FORM 10-K

24 Bell’s operating expenses increased $49 million, 2%, in 2017, compared with 2016, primarily due to higher volume as described above. Factors contributing to the 2016 year-over-year revenue change are provided below: (In millions) 2016 versus 2015 Volume and mix $ (225) Other 10 Total change $ (215) Bell’s revenues decreased $215 million, 6%, in 2016, compared with 2015, primarily due to the following factors: • $269 million decrease in commercial revenues, primarily due to lower aircraft deliveries, as we delivered 114 commercial aircraft in 2016, compared with 175 aircraft in 2015. • $43 million decrease in V-22 program revenues, primarily due to lower aircraft deliveries, as we delivered 22 V-22 aircraft in 2016, compared with 24 V-22 aircraft in 2015. • $97 million increase in other military revenues, primarily reflecting higher H-1 program revenues, as we delivered 35 H-1 aircraft in 2016, compared with 24 H-1 aircraft in 2015. Bell’s operating expenses decreased $201 million, 7%, in 2016, compared with 2015, primarily due to lower net sales volume as described above. Bell Segment Profit Factors contributing to 2017 year-over-year segment profit change are provided below: (In millions) 2017 versus 2016 Performance and other $ 66 Volume and mix (37) Total change $ 29 Bell’s segment profit increased $29 million, 8%, in 2017, compared with 2016, reflecting a favorable impact from performance and other of $66 million, largely the result of improved manufacturing performance and lower research and development costs, partially offset by an unfavorable impact from volume and mix of $37 million. Factors contributing to 2016 year-over-year segment profit change are provided below: (In millions) 2016 versus 2015 Volume and mix $ (46) Performance and other 32 Total change $ (14) Bell’s segment profit decreased $14 million, 4%, in 2016, compared with 2015. The unfavorable impact from volume and mix was primarily due to lower commercial aircraft deliveries, while the favorable performance and other was largely the result of lower research and development costs. Bell Backlog Bell’s backlog decreased $762 million, 14%, in 2017, and increased $136 million, 3%, in 2016. The decrease in 2017 was primarily due to deliveries on the V-22 and H-1 programs in excess of orders.