Boeing 2010 Annual Report Download - page 48

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Global Services & Support
Operating Results
(Dollars in millions)
Years ended December 31, 2010 2009 2008
Revenues $ 8,250 $ 8,480 $ 7,256
% of Total company revenues 13% 12% 12%
Earnings from operations $ 906 $ 932 $ 904
Operating margins 11.0% 11.0% 12.5%
Research and development $ 130 $ 122 $ 149
Contractual backlog $13,684 $11,924 $10,615
Unobligated backlog $90$ 331 $ 703
Revenues GS&S revenues decreased $230 million in 2010, a decrease of 3%, and increased $1,224
million in 2009, an increase of 17%, in each case compared with the prior year. The 2010 decrease is
primarily due to lower revenues on several Maintenance, Modifications and Upgrades (MM&U)
programs partially offset by higher revenues on several Integrated Logistics (IL) programs. The 2009
increase was due to increased volume in the IL programs and the Training Systems and Services
(TS&S) divisions.
Operating Earnings GS&S operating earnings decreased by 3% in 2010 primarily due to lower
revenues. 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.
Research and Development GS&S continues to focus investment strategies on its core businesses
including IL, MM&U and TS&S, as well as on moving into new market areas of logistics command and
control (Log C2) in Advanced Services and energy management in Boeing Energy. 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.
Backlog GS&S total backlog increased by 12% in 2010 compared with 2009 primarily due to the
award of the UK FLIS contract. Backlog also increased due to increases in several IL and MM&U
programs, partially offset by decreases in several Training Systems programs. 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 several IL and MM&U programs.
Boeing Capital Corporation
Business Environment and Trends
BCC’s customer financing and investment portfolio at December 31, 2010 totaled $4,694 million. A
substantial portion of BCC’s portfolio is concentrated among certain U.S. commercial airline customers.
BCC’s portfolio is also concentrated by varying degrees across Boeing aircraft product types most
notably out of production Boeing aircraft such as 717 aircraft.
We provided greater amounts of financing to Boeing customers during 2009 than in any of the
preceding five years. Sources of financing available for aircraft deliveries improved during 2010 and as
a result, we provided no financing for Boeing aircraft deliveries.
Aircraft values and lease rates are impacted by the number and type of aircraft that are currently out of
service. Approximately 2,200 western-built commercial jet aircraft (10.5% of current world fleet) were
36