BC112_Final Cover0302 3/6/05 10:49 PM Page fc1 The Boeing Company The Boeing Company The Boeing Company 2004 Annual Report 100 North Riverside Plaza Chicago, IL 60606-1596 U.S.A. 2004 Annual Report 0707-AR-050707-AR-05 Boeing ifc_ibc_0304 03.04.05 4:06 PM Page ifc1 Vision 2016: People working Shareholder Information The Boeing Company Electronic Proxy Receipt and Voting Duplicate Shareholder Accounts World Headquarters Shareholders have the option of voting their Registered shareholders with duplicate together as a global enterprise The Boeing Company proxies by Internet or telephone, instead of accounts may contact EquiServe for 100 North Riverside Plaza returning their proxy cards through the mail. instructions regarding the consolidation of Chicago, IL 60606-1596 Instructions are in the proxy statement and those accounts. The Company recom- for aerospace leadership. 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Table of Contents Annual Meeting or call 425-393-4964 or 800-457-7723 The annual meeting of Boeing shareholders is scheduled to be held on Monday, Boeing on the Internet 1 Operational Highlights 18 Boeing Internal Services May 2, 2005. Details are provided in the The Boeing home page—www.boeing.com proxy statement. —is your entry point for viewing the latest 2Message to Shareholders 20 Financials Company information about its products 7 Executive Council 99 Selected Products, Programs and Services and people. You may also view electronic versions of the annual report, proxy state- 8Boeing Commercial Airplanes 105 Board of Directors ment, Form 10-K or Form 10-Q. 10 Boeing Integrated Defense Systems 106 Company Officers 12 Connexion by Boeing 107 Shareholder Information 14 Boeing Capital Corporation 16 Boeing Technology Printed in the U.S.A. 1-7_NEW_cvo03.09 3/9/05 4:22 PM Page 1 Operational Highlights Sharper focus on execution led to impressive operational performance in 2004. I Delivered solid growth and profitability, improving I Won $3.9 billion Multi-mission Maritime Aircraft revenues by 4.4 percent and earnings by 161 per- contract—with a potential value of $44 billion— cent over 2003; also increased earnings per share besting the 40-year incumbent to build next- by 164 percent. generation “submarine hunters.” I Generated strong cash flow of $3.5 billion after I Signed a $6 billion extension to expand the scope $4.4 billion in discretionary and nondiscretionary of the Future Combat Systems program and pension funding. accelerate delivery of technologies and capabili- ties to the U.S. Army. I Continued robust stock performance with Boeing stock appreciation of 22.9 percent in 2004, I Sold our commercial equipment financing busi- compared with 9 percent for the S&P 500, 14 per- ness to GE for more than $2 billion, strengthening cent for S&P 500 Aerospace and Defense Index an already strong cash balance; with strong and 3.2 percent for the Dow. operating cash flows, allowed Boeing Capital Corporation to retire more than $2 billion in debt. I Launched the 787 (formerly 7E7) Dreamliner with our largest-ever inaugural order, ending the year I Began initial deployment of Connexion by with customers ordering 56 787s and placing com- BoeingSM service on four airlines, and reached mitments for 70 additional airplanes. Announced definitive service agreements with three and sales in early 2005 brought the total to 193. preliminary agreements with four others. 2004 Financial Highlights (U.S. dollars in millions except per share data) 2004 2003 2002 2001 2000 Revenues 52,457 50,256 53,831 57,970 51,119 Net earnings* 1,872 718 492 2,827 2,128 Earnings per share* 2.24 0.85 2.84 3.40 2.37 Operating margins 3.8% 0.8% 6.4% 6.2% 6.0% Contractual backlog 109,600 104,812 104,173 106,591 120,600 *Before cumulative effect of accounting change. 1 1-7_NEW_cvo03.09 3/9/05 4:22 PM Page 2 Message to the Shareholders and Employees of The Boeing Company Lewis E. Platt Non-Executive Chairman 2 1-7_NEW_cvo03.09 3/9/05 4:23 PM Page 3 An intense focus on execution led to strongly im- Two, we understand the U.S.