Company: SPR
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001364885-25-000011
Chunk: 111

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 1
Chunk 111
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 adverse effect on the Company’s long-term financial position or liquidity.  Customer and Vendor ClaimsThe Company receives, and is currently subject to, customer and vendor claims arising in the ordinary course of business, including, but not limited to, those related to product quality and late delivery. The Company accrues for matters when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, the Company takes into consideration multiple factors including without limitation its historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of an unfavorable outcome, and the severity of any potential loss. Any accruals deemed necessary are reevaluated at least quarterly and updated as matters progress over time.ContingenciesDuring the first three quarters of 2025, the Company updated its estimated cost to satisfy customer firm orders on the A350, A330, and A220 programs. Based on these estimates, and management’s evaluation of key macroeconomic assumptions including the probability that these performance obligations would be exercised, management determined that it is probable each of these programs' performance obligations will extend beyond the period of time for which the Company has recorded forward losses. The key drivers of the additional forward losses are foreign exchange rates, customer driven schedule changes, supply chain cost growth and production performance on the A350, A330 and A220 programs. As a result, the Company recorded incremental forward losses during the first three quarters of 2025 of $471.3 on the A350, A330 and A220 programs for production of expected firm orders through January 2030. Additional losses beyond what has been reserved could occur if there are unexpected changes to current assumptions in macroeconomic factors relevant to the Company's cost to complete all firm orders. As a result, while the Company does not believe incremental losses beyond those currently recorded are evident, it is reasonably possible one or more of these programs could be performed at a loss incremental to forward losses previously recorded for production outside of the timeframe or for orders that may be placed in addition to those assessed as of October 2, 2025 highlighted above. The Company continues to evaluate all options to reduce or eliminate recorded forward losses prospectively, including, but not limited to, continued active negotiations with its A220, A330 and A350 customer, regarding, among other things, elements of price.GuaranteesContingent liabilities in the form of letters of guarantee have been provided by the Company. Outstanding guarantees were $26.8 and $24.9 at October 2, 202