forward loss charges of $121.3 million for the year ended December 31, 2023 related to labor and production cost growth, higher supply chain costs and schedule revisions. During the year ended December 31, 2024, our updated estimates drove $359.2 million ofincremental estimated forward loss on the A350 program, driven primarily by a change in strategic pricing conversations with our customer, Airbus, incremental orders Airbus secured, and the impact of factory performance and supply chain cost growth. For the nine months ended October 2, 2025, our updated estimates drove $226.8 million of incremental estimated forward loss on the A350 program, driven primarily by schedule changes and increased production and supply chain costs.
The A220 wing program recorded additional forward losses of $25 million for the year ended December 31, 2022, primarily related to the bankruptcy of a supplier and associated failure of the supplier to deliver key parts on the program. The A220 program recorded additional forward losses of $164.8 million for the year ended December 31, 2023, primarily related to higher production, labor and supply chain costs. During the year ended December 31, 2024, our updated estimates drove $328.8 million of incremental estimated forward loss on the A220 program, driven by a change in strategic pricing conversations with our customer, Airbus, incremental orders Airbus secured, schedule changes, and increased production and supply chain costs. For the nine months ended October 2, 2025, our updated estimates drove $242.2 million of incremental estimated forward loss on the A220 program, driven by foreign exchange rates, increased production costs and supply chain costs.
See also Note 20 Commitments, Contingencies and Guarantees to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report.
Critical Accounting Estimates
Goodwill
Goodwill is assessed for impairment annually on the first day of the fourth quarter, or whenever events or circumstances indicate that it is more likely than not that the estimated fair value of a reporting unit is below its carrying value.
For the year ended December 31, 2024, in accordance with our annual assessment policy, we opted to bypass the qualitative assessment and performed a quantitative assessment to test goodwill for impairment.
As part of our impairment assessment, we utilized a third-party to assist us with estimating the fair value of each of our respective reporting units under both the income approach and the market approach with equal weighing applied to the results of each approach. These approaches require making assumptions regarding long-term growth rates, revenue and earnings projections, estimation of cash flows, discount rates, and market and company-specific factors.
The results of our annual assessment indicated that the fair value substantially exceeded the carrying value for each reporting unit, and as a result, no impairment existed as of the annual assessment date during the fourth quarter of 2024. Further, we have not identified any indications of impairment that would prompt an interim impairment assessment for the quarter ended October 2, 2025.
Results of Operations
The following table sets forth, for the periods indicated, certain of our operating data:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
|
October 2, 2025 |
September 26, 2024 |
October 2, 2025 |
September 26, 2024 |
||||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||
|
Net revenues
|
$ | 1,585.4 | $ | 1,470.6 | $ | 4,742.3 | $ | 4,665.3 | |||||||||||||||
| Cost of sales | 2,205.0 | 1,716.6 | 6,054.4 | 5,580.3 | |||||||||||||||||||
| Gross loss | (619.6) | (246.0) | (1,312.1) | (915.0) | |||||||||||||||||||
| Selling, general and administrative | 40.5 | 93.8 | 239.6 | 258.9 | |||||||||||||||||||
| Restructuring costs | - | (0.1) | - | 0.7 | |||||||||||||||||||
| Research and development | 9.3 | 10.4 | 36.0 | 34.4 | |||||||||||||||||||
|
(Gain) loss on disposition of businesses, net
|
(22.9) | - | 26.6 | - | |||||||||||||||||||
| Operating loss | (646.5) | (350.1) | (1,614.3) | (1,209.0) | |||||||||||||||||||
| Interest expense and financing fee amortization | (94.5) | (90.8) | (293.4) | (253.3) | |||||||||||||||||||
| Other income (expense), net | 14.3 | (33.0) | (29.9) | (30.3) | |||||||||||||||||||
| Loss before income taxes and equity in net income (loss) of affiliates | (726.7) | (473.9) | (1,937.6) | (1,492.6) | |||||||||||||||||||
| Income tax benefit (provision) | 2.6 | (2.8) | (29.7) | (15.9) | |||||||||||||||||||
| Loss before equity in net income (loss) of affiliates | (724.1) | (476.7) | (1,967.3) | (1,508.5) | |||||||||||||||||||
| Equity in net income (loss) of affiliates | 0.1 | 0.1 | (0.2) | 0.2 | |||||||||||||||||||
| Net loss | $ | (724.0) | $ | (476.6) | $ | (1,967.5) | $ | (1,508.3) | |||||||||||||||
Comparative shipset deliveries by model were as follows(1):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| Model |
October 2, 2025 |
September 26, 2024 |
October 2, 2025 |
September 26, 2024 |
||||||||||||||||||||||
| B737 | 90 | 64 | 330 | 135 | ||||||||||||||||||||||
| B767 | 8 | 6 | 19 | 20 | ||||||||||||||||||||||
| B777 | 11 | 9 | 26 | 25 | ||||||||||||||||||||||
| B787 | 17 | 9 | 48 | 36 | ||||||||||||||||||||||
| Total Boeing | 126 | 88 | 423 | 216 | ||||||||||||||||||||||
| A220 | 20 | 19 | 70 | 56 | ||||||||||||||||||||||
| A320 Family | 172 | 135 | 515 | 467 | ||||||||||||||||||||||
| A330 | 10 | 11 | 32 | 27 | ||||||||||||||||||||||
| A350 | 15 | 13 | 50 | 44 | ||||||||||||||||||||||
| Total Airbus | 217 | 178 | 667 | 594 | ||||||||||||||||||||||
| Total Business and Regional Jets | 49 | 66 | 161 | 165 | ||||||||||||||||||||||
| Total | 392 | 332 | 1,251 | 975 | ||||||||||||||||||||||
(1) For purposes of measuring production or shipset deliveries for Boeing aircraft in a given period, the term "shipset" refers to sets of structural fuselage components produced or delivered for one aircraft in such period. For purposes of measuring production or shipset deliveries for Airbus A220 aircraft in a given period, the term "shipset" refers to sets of structural wing components produced or delivered for one aircraft in such period. For purposes of measuring production or shipset deliveries for all other Airbus and Business/Regional Jet aircraft in a given period, the term "shipset" refers to all structural aircraft components produced or delivered for one aircraft in such period. Other components that are part of the same aircraft shipsets could be produced or shipped in earlier or later accounting periods than the components used to measure production or shipset deliveries, which may result in slight variations in production or delivery quantities of the various shipset components in any given period.
Net revenues by prime customer were as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Prime Customer |
October 2, 2025 |
September 26, 2024 |
October 2, 2025 |
September 26, 2024 |
|||||||||||||||||||
| ($ in millions) | ($ in millions) | ||||||||||||||||||||||
| Boeing | $ | 951.7 | $ | 850.7 | $ | 2,802.0 | $ | 2,801.6 | |||||||||||||||
| Airbus | 367.9 | 299.8 | 1,117.9 | 954.0 | |||||||||||||||||||
| Other | 265.8 | 320.1 | 822.4 | 909.7 | |||||||||||||||||||
| Total net revenues | $ | 1,585.4 | $ | 1,470.6 | $ | 4,742.3 | $ | 4,665.3 | |||||||||||||||
Changes in Estimates
During the quarter ended October 2, 2025, we recognized unfavorable changes in estimates of $599.6 million, which included net forward loss charges of $585.2 million, and unfavorable cumulative catch-up adjustments related to periods prior to the third quarter of 2025 of $14.4 million. The forward losses in the third quarter were primarily driven by schedule changes, increased supply chain cost and overall production cost growth on the B737 program, foreign exchange rates, current production performance and supply chain cost growth on the A350 and A220 programs, and production cost and supply chain cost growth, which includes the Company's latest estimate for tariffs on the B787 program.The unfavorable cumulative catch-up adjustments primarily relate to increased production cost on the B737 and B777 programs. As referenced above, we utilize a periodic forecasting process to assess the progress and performance of our programs. We may continue to experience forward losses in the future as a result of production schedule impacts from our customers, increases in costs related to persistent inflation, or other factors resulting in cost estimates higher than our original forecast.
During the same period in the prior year, we recognized total unfavorable changes in estimates of $242.9 million, which included net forward loss charges of $217.2 million, and unfavorable cumulative catch-up adjustments related to periods prior to the third quarter of 2024 of $25.7 million.
Three Months Ended October 2, 2025 as Compared to Three Months Ended September 26, 2024
Revenue.Net revenue for the three months ended October 2, 2025 was $1,585.4 million, an increase of $114.8 million, or 7.8%, compared to net revenue of $1,470.6 million for the same period in the prior year. The increase in revenue was primarily driven by increased Boeing, Airbus and Defense & Space revenues. Approximately 83% and 78% of Spirit's net revenues for the third quarter of 2025 and 2024, respectively, came from our two largest customers, Boeing and Airbus.
Total deliveries to Boeing increased to 126 shipsets during the third quarter of 2025, compared to 88 shipsets delivered in the same period of the prior year, primarily driven by higher deliveries of the B737. Total deliveries to Airbus increased to 217 shipsets during the third quarter of 2025, compared to 178 shipsets delivered in the same period of the prior year, primarily driven by higher deliveries of the A320. Deliveries for business/regional jet components decreased to 49 shipsets delivered during the third quarter of 2025, compared to 66 shipsets delivered in the same period of the prior year. In total, deliveries increased to 392 shipsets during the third quarter of 2025, compared to 332 shipsets delivered in the same period of the prior year.
