Boeing 2010 Annual Report Download - page 33
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Other Earnings Items
(Dollars in millions)
Years ended December 31, 2010 2009 2008
Earnings from operations $ 4,971 $2,096 $ 3,950
Other income/(expense), net 52 (26) 247
Interest and debt expense (516) (339) (202)
Earnings before income taxes 4,507 1,731 3,995
Income tax expense (1,196) (396) (1,341)
Net earnings from continuing operations $ 3,311 $1,335 $ 2,654
Other income increased by $78 million in 2010 primarily due to investment income on higher cash and
investment balances throughout 2010. The decrease in 2009 of $273 million was driven by lower
investment income due to both lower interest rates and investment balances. Interest and debt
expense increased by $177 million and $137 million in 2010 and 2009 due to debt issued in 2009.
Our effective income tax rate was 26.5%, 22.9% and 33.6% for the years ended December 31, 2010,
2009 and 2008, respectively. Our effective tax rate was higher in 2010, compared with 2009, primarily
because pre-tax book income in 2010 was higher than in 2009 and because of an income tax charge
of $150 million recorded during the first quarter of 2010 as a result of the Patient Protection and
Affordable Care Act, as modified by the Health Care and Education Reconciliation Act of 2010. This
was partially offset by a tax benefit of $371 million recorded during the fourth quarter of 2010 as a
result of settling the 1998-2003 federal audit. Our effective tax rate was lower in 2009, compared with
2008, primarily because tax credits, such as research and development credits, represented a higher
proportion of earnings before taxes due to the year-over-year reduction in earnings. For additional
discussion related to Income Taxes, see Note 5 to our Consolidated Financial Statements.
Backlog
Our backlog at December 31 was as follows:
(Dollars in millions) 2010 2009 2008
Contractual Backlog:
Commercial Airplanes $255,591 $250,476 $278,575
Boeing Defense, Space & Security:
Boeing Military Aircraft 25,094 26,354 25,802
Network & Space Systems 9,586 7,746 8,868
Global Services & Support 13,684 11,924 10,615
Total Boeing Defense, Space & Security 48,364 46,024 45,285
Total contractual backlog $303,955 $296,500 $323,860
Unobligated backlog $ 16,871 $ 19,058 $ 28,066
Contractual backlog of unfilled orders excludes purchase options, announced orders for which
definitive contracts have not been executed, and unobligated U.S. and non-U.S. government contract
funding. The increase in contractual backlog during 2010 was due to orders in excess of deliveries and
changes in projected revenue escalation, partially reduced by cancellations of orders. The decrease in
backlog during 2009 was due to deliveries in excess of orders, changes in projected revenue
escalation and cancellations of orders.
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