The Boeing Company 2006 Annual Report The Boeing Company 100 North Riverside Plaza Chicago, IL 60606-1596 U.S.A. Charting the 2006 THE BOEING COMPANY Course ANNUAL REPORT 0707-AR-07 Shareholder Information The Boeing Company Duplicate Shareholder Accounts To Request an Annual Report, 100 North Riverside Plaza Registered shareholders with duplicate Proxy Statement, Form 10-K or Chicago, IL 60606-1596 accounts may contact Computershare for Form 10-Q, Contact: U.S.A. instructions regarding the consolidation of Data Shipping 312-544-2000 those accounts. The Company recommends The Boeing Company that registered shareholders always use the Mail Code 3T-33 Transfer Agent, Registrar, Dividend same form of their names in all stock transac- P.O. Box 3707 Paying Agent and Plan Administrator tions to be handled in the same account. 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Box 43078 (toll-free for domestic U.S. callers) Providence, RI 02940-3078 Stock Exchanges 781-575-3400 U.S.A. The Company’s common stock is traded (anyone phoning from outside the principally on the New York Stock Exchange; U.S. may call collect) For Boeing beneficial owners: the trading symbol is BA. Boeing common Contact your brokerage firm or bank to give stock is also listed on the Amsterdam, Boeing registered shareholders can also notice of your change of address. Brussels, London, Swiss and Tokyo stock The Boeing Company Vision 2016: obtain answers to frequently asked questions exchanges. Additionally, the stock is traded on such topics as transfer instructions, the Annual Meeting without being listed on the Boston, Chicago, replacement of lost certificates, consolidation The annual meeting of Boeing shareholders Cincinnati, Pacific and Philadelphia exchanges. People working together as a global of accounts and book entry shares through is scheduled to be held on Monday, The number of Boeing shareholders as of Computershare’s home page on the Internet April 30, 2007. Details are provided in the February 21, 2007 was 547,461. enterprise for aerospace leadership at www.computershare.com/investor proxy statement. Independent Auditors Registered shareholders also have secure Written Inquiries May Be Sent To: Deloitte & Touche LLP Boeing is the world’s leading aerospace electronic and defense systems, mis- corporate offices in Chicago, Illinois, Internet access to their own accounts through Shareholder Services 111 South Wacker Drive Computershare’s home page (see above web The Boeing Company Chicago, IL 60606-4301 company and the largest manufacturer siles, satellites, launch systems, and Boeing employs more than 154,000 site address). They can view their account his- Mail Code 5003-1001 U.S.A. of commercial jetliners and military air- advanced information and communica- people in 49 American states and 70 tory, change their address, certify their tax 100 North Riverside Plaza 312-486-1000 craft combined, providing products and tion systems. Our reach extends to countries. Our enterprise also leverages identification number, replace checks, request Chicago, IL 60606-1596 tailored services to airlines and U.S. customers in more than 90 countries the talents of hundreds of thousands duplicate statements, consent to receive their U.S.A. Equal Opportunity Employer and allied armed forces around the around the world, and we are a leading more people working for Boeing proxy voting materials and other shareholder Boeing is an equal opportunity employer and communications electronically, make addition- Investor Relations seeks to attract and retain the best-qualified world. Our capabilities include rotorcraft, U.S. exporter in terms of sales. With suppliers worldwide. al investments and download a variety of The Boeing Company people regardless of race, color, religion, forms related to stock transactions. If you are Mail Code 5003-5016 national origin, gender, sexual orientation, a registered shareholder and want Internet 100 North Riverside Plaza age, disability, or status as a disabled or access and either need a password or have Chicago, IL 60606-1596 Vietnam Era Veteran. Table of Contents lost your password, please click on U.S.A. Computershare’s Internet home page (see above web site address) and then click on Company Shareholder Services 1 Operational Highlights 16 Global Presence “Forgotten Password?” in the Member Login Prerecorded shareholder information