During the quarter, Defense, Space & Security received contracts for MH-47G Block II Chinook for the U.S. Army Special Operations, F/A-18 service life modification for the U.S. Navy, Joint Direct Attack Munition for the U.S. Air Force, and Wideband Global Satellite Communication for the U.S. Air Force. Significant milestones achieved during the quarter included completion of the first T-X Trainer flight test on contract with the U.S. Air Force and the final parachute test for the Commercial Crew spacecraft.
Backlog at Defense, Space & Security was $64 billion, of which 31 percent represents orders from customers outside the U.S.
Global Services
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Table 6. Global Services | Second Quarter |
|
|
| First Half |
|
| ||||
(Dollars in Millions) | 2019 |
| 2018 |
| Change |
| 2019 |
| 2018 |
| Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $4,543 |
| $4,097 |
| 11% |
| $9,162 |
| $8,047 |
| 14% |
Earnings from Operations | $687 |
| $604 |
| 14% |
| $1,340 |
| $1,251 |
| 7% |
Operating Margin | 15.1% |
| 14.7% |
| 0.4 Pts |
| 14.6% |
| 15.5% |
| (0.9) Pts |
Global Services second-quarter revenue increased to $4.5 billion, primarily driven by the acquisition of Boeing Distribution Services, Inc. (formerly KLX) and higher international government services volume (Table 6). Second-quarter operating margin was relatively stable at 15.1 percent.
During the quarter, Global Services was awarded Performance Based Logistics contracts for AH-64 Apache for the U.S. Army and KC-767A Tanker for the Italian Air Force. At the Paris Air Show, Global Services signed commitments with ASL Aviation Holdings and GECAS for up to 45 737-800 converted freighters and announced digital solution agreements with Delta Air Lines and JetBlue Airways.
Additional Financial Information
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Table 7. Additional Financial Information | Second Quarter |
| First Half | ||||
(Dollars in Millions) | 2019 |
| 2018 |
| 2019 |
| 2018 |
Revenues |
|
|
|
|
|
|
|
Boeing Capital | $75 |
| $72 |
| $141 |
| $137 |
Unallocated items, eliminations and other | ($201) |
| $37 |
| ($402) |
| ($22) |
| Earnings from Operations |
|
|
|
|
|
|
|
| Boeing Capital | $37 |
| $24 |
| $57 |
| $44 |
| FAS/CAS service cost adjustment | $365 |
| $317 |
| $729 |
| $682 |
| Other unallocated items and eliminations | ($498) |
| ($396) |
| ($1,205) |
| ($722) |
| Other income, net | $107 |
| ($15) |
| $213 |
| $51 |
| Interest and debt expense | ($154) |
| ($109) |
| ($277) |
| ($211) |
| Effective tax rate | 14.2% |
| 15.1% |
| 27.5% |
| 13.9% |
