Company: SPR
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001364885-25-000011
Chunk: 105

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 1
Chunk 105
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-based compensation, finalizing amounts in income tax returns filed, finalizing audit examinations for open tax years, expiration of statutes of limitations, and changes in tax law.   The (1.53%) effective tax rate for the nine months ended October 2, 2025 differs from the (1.07%) effective tax rate for the same period of 2024 primarily due to changes in the valuation allowances recorded on U.S. and U.K. deferred tax assets. As the Company is currently 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 Company’s federal audit is conducted under the Internal Revenue Service Compliance Assurance Process (“CAP”) program. The Company will continue to participate in the CAP program for 2021 through 2025. The CAP program’s objective is to resolve issues in a timely, contemporaneous manner and eliminate the need for a lengthy post-filing examination. The Company has an open tax audit in the Kingdom of Morocco for tax years ending prior to the Company’s ownership of the Moroccan legal entity. There are ongoing audits in other jurisdictions that are not material to the financial statements and the Company believes appropriate provisions for all outstanding tax issues have been made for all jurisdictions and years.The Company operated under a tax holiday in Malaysia which was effective through September 30, 2024. The tax holiday was conditional upon remaining in good standing with the Malaysia taxing authorities, having at least 20% value-add, and having at least 30% of employees with diploma/degree in science/technical discipline. The tax benefit impact of this holiday was $2.8 for 2024. The State of Kansas enacted new tax legislation during the second quarter of 2025. Included in this legislation were changes to move Kansas to single sales apportionment for years starting in 2027 and to provide for a deferred tax impact deduction if the imposition of the single sales apportionment factor results in a decrease in Kansas net deferred tax assets. Before the valuation allowance, this will have a material impact on the Company’s Kansas deferred tax assets and liabilities. After the valuation allowance, this will have an immaterial impact on the Company’s Kansas deferred tax assets and liabilities. This impact has been recorded to the financial statements for the nine months ended October 2, 2025. The Organization for Economic Co-operation and Development has issued Pillar Two model