Company: SPR
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001364885-25-000011
Chunk: 30

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 2
Chunk 30
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 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