Condensed Consolidating Financial Information

3 Months Ended

Apr. 02, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Information

Condensed Consolidating Financial Information

The Floating Rate Notes, 2023 Notes, and 2028 Notes (collectively, the "Unsecured Notes") are fully and unconditionally guaranteed on a senior unsecured basis by Holdings. The 2026 Notes are fully and unconditionally guaranteed on a secured senior and second lien basis by Holdings and Spirit NC. The 2025 Notes are fully and unconditionally guaranteed on a secured second lien basis by Holdings and Spirit NC. Together, the Floating Rate Notes, 2023 Notes, 2025 Notes, 2026 Notes, and 2028 Notes shall be referred to as the “Existing Notes.”

The following condensed consolidating financial information, which has been prepared in accordance with the requirements for presentation of Rule 3-10(d) of Regulation S-X promulgated under the Securities Act, presents the condensed consolidating financial information separately for:

(i) Holdings, as the parent guarantor of the Existing Notes, as further detailed in Note 15, Debt;

(ii) Spirit, as issuer of the Existing Notes;

(iii) Spirit NC, as a guarantor of the 2026 Notes on a secured senior and second lien basis and 2025 Notes on a secured second lien basis;

(iv) The Company’s other subsidiaries (the “Non-Guarantor Subsidiaries”), on a combined basis;

(v) Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Holdings, Spirit NC, and the Non-Guarantor Subsidiaries, (b) eliminate the investments in the Company’s subsidiaries, and (c) record consolidating entries; and

(vi) Holdings and its subsidiaries on a consolidated basis.

Condensed Consolidating Statements of Operations

For the Three Months Ended April 2, 2020

	Holdings			Spirit			Spirit NC			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenue	$	—		$	899.2		$	111.2		$	230.9		$	(164.0	)	$	1,077.3
Operating costs and expenses
Cost of sales	—			962.7			107.4			206.4			(164.0		)	1,112.5
Selling, general and administrative	3.5			68.1			0.8			5.0			—			77.4
Restructuring cost	—			42.6			—			—			—			42.6
Research and development	—			11.6			0.1			0.6			—			12.3
Total operating costs and expenses	3.5			1,085.0			108.3			212.0			(164.0		)	1,244.8
Operating (loss) income	(3.5		)	(185.8		)	2.9			18.9			—			(167.5		)
Interest expense and financing fee amortization	—			(32.1		)	—			(0.9		)	0.8			(32.2		)
Other (expense) income, net	—			(54.3		)	—			6.1			(0.8		)	(49.0		)
(Loss) income before income taxes and equity in net (loss) income of affiliate and subsidiaries	(3.5		)	(272.2		)	2.9			24.1			—			(248.7		)
Income tax benefit (provision)	1.2			90.3			(0.7		)	(3.6		)	—			87.2
(Loss) income before equity in net (loss) income of affiliate and subsidiaries	(2.3		)	(181.9		)	2.2			20.5			—			(161.5		)
Equity in net (loss) income of affiliate	—			—			—			(1.5		)	—			(1.5		)
Equity in net (loss) income of subsidiaries	(160.7		)	21.2			—			—			139.5			—
Net (loss) income	(163.0		)	(160.7		)	2.2			19.0			139.5			(163.0		)
Other comprehensive (loss) income	(141.7		)	(141.7		)	—			24.5			117.2			(141.7		)
Comprehensive (loss) income	$	(304.7	)	$	(302.4	)	$	2.2		$	43.5		$	256.7		$	(304.7	)

