Boeing 2009 Annual Report Download - page 45

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areas like autonomous operation of unmanned vehicles, advanced sensors and Electronic Warfare.
These efforts focus on increasing mission effectiveness, interoperability, reliability and reducing the
cost of ownership.
Backlog BMA total backlog in 2009 was virtually unchanged from 2008. Backlog increases due to
2009 current year orders for C-17, P-8 India and Chinook aircraft were offset by revenues recognized
on multi-year contracts received in prior years with the largest decrease in the F/A-18 program. Total
backlog increased by 13% in 2008 compared with 2007 primarily due to an increase in the V-22,
Chinook and F-15 program backlog. These increases were partially offset by deliveries and sales on
multi-year contracts awarded in prior years with the largest decreases in the C-17 and F/A-18
programs.
Additional Considerations
Items which could have a future impact on BMA operations include the following:
AEW&C During 2009, 2008 and 2007, we recorded charges increasing the reach-forward losses on
the AEW&C programs in Australia and Turkey by $133 million, $308 million and $81 million,
respectively. The 2009 charge primarily related to delivery schedule delays. The 2008 charge, primarily
related to our program in Australia, was due to subsystem development issues on the electronic
warfare and ground support systems and the additional time required for integration testing. The
AEW&C development program, also known as Wedgetail in Australia, Peace Eagle in Turkey and
Peace Eye in the Republic of Korea, consists of 737-700 aircraft outfitted with a variety of command
and control and advanced radar systems, some of which have never been installed on an airplane
before. Wedgetail includes six aircraft and Peace Eagle and Peace Eye include four aircraft each.
During the fourth quarter of 2009, two Wedgetail aircraft were provided to Australia for familiarization
and training. Wedgetail final delivery and customer acceptance is scheduled to begin in late 2010 and
extend through the second quarter of 2011. These are advanced and complex fixed-price development
programs involving technical challenges at the individual subsystem level and in the overall integration
of these subsystems into a reliable and effective operational capability. We believe that the cost and
revenue estimates incorporated in the financial statements are appropriate; however, the technical
complexity of the programs creates financial risk as additional completion costs may be necessary or
scheduled delivery dates could be delayed.
International KC-767 Tanker Program During 2009, 2008 and 2007, we recorded charges increasing
the reach-forward losses in the International KC-767 Tanker programs by $78 million, $85 million and
$152 million, respectively. The 2007 charge was partially offset at the consolidated level. The
International KC-767 Tanker program includes four aircraft for the Italian Air Force and four aircraft for
the Japanese Air Self Defense Force. The final delivery to Japan was made in December 2009. The
Italian International KC-767 program is ongoing, and while we believe the revenue and cost estimates
incorporated in the financial statements are appropriate, the technical complexity of the program
creates financial risk as additional completion and development costs may be necessary or remaining
scheduled delivery dates could be delayed.
C-17 See the discussion of C-17 in Note 11 Liabilities, Commitments and Contingencies.
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