Boeing 2009 Annual Report Download - page 29

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Consolidated Results of Operations and Financial Condition
Overview
We are a global market leader in design, development, manufacture, sale and support of commercial
jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and
services. We are one of the two major manufacturers of 100+ seat airplanes for the worldwide
commercial airline industry and one of the largest defense contractors in the U.S. While our principal
operations are in the U.S., we rely extensively on a network of partners, key suppliers and
subcontractors around the world.
Our strategy is centered on successful execution in healthy core businesses – Commercial Airplanes
and Boeing Defense, Space & Security (BDS) – supplemented and supported by Boeing Capital
Corporation (BCC). Taken together, these core businesses have historically generated substantial
earnings and cash flow that permit us to invest in new products and services that open new frontiers in
aerospace. We focus on producing the airplanes the market demands and we price our products to
provide a fair return for our shareholders while continuing to find new ways to improve efficiency and
quality. BDS integrates its resources in defense, intelligence, communications, security and space to
deliver capability-driven solutions to its customers at reduced costs. Our strategy is to leverage our
core businesses to capture key next-generation programs while expanding our presence in adjacent
and international markets, underscored by an intense focus on growth and productivity. Our strategy
also benefits as the cyclicality of commercial and defense markets often offset. BCC delivers value by
supporting our business units and managing overall financing exposure.
Consolidated Results of Operations
Revenues
(Dollars in millions)
Years ended December 31, 2009 2008 2007
Commercial Airplanes $34,051 $28,263 $33,386
Boeing Defense, Space & Security 33,661 32,047 32,052
Boeing Capital Corporation 660 703 815
Other segment 165 567 308
Unallocated items and eliminations (256) (671) (174)
Total $68,281 $60,909 $66,387
Revenues in 2009 increased by $7,372 million due to higher revenues in Commercial Airplanes and
BDS. Commercial Airplanes revenues increased by $5,788, primarily due to higher commercial
airplane deliveries in 2009. Deliveries in 2008 were lower as a result of a labor strike in the prior year.
Increases were partially offset by decreases in commercial aviation services and intercompany
revenues. BDS revenues increased by $1,614 million, primarily due to higher revenues in Global
Services & Support (GS&S) and Boeing Military Airplanes (BMA), partially offset by decreases in
Network & Space Systems (N&SS). BCC revenues decreased by $43 million during the year primarily
due to a decrease in the customer financing portfolio. Other segment revenues decreased by $402
million partly due to higher revenues in the prior year from the sale of four C-17 aircraft held under
operating lease. Lower Unallocated items and eliminations improved revenues by $415 million primarily
due to lower P-8A Poseidon program (P-8A) intercompany revenues recognized by Commercial
Airplanes in 2009 compared with 2008.
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