16

P> Total Contracts $316,926,000

http://www.boeing.com/

A lot has changed since Stanley Beckelman started work at The Boeing Co. in 1951. In those days, the aircraft manufacturer literally built airplanes piece by piece. For its latest 777 commercial airplane, however, the Seattle, Wash.-based company used virtual pieces, crafted through computer-aided design and computer-aided manufacturing systems. Unlike conventional methods of continuous prototyping, the digital preassembly process allowed Boeing's design-and-build teams to test components before manufacturing them. In fact, the entire aircraft was produced from a computer model with no physical mock-up.

Boeing's experience building and managing large complex systems, such as the 777 and NASA's Space Station, have given Beckelman the ammunition he needs to pursue and win large-scale federal information technology contracts. The 777 experience "really evolved our application of information technology and helps us in helping our customers," said Beckelman, president of Boeing Information Services Inc. in Vienna, Va.

Boeing Information, now part of the company's Defense and Space Group, perhaps is best known for its development of the Reserve Component Automation System. Under the $1.3 billion contract -- which has had its share of problems -- Boeing will provide office automation, modern telecommunications, and distributed database and processing capabilities for mobilization and management of Army reserve and National Guard forces.

Boeing Information also was one of several major systems integrators that won a piece of the highly successful $935 million Defense Enterprise Integration Services contract. The indefinite-delivery, indefinite-quantity contract offered Defense agencies the first, major contract vehicle for a wide range of infotech services, from business process modeling and analysis to system architecture development.

Although Boeing Information officials say they got off to a slow start in generating business from the defense contract, they plan to pursue the next DEIS contract. The follow-on contract, estimated at $3 billion and scheduled for award this summer, will expand the types of services agencies can buy, including software and application development.

The Virginia-based division, formerly part of the Boeing Computer Services group that supported internal operations, also does extensive work with NASA. It provides computing and telecommunications capabilities to the Marshall Space Flight Center in Huntsville, Ala., the space shuttle program and the International Space Station.

In 1975, Boeing began a long-standing relationship with Department of Energy facilities in Richland, Wash. Boeing Information Services also supports the Naval Air Warfare Center's Weapons Division in China Lake, the Navy's premier facility for weapon systems integration with air platforms.

Despite the consolidation of the defense industry, Boeing's defense and space business has remained relatively stable, accounting for 29 percent of Boeing's $19.5 billion in sales.

But overall, the aircraft manufacturer, which generates 71 percent of revenues from commercial aircraft business, has had four rocky years marked by declining sales and earnings. Revenues for 1995 dropped from $22 billion in 1994, and earnings fell from $856 million in 1994 to $393 million.

Boeing's design, development and integration work on NASA's International Space Station program represented 25 percent of total 1995 revenues. However, Russia's fiscal problems could jeopardize the $5.6 billion joint venture with the U.S. and delay the first launch of a space station component in 1997.

Financial Highlights

19911992199319941995

Sales$29.3B$30.2B$25.4B$21.9B$19.5B

Net Earnings$1.6B$1.6B$1.2B$856M$393M

Earnings/Share$4.56$4.57$3.66$2.51$1.15

Contract Backlog $97.9B$87.9B$73.5B$66.3B$72.3B

Defense and Space Business

1995 Sales by Customer

Army - 13Air Force - 26

NASA - 28Navy - 10

Foreign - 15Other - 8