The undelivered units under firm order* as of December
31 were as follows:
*Firm orders represent new aircraft purchase agreements where
the customers’ rights to cancel without penalty have expired.
Typical customer rights to cancel without penalty include
receiving Board of Directors’ approval, shareholder approval,
government approval and completing financing arrangements.
All such cancellation rights must be satisfied or expired
even if satisfying such conditions are highly certain. Firm
orders exclude option aircraft and aircraft subject to reconfirmation.
Total commercial jet aircraft deliveries for 2003 are currently
projected to approximate 280 aircraft. For 2004, commercial
aircraft deliveries are currently projected to be in the range
of 275 to 300 aircraft. As of January 30, 2003, the delivery
forecast for 2003 is virtually sold out and approximately
80% sold for 2004 at the lower end of the range. Commercial
Airplanes segment revenues for 2003 are projected to be in
the range of $22 billion.
Operating Earnings
Commercial Airplanes segment calculates its operating earnings
using both the unit cost and program accounting methods. For
segment reporting purposes, as disclosed in Note
24, the Commercial Airplanes operating earnings as of
December 31, 2002, 2001 and 2000, are provided on the unit
cost basis. Beginning in first quarter 2003, Commercial Airplanes
segment data will be based on the program accounting method.
Commercial Airplanes segment 2002 operating earnings, based
on the unit cost of airplanes delivered, were $2,847 million,
compared with $2,632 million in 2001 and $2,736 million in
2000. The related operating margins were 10.0%, 7.5% and 8.8%,
respectively. 2002 and 2001 operating earnings included $(2)
million and $908 million, respectively, of (recoveries)/charges
associated with the September 11, 2001, terrorist attacks.
Excluding these (recoveries)/charges, Commercial Airplanes
segment operating earnings in 2002 and 2001 were $2,845 million
and $3,540 million, resulting in operating margins of 10.0%
and 10.1%, respectively. Excluding the September 11 (recoveries)/
charges, 2002 operating margin was slightly lower than 2001
due to the decline in revenue offset by improved operating
efficiency and reduced research and development expense. 2001
operating earnings and margin, excluding September 11 charges,
increased from 2000 principally due to increased revenue and
continued improvement in the production process.
Commercial Airplanes segment operating earnings, based on
the program method of accounting and including intercompany
transactions, as discussed in Note 24, were $2,017 million,
$1,911 million and $2,099 million as of December 31, 2002,
2001 and 2000, respectively. The related operating margins
were 7.1%, 5.5%, and 6.7%. Excluding the 2002 and 2001 (recoveries)/charges
associated with September 11, 2001, the operating earnings
for these periods were $2,015 million and $2,819 million,
respectively. The comparable margins were 7.1% and 8.0%. The
decline in margins from 2001 to 2002 is primarily due to the
reduction in revenue offset by improved operating efficiency
and reduced research and development expense. In addition,
the margins have been adversely impacted compared to 2001
due to the aircraft market decline. In general, this has resulted
in the lengthening of the time needed to produce the accounting
quantity.
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