Gross (Loss) Profit. Gross loss was ($619.6) million for the three months ended October 2, 2025, compared to gross loss of ($246.0) million for the same period in the prior year. The increase in loss from the prior year period was primarily driven by higher forward loss charges and lower program margins on Boeing programs, partially offset by lower cumulative catch-up adjustments and lower excess capacity charges. In the third quarter of 2025, we recognized $55.2 million of excess capacity production costs driven by cost overruns and production schedule changes on B737 MAX and A220 programs, compared to excess capacity cost of $70.1 million in the same period of the prior year. In the third quarter of 2025, we recognized $14.4 million of unfavorable cumulative catch-up adjustments related to periods prior to the third quarter of 2025, and $585.2 million of net forward loss charges. As mentioned in Note 4 Changes in Estimates to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report, the forward losses recorded in the third quarter of 2025 were primarily driven by schedule changes, increased supply chain cost and overall production cost growth on the B737 program, foreign exchange rates, current production performance and supply chain cost growth on the A350 and A220 programs, and production cost and supply chain cost growth, which includes the Company's latest estimate for tariffs on the B787 program.In the third quarter of 2024, we recorded $25.7 million of unfavorable cumulative catch-up adjustments related to periods prior to the third quarter of 2024, and $217.2 million of net forward loss charges primarily driven by production performance, and supply chain cost growth on the A350 and A220 programs, additional labor and supply chain cost growth on the B787 program, and increased costs related to factory performance on the B767 program.
SG&A and Research and Development.Current period SG&A was lower than in the prior year period by $53.3 million, primarily due tothe reversal of $45.5 million of accrued liabilities related to the favorable resolution of litigation with a former CEO in the third quarter of 2025 as well as reduced incentive compensation accruals, partially offset by certain employee retention-related expenditures outlined in the Merger Agreement of $2.3 million. Research and development expenses decreased for the three months ended October 2, 2025, as compared to the same period in the prior year primarily due to reduced project spending year-over-year.
Restructuring Costs.There were no restructuring costs recorded during the three months ended October 2, 2025. Restructuring costs of ($0.1) million were recorded during the three months ended September 26, 2024.
Operating (Loss) Income.Operating loss for the three months ended October 2, 2025 was ($646.5) million, an increase of $296.4 million, compared to operating loss of ($350.1) million for the same period in the prior year. The variance reflects the reversal of the ($132.5) million loss that was recorded in the second quarter of 2025 for a valuation allowance on assets held for sale in relation to the Company's Airbus Business due to the subsequent deterioration of the balance sheet in addition to the recording of a ($109.6) million loss for a valuation allowance on assets held for sale in relation to the Company's Malaysia Business, resulting in a net reversal of loss of $22.9 reflected within (Gain) loss on dispositions of businesses, net.
Interest Expense and Financing Fee Amortization.Interest expense and financing fee amortization for the three months ended October 2, 2025 increased $3.7 million compared to the same period in the prior year, driven by the addition of the Boeing $350 million advance agreement and the Amended and Restated Bridge Credit Agreement. The three months ended October 2, 2025 includes $91.6 million of interest and fees paid or accrued in connection with long-term debt and $6.2 million in amortization of deferred financing costs and original issue discount, compared to $81.2 million of interest and fees paid or accrued in connection with long-term debt and $6.5 million in amortization of deferred financing costs and original issue discount for the same period in the prior year. See also Note 15 Debt to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report.
Other Income (Expense), net.Other income, net for the three months ended October 2, 2025 was $14.3 million, compared to other expense of ($33.0) million for the same period in the prior year, an increase in income of $47.3 million. The increase in other income was primarily due to foreign currency gains of $9.4 million recognized in the current period, versus losses of ($28.0) million in the same period of the prior year, in addition to a reduction in the loss on sale of accounts receivables.
Benefit from (Provision for) Income Taxes. Our reported tax rate includes two principal components: an expected annual tax rate and discrete items resulting in additional provisions or benefits that are recorded in the quarter that an event arises. Events or items that could give rise to discrete recognition include excess tax benefit in respect of share-based compensation, finalizing audit examinations for open tax years, statute of limitations expiration, or a change in tax law.
Deferred income tax assets and liabilities are recognized for future income tax consequences attributable to differences between the financial statement carrying amounts for existing assets and liabilities and their respective tax bases. A valuation allowance is recorded to reduce deferred income tax assets to an amount that in management's opinion will ultimately be realized. We have reviewed our material deferred tax assets to determine whether or not a valuation allowance was necessary. Based on evaluation of both the positive and negative evidence available, management determined that it was necessary to continue to maintain a valuation allowance against nearly all of its net U.S. and U.K. deferred tax assets as of October 2, 2025. The net valuation allowance was increased by $123.1 million in the U.S. and increased by $28.4 million in the U.K. for the three months ended October 2, 2025.
The income tax benefit for the three months ended October 2, 2025 includes $2.0 million for federal taxes, $3.6 million for state taxes and ($3.0) million for foreign taxes. The income tax provision for the three months ended September 26, 2024 includes ($0.1) million for federal taxes, ($2.6) million for state taxes and ($0.1) million for foreign taxes. The effective tax rate for the three months ended October 2, 2025 is 0.36% as compared to (0.60%) for the same period in 2024. As we are reporting a pre-tax loss for the three months ended October 2, 2025, an increase in the effective tax rate results in an increase of income tax benefits, while a decrease in the rate results in a reduction of income tax benefits.
The decrease from the U.S. statutory tax rate is attributable primarily to valuation allowances on deferred tax assets.
Merger Agreement. Other than transaction expenses associated with the Merger of $27.1 million, the Merger Agreement did not affect the Company's consolidated financial statements for the three months ended October 2, 2025. Transaction expenses associated with the Merger were $28.8 million for the same period in the prior year.
Segments.The following tables show segment revenues and operating loss for the three months ended October 2, 2025 and September 26, 2024:
| Three Months Ended October 2, 2025 |
Commercial
|
Defense & Space
|
Aftermarket
|
Corporate and Other
|
Consolidated
|
||||||||||||
|
($ in millions)
|
|||||||||||||||||
|
Net revenues
|
$ | 1,170.1 | $ | 304.1 | $ | 111.2 | $ | - | $ | 1,585.4 | |||||||
|
Cost of sales
|
(1,740.4) | (307.8) | (101.6) | - | (2,149.8) | ||||||||||||
|
Excess capacity costs
|
(43.1) | (12.1) | - | - | (55.2) | ||||||||||||
| Segment operating (loss) income | $ | (613.4) | $ | (15.8) | $ | 9.6 | $ | - | $ | (619.6) | |||||||
|
Selling, general and administrative
|
- | - | - | (40.5) | (40.5) | ||||||||||||
|
Research and development
|
- | - | - | (9.3) | (9.3) | ||||||||||||
|
Gain on disposition of businesses (1)
|
- | - | - | 22.9 | 22.9 | ||||||||||||
| Operating (loss) income | $ | (613.4) | $ | (15.8) | $ | 9.6 | $ | (26.9) | $ | (646.5) | |||||||
|
Interest expense and financing fee amortization
|
- | - | - | (94.5) | (94.5) | ||||||||||||
| Other income, net | - | - | - | 14.3 | 14.3 | ||||||||||||
| (Loss) income before income taxes and equity in net income of affiliates | $ | (613.4) | $ | (15.8) | $ | 9.6 | $ | (107.1) | $ | (726.7) | |||||||
| Three Months Ended September 26, 2024 |
Commercial
|
Defense & Space
|
Aftermarket
|
Corporate and Other
|
Consolidated
|
||||||||||||
|
($ in millions)
|
|||||||||||||||||
|
Net revenues
|
$ | 1,139.8 | $ | 231.3 | $ | 99.5 | $ | - | $ | 1,470.6 | |||||||
|
Cost of sales
|
(1,373.5) | (182.2) | (90.8) | - | (1,646.5) | ||||||||||||
|
Excess capacity costs
|
(65.8) | (4.3) | - | - | (70.1) | ||||||||||||
| Segment operating (loss) income | $ | (299.4) | $ | 44.8 | $ | 8.7 | $ | - | $ | (245.9) | |||||||
|
Selling, general and administrative
|
- | - | - | (93.8) | (93.8) | ||||||||||||
|
Research and development
|
- | - | - | (10.4) | (10.4) | ||||||||||||
| Operating (loss) income | $ | (299.4) | $ | 44.8 | $ | 8.7 | $ | (104.2) | $ | (350.1) | |||||||
|
Interest expense and financing fee amortization
|
- | - | - | (90.8) | (90.8) | ||||||||||||
| Other expense, net | - | - | - | (33.0) | (33.0) | ||||||||||||
| (Loss) income before income taxes and equity in net income of affiliates | $ | (299.4) | $ | 44.8 | $ | 8.7 | $ | (228.0) | $ | (473.9) | |||||||
(1)During the three months ended October 2, 2025, the Company reversed the ($132.5) million loss that was recorded in the second quarter of 2025 for a valuation allowance on assets held for sale in relation to the Company's Airbus Business due to subsequent deterioration of the balance sheet. In the third quarter of 2025, the Company also recorded a ($109.6) million loss for a valuation allowance on assets held for sale in relation to the Company's Malaysia Business, resulting in a net reversal of loss of $22.9 million reflected within (Gain) loss on dispositions of businesses, net in the Condensed Consolidated Statement of Operations for the three months ended October 2, 2025. See Note 26 Dispositionsto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for additional information.
Commercial segment, Defense & Space segment, and Aftermarket segment represented approximately 74%, 19%, and 7%, respectively, of our net revenues for the three months ended October 2, 2025 and approximately 78%, 16%, and 7%, respectively, of our net revenues for the three months ended September 26, 2024.
Commercial segment.Commercial segment net revenues for the three months ended October 2, 2025 were $1,170.1 million, an increase of $30.3 million, or 3%, compared to the same period in the prior year. The increase in revenues was primarily driven by increased production on Airbus programs, partially offset by reduced regional jet programs.
