Boeing 2009 Annual Report Download - page 48

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impairment was indicated by our tests. Future recommended budgetary changes, if approved by
Congress, or additional partial terminations, could further impact N&SS programs, including the
recoverability of goodwill.
Sea Launch See the discussion of Sea Launch Chapter 11 Filing and outstanding accounts receivable
in Note 6 Accounts Receivable.
Satellites See the discussions of Boeing Satellite Systems International, Inc. (BSSI) in Note 20 Legal
Proceedings and discussion of Satellite insurance risk in Note 11 Liabilities, Commitments and
Contingencies.
Global Services & Support
Operating Results
(Dollars in millions)
Years ended December 31, 2009 2008 2007
Revenues $ 8,727 $ 7,390 $7,072
% of Total company revenues 13% 12% 11%
Earnings from operations $ 947 $ 921 $ 970
Operating margins 10.9% 12.5% 13.7%
Research and development $ 163 $ 156 $ 114
Contractual backlog $11,967 $10,707 $9,607
Unobligated backlog $ 306 $ 690 $1,172
Revenues GS&S revenues increased $1,337 million in 2009 and $318 million in 2008, an increase of
18% and 4%. The 2009 increase was due to increased volume in the Integrated Logistics (IL), and the
Training Systems and Services (TS&S) divisions. The 2008 increase was due to higher revenues in the
TS&S and IL divisions partially offset by decreases in International Support program volume.
Operating Earnings GS&S Operating earnings increased 3% in 2009 as additional earnings from
increased volume were partially offset by lower margins due to contract adjustments and changes in
contract mix. Operating earnings decreased by 5% in 2008 due to changes in the contract mix and
disposition of contract matters.
Research and Development GS&S continues to focus investment strategies on its core businesses
including IL, Maintenance Modifications and Upgrades (MM&U) and TS&S, as well as on moving into
new market areas of Logistics Command and Control (Log C2) and Energy Management in
Advanced Global Services and Support. Investments have been made to continue the development
and implementation of innovative tools, processes and systems as market discriminators in the delivery
of integrated customer solutions. Examples of successful programs stemming from these investment
strategies include the C-17 Globemaster Sustainment Partnership, the F/A-18 Integrated Readiness
Support Teaming program, the F-15 Singapore Performance-Based Logistics contract, and Smart Grid
Projects. Successful development of adaptable systems has allowed GS&S to transition from Boeing
platforms and into the broader aviation market. Beyond aerospace, GS&S capabilities have created
opportunities in adjacencies and new markets exemplified in 2009 through entrance into
the Land Vehicle support, Energy Solutions, and Logistics Information Systems markets.
Backlog GS&S total backlog increased by 8% in 2009 compared with 2008 due to significant growth in
International Support and Defense and Government Services programs and partially offset by
decreases in the IL and MM&U divisions. Total backlog increased 6% in 2008 compared with 2007
primarily due to increases in IL and International Support programs.
36