Company: SPR
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001628280-25-009088
Chunk: 142

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 142
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 ended December 31, 2023.

Commercial Segment.  Commercial segment net revenues for the twelve months ended December 31, 2024 were $4,927.4 million, an increase of $42.4 million, or 0.9%, compared to the same period in the prior year. The increase in revenue was primarily due to increased production on the B777, A350 and A320 programs in the current year period, partially offset by decreases in revenue on the B737, B767, B787 and Business Jet programs. The B787 revenues were lower as compared to prior year despite higher current year deliveries due to the reversal in 2023 of a previously recognized material right obligation of $154.6 million as a result of the 2023 MOA with Boeing. Commercial segment operating margins were (31%) for the twelve 

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months ended December 31, 2024, compared to 1% for the same period in the prior year. The decrease in margin, compared to the same period in the prior year, was driven by higher unfavorable changes in estimates recorded in the current period as the prior period included the reversal of $205.6 million of forward losses on the B787 as a result of the 2023 MOA. Higher excess capacity costs and the relative impact of greater forward losses on the A350, A220, RB3070, and B787 programs, and margin deterioration on the A320 program also drove the year-over-year deterioration. The twelve months ended December 31, 2024 include excess capacity production costs of $186.5 million related to temporary B737 MAX, and A220 production schedule changes, and $0.7 million related to restructuring costs. The twelve months ended December 31, 2023 include excess capacity production costs of $177.3 million related to temporary B737 MAX, A320 and A220 production schedule changes, $8.1 million related to the temporary production pause, and restructuring costs of $6.3 million. In 2024, the segment recorded unfavorable cumulative catch-up adjustments of $83.5 million and $1,328.9 million of net forward loss charges. Unfavorable cumulative catch-up adjustments were primarily recognized on the B737 MAX and B777 programs, reflective of increased supply chain, raw material, factory performance and other costs on the program. The 2024 forward loss charges were primarily driven by current production performance, and supply chain cost growth on the A350 and A220 programs, additional labor