Commercial segment operating margins were (52%) for the three months ended October 2, 2025, compared to (26%) for the same period in the prior year. The decrease in margin for the three months ended October 2, 2025, as compared to the prior year period, was primarily due tohigher forward loss charges and lower margins for the Boeing programs, partially offset by lower cumulative catch-up adjustment and excess capacity charges.In the third quarter of 2025, the segment recorded unfavorable cumulative catch-up adjustments of $10.5 million and net forward loss charges of $577.7 million. In comparison, during the third quarter of 2024, the segment recorded unfavorable cumulative catch-up adjustments of $37.5 million and net
forward loss charges of $212.9 million. For the three months ended October 2, 2025, the Commercial segment included $43.1 million of excess capacity production costs compared with excess capacity costs of $65.8 million for the same period in the prior year.
Defense & Space segment. Defense & Space segment net revenues for the three months ended October 2, 2025 were $304.1 million, an increase of $72.8 million, or 31%, compared to the same period in the prior year. The variance from the prior year period includes the impact of higher production on the Sikorsky CH-53K as well as increased revenue on the P-8 units under the Boeing B737 program, the contracts for which include units produced for the Boeing P-8 program that are accounted for in the Defense & Space segment.
Defense & Space segment operating margins decreased to (5%) for the three months ended October 2, 2025, compared to 19% for the same period in the prior year. The decrease in margin over the prior year period was primarily due tohigher unfavorable changes in estimates recorded on the KC-46 Tanker and P-8 programs as well as higher excess capacity costs. For the three months ended October 2, 2025 the Defense & Space segment included $12.1 million of excess capacity production costs compared with excess capacity costs of $4.3 million for the same period in the prior year. The segment recorded unfavorable cumulative catch-up adjustments of $3.9 million for the three months ended October 2, 2025. The segment recorded net forward loss charges of $7.5 million for the three months ended October 2, 2025. In comparison, during the same period of the prior year, the segment recorded favorable cumulative catch-up adjustments of $11.8 million and net forward loss charges of $4.3 million.
Aftermarket segment.Aftermarket segment net revenues for the three months ended October 2, 2025 were $111.2 million, an increase of $11.7 million, or 12%, compared to the same period in the prior year. Aftermarket segment operating margins were 9% for the three months ended October 2, 2025, compared to 9% for the same period in the prior year.
Nine Months Ended October 2, 2025 as Compared to Nine Months Ended September 26, 2024
Revenue.Net revenue for the nine months ended October 2, 2025 was $4,742.3 million, an increase of $77.0 million, or 1.7%, compared to net revenue of $4,665.3 million in the same period of the prior year. The increase in revenue was primarily driven by increased Airbus and Defense & Space production partially offset by the effect of lower margins on higher Boeing production. Approximately 83% and 81% of the Company's net revenues for the nine months ended October 2, 2025 and September 26, 2024, respectively, came from our two largest customers, Boeing and Airbus.
Total deliveries to Boeing increased to 423 shipsets during the nine months ended October 2, 2025, compared to 216 shipsets delivered in the same period in the prior year, primarily driven by higher deliveries of B737. Total deliveries to Airbus increased to 667 shipsets during the nine months ended October 2, 2025, compared to 594 deliveries in the same period in the prior year, driven by increased production across all programs. Deliveries for business/regional jet components decreased to 161 shipsets during the nine months ended October 2, 2025, compared to 165 deliveries in the same period in the prior year. In total, deliveries increased to 1,251 shipsets delivered in the nine months ended October 2, 2025, compared to 975 shipsets delivered in the same period of the prior year.
Gross (Loss) Profit. Gross loss was ($1,312.1) million for the nine months ended October 2, 2025, compared to gross loss of ($915.0) million for the same period in the prior year. The increase in loss over the same period in the prior year was primarily driven by higher forward loss charges and lower program margins on Boeing programs, as well as higher excess capacity charges partially offset by lower cumulative catch-up adjustments. In the nine months ended October 2, 2025, we recognized $146.1 million of excess capacity costs driven by cost overruns and production schedule changes on the B737 MAX and A220 programs, compared to excess capacity production costs of $142.5 million in the same period of the prior year. In the nine months ended October 2, 2025, the Company recorded $24.6 million of unfavorable cumulative catch-up adjustments related to periods prior to the nine months ended October 2, 2025, and $1,098.0 million of net forward loss charges. The forward losses recorded in the nine months ended October 2, 2025 were primarily driven by schedule changes, increased supply chain cost and overall production cost growth on the B737 program, foreign exchange rates, current production performance and supply chain cost growth on the A350 and A220 programs, production cost and supply chain cost growth, which includes the Company's latest estimate for tariffs on the B787 program, increased costs related to factory performance and supply chain cost growth, which includes our latest estimate for tariffs on the B767 program and supply chain cost estimates on the KC-135 program.In the nine months ended September 26, 2024, we recorded $78.1 million of unfavorable cumulative catch-up adjustments related to periods prior to the nine months ended September 26, 2024, and $926.1 million of net forward loss charges. The forward loss charges recorded in the nine months ended September 26, 2024 were primarily driven by a change in strategic pricing conversations with our customer, Airbus, incremental orders Airbus secured, production performance, and supply chain cost growth on the A350 and A220 programs, schedule changes, additional labor and supply chain cost growth on the B787 program, and increased costs related to factory performance and supply chain cost growth on the B767 program.
SG&A and Research and Development.SG&A expense was $19.3 million lower for the nine months ended October 2, 2025, compared to the same period in the prior year. The variance was driven by the reversal of $45.5 million of accrued liabilities related to the favorable resolution of litigation with a former CEO in the third quarter of 2025 as well as reduced incentive compensation accruals in the current year, partially offset by the $23.2 million impairment charge for customer relationship intangible assets related to Airbus recorded in the second quarter of 2025, increased purchased services for merger-related activities and certain employee retention-related expenditures outlined in the Merger Agreement of $8.7 million. Greater research and development activity drove research and development expense $1.6 million higher for the nine months ended October 2, 2025, compared to the same period in the prior year.
Restructuring Costs. There were no restructuring costs recorded for the nine months ended October 2, 2025. Restructuring costs of $0.7 million were recorded during the nine months ended September 26, 2024, driven by a reduction in hourly production workforce due to high inventory levels.
Operating (Loss) Income. Operating loss for the nine months ended October 2, 2025 was ($1,614.3) million, an increase of $405.3 million, compared to operating loss of ($1,209.0) million for the same period in the prior year. The increase primarily reflects the higher forward losses recorded in the current year, the $109.6 million charge recorded in the third quarter of 2025 in (Gain) loss on dispositions of businesses, netrepresenting the difference between the current carrying value of the Malaysia Business held for sale group and its estimated sales price, the $23.2 million customer relationship intangible impairment charge recorded in the second quarter of 2025 reflected in Selling, general and administrativeexpense, the reduction in Boeing program production and margins, higher excess capacity costs, and the specific warranty charge recorded in the first quarter of 2025, partially offset by the gain recorded on the sale of FMI, the reversal of $45.5 million of accrued liabilities related to the favorable resolution of litigation with a former CEO in the third quarter of 2025, and lower negative cumulative catch-up adjustments.
Interest Expense and Financing Fee Amortization. Interest expense and financing fee amortization for the nine months ended October 2, 2025 increased $40.1 million compared to the same period in the prior year, driven by the addition of the Boeing $350.0 million advance agreement and the Amended and Restated Bridge Credit Agreement. The nine months ended October 2, 2025 includes $267.3 million of interest and fees paid or accrued in connection with long-term debt and $23.1 million in amortization of deferred financing costs and original issue discount, compared to $231.1 million of interest and fees paid or accrued in connection with long-term debt and $12.2 million in amortization of deferred financing costs and original issue discount for the same period in the prior year. See also Note 15 Debtto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report.
Other Income (Expense), net. Other expense, net for the nine months ended October 2, 2025 was ($29.9) million, compared to other expense of $(30.3) million for the same period in the prior year. The decrease in other expense was primarily due to the reduction in the loss on sale of accounts receivable partially offset by an increase in foreign currency losses in the current year.
Provision for Income Taxes.Our reported tax rate includes two principal components: an expected annual tax rate and discrete items resulting in additional provisions or benefits that are recorded in the quarter that an event arises. Events or items that could give rise to discrete recognition include excess tax benefit in respect of share-based compensation, finalizing audit examinations for open tax years, statute of limitations expiration, or a change in tax law.
Deferred income tax assets and liabilities are recognized for future income tax consequences attributable to differences between the financial statement carrying amounts for existing assets and liabilities and their respective tax bases. A valuation allowance is recorded to reduce deferred income tax assets to an amount that in management's opinion will ultimately be realized. We have reviewed our material deferred tax assets to determine whether or not a valuation allowance was necessary. Based on evaluation of both the positive and negative evidence available, management determined that it was necessary to continue to maintain a valuation allowance against nearly all of its net U.S. and U.K. deferred tax assets as of October 2, 2025. The net valuation allowance increased by $393.3 million in the U.S. and increased by $109.2 million in the U.K. for the nine months ended October 2, 2025.
The income tax provision for the nine months ended October 2, 2025 includes $26.2 million for federal taxes, ($1.7) million for state taxes, and $5.2 million for foreign taxes. The income tax provision for the nine months ended September 26, 2024 includes $2.5 million for federal taxes, $2.0 million for state taxes, and $11.4 million for foreign taxes. The effective tax rate for the nine months ended October 2, 2025 is (1.53%) as compared to the (1.07%) for the same period in the prior year. As we are reporting a pre-tax loss for the nine months ended October 2, 2025, an increase in the effective tax rate results in an increase of income tax benefits, while a decrease in the rate results in a reduction of income tax benefits.
