The Boeing Company (BA)

Boeing (NYSE:BA) | Products & Business Segments

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The Boeing Company, together with its subsidiaries, is one of the world's largest aerospace companies and a leading manufacturer of commercial jet aircraft and defense, space and security systems. The company supports airlines and U.S. and allied government customers in 150 countries. Boeing's products and services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, as well as performance-based logistics and training. In 1916, Boeing was incorporated in Seattle by William Boeing (as Pacific Aero Products Co.) but renamed the Boeing Airplane Co. the following year. Today, the company is incorporated in Delaware with corporate offices located in Chicago.

Boeing operates in five principal business segments:

 

Commercial Airplanes
Boeing Defense, Space & Security (BDS)
      Boeing Military Aircraft (BMA)
      Network & Space Systems (N&SS)
      Global Services & Support (GS&S)
Boeing Capital Corporation (BCC)
• Other.



The following table highlights Boeing's sales from 2012 to 2014 by segment:
Boeing's Segment Sales



The unallocated activities of Engineering, Operations & Technology (EO&T) and Shared Services Group (SSG), Corporate and intercompany guarantees provided to BCC are included in 'unallocated items and eliminations.' EO&T provides Boeing with technical and functional capabilities, including information technology, research and development, test and evaluation, technology strategy development, environmental remediation management and intellectual property management.

On February 24, 2011, Boeing was awarded a contract from the U.S. Air Force to design, develop, manufacture and deliver 4 next generation aerial refueling tankers. The KC-46A Tanker is a derivative of the 767 commercial aircraft. This contract is a fixed-price incentive firm contract valued at $4.9 billion and involves highly complex designs. Changes to Boeing's estimated cost to perform the work could result in a material charge. This contract also contains production options. If all options under the contract are exercised, the company expects to deliver 179 aircraft for a total expected contract value of approximately $30 billion. For segment reporting purposes, backlog, revenues and costs are recorded in both the Commercial Airplanes and BMA segments.


Boeing Commercial Airplanes (BCA)

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Boeing Commercial Airplanes (BCA) develops, produces and markets commercial jet aircraft and provides related support services, principally to the commercial airline industry worldwide. Boeing is a leading producer of commercial aircraft and offers a family of commercial jetliners designed to meet a broad spectrum of passenger and cargo requirements of domestic and non-U.S. airlines. This family of commercial jet aircraft in production includes the 737 narrow-body model and the 747, 767, 777 and 787 wide-body models. Development continues on the 787-10 and 737 MAX derivatives. In November 2013, Boeing launched the 777X, which features a new composite wing, new engines and folding wing-tips all designed to deliver greater efficiency and significant fuel savings. BCA also offers aviation services support, aircraft modifications, spares, training, maintenance documents and technical advice to commercial and government customers worldwide.

BCA's primary commercial airplane manufacturing and assembly locations are Everett and Renton in Washington State and Charleston, South Carolina. In Everett, Boeing assembles the company's wide-body aircraft families: 747-8, 767, 777 and 787. In Renton, Boeing assembles its 737NG Family of narrow-body aircraft. In Charleston, Boeing fabricates and assembles the 787 aft fuselage sections and integrates these with the center fuselage.

     Financial results for Boeing's Commercial Airplanes segment were as follows:
Performance of Boeing's principal lines of business

BCA revenues increased by $7,009 million, or 13%, in 2014 compared with 2013 and by $3,854 million or 8% in 2013 compared with 2012 primarily due to higher new airplane deliveries.

Earnings from operations in 2014 increased by $616 million, or 11% compared with 2013. The increase in earnings is primarily due to higher earnings of $947 million driven by higher new airplane deliveries and commercial aviation services revenue growth. This earnings increase was partially offset by a reach-forward loss of $238 million recorded in the second quarter of 2014 related to the USAF KC-46A Tanker contract and higher research and development expenses in the amount of $74 million. The increase in research and development reflects higher spending on the 777X, 787-10 and 737 MAX, which more than offset lower 787-9 spending. Operating margins decreased from 10.9% in 2013 to 10.7% in 2014 primarily due to the dilutive impact of 747-8 and 787 deliveries and the USAF KC-46A Tanker reach-forward loss.

