Pamphlet_2000sm

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Contents Contents

Page 1 Front Page 2 Table of Contents 3 Company Offices Finance Department 4 Headquarters St. Louis - Business

Management 5 A&M So. Cal. Business Management 6 A&M So. Cal. Contracts/Pricing &

Estimating 7 A&M So. Cal. Accounting 8 A&M So. Cal. Financial Management 9 A&M So. Cal. Information Systems 10 A&M So. Cal. Derivative Aircraft

Programs Business Operations 11 A&M So. Cal. C-17 Business

Operations 12 A&M So. Cal. Support Systems & B-1B

Business Operations 13 A&M So. Cal. Phantom Works Business

Operations 14 Glossary 15 Glossary (continued) 16 Economic Profit

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Glossary (continued) • Gross profit: Amount left when the costs of products and services are subtracted from the revenues. • Inventories: Raw materials, work in progress, and finished goods to be sold. • Liabilities: What a business owes to others, such as accounts payable, income taxes payable, and

long- and short-term debt. • Margin: One of the three economic drivers, it is a percentage (so multiply by 100). The formula is

• Margin = (Revenues - Costs) / Revenues Margin reflects operational efficiency. Grocery stores have very low margins (about one percent), whereas credit card companies have higher margins.

• Market economic profit (%): Average economic profit percentage. Company economic profit divided by company revenue or all the companies competing in a specific market or market segment.

• Market economic profit ($): Potential economic profit, measured in dollars, that is available to companies in a specific market or market segment. For example, if the market size is $32 billion and the market economic profit percentage is 3 percent, then the market economic profit equals $960 million.

• Market size ($): Money expected to be spent by customers in a specific market or market segment. For example, if it is projected that airlines will buy 800 100-seat aircraft for $40 million each over the next 10 years, the market size would be $32 billion.

• Net assets: Assets used to determine the capital charge in the economic profit calculation. The formula is

• Net Assets = Assets - Cash - Short-Term Investments - Liabilities (Excluding Debt) • Net earnings: Also known as net profit or net income, it is the operating earnings less interest and

debt expenses (from borrowing), less taxes. • Net operating profit after taxes (NOPAT): Component of the EP calculation. The formula is

• NOPAT = Operating Earnings - (Operating Earnings x Tax Rate) NOPAT shows the profit (or loss) from continuing operations.

• Operating earnings: Also called operating income, the amount left after research and development and G&A are subtracted from the gross profit.

• Property, plant, and equipment (PP&E): Land, buildings, and equipment owned by the company. • Research and development (R&D) costs: Additional expenses of research and development for

future products and services not clearly associated with a product or service. • Retained earnings: Net earnings left in the company over its life, less all paid dividends. • Revenue: Money received from the sale and delivery of products and services; one of the economic

drivers. • Taxes: Something everyone loves to complain about; money paid to governmental agencies.

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( Corporate Controller responsible for internal & external financial reporting, consistent accounting and financial planning processes, information and systems across the company. ( New Ventures engages in activities in order to leverage the com-pany’s global aerospace leadership position into new opportunities, including E-commerce. ( Treasurer responsible for a number of key functions, including corporate finance, trust investments, banking relationships, corporate development, customer financing and Boeing Capital Corp., financial planning and analysis, and investor relations. ( General Auditor Responsible for insuring financial regulatory compliance both internally and externally. ( Tax responsible for all aspects of employee and company foreign, federal, state and local income taxes and all international transactions, advisor on after-tax impact of business decisions. ( Employee Development responsible for enhancing career development activities within finance and implementing a process for development and selection of qualified candidates for job placement.

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Glossary • Assets: Resources (such as cash, investments, inventories, land, buildings, and equipment) that are

used to operate the company. • Asset utilization: Measure of how efficiently a company uses its resources. It is one of the three

economic drivers each operating group is expected to measure. • Boeing market share (%): Portion of the money spent by customers for Boeing products and services

in a specific market or market segment. For example, if the market size is $32 billion, and Boeing receives $19.2 billion in revenues from that market, then the Boeing market share is 60 percent.

• Boeing relative economic profit (ratio): Ratio of Boeing economic profit percentage divided by market economic profit percentage. It shows how Boeing economic profit percentage compares to the market economic profit percentage. For example, if the Boeing economic profit percentage is 3.15 percent, and the market economic profit percentage is 3 percent, then the Boeing relative economic profit ratio would be 3.15 percent divided by 3 percent, or 1.05. Because the ratio is greater than 1, Boeing should be getting a bigger share of the market economic profit.

