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33
Boeing Military Aircraft
Results of Operations
(Dollars in millions)
Years ended December 31, 2014 2013 2012
Revenues $13,511 $15,285 $15,388
% of total company revenues 15% 18% 19%
Earnings from operations $1,304 $1,504 $1,487
Operating margins 9.7% 9.8% 9.7%
Contractual backlog $21,143 $23,604 $27,898
Unobligated backlog $8,030 $10,058 $8,671
Revenues
BMA revenues in 2014 decreased by $1,774 million, or 12%, compared with 2013 primarily due to a
reduction of revenue of $1,730 million related to F-15 and KC-46A Tanker milestones, fewer C-17 aircraft
deliveries and delivery mix on the P-8 program.
BMA revenues in 2013 decreased by $103 million compared with 2012 primarily due to a reduction of
$1,320 million related to fewer deliveries of AEW&C aircraft to Australia and the Republic of Korea and
customer and delivery mix for the F/A-18 and C-17 programs. This reduction was partially offset by an
increase of $1,168 million related to higher 2013 deliveries of P-8 aircraft and Apache rotorcraft, as well
as non-recurring effort on several Chinook programs.
Earnings From Operations
BMA earnings from operations in 2014 decreased by $200 million, or 13%, compared with 2013 primarily
due to 2014 charges of $235 million and lower earnings of $73 million related to fewer deliveries on the
C-17 program. The charges recorded in 2014 included $187 million related to the USAF KC-46A Tanker
contract and $48 million to write off inventory and accrue termination liabilities as a result of our 2014
decision to produce three fewer C-17 aircraft in 2015 than previously planned. See Note 11. These
decreases were partially offset by higher earnings of $65 million related to improved performance on the
F/A-18 program. In addition, in 2013, we recorded a charge of $64 million to write off inventory and accrue
termination liabilities as a result of the Republic of Korea's announcement to restart its F-X fighter aircraft
competition. Net favorable cumulative contract catch-up adjustments were $39 million lower in 2014 than
in 2013 primarily driven by the reach-forward loss on the USAF KC-46A Tanker contract, partially offset
by higher favorable adjustments to the F/A-18 and F-15 programs.
BMA earnings from operations in 2013 increased by $17 million compared with 2012 primarily due to
increased deliveries and higher revenues on the P-8, Apache and Chinook programs of $263 million
partially offset by lower earnings of $175 million related to initial revenues in 2012 on the Saudi F-15
program and lower C-17 performance. Net favorable cumulative contract catch-up adjustments were $62
million lower in 2013 than in 2012, primarily driven by less favorable adjustments to the F-15 program. In
the third quarter of 2013, we decided to end production of C-17 aircraft in 2015. See Note 11. Also in the
third quarter of 2013, we recorded a charge of $64 million to write off inventory and accrue termination
liabilities as a result of the Republic of Korea's announcement that it will restart its F-X fighter aircraft
competition.