The decrease from the U.S. statutory tax rate is attributable primarily to valuation allowances on deferred tax assets.
Merger Agreement. Other than transaction expenses associated with the Merger of $72.1 million, the Merger Agreement did not affect the Company's consolidated financial statements for the nine months ended October 2, 2025. Transaction expenses associated with the Merger were $46.8 million for the same period in the prior year.
Segments. The following tables show segment revenues and operating loss for the nine months ended October 2, 2025 and September 26, 2024:
| Nine Months Ended October 2, 2025 |
Commercial
|
Defense & Space
|
Aftermarket
|
Corporate and Other
|
Consolidated
|
||||||||||||
|
($ in millions)
|
|||||||||||||||||
|
Net revenues
|
$ | 3,598.0 | $ | 831.1 | $ | 313.2 | $ | - | $ | 4,742.3 | |||||||
|
Cost of sales
|
(4,790.9) | (838.3) | (279.1) | - | (5,908.3) | ||||||||||||
|
Excess capacity costs
|
(119.6) | (26.5) | - | - | (146.1) | ||||||||||||
| Segment operating (loss) income | $ | (1,312.5) | $ | (33.7) | $ | 34.1 | $ | - | $ | (1,312.1) | |||||||
|
Selling, general and administrative
|
- | - | - | (239.6) | (239.6) | ||||||||||||
|
Research and development
|
- | - | - | (36.0) | (36.0) | ||||||||||||
|
Loss on dispositions of businesses, net (1)
|
- | - | - | (26.6) | (26.6) | ||||||||||||
| Operating (loss) income | $ | (1,312.5) | $ | (33.7) | $ | 34.1 | $ | (302.2) | $ | (1,614.3) | |||||||
|
Interest expense and financing fee amortization
|
- | - | - | (293.4) | (293.4) | ||||||||||||
| Other expense, net | - | - | - | (29.9) | (29.9) | ||||||||||||
| (Loss) income before income taxes and equity in net loss of affiliates | $ | (1,312.5) | $ | (33.7) | $ | 34.1 | $ | (625.5) | $ | (1,937.6) | |||||||
| Nine Months Ended September 26, 2024 |
Commercial
|
Defense & Space
|
Aftermarket
|
Corporate and Other
|
Consolidated
|
||||||||||||
|
($ in millions)
|
|||||||||||||||||
|
Net revenues
|
$ | 3,662.3 | $ | 706.5 | $ | 296.5 | $ | - | $ | 4,665.3 | |||||||
|
Cost of sales
|
(4,581.4) | (603.3) | (253.1) | - | (5,437.8) | ||||||||||||
|
Excess capacity costs
|
(135.0) | (7.5) | - | - | (142.5) | ||||||||||||
| Segment gross (loss) profit | $ | (1,054.1) | $ | 95.7 | $ | 43.4 | $ | - | $ | (915.0) | |||||||
|
Restructuring costs
|
(0.7) | - | - | - | (0.7) | ||||||||||||
| Segment operating (loss) income | $ | (1,054.8) | $ | 95.7 | $ | 43.4 | $ | - | $ | (915.7) | |||||||
|
Selling, general and administrative
|
- | - | - | (258.9) | (258.9) | ||||||||||||
|
Research and development
|
- | - | - | (34.4) | (34.4) | ||||||||||||
| Operating (loss) income | $ | (1,054.8) | $ | 95.7 | $ | 43.4 | $ | (293.3) | $ | (1,209.0) | |||||||
|
Interest expense and financing fee amortization
|
- | - | - | (253.3) | (253.3) | ||||||||||||
| Other expense, net | - | - | - | (30.3) | (30.3) | ||||||||||||
| (Loss) income before income taxes and equity in net income of affiliates | $ | (1,054.8) | $ | 95.7 | $ | 43.4 | $ | (576.9) | $ | (1,492.6) | |||||||
(1)During the nine months ended October 2, 2025, the Company completed the sale of its wholly owned subsidiary, Fiber Materials, Inc., and sold its equity in a Chinese joint venture, resulting in net gains of $81.2 million and $1.8 million, respectively. In the second quarter of 2025, the Company also recorded a ($132.5) million loss for a valuation allowance on assets held for sale in relation to the Company's Airbus Business but reversed that charge in the third quarter of 2025 due to deterioration of the balance sheet. In the third quarter of 2025, the Company recorded a ($109.6) million loss for a valuation allowance on assets held for sale in relation to the Company's Malaysia Business. These dispositions resulted in a net loss of $26.6 million reflected within (Gain) loss on dispositions of businesses, net in the Condensed Consolidated Statement of Operations for the nine months ended October 2, 2025. See Note 26 Dispositionsto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for additional information.
Commercial segment, Defense & Space segment, and Aftermarket segment represented approximately 76%, 18%, and 7%, respectively, of our net revenues for the nine months ended October 2, 2025, and approximately 79%, 15%, and 6%, respectively, of our net revenues for the nine months ended September 26, 2024.
Commercial segment. Commercial segment net revenues for the nine months ended October 2, 2025 were $3,598.0 million, a decrease of $64.3 million, or (2%), compared to the same period in the prior year. The decrease in revenues was primarily driven by the effect of lower margins on increased Boeing production and lower production on regional jet programs, partially offset by increased production on Airbus programs.
Commercial segment operating margins were (36%) for the nine months ended October 2, 2025, compared to (29%) for the same period in the prior year. The decrease in margin, compared to the same period in the prior year, was primarily driven by higher forward losses and lower margins for the Boeing programs, partially offset by lower cumulative catch-up adjustments and lower excess capacity production costs. For the nine months ended October 2, 2025, the Commercial segment includes $119.6 million of excess capacity production costs, compared with excess capacity production costs of $135.0 million and $0.7 million of restructuring costs for the same period in the prior year. For the nine months ended October 2, 2025, the segment recorded unfavorable cumulative catch-up adjustments of $25.3 million and net forward loss charges of $1,032.6 million. In comparison, for the nine months ended September 26, 2024, the segment recorded unfavorable cumulative catch-up adjustments of $89.0 million and net forward loss charges of $918.9 million.
Defense & Space segment. Defense & Space segment net revenues for the nine months ended October 2, 2025 were $831.1 million, an increase of $124.6 million, or 18%, compared to the same period in the prior year. The increase in revenues was primarily driven by higher production on the Sikorsky CH-53K as well as increased revenue on P-8 units under the Boeing B737 program, the contracts for which include units produced for the Boeing P-8 program that are accounted for in the Defense & Space segment.
Defense & Space segment operating margins were (4%) for the nine months ended October 2, 2025, compared to 14% for the same period in the prior year. The decrease in margin, compared to the same period the prior year, was primarily driven by forward losses recorded on the P-8, KC-46 Tanker and KC-135 programs as well as higher excess capacity charges, partially offset by higher revenues and margin on Sikorsky CH-53K. For the nine months ended October 2, 2025, the Defense & Space segment includes $26.5 million of excess capacity production costs, compared to excess capacity production costs of $7.5 million for the same period in the prior year. For the nine months ended October 2, 2025, the segment recorded favorable cumulative catch-up adjustments of $0.7 million and net forward loss charges of $65.4 million. In comparison, for the nine months ended September 26, 2024, the segment recorded favorable cumulative catch-up adjustments of $10.9 million and net forward loss charges of $7.2 million.
Aftermarket segment. Aftermarket segment net revenues for the nine months ended October 2, 2025 were $313.2 million, an increase of $16.7 million, or 6%, compared to the same period in the prior year. Aftermarket segment operating margins were 11% for the nine months ended October 2, 2025, compared to 15% for the same period in the prior year. The decrease in margin, compared to the same period in the prior year, was primarily driven by the impact of the mix of spares sales with lower margins in the current year.
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing, and financing activities. Our principal sources of liquidity are operating cash flows from continuing operations and borrowings to finance our business operations. Our operating cash flows from continuing operations have been adversely impacted by, among other things, the B737 MAX grounding, the COVID-19 pandemic,production rate changes for the B737 MAX program and other programs, the impact of inflation on labor and supply chain costs, supply chain disruptions, and labor shortages affecting our business. We expect those adverse impacts to continue for 2025 and beyond. For purposes of assessing our liquidity needs in this section, we have assumed that Boeing would not further reduce the B737 MAX production rate and that other customers generally would not further reduce their production rates. For risks that may affect that assumption, see Item 1A "Risk Factors." in the 2024 Form 10-K.
These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) on a going concern basis, which assumes the Company will be able to continue as a going concern and contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists. We have incurred net losses of $1,968.2 million, $2,139.8 million, $616.2 million, and $545.7 million, for the nine months ended October 2, 2025, and the years ended December 31, 2024, 2023, and 2022, respectively, and cash used in operating activities of $750.4 million, $1,120.9 million, $225.8 million, and $394.6 million, respectively for the same periods. As of October 2, 2025, our debt balance was $4,338.6 million, including $690.9 million of debt classified as short-term. Our cash and cash equivalents were $299.0 million and $537.0 million as of October 2, 2025, and December 31, 2024, respectively. The Company will require additional liquidity to continue its operations over the next 12 months.
Further, certain changes made to the production and delivery process implemented by Boeing have had an immediate impact on our results of operations and cash flows. On March 2, 2024, Boeing announced they would no longer accept deliveries of product that required out of sequence assembly or incremental quality re-work. As a result, during most of 2024 we experienced higher levels of inventory and contract assets and lower operational cash flows due to the inability to physically ship and invoice end items to Boeing in a timeframe aligned with production activities. Although our physical delivery rates have steadily increased since late 2024 such that we are increasingly able to reduce contract assets, we are still mitigating the lingering effects of such a significant change in production and delivery processes. Boeing's ability to increase production rates is governed by the FAA, and we cannot predict when or whether forecasted production rates will be achieved.
