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Segment Information
 12 Months Ended
Dec. 31, 2013
Segment Reporting [Abstract]  
Segment Information
 Segment Information
The Company operates in three principal segments: Fuselage Systems, Propulsion Systems and Wing Systems. Substantially all revenues in the three principal segments are from Boeing, with the exception of Wing Systems, which includes revenues from Airbus and other customers. Approximately 94% of the Company's net revenues for the twelve months ended December 31, 2013 came from our two largest customers, Boeing and Airbus. All other activities fall within the All Other segment, principally made up of sundry sales of miscellaneous services, tooling contracts, and sales of natural gas through a tenancy-in-common with other companies that have operations in Wichita, Kansas. The Company's primary profitability measure to review a segment's operating performance is segment operating income before unallocated corporate selling, general and administrative expenses, unallocated impact of severe weather event, unallocated research and development and unallocated cost of sales. Unallocated corporate selling, general and administrative expenses include centralized functions such as accounting, treasury and human resources that are not specifically related to our operating segments and are not allocated in measuring the operating segments' profitability and performance and operating margins. Unallocated impact of severe weather event includes property repairs, clean up and recovery costs related to the April 14, 2012 tornado at the Company's Wichita facility. Unallocated research and development includes research and development efforts that benefit the Company as a whole and are not unique to a specific segment. Unallocated cost of sales includes general costs not directly attributable to segment operations, such as early retirement and other incentives. All of these unallocated items are not specifically related to our operating segments and are not allocated in measuring the operating segments' profitability and performance and operating margins.
We are evaluating the potential realignment of our reportable segments as part of our 2014 business strategy. The reportable segment amounts and discussions reflected in this Annual Report reflect the management reporting that existed through the end of our 2013 fiscal year.
The Company's Fuselage Systems segment includes development, production and marketing of forward, mid and rear fuselage sections and systems, primarily to aircraft OEMs (OEM refers to aircraft original equipment manufacturer), as well as related spares and maintenance, repairs and overhaul. The Fuselage Systems segment manufactures products at our facilities in Wichita, Kansas and Kinston, North Carolina. The Fuselage Systems segment also includes an assembly plant for the A350 XWB aircraft in Saint-Nazaire, France.
The Company's Propulsion Systems segment includes development, production and marketing of struts/pylons, nacelles (including thrust reversers) and related engine structural components primarily to aircraft or engine OEMs, as well as related spares and MRO services. The Propulsion Systems segment manufactures products at our facilities in Wichita and Chanute, Kansas.
The Company's Wing Systems segment includes development, production and marketing of wings and wing components (including flight control surfaces) as well as other miscellaneous structural parts primarily to aircraft OEMs, as well as related spares and MRO services. These activities take place at the Company's facilities in Tulsa and McAlester, Oklahoma; Kinston, North Carolina; Prestwick, Scotland; and Subang, Malaysia.
The Company's definition of segment operating income differs from operating income as presented in its primary financial statements and a reconciliation of the segment and consolidated results is provided in the table set forth below. Most selling, general and administrative expenses, and all interest expense or income, related financing costs and income tax amounts, are not allocated to the operating segments.
While some working capital accounts are maintained on a segment basis, much of the Company's assets are not managed or maintained on a segment basis. Property, plant and equipment, including tooling, is used in the design and production of products for each of the segments and, therefore, is not allocated to any individual segment. In addition, cash, prepaid expenses, other assets and deferred taxes are managed and maintained on a consolidated basis and generally do not pertain to any particular segment. Raw materials and certain component parts are used in the production of aerostructures across all segments. Work-in-process inventory is identifiable by segment, but is managed and evaluated at the program level. As there is no segmentation of the Company's productive assets, depreciation expense (included in fixed manufacturing costs and selling, general and administrative expenses) and capital expenditures, no allocation of these amounts has been made solely for purposes of segment disclosure requirements.
The following table shows segment revenues and operating income for the twelve months ended December 31, 2013, December 31, 2012 and December 31, 2011:
 
Twelve Months Ended December 31, 2013
 
Twelve Months Ended December 31, 2012
 
Twelve Months Ended December 31, 2011
Segment Revenues
 
 
 
 
 
Fuselage Systems
$
2,861.1

 
$
2,590.6

 
$
2,425.0

Propulsion Systems
1,581.3

 
1,420.9

 
1,221.5

Wing Systems
1,502.5

 
1,375.1

 
1,207.8

All Other
16.1

 
11.1

 
9.5

 
$
5,961.0

 
$
5,397.7

 
$
4,863.8

Segment Operating (Loss) Income
 
 
 
 
 
Fuselage Systems(1)
$
70.1

 
$
391.9

 
$
323.1

Propulsion Systems(2)
235.8

 
67.5

 
196.4

Wing Systems(3)
(414.0
)
 
(335.6
)
 
0.5

All Other
4.4

 
1.0

 
1.3

 
(103.7
)
 
124.8

 
521.3

Unallocated corporate SG&A
(181.5
)
 
(155.3
)
 
(145.5
)
Unallocated impact of severe weather event(4)
(30.3
)
 
146.2

 
—

Unallocated research and development
(8.9
)
 