• Boeing share of economic profit (%): Portion of the market economic profit that Boeing could potentially earn. For example, if the Boeing market share is 60 percent, and the Boeing relative economic profit ratio is 1.05, then Boeing could expect to earn 63 percent of the market economic profit dollars.

• Capital charge: Cost associated with using the net assets, determined by multiplying the cost of capital by net assets.

• Cost of capital: Weighted average of the cost of debt and the cost of equity. When multiplied by the net assets, yields the capital charge on those assets.

• Costs of products and services: Also called the costs of goods sold or operating expenses. Includes the labor, materials, and overhead expenses used in developing, manufacturing, and delivering the products and services sold.

• Datamart: the repository of Company financial data. See your representative from Finance for more details.

• Economic profit (EP): Measure that shows not only how much money a business earns, but also the value of the assets used to earn the money. It provides employees a clear line of sight between their organizational performance and the company financial statements. The formula is

• EP = Net Operating Profit After Taxes - Capital Charge If the EP of a program, project, or service is greater than 0, it is creating value for the company; if the EP is less than 0, it is destroying value. Looking at projected EPs over time helps the company select a strategic direction.

• Free cash flow: Free cash flow = net operating profit after tax (NOPAT) minus change in net assets. • General and administrative (G&A) costs: Other operating expenses, including rent, utilities, office

supplies, and administrative departments -- such as accounting, marketing, and human resources that support continuing operations not clearly associated with a product or service.

Aircraft &

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( Contracts & Pricing Responsible for establishing near and long-term goals, encouraging and guiding continuous improvement, management of business unit daily operations, and ensuring the process integrity of contracting, estimating and cost/price analysis

( Controller/Finance Defines and ensures consistent accounting and financial planning processes, information, and systems to meet fiscal, legal and regulatory responsibilities.

( Information Systems Provides site & program information system leadership.

( Business Operations Responsible for coordinating and guiding continuous process improvement, establishing best practices, and ensuring process integrity of cost/scheduling, earned value management, forward pricing, overhead management, and budgeting.

( Internal Audit Responsible for insuring financial regulatory compliance.

( People responsible for attracting, developing, and sustaining a highly skilled and motivated workforce committed to integrity, quality and technical excellence

( Major Programs provide support for the Advanced Tactical Transport (ATT), Blended Wing Body (BWB) and the Affordable Rapid Response Missile Demonstrator (ARRMD).

( Financial Planning & Business Operations - supports specific technology development operations arranged by Organization Element Leaders (OELs) and provide business, financial planning and rate management.

( Business Resources provides direct labor, material, overhead and business system support for special projects, responsible for coordinating projects and requirements with other sites.

( Contracts, Pricing & Estimating supports new business analysis, labor and material pricing and estimating, proposal preparation/review, contract management and administration. This group acts as the interface between the various customers and procurement organizations under contract and the performing organizations. B

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( Business Operations provides scheduling (master & detail), budgeting (direct & indirect) and capital planning by program.

( Contracts & Pricing is responsible for pricing and negotiating new contracts, contract changes, contract administration, product deliveries and IWAs.

( Programs include the B-1B, avionics upgrades on B-1B and C-130 AMP, E-6, C-17 Flex and spares.

( Customers include the B-1 SPO, DCAA, Financial Management and Contracts/Pricing & Estimating.

L-159 C-17 B-1B

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Estim

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( Material Estimating – Develops material estimates in support of activities such as procurement, Must-Cost, and IWAs. Rresponsible for Cost Estimate Relations (CERs) provided to pricing and negotiated with the DCMA.

( Direct Labor Estimating - Develops direct labor estimates of production and engineering in support of many activities such as must-cost, divisional work transfers and IWAs. They are responsible for the creation of Cost Estimate Relations (CERs) which are provided to pricing and negotiated with the DCMA.

( Contract Management – Responsible for proposal review, contract management and administration and contract compliance. Acts as the interface between Boeing and the DCMA or other government organizations. Responsible for creation and implementation of metrics, correspondence control and maintenance of the pricing system.

