Boeing 2006 Annual Report Download - page 5

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The great progress we made in 2006
provides the foundation for even better
performance in 2007 and beyond. The
challenge before us now is to unleash
the full potential of The Boeing Company
to deliver on this promising future.
In 2006, we witnessed what is possible
when we focus on both growth and
productivity. We delivered double-digit
increases in revenue and core earnings
per share. Revenues rose 15 percent to
a record $61.5 billion and, excluding
special items, our core earnings per
share rose 51 percent to $3.62 reflecting
strong performance across both of our
principal businesses. Our 2006 reported
earnings per share totaled $2.85, down
from $3.20 in 2005.
We also delivered a record year in cash
flow, commercial airplane orders and
total backlog. Our cash flow went from
strong to stronger; it grew from $7 billion
in 2005 to a record $7.5 billion — 12 per-
cent of our revenues — and that was
after we had invested in our growth pro-
grams and fully funded our pension plans.
Boeing Commercial Airplanes had a
tremendous year, adding 1,044 net
orders for new airplanes to break the
record of 1,002 net orders set in 2005.
We also smoothly and efficiently increased
our production rate by more than a third.
We delivered 398 airplanes to a broad
range of customers in 2006, compared
to 290 in 2005. We did this with a disci-
plined approach that we will continue
to use as we ramp up production rates
further to meet our commitments for
2007 deliveries and beyond.
Integrated Defense Systems also showed
strong financial performance. IDS delivered
continued healthy margins and record
revenues in 2006. Despite a moderating
defense market, this business continues
to do well — winning important new busi-
ness such as the SBInet program, which
supports the U.S. Department of Home-
land Security’s Secure Border Initiative,
and meeting key program milestones.
With the great success we have had in
winning new business over the past two
years, our backlog has increased 60 per-
cent to more than $250 billion — more
than four times our total revenues for
2006 and by far the largest backlog in
our history. With solid execution and
continuing gains in productivity, we ex-
pect to convert that backlog into
delivered product, continue our strong
sales and improve financial performance
in the years immediately ahead.
Boeing’s stock price increased 26.5 per-
cent over the course of 2006, and for
the fourth consecutive year, we have
delivered 25 percent or greater total
shareholder return. At the end of 2006,
we increased our shareholder dividend
another 17 percent, following a 20 per-
cent increase in the dividend in 2005.
W. James McNerney, Jr., Chairman,
President and Chief Executive Officer
To the Shareholders and Employees of
The Boeing Company: This was an impor-
tant year for Boeing. Not only did we
observe our 90th year in business, but I
also believe that, when we look back on
2006, we will see it as a pivotal year in the
company’s history. It will be viewed as a
year in which we turned the corner and
positioned ourselves for what promises
to be an exciting future and a period of
accelerated and exhilarating growth.