Changes in Estimates

The Company has a Company-wide quarterly Estimate at Completion (EAC) process in which management assesses the progress and performance of the Company's contracts. This process requires management to review each program’s progress towards completion by evaluating the program schedule, changes to identified risks and opportunities, changes to estimated contract revenues and estimated contract costs over the current contract block and any outstanding contract matters. Risks and opportunities include management's judgment about the cost associated with a program’s ability to achieve the schedule, technical requirements (e.g., a newly-developed product versus a mature product) and any other contract requirements. The majority of the Company's fixed priced contracts are life of aircraft program contracts. Due to the span of years it may take to complete a contract block and the scope and nature of the work required to be performed on those contracts, the estimation of total revenue and costs at completion is complicated and subject to many variables and, accordingly, is subject to change. When adjustments in estimated total contract block revenue or estimated total cost are required, any changes from prior estimates for delivered units are recognized in the current period as a cumulative catch-up adjustment for the inception-to-date effect of such changes. Cumulative catch-up adjustments are driven by several factors including improved production efficiencies, assumed rate of production, the rate of overhead absorption, changes to scope of work and contract modifications. When estimates of total costs to be incurred on a contract block exceed estimates of total revenue to be earned, a provision for the entire loss on the contract block is recorded in the period in which the loss is determined. Changes in estimates are summarized below:



Changes in Estimates	December 31, 2015		December 31, 2014		December 31, 2013
Favorable Cumulative Catch-up Adjustment by Segment
Fuselage	16.1		14.8		60.1
Propulsion	22.8		18.8		30.0
Wing	2.7		26.8		5.4
Total Favorable Cumulative Catch-up Adjustment	41.6		60.4		95.5

Changes in Estimates on Loss Programs and (Forward loss)
Fuselage
B787	—		—		(333.1	)
Boeing - All other platforms	8.7		10.8		(45.2	)
A350 XWB	—		—		(111.3	)
Other Platforms	—		(0.9	)	—
Total Fuselage Change in Estimate on Loss Program and (Forward Loss)	8.7		9.9		(489.6	)
Propulsion
B787	—		—		(30.6	)
Boeing - All other platforms	(0.3	)	1.1		(12.3	)
Other Platforms	2.7		15.4		(13.3	)
Total Propulsion Change in Estimate on Loss Program and (Forward Loss)	2.4		16.5		(56.2	)
Wing
B787	—		—		(58.3	)
Boeing - All other platforms	(6.6	)	—		—
A350 XWB	6.3		—		—
Other Platforms	—		(0.3	)	(529.2	)
Total Wing Forward Loss	(0.3	)	(0.3	)	(587.5	)
Total Change in Estimate on Loss Program and (Forward Loss)	10.8		26.1		(1,133.3	)

Total Change in Estimate	52.4		86.5		(1,037.8	)
EPS Impact (diluted per share based on statutory rates)	0.24		0.38		(4.61	)

The Company is currently working on several maturing programs which are in various stages of production, including the B787, A350 XWB and BR725 programs. These programs carry risks associated with design responsibility, development of production tooling, production inefficiencies during the early phases of production, hiring and training of qualified personnel, increased capital and funding commitments, supplier performance, delivery schedules and unique customer requirements. The Company has previously recorded forward loss charges on these programs. If the risks related to these programs are not mitigated, then the Company could record additional forward loss charges.

2015 Changes in Estimates

Favorable cumulative catch-up adjustments for the periods prior to 2015 and changes in estimates on loss programs were primarily driven by productivity and efficiency improvements, favorable cost performance, mitigation of risk, benefits from increased production rates related to the absorption of fixed costs and favorable pricing negotiations on a maturing program. Forward loss charges were due to a production rate decrease on a mature program.

2014 Changes in Estimates

Favorable cumulative catch-up adjustments for the periods prior to 2014 and changes in estimates on loss programs were primarily driven by productivity and efficiency improvements, favorable cost performance, mitigation of risk, benefits from increased production rates related to the absorption of fixed costs, increased statement of work on mature programs and favorable pricing negotiations on a maturing program.

2013 Changes in Estimates

The $422.0 forward loss recorded on the B787 program was primarily due to revised cost estimates to reflect the Company's evaluation of near-term achievable cost reductions and continued deterioration in labor performance at the Tulsa facility related to the transition to the B787-9 derivative. The $529.2 of forward losses recorded on the wing Other Platforms was primarily due to continued deterioration in labor performance at the Tulsa facility, underperformance with respect to supply chain cost reduction and settlement of contractual items on the Gulfstream wing programs. The $111.3 forward loss recorded on the A350 XWB wing program was due to production inefficiencies mostly driven by early development discovery and engineering change to the aircraft design, higher than expected test and transportation costs and the execution of an agreement with Airbus in 2013 regarding the work scope for the design and tooling related to the -1000 derivative. The Company recorded $95.5 of favorable cumulative catch-up adjustments related to periods prior to 2013 primarily driven by productivity and efficiency improvements and favorable cost performance on mature programs.