Boeing 2012 Annual Report Download - page 38

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26
Commercial airplanes deliveries as of December 31 were as follows:
737 747 767 777 787 Total
2012
Cumulative deliveries 4,293 1,458 1,040 1,066 49
Deliveries 415 (1) 31 26 83 46 (2) 601
2011
Cumulative deliveries 3,878 1,427 1,014 983 3
Deliveries 372 (1) 920733477
2010
Cumulative deliveries 3,506 1,418 994 910
Deliveries 376 (1) 12 74 462
(1) Includes intercompany deliveries of nine aircraft in 2012, seven in 2011 and five in 2010.
(2) Includes three aircraft accounted for as revenues by BCA and as operating leases in consolidation.
Earnings From Operations
Earnings from operations for 2012 increased by $1,216 million compared with 2011. This was primarily
due to higher new airplane deliveries, which drove an increase in earnings of $1,292 million, and lower
research and development expense of $666 million primarily due to lower spending on the 747-8 and
787-8 programs. These increases were partially offset by lower earnings of $742 million driven by higher
fleet support costs, increased operating costs associated with business growth, other period costs and
decreased earnings from commercial aviation services. The decrease in operating margins from 9.7% in
2011 to 9.6% in 2012 was primarily due to the dilutive effect of the 787 and 747-8 deliveries.
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.
Backlog Firm backlog represents orders for products and services where no contingencies remain before
we 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 contractual remedies that may
be implicated by program delays. We continue to address customer claims and requests for other
contractual relief as they arise. However, once orders are included in firm backlog, orders remain in backlog
until canceled or fulfilled, although the value of orders is adjusted as changes to price and schedule are
agreed to with customers.
The increase in contractual backlog during 2012 was due to orders in excess of deliveries, partially reduced
by cancellations of orders and changes in projected revenue escalation. The decrease in unobligated
backlog in 2012 was due to incremental funding of the existing multi-year contract for Commercial Airplanes’
share of the USAF contract for the KC-46A Tanker.
The increase in contractual backlog during 2011 was due to orders in excess of deliveries and changes
in projected revenue escalation, partially reduced by cancellations of orders. The increase in unobligated
backlog in 2011 represents Commercial Airplanes’ share of the USAF contract for the KC-46A Tanker.