Boeing 2012 Annual Report Download - page 31

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19
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, service 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
Defense, Space & Security (BDS) – supplemented and supported by Boeing Capital (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, 2012 2011 2010
Commercial Airplanes $49,127 $36,171 $31,834
Defense, Space & Security 32,607 31,976 31,943
Boeing Capital 441 520 639
Other segment 133 150 138
Unallocated items and eliminations (610) (82) (248)
Total $81,698 $68,735 $64,306
Revenues in 2012 increased by $12,963 million or 19% compared with 2011. Commercial Airplanes
revenues increased by $12,956 million primarily due to higher new airplane deliveries across all programs.
BDS revenues increased by $631 million due to higher revenues in the Boeing Military Aircraft (BMA) and
Global Service & Support (GS&S) segments partially offset by lower revenues in the Network & Space
Systems (N&SS) segment. Unallocated items and eliminations reduced revenues by $610 million in 2012
compared with $82 million in 2011 reflecting higher intercompany deliveries of P-8 and commercial aircraft
in 2012.
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