     Deliveries of commercial aircraft by model: Boeing - deliveries of commercial aircraft


Boeing Defense, Space & Security (BDS)

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The BDS operations principally involve research, development, production, modification and support of the following products and related systems: global strike systems, including fighters, bombers, combat rotorcraft systems, weapons and unmanned systems; global mobility systems, including transport and tanker aircraft, rotorcraft transport and tilt-rotor systems; airborne surveillance and reconnaissance aircraft, including command and control, battle management and airborne anti-submarine aircraft; network and tactical systems, including information and battle management systems; intelligence and security systems; missile defense systems; space and intelligence systems, including satellites and commercial satellite launching vehicles; and space exploration. BDS focuses on providing affordable, best-of-industry solutions and brings value to customers through its ability to solve the most complex problems utilizing expertise in large-scale systems integration, knowledge of legacy platforms and development of common network-enabled solutions across all customers' domains.

BDS consists of three capabilities-driven businesses: Boeing Military Aircraft (BMA), Network & Space Systems (N&SS), and Global Services & Support (GS&S). Additionally, the Phantom Works group is an integrated team that works with the three businesses via product development, rapid prototyping and customer engagement through experimentation and enterprise technology investment strategies.

     Financial results for Boeing's BDS segment were as follows:
Performance of Boeing's principal lines of business

BDS revenues in 2014 decreased by $2,316 million compared with 2013 primarily due to lower revenues of $1,774 million in the BMA segment and lower revenues of $509 million in the N&SS segment.

BDS earnings from operations in 2014 decreased by $102 million compared with 2013 due to lower earnings of $200 million and $21 million in the BMA and N&SS segments, partially offset by higher earnings of $119 million in the GS&S segment. Included are net favorable cumulative contract catch-up adjustments, which were $96 million higher in 2014 compared with 2013, primarily reflecting higher favorable adjustments in the GS&S segment.



Boeing Military Aircraft


Boeing Military Aircraft (BMA) is engaged in the research, development, production and modification of manned and unmanned military weapons systems for the global strike, mobility and surveillance and engagement markets as well as related services. The major programs in this segment include for global strike: EA-18G Growler Airborne Electronic Attack Aircraft, F/A-18E/F Super Hornet, F-15 Strike Eagle, and Joint Direct Attack Munition; for vertical lift: AH-64 Apache, CH-47 Chinook, and V-22 Osprey; for unmanned airborne systems programs: ScanEagle; and for mobility, surveillance and engagement: Airborne Early Warning and Control (AEW&C), C-17 Globemaster III,
P-8A Poseidon, India P8-I, and KC-46 Tanker.

The C-17 Globemaster III program is scheduled to end production in late 2015. During 2011, BMA production deliveries concluded on the F-22 Raptor and KC-767 International Tanker programs.

Financial results for BDS' BMA group were as follows:
Performance of Boeing's principal lines of business

BMA revenues in 2014 decreased by $1,774 million, or 12%, compared with 2013 primarily due to a reduction of revenue of $1,730 million related to F-15 and KC-46A Tanker milestones, fewer C-17 aircraft deliveries and delivery mix on the P-8 program.

