Company: SPR
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001628280-25-009088
Chunk: 143

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 143
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 and supply chain cost growth on the B787 program, and increased costs related to factory performance on the B767 program. Unfavorable cumulative catch-up adjustments were primarily recognized on the B737 MAX program, reflective of increased production costs associated with changes implemented by Boeing in March 2024 to introduce a new product verification process in Wichita, KS on the B737 program. In comparison, during 2023, the segment recorded unfavorable cumulative catch-up adjustments of $45.6 million and $234.0 million of net forward loss charges. The 2023 forward loss charges were primarily driven by labor and production cost growth, higher supply chain costs, and schedule revisions on the A350 program and additional labor, the impact of the IAM agreement and supply chain cost growth on the B787 program, increased factory performance and supply chain costs on the B767, and higher production, labor and supply chain costs on the A220 program. The A320 program unfavorable cumulative catch-up adjustment was driven by production cost overruns experienced due to operational and supply chain disruptions, and foreign currency movements.

Defense & Space Segment.  Defense & Space segment net revenues for the twelve months ended December 31, 2024 were $975.2 million, an increase of $186.2 million, or 23.6%, compared to the same period in the prior year. The increase in revenue was primarily due to increased CH-53K and classified program revenues, partially offset by decreases in Boeing P-8 and KC-46 Tanker program production. Defense & Space segment operating margins were 10% for the twelve months ended December 31, 2024, compared to 6% for the same period in the prior year. The increase in margin was driven by the impact of additional revenues from higher activity on development programs, higher production on the Sikorsky CH-53K and progress on classified programs partially offset by forward losses recorded on the KC-46 Tanker and KC-135 programs, and decreased revenue on P-8 units under the Boeing B737 program, the contracts for which include units produced for the Boeing P-8 program that are accounted for in the Defense & Space segment. Additionally, we recognized non-recurring revenues on the FLRAA program associated with Spirit’s closeout of the program. The twelve months ended December 31, 2024 includes excess capacity production costs of $10.0 million related to the temporary B737 production schedule changes. The year ended December 31, 2023 includes excess capacity production costs of $