| The broad portfolio and exceptional program management capabilities of
Boeing Military Aircraft and Missile Systems continue to fuel growth, yield double-digit
operating margins and increase customer satisfaction. Boeing designs, develops,
produces and supports a wide range of military aircraft and weapon systems —
including airlift, tanker, transport and fighter aircraft; rotorcraft; and precision
munitions. | | Growth in the worldwide Military Aerospace Support
organization continues to be a substantial source of revenue. Through this organization,
Military Aircraft and Missile Systems offers the full spectrum of maintenance,
modification, training and logistics support services to help customers minimize
product life cycle costs and to sustain high readiness rates. | | With
our ability to apply pioneering processes and technologies across business units,
Boeing provides unique solutions to the challenges our defense customers face.
In addition to continually improving current military aircraft, weapon systems
and support services, we are increasing our focus on additional areas key to the
future, including tanker/transports, other commercial derivatives, long-range
precision munitions and unmanned systems. | |  |
| Combining the expertise
of both our commercial and military aircraft businesses, Boeing is a strong competitor
in the growing tanker/transport market. In 2001, Italy and Japan selected Boeing
to develop and build four 767 military tanker/transports each. Winning these two
competitions launched Boeing into a global market, valued at almost $100 billion.
Later in 2001, the U.S. government authorized the U.S. Air Force to begin negotiations
with Boeing on a lease of 100 767 tankers. Because the 767 airframe offers proven
air-refueling systems and flexible interior configurations, it is the optimal
platform for the tanker/transport mission. | | In 2001, Military
Aircraft and Missile Systems and Phantom Works, the company’s research and
development arm, formed a business organization to lead Boeing into the unmanned
systems of the next decade. The unit’s concepts, such as the Boeing Phantom
Works X-45 Unmanned Combat Air Vehicle, or UCAV, are true agents of change. A
stealthy vehicle, the UCAV is also designed to detect and destroy threats that
the enemy would prefer to keep hidden. It will operate in networks, at one-third
the cost of a conventional strike aircraft, without putting human crews in harm’s
way. | |  |
