Effective at the beginning of 2019, all revenues and costs associated with military derivative aircraft production are reported in the BDS segment. Revenues and costs associated with military derivative aircraft production were previously reported in the BCA and BDS segments. Business segment data for 2018 reflects the realignment for military derivative aircraft, as well as the realignment of certain programs from BDS to BGS.

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 7 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.

BDS engages 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. BGS segment revenue and costs include certain services provided to other segments. 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.

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.



(Dollars in millions)	Nine months ended September 30						Three months ended September 30
	2019			2018			2019			2018
Revenue from contracts with customers:
Europe		$3,944			$7,189			$1,260			$1,882
China	4,393			9,433			1,237			4,677
Asia, other than China	5,832			5,966			1,454			1,886
Middle East	2,926			3,931			1,121			1,598
Other	2,533			3,598			166			1,098
Total non-U.S. revenues	19,628			30,117			5,238			11,141
United States	10,591			10,824			3,004			2,922
Estimated potential concessions and other considerations to 737 MAX customers, net⁽¹⁾	(5,610		)
Total revenues from contracts with customers	24,609			40,941			8,242			14,063
Intersegment revenues eliminated on consolidation	184			27			7			8
Total segment revenues		$24,793			$40,968			$8,249			$14,071

Revenue recognized on fixed-price contracts	100		%	100		%	100		%	100		%

Revenue recognized at a point in time	100		%	100		%	100		%	99		%



(Dollars in millions)	Nine months ended September 30						Three months ended September 30
	2019			2018			2019			2018
Revenue from contracts with customers:
U.S. customers		$15,234			$14,586			$5,459			$5,381
Non U.S. customers⁽¹⁾	5,031			4,932			1,583			1,556
Total segment revenue from contracts with customers		$20,265			$19,518			$7,042			$6,937

Revenue recognized over time	98		%	98		%	97		%	98		%

Revenue recognized on fixed-price contracts	69		%	69		%	70		%	70		%

Revenue from the U.S. government⁽¹⁾	89		%	88		%	90		%	88		%



(Dollars in millions)	Nine months ended September 30						Three months ended September 30
	2019			2018			2019			2018
Revenue from contracts with customers:
Commercial		$7,621			$6,419			$2,510			$2,167
Government	6,075			5,584			2,101			1,882
Total revenues from contracts with customers	13,696			12,003			4,611			4,049
Intersegment revenues eliminated on consolidation	124			145			47			52
Total segment revenues		$13,820			$12,148			$4,658			$4,101

Revenue recognized at a point in time	56		%	52		%	54		%	52		%

Revenue recognized on fixed-price contracts	89		%	88		%	90		%	85		%

Revenue from the U.S. government⁽¹⁾	33		%	32		%	35		%	32		%

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, 2019 was $470,225. We expect approximately 26% to be converted to revenue through 2020 and approximately 72% through 2023, with the remainder thereafter.

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. Such sales include airplanes accounted for as operating leases and considered transferred to the BCC segment. 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
	2019			2018			2019			2018
Share-based plans		($57	)		($60	)		($21	)		($24	)
Deferred compensation	(154		)	(112		)	(25		)	(56		)
Amortization of previously capitalized interest	(68		)	(67		)	(23		)	(19		)
Research and development expense, net	(270		)	(69		)	(97		)	(50		)
Customer financing impairment	(250		)
Litigation	(109		)	(148		)
Eliminations and other unallocated items	(819		)	(737		)	(356		)	(322		)
Unallocated items, eliminations and other		($1,727	)		($1,193	)		($522	)		($471	)

Pension FAS/CAS service cost adjustment		$823			$780			$274			$260
Postretirement FAS/CAS service cost adjustment	270			239			90			77
FAS/CAS service cost adjustment		$1,093			$1,019			$364			$337

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.



	September 30 2019		December 31 2018
Commercial Airplanes		$74,994		$64,788
Defense, Space & Security	19,431		19,594
Global Services	18,696		17,921
Boeing Capital	2,246		2,809
Unallocated items, eliminations and other	17,231		12,247
Total		$132,598		$117,359

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.