Company: SPR
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001628280-25-009088
Chunk: 202

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 202
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4, revenue from over time contracts accounted for approximately $4,519.8 million of the Company’s $6,316.6 million revenues. For loss contracts, the Company establishes forward loss reserves for total estimated costs that are in excess of total estimated consideration.Auditing the Company’s estimate-at-completion process used in their revenue and profit recognition process is complex due to the judgment involved in evaluating the assumptions made by management to forecast the estimated cost to complete individual accounting contracts. For example, total cost estimates to satisfy the performance obligations reflect management’s assumptions about future labor and overhead efficiencies, program progress on various initiatives and program performance.  Changes in those assumptions can have a material effect on the previously recognized revenue and profit. These adjustments are recorded as cumulative catch-up adjustments.How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process including controls over management’s review of the estimated cost to complete accounting contracts.We also performed audit procedures that included, among others, testing the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used in management's estimate-at-completion analysis. Specifically, for estimates related to program costs and revenues, we (1) inspected contracts and related modifications with the Company’s customers and significant suppliers, (2) compared actual costs to costs estimated at completion, (3) inquired of contract management, program management and supplier management to evaluate the basis of assumptions used in the estimate at completion and to assess whether all contracts were provided for accounting analysis, and (4) inspected source documentation for customer claims. Finally, we involved EY specialists to perform an independent estimate-at-completion for certain programs and performed sensitivity analyses to determine the effect of changes in assumptions.  

/s/ Ernst & Young LLP 

We have served as the Company’s auditor since 2014.

Wichita, Kansas

February 28, 2025

83

Spirit AeroSystems Holdings, Inc.

Consolidated Statements of Operations

 For the Twelve Months Ended December 31,2024December 31,2023December 31,2022 ($ in millions, except per share data)Net revenues$6,316.6 $6,047.9 $5,029.6 Operating costs and expensesCost of sales7,689.0 5,841.7 4,981.0 Selling, general and administrative365.5 281.9 279.2 Restructuring costs