Segment Information
We operate in five principal segments: Commercial Airplanes; Boeing Military Aircraft (BMA), Network & Space Systems (N&SS), and Global Services & Support (GS&S), collectively Defense, Space & Security; and Boeing Capital. All other activities fall within the Other segment or Unallocated items and eliminations. See page 54 for the Summary of Business Segment Data, which is an integral part of this note.
The Commercial Airplanes segment develops, produces and markets commercial jet aircraft and provides related support services, principally to the commercial airline industry worldwide.
Our BMA segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for global strike, including fighter aircraft and missile systems; vertical lift including rotorcraft and tilt-rotor aircraft; mobility, surveillance and engagement, including command and control, battle management, airborne, anti-submarine, transport and tanker aircraft.
Our 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.
Our GS&S segment provides customers with mission readiness through total support solutions. Our 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., Boeing Defence Australia, and Alsalam Aircraft Company, a joint venture.
Our BCC segment facilitates, arranges, structures and provides selective financing solutions for our Commercial Airplanes customers. In the space and defense markets, BCC primarily arranges and structures financing solutions for our BDS government and commercial satellite customers.
Our Other segment includes the unallocated activities of Engineering, Operations & Technology (EO&T) and Shared Services Group (SSG), as well as intercompany guarantees provided to BCC. 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.
Effective January 1, 2013, 2012 and 2011 certain programs were realigned among BDS segments. Business segment data for all periods presented have been adjusted to reflect the realignment. Effective January 1, 2013, BCC's accounting policies for certain leasing transactions were aligned with Boeing's consolidated accounting policies. Segment information previously reported has been adjusted to reflect this change. The resulting adjustments affected the BCC and Other segments as well as consolidated amounts reported for Boeing Capital interest expense, Earnings from operations, and Interest and debt expense.
While our principal operations are in the United States, Canada and Australia, some key suppliers and subcontractors are located in Europe and Japan. Revenues, including foreign military sales, are reported by customer location and consisted of the following:
|
| | | | | | | | | | | |
Years ended December 31, | 2013 |
| | 2012 |
| | 2011 |
|
Asia, other than China |
| $12,200 |
| |
| $10,390 |
| |
| $7,438 |
|
China | 10,555 |
| | 6,086 |
| | 4,779 |
|
Europe | 10,622 |
| | 10,269 |
| | 9,850 |
|
Middle East | 9,165 |
| | 10,285 |
| | 5,477 |
|
Oceania | 1,657 |
| | 2,043 |
| | 3,067 |
|
Canada | 1,486 |
| | 586 |
| | 618 |
|
Africa | 621 |
| | 1,282 |
| | 1,759 |
|
Latin America, Caribbean and other | 2,725 |
| | 3,555 |
| | 1,356 |
|
Total non-U.S. revenues | 49,031 |
| | 44,496 |
| | 34,344 |
|
United States | 37,592 |
| | 37,202 |
| | 34,391 |
|
Total revenues |
| $86,623 |
| |
| $81,698 |
| |
| $68,735 |
|
Revenues from the U.S. government (including foreign military sales through the U.S. government), primarily recorded at BDS, represented 34%, 33% and 37% of consolidated revenues for 2013, 2012 and 2011, respectively. Approximately 3% of operating assets were located outside the United States as of December 31, 2013 and 2012. The information in the following tables is derived directly from the segments’ internal financial reporting used for corporate management purposes.
Depreciation and Amortization
|
| | | | | | | | | | | |
Years ended December 31, | 2013 |
| | 2012 |
| | 2011 |
|
Commercial Airplanes |
| $632 |
| |
| $614 |
| |
| $565 |
|
Defense, Space & Security: | | | | | |
Boeing Military Aircraft | 131 |
| | 120 |
| | 116 |
|
Network & Space Systems | 120 |
| | 123 |
| | 128 |
|
Global Services & Support | 69 |
| | 67 |
| | 62 |
|
Total Defense, Space & Security | 320 |
| | 310 |
| | 306 |
|
Boeing Capital Corporation | 110 |
| | 150 |
| | 153 |
|
Other segment | 299 |
| | 261 |
| | 242 |
|
Unallocated items and eliminations | 483 |
| | 476 |
| | 409 |
|
Total |
| $1,844 |
| |
| $1,811 |
| |
| $1,675 |
|
Capital Expenditures
|
| | | | | | | | | | | |
Years ended December 31, | 2013 |
| | 2012 |
| | 2011 |
|
Commercial Airplanes |
| $694 |
| |
| $665 |
| |
| $540 |
|
Defense, Space & Security: | | | | | |
Boeing Military Aircraft | 186 |
| | 153 |
| | 122 |
|
Network & Space Systems | 96 |
| | 115 |
| | 101 |
|
Global Services & Support | 48 |
| | 57 |
| | 55 |
|
Total Defense, Space & Security | 330 |
| | 325 |
| | 278 |
|
Other segment | 323 |
| | 232 |
| | 174 |
|
Unallocated items and eliminations | 751 |
| | 481 |
| | 721 |
|
Total |
| $2,098 |
| |
| $1,703 |
| |
| $1,713 |
|
Unallocated capital expenditures relate primarily to assets managed by SSG on behalf of the five principal segments.
