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Segment Information
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Information  Segment and Geographical Information
The Company operates in three principal segments: Fuselage Systems, Propulsion Systems and Wing Systems. Revenue from Boeing represents a substantial portion of our revenues in all segments. Wing Systems also includes significant revenues from Airbus. Approximately 95% of the Company's net revenues for the twelve months ended December 31, 2019 came from the Company's 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 corporate selling, general and administrative expenses, research and development and unallocated cost of sales.
Corporate selling, general and administrative expenses include centralized functions such as accounting, treasury and human resources that are not specifically related to the Company's operating segments and are not allocated in measuring the operating segments’ profitability and performance and net profit margins. 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 warranty, early retirement and other incentives. All of these items are not specifically related to the Company’s operating segments and are not utilized in measuring the operating segments’ profitability and performance.
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 (“MRO”) services.  The Fuselage Systems segment manufactures products at the Company's facilities in Wichita, Kansas; Tulsa and McAlester, Oklahoma; San Antonio, Texas; Kinston, North Carolina; and Subang, Malaysia.  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 the Company's facility in Wichita, Kansas; and San Antonio, Texas.
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; San Antonio, Texas; Kinston, North Carolina; Prestwick, Scotland; and Subang, Malaysia.
 The Company’s segments are consistent with the organization and responsibilities of management reporting to the chief operating decision-maker for the purpose of assessing performance. The Company’s definition of segment operating income differs from net profit margin as presented in its primary financial statements and a reconciliation of the segment and consolidated results is provided in the table set forth below.
 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 aerostructure production 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, 2019, 2018 and 2017:
 
Twelve Months Ended December 31, 2019
 
Twelve Months Ended December 31, 2018
 
Twelve Months Ended December 31, 2017
Segment Revenues
 
 
 
 
 
Fuselage Systems
$
4,206.2

 
$
4,000.8

 
$
3,730.8

Propulsion Systems
2,057.8

 
1,702.5

 
1,666.2

Wing Systems
1,588.3

 
1,513.0

 
1,578.8

All Other
10.8

 
5.7

 
7.2

 
$
7,863.1

 
$
7,222.0

 
$
6,983.0

Segment Operating Income (1, 2)
 
 
 
 
 
Fuselage Systems
$
440.8

 
$
576.1

 
$
329.6

Propulsion Systems
404.6

 
283.5

 
267.7

Wing Systems
216.0

 
226.4

 
205.1

All Other
3.4

 
0.3

 
2.0

 
1,064.8

 
1,086.3

 
804.4

Corporate SG&A (2)
(261.4
)
 
(210.4
)
 
(204.7
)
Unallocated impact of severe weather event
—

 
10.0

 
(19.9
)
Research and development
(54.5
)
 
(42.5
)
 
(31.2
)
Unallocated cost of sales(3)
11.9

 
(0.2
)
 
(16.7
)
Total operating income
$
760.8

 
$
843.2

 
$
531.9

_______________________________________
(1)
Inclusive of forward losses, changes in estimate on loss programs and cumulative catch-up adjustments. These changes in estimates for the periods ended December 31, 2019, 2018, and 2017 are further detailed in Note 5, Changes in Estimates.
(2)
Prior period information has been reclassified as a result of the Company's adoption of ASU 2017-07 on a retrospective basis in 2018. In accordance with the adoption of this guidance, prior year amounts related to the components of net periodic pension and postretirement benefit cost other than service costs have been reclassified from cost of sales and selling, general, and administrative expense to other (expense) income within the consolidated statement of operation for all periods presented. Accordingly, expenses of $18.1, $7.4, and $7.3 attributable to the Fuselage Systems segment, Propulsion Systems segment, and Wing Systems segment, respectively, were reclassified into segment operating income for the twelve months ended December 31, 2017.
(3)
For 2019, includes $13.9 related to warranty reserves. For 2018, includes charges of $1.1 related to warranty reserves. For 2017, includes charges of $1.8 and $12.7, related to warranty reserves and charges for excess purchases and purchase commitments, respectively.
Most of the Company’s revenue is obtained from sales inside the U.S. However the Company does generate international sales, primarily from sales to Airbus. The following chart illustrates the split between domestic and foreign revenues:
 
Year Ended December 31, 2019
 
Year Ended December 31, 2018
 
Year Ended December 31, 2017
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
$
6,566.3

 
84
%
 
$
5,967.1

 
83
%
 
$
5,722.9

 
82
%
International
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
771.9

 
10
%
 
763.3

 
10
%
 
740.9

 
11
%
Other
524.9

 
6
%
 
491.6

 
7
%
 
519.2

 
7
%
Total International
1,296.8

 
16
%
 
1,254.9

 
17
%
 
1,260.1

 
18
%
Total Revenues
$
7,863.1

 
100
%
 
$
7,222.0

 
100
%
 
$
6,983.0

 
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 U.S. Approximately 5% of the Company's long-lived assets based on book value are located in the U.K. with approximately another 3% of the Company's total long-lived assets located in countries outside the U.S. and the U.K. The following chart illustrates the split between domestic and foreign assets:
 
Year Ended December 31, 2019
 
Year Ended December 31, 2018
 
Year Ended December 31, 2017
Asset Location
Total
Long-Lived Assets
 
Percent of
Total
Long-Lived Assets
 
Total
Long-Lived Assets
 
Percent of
Total
Long-Lived Assets
 
Total
Long-Lived Assets
 
Percent of
Total
Long-Lived Assets
United States
$
2,079.4

 
92
%
 
$
2,003.9

 
92
%
 
$
1,939.0

 
92
%
International
 
 
 
 
 
 
 
 
 
 
 
United Kingdom
112.4

 
5
%
 
82.1

 
4
%
 
82.5

 
4
%
Other
79.9

 
3
%
 
81.6

 
4
%
 
83.8

 
4
%
Total International
192.3

 
8
%
 
163.7

 
8
%
 
166.3

 
8
%
Total Long-Lived Assets
$
2,271.7

 
100
%
 
$
2,167.6

 
100
%
 
$
2,105.3

 
100
%