▪ Begun implementation of repairs to available units located at Spirit ▪ Based on preliminary financial assessment, disruptions and rework within Spirit's factory is expected to have a negative impact of $31 million to full-year gross profit, of which $17 million is reflected in Q1 financial results ▪ Additional costs are expected but cannot be reasonably estimated at this time ▪ Implementing additional protocols to reinforce our quality systems to prevent similar occurrences in the future SPIRIT AEROSYSTEM ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33160 Spirit AeroSystems Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware 20-2436320 ( ...

Spirit AeroSystems Holdings, Inc. (NYSE:SPR) Q4 2022 Earnings Conference Call February 7, 2023 11:00 AM ET Company Participants Aaron Hunt - Director, IR Tom Gentile - President and CEO Duane Hawkins - EVP and President, Defense & Space Division Mark Suchinski - SVP and CFO Conference Call Participants David Strauss - Barclays Cai von Rumohr - Cowen Sheila Kahyaoglu - Jefferies Ken Herbert - RBC Seth Seifman - JPMorgan George Shapiro - Shapiro Research Kristine Liwag - Morgan Stanley Michael Ciarmoli - Trui ...

Tom Gentile President and Chief Executive Officer 2021 ▪ Received $300 of tax refund in 2021 ▪ Repaid the 2019 Boeing 737 Advance of $123 in 2022 2022 significant cash items: ▪ Paid $123 for 737 advance repayment ▪ Received $27 of pension-related cash benefits, net of excise tax 6 | --- | --- | --- | --- | --- | --- | --- | |-------------------|-------|---------------|-------|-------|-------|----------------------------------------------------------------------------------| | | | Revenue \n11% | | | | | | | ...

Third Quarter 2022 Earnings Review Tom Gentile President and Chief Executive Officer Mark Suchinski Senior Vice President and Chief Financial Officer November 3, 2022 spiritaero.com Revenue $ millions | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------------------------------------------------------------------------| | | | | | | | | 30% | | ▪ | Increased aftermarket activity | | | | | ▪ | Overall deliveries increased to 316 | | | | | | shipsets compared to 248 in Q3 2021 ▪ 69 737 ships ...

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $1.3 billion, up 30% year-over-year, primarily due to higher production on the 737 program and increased Aftermarket revenue [25][24] - Gross margins were the highest reported since the pandemic began, with operating margins slightly positive compared to negative 16% in Q3 2021 [28][24] - Adjusted EPS was negative $0.15, an improvement from negative $1.13 in the same period last year [27] Business Line Data and Key Metrics Changes - Commercial segment revenues increased 32% compared to 2021, with operating margin rising to positive 4% from negative 9% [40][41] - Defense & Space segment revenue grew by 17% with operating margins at just under 12%, driven by increased production and classified program activity [42][43] - Aftermarket segment revenues were up 38% compared to Q3 2021, with operating margins increasing to 24% [45][46] Market Data and Key Metrics Changes - Deliveries of narrowbody programs in Q3 2022 were 40% higher compared to 2021, totaling 226 units, while overall deliveries increased to 316 units from 248 in the same period last year [26] - The company continues to face challenges in the supply chain, labor shortages, and inflation, impacting production schedules and cash flow [22][24] Company Strategy and Development Direction - The company is focusing on cost optimization efforts to ensure profitability and cash flow positivity at a production rate of 31 aircraft per month [16][54] - Plans to diversify into Defense & Space and Aftermarket segments are gaining traction, with targets of $1 billion in Defense & Space revenue and $500 million in Aftermarket revenue by 2025 [19][20] - The company is exploring refinancing options to provide additional financial cushion amid an uncertain economic environment [55] Management's Comments on Operating Environment and Future Outlook - Management noted that global air traffic demand is recovering but remains complicated by pandemic impacts and supply chain fragility [8][9] - The expectation is that challenges such as schedule changes, part shortages, and inflation will continue into 2023 [53][22] - The company aims to achieve a target of 300 deliveries for the 737 in 2022, with a focus on starting 2023 in a stronger position [15][16] Other Important Information - The company ended Q3 2022 with $671 million in cash and $3.8 billion in debt, indicating a need for careful financial management moving forward [37] - The termination of the U.S. Pension Plan Value A is expected to result in a cash reversion of $120 million to $150 million in 2023 [32][38] Q&A Session Summary Question: What are the expectations for Q4 free cash flow? - Management indicated that Q4 cash flow will depend heavily on deliveries, particularly of the 737 MAX, with a target of 100 deliveries [61][62] Question: Will free cash flow be positive next year without the pension cash reversion? - Management confirmed that they expect to be free cash flow positive even without the pension cash reversion [65][66] Question: What caused the recent changes in production rate assumptions? - Management explained that changes were due to greater clarity from Boeing regarding their outlook and adjustments made by Airbus [75][78] Question: What challenges exist in achieving the target of 100 737 deliveries in Q4? - Management acknowledged that while the target is aggressive, improvements in staffing and stabilization of part shortages provide confidence in meeting the goal [88][90] Question: How will cost reduction efforts be balanced with potential future production increases? - Management emphasized the need to align costs with production levels and ensure that cost-cutting measures do not hinder the ability to meet customer demands [98][100]

Financial Performance - Revenue increased due to higher production deliveries on 737, increased aftermarket activity, and overall deliveries increased to 318 shipsets compared to 235 in Q2 2021[4] - Commercial segment revenue increased by 28%[14] - Aftermarket segment revenue increased significantly by 42%[21] - Defense & Space segment revenue increased by 3%[17] - The company reported a GAAP diluted loss per share of ($1.17) for the three months ended June 30, 2022[29] - Adjusted diluted loss per share was ($1.21) for the three months ended June 30, 2022[29] - Free cash flow was ($79) million for the three months ended June 30, 2022[31] Operational Highlights - Overall deliveries increased to 318 shipsets in Q2 2022 compared to 235 in Q2 2021[4] - 71 737 shipsets were delivered in Q2 2022 compared to 35 in Q2 2021[4] - 147 A320 shipsets were delivered in Q2 2022 compared to 96 in Q2 2021[4] Strategic Initiatives - Settled repayable investment agreement with the U.K Department of Business, Energy and Industrial Strategy[2] - Selected by Boeing to support the B-52 Commercial Engine Replacement Program[2] - Awarded Shooting Star Cargo Module by Sierra Space[2] - Joined Airbus as a strategic partner to support the British-produced H175M for the U.K's New Medium Helicopter requirement[2]

Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $1.3 billion, up 26% from the same quarter last year, primarily due to higher production on the 737 and increased Aftermarket revenue [21][38] - Earnings per share (EPS) was negative $1.17, an improvement from negative $1.30 in Q2 2021; adjusted EPS was negative $1.21 compared to negative $0.31 in the same period last year [24][25] - Operating margin was negative 8%, down from 10% in Q2 2021, impacted by supply chain challenges and losses related to Russian sanctions [27][28] Business Line Data and Key Metrics Changes - Commercial revenue increased 28% compared to 2021, driven by higher production volumes on the 737, 777, and A220 programs, partially offset by lower production on the 787 and 747 programs [38] - Defense & Space revenue improved 3% compared to Q2 2021, due to increased production and development program activity [42] - Aftermarket revenues were up 42% compared to the same period in 2021, primarily due to higher spare part sales and maintenance activities [44] Market Data and Key Metrics Changes - Domestic air traffic has recovered to close to 2019 levels, with air traffic exceeding 2019 levels during the July 4th holiday weekend [7][8] - Spirit's backlog stands at $34 billion, with 85% attributed to narrowbody aircraft [8] Company Strategy and Development Direction - The company is focused on managing supply chain challenges and inflationary pressures while aiming to stabilize 737 MAX production rates [48] - Diversification efforts in the Defense & Space segment are progressing well, with additional work secured [49] - The Aftermarket segment is expected to continue revenue growth as aircraft utilization recovers [49] Management's Comments on Operating Environment and Future Outlook - Management acknowledges near-term pressures from supply chain issues, staffing shortages, and inflation but remains optimistic about the long-term recovery of the aerospace industry [19][20] - The company expects to deliver about 300 737 MAX units in 2022, down from previous expectations due to supply chain disruptions [11][93] Other Important Information - The company recorded a net charge of $28 million related to adjustments of certain assets and liabilities due to U.S. sanctions on Russia [14] - Free cash flow usage for Q2 2022 was $62 million, with expectations of $250 million to $300 million for the full year [33][35] Q&A Session Summary Question: Update on 787 program and FAA work - Management confirmed that all requested engineering analysis for the 787 has been submitted and they are working closely with Boeing to resolve outstanding issues [56][58] Question: Cash flow outlook for 2023 - Management indicated that cash flow generation in 2023 will depend on production rates, particularly for the 737 MAX, and they expect to be cash flow positive if production rates exceed breakeven levels [72][74] Question: Labor challenges and hiring process - Management noted that they have exhausted their recall list and are now hiring externally, with a solid staffing situation across various locations [81][83] Question: Clarification on MAX buffer and production rates - Management explained that the buffer has been reduced to 66 units and that they plan to maintain a permanent buffer of about 20 units while aligning production rates with Boeing [90][132] Question: Cash flow and working capital management - Management outlined five key levers for improving cash flow in the second half of the year, including stable 737 production rates and increased 787 deliveries [100][102]

Second Quarter 2022 Earnings Review Tom Gentile President and Chief Executive Officer Mark Suchinski Senior Vice President and Chief Financial Officer August 3, 2022 > spiritaero.com Recent Events ▪ Settled repayable investment agreement with the U.K. Department of Business, Energy and Industrial Strategy ▪ Participated in the Farnborough airshow, the first major airshow since 2019 ▪ Selected by Boeing to support the B-52 Commercial Engine Replacement Program ▪ Awarded Shooting Star Cargo Module by Sierra S ...

[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q) This section provides key filing details for Spirit AeroSystems Holdings, Inc.'s Form 10-Q for the quarter ended June 30, 2022 [Registrant Information](index=1&type=section&id=Registrant%20Information) Spirit AeroSystems Holdings, Inc. filed its Form 10-Q, detailing its corporate structure, NYSE listing under SPR, and status as a large accelerated filer - Spirit AeroSystems Holdings, Inc. is a Delaware corporation with headquarters in Wichita, Kansas[2](index=2&type=chunk) Class A Common Stock Listing | Title of each class | Trading symbol | Name of each exchange on which registered | | :------------------ | :------------- | :-------------------------------------- | | Class A common stock, par value $0.01 per share | SPR | New York Stock Exchange | - The registrant is a large accelerated filer and not a shell company[3](index=3&type=chunk) - As of July 20, 2022, **105,137,748 shares of Class A common stock** were outstanding[3](index=3&type=chunk) [PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the company [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the periods ended June 30, 2022 [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, operating costs, and net loss for the three and six months ended June 30, 2022 Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2022 ($ in millions) | Three Months Ended July 1, 2021 ($ in millions) | Six Months Ended June 30, 2022 ($ in millions) | Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------ | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | 1,257.9 | 1,002.1 | 2,432.6 | 1,902.9 | | Total operating costs and expenses | 1,362.6 | 1,099.8 | 2,579.5 | 2,126.5 | | Operating loss | (104.7) | (97.7) | (146.9) | (223.6) | | Net loss | (122.2) | (135.3) | (175.0) | (306.9) | | Basic Loss per share | (1.17) | (1.30) | (1.67) | (2.95) | | Diluted Loss per share | (1.17) | (1.30) | (1.67) | (2.95) | - Revenue increased by **$255.8 million (25.5%)** for the three months and **$529.7 million (27.8%)** for the six months ended June 30, 2022, year-over-year[10](index=10&type=chunk) - Net loss improved for both the three-month period (from **$135.3 million to $122.2 million**) and the six-month period (from **$306.9 