Company: SPR
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001628280-25-021582
Chunk: 125

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-05-01
Form: 10-Q
Item: Part I, Item 1
Chunk 125
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 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 are insufficient to offset the advance amount, any amount not offset against deliveries will be due and payable to Airbus per the terms of the Purchase Agreement. 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. Based on the specific terms and conditions within the A350 Agreement, the $100.0 million of receipts was included within operating cash flows during the twelve months ended December 31, 2023. As the Airbus advance will be repaid through offset against shipset deliveries, those repayments will effectively reduce operating cash flow in 2025.

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 April 3, 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 April 3, 2025 includes $18.9 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 Advances to 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