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| We have invested heavily in Boeing Space and
Communications in recent years, and
this business has also become a true high-performer — in
every sense. Before R&D
expenses, it had a double-digit operating margin in 2001. This
business exemplifies
one of our core competencies — large-scale systems integration.
It is the prime contractor
for not one, but a whole series of programs of great national
and international
importance. They include Ground-based Midcourse Defense (formerly
called National
Missile Defense), the Future Imagery Architecture program for
the NRO, Airborne Laser,
Space Shuttle and International Space Station. We had a perfect
record of seven out
of seven successful Delta II launches in 2001, and two out of
two commercial Sea
Launch missions. We launched the 200th Boeing-built satellite
in 2001. All told, this
business had a near-perfect success rate, with Boeing-supplied
hardware performing
flawlessly in 39 out of 40 missions. With annual revenues of
more than $10 billion,
up from $6.9 billion in 1998, Space and Communications is a
growing and increasingly
profitable business. With its large-scale systems integration
expertise, it is positioned to
play a key role in developing new and exciting ways of connecting
and protecting people. |
| Even with the adverse effects of
a downturn in the commercial airplane market, our
core businesses, as a group, are still doing something that
core businesses are supposed
to do. They are generating a lot of cash — more than $2.7
billion of free cash
flow in 2001 and between $2.5 and $3.0 billion anticipated in
2002. This gives us many
options in seeking new ways to grow and maximize shareholder
value. For example,
Boeing Capital Corporation provides a perfect fulcrum for leveraging
our financial
strength. With support from the parent company, it is pursuing
opportunities for providing
financing solutions to customers across all our lines of business
and to commercial
finance customers outside the aerospace industry as well. We
are confident
of prudent, strong growth and increasing earnings in this business
for years to come. |
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| In the mid 90s, we were looking at a future in
which 85 percent of our revenues
would come from one highly cyclical business. All of our eggs
were in one basket —
and that basket travels on an economic roller-coaster ride.
Since then, we have
transformed Boeing — |
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From a commercial airplane manufacturer to a broad,
balanced aerospace company. |
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From a product-focused culture with a slow, ponderous
mindset to one that is rigorously
and relentlessly business-focused, with an emphasis on speed
and agility. |
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From an international exporter to a true global
enterprise. |
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From a hardware and platform provider to a solutions
and systems provider. |
| Pictured on the cover of this annual report, our
new World Headquarters, in the heart
of Chicago, one of the world’s great cities, is a metaphor
for how this company has
changed. It is not an everyday event to move the headquarters
of a company as big,
as long-established and as well-known as Boeing. But instead
of agonizing over the
move, or making it a long, drawn-out process, we did it in 167
days — less time than
the average homeowner takes to move from one part of town to
another. That’s
everything from announcing our intent, to evaluating three potential
headquarters
cities, to choosing one, to finding a site, fixing it up, moving
in and going to work.
All that happened between March 21 and September 4, 2001. That’s
speed of
execution — and it shows our ability to pull together as
one company. |
| The corporate center is a lean enterprise —
just like our operating businesses. Not
coincidentally, in announcing the move, we put additional responsibility
and authority
in the core operating businesses — elevating the leaders
of these businesses to the
position of CEOs. |
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