Organization, Basis of Interim Presentation and Recent Developments Spirit AeroSystems Holdings, Inc. (Holdings or the Company) provides manufacturing and design expertise in a wide range of fuselage, propulsion, and wing products and services for aircraft original equipment manufacturers (OEM) and operators through its subsidiary, Spirit AeroSystems, Inc. (Spirit). The Company's headquarters are in Wichita, Kansas, with manufacturing and assembly facilities in Tulsa and McAlester, Oklahoma; Prestwick, Scotland; Wichita, Kansas; Kinston, North Carolina; Subang, Malaysia; Saint-Nazaire, France; San Antonio, Texas; and Biddeford, Maine. The accompanying unaudited interim condensed consolidated financial statements include the Companys financial statements and the financial statements of its majority-owned or controlled subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the instructions to Form 10-Q and Article 10 of Regulation S-X. The Companys fiscal quarters are 13 weeks in length. Since the Companys fiscal year ends on December 31, the number of days in the Companys first and fourth quarters varies slightly from year to year. All intercompany balances and transactions have been eliminated in consolidation. As part of the monthly consolidation process, the Companys international entities that have functional currencies other than the U.S. dollar are translated to U.S. dollars using the end-of-month translation rate for balance sheet accounts and average period currency translation rates for revenue and income accounts. The U.K. and Malaysian subsidiaries use the British pound as their functional currency. All other foreign subsidiaries and branches use the U.S. dollar as their functional currency. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments and elimination of intercompany balances and transactions) considered necessary to fairly present the results of operations for the interim period. The results of operations for the six months ended July 2, 2020 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 . In connection with the preparation of the condensed consolidated financial statements, the Company evaluated subsequent events through the date the financial statements were issued. The interim financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Companys 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the SEC) on February 28, 2020 (the 2019 Form 10-K). The Company's significant accounting policies are described in Note 3, Summary of Significant Accounting Policies to our consolidated financial statements in the 2019 Form 10-K. The single update to the significant accounting policies described in the 2019 Form 10-K is related to the impact of adopting ASU No. 2016-13, Financial Instruments - Credit losses (Topic 326) ( ASU 2016-13) and is described in detail in Note 2, Adoption of New Accounting Standards , and Note 5, Accounts Receivable and Allowance for Credit Losses . Recent Developments B737MAX . In March 2019, the B737 MAX fleet was grounded in the U.S. and internationally following the 2018 and 2019 accidents involving two B737 MAX aircraft. To date, the fleet remains grounded and the recertification process is continuing. The B737 MAX program is a critical program to the Company and for the twelve months ended December 31, 2019, approximately 53% of the Companys net revenues were generated from sales of components to The Boeing Company (Boeing) for the B737 aircraft. Due to the grounding and the impacts of COVID-19 on the aviation industry, the Company has experienced significant deteriorations in its B737 MAX production rates that have reduced the Companys revenues. A summary of the production rate changes is below.  On April 12, 2019, Boeing and the Company executed a Memorandum of Agreement (the 2019 MOA) providing that the Company was to maintain its delivery rate of 52 shipsets per month with respect to the B737 MAX. Previously, the Company was expecting to increase production to a rate of 57 shipsets per month;  On December 19, 2019, Boeing directed the Company to stop all B737 MAX deliveries to Boeing effective January 1, 2020. Accordingly, Spirit suspended all B737 MAX production beginning on January 1, 2020;  On February 6, 2020, Boeing and Spirit entered into a Memorandum of Agreement (the 2020 MOA) largely superseding the 2019 MOA and providing for Spirit to deliver to Boeing 216 B737 MAX shipsets in 2020;  On May 4, 2020, Boeing and the Company agreed that Spirit would deliver 125 B737 MAX shipsets to Boeing in 2020; and  On June 19, 2020, Boeing directed Spirit to reduce its 2020 B737 production plan from 125 to 72 shipsets. COVID-19 . The COVID-19 pandemic and its effects (including travel advisories, shutdowns or shelter-in-place mandates or recommendations, restrictive protocols, and canceled events) have caused a significant decline in the demand for air travel and, as a result, the Company has experienced a significant deterioration in its revenues in the first half of 2020, resulting in a net loss of $ 418.9 for that period. The length of the COVID-19 pandemic and its impact on the aviation industry and the Companys operational and financial performance is uncertain and outside of the Companys control. The Company expects the pandemic and its effects to continue to have a significant negative impact on its business for the duration of the pandemic and during the subsequent economic recovery, which could be for an extended period of time. The Company has taken several actions to reduce costs, increase liquidity and strengthen its financial position in light of the economic impact of the COVID-19 pandemic, and the B737 MAX grounding and related production changes including the following:  Reduced pay for all U.S.-based executives by 20 percent until further notice;  Reduced 2020-2021 term non-employee director compensation by 15 percent;  Reduced planned capital expenditures and operating expenses;  Suspended its share repurchase program;  Reduced quarterly dividends to one penny per share;  Initiated multiple production worker furloughs;  Implemented a four-day work week for its salaried workforce at its Wichita, Kansas facility until further notice;  Reduced ~5,500 employees globally including voluntary retirement;  Amended our 2018 Credit Agreement for covenant relief;  Issued $1.2 billion in senior secured second-lien notes in April 2020; and  Elected to defer the payment of $15.9 in employer payroll taxes incurred through July 2, 2020, as provided by the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), of which 50% is required to be deposited by December 2021 and the remaining 50% by December 2022. In addition, as of July 2, 2020 the Company has recorded a deferral of $28.5 of VAT payments until March 2021 under the United Kingdom deferral scheme. The substantial reduction in our production rates for 2020 has significantly reduced revenue received in connection with the B737 MAX program and presents challenges to our liquidity. These challenges are exacerbated by the COVID-19 pandemic as other programs that mitigate the strain of the lower B737 MAX production rate are now suspended or producing at lower rates. The COVID-19 and B737 MAX situations are largely out of our control. If Boeing is unable to return the B737 MAX to service in one or more jurisdictions, begin timely deliveries to customers, or if our customers' production levels across our programs are reduced beyond current expectations due to depressed demand relating to COVID-19 or otherwise, our business, financial condition, results of operations and cash flows could be materially adversely impacted.