Condensed Consolidating Statements of Operations

For the Three Months Ended March 28, 2019

	Holdings			Spirit			Spirit NC		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenue	$	—		$	1,765.2		116.4		$	256.8		$	(170.6	)	$	1,967.8
Operating costs and expenses
Cost of sales	—			1,500.3			112.7		215.9			(170.6		)	1,658.3
Selling, general and administrative	2.3			56.5			0.8		4.0			—			63.6
Research and development	—			11.4			0.4		1.1			—			12.9
Total operating costs and expenses	2.3			1,568.2			113.9		221.0			(170.6		)	1,734.8
Operating income (loss)	(2.3		)	197.0			2.5		35.8			—			233.0
Interest expense and financing fee amortization	—			(18.8		)	—		(1.0		)	1.0			(18.8		)
Other (expense) income, net	—			(8.4		)	—		(1.6		)	(1.0		)	(11.0		)
Income (loss) before income taxes and equity in net income of affiliate and subsidiaries	(2.3		)	169.8			2.5		33.2			—			203.2
Income tax (provision) benefit	0.5			(34.7		)	(0.6	)	(5.3		)	—			(40.1		)
Income (loss) before equity in net income of affiliate and subsidiaries	(1.8		)	135.1			1.9		27.9			—			163.1
Equity in net income of affiliate	—			—			—		—			—			—
Equity in net income of subsidiaries	164.9			29.8			—		—			(194.7		)	—
Net income	163.1			164.9			1.9		27.9			(194.7		)	163.1
Other comprehensive income (loss)	10.0			10.0			—		10.4			(20.4		)	10.0
Comprehensive income (loss)	$	173.1		$	174.9		1.9		$	38.3		$	(215.1	)	$	173.1

Condensed Consolidating Balance Sheet

April 2, 2020

	Holdings		Spirit		Spirit NC		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Cash and cash equivalents	$	—	$	1,717.0	$	—	$	116.6	$	—		$	1,833.6
Restricted cash	—		0.3		—		—		—			0.3
Accounts receivable, net	—		480.1		52.6		301.2		(325.3		)	508.6
Contract assets, short-term	—		328.2		—		52.7		—			380.9
Inventory, net	—		832.8		145.0		190.9		—			1,168.7
Other current assets	—		129.7		—		4.3		—			134.0
Total current assets	—		3,488.1		197.6		665.7		(325.3		)	4,026.1
Property, plant and equipment, net	—		1,773.9		295.7		183.6		—			2,253.2
Right of use assets	—		40.0		7.3		0.2		—			47.5
Contract assets, long-term	—		3.6		—		6.8		—			10.4
Pension assets, net	—		259.0		—		23.6		—			282.6
Deferred income taxes	—		192.4		—		0.2		—			192.6
Goodwill	—		76.2		—		2.3		—			78.5
Intangible assets, net	—		30.6		—		—		—			30.6
Investment in subsidiary	1,456.4		821.0		—		—		(2,277.4		)	—
Other assets	—		152.7		—		113.7		(186.8		)	79.6
Total assets	$	1,456.4	$	6,837.5	$	500.6	$	996.1	$	(2,789.5	)	$	7,001.1
Liabilities
Accounts payable	$	—	$	660.4	$	225.6	$	180.0	$	(325.3	)	$	740.7
Accrued expenses	—		251.0		1.1		34.0		—			286.1
Profit sharing	—		15.4		—		2.2		—			17.6
Current portion of long-term debt	—		50.8		0.2		1.7		—			52.7
Operating lease liabilities, short-term	—		5.3		0.6		—		—			5.9
Advance payments, short-term	—		17.8		—		—		—			17.8
Contract liabilities, short-term	—		166.9		—		—		—			166.9
Forward loss provision, long-term	—		91.5		—		—		—			91.5
Deferred revenue and other deferred credits, short-term	—		17.6		—		0.3		—			17.9
Other current liabilities	—		27.2		—		9.8		—			37.0
Total current liabilities	—		1,303.9		227.5		228.0		(325.3		)	1,434.1
Long-term debt	—		2,968.9		0.8		94.7		(86.2		)	2,978.2
Operating lease liabilities, long-term	—		34.9		6.7		0.1		—			41.7
Advance payments, long-term	—		327.3		—		—		—			327.3
Pension/OPEB obligation	—		50.9		—		—		—			50.9
Contract liabilities, long-term	—		388.9		—		—		—			388.9
Forward loss provision, long-term	—		146.9		—		—		—			146.9
Deferred grant income liability - non-current	—		9.1		—		18.3		—			27.4
Deferred revenue and other deferred credits	—		31.4		—		5.4		—			36.8
Deferred income taxes	—		—		—		8.2		—			8.2
Other liabilities	—		199.0		—		5.9		(100.6		)	104.3
Total equity	1,456.4		1,376.3		265.6		635.5		(2,277.4		)	1,456.4
Total liabilities and stockholders’ equity	$	1,456.4	$	6,837.5	$	500.6	$	996.1	$	(2,789.5	)	$	7,001.1

