Company: SPR
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037839
Chunk: 15

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 15
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 same period in the prior year, a decrease in income of $24.7 million. The decrease in other income was primarily due to foreign currency losses of ($22.8) million recognized in the current period, versus gains of $0.8 million in the same period of the prior year, partially offset by a reduction in the loss on sale of accounts receivables. 

Provision for Income Taxes.  Our reported tax rate includes two principal components: an expected annual tax rate and discrete items resulting in additional provisions or benefits that are recorded in the quarter that an event arises. Events or items that could give rise to discrete recognition include excess tax benefit in respect of share-based compensation, finalizing audit examinations for open tax years, statute of limitations expiration, or a change in tax law.

Deferred income tax assets and liabilities are recognized for future income tax consequences attributable to differences between the financial statement carrying amounts for existing assets and liabilities and their respective tax bases. A valuation allowance is recorded to reduce deferred income tax assets to an amount that in management’s opinion will ultimately be realized. We have reviewed our material deferred tax assets to determine whether or not a valuation allowance was necessary. Based on evaluation of both the positive and negative evidence available, management determined that it was necessary to continue to maintain a valuation allowance against nearly all of its net U.S. and U.K. deferred tax assets as of July 3, 2025. The net valuation allowance was increased by $134.4 million in the U.S. and increased by $103.4 million in the U.K. for the three months ended July 3, 2025.

The income tax provision for the three months ended July 3, 2025 includes $23.2 million for federal taxes, $0.8 million for state taxes and $2.3 million for foreign taxes. The income tax provision for the three months ended June 27, 2024 includes $1.2 million for federal taxes, $0.5 million for state taxes and $0.4 million for foreign taxes. The effective tax rate for the three months ended July 3, 2025 is (4.36%) as compared to (0.50%) for the same period in 2024. As we are reporting a pre-tax loss for the three months ended July 3, 2025, an increase in the effective tax rate results in an increase of income tax benefits, while a decrease in the rate results in a reduction of income tax benefits.  

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