During the quarter, Defense, Space & Security was awarded contracts for the second KC-46 Tanker to Japan, a joint ground system to provide tactical satellite communications for the U.S. Air Force and to modernize 17 Chinooks for Spain. Defense, Space & Security also completed a successful test for the U.S. Air Force's Minuteman III and unveiled the SB>1 DEFIANT helicopter for the U.S. Army. In January, the first two KC-46 Tankers were delivered to the U.S. Air Force.
Backlog at Defense, Space & Security was $57 billion, of which 30 percent represents orders from customers outside the U.S.
Global Services
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Table 6. Global Services | Fourth Quarter |
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|
| Full Year |
|
| ||||
(Dollars in Millions) | 2018 |
| 2017 |
| Change |
| 2018 |
| 2017 |
| Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $4,894 |
| $3,797 |
| 29% |
| $17,018 |
| $14,581 |
| 17% |
Earnings from Operations | $732 |
| $559 |
| 31% |
| $2,522 |
| $2,246 |
| 12% |
Operating Margin | 15.0% |
| 14.7% |
| 0.3 Pts |
| 14.8% |
| 15.4% |
| (0.6) Pts |
Global Services fourth-quarter revenue increased to $4.9 billion, primarily driven by higher parts volume including the acquisition of KLX (Table 6). Fourth-quarter operating margin increased to 15.0 percent reflecting improved performance, partially offset by higher period costs.
During the quarter, Global Services was awarded Performance Based Logistics contracts for C-17 and F-22 for the U.S. Air Force and F-15 for Qatar as well as contracts for F/A-18 services for the U.S Navy. Global Services was also selected by Shenzhen Airlines to provide crew management solutions, making them the first airline in China to utilize Boeing AnalytX-powered services. Significant milestones during the quarter included the first KC-46 training flight with the U.S. Air Force. In addition, Global Services successfully began integrating KLX and began operations of the Auxiliary Power Unit joint venture with Safran.
Additional Financial Information
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Table 7. Additional Financial Information | Fourth Quarter |
| Full Year | ||||
(Dollars in Millions) | 2018 |
| 2017 |
| 2018 |
| 2017 |
Revenues |
|
|
|
|
|
|
|
Boeing Capital | $60 |
| $73 |
| $274 |
| $307 |
Unallocated items, eliminations and other | ($30) |
| $255 |
| ($75) |
| $542 |
Earnings from Operations |
|
|
|
|
|
|
|
| Boeing Capital | $8 |
| $27 |
| $79 |
| $114 |
| FAS/CAS service cost adjustment | $308 |
| $389 |
| $1,327 |
| $1,438 |
| Other unallocated items and eliminations | ($246) |
| ($328) |
| ($1,414) |
| ($1,099) |
| Other income, net | $29 |
| $32 |
| $92 |
| $123 |
| Interest and debt expense | ($158) |
| ($93) |
| ($475) |
| ($360) |
| Effective tax rate | 15.4% |
| (13.8)% |
| 9.9% |
| 16.3% |