Condensed Consolidating Balance Sheet

December 31, 2019

	Holdings		Spirit		Spirit NC		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Cash and cash equivalents	$	—	$	2,193.3	$	—	$	157.2	$	—		$	2,350.5
Restricted cash	—		0.3		—		—		—			0.3
Accounts receivable, net	—		565.4		50.5		250.7		(320.2		)	546.4
Inventory, net	—		786.8		136.8		195.2		—			1,118.8
Contract assets, short-term	—		458.8		—		69.5		—			528.3
Other current assets	—		93.5		—		5.2		—			98.7
Total current assets	—		4,098.1		187.3		677.8		(320.2		)	4,643.0
Property, plant and equipment, net	—		1,773.0		306.3		192.4		—			2,271.7
Right of use assets	—		41.2		7.5		0.2		—			48.9
Contract assets, long-term	—		6.4		—		—		—			6.4
Pension assets, net	—		424.2		—		24.9		—			449.1
Deferred income taxes	—		106.3		—		0.2		—			106.5
Goodwill	—		—		—		2.4		—			2.4
Intangible assets, net	—		1.2		—		—		—			1.2
Investment in subsidiary	1,761.9		838.4		—		—		(2,600.3		)	—
Other assets	—		147.6		—		116.0		(186.8		)	76.8
Total assets	$	1,761.9	$	7,436.4	$	501.1	$	1,013.9	$	(3,107.3	)	$	7,606.0
Liabilities
Accounts payable	$	—	$	977.1	$	226.3	$	175.1	$	(320.2	)	$	1,058.3
Accrued expenses	—		210.0		0.8		29.4		—			240.2
Profit sharing	—		76.9		—		7.6		—			84.5
Current portion of long-term debt	—		48.4		0.2		1.6		—			50.2
Operating lease liabilities, short-term	—		5.3		0.6		0.1		—			6.0
Advance payments, short-term	—		21.6		—		—		—			21.6
Contract liabilities, short-term	—		158.3		—		—		—			158.3
Forward loss provision, long-term	—		83.9		—		—		—			83.9
Deferred revenue and other deferred credits, short-term	—		14.5		—		0.3		—			14.8
Other current liabilities	—		29.3		2.1		11.5		—			42.9
Total current liabilities	—		1,625.3		230.0		225.6		(320.2		)	1,760.7
Long-term debt	—		2,974.7		0.9		94.7		(86.2		)	2,984.1
Operating lease liabilities, long-term	—		36.0		6.9		0.1		—			43.0
Advance payments, long-term	—		333.3		—		—		—			333.3
Pension/OPEB obligation	—		35.7		—		—		—			35.7
Contract liabilities, long-term	—		356.3		—		—		—			356.3
Forward loss provision, long-term	—		163.5		—		—		—			163.5
Deferred grant income liability - non-current	—		9.2		—		19.8		—			29.0
Deferred revenue and other deferred credits	—		30.4		—		4.0		—			34.4
Deferred income taxes	—		—		—		8.3		—			8.3
Other liabilities	—		190.1		—		6.3		(100.6		)	95.8
Total equity	1,761.9		1,681.9		263.3		655.1		(2,600.3		)	1,761.9
Total liabilities and stockholders’ equity	$	1,761.9	$	7,436.4	$	501.1	$	1,013.9	$	(3,107.3	)	$	7,606.0

