XML 43 R28.htm IDEA: XBRL DOCUMENT v3.20.4
Segment Information
12 Months Ended
Dec. 31, 2020
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 the Company's revenues in all segments. Wing Systems also includes significant revenues from Airbus. Approximately 83% of the Company's net revenues for the twelve months ended December 31, 2020 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 from ventilator production, miscellaneous other 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).  The Fuselage Systems segment manufactures products at the Company's facilities in Wichita, Kansas; Tulsa and McAlester, Oklahoma; San Antonio, Texas; Kinston, North Carolina; Biddeford, Maine; Casablanca, Morocco; 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; Dallas, Texas; Biddeford, Maine; Belfast, Northern Ireland; 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. These activities take place at the Company’s facilities in Tulsa and McAlester, Oklahoma; San Antonio, Texas; Kinston, North Carolina; Prestwick, Scotland; Belfast, Northern Ireland; Casablanca, Morocco; 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 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.
 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, 2020, 2019 and 2018:
Twelve Months Ended December 31, 2020Twelve Months Ended December 31, 2019Twelve Months Ended December 31, 2018
Segment Revenues   
Fuselage Systems$1,725.9 $4,206.2 $4,000.8 
Propulsion Systems784.5 2,057.8 1,702.5 
Wing Systems798.6 1,588.3 1,513.0 
All Other95.8 10.8 5.7 
$3,404.8 $7,863.1 $7,222.0 
Segment Operating (loss) income (1)
  
Fuselage Systems(2)
$(454.5)$440.8 $576.1 
Propulsion Systems(3)
(36.8)404.6 283.5 
Wing Systems(4)
(68.1)216.0 226.4 
All Other34.7 3.4 0.3 
(524.7)1,064.8 1,086.3 
Corporate SG&A(237.4)(261.4)(210.4)
Unallocated impact of severe weather event— — 10.0 
Research and development(38.8)(54.5)(42.5)
Unallocated cost of sales(5)
(11.9)11.9 (0.2)
Total operating (loss) income$(812.8)$760.8 $843.2 
_______________________________________
(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, 2020, 2019, and 2018 are further detailed in Note 5, Changes in Estimates.
(2)The year ended December 31, 2020 includes excess capacity production costs of $175.0 related to the temporary B737 MAX production schedule changes, temporary workforce costs of $19.0 as a result of COVID-19 production pause net of U.S. employee retention credit, $41.3 of restructuring costs and $22.5 from loss on the disposition of assets.
(3)The year ended December 31, 2020 includes excess capacity production costs of $61.1 related to the temporary B737 MAX production schedule changes, temporary workforce costs of $7.2 as a result of COVID-19 production pause net of U.S employee retention credit and $15.2 of restructuring costs.
(4)The year ended December 31, 2020 includes excess capacity production costs of $42.9 related to the temporary B737 MAX and A320 production schedule changes, temporary workforce costs of $7.5 as a result of COVID-19, net of U.S employee retention credit and U.K government subsidies, $16.5 of restructuring costs and $0.4 from loss on the disposition of assets.
(5)Includes $(3.3), $13.9 and $(1.1) related to warranty reserves for the periods ended December 31, 2020, 2019 and 2018, respectively. Included in unallocated for December 31, 2020 is write off of excess material of ($8.1).
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, 2020Year Ended December 31, 2019Year Ended December 31, 2018
Revenue Source(1)
Net RevenuesPercent of
Total
Net Revenues
Net RevenuesPercent of
Total
Net Revenues
Net RevenuesPercent of
Total
Net Revenues
United States$2,637.6 77 %$6,566.3 84 %$5,967.1 83 %
International 
United Kingdom433.5 13 %771.9 10 %763.3 10 %
Other333.7 10 %524.9 %491.6 %
Total International767.2 23 %1,296.8 16 %1,254.9 17 %
Total Revenues$3,404.8 100 %$7,863.1 100 %$7,222.0 100 %
_______________________________________

(1)Net Revenues are attributable to countries based on destination where goods are delivered.
Most of the Company’s property, plant and equipment are located within the U.S. Approximately 19% of the Company's property, plant and equipment based on book value are located in the U.K. with approximately another 4% of the Company's total property, plant and equipment 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, 2020Year Ended December 31, 2019Year Ended December 31, 2018
Asset LocationTotal
PPE
Percent of
PPE
Total
PPE
Percent of
Total
PPE
Total
PPE
Percent of
Total
PPE
United States$1,931.0 77 %$2,079.4 92 %$2,003.9 92 %
International 
United Kingdom466.2 19 %112.4 %82.1 %
Other106.6 %79.9 %81.6 %
Total International572.8 23 %192.3 %163.7 %
Total Property, Plant & Equipment$2,503.8 100 %$2,271.7 100 %$2,167.6 100 %