We recorded Earnings from operations associated with our cost and equity method investments of $25, $77 and $69 in our Commercial Airplanes segment and $203, $196 and $210 in BDS, primarily in our N&SS segment, for the years ended December 31, 2013, 2012 and 2011, respectively.
For segment reporting purposes, we record Commercial Airplanes segment revenues and cost of sales for airplanes transferred to other segments. Such transfers may include airplanes accounted for as operating leases and considered transferred to the BCC segment and airplanes transferred to the BDS segment for further modification prior to delivery to the customer. The revenues and cost of sales for these transfers are eliminated in the Unallocated items and eliminations caption. For segment reporting purposes, we record BDS revenues and cost of sales for the modification performed on airplanes received from Commercial Airplanes when the airplane is delivered to the customer or at the attainment of performance milestones.
Intersegment revenues, eliminated in Unallocated items and eliminations, are shown in the following table.
|
| | | | | | | | | | | |
Years ended December 31, | 2013 |
| | 2012 |
| | 2011 |
|
Commercial Airplanes |
| $879 |
| |
| $1,215 |
| |
| $701 |
|
Boeing Capital | 29 |
| | 49 |
| | 66 |
|
Total |
| $908 |
| |
| $1,264 |
| |
| $767 |
|
Unallocated Items and Eliminations
Unallocated items and eliminations includes costs not attributable to business segments as well as intercompany profit eliminations. We generally allocate costs to business segments based on the U.S. federal cost accounting standards. Components of Unallocated items and eliminations are shown in the following table.
|
| | | | | | | | | | | |
Years ended December 31, | 2013 |
| | 2012 |
| | 2011 |
|
Share-based plans |
| ($95 | ) | |
| ($81 | ) | |
| ($83 | ) |
Deferred compensation | (238 | ) | | (75 | ) | | (61 | ) |
Capitalized interest | (69 | ) | | (70 | ) | | (51 | ) |
Eliminations and other | (703 | ) | | (266 | ) | | (276 | ) |
Sub-total | (1,105 | ) | | (492 | ) | | (471 | ) |
Pension | (1,374 | ) | | (787 | ) | | (269 | ) |
Postretirement | 60 |
| | (112 | ) | | (248 | ) |
Pension and Postretirement | (1,314 | ) | | (899 | ) | | (517 | ) |
Total |
| ($2,419 | ) | |
| ($1,391 | ) | |
| ($988 | ) |
Unallocated Pension and Other Postretirement Benefit Expense
Unallocated pension and other postretirement benefit expense represents the portion of pension and other postretirement benefit costs that are not recognized by business segments for segment reporting purposes. Through 2012, the business segments have been allocated pension and other postretirement benefit costs using U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than Generally Accepted Accounting Principles in the United States of America (GAAP). Beginning in 2013, pension costs, comprising GAAP service and prior service costs, are allocated to Commercial Airplanes. BDS continues to be allocated CAS pension costs which are allocable to government contracts. Other postretirement benefit costs will continue to be allocated to business segments based on CAS, which is generally based on benefits paid. Prior year allocations have not been adjusted.
Assets
Segment assets are summarized in the table below.
|
| | | | | | | |
December 31, | 2013 |
| | 2012 |
|
Commercial Airplanes |
| $49,520 |
| |
| $41,769 |
|
Defense, Space & Security: | | | |
Boeing Military Aircraft | 6,973 |
| | 6,582 |
|
Network & Space Systems | 6,450 |
| | 6,669 |
|
Global Services & Support | 3,939 |
| | 3,692 |
|
Total Defense, Space & Security | 17,362 |
| | 16,943 |
|
Boeing Capital | 3,914 |
| | 4,347 |
|
Other segment | 1,208 |
| | 1,043 |
|
Unallocated items and eliminations | 20,659 |
| | 24,794 |
|
Total |
| $92,663 |
| |
| $88,896 |
|
Assets included in Unallocated items and eliminations primarily consist of Cash and cash equivalents, Short-term and other investments, Deferred tax assets, capitalized interest and assets held by SSG as well as intercompany eliminations.
