Boeing 2009 Annual Report Download - page 30

The decrease in 2008 revenues of $5,478 million compared with 2007, is primarily due to lower
revenues at Commercial Airplanes. Commercial Airplanes revenues decreased by $5,123 million,
primarily as a result of decreases in new airplane deliveries reflecting the effects of the labor strike,
partially offset by higher intercompany revenues and higher pre-strike deliveries and model mix. We
delivered 104 fewer airplanes than expected during 2008 due to the strike. This reduced revenue by
approximately $6.4 billion for the twelve months ended December 31, 2008. BDS revenues were
unchanged as revenue growth in GS&S was offset by decreases in BMA and N&SS. BCC revenues
decreased by $112 million primarily due to lower interest income on financing receivables and notes
and a decrease in the customer financing portfolio. Other segment revenues increased by $259 million
primarily due to the sale of four C-17 aircraft during 2008, that were held under an operating lease.
Unallocated items and eliminations changed by $497 million, primarily due to the intercompany
elimination of P-8A revenues recognized by Commercial Airplanes.
Earnings From Operations
The following table summarizes our earnings/(loss) from operations:
(Dollars in millions)
Years ended December 31, 2009 2008 2007
Commercial Airplanes (583) 1,186 $ 3,584
Boeing Defense, Space & Security 3,299 3,232 3,440
Boeing Capital Corporation 126 162 234
Other segment (152) (307) (331)
Unallocated items and eliminations (594) (323) (1,097)
Total $2,096 $3,950 $ 5,830
Operating earnings in 2009 decreased by $1,854 million compared with 2008. Commercial Airplanes
earnings decreased by $1,769 million primarily due to $2,693 million of costs related to the first three
787 flight test aircraft included in research and development expense as a result of our determination
in August 2009 that these aircraft could not be sold. The earnings decrease is also attributable to
reach-forward losses on the 747 program which grew by $1,352 million in 2009 which is an increase of
$667 million over 2008. Lower commercial aviation services and intercompany earnings also
contributed to lower 2009 earnings. These decreases were partially offset by higher commercial
airplane deliveries in 2009 compared with 2008. BDS earnings increased by $67 million compared with
2008 primarily due to higher earnings in the BMA segment partially offset by lower earnings in the
N&SS segment. BCC operating earnings decreased $36 million reflecting lower revenues, higher
impairment expense and a provision for losses, partially offset by lower interest expense. Other
segment losses decreased by $155 million primarily due to recognition of pre-tax expense of $82
million in the prior year to increase the allowance for losses on customer financing receivables and
lower environmental remediation charges compared with the prior year. Unallocated items and
eliminations in 2009 reduced earnings by $271 million compared with 2008, which is further explained
in the table below.
Operating earnings in 2008 decreased by $1,880 million compared with 2007. Commercial Airplanes
earnings decreased by $2,398 million compared with the same period in 2007, primarily due to fewer
new airplane deliveries resulting from the strike, increased program infrastructure costs related to the
strike and revised schedules on 787 and 747-8, and a charge taken on the 747-8 program.
Commercial Airplanes’ research and development expense decreased by $124 million to $2,838 million
compared with the same period in 2007, primarily due to lower spending on 787 partially offset by
higher spending on 747-8 and lower supplier development cost sharing payments. BDS earnings
decreased by $208 million compared with 2007 primarily due to lower earnings in the BMA segment
resulting from charges taken on the Airborne Early Warning and Control (AEW&C). BCC operating
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