Management’s Discussion and Analysis

Management’s Discussion and Analysis

In June 2001, the FASB issued SFAS No.143, Accounting for Asset Retirement Obligations, and in August 2001, the FASB issued SFAS No.144, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company does not believe that the implementation of these standards will have a significant impact on the financial statements.

Results of Operations and Financial Condition

Revenues

Operating revenues for 2001 were $58.2 billion compared with $51.3 billion in 2000 and $58.0 billion in 1999. The higher revenues in 2001 principally reflect increased deliveries in the Commercial Airplanes segment, but also reflect an increase in Space and Communications segment revenues of $2.4 billion to $10.4 billion. The lower revenues in 2000 relative to 1999 principally reflected decreased deliveries in the Commercial Airplanes segment, partially offset by an increase in Space and Communications segment revenues of $1.2 billion to $8.0 billion in 2000.

Commercial Airplanes Commercial Airplanes segment revenues were $35.1 billion in 2001, $31.2 billion in 2000 and $38.5 billion in 1999. These revenues account for 60%, 61% and 66% of total operating revenues for the years 2001, 2000 and 1999, respectively. Commercial Airplanes revenues are generated principally by jet aircraft deliveries. Total commercial jet aircraft deliveries by model, including deliveries under operating lease, which are identified by the number in parentheses, were as follows:

2001

2000

1999

717
737 Classic
737 NG
747
757
767
777
MD-80
MD-90
MD-11

49(10)
–
299(5)
31(1)
45
40
61
–
–
2

32(23)
2
279
25
45
44
55
–
3
4

12(2)
42
278
47
67
44(1)
83
26(21)
13
8

527

489

620

Deliveries in 2001 include intercompany deliveries of two 737 NG aircraft, and in 2000 include intercompany deliveries of four 737 NG aircraft and one Airborne Laser 747. 737 NG deliveries in 2001 include one delivery to Boeing NetJets for which revenue is recognized as fractional shares are sold.

Final deliveries of the MD-80 aircraft program occurred in 1999, final deliveries of the 737 Classic and MD-90 aircraft programs occurred in

2000, and final deliveriesof the MD-11 aircraft program occurred in 2001. The first 717 delivery occurred in the third quarter of 1999.

Total commercial aircraft deliveries for 2002 are currently projected to total approximately 380. Total commercial aircraft deliveries for 2003 are currently projected to be between 275 and 300. Commercial aircraft transportation trends are discussed in the Commercial Airplanes Business Environment and Trends section.

Commercial Airplanes segment revenues for 2002 are projected to be in the range of $28 billion.

Military Aircraft and Missile Systems Military Aircraft and Missile Systems segment revenues were $12.5 billion in 2001, $11.9 billion in 2000 and $11.9 billion in 1999. The principal contributors to 2001 Military Aircraft and Missile Systems segment revenues included the C-17 Globemaster, F/A-18E/F Super Hornet, AH-64 Apache, F-22 Raptor, V-22 Osprey, and CH-47 Chinook programs, along with several aerospace support programs. The Military Aircraft and Missile Systems business segment is broadly diversified, and no program other than the C-17 transport program and the F/A-18E/F Super Hornet program accounted for more than 7% of total 2001 segment revenues. Revenues include amounts attributable to production programs and amounts recognized on a cost-reimbursement basis for developmental programs such as the F-22 Raptor, V-22 Osprey, and the RAH-66 Comanche.

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