Company: SPR
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037839
Chunk: 20

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 20
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 excess capacity charges, partially offset by lower cumulative catch-up adjustments and lower forward loss charges. In the six months ended July 3, 2025, we recognized $90.9 million of excess capacity costs driven by cost overruns and production schedule changes on the B737 MAX and A220 programs, compared to excess capacity production costs of $72.4 million in the same period of the prior year. In the six months ended July 3, 2025, the Company recorded $14.9 million of unfavorable cumulative catch-up adjustments related to periods prior to the six months ended July 3, 2025, and $512.8 million of net forward loss charges. The forward losses recorded in the six months ended July 3, 2025 were primarily driven by foreign exchange rates, schedule changes, current production performance and supply chain cost growth on the A350 and A220 programs, schedule changes, production cost and supply chain growth, which includes our latest estimate for tariffs on the B787 program, increased costs related to factory performance and supply chain cost growth, which includes our latest estimate for tariffs on the B767 program and supply chain cost estimates on the KC-135 program. In the six months ended June 27, 2024, we recorded $74.4 million of unfavorable cumulative catch-up adjustments related to periods prior to the six months ended June 27, 2024, and $708.9 million of net forward loss charges. The forward loss charges recorded in the six months ended June 27, 2024 were primarily driven by a change in strategic pricing conversations with our customer, Airbus, incremental orders Airbus secured, production performance, and supply chain cost growth on the A350 and A220 programs, schedule changes, additional labor and supply chain cost growth on the B787 program, and increased costs related to factory performance and supply chain cost growth on the B767 program.

SG&A and Research and Development.  SG&A expense was $34.0 million higher for the six months ended July 3, 2025, compared to the same period in the prior year. The variance was driven by the $23.2 million impairment charge for customer 

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relationship intangible assets related to Airbus recorded in the second quarter of 2025, increased purchased services for merger-related activities and certain employee retention-related expenditures outlined in the Merger Agreement of $13.1 million. Greater research and development activity drove research and development expense $2.7 million higher for the six months ended July 3,