Boeing 2008 Annual Report Download - page 46

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Commercial Satellite Environment The commercial satellite market has strengthened since the
downturn earlier in the decade and is expected to stabilize with replacement demand through the end
of the decade. Despite improvement in market demand the industry continues to be characterized by
overcapacity creating strong competitive pressures on pricing.
Segment Name Changes
In the third quarter of 2008, we changed the names of the Precision Engagement and Mobility Systems
segment to Boeing Military Aircraft (BMA) and the Support Systems segment to Global Services and
Support (GS&S).
IDS Realignment
Effective January 1, 2008 and 2007, certain programs were realigned between IDS segments. In
addition, certain environmental remediation contracts (formerly included in N&SS) were transferred to
the Other Segment. Business segment data for all periods presented have been adjusted to reflect the
realignment. See Note 21.
Operating Results
(Dollars in millions)
Years ended December 31, 2008 2007 2006
Revenues $32,047 $32,052 $32,411
% of Total company revenues 53% 48% 53%
Earnings from operations $ 3,232 $ 3,440 $ 3,031
Operating margins 10.1% 10.7% 9.4%
Research and development $ 933 $ 848 $ 786
Contractual backlog $45,285 $41,788 $42,287
Unobligated backlog $27,719 $29,893 $33,385
Since our operating cycle is long-term and involves many different types of development and
production contracts with varying delivery and milestone schedules, the operating results of a particular
year, or year-to-year comparisons of revenues and earnings, may not be indicative of future operating
results. In addition, depending on the customer and their funding sources, our orders might be
structured as annual follow-on contracts, or as one large multi-year order or long-term award. As a
result, period-to-period comparisons of backlog are not necessarily indicative of future workloads. The
following discussions of comparative results among periods should be viewed in this context.
Revenues IDS revenues were unchanged in 2008 as revenue growth in GS&S was offset by
decreases in BMA and N&SS. IDS revenues decreased by 1% in 2007 primarily due to the exclusion of
the government Delta volume from N&SS revenues, now a revenue component for our joint venture
ULA. Decreased revenue from this exclusion and lower revenues in the BMA segment were partially
offset by increased volume in other N&SS programs and growth in the GS&S segment.
Operating Earnings IDS earnings, which include the effects of the IAM strike, decreased by $208
million in 2008 primarily due to lower earnings in the BMA segment resulting from a $248 million
charge taken on the AEW&C program in the second quarter partially offset by higher earnings in the
N&SS Segment. IDS operating earnings increased by $409 million in 2007 compared with 2006
primarily due to $770 million of charges on AEW&C in 2006. The 2007 increase was partially offset by
lower earnings in the N&SS segment and other BMA programs.
32