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended April 2, 2020

	Holdings			Spirit			Spirit NC			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Operating activities
Net cash used in operating activities	$	—		$	(312.5	)	$	9.8		$	(28.6	)			$	(331.3	)
Investing activities
Purchase of property, plant and equipment	—			(23.4		)	(0.4		)	(7.2		)	—		(31.0		)
Acquisition, net of cash acquired	—			(118.1		)	—			—			—		(118.1		)
Other	—			0.3			—			1.5			—		1.8
Net cash used in investing activities	—			(141.2		)	(0.4		)	(5.7		)	—		(147.3		)
Financing activities
Customer financing	—			10.0			—			—			—		10.0
Principal payments of debt	—			(7.0		)	—			(0.3		)	—		(7.3		)
Payments on term loan	—			(5.7		)	—			—			—		(5.7		)
Proceeds (payments) from intercompany debt	—			9.1			(9.4		)	0.3			—		—
Taxes paid related to net share settlement of awards	—			(13.1		)	—			—			—		(13.1		)
Proceeds (payments) from subsidiary for dividends paid	12.4			(12.4		)	—			—			—		—
Dividends Paid	(12.4		)	—			—			—			—		(12.4		)
Proceeds from issuance of ESPP stock	—			1.3			—			—			—		1.3
Debt issuance costs	—			(4.8		)	—			—			—		(4.8		)
Net cash provided by (used in) financing activities	—			(22.6		)	(9.4		)	—			—		(32.0		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—			(6.2		)			(6.2		)
Net decrease in cash and cash equivalents for the period	—			(476.3		)	—			(40.5		)	—		(516.8		)
Cash, cash equivalents, and restricted cash, beginning of period	—			2,210.0			—			157.2			—		2,367.2
Cash, cash equivalents, and restricted cash, end of period	$	—		$	1,733.7		$	—		$	116.7		$	—	$	1,850.4

Condensed Consolidating Statements of Cash Flows

For the Three Months Ended March 28, 2019

	Holdings			Spirit			Spirit NC			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Operating activities
Net cash provided by operating activities	$	—		$	197.4		$	3.3		$	41.5		$	—	$	242.2
Investing activities
Purchase of property, plant and equipment	—			(29.3		)	(3.3		)	(8.2		)	—		(40.8		)
Acquisition, net of cash acquired	—			—			—			—			—		—
Other	—			0.1			—			—			—		0.1
Net cash used in investing activities	—			(29.2		)	(3.3		)	(8.2		)	—		(40.7		)
Financing activities
Proceeds from issuance of debt	—			250.0			—			—			—		250.0
Proceeds from revolving credit facility	—			100.0			—			—			—		100.0
Principal payments of debt	—			(2.4		)	—			(0.2		)	—		(2.6		)
Proceeds (payments) from intercompany debt	—			34.0			—			(34.0		)	—		—
Taxes paid related to net share settlement of awards	—			(10.0		)	—			—			—		(10.0		)
Proceeds (payments) from subsidiary for purchase of treasury stock	75.0			(75.0		)	—			—			—		—
Purchase of treasury stock	(75.0		)	—			—			—			—		(75.0		)
Proceeds (payments) from subsidiary for dividends paid	12.7			(12.7		)	—			—			—		—
Dividends Paid	(12.7		)	—			—			—			—		(12.7		)
Net cash provided by (used in) financing activities	—			283.9			—			(34.2		)	—		249.7
Effect of exchange rate changes on cash and cash equivalents	—			—			—			(0.3		)	—		(0.3		)
Net increase (decrease) in cash and cash equivalents for the period	—			452.1			—			(1.2		)	—		450.9
Cash, cash equivalents, and restricted cash, beginning of period	—			725.5			—			68.6			—		794.1
Cash, cash equivalents, and restricted cash, end of period	—			1,177.6			—			67.4			—		1,245.0