is 2 Message to Shareholders 18 Technology Development area located in the top left portion of the available toll-free from Boeing Shareholder home page. Services at 800-457-7723. You may also 7 Executive Council 20 Financials speak to a Boeing Shareholder Services 8 Boeing Commercial Airplanes 84 Selected Programs, representative at 312-544-2660 between 8:00 a.m. and 4:30 p.m. Central Time. 10 Boeing Integrated Products and Services Defense Systems 91 Board of Directors 12 2007 Initiative Spotlight: 92 Company Officers Internal Services Productivity 93 Shareholder Information 14 Serving Our Customers Printed in the U.S.A. 2006 Financial Highlights U.S. dollars in millions except per share data 2006 2005 2004 2003 2002 Revenues 61,530 53,621 51,400 49,311 52,720 Net earnings 2,215 2,572 1,872 718 492 Earnings per share* 2.84 3.19 2.24 0.85 2.84 Operating margins 4.9% 5.2% 3.9% 0.8% 6.5% Contractual backlog 216,567 160,637 104,778 104,855 104,173 Operational Highlights R Increased revenue 15 percent to a R Continued strong stock performance, R Achieved major Integrated Defense record $61.5 billion; net income declined outperforming the major indices and Systems milestones including winning 14 percent due in part to charges related delivering the fourth consecutive year the technology development program of to ending the Connexion by Boeing in- of 25 percent or greater total share- the U.S. Secure Border Initiative, signifi- flight Internet service and our settlement holder return. cant new orders on our Apache and with the U.S. Department of Justice. Chinook programs, and the Republic of R Captured a Boeing record 1,044 net Korea Airborne Early Warning & Control R Increased total backlog by 22 percent (1,050 gross) commercial airplane program; and delivering Australia’s first to a record $250 billion. orders, the second consecutive year we C-17 and the U.S. Navy’s first EA-18G. set a record. R Increased dividend by 17 percent. R Continued strategic acquisitions to R Achieved significant Commercial R Generated a record $7.5 billion of grow our commercial and military serv- Airplanes milestones, including virtual operating cash flow, allowing us to ices businesses, including the purchases rollout of the 787 DreamlinerTM, first order fully fund our pension plans, buy back of Aviall, Inc., and Carmen Systems. for the 747-8 passenger variant, delivery approximately $2.0 billion in stock and of the 600th 777 and delivery of the invest in new products and services. 5,000th 737. 1 Message From Our Chairman 2 Boeing Commercial Airplanes had a To the Shareholders and Employees of tremendous year, adding 1,044 net The Boeing Company: This was an impor- orders for new airplanes to break the record of 1,002 net orders set in 2005. tant year for Boeing. Not only did we We also smoothly and efficiently increased our production rate by more than a third. observe our 90th year in business, but I We delivered 398 airplanes to a broad also believe that, when we look back on range of customers in 2006, compared to 290 in 2005. We did this with a disci- 2006, we will see it as a pivotal year in the plined approach that we will continue to use as we ramp up production rates company’s history. It will be viewed as a further to meet our commitments for year in which we turned the corner and 2007 deliveries and beyond. positioned ourselves for what promises Integrated Defense Systems also showed strong financial performance. IDS delivered to be an exciting future and a period of continued healthy margins and record accelerated and exhilarating growth. revenues in 2006. Despite a moderating defense market, this business continues to do well — winning important new busi- W. James McNerney, Jr., Chairman, The great progress we made in 2006 ness such as the SBInet program, which President and Chief Executive Officer provides the foundation for even better supports the U.S. Department of Home- performance in 2007 and beyond. The land Security’s Secure Border Initiative, challenge before us now is to unleash and meeting key program milestones. the full potential of The Boeing Company to deliver on this promising future. With the great success we have had in winning new business over the past two In 2006, we witnessed what is possible years, our backlog has increased 60 per- when we focus on both growth and cent to more than $250 billion — more productivity.