Boeing 2011 Annual Report Download - page 31

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Consolidated Results of Operations and Financial Condition
Overview
We are a global market leader in design, development, manufacture, sale and support of commercial
jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and
services. We are one of the two major manufacturers of 100+ seat airplanes for the worldwide
commercial airline industry and one of the largest defense contractors in the U.S. While our principal
operations are in the U.S., we conduct operations in many countries and rely on an extensive network
of international partners, key suppliers and subcontractors.
Our strategy is centered on successful execution in healthy core businesses – Commercial Airplanes
and Boeing Defense, Space & Security (BDS) – supplemented and supported by Boeing Capital
Corporation (BCC). Taken together, these core businesses have historically generated substantial
earnings and cash flow that permit us to invest in new products and services. We focus on producing
the products and providing the services that the market demands and we price our products and
services to provide a fair return for our shareholders while continuing to find new ways to improve
efficiency and quality. Commercial Airplanes is committed to being the leader in commercial aviation by
offering airplanes and services that deliver superior design, efficiency and value to customers around
the world. BDS integrates its resources in defense, intelligence, communications, security and space to
deliver capability-driven solutions to its customers at reduced costs. Our strategy is to leverage our
core businesses to capture key next-generation programs while expanding our presence in adjacent
and international markets, underscored by an intense focus on growth and productivity. Our strategy
also benefits as the cyclicality of commercial and defense markets often offset. BCC delivers value by
supporting our business units and managing overall financing exposure.
Consolidated Results of Operations
Revenues
(Dollars in millions)
Years ended December 31, 2011 2010 2009
Commercial Airplanes $36,171 $31,834 $34,051
Boeing Defense, Space & Security 31,976 31,943 33,661
Boeing Capital Corporation 532 639 660
Other segment 138 138 165
Unallocated items and eliminations (82) (248) (256)
Total $68,735 $64,306 $68,281
Revenues in 2011 increased by $4,429 million or 7% compared with 2010. Commercial Airplanes
revenues increased by $4,337 million due to higher new airplane deliveries, including the impact of
entry into service of the 787-8 and 747-8 Freighter, favorable new airplane delivery mix and higher
commercial aviation services revenues. BDS revenues increased by $33 million primarily due to higher
revenues in the Boeing Military Aircraft (BMA) and Global Services & Support (GS&S) segments,
partially offset by lower revenues in the Network & Space Systems (N&SS) segment.
Revenues in 2010 decreased by $3,975 million or 6% compared with 2009. Commercial Airplanes
revenues decreased by $2,217 million due to lower 777 deliveries primarily resulting from a production
rate change from 7 to 5 per month beginning in June 2010 and no deliveries on the 747 program due
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