Company: SPR
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001364885-25-000011
Chunk: 155

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 1
Chunk 155
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, 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.

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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, 2025CommercialDefense