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Segment and Revenue Information
 9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
Segment and Revenue Information Segment and Revenue Information
Our primary profitability measurements to review a segment’s operating results are Earnings from operations and operating margins. We operate in four reportable segments: BCA, BDS, BGS, and BCC. All other activities fall within Unallocated items, eliminations and other. See page 6 for the Summary of Business Segment Data, which is an integral part of this note.
BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide. Revenue on commercial aircraft contracts is recognized at the point in time when an aircraft is completed and accepted by the customer. Revenue on certain military derivative aircraft contracts is recognized over time as costs are incurred.
BDS is engaged in the research, development, production and modification of the following products and related services: manned and unmanned military aircraft and weapons systems, surveillance and engagement, strategic defense and intelligence systems, satellite systems and space exploration. BDS revenue is generally recognized over the contract term (over time) as costs are incurred.
BGS provides parts, maintenance, modifications, logistics support, training, data analytics and information-based services to commercial and government customers worldwide. Revenue on commercial spare parts contracts is recognized at the point in time when a spare part is delivered to the customer. Revenue on other contracts is generally recognized over the contract term (over time) as costs are incurred.
BCC facilitates, arranges, structures and provides selective financing solutions for our Boeing customers.
The following tables present BCA, BDS and BGS revenues from contracts with customers disaggregated in a number of ways, such as geographic location, contract type and the method of revenue recognition. We believe these best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors.
BCA revenues by customer location consist of the following:
(Dollars in millions)
Nine months ended September 30
 
Three months ended September 30
 
2018
 
2017
 
2018
 
2017
Revenue from contracts with customers:
 
 
 
 
 
 
 
Europe

$7,189

 

$6,519

 

$1,882

 

$1,754

China
9,433

 
7,510

 
4,677

 
4,016

Asia, other than China
5,966

 
4,981

 
1,886

 
1,898

Middle East
3,931

 
7,157

 
1,598

 
2,577

Other
3,598

 
2,773

 
1,098

 
601

Total non-U.S. revenues
30,117

 
28,940

 
11,141

 
10,846

United States
12,170

 
12,120

 
3,821

 
3,872

Total revenues from contracts with customers
42,287

 
41,060

 
14,962

 
14,718

Intersegment revenues, eliminated on consolidation
1,122

 
1,566

 
314

 
675

Total segment revenues

$43,409

 

$42,626

 

$15,276

 

$15,393

 
 
 
 
 
 
 
 
Revenue recognized on fixed price contracts
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
Revenue recognized at a point in time
94
%
 
94
%
 
91
%
 
95
%

BDS revenues on contracts with customers, based on the customer's location, consist of the following:
(Dollars in millions)
Nine months ended September 30
 
Three months ended September 30
 
2018
 
2017
 
2018
 
2017
Revenue from contracts with customers:
 
 
 
 
 
 
 
U.S. customers

$12,201

 

$11,924

 

$4,178

 

$3,917

Non U.S. customers(1)
4,883

 
3,380

 
1,551

 
1,133

Total segment revenue from contracts with customers

$17,084

 

$15,304

 

$5,729

 

$5,050

 
 
 
 
 
 
 
 
Revenue recognized over time
98
%
 
98
%
 
97
%
 
98
%
 
 
 
 
 
 
 
 
Revenue recognized on fixed-price contracts
65
%
 
64
%
 
64
%
 
63
%
 
 
 
 
 
 
 
 
Revenue from the U.S. government(1)
86
%
 
88
%
 
85
%
 
85
%
(1) 
Includes revenues earned from foreign military sales through the U.S. government.
BGS revenues consist of the following:
(Dollars in millions)
Nine months ended September 30
 
Three months ended September 30
 
2018
 
2017
 
2018
 
2017
Revenue from contracts with customers:
 
 
 
 
 
 
 
Commercial

$7,276

 

$5,682

 

$2,431

 

$1,950

Government
4,703

 
5,064

 
1,608

 
1,617

Total revenues from contracts with customers
11,979

 
10,746

 
4,039

 
3,567

Intersegment revenues eliminated on consolidation
145

 
38

 
52

 
12

Total segment revenues

$12,124

 

$10,784

 

$4,091

 

$3,579

 
 
 
 
 
 
 
 
Revenue recognized at a point in time
52
%
 
48
%
 
51
%
 
48
%
 
 
 
 
 
 
 
 
Revenue recognized on fixed-price contracts
88
%
 
89
%
 
85
%
 
89
%
 
 
 
 
 
 
 
 
Revenue from the U.S. government(1)
32
%
 
40
%
 
32
%
 
38
%
(1) 
Includes revenues earned from foreign military sales through the U.S. government.
Backlog
Our total backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. Backlog is converted into revenue in future periods as work is performed, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable accounting method.
Our backlog at September 30, 2018 was $491,179. We expect approximately 24% to be converted to revenue through 2019 and approximately 69% through 2022, with the remainder thereafter.
Unallocated Items, Eliminations and other
Unallocated items, eliminations and other include common internal services that support Boeing’s global business operations, intercompany guarantees provided to BCC and eliminations of certain sales between segments. We generally allocate costs to business segments based on the U.S. federal cost accounting standards. Components of Unallocated items, eliminations and other are shown in the following table.
 
Nine months ended September 30
 
Three months ended September 30

2018

 
2017

 
2018

 
2017

Share-based plans

($60
)
 

($67
)
 

($24
)
 

($21
)
Deferred compensation
(112
)
 
(174
)
 
(56
)
 
(78
)
Amortization of previously capitalized interest
(67
)
 
(68
)
 
(19
)
 
(22
)
Eliminations and other unallocated items
(929
)
 
(462
)
 
(359
)
 
(112
)
Unallocated items, eliminations and other

($1,168
)
 

($771
)
 

($458
)
 

($233
)
 
 
 
 
 
 
 
 
Pension FAS/CAS service cost adjustment

$780

 

$811

 

$260

 

$271

Postretirement FAS/CAS service cost adjustment
239

 
238

 
77

 
75

FAS/CAS service cost adjustment

$1,019

 

$1,049

 

$337

 

$346


Pension and Other Postretirement Benefit Expense
Pension costs, comprising GAAP service and prior service costs, are allocated to BCA and the commercial operations at BGS. Pension costs are allocated to BDS and BGS businesses supporting government customers using U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. These costs are allocable to government contracts. Other postretirement benefit costs are allocated to business segments based on CAS, which is generally based on benefits paid. FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income, net.
Assets
Segment assets are summarized in the table below:
 
September 30
2018

 
December 31
2017

Commercial Airplanes

$65,509

 

$64,647

Defense, Space & Security
18,688

 
18,476

Global Services
12,843

 
12,491

Boeing Capital
3,120

 
3,156

Unallocated items, eliminations and other
14,499

 
13,592

Total

$114,659

 

$112,362


Assets included in Unallocated items, eliminations and other primarily consist of Cash and cash equivalents, Short-term and other investments, Deferred tax assets, capitalized interest and assets held centrally as well as intercompany eliminations.