million to $175.0 million**) year-over-year[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) This statement presents the net loss and other comprehensive income components, leading to total comprehensive loss Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) | Metric | Three Months Ended June 30, 2022 ($ in millions) | Three Months Ended July 1, 2021 ($ in millions) | Six Months Ended June 30, 2022 ($ in millions) | Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------ | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss | (122.2) | (135.3) | (175.0) | (306.9) | | Total other comprehensive (loss) gain | (41.7) | (2.1) | (59.3) | 2.0 | | Total comprehensive loss | (163.9) | (137.4) | (234.3) | (304.9) | - Total comprehensive loss for the six months ended June 30, 2022, was **$234.3 million**, an improvement from **$304.9 million** in the prior year, despite a larger 'Total other comprehensive loss' in the current period[13](index=13&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheets (Unaudited) | Asset/Liability/Equity | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | | :-------------------------------- | :---------------------------- | :-------------------------------- | | Cash and cash equivalents | 770.2 | 1,478.6 | | Total current assets | 3,211.6 | 3,806.0 | | Total assets | 6,989.3 | 7,737.3 | | Total current liabilities | 2,179.9 | 1,876.0 | | Long-term debt | 3,424.8 | 3,742.7 | | Total stockholders' equity | 225.4 | 448.3 | | Total liabilities and equity | 6,989.3 | 7,737.3 | - Cash and cash equivalents decreased significantly from **$1,478.6 million** at December 31, 2021, to **$770.2 million** at June 30, 2022[15](index=15&type=chunk) - Total stockholders' equity decreased from **$448.3 million to $225.4 million**, while total current liabilities increased from **$1,876.0 million to $2,179.9 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement details changes in stockholders' equity, including net losses, other comprehensive losses, and employee equity awards Changes in Stockholders' Equity (Unaudited) | Metric | Balance — December 31, 2021 ($ in millions) | Balance — June 30, 2022 ($ in millions) | | :-------------------------------- | :---------------------------------------- | :------------------------------------ | | Total Stockholders' Equity | 448.3 | 225.4 | | Net loss (Q1 2022) | (52.8) | (52.8) | | Net loss (Q2 2022) | (122.2) | (122.2) | | Other comprehensive loss (Q1 2022) | (17.6) | (17.6) | | Other comprehensive loss (Q2 2022) | (41.7) | (41.7) | | Employee equity awards (total) | 18.2 | 18.2 | | Dividends declared (total) | (2.2) | (2.2) | - Total stockholders' equity decreased from **$448.3 million** at December 31, 2021, to **$225.4 million** at June 30, 2022, primarily due to net losses and other comprehensive losses[17](index=17&type=chunk) - Cash dividends declared per common share were **$0.01** for the three months ended June 30, 2022 and July 1, 2021, and **$0.02** for the six months ended June 30, 2022 and July 1, 2021[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2022 Condensed Consolidated Statements of Cash Flows (Unaudited) | Activity | Six Months Ended June 30, 2022 ($ in millions) | Six Months Ended July 1, 2021 ($ in millions) | | :-------------------------------- | :--------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | (331.7) | (197.7) | | Net cash used in investing activities | (47.4) | (72.2) | | Net cash used in financing activities | (321.8) | (332.0) | | Net decrease in cash, cash equivalents, and restricted cash | (708.5) | (604.0) | | Cash, cash equivalents, and restricted cash, end of period | 789.9 | 1,289.1 | - Net cash used in operating activities increased to **$331.7 million** for the six months ended June 30, 2022, from **$197.7 million** in the prior year, primarily due to working capital growth associated with increased production[20](index=20&type=chunk)[256](index=256&type=chunk) - Net cash used in investing activities decreased to **$47.4 million** from **$72.2 million**, mainly due to the prior year acquisition of Applied Aerodynamics[20](index=20&type=chunk)[257](index=257&type=chunk) - Net cash used in financing activities slightly decreased to **$321.8 million** from **$332.0 million**, driven by differences in debt repayments[20](index=20&type=chunk)[258](index=258&type=chunk) [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization, Basis of Interim Presentation and Recent Developments](index=9&type=section&id=1.%20Organization,%20Basis%20of%20Interim%20Presentation%20and%20Recent%20Developments) This note details the company's business, interim financial statement basis, and recent developments including COVID-19 impacts and Russia sanctions - The Company provides manufacturing and design expertise for fuselage, propulsion, and wing products for aircraft OEMs and operators[25](index=25&type=chunk) - COVID-19 pandemic continues to have a significant negative impact on the aviation industry and the Company's business, with uncertain duration and recovery[31](index=31&type=chunk) - B737 MAX deliveries resumed in Q4 2020, with most regulators ungrounding the aircraft; China issued an airworthiness directive in December 2021[33](index=33&type=chunk) - Suspension of sanctioned activities relating to Russia resulted in a pre-tax loss of **$28.1 million** related to asset and liability adjustments in Q2 2022[34](index=34&type=chunk) [2. Adoption of New Accounting Standards](index=10&type=section&id=2.%20Adoption%20of%20New%20Accounting%20Standards) The company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, with no material impact on its financial statements - Adoption of ASU 2019-12, Simplifying the Accounting for Income Taxes, as of January 1, 2021, did not have a material impact on financial position or results of operations[35](index=35&type=chunk) [3. New Accounting Pronouncements](index=10&type=section&id=3.%20New%20Accounting%20Pronouncements) The company is evaluating ASU 2020-04 and preparing for ASU 2021-10, with no significant impact expected from the latter - The Company is evaluating ASU 2020-04, Reference Rate Reform, but has not yet applied its guidance to any contract modifications[36](index=36&type=chunk) - The Company is preparing for the initial application of ASU 2021-10, Government Assistance, for annual financial statements ending December 31, 2022, with no significant impact expected[37](index=37&type=chunk)[39](index=39&type=chunk) [4. Changes in Estimates](index=11&type=section&id=4.