On April 18, 2024, we entered into a Memorandum of Agreement ("MOA") with Boeing, under which Boeing advanced $425.0 million to us to support our liquidity. This MOA was amended on June 20, 2024, to increase the advance by an additional $40.0 million and to revise certain repayment amounts and extend near-term repayment dates. As of the date of this filing, we have repaid $40.0 million of the MOA advances; however, the other amounts remain outstanding. The MOA was amended again on January 22, 2025 to reschedule the repayment dates to occur from April 2026 to September 2026. Additionally, the amendment added a provision whereby in the event the Merger Agreement is terminated, any advances then outstanding under the MOA would become due and payable on April 1, 2026.
Our ability to align our costs, including both internal and supply chain related spending, to react to unexpected changes in customer-determined production rates has had and will likely continue to have a material impact on our results of operations and cash flows. Our liquidity has been impacted by higher levels of inventory and contract assets, lower operational cash flows due to a decrease in expected deliveries to Boeing, higher factory costs to maintain rate readiness, and the limitations on Boeing increasing production rates.
Additionally, we were in negotiations with Airbus related to pricing adjustments on the A220 and A350 programs during 2023 and continuing into 2024 with a goal of completing those negotiations in early 2024. As a result of the announcement on March 1, 2024, that we were engaged in discussions with Boeing about a possible acquisition of the Company by Boeing, there was a shift in the strategic discussions with Airbus relevant to pricing adjustments on the A220 and A350 programs, most recently with a focus toward customer advances and other accommodations.
These developments in 2024 resulted in a significant reduction in projected revenue and operating cash flows over the next twelve months. Additionally, although the advances received in 2024 have provided essential operational liquidity, there can be no assurance that we will be able to obtain additional advances from our customers, repay current advances on the specified due dates, renegotiate the due date or otherwise obtain additional liquidity as needed under acceptable terms or at all. We will need to obtain additional funding to sustain operations, as we expect to continue generating operating losses for the foreseeable future. Accordingly, substantial doubt about the Company's ability to continue as a going concern exists.
Management has developed a plan designed to improve liquidity in response to the developments highlighted above. These plans are dependent upon many factors, including, among other things, the timing and expected proceeds received from certain divestitures, the expected timing and outcome of the transactions contemplated by the Merger Agreement and the Purchase Agreement, and achieving anticipated B737 deliveries. Management is also evaluating additional strategies intended to improve liquidity to support operations, including, but not limited to, additional customer advances and restructuring of operations in an effort to increase efficiency and decrease expenses, which may include layoffs or additional furloughs. However, there can be no assurance that these plans or strategies will sufficiently improve our liquidity needs or that we will otherwise realize the anticipated benefits. Accordingly, substantial doubt about the Company's ability to continue as a going concern exists. For additional information, please see Part I, Item 1A. Risk Factors, "We have incurred significant operating losses in the last few years and have identified conditions or events that raise substantial doubt about our ability to continue as a going concern" in the 2024 Form 10-K.
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
Purchase Agreement
On April 27, 2025, we entered into the Purchase Agreement. The Purchase Agreement contains customary covenants by us regarding the conduct of the Spirit Airbus Business prior to the Airbus Closing, including an obligation to run the Spirit Airbus Business in the ordinary course, subject to specified exceptions, and not to take specified actions with respect to the Spirit Airbus Business and its employees, subject to specified exceptions, without the prior consent of Airbus SE.
Merger Agreement
On June 30, 2024, we entered into the Merger Agreement. The Merger Agreement contains customary covenants by us regarding the conduct of our business prior to the closing of the Merger. In addition, pursuant to the Merger Agreement, we have agreed, subject to certain exceptions, not to take, authorize, agree or commit to do certain actions outside of the ordinary course of business, including incurring indebtedness (other than under existing credit facilities or to replace certain existing indebtedness maturing in 2025) or materially amending the terms of existing indebtedness, issuing equity, and disposing of significant assets. We do not believe that the restrictions in the Merger Agreement will prevent us from meeting our debt obligations, ongoing costs of operations, working capital needs or capital expenditure requirements.
Customer Advances
Advances on the B787 Program.Boeing has made advance payments to Spirit under the B787 Supply Agreement that are required to be repaid to Boeing by way of offset against the purchase price for future shipset deliveries. As of October 2, 2025, the amount of advance payments received by us from Boeing under the B787 Supply Agreement and not yet repaid was approximately $161.2 million.
Other. The Advance payments, long-term line item on the Condensed Consolidated Balance Sheets for the period ended October 2, 2025 includes $19.0 related to payments received from an Aftermarket segment customer for contracted work that was impacted by the sanctions imposed by the U.S. and other governments on Russia following its invasion of Ukraine.
See Note 12 Customer Advancesto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information.
Customer Financing
As described in the Form 8-K filed by us on November 12, 2024, on November 8, 2024, we entered into an advance payments agreement with Boeing to provide up to $350.0 million of cash advances for the sole purpose of producing and maintaining readiness to produce products as defined in existing contracts at the rates required by Boeing. These advances were intended to address Spirit's higher levels of inventory and contract assets, lower operational cash flows, decrease in expected deliveries to Boeing and higher factory costs to maintain rate readiness, attributed to product quality verification process enhancements (including moving such process from Renton, Washington, to Wichita, Kansas), the lingering effects of the 2024 strike by Boeing employees and limitations on Boeing increasing production rates. In the third quarter of 2025, we executed three separate amendments with Boeing to secure additional operational cash flows which aggregated in total to $120.0 million, all of which was received prior to the end of the third quarter As of October 2, 2025, we had $478.6 million outstanding under this advance agreement, including $8.6 million of capitalized interest.
The advance agreement requires Spirit to repay the advances to Boeing in accordance with the following payment schedule: 25% of the then-outstanding advances on each of April 30, 2026, June 30, 2026, and September 30, 2026, and the remaining balance of outstanding advances on December 31, 2026. The advances will bear an advance fee in an amount equal to 6.0% of the outstanding amount of the advances which will be paid on the fifteenth day of each calendar quarter, by capitalizing such fee and adding it to the outstanding amount of advances thereunder.
As described in the Form 8-K filed by us on April 23, 2024, on April 18, 2024, we entered into the MOA with Boeing providing for $425.0 million of cash advances, based upon our maintaining a production rate that supports Boeing's production demand in accordance with certain long-term supply agreements, all of which was received in the second quarter of 2024. The MOA was amended on June 20, 2024 to provide an additional $40.0 million cash advance which was received in the second quarter of 2024. The MOA was amended again on January 22, 2025 to reschedule the repayment dates to occur from April 2026 to September 2026. Additionally, the amendment added a provision whereby in the event the Merger Agreement is terminated, any advances then outstanding under the MOA would become due and payable on April 1, 2026.
Per the terms of the January 2025 amended MOA, repayments will be $75.0 million on April 1, 2026, $75.0 million on May 1, 2026, $75.0 million on June 1, 2026, $75.0 million on July 1, 2026, $75.0 million on August 1, 2026 and $50.0 million on September 1, 2026. Our repayment obligation will be accelerated, and any outstanding amount advanced under the agreement will immediately become due and payable, in the event that (i) we fail to make any repayment in full on the applicable repayment date, (ii) we fail to submit a satisfactory written confirmation that we are able to and intend to make the required repayment thirty days prior to each repayment date, as required under the agreement, (iii) we repudiate any performance obligation under the MOA or certain other of our existing agreements with Boeing, (iv) there occurs, either as to Spirit, Holdings or any of their respective subsidiaries, any of the events of default (generally relating to insolvency, reorganization, liquidation or similar proceedings, or to business suspension, dissolution or winding-up) described in specified
provisions of our existing agreements with Boeing. Under the January 2025 amended MOA, in the event that the Merger Agreement is terminated, the then outstanding advances under the MOA will become due and payable on April 1, 2026. These advances have been accounted for as financing cash flows. As of the date of this filing, we have repaid $40.0 million of the MOA advances.
As described in the Form 8-K filed by us on April 28, 2025, on April 23, 2025, effective April 22, 2025, Spirit, acting on its own behalf and on behalf of Spirit Europe, Short Brothers plc, and Spirit AeroSystems North Carolina, Inc. ("Spirit NC"), entered into a Memorandum of Agreement with Airbus S.A.S. (the "April 2025 Airbus MOA"), under which Airbus S.A.S. has agreed to, among other things, provide two non-interest bearing lines of credit to Spirit NC, each in the amount of $100.0 million, each of which will be used to support the continued production of specified Airbus programs. Under the terms of the April 2025 Airbus MOA, these amounts, and the related repayment obligations, will be directly or indirectly assumed by Airbus S.A.S. or one of its affiliates upon the Airbus Closing or, if earlier, repaid to Airbus on April 1, 2026. In the second quarter of 2025, we received $200.0 million under the April 2025 Airbus MOA in addition to $0.6 million related to an additional advance that is subject to the same terms and conditions. During the third quarter of 2025, we entered into four separate amendments of this MOA with Airbus to secure additional operational cash flows which aggregated in total to $59.0 million, all of which was received by the end of the third quarter of 2025. The total amount outstanding under this agreement at October 2, 2025 was $259.6 million.
