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78 The Boeing Company and Subsidiaries
Notes to Consolidated Financial Statements
Precision Engagement and Mobility Systems
Programs in this segment include AH-64 Apache, CH-47
Chinook, C-17, EA-18G, F/A-18E/F, F-15, F-22A, Joint Direct
Attack Munition, P-8A Poseidon, formerly Multi-mission
Maritime Aircraft, Small Diameter Bomb, V-22 Osprey, 737
AEW&C, and 767 Tanker.
Network and Space Systems
Programs in this segment include Future Combat Systems,
Joint Tactical Radio System, and Family of Beyond Line-of-
Sight Terminals, which are helping our military customers
transform their operations to be network-centric; launch
exploration and satellite products and services including the
Space Shuttle, International Space Station, and Delta launch
services; and missile defense programs including Ground-
based Midcourse Defense and Airborne Laser. Also included
are military satellite programs and Proprietary programs.
Support Systems
Program areas in this segment include Integrated Logistics
(AH-64 Apache, C-17, CH-47 Chinook, E-6, F/A-18),
Maintenance, Modifications and Upgrades (B-52, C-130
Avionics Modernization Program, KC-10, KC-135, T-38), and
Training Systems and Services (AH-64 Apache, C-17, F/A-18,
F-15, T-45).
Our BCC segment is primarily engaged in supporting our
major operating units by facilitating, arranging, structuring and
providing selective financing solutions to our customers and
managing our overall financial exposures.
Engineering, Operations and Technology is an advanced
research and development organization focused on innovative
technologies, improved processes and the creation of new
products. Financing activities other than BCC, consisting
principally of four C-17 transport 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. Revenues by geographic area
consisted of the following:
Year ended December 31, 2006 2005 2004
Asia, other than China $10,663 $««5,554 $««6,068
China 2,659 3,154 1,720
Europe 5,445 3,312 4,204
Oceania 1,206 1,283 932
Africa 967 961 604
Canada 660 748 582
Latin America, Caribbean and other 1,431 629 680
23,031 15,641 14,790
United States 38,499 37,980 36,610
Total revenues $61,530 $53,621 $51,400
Commercial Airplanes segment revenues were approximately
73%, 76%, and 75% of total revenues in Europe and
approximately 78%, 77% and 90% of total revenues in Asia,
excluding China, for 2006, 2005 and 2004, respectively. IDS
revenues were approximately 22%, 20% and 21% of total
revenues in Europe and approximately 21%, 22% and 8% of
total revenues in Asia, excluding China, for 2006, 2005 and
2004, respectively. Exclusive of these amounts, IDS revenues
were principally to the U.S. Government and represented 46%,
51% and 56% of consolidated revenues for 2006, 2005 and
2004. Approximately 10% 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.
Research and Development Expense
Year ended December 31, 2006 2005 2004
Commercial Airplanes $2,390 $1,302 $«««941
Integrated Defense Systems:
Precision Engagement and
Mobility Systems 404 440 420
Network and Space Systems 301 334 357
Support Systems 86 81 57
Total Integrated Defense Systems 791 855 834
Other 76 48 104
$3,257 $2,205 $1,879
Depreciation and Amortization
Year ended December 31, 2006 2005 2004
Commercial Airplanes $«««263 $«««396 $«««460
Integrated Defense Systems:
Precision Engagement and
Mobility Systems 141 161 145
Network and Space Systems 231 283 277
Support Systems 38 24 23
Total Integrated Defense Systems 410 468 445
Boeing Capital Corporation 247 257 226
Other 60 40 51
Unallocated 579 365 342
$1,559 $1,526 $1,524
We recorded earnings from operations associated with our
equity method investments of $50, $0, and $8 in our Commercial
Airplanes segment and $96, $88, and $85 primarily in our
N&SS segment for the years ended December 31, 2006, 2005
and 2004, respectively.