Company: SPR
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037839
Chunk: 106

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 106
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, the Company cannot estimate the maximum potential amount of future payments under these indemnities and therefore, no liability has been recorded.Service and Product Warranties and Extraordinary Rework Provisions for estimated expenses related to service and product warranties and certain extraordinary rework are evaluated on a quarterly basis. These costs are accrued and are recorded to unallocated cost of goods sold. These estimates are established using historical information on the nature, frequency, and average cost of warranty claims, including the experience of industry peers. In the case of new development products or new customers, the Company considers other factors including the experience of other entities in the same business and management judgment, among others. Service warranty and extraordinary work is reported in current liabilities and other liabilities on the Company’s Condensed Consolidated Balance Sheets. During the six months ended July 3, 2025, the Company updated its estimate related to a specific warranty issue involving parts affected by the titanium records and certifications that are alleged to have been counterfeited and has established a specific warranty reserve of $115.5 for that matter. The Company believes it has certain contractual rights related to recovery from suppliers and is aggressively pursuing these.The warranty balance presented in the table below includes unresolved warranty claims that are in dispute in regard to their value as well as their contractual liability. The Company estimated the total costs related to some of these claims; however, there is significant uncertainty surrounding the disposition of these disputed claims and as such, the ultimate determination of the provision’s adequacy requires significant management judgment. The amount of the specific provisions recorded against disputed warranty claims was $2.3 as of July 3, 2025 and December 31, 2024. These specific provisions represent the Company’s best estimate of probable warranty claims. Should the Company incur higher than expected warranty costs and/or discover new or additional information related to these warranty provisions, the Company may incur additional charges that exceed these recorded provisions. The Company utilized available information to make appropriate assessments, however the Company recognizes that data on actual claims experience is of limited duration and therefore, claims projections are subject to significant judgment. The amount of the reasonably possible disputed warranty claims in excess of the specific warranty provision was $3.4 as of July 3, 2025 and December 31, 2024. The following is a roll forward of the service warranty and extraordinary rework balance at July 3, 2025: Balance, December 31, 2024$86.7 Charges (release) to costs and expenses116.