In the third quarter of 2024, we received an advance payment from Airbus of $27.4 million under a Memorandum of Agreement between Airbus S.A.S. and Spirit NC, for up to $50.0 million related to certain program related expenditures. The remaining $22.6 million was received on October 2, 2024. This memorandum of agreement was amended on October 6, 2024 to include an additional $12.0 million for specified expenditures. This amount was received on October 8, 2024. It was amended again on November 8, 2024 to increase the funding capacity by $57.0 million. On December 18, 2024, Spirit received $20.0 million of the additional capacity with an additional $15.0 million received on January 31, 2025 and the remaining $15.0 million received in February 2025. On January 17, 2025, the second amended and restated agreement was amended to increase the funding capacity by $8.0 million which was received in January 2025. Per the terms of the amended memorandum of agreement, these amounts will be assumed by Airbus upon the Airbus Closing, or if earlier, repaid to Airbus on April 1, 2026. On July 11, 2025, we entered into a third amended and restated memorandum of agreement to the original 2024 Airbus MOA, under which Airbus S.A.S., directly or through its affiliates, extended certain financial assistance to the Supplier in respect of specified contracts under which Spirit and certain of its subsidiaries are suppliers to Airbus S.A.S. or affiliates of Airbus S.A.S. This third amendment and restatement restated and superseded the 2024 Airbus MOA. Under this amended and restated MOA, subject to the terms and conditions therein, Airbus S.A.S. has agreed to, among other things, provide an additional $94.0 million support package paid to the Supplier (for a total of $152.0 million), which shall be used solely and exclusively in relation to Airbus programs. In July 2025, we repaid $7.5 million related to the $8.0 million received as part of the second amended and restated agreement.
During the quarter ended March 28, 2024, we received an advance payment from Airbus of $17.0 million under a term sheet agreement between Airbus Canada Limited Partnership ("Airbus Canada") and Short Brothers plc (our facilities located in Belfast, Northern Ireland), for short term funding for increased freight costs incurred in the period from January to March 2024. The full amount of the advance is to be repaid per the terms of the Purchase Agreement.
During the quarter ended June 29, 2023, we received cash advances of $180.0 million from Boeing related to a memorandum of agreement with Boeing executed on April 28, 2023. The most recent amendment to this agreement was on January 22, 2025. Per the terms of the most recent amended memorandum of agreement, equal payments of $45.0 million are due in October, November and December of 2026 with the final $45.0 million payment due in December 2027. Our repayment obligation will be accelerated, and any outstanding amount advanced under the agreement will immediately become due and payable, in the event that (i) we fail to make any repayment in full on the applicable Repayment Date, (ii) we fail to submit a satisfactory written confirmation that we are able to and intend to make the required repayment thirty days prior to each Repayment Date, as required under the agreement, or (iii) we repudiate any performance obligation under the agreement or certain of our existing agreements with Boeing. Boeing will have the right to set off any unpaid amount due and payable under the memorandum of agreement from any amount owed to Boeing under any other agreement between the parties. Under the January 2025 amendment, in the event that the Merger Agreement is terminated, the then outstanding advances under this memorandum of agreement will become due and payable on April 1, 2026. As of October 2, 2025, $45.0 million is included in Customer financing, short-term while the remaining $135.0 million is included inCustomer financing, long-term line item on the Condensed Consolidated Balance Sheets. See Note 22 Customer Financing to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information.
Advances on the A350 Program. During the quarters ended June 29, 2023 and September 28, 2023, we received two equal advance payments from Airbus of $50.0 million each under an agreement between Airbus S.A.S. and Spirit AeroSystems (Europe) Limited ("Spirit Europe") signed on June 23, 2023 (the "A350 Agreement"). The A350 Agreement provided for up to
$100.0 million of advances that were originally required to be repaid along with a nominal fee to Airbus by way of offset against the purchase price of A350 FLE shipset deliveries in 2025. To the extent actual deliveries in 2025 were insufficient to offset the advance amount, any amount not offset against deliveries would have been due and payable to Airbus per the terms of the Purchase Agreement. However, per the terms of the Purchase Agreement, these payments will not be offset against deliveries but instead be due at the closing of the divestiture of the Airbus businesses. As of October 2, 2025, we had $102.5 million outstanding under this agreement, including $2.5 million of capitalized interest. Related to the A350 Agreement, Spirit Europe has pledged certain program assets including work in process inventories and raw materials at Spirit's Scotland facility in an amount sufficient to cover the advances. As the Airbus advance will be repaid to Airbus at the closing of the divestiture, those repayments will effectively reduce financing cash flow in 2025.
Operational Impacts of Alaska Airlines Incident
The B737 MAX 9 derivative fleet was temporarily grounded by the FAA while certain safety inspections were completed and to allow the FAA time to review any required maintenance actions following the January 5, 2024 in-flight incident on a B737 MAX 9 aircraft flown by Alaska Airlines. The B737 MAX 9 fleet returned to service on January 26, 2024 after mandatory inspections were completed. We are participating in investigations relating to this incident. As discussed in Item 1A. "Risk Factors" in our 2024 Form 10-K, we are currently unable to fully estimate what impact this incident, including any impacts of investigations, will have on our near or long-term financial position, results of operations and cash flows.
However, certain changes made to the production and delivery process implemented by Boeing have had an immediate impact to our results of operations and cash flows. On March 2, 2024, Boeing announced they would no longer accept deliveries of product that required out of sequence assembly or incremental quality re-work. A new product verification process was implemented by Boeing at our factory in Wichita, KS. As a result, we experienced higher levels of inventory and contract assets and lower operational cash flows due to the inability to physically ship and invoice end items to Boeing. Additionally, during late 2023 we began preparing our production line to accommodate an expected increase in production rates that has now been delayed due to the limitation on Boeing increasing its production rates. Our ability to align our factory costs, which include both internal and supply chain related spending to react to unexpected changes in customer-determined production rates, had a material impact on our results of operations and cash flows throughout 2024. In late 2024 through 2025, physical deliveries began to improve as we incorporated improvements to our production and quality systems which allowed us reduce contract assets and generate increasing amounts of cash.
Sales of Trade Accounts Receivable
We have agreements to sell, on a revolving basis, certain trade accounts receivable balances with Boeing, Airbus, and Rolls-Royce to third-party financial institutions. These programs were primarily entered into as a result of Boeing and Airbus seeking payment term extensions with us, and they continue to allow us to monetize the receivables prior to their payment date, subject to payment of a discount. Our ability to continue using such agreements is primarily dependent upon the strength of Boeing's, Airbus's, and Rolls-Royce's financial condition. If any of these financial institutions involved with these arrangements experiences financial difficulties, becomes unwilling to support Boeing, Airbus, or Rolls-Royce due to a deterioration in their financial condition or otherwise, or is otherwise unable to honor the terms of the factoring arrangements, we may experience significant disruption and potential liquidity issues, which could have an adverse impact upon our operating results, financial condition, and cash flows. For the nine months ended October 2, 2025, $814.9 million of accounts receivable were sold via these arrangements.
Cash Flows
The following table provides a summary of our cash flows for the nine months ended October 2, 2025 and September 26, 2024:
| For the Nine Months Ended | |||||||||||
| October 2, 2025 | September 26, 2024 | ||||||||||
| ($ in millions) | |||||||||||
| Net cash used in operating activities | $ | (750.4) | $ | (1,257.5) | |||||||
| Net cash provided by (used in) investing activities | 35.1 | (106.7) | |||||||||
| Net cash provided by financing activities | 506.0 | 764.8 | |||||||||
| Effect of exchange rate change on cash and cash equivalents | (2.8) | 0.3 | |||||||||
| Net decrease in cash, cash equivalents, and restricted cash for the period | (212.1) | (599.1) | |||||||||
| Cash, cash equivalents, and restricted cash beginning of period | 566.5 | 845.9 | |||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 354.4 | $ | 246.8 | |||||||
Nine Months Ended October 2, 2025as Compared to Nine Months Ended September 26, 2024
Operating Activities.For the nine months ended October 2, 2025, we had a net cash outflow of $750.4 million from operating activities, a decrease in net cash outflow of $507.1 million compared to a net cash outflow of $1,257.5 million for the same period in the prior year. The decrease in net cash outflow, period over period, primarily representsthe collection of cash through the reduction in contract assets due to improved production flow and physical deliveries to Boeing.
Investing Activities.For the nine months ended October 2, 2025, we had a net cash inflow of $35.1 million for investing activities, an increase in net cash inflow of $141.8 million compared to a net cash outflow of $106.7 million for the same period in the prior year. The cash flows for investing activities in the current period were driven by the receipts from the sale of the FMI and Chinese joint venture businesses, partially offset by increased capital expenditures.
Financing Activities.For the nine months ended October 2, 2025, we had a net cash inflow of $506.0 million for financing activities, a decrease in net cash inflow of $258.8 million, compared to a net cash inflow of $764.8 million for the same period in the prior year. The decrease in net cash inflow was primarily driven by the prior borrowing of $350 million under the Bridge Credit Agreement partially offset by higher receipts from customer financing as compared to prior year.During the nine month periods ended October 2, 2025 and September 26, 2024, we did not pay any dividends. There were no repurchases of Holdings Common Stock under our share repurchase program during either the nine months ended October 2, 2025 or September 26, 2024.
Pension and Other Post-Retirement Benefit Obligations
Effective October 1, 2021, we spun off a portion of the existing Pension Value Plan ("PVP A"), to a new plan called PVP B ("PVP B"). As part of the PVP B plan termination process, a lump sum offering was provided during 2021 for PVP B participants and the final asset distribution was completed in the first quarter of 2022. At October 2, 2025 and December 31, 2023, an excess pension plan asset reversion of $6.4 million and $41.2 million, respectively, is recorded on the Restricted plan assetsline item on the Company's Condensed Consolidated Balance Sheets. Restricted plan assetsare expected to be reduced over four years as they are distributed to employees under a qualified benefit program.