(4.4
)
 
(1.9
)
Unallocated cost of sales(5)
(39.9
)
 
(19.0
)
 
(17.8
)
Total operating (loss) income
$
(364.3
)
 
$
92.3

 
$
356.1

_______________________________________


(1)
For 2013, inclusive of forward loss charges of $41.1, $4.1, $333.1 and $111.3 for the B747-8, B767, B787 and A350 XWB programs, respectively. A350 XWB forward loss of $111.3 is comprised of $32.7 on the A350-1000 XWB non-recurring fuselage portion and $78.6 on the A350 XWB recurring fuselage program. For 2012, includes a forward loss charge of $6.4 for the B747-8 program. For 2011, includes a $29.0 forward loss charge recorded for the Sikorsky CH-53K helicopter program and a $12.6 forward loss charge for the B747-8 program. Also includes cumulative catch-up adjustments for periods prior to 2013 and 2012 of $60.1 and $(2.4), respectively.
(2)
Inclusive of forward loss charges of $12.3, $30.6 and $21.7 for the B767, B787 and Rolls-Royce BR725 programs, respectively, for 2013. Also includes $8.4 reduction of forward loss charge recorded due to change in estimate for the Rolls-Royce program in 2013. For 2012, includes forward loss charges of $151.0 recorded on our Rolls-Royce program and $8.0 on our B767 program. Also includes cumulative catch-up adjustments for periods prior to 2013 and 2012 of $30.0 and $7.3, respectively.
(3)
For 2013, includes forward loss charges of $58.3, $240.9 and $288.3 for the B787, G280 and G650 programs, respectively. For 2012, includes forward loss charges recorded of $184.0 for the B787 wing program, $162.5 for the G650 wing program, $118.8 for the G280 wing program, $8.9 for the A350 XWB non-recurring wing contract, and $5.1 for the B747-8 wing program. Also includes cumulative catch-up adjustments for periods prior to 2013 and 2012 of $5.4 and $9.8, respectively. For 2011, includes a $81.8 forward loss charge recorded for the G280 wing program, a $5.7 forward loss charge for the B747-8 program and a $3.0 forward loss on the A350 XWB non-recurring wing contract.
(4)
For 2012, gain includes a $234.9 insurance settlement amount, offset by $88.7 of costs incurred related to the April 14, 2012 severe weather event. Costs include assets impaired by the storm, clean-up costs, repair costs and incremental labor, freight and warehousing costs associated with the impacts of the storm.
(5)
Inclusive of charges of $38.1, $17.8, and $1.6 related to warranty reserve adjustments, reduction in workforce and early retirement incentives in 2013. Also, includes gains related to pension activity of $15.4 for the same period. For 2012 and 2011, $11.0 and $6.9, respectively, were reclassified from segment operating income to unallocated cost of sales to conform to current year presentation. Includes charges in the second quarter of 2012 of $3.6 related to asset impairments, $2.2 related to stock incentives for certain UAW-represented employees and $2.1 in early retirement incentives to eligible employees and charges in the second quarter of 2011 of $9.0 due to a change in estimate to increase warranty and extraordinary rework reserves and $1.9 in early retirement incentives elected by eligible UAW-represented employees.
The following chart illustrates the split between domestic and foreign revenues:
 
Year Ended December 31, 2013
 
Year Ended December 31, 2012
 
Year Ended December 31, 2011
Revenue Source(1)
Net Revenues
 
Percent of
Total
Net Revenues
 
Net Revenues
 
Percent of
Total
Net Revenues
 
Net Revenues
 
Percent of
Total
Net Revenues
United States
$
5,154.9

 
87
%
 
$
4,612.0

 
85
%
 
$
4,210.7

 
87
%
International
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
559.7

 
9
%
 
470.4

 
9
%
 
422.6

 
8
%
Other
246.4

 
4
%
 
315.3

 
6
%
 
230.5

 
5
%
Total International
806.1

 
13
%
 
785.7

 
15
%
 
653.1

 
13
%
Total Revenues
$
5,961.0

 
100
%
 
$
5,397.7

 
100
%
 
$
4,863.8

 
100
%
_______________________________________

(1)
Net Revenues are attributable to countries based on destination where goods are delivered.
Most of the Company's long-lived assets are located within the United States. Approximately 6% of our long-lived assets based on book value are located in the United Kingdom as part of Spirit Europe with approximately another 5% of our total long-lived assets located in countries outside the United States and the United Kingdom. The following chart illustrates the split between domestic and foreign assets:
 
Year Ended December 31, 2013
 
Year Ended December 31, 2012
Asset Location
Total
Long-Lived Assets
 
Percent of
Total
Long-Lived Assets
 
Total
Long-Lived Assets
 
Percent of
Total
Long-Lived Assets
United States
$
1,608.2

 
89
%
 
$
1,506.9

 
89
%
International
 
 
 
 
 
 
 
United Kingdom
99.3

 
6
%
 
101.1

 
6
%
Other
95.8

 
5
%
 
90.5

 
5
%
Total International
195.1

 
11
%
 
191.6

 
11
%
Total Long-Lived Assets
$
1,803.3

 
100
%
 
$
1,698.5

 
100
%