BMA earnings from operations in 2014 decreased by $200 million, or 13%, compared with 2013 primarily due to 2014 charges of $235 million and lower earnings of $73 million related to fewer deliveries on the C-17 program. The charges recorded in 2014 included $187 million related to the USAF KC-46A Tanker contract and $48 million to write off inventory and accrue termination liabilities as a result of Boeing's 2014 decision to produce three fewer C-17 aircraft in 2015 than previously planned. These decreases were partially offset by higher earnings of $65 million related to improved performance on the F/A-18 program. In addition, in 2013, Boeing recorded a charge of $64 million to write off inventory and accrue termination liabilities as a result of the Republic of Korea's announcement to restart its F-X fighter aircraft competition. Net favorable cumulative contract catch-up adjustments were $39 million lower in 2014 than in 2013 primarily driven by the reach-forward loss on the USAF KC-46A Tanker contract, partially offset by higher favorable adjustments to the F/A-18 and F-15 programs.

     Deliveries of new-build production aircraft, excluding remanufactures and modifications: Boeing - deliveries of military aircraft



Network & Space Systems


The Network & Space Systems (N&SS) segment is engaged in the research, development, production and modification of the following products and related services: electronics and information solutions, including command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR), cyber and information solutions, and intelligence systems; strategic missile and defense systems; space and intelligence systems, including satellites and commercial satellite launch vehicles; and space exploration.

The major programs in this segment include for strategic missile and defense systems: Ground-based Midcourse Defense (GMD); for space and intelligence systems: commercial, civil and military satellites, including the Global Positioning System (GPS) and Wideband Global SATCOM system; and for space exploration: Space Launch System (SLS), Commercial Crew, and International Space Station (ISS).

During 2011, the Brigade Combat Team Modernization (BCTM) and Space Shuttle programs concluded.

This segment also includes Boeing's joint venture operations related to United Launch Alliance (ULA) and United Space Alliance (USA).

     Financial results for BDS' N&SS group were as follows:
Performance of Boeing's principal lines of business

N&SS revenues in 2014 decreased by $509 million compared with 2013 primarily due to a reduction of $812 million related to lower volume on several government satellite, Electronic and Information Solutions (E&IS) and proprietary programs, partially offset by $257 million related to higher volume on the Commercial Crew and SLS programs.

N&SS earnings from operations in 2014 decreased by $21 million compared with 2013 primarily due to lower earnings of $84 million on several commercial satellite programs related to lower milestone volume, partially offset by higher earnings of $68 million due to improved performance on several government satellite programs and Boeing's United Launch Alliance (ULA) joint venture as well as higher volume on Commercial Crew during the initial performance period. Net favorable cumulative contract catch-up adjustments were $12 million higher in 2014 than in 2013.

     Boeing Satellite deliveries were as follows: Boeing - deliveries of satellites and launch vehicles



Global Services & Support


Global Services & Support (GS&S) provides customers with mission readiness through total support solutions. Boeing's global services business sustains aircraft and systems with a full spectrum of products and services through integrated logistics, including supply chain management and engineering support; maintenance, modification and upgrades for aircraft; and training systems and government services, including pilot and maintenance training. GS&S international operations include Boeing Defence U.K. Ltd., and Boeing Defence Australia, as well as Alsalam Aircraft Company, Aviation Training International, and Boeing Sikorsky International Services, joint ventures.

Integrated logistics comprises an integrated array of services that address the complete life cycle of aircraft and systems. Major programs include the F/A-18E/F support program and domestic and international performance based logistic programs for the AH-64, CH-47 and other BDS platforms.

Maintenance, modification and upgrades for aircraft are performed at centers throughout the United States and around the world, providing rapid cycle time and aircraft services for military customers on a wide variety of BDS and non-BDS platforms. Major support programs include the C-17 Globemaster III Integrated Sustainment Program and F-15 support programs for the United States Air Force (USAF) and several international customers. Aircraft programs include the Airborne Early Warning and Control (AEW&C) Peace Eagle contract with Turkey and the Airborne Warning and Control Systems (AWACS) program.

Training systems and government services comprise a full range of training capabilities for domestic and international customers, including the design and development of trainers for multiple aircraft platforms and logistics and asset management solutions.