Separately, during the nine months ended September 28, 2023, we received an excess plan asset reversion of $179.5 million of cash from PVP A. This transaction was accounted for as a negative contribution and is included on the Pension plans employer contributionsline item on the Consolidated Statements of Cash Flows for the nine months ended September 28, 2023. Excise tax of $35.9 million related to the reversion of excess plan assets was separately recorded to the Other income (expense), net line item on the Consolidated Statements of Operations for the nine months ended September 28, 2023. See also Note 21 Other Income (Expense), Net to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information.
As disclosed in the Company's 2022 Form 10-K, in July 2022, the Company adopted and communicated to participants a plan to terminate PVP A. In the first quarter of 2023, the Company recognized additional non-cash, pre-tax non-operating settlement accounting charges of $64.6 million related to the purchase of annuities for any participants not electing a lump-sum distribution.
Our U.S. pension plan remained fully funded at October 2, 2025. Our plan investments are broadly diversified, and we do not anticipate a near-term requirement to make cash contributions to our U.S. pension plan. See Note 16 Pension and Other Post-Retirement Benefits to our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information on the Company's pension plans. Other than the reversion of excess plan assets noted above, which was accounted for as a negative contribution, the Company's expected contributions for the current year have not significantly changed from those described in the Company's 2024 Form 10-K. The Shorts' Pension has been in a deficit position during recent years, and there is a risk that additional contributions will be required from the trustees or the U.K. Pension Regulator as described under Part I, Item 1A. "Risk Factors"of our 2024 Form 10-K.
Derivatives Accounted for as Hedges
Cash Flow Hedges - Foreign Currency Forward Contract
The Company has entered into a series of currency forward contracts, each designated as a cash flow hedge upon the date of execution, for the purpose of reducing the variability of cash flows and hedging against the foreign currency exposure for forecasted payroll, pension and vendor disbursements that are expected to be made in the British pound sterling at our operations located in Belfast, Northern Ireland. All outstanding foreign currency forward contracts were settled in August 2024. Since the forecasted transactions remain probable of occurring, the changes in the fair value of cash flow hedges recorded in AOCI will be recognized in earnings in the period in which the forecasted transactions impact earnings. Changes in the fair value of cash flow hedges are recorded in AOCI and recorded in earnings in the period in which the forecasted transactions impact earnings. The gain recognized in AOCI was $0.0 million for the nine months ended October 2, 2025. The final recognition of $0.9 million was recorded to earnings in the first quarter of 2025.
See Note 14 Derivative and Hedging Activitiesto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information.
Debt and Other Financing Arrangements
As of October 2, 2025, the outstanding balance of the senior secured Term Loan B Credit Agreement was $576.2 million and the carrying value was $568.5 million.
As of October 2, 2025, the outstanding balance of the Exchangeable 2028 Notes was $230.0 million and the carrying value was $224.8 million.
As of October 2, 2025, the outstanding balance of the 2026 Notes and 2028 Notes was $300.0 million and $700.0 million, respectively, and the carrying value was $299.7 million and$697.9 million, respectively.
As of October 2, 2025, the outstanding balance of the 2025 Notes, First Lien 2029 Notes, and Second Lien 2030 Noteswas $0.0 million, $900.0 million, and $1,200.0 million, respectively, and the carrying value was $0.0 million, $891.2 million, and $1,183.7 million, respectively.
On June 30, 2024, we entered into a Delayed-Draw Bridge Credit Agreement (the "Bridge Credit Agreement") with Morgan Stanley Senior Funding, Inc. as lender, as administrative agent and as collateral agent, which provides for a senior secured delayed-draw bridge term loan facility in an aggregate principal amount of $350.0 million. On July 18, 2024, August 15, 2024, and September 12, 2024, Spirit borrowed $200.0 million, $100.0 million, and $50.0 million, respectively, under the Bridge Credit Agreement. The Bridge Credit Agreement was amended and restated on June 25, 2025 (the "Amended and Restated Bridge Credit Agreement"). As of October 2, 2025, the outstanding balance of the Amended and Restated Bridge Credit Agreement was $350.9 million
See Note 15 Debtto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information.
Information Regarding Guarantors of Spirit's Notes Registered Under the Securities Act of 1933
Spirit's 2026 Notes are guaranteed by Spirit AeroSystems North Carolina, Inc., a wholly-owned subsidiary of Holdings ("Spirit NC"), and Holdings, and Spirit's 2028 Notes are guaranteed by Holdings. None of Spirit's notes are guaranteed by Spirit's or Holdings' other domestic subsidiaries or any foreign subsidiaries (together, the "Non-Guarantor Subsidiaries"). The Company consolidates each of Spirit and Spirit NC in its consolidated financial statements. Spirit and Spirit NC are both 100 percent-owned and controlled by Holdings. Holdings' guarantees of Spirit's indebtedness are full and unconditional, except that the guarantees may be automatically released and relieved upon satisfaction of the requirements for legal defeasance or covenant defeasance under the applicable indenture being met. Holdings' guarantees are also subject to a standard limitation which provides that the maximum amount guaranteed by Holdings will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws.
The guarantees of Holdings and Spirit NC with respect to Spirit's 2026 Notes are made on a joint and several basis. The guarantee of Spirit NC is not full and unconditional because Spirit NC can be automatically released and relieved of its obligations under certain circumstances, including if it no longer guarantees Spirit's credit facility. Like Holdings' guarantees, the guarantee of Spirit NC is subject to a standard limitation which provides that the maximum amount guaranteed by Spirit NC will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws.
All of the existing guarantees by Holdings and Spirit NC rank equally in right of payment with all of the guarantors' existing and future senior indebtedness. The secured indebtedness of Spirit (including guarantees of Spirit's existing and future secured indebtedness) will be effectively senior to guarantees of any unsecured indebtedness to the extent of the value of the assets securing such indebtedness. Future guarantees of subordinated indebtedness will rank junior to any existing and future senior indebtedness of the guarantors. The guarantees are structurally junior to any debt or obligations of non-guarantor subsidiaries, including all debt or obligations of subsidiaries that are released from their guarantees of the notes. As of October 2, 2025, indebtedness of our non-guarantor subsidiaries included $377.5 million of outstanding borrowings under intercompany agreements with guarantor subsidiaries and $11.3 million of finance leases of our non-guarantor subsidiaries. Based on our understanding of Rule 3-10 of Regulation S-X ("Rule 3-10"), we believe that Holdings' guarantees of Spirit's indebtedness comply with the conditions set forth in Rule 3-10, which enable us to present summarized financial information for Holdings, Spirit and Spirit NC, which is a consolidated guarantor subsidiary, in accordance with Rule 13-01 of Regulation S-X. The summarized financial information excludes information regarding the non-guarantor subsidiaries. In accordance with Rule 3-10, separate financial statements of the guarantor subsidiaries have not been presented. The following tables include summarized financial information of Spirit, Holdings, and Spirit NC (together, the "obligor group"). Investments in and equity in the earnings of the Non-Guarantor Subsidiaries, which are not a member of the obligor group, have been excluded. The summarized financial information of the obligor group is presented on a combined basis for Spirit and Holdings, and separately for Spirit NC, with intercompany balances and transactions between entities in the obligor group eliminated. The obligor group's amounts due from, amounts due to and transactions with Non-Guarantor Subsidiaries have been presented in separate line items, if they are material. There are no non-controlling interests in any of the obligor group entities.
| Summarized Statements of Income | Nine months ended October 2, 2025 | ||||||||||
| ($ millions) | Holdings and Spirit | Spirit NC | |||||||||
| Net Sales to unrelated parties | $ | 3,576.0 | $ | - | |||||||
| Net Sales to Non-Guarantor Subsidiaries | 0.6 | 38.7 | |||||||||
|
Gross (loss) profit on sales to unrelated parties
|
(1,018.7) | (0.5) | |||||||||
| Gross (loss) profit on sales to Non-Guarantor Subsidiaries | (14.5) | 1.3 | |||||||||
| Loss from continuing operations | (1,553.8) | 9.4 | |||||||||
| Net loss | $ | (1,553.8) | $ | 9.4 | |||||||
| Summarized Balance Sheets | Holdings and Spirit | Spirit NC | |||||||||||||||||||||
| ($ millions) | October 2, 2025 | December 31, 2024 | October 2, 2025 | December 31, 2024 | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 172.6 | $ | 381.3 | $ | - | $ | - | |||||||||||||||
| Receivables due from Non-Guarantor Subsidiaries | 128.1 | 161.7 | - | 18.3 | |||||||||||||||||||
| Receivables due from unrelated parties | 268.4 | 232.0 | - | - | |||||||||||||||||||
| Contract assets | 491.9 | 735.2 | - | - | |||||||||||||||||||
| Inventory, net | 954.3 | 1,092.5 | - | 164.0 | |||||||||||||||||||
|
Assets of business held for sale
|
34.1 | 100.6 | 394.8 | - | |||||||||||||||||||
| Other current assets | 25.7 | 30.8 | - | 0.4 | |||||||||||||||||||
| Total current assets | $ | 2,075.1 | $ | 2,734.1 | $ | 394.8 | $ | 182.7 | |||||||||||||||
| Loan receivable from Non-Guarantor Subsidiaries | 377.5 | 356.3 | - | - | |||||||||||||||||||
| Property, plant and equipment, net | 1,254.6 | 1,343.5 | - | 154.1 | |||||||||||||||||||
| Pension assets, net | 6.4 | 41.2 | - | - | |||||||||||||||||||
| Other non-current assets | 230.7 | 234.0 | - | 16.9 | |||||||||||||||||||
| Total non-current assets | $ | 1,869.2 | $ | 1,975.0 | $ | - | $ | 171.0 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Accounts payable to Non-Guarantor Subsidiaries | $ | 132.8 | $ | 132.8 | $ | - | $ | 6.6 | |||||||||||||||
| Accounts payable to unrelated parties | 772.4 | 728.1 | - | 50.6 | |||||||||||||||||||
| Accrued expenses | 378.6 | 349.4 | - | 3.5 | |||||||||||||||||||
| Current portion of long-term debt | 685.1 | 413.8 | - | 0.9 | |||||||||||||||||||
|
Customer financing, short-term
|
746.7 | 515.0 | - | - | |||||||||||||||||||
|
Liabilities of business held for sale
|
14.4 | 18.8 | 131.0 | - | |||||||||||||||||||
| Other current liabilities | 831.5 | 645.4 | - | 0.6 | |||||||||||||||||||
| Total current liabilities | $ | 3,561.5 | $ | 2,803.3 | $ | 131.0 | $ | 62.2 | |||||||||||||||
| Long-term debt | 3,645.5 | 3,961.1 | - | 2.5 | |||||||||||||||||||
| Contract liabilities, long-term | 153.8 | 177.4 | - | - | |||||||||||||||||||
| Forward loss provision, long-term | 732.1 | 497.5 | - | - | |||||||||||||||||||
|
Customer financing, long-term
|
336.9 | 290.0 | - | 12.0 | |||||||||||||||||||
| Other non-current liabilities | 404.3 | 342.5 | - | 15.3 | |||||||||||||||||||
| Total non-current liabilities | $ | 5,272.6 | $ | 5,268.5 | $ | - | $ | 29.8 | |||||||||||||||
Supply Chain Financing Applicable to Suppliers
We have provided our suppliers with access to a supply chain financing program through facilities with a third-party financing institution. The program allows suppliers to monetize the receivables prior to their payment date, subject to payment of a discount. Our suppliers' ability to continue using such agreements is primarily dependent upon the strength of our financial condition. During thenine months ended October 2, 2025, our financing institution adjusted their capacity resulting in a net increase in capacity under our existing supply chain financing program. While our suppliers' access to this supply chain financing program could be curtailed if our credit ratings are downgraded, we do not expect that changes in the availability of supply chain financing to our suppliers will have a significant impact on our liquidity.
