Boeing 2011 Annual Report Download - page 37

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Revenues for 2011 increased by $4,337 million or 13.6% compared with 2010 due to higher new
airplane deliveries, including the impact of entry into service of the 787-8 and 747-8 Freighter,
favorable commercial airplane delivery model mix and higher commercial aviation services revenues.
The increase in revenues from commercial aviation services was primarily due to increased sales of
spares.
Revenues for 2010 decreased by $2,217 million or 6.5% compared with 2009. The decrease in new
airplane revenues primarily reflects lower 777 deliveries resulting from a production rate change from 7
to 5 per month beginning in June 2010 and no deliveries on the 747 program due to the transition from
the 747-400 to the 747-8 derivative. The increase in revenues from commercial aviation services
business was primarily due to increased sales of spares.
Commercial airplanes deliveries as of December 31 were as follows:
737 747 767 777 787 Total
2011
Cumulative Deliveries 3,878 1,427 1,014 983 3
Deliveries 372(1) 9 20 73 3 477
2010
Cumulative Deliveries 3,506 1,418 994 910
Deliveries 376(1) 12 74 462
2009
Cumulative Deliveries 3,130 1,418 982 836
Deliveries 372(1) 8 13 88 481
(1) Includes intercompany deliveries of 7 737 airplanes in 2011, 5 737 airplanes in both 2010 and
2009.
Earnings From Operations
Earnings from operations for 2011 increased by $489 million compared with 2010. This increase
reflects earnings of $376 million from higher revenues on new airplane deliveries, $180 million of
higher earnings due to commercial aviation services volume and margins and $261 million of lower
research and development expense, partially offset by increases of $328 million reflecting higher fleet
support costs and other costs associated with business growth.
Earnings from operations for 2010 increased by $3,589 million compared with 2009. The increase was
primarily due to the 2009 reclassification from inventory to research and development expense of costs
related to the first three 787 flight test airplanes, and the 2009 reach-forward losses on the 747
program. Costs of $2,693 million included in research and development expense in 2009 for the first
three flight test 787 airplanes were a result of our determination that these airplanes could not be sold.
The reach-forward loss on the 747 program of $1,352 million during 2009 was primarily due to
increased production costs, reductions in projected delivery price increases associated with escalation
and the difficult market conditions affecting the 747-8. The remaining net decrease in earnings for 2010
was primarily attributable to increased research and development expense of $285 million and lower
new airplane deliveries.
Backlog Firm backlog represents orders for products and services where no contingencies remain
before Boeing and the customer are required to perform. Backlog does not include prospective orders
where customer controlled contingencies remain, such as the customers receiving approval from their
Board of Directors, shareholders or government and completing financing arrangements. All such
contingencies must be satisfied or have expired prior to recording a new firm order even if satisfying
such conditions is highly certain. Firm orders exclude options. A number of our customers may have
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