With increased interest in climate forecasts and projections, it is important to understand more about their sources and levels of skill. A starting point here is to describe the nature of the skill associated with forecasts and projections. Climate forecasts and projections typically both include time varying forcing of the climate, but only forecasts have initial conditions set close to the observed climate state. Climate forecasts therefore derive skill from both initial conditions and from forcing. The character of the initial condition skill and forcing skill is different. Skill from initial conditions results in a narrowing of expectations relative to a climatological distribution and points toward a more favoured part of the distribution. Forcing skill could result from a shift in the preferred parts of the climatological distribution in response to forcing, or it could result from a shift in the entire distribution, or both. Assessments of forcing skill require time averages of the target variable that are long enough so that the contributions from internal variations are small compared to the forced response. The assessment of skill of climate forecasts and projections is inherently partial because of the small number of repeated trials possible on typical climate time scales but is nonetheless the only direct measure of their performance.