Company: SPR
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037839
Chunk: 97

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 97
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ger Agreement. If the Merger is completed, the ESPP will be terminated. See Note 1 Organization, Basis of Interim Presentation and Recent Developments.

18. Income Taxes

    At interim periods, income tax related to ordinary income or loss is typically computed at an estimated annual effective tax rate (“AETR”), and income tax related to all other items is typically computed individually and recognized when the items occur (i.e., discretely). In the second quarter of 2025, the Company determined that a reliable estimate of the AETR for one of its non-U.S. subsidiaries could not be made, primarily due to the sensitivity of the estimated AETR to changes in forecasted pre-tax earnings in relation to significant permanent differences. As a result, the income tax provision for the six months ended July 3, 2025 was calculated based on 2025 year-to-date results for one subsidiary, and an estimate of the AETR, adjusted for discrete items, for all other entities.Deferred tax assets are periodically evaluated to determine their recoverability and whether a valuation allowance is necessary. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. When determining the amount of net deferred tax assets that are more likely than not to be realized, the Company assesses all available positive and negative evidence. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses.Based on these criteria and the relative weighting of both the positive and negative evidence available, and in particular the activity surrounding our prior earnings history, including the forward losses previously recognized in the U.S., the Company has recorded a valuation allowance against U.S. deferred tax assets. Increases in the valuation allowances recorded against U.S. deferred tax assets in the six months ended July 3, 2025 were $270.1. This is comprised of $0.0 related to other comprehensive income (“OCI”) and $270.1 from continuing operations. As of July 3, 2025, the total net U.S. deferred tax asset before the valuation allowance was $1,114.5 and the total net U.S. valuation allowance was $1,146.7. The net U.S. deferred tax liability after valuation allowances was $32.2.  The Company has determined a valuation allowance