Boeing 2005 Annual Report Download - page 84

Notes to Consolidated Financial Statements
into a USAF tanker contract is becoming less likely. We are
continuing to pursue market opportunities for additional 767
sales. Despite the recent orders and the possibility of additional
orders, it is still reasonably possible a decision to complete pro-
duction could be made in 2006. A forward loss is not expected
as a result of such a decision but program margins would be
reduced.
We have entered into standby letters of credit agreements and
surety bonds with financial institutions primarily relating to the
guarantee of future performance on certain contracts.
Contingent liabilities on outstanding letters of credit agreements
and surety bonds aggregated approximately $3,957 as of
December 31, 2005 and approximately $3,183 at December
31, 2004.
Note 25 - Segment Information
We operate in six principal segments: Commercial Airplanes;
A&WS, Network Systems, Support Systems, and L&OS, col-
lectively IDS; and BCC. All other activities fall within the Other
segment, principally made up of Boeing Technology, Connexion
by BoeingSM and our Shared Services Group. Our primary
profitability measurements to review a segment’s operating
results are earnings from operations and operating margins.
Our Commercial Airplanes operation principally involves devel-
opment, production and marketing of commercial jet aircraft
and providing related support services, principally to the com-
mercial airline industry worldwide.
IDS operations principally involve research, development, pro-
duction, modification and support of the following products and
related systems: military aircraft, both land-based and aircraft-
carrier-based, including fighter, transport and attack aircraft
with wide mission capability, and vertical/short takeoff and
landing capability; helicopters and missiles, space systems,
missile defense systems, satellites and satellite launching vehi-
cles, and information and battle management systems.
Although some IDS products are contracted in the commercial
environment, the primary customer is the U.S. Government.
BCC is primarily engaged in supporting our major operating
units by providing selective financing solutions to our cus-
tomers and managing overall portfolio risk exposures.
Boeing Technology is an advanced research and development
organization focused on innovative technologies, improved
processes and the creation of new products. Financing activi-
ties other than BCC, consisting principally of four C-17 trans-
port aircraft under lease to the UKRAF, are included within the
Other segment classification.
While our principal operations are in the United States, Canada,
and Australia, some key suppliers and subcontractors are
located in Europe and Japan. Sales and other operating rev-
enue by geographic area consisted of the following:
Year ended December 31, 2005 2004 2003
Asia, other than China $ 5,576 $ 6,091 $ 6,885
China 3,324 1,769 745
Europe 3,622 4,506 3,826
Oceania 1,362 1,032 1,944
Africa 1,011 625 670
Canada 833 644 639
Latin America, Caribbean and other 669 738 607
16,397 15,405 15,316
United States 38,448 37,052 34,940
Total sales $54,845 $52,457 $50,256
Commercial Airplanes segment sales were approximately 78%,
77% and 80% of total sales in Europe and approximately 77%,
90% and 90% of total sales in Asia, excluding China, for 2005,
2004 and 2003, respectively. IDS sales were approximately
18%, 20% and 16% of total sales in Europe and approximately
22%, 8% and 8% of total sales in Asia, excluding China, for
2005, 2004 and 2003 respectively. Exclusive of these amounts,
IDS sales were principally to the U.S. Government and repre-
sented 51%, 56% and 50% of consolidated sales for 2005,
2004 and 2003, respectively. Approximately 6% of operating
assets are located outside the United States.
The information in the following tables is derived directly from
the segments’ internal financial reporting used for corporate
management purposes.
Revenues
Year ended December 31, 2005 2004 2003
Commercial Airplanes $22,651 $21,037 $22,408
Integrated Defense Systems:
Aircraft and Weapon Systems 11,444 11,394 10,763
Network Systems 11,264 11,221 9,198
Support Systems 5,342 4,881 4,408
Launch and Orbital Systems 2,741 2,969 2,992
Total Integrated Defense Systems 30,791 30,465 27,361
Boeing Capital Corporation 966 959 991
Other 972 549 871
Accounting differences/eliminations (535) (553) (1,375)
Total revenues $54,845 $52,457 $50,256
82 The Boeing Company and Subsidiaries