The balance of confirmed obligations to suppliers who elected to participate in the supply chain financing program included in our accounts payable balance as of October 2, 2025and September 26, 2024 was $123.1 million and $116.9 million, respectively. Confirmed obligations to suppliers who elected to participate in the supply chain financing program increased by $46.3million and decreased by $38.7million during the nine-month periods ended October 2, 2025 and September 26, 2024, respectively. The changes in the current and prior periods are consistent with purchasing activity and the mix of various suppliers that have varying requirements for such financing. See Note 25 Supplier Financingto our condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report for more information.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
You should read the discussion of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes to the unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect our current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "aim," "anticipate," "believe," "could," "continue," "designed," "ensure," "estimate," "expect," "forecast," "goal," "intend," "may," "might," "model," "objective," "outlook," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," and other similar words, or phrases, or the negative thereof, unless the context requires otherwise. These statements reflect management's current views with respect to future events and are subject to risks and uncertainties, both known and unknown, including, but not limited to, those described in the "Risk Factors" sections of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 28, 2025 (the "2024 Form 10-K") and subsequent Quarterly Reports on Form 10-Q, including this Quarterly Report on Form 10-Q. Our actual results may vary materially from those anticipated in forward-looking statements. We caution investors not to place undue reliance on any forward-looking statements.
Important factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following:
•our ability to continue as a going concern and satisfy our liquidity needs, the success of our liquidity enhancement plans, operational and efficiency initiatives, our ability to access the capital and credit markets (including as a result of any contractual limitations, including under the Merger Agreement, the outcomes of discussions related to the timing or amounts of repayment for certain customer advances, and the costs and terms of any additional financing;
•the continued fragility of the global aerospace supply chain including our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components, including increases in energy, freight, and other raw material costs as a result of inflation or continued global inflationary pressures;
•our ability and our suppliers' ability and willingness to meet stringent delivery (including quality and timeliness) standards and accommodate changes in the build rates or model mix of aircraft under existing contractual commitments, including the ability or willingness to staff appropriately or expend capital for current production volumes and anticipated production volume increases;
•our ability to maintain continuing, uninterrupted production at our manufacturing facilities and our suppliers' facilities;
•our ability, and our suppliers' ability, to attract and retain the skilled work force necessary for production and development in an extremely competitive market;
•the effect of economic conditions, including increases in interest rates and inflation, on the demand for our and our customers' products and services, on the industries and markets in which we operate in the U.S. and globally, and on the global aerospace supply chain;
•the general effect of geopolitical conditions, including Russia's invasion of Ukraine and the resultant sanctions being imposed in response to the conflict, including any trade and transport restrictions;
•the conflict in the Middle East could impact certain suppliers' ability to continue production or make timely deliveries of supplies required to produce and timely deliver our products, and may result in sanctions being imposed in response to the conflict, including trade and transport restrictions;
•our relationships with the unions representing many of our employees, including our ability to successfully negotiate new agreements, and avoid labor disputes and work stoppages with respect to our union-represented employees;
•the impact of significant health events, such as pandemics, contagions or other public health emergencies or fear of such events, on the demand for our and our customers' products and services, and on the industries and markets in which we operate in the U.S. and globally;
•the timing and conditions surrounding the full worldwide return to service (including receiving the remaining regulatory approvals) of the B737 MAX, future demand for the aircraft, and any residual impacts of the B737 MAX grounding on production rates for the aircraft;
•our reliance on Boeing and Airbus SE and its affiliates for a significant portion of our revenues;
•the business condition and liquidity of our customers and their ability to satisfy their contractual obligations to the Company;
•the certainty of our backlog, including the ability of customers to cancel or delay orders prior to shipment on short notice, and the potential impact of regulatory approvals of existing and derivative models;
•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;
•our accounting estimates for revenue and costs for our contracts and potential changes to those estimates;
•our ability to continue to grow and diversify our business, execute our growth strategy, and secure replacement programs, including our ability to enter into profitable supply arrangements with additional customers;
•the outcome of product warranty or defective product claims and the impact settlement of such claims may have on our accounting assumptions;
•competitive conditions in the markets in which we operate, including in-sourcing by commercial aerospace original equipment manufacturers;
•our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing, Airbus SE and its affiliates and other customers;
•the possibility that our cash flows may not be adequate for our additional capital needs;
•any reduction in our credit ratings;
•our ability to avoid or recover from cyber or other security attacks and other operations disruptions;
•legislative or regulatory actions, both domestic and foreign, impacting our operations, including the effect of changes in tax laws and rates and our ability to accurately calculate and estimate the effect of such changes;
•spending by the U.S. and other governments on defense;
•pension plan assumptions and future contributions;
•the effectiveness of our internal control over financial reporting;
•the outcome or impact of ongoing or future litigation, arbitration, claims, and regulatory actions or investigations, including our exposure to potential product liability and warranty claims;
•adequacy of our insurance coverage;
•our ability to continue selling certain receivables through our receivables financing programs;
•our ability to effectively integrate recent acquisitions, along with other acquisitions 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;
•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, the impact of trade disputes and changes to trade policies, including the imposition of new or increased tariffs, retaliatory tariffs or other trade restrictions; and
•risks and uncertainties relating to the Merger and the Airbus Transactions (together with the Merger, the "Transactions"), including, among others, the possible inability of the parties to a Transaction to obtain the required regulatory approvals for such Transaction and to satisfy the other conditions to the closing of such Transaction on a timely basis or at all; the possible occurrence of events that may give rise to a right of one or more of the parties to the Merger Agreement or the Purchase Agreement to terminate such agreement; the risk that we are unable to consummate the Transactions on a timely basis or at all for any reason, including, without limitation, failure to obtain the required regulatory approvals, or failure to satisfy other conditions to the closing of either of the Transactions; the potential for the pendency of the Transactions or any failure to consummate the Transactions to adversely affect the market price of Holdings common stock or our financial performance or business relationships; risks relating to the value of Boeing common stock to be issued in the Merger; the possibility that the anticipated benefits of the Transactions cannot be realized in full or at all or may take longer to realize than expected; the possibility that costs or difficulties related to the integration of our operations with those of Boeing will be greater than expected; risks relating to significant transaction costs; the intended or actual tax treatment of the Transactions; litigation or other legal or regulatory action relating to the Transactions or otherwise relating to us or other parties to the Transactions instituted against us or such other parties or Holdings' or such other parties' respective directors and officers and the effect of the outcome of any such litigation or other legal or regulatory action; risks associated with contracts containing provisions that may be triggered by the Transactions; potential difficulties in retaining and hiring key personnel or arising in connection with labor disputes during the pendency of or following the Transactions; the risk of other Transaction-related disruptions to our business, including business plans and operations; the potential for the Transactions to divert the time and attention of management from ongoing business operations; the potential for contractual restrictions under the agreements relating to the Transactions to adversely affect our ability to pursue other business opportunities or strategic transactions; and competitors' responses to the Transactions.
These factors are not exhaustive, and it is not possible for us to predict all factors that could cause actual results to differ materially from those reflected in our forward-looking statements. These factors speak only as of the date hereof, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. As with any projection or forecast, these statements are inherently susceptible to uncertainty and changes in circumstances. Except to the extent required by law, we undertake no obligation to, and expressly disclaim any obligation to, publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You should review carefully the sections captioned "Risk Factors" in the 2024 Form 10-K and the Company's subsequent Quarterly Reports on Form 10-Q, including this Form 10-Q, for a more complete discussion of these and other factors that may affect our business.
Spirit AeroSystems Holdings Inc. published this content on October 31, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 31, 2025 at 20:27 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]