%20Changes%20in%20Estimates) Unfavorable changes in estimates totaled **$71.7 million** in Q2 2022, driven by forward loss charges and cumulative catch-up adjustments on key programs - Unfavorable changes in estimates totaled **$71.7 million** for Q2 2022, including **$63.7 million** in net forward loss charges and **$8.0 million** in unfavorable cumulative catch-up adjustments[41](index=41&type=chunk) - Forward losses in Q2 2022 were primarily due to increased cost estimates for B787 (production rate decreases, supply chain costs), A220 (supplier bankruptcy), and A350 (production schedule changes, labor, NRE/tooling costs)[42](index=42&type=chunk) - Unfavorable cumulative catch-up adjustments for Q2 2022 mainly related to B737 (production schedule changes, parts shortages, supply chain costs) and A320 (production cost overruns, material/freight/labor/overhead increases)[43](index=43&type=chunk) Changes in Estimates Summary | Changes in Estimates | For the Three Months Ended June 30, 2022 ($ in millions) | For the Three Months Ended July 1, 2021 ($ in millions) | For the Six Months Ended June 30, 2022 ($ in millions) | For the Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | | Total (Unfavorable) Favorable Cumulative Catch-up Adjustment | (8.0) | 9.9 | (24.4) | 0.1 | | Total Changes in Estimates (Forward Loss) on Loss Programs | (63.7) | (52.2) | (87.5) | (124.6) | | Total Change in Estimate | (71.7) | (42.3) | (111.9) | (124.5) | | EPS Impact (diluted per share) | (0.63) | (0.42) | (0.98) | (1.22) | [5. Accounts Receivable and Allowance for Credit Losses](index=12&type=section&id=5.%20Accounts%20Receivable%20and%20Allowance%20for%20Credit%20Losses) Accounts receivable, net, increased to **$581.3 million**, with **$1,309.6 million** monetized through sales arrangements with major customers Accounts Receivable, net | Metric | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | | :------------------------ | :---------------------------- | :-------------------------------- | | Trade receivables | 565.2 | 412.0 | | Other | 27.0 | 58.1 | | Less: allowance for credit losses | (10.9) | (8.5) | | Accounts receivable, net | 581.3 | 461.6 | - For the six months ended June 30, 2022, **$1,309.6 million** of accounts receivable were sold via arrangements with Boeing, Airbus, and Rolls-Royce, included in cash from operating activities[50](index=50&type=chunk) - The recorded net loss on sale of receivables was **$6.5 million** for the six months ended June 30, 2022[50](index=50&type=chunk) [6. Contract Assets and Contract Liabilities](index=13&type=section&id=6.%20Contract%20Assets%20and%20Contract%20Liabilities) Net contract assets increased to **$123.2 million**, reflecting higher over-time revenue recognition and decreased deferred revenues Net Contract Assets (Liabilities) | Metric | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | Change ($ in millions) | | :------------------------ | :---------------------------- | :-------------------------------- | :--------------------- | | Contract assets | 483.6 | 443.2 | 40.4 | | Contract liabilities | (360.4) | (387.0) | 26.6 | | Net contract assets (liabilities) | 123.2 | 56.2 | 67.0 | - The increase in contract assets reflects more over-time revenue recognition in relation to billed revenues[54](index=54&type=chunk) - The decrease in contract liabilities reflects less deferred revenues recorded in excess of revenue recognized[54](index=54&type=chunk) [7. Revenue Disaggregation and Outstanding Performance Obligations](index=14&type=section&id=7.%20Revenue%20Disaggregation%20and%20Outstanding%20Performance%20Obligations) Total revenue for the six months was **$2,432.6 million**, with significant unsatisfied performance obligations for 2022 and beyond Disaggregated Revenue by Satisfaction Method | Revenue Type | For the Three Months Ended June 30, 2022 ($ in millions) | For the Three Months Ended July 1, 2021 ($ in millions) | For the Six Months Ended June 30, 2022 ($ in millions) | For the Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | | Contracts with performance obligations satisfied over time | 933.0 | 763.2 | 1,762.7 | 1,412.4 | | Contracts with performance obligations satisfied at a point in time | 324.9 | 238.9 | 669.9 | 490.5 | | Total Revenue | 1,257.9 | 1,002.1 | 2,432.6 | 1,902.9 | Disaggregated Revenue by Major Customer | Customer | For the Three Months Ended June 30, 2022 ($ in millions) | For the Three Months Ended July 1, 2021 ($ in millions) | For the Six Months Ended June 30, 2022 ($ in millions) | For the Six Months Ended July 1, 2021 ($ in millions) | | :--------- | :------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | | Boeing | 762.2 | 561.8 | 1,409.4 | 1,029.7 | | Airbus | 281.1 | 244.6 | 585.0 | 476.2 | | Other | 214.6 | 195.7 | 438.2 | 397.0 | | Total Revenue | 1,257.9 | 1,002.1 | 2,432.6 | 1,902.9 | Unsatisfied Performance Obligations | Year | Unsatisfied performance obligations ($ in millions) | | :---------------- | :---------------------------------------- | | Remaining in 2022 | 2,119.3 | | 2023 | 4,237.6 | | 2024 | 4,062.5 | | 2025 and After | 708.8 | [8. Inventory](index=15&type=section&id=8.%20Inventory) Total inventory, net, decreased slightly to **$1,345.8 million**, with increased valuation reserves partly due to Russia sanctions Inventory, net | Inventory Component | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | | :------------------------ | :---------------------------- | :-------------------------------- | | Raw materials | 323.0 | 301.4 | | Work-in-process | 937.3 | 999.1 | | Finished goods | 60.9 | 56.9 | | Product inventory | 1,321.2 | 1,357.4 | | Capitalized pre-production | 24.6 | 25.2 | | Total inventory, net | 1,345.8 | 1,382.6 | - Product inventory is net of valuation reserves of **$87.2 million** at June 30, 2022, an increase from **$54.9 million** at December 31, 2021, partly due to impacts from the suspension of activities in Russia[63](index=63&type=chunk) - Cost of sales for the six months ended June 30, 2022, includes **$94.7 million** for excess capacity production costs and **$9.5 million** for abnormal costs related to temporary workforce adjustments[64](index=64&type=chunk) [9. Property, Plant and Equipment, net](index=16&type=section&id=9.%20Property,%20Plant%20and%20Equipment,%20net) Property, plant and equipment, net, decreased to **$2,260.9 million**, with **$71.3 million** in repair and maintenance costs incurred Property, Plant and Equipment, net | Asset Category | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | | :-------------------------- | :---------------------------- | :-------------------------------- | | Total | 5,061.2 | 5,040.4 | | Less: accumulated depreciation | (2,800.3) | (2,654.9) | | Property, plant and equipment, net | 2,260.9 | 2,385.5 | - Repair and maintenance costs were **$71.3 million** for the six months ended June 30, 2022[66](index=66&type=chunk) - Depreciation expense related to capitalized software was **$11.5 million** for the six months ended June 30, 2022[67](index=67&type=chunk) [10. Leases](index=16&type=section&id=10.