( Electronic Contracting – This organization is responsible for maintaining the changes that have been negotiated by the other organizations through their interactions with their various customers (I.e. documentum) B

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( Program Affordability & Parts Costing - Acts as focal point for C-17 cost reduction activities to meet unit cost goals and transition process to IPTs. Provides part cost visibility and cost targets to mechanics.

( Program Planning & Control – provides master schedules, maintains management reserve, undistributed budget, company funds, government reporting, financial analysis, A&M site cost reporting, EAC & risk assessment, budget planning, schedules forecasting, affordability, best practices processes, government, program and site business support.

( Contracts & Pricing - Responsible for pricing, negotiating contracts and changes, contract administration, Executive Source Review Board (ESRB), product deliveries and IWAs. DCAA focal, support defective pricing audits and non-recurring development.

( Business Operations – Responsible for schedules, direct & indirect budgets, and capital planning.

( C-17 St. Louis Business Management - Provides scheduling, estimating, Contracts & Pricing, Business Operations and Financial Controls; supports all A&M programs and functions as the A&M focal for IWAs.

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Cost Accounting - Collects, maintains and reports cost data for labor and time keeping, attendance, material costs (received, inventoried and issued) and overhead costs. Financial statement data and cash forecasts are created and supplied by this organization. Accounts Receivable - Collects the amounts due Boeing from our customer, employees, components and others then they are recorded, maintained and reported, and reports contract completions. Accounts Payable - Pays our vendors, suppliers, subcontractors and employees for the products and services supplied. Includes companies who supply material included on the plane and consumed in the manufacturing process, contract labor, consultants and leases for cars, buildings and equipment. Government Accounting - This is the accounting interface with our customer for reporting changes to our disclosure statement as well as maintaining this document. Assist with DCMA audits, responsible for the annual overhead claim to our customer.

Business M

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( People provides the usual human resources support. ( Contracts & Pricing is responsible for pricing and negotiating new contracts,

changes, contract administration, product deliveries and IWAs. ( Material Buyers provide procurement support unique to DAP program and customer

needs. ( Business Operations provides financial planning, cost reporting, forecasting,

program risk analysis, scheduling, planning, direct/indirect and capital planning. ( Operations Support provides configuration control, program library, customer

satisfaction, QA initiatives and facilities support. ( Computing Support provides systems support and web development for DAP

Business Resource.

C-32A Executive Transport

C-40A Navy Airlift Aircraft

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Business M

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( Compliance – Includes process & procedure training, Earned Value Management (EVM) training, PBM integration, ISO 9000 audit tracking & reporting (B-1), audit monitoring & reporting, metrics, and is the P & PDS focal.

( Financial Planning - Responsible for the creation of Operating Plans, reporting financial data, financial analysis, cash and funding analyses, new business analysis financials (i.e. NPV and IRR) and sales and earnings recognition.

( Program Planning & Control – provides master schedules, maintains management reserve, undistributed budget, company funds, government reporting, financial analysis, A&M site cost reporting, EAC & risk assessment, budget planning, schedules forecasting, affordability, best practices processes, government, program and site business support.

( Resource Planning –Indirect budgets, rate forecasting, capital budget tracking/control, facilities requests (FR), indirect budget distribution, creation & distribution of the monthly variance analysis package by pool, maintains the joint rate model and provides cost impact studies for changes in labor/expense.

( Palmdale Business Management - Supports the F-15, F-22, B1B, B-52, JSF and X-37 programs with proposal preparation and control, operating plan support, business plans, overhead rates, direct/indirect budgets, performance reports and schedules.

( Business/Supplier Systems, Production Systems, Engineering Systems and Post Delivery (Product Support) - primarily programmers who write and maintain the code and system applications for their designated customers.

( Examples: ( Business/Supplier Systems - IMSH, PRISM, MAIN, ATLANTIS, ( Production Systems - Shop Floor 2000, MRP, Planning, etc. ( Engineering Systems - PRIMS, design systems, Unigraphics, etc. ( Post Delivery - Standard Delivery System (SDS).

( Infrastructure Resource Management - provides "behind the scenes" system administration and technical support for program wide system infrastructure such as servers, databases, software maintenance and phones. Provide background interface with the IBM Global Services group.

( BHAIT - Boeing High-desert Assembly, Integration & Test provides complete offsite IS support for Palmdale and Edwards from writing code to telephone service.

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