     Financial results for BDS' GS&S group were as follows:
Performance of Boeing's principal lines of business

GS&S revenues in 2014 decreased by $33 million compared with 2013 primarily due to lower volume of $277 million in Integrated Logistics (IL) and Training Systems & Government Services (TSGS) programs. These decreases were partially offset by higher Maintenance, Modification and Upgrades (MM&U) revenues of $245 million primarily related to deliveries of three AEW&C Peace Eagle to Turkey in 2014.

GS&S earnings from operations in 2014 increased by $119 million, or 12%, compared with 2013 primarily due to an increase of $145 million related to improved performance in several MM&U programs, most notably the AEW&C Peace Eagle contract. Net favorable cumulative contract catch-up adjustments were $123 million higher in 2014 than in 2013 primarily due to unfavorable adjustments on the AEW&C Peace Eagle contract in 2013.




Boeing Capital Corporation Segment

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In the commercial aircraft market, BCC facilitates, arranges, structures and provides selective financing solutions for Boeing's Commercial Airplanes customers. In the space and defense markets, BCC primarily arranges and structures financing solutions for Boeing's BDS government customers. BCC's portfolio consists of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments.

BCC provided customer financing of $489 million and $220 million during 2014 and 2013. BCC's customer financing and investment portfolio at December 31 totaled $3,506 million and $3,921 million in 2014 and 2013, respectively. A substantial portion of BCC's portfolio is concentrated among certain U.S. commercial airline customers. BCC's portfolio is also concentrated by varying degrees across Boeing aircraft product types most notably out-of-production aircraft such as the B717.

Company Information

Revenues ('14): $90,762M +4.8%

R&D ('14): $3,047M -0.8%

Net Profit ('14): $5,446M +18.8%

CAPEX ('14): $2,236M +6.6%

Boeing - OEM

Products News Subsidiaries Acquisitions Competitors Customers R&D Spending 5-Year Financials

Aerospace Sector:

   

Major Diversified OEM

Boeing Products:


Commercial wide-body jet aircraft; Commercial narrow-body jet aircraft; Commercial jet freighter aircraft; Commercial aircraft financing solutions; Fighter and attack aircraft; Bombers; Military transport and tanker aircraft; Military rotorcraft and tilt-rotor aircraft; Airborne surveillance and reconnaissance aircraft; Airborne command and control aircraft; Naval warfare aircraft; UAVs/UAS; Air-to-ground missiles (AGM); Smart bombs; Smart bomb kits; Missile defense systems; Network and tactical systems; Battle management systems; Intelligence and security systems; Space and intelligence systems; Satellites; Satellite launch vehicles; Space exploration services;

Boeing's Major U.S. Defense Programs:


| A-10 | DoD Prime ContractorAH-64 | DoD Prime ContractorAV-8B | DoD Prime ContractorB-1B | DoD Prime ContractorB-52 | DoD Prime ContractorC-17 | DoD Prime ContractorC-40 | DoD Prime ContractorCH-47 | DoD Prime ContractorE-3 |
| DoD Prime ContractorE-4B | DoD Prime ContractorE-6B | DoD Prime ContractorEELV | DoD Prime ContractorF-15 | DoD Prime ContractorF/A-18E/F | DoD Prime ContractorEA-18G |
| DoD Prime ContractorF-22 Raptor | DoD Prime ContractorGMD | GPS | DoD Prime ContractorHellfire | DoD Prime ContractorKC-10 | DoD Prime ContractorKC-46 | DoD Prime ContractorJDAM | DoD Prime ContractorJTRS |
| DoD Prime ContractorP-8A Poseidon | DoD Prime ContractorSmall Diameter Bomb | DoD Prime ContractorV-22 Osprey | DoD Prime ContractorVC-25 | DoD Prime ContractorWGS |

Boeing's Commercial Programs:


| Boeing: 737NG, 737 MAX (dev.), 747-8, 767, 777, 777X (dev.), 787 |

Sales 2010-2014 Net Income 2010-2014 R&D Spending 2010-2014 # Employees 2010-2014

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