%20Leases) The company reported total net lease cost of **$26.2 million**, with remaining lease liabilities of **$81.5 million** for operating and **$145.4 million** for finance leases Components of Lease Expense | Lease Cost Component | For the Six Months Ended June 30, 2022 ($ in millions) | For the Six Months Ended July 1, 2021 ($ in millions) | | :-------------------------- | :------------------------------------------------------- | :------------------------------------------------------ | | Operating lease cost | 6.6 | 5.0 | | Finance lease cost: Amortization of assets | 16.3 | 12.4 | | Finance lease cost: Interest on lease liabilities | 3.3 | 3.5 | | Total net lease cost | 26.2 | 20.9 | - Weighted average remaining lease term as of June 30, 2022, was **35.1 years** for operating leases and **4.6 years** for finance leases[77](index=77&type=chunk) Remaining Maturities of Lease Liabilities (as of June 30, 2022) | Lease Type | Total Lease Payments ($ in millions) | Less: Imputed Interest ($ in millions) | Total Lease Obligations ($ in millions) | | :--------------- | :----------------------------------- | :------------------------------------- | :------------------------------------ | | Operating Leases | 204.0 | (122.5) | 81.5 | | Financing Leases | 161.7 | (16.3) | 145.4 | [11. Other Assets, Goodwill, and Intangible Assets](index=18&type=section&id=11.%20Other%20Assets,%20Goodwill,%20and%20Intangible%20Assets) Other current assets decreased to **$31.4 million**, while goodwill remained stable and intangible assets, net, decreased to **$205.0 million** Other Current Assets | Asset Category | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | | :-------------------- | :---------------------------- | :-------------------------------- | | Prepaid expenses | 24.6 | 20.7 | | Income tax receivable | 1.0 | 14.0 | | Other assets - short-term | 5.8 | 5.0 | | Total other current assets | 31.4 | 39.7 | Goodwill by Segment (as of June 30, 2022) | Segment | Balance at December 31, 2021 ($ in millions) | Currency Exchange Adjustments/Other ($ in millions) | Balance at June 30, 2022 ($ in millions) | | :-------------- | :----------------------------------------- | :------------------------------------------------ | :--------------------------------------- | | Commercial | 296.8 | (0.3) | 296.5 | | Defense & Space | 5.5 | — | 5.5 | | Aftermarket | 321.4 | — | 321.4 | | Total | 623.7 | (0.3) | 623.4 | Intangible Assets, net | Intangible Asset | June 30, 2022 ($ in millions) | December 31, 2021 ($ in millions) | | :------------------------------------ | :---------------------------- | :-------------------------------- | | Total intangible assets | 232.0 | 232.0 | | Less: Accumulated amortization | (27.0) | (19.7) | | Intangible assets, net | 205.0 | 212.3 | - The weighted average amortization period for intangible assets is **14.8 years** as of June 30, 2022[83](index=83&type=chunk) [12. Advance Payments](index=20&type=section&id=12.%20Advance%20Payments) Outstanding advance payments from Boeing for B787 and B737 programs totaled **$211.2 million** and **$61.5 million**, respectively - Advance payments from Boeing for the B787 program not yet repaid totaled approximately **$211.2 million** as of June 30, 2022[86](index=86&type=chunk) - Advance payments from Boeing for the B737 program not yet repaid totaled **$61.5 million** as of June 30, 2022, after a **$61.5 million** repayment during the six-month period[87](index=87&type=chunk) - Advance payments, short-term, include **$18.9 million** related to an Aftermarket segment customer, impacted by sanctions on Russia[88](index=88&type=chunk) [13. Fair Value Measurements](index=20&type=section&id=13.%20Fair%20Value%20Measurements) Long-term debt had a carrying amount of **$3,571.7 million** and an estimated fair value of **$3,205.2 million** as of June 30, 2022 Carrying Amount and Estimated Fair Value of Long-Term Debt | Debt Type | June 30, 2022 Carrying Amount ($ in millions) | June 30, 2022 Fair Value ($ in millions) | December 31, 2021 Carrying Amount ($ in millions) | December 31, 2021 Fair Value ($ in millions) | | :------------------------------------ | :------------------------------------------ | :--------------------------------------- | :------------------------------------------ | :--------------------------------------- | | Senior secured term loan B | 592.8 | 578.0 | 595.2 | 595.2 | | Senior notes due 2023 | 299.5 | 281.1 | 299.3 | 303.6 | | Senior secured first lien notes due 2025 | 496.0 | 461.5 | 495.3 | 513.3 | | Senior secured second lien notes due 2025 | 1,189.2 | 1,110.2 | 1,187.5 | 1,252.4 | | Senior notes due 2026 | 298.6 | 255.7 | 298.4 | 307.5 | | Senior notes due 2028 | 695.6 | 518.7 | 695.2 | 697.4 | | Total | 3,571.7 | 3,205.2 | 3,570.9 | 3,669.4 | - Senior notes are classified as Level 1 Fair Value hierarchy, while the senior secured term loan B is Level 2[92](index=92&type=chunk) [14. Derivative and Hedging Activities](index=21&type=section&id=14.%20Derivative%20and%20Hedging%20Activities) The company uses foreign currency forward contracts as cash flow hedges, recognizing a **$17.0 million** loss in AOCI for the six months - The Company uses foreign currency forward contracts as cash flow hedges to reduce foreign currency exposure for forecasted British Pound Sterling disbursements through March 2023[96](index=96&type=chunk) Gain (Loss) Recognized in AOCI from Hedging Transactions | Metric | Three Months Ended June 30, 2022 ($ in millions) | Three Months Ended July 1, 2021 ($ in millions) | Six Months Ended June 30, 2022 ($ in millions) | Six Months Ended July 1, 2021 ($ in millions) | | :-------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Foreign currency exchange contracts | (13.1) | (0.5) | (17.0) | 0.7 | - Within the next 12 months, the Company expects to recognize a loss of **$13.3 million** in earnings related to foreign currency forward contracts[98](index=98&type=chunk) - For the six months ended June 30, 2022, the Company recorded a net gain of **$1.6 million** to other income from settled non-hedged foreign currency forward contracts[101](index=101&type=chunk) [15. Debt](index=23&type=section&id=15.%20Debt) Total debt was **$3,772.5 million** at June 30, 2022, including a senior secured term loan and various senior notes, with all debt covenants in compliance Total Debt (as of June 30, 2022) | Debt Type | Current ($ in millions) | Noncurrent ($ in millions) | | :-------------------------------- | :---------------------- | :------------------------- | | Senior secured term loan B | 5.9 | 586.9 | | Senior notes due 2023 | 299.5 | — | | Senior secured first lien notes due 2025 | — | 496.0 | | Senior secured second lien notes due 2025 | — | 1,189.2 | | Senior notes due 2026 | — | 298.6 | | Senior notes due 2028 | — | 695.6 | | Present value of finance lease obligations | 40.7 | 104.7 | | Other | 1.6 | 53.8 | | Total | 347.7 | 3,424.8 | - As of June 30, 2022, the outstanding balance of the Credit Agreement (Term Loan B) was **$595.5 million**, with a carrying value of **$592.8 million**[105](index=105&type=chunk) - The Company was in compliance with all covenants in the Credit Agreement and indentures governing its notes as of June 30, 2022[106](index=106&type=chunk)[116](index=116&type=chunk) [16. Pension and Other Post-Retirement Benefits](index=25&type=section&id=16.