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Segment and Revenue Information
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment and Revenue Information Segment and Revenue Information
Effective at the beginning of 2020, certain programs were realigned between our BDS segment and Unallocated items, eliminations and other. Business segment data for 2019 has been adjusted to reflect the realignment.
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.
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)
Six months ended June 30
 
Three months ended June 30
 
2020
 
2019
 
2020
 
2019
Revenue from contracts with customers:
 
 
 
 
 
 
 
Europe

$2,302

 

$2,684

 

$332

 

$1,023

Asia
1,464

 
7,534

 
305

 
4,360

Middle East
556

 
1,805

 
7

 
695

Other
453

 
2,367

 
142

 
829

Total non-U.S. revenues
4,775

 
14,390

 
786

 
6,907

United States
3,557

 
7,587

 
1,383

 
3,417

Estimated potential concessions and other considerations to 737 MAX customers, net
(521
)
 
(5,610
)
 
(551
)
 
(5,610
)
Total revenues from contracts with customers
7,811

 
16,367

 
1,618

 
4,714

Intersegment revenues eliminated on consolidation
27

 
177

 
15

 
8

Total segment revenues

$7,838

 

$16,544

 

$1,633

 

$4,722

 
 
 
 
 
 
 
 
Revenue recognized on fixed-price contracts
100
%
 
100
%
 
100
%
 
100
%
 
 
 
 
 
 
 
 
Revenue recognized at a point in time
99
%
 
99
%
 
99
%
 
99
%

BDS revenues on contracts with customers, based on the customer's location, consist of the following:
(Dollars in millions)
Six months ended June 30
 
Three months ended June 30
 
2020
 
2019
 
2020
 
2019
Revenue from contracts with customers:
 
 
 
 
 
 
 
U.S. customers

$9,153

 

$9,719

 

$4,837

 

$4,836

Non U.S. customers(1)
3,477

 
3,447

 
1,751

 
1,743

Total segment revenue from contracts with customers

$12,630

 

$13,166

 

$6,588

 

$6,579

 
 
 
 
 
 
 
 
Revenue recognized over time
99
%
 
99
%
 
99
%
 
99
%
 
 
 
 
 
 
 
 
Revenue recognized on fixed-price contracts
68
%
 
69
%
 
69
%
 
69
%
 
 
 
 
 
 
 
 
Revenue from the U.S. government(1)
89
%
 
88
%
 
89
%
 
89
%
(1) 
Includes revenues earned from foreign military sales through the U.S. government.
BGS revenues consist of the following:
(Dollars in millions)
Six months ended June 30
 
Three months ended June 30
 
2020
 
2019
 
2020
 
2019
Revenue from contracts with customers:
 
 
 
 
 
 
 
Commercial

$3,894

 

$5,111

 

$1,371

 

$2,526

Government
4,099

 
3,974

 
2,066

 
1,977

Total revenues from contracts with customers
7,993

 
9,085

 
3,437

 
4,503

Intersegment revenues eliminated on consolidation
123

 
77

 
51

 
40

Total segment revenues

$8,116

 

$9,162

 

$3,488

 

$4,543

 
 
 
 
 
 
 
 
Revenue recognized at a point in time
49
%
 
57
%
 
41
%
 
57
%
 
 
 
 
 
 
 
 
Revenue recognized on fixed-price contracts
88
%
 
89
%
 
86
%
 
90
%
 
 
 
 
 
 
 
 
Revenue from the U.S. government(1)
40
%
 
32
%
 
46
%
 
32
%
(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 June 30, 2020 was $408,650. We expect approximately 27% to be converted to revenue through 2021 and approximately 70% through 2024, with the remainder thereafter. The future periods when backlog is expected to convert to revenue could be impacted if the timing of aircraft deliveries is adjusted due to COVID-19 impacts.

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. 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.
 
Six months ended June 30
 
Three months ended June 30

2020

 
2019

 
2020

 
2019

Share-based plans

($43
)
 

($36
)
 

($25
)
 

($22
)
Deferred compensation
73

 
(129
)
 
(120
)
 
(27
)
Amortization of previously capitalized interest
(50
)
 
(45
)
 
(27
)
 
(21
)
Research and development expense, net
(116
)
 
(183
)
 
(62
)
 
(105
)
Customer financing impairment


 
(250
)
 


 


Litigation


 
(109
)
 


 
(109
)
Eliminations and other unallocated items
(515
)
 
(458
)
 
(244
)
 
(214
)
Unallocated items, eliminations and other

($651
)
 

($1,210
)
 

($478
)
 

($498
)
 
 
 
 
 
 
 
 
Pension FAS/CAS service cost adjustment

$513

 

$549

 

$258

 

$275

Postretirement FAS/CAS service cost adjustment
189

 
180

 
97

 
90

FAS/CAS service cost adjustment

$702

 

$729

 

$355

 

$365


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:
 
June 30
2020

 
December 31
2019

Commercial Airplanes

$80,160

 

$73,995

Defense, Space & Security
15,407

 
15,757

Global Services
18,438

 
18,605

Boeing Capital
2,116

 
2,269

Unallocated items, eliminations and other
46,751

 
22,999

Total

$162,872

 

$133,625


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 managed centrally on behalf of the four principal business segments and intercompany eliminations. From December 31, 2019 to June 30, 2020, assets in BCA increased primarily due to higher inventory balances and assets in Unallocated items, eliminations, and other increased due to higher cash and short-term investment balances from debt issued during the first half of 2020.