%20Pension%20and%20Other%20Post-Retirement%20Benefits) The company reported net periodic pension income of **$39.3 million**, with a **$70.3 million** pension reversion asset recorded after PVP B plan termination Components of Net Periodic Pension Expense (Income) | Metric | For the Six Months Ended June 30, 2022 ($ in millions) | For the Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------ | | Service cost | 1.2 | 21.7 | | Interest cost | 29.1 | 27.5 | | Expected return on plan assets | (70.3) | (79.0) | | Amortization of net loss | 2.1 | — | | Settlement loss | (1.4) | (0.1) | | Net periodic pension expense (income) | (39.3) | (29.9) | - A pension reversion asset of **$70.3 million** is recorded on the Restricted plan assets line item as of June 30, 2022, following the PVP B plan termination[119](index=119&type=chunk) - The Company withdrew **$34.0 million** cash from PVP B as an excess plan assets reversion, resulting in an excise tax of **$6.8 million** recorded in Other income (expense), net[120](index=120&type=chunk) [17. Stock Compensation](index=26&type=section&id=17.%20Stock%20Compensation) The company recognized **$18.3 million** in stock compensation expense for the six months, including various RSU grants - The Company recognized a net total of **$18.3 million** of stock compensation expense for the six months ended June 30, 2022[124](index=124&type=chunk) - During the six months ended June 30, 2022, **500,053 time or service-based RSUs** were granted with aggregate fair values of **$22.5 million**[125](index=125&type=chunk) - During the six months ended June 30, 2022, **284,653 performance-based RSUs (PBRSUs)** were granted with aggregate grant date fair value of **$22.0 million**[126](index=126&type=chunk) [18. Income Taxes](index=27&type=section&id=18.%20Income%20Taxes) An incremental valuation allowance of **$43.5 million** was recorded against U.S. deferred tax assets, resulting in a **7.67%** effective tax rate - An incremental valuation allowance of **$43.5 million** was recorded against U.S. deferred tax assets for the six months ended June 30, 2022, with the total net U.S. valuation allowance reaching **$339.7 million**[133](index=133&type=chunk) - Increases in valuation allowances against U.K. deferred tax assets totaled **$4.3 million** for the six months ended June 30, 2022[134](index=134&type=chunk) - The effective tax rate for the six months ended June 30, 2022, was **7.67%**, compared to **(2.44%)** for the same period in 2021, primarily due to the release of valuation allowance on U.K. deferred tax assets for projected U.K. group relief[137](index=137&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) [19. Equity](index=28&type=section&id=19.%20Equity) Basic and diluted loss per share improved to **$1.67**, while accumulated other comprehensive loss increased to **$83.0 million** Loss Per Share | Metric | For the Three Months Ended June 30, 2022 | For the Three Months Ended July 1, 2021 | For the Six Months Ended June 30, 2022 | For the Six Months Ended July 1, 2021 | | :-------------------------------- | :--------------------------------------- | :-------------------------------------- | :--------------------------------------- | :-------------------------------------- | | Basic Loss per share | (1.17) | (1.30) | (1.67) | (2.95) | | Diluted Loss per share | (1.17) | (1.30) | (1.67) | (2.95) | - The total authorization amount remaining under the current share repurchase program is approximately **$925.0 million**, but share repurchases are currently on hold due to Credit Agreement restrictions[144](index=144&type=chunk) Accumulated Other Comprehensive Loss | Component | As of June 30, 2022 ($ in millions) | As of December 31, 2021 ($ in millions) | | :------------------------------------ | :---------------------------------- | :------------------------------------ | | Pension | 30.0 | 26.6 | | SERP/Retiree medical | 11.3 | 12.1 | | Derivatives - foreign currency hedge | (13.3) | (2.0) | | Foreign currency impact on long-term intercompany loan | (16.2) | (12.2) | | Currency translation adjustment | (94.8) | (48.2) | | Total accumulated other comprehensive loss | (83.0) | (23.7) | [20. Commitments, Contingencies and Guarantees](index=29&type=section&id=20.%20Commitments,%20Contingencies%20and%20Guarantees) The company faces ongoing legal proceedings, including appeals of dismissed lawsuits and a **$44.8 million** liability for a former CEO's ruling - A consolidated securities class action lawsuit and shareholder derivative lawsuits were dismissed by the U.S. District Court on January 7, 2022, but the decision was appealed to the Tenth Circuit Court of Appeals on February 4, 2022[154](index=154&type=chunk) - A liability of **$44.8 million** plus accrued interest has been recognized for a court ruling in favor of a former Chief Executive Officer regarding withheld benefits, which is currently under appeal[155](index=155&type=chunk) - The Company cannot reasonably estimate the amount of potential claims related to B787 rework or a new product quality claim received on June 25, 2022, due to uncertainties[159](index=159&type=chunk)[160](index=160&type=chunk) Service Warranty and Extraordinary Rework Balance Roll Forward | Metric | Amount ($ in millions) | | :-------------------------- | :--------------------- | | Balance, December 31, 2021 | 71.3 | | Charges to costs and expenses | 0.8 | | Payouts | (1.7) | | Exchange rate | (0.6) | | Balance, June 30, 2022 | 69.8 | [21. Other Income (Expense), Net](index=32&type=section&id=21.%20Other%20Income%20(Expense),%20Net) Other income, net, increased to **$72.3 million**, driven by a **$20.7 million** gain on a repayable investment agreement and foreign currency gains Other Income (Expense), Net | Item | For the Three Months Ended June 30, 2022 ($ in millions) | For the Three Months Ended July 1, 2021 ($ in millions) | For the Six Months Ended June 30, 2022 ($ in millions) | For the Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | | Kansas Development Finance Authority bond | 0.7 | 0.7 | 1.3 | 1.6 | | Foreign currency (losses) gains | 12.3 | 1.4 | 27.2 | (7.5) | | Loss on foreign currency forward contract | (4.7) | — | (4.0) | — | | Loss on sale of accounts receivable | (4.1) | (1.4) | (6.5) | (3.0) | | Pension income | 17.9 | 26.4 | 41.3 | 52.5 | | Excise tax on pension assets reversion | (6.8) | — | (6.8) | — | | Other | 19.3 | 4.0 | 19.8 | 0.3 | | Total | 34.6 | 31.1 | 72.3 | 43.9 | - The six months ended June 30, 2022, includes a **$20.7 million** gain related to the full settlement of the repayable investment agreement with the U.K.'s Department for Business, Energy and Industrial Strategy[173](index=173&type=chunk) [22. Segment Information](index=32&type=section&id=22.%20Segment%20Information) Commercial segment revenues increased by **31%** to **$1,969.5 million**, with improved operating loss, while other segments maintained profitability - Approximately **82%** of net revenues for the six months ended June 30, 2022, came from Boeing and Airbus[174](index=174&type=chunk) Segment Revenues and Operating Income (Loss) | Segment | Three Months Ended June 30, 2022 ($ in millions) | Three Months Ended July 1, 2021 ($ in millions) | Six Months Ended June 30, 2022 ($ in millions) | Six Months Ended July 1, 2021 ($ in millions) | | :---------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | **Segment Revenues** | | | | | | Commercial | 1,031.1 | 803.6 | 1,969.5 | 1,499.7 | | Defense & Space | 146.4 | 141.8 | 304.9 | 295.2 | | Aftermarket | 80.4 | 56.7 | 158.2 | 108.0 | | **Segment Operating Income (Loss)** | | | | | | Commercial | (45.1) | (44.7) | (48.5) | (127.6) | | Defense & Space | 13.7 | 12.4 | 33.7 | 24.4 | | Aftermarket | 11.8 | 14.8 | 29.8 | 25.6 | | Total operating loss | (104.7) | (97.7) | (146.9) | (223.6) | - Commercial segment operating margins improved from **(9%) to (2%)** for the six months ended June 30, 2022, driven by lower excess capacity and restructuring costs, and increased B737 program sales[244](index=244&type=chunk) - Defense & Space segment operating margins increased from **8% to 11%** for the six months ended June 30, 2022, due to lower excess capacity, restructuring costs, and the AMJP grant[246](index=246&type=chunk) [23. Restructuring Costs](index=35&type=section&id=23.%20Restructuring%20Costs) Restructuring costs significantly decreased to **$0.2 million** for the six months, reflecting reduced cost-alignment activities - Total restructuring costs for the six months ended June 30, 2022, were **$0.2 million**, included in the Commercial Segment[189](index=189&type=chunk) - For the six months ended July 1, 2021, total restructuring costs were **$7.3 million**, primarily due to site closures[190](index=190&type=chunk) [24. Subsequent Events](index=35&type=section&id=24.%20Subsequent%20Events) The company plans to terminate Pension Value Plan A, expecting a **$74 million** non-cash charge and at least **$180 million** in settlement charges - In July 2022, the Company adopted a plan to terminate its Pension Value Plan A (PVP A)[191](index=191&type=chunk) - The Company expects to recognize a non-cash, pre-tax non-operating charge of approximately **$74 million** for increased periodic benefit costs in Q3 2022[191](index=191&type=chunk) - Non-cash pre-tax non-operating settlement charges of at least **$180 million** are expected due to accelerated recognition of actuarial losses, with finalization between Q3 2022 and Q1 2023[191](index=191&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses financial condition, results of operations, and impacts of COVID-19 and global events on key programs [COVID-19](index=36&type=section&id=COVID-19) The COVID-19 pandemic continues to significantly impact the aviation industry and the company's global business - The COVID-19 pandemic continues to significantly negatively impact the aviation industry, customers, and the Company's global business[194](index=194&type=chunk) - The Company cannot accurately predict the future impact of COVID-19, expecting business operations to improve only when customers produce aircraft at sufficient levels, dependent on public air travel willingness, OEM orders, and airline financial resources[194](index=194&type=chunk) [Global Economic Events](index=36&type=section&id=Global%20Economic%20Events) The Russian invasion of Ukraine and associated sanctions led to a **$28.1 million** pre-tax loss in Q2 2022 - The Russian invasion of Ukraine and associated U.S. sanctions led to the suspension of sanctioned activities relating to Russia, resulting in an aggregate pre-tax loss of **$28.1 million** in Q2 2022[195](index=195&type=chunk) - Prospective impacts to revenues, net income, net assets, and cash flow from operations are not material, but a significant expansion of economic disruption or conflict escalation could have a material adverse effect[195](index=195&type=chunk) [B737 Program](index=36&type=section&id=B737%20Program) The B737 MAX program is critical, generating approximately **35%** of net revenues in 2021, but faces ongoing demand challenges - The B737 MAX program is critical, generating approximately **35%** of net revenues in 2021[196](index=196&type=chunk) - Boeing's deliveries of the B737 MAX resumed in Q4 2020, with most international regulators ungrounding the aircraft; China issued an airworthiness directive in December 2021[197](index=197&type=chunk) - Ongoing demand challenges from the B737 MAX grounding are exacerbated by the COVID-19 pandemic, with narrowbody production rates expected to recover before widebody rates[198](index=198&type=chunk)[199](index=199&type=chunk) - Failure to achieve FAA certification for 737 MAX 7 and MAX 10 models or inconsistent entry into service could adversely impact future revenues, earnings, and cash flows[200](index=200&type=chunk) [B787 Program](index=37&type=section&id=B787%20Program) The B787 program incurred additional forward losses of **$30.9 million** and **$44.3 million** for the three and six months, respectively - For the three and six months ended June 30, 2022, the B787 program incurred additional forward losses of **$30.9 million** and **$44.3 million**, respectively, due to production rate decreases, build schedule changes, supply chain costs, and rework costs[201](index=201&type=chunk) - Changes to the scope of quality issues, rework, production rates, cost assessments, or claims could lead to further incremental forward loss charges[201](index=201&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, gross profit, operating loss, and net loss, along with comparative shipset deliveries Operating Data Summary | Metric | Three Months Ended June 30, 2022 ($ in millions) | Three Months Ended July 1, 2021 ($ in millions) | Six Months Ended June 30, 2022 ($ in millions) | Six Months Ended July 1, 2021 ($ in millions) | | :------------------------------------------ | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | 1,257.9 | 1,002.1 | 2,432.6 | 1,902.9 | | Gross profit (loss) | (19.6) | (12.3) | 15.2 | (70.3) | | Operating loss | (104.7) | (97.7) | (146.9) | (223.6) | | Net loss | (122.2) | (135.3) | (175.0) | (306.9) | Comparative Shipset Deliveries by Model | Model | Three Months Ended June 30, 2022 | Three Months Ended July 1, 2021 | Six Months Ended June 30, 2022 | Six Months Ended July 1, 2021 | | :------------------------ | :------------------------------- | :------------------------------ | :------------------------------- | :------------------------------ | | B737 | 71 | 35 | 131 | 64 | | Total Boeing | 89 | 63 | 166 | 123 | | A220 | 16 | 15 | 34 | 27 | | A320 Family | 147 | 96 | 302 | 226 | | Total Airbus | 180 | 126 | 374 | 285 | | Total Business and Regional Jets | 49 | 46 | 99 | 89 | | Total | 318 | 235 | 639 | 497 | - Net revenue for the three months ended June 30, 2022, increased by **$255.8 million (25.5%)** to **$1,257.9 million**, primarily due to increased B737 production[211](index=211&type=chunk) - Gross loss for the three months ended June 30, 2022, was **($19.6) million**, an increase in loss from **($12.3) million** in the prior year, impacted by a **$28.1 million** charge related to Russia sanctions and unfavorable cumulative catch-up adjustments and forward loss charges[213](index=213&type=chunk) - Operating loss for the six months ended June 30, 2022, improved by **$76.7 million** to **($146.9) million**, compared to **($223.6) million** in the prior year, reflecting increased gross profit and changes in operating expenses[235](index=235&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section reviews the company's debt, cash position, and significant cash flow activities, including asset sales and grants - As of June 30, 2022, total debt was **$3,772.5 million**, and cash and cash equivalents decreased by **$708.4 million** to **$770.2 million** from December 31, 2021[249](index=249&type=chunk) - The company settled a repayable investment agreement with the U.K.'s Department for Business, Energy and Industrial Strategy in April 2022 with a payment of **$292.8 million**[250](index=250&type=chunk) - The company received the full **$75.5 million** grant from the Aviation Manufacturing Jobs Protection Program as of June 30, 2022[251](index=251&type=chunk) - For the six months ended June 30, 2022, **$1,309.6 million** of accounts receivable were sold via factoring arrangements with Boeing, Airbus, and Rolls-Royce[253](index=253&type=chunk) - The balance of payables to suppliers participating in the supply chain financing program increased to **$95.7 million** as of June 30, 2022, from **$55.5 million** as of July 1, 2021[276](index=276&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily interest rate fluctuations, with no material changes since its 2021 Form 10-K - The Company is exposed to market risks, including fluctuations in interest rates on its variable rate debt[286](index=286&type=chunk) - There have been no material changes in the Company's market risk from the information provided in its 2021 Form 10-K[286](index=286&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting - The President and CEO and Senior VP and CFO concluded that disclosure controls and procedures were effective as of June 30, 2022[287](index=287&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2022[288](index=288&type=chunk) [PART II — OTHER INFORMATION](index=54&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings and exhibits [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is incorporated by reference from Note 20 of the condensed consolidated financial statements - Information on legal proceedings is incorporated by reference from Note 20, Commitments, Contingencies and Guarantees, in the condensed consolidated financial statements[291](index=291&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors described in the company's 2021 Form 10-K - There have been no material changes from the risk factors described in the Company's 2021 Form 10-K[292](index=292&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No purchases were made under the share repurchase program, but **30,869 shares** were transferred for tax withholding Issuer Purchases of Equity Securities (Three Months Ended June 30, 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Repurchased Under the Plans or Programs ($ in millions) | | :-------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :---------------------------------------------------------------------------------------------------- | | April 1, 2022 - May 5, 2022 | 19,549 | $48.69 | — | $925.0 | | May 6, 2022 - June 2, 2022 | 9,322 | $29.40 | — | $925.0 | | June 3, 2022 - June 30, 2022 | 1,998 | $29.09 | — | $925.0 | | Total | 30,869 | $43.69 | — | $925.0 | - **30,869 shares** were transferred from employees to satisfy tax withholding obligations associated with the vesting of restricted stock awards[296](index=296&type=chunk) - No purchases were made under the Board-approved share repurchase program, which has **$925.0 million** remaining authorization but is currently on hold due to Credit Agreement restrictions[296](index=296&type=chunk) [Item 3. Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - No defaults upon senior securities occurred[296](index=296&type=chunk) [Item 4. Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[297](index=297&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) No other information to report under this item - No other information to report[297](index=297&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including bylaws, employment agreements, and certifications Key Exhibits Filed | Exhibit Number | Exhibit | Incorporated by Reference to the Following Documents | | :------------- | :------------------------------------------------ | :--------------------------------------------------- | | 3.1 | Ninth Amended and Restated Bylaws of Spirit AeroSystems Holdings, Inc. | Current Report on Form 8-K (File No. 001-33160), filed July 13, 2022, Exhibit 3.1 | | † 10.1 | Employment Agreement, dated September 12, 2013, between Spirit AeroSystems, Inc. and Kevin Matthies | * | | 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002. | * | | 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002. | * | | 32.1** | Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. | ** | | 32.2** | Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. | ** | | 101.INS* | Inline XBRL Instance Document | * | | 104 | Cover Page Interactive Data File | | [Signatures](index=57&type=section&id=Signatures) The report was signed by the Senior Vice President and CFO and Vice President, Corporate Controller on August 3, 2022 - The report was signed by Mark J. Suchinski, Senior Vice President and Chief Financial Officer, and Damon Ward, Vice President, Corporate Controller, on August 3, 2022[303](index=303&type=chunk)