CHICAGO, July 23, 2014 /PRNewswire/ --
Table 1. Summary
Financial Results
|
Second
Quarter
|
|
|
First
Half
|
|
|
(Dollars in
Millions, except per share data)
|
|
2014
|
2013
|
|
Change
|
|
2014
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$22,045
|
|
$21,815
|
|
1%
|
|
$42,510
|
|
$40,708
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP*
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Operating
Earnings
|
|
$1,991
|
|
$2,028
|
|
(2)%
|
|
$4,086
|
|
$3,895
|
|
5%
|
Core Operating
Margin
|
|
9.0%
|
|
9.3%
|
|
(0.3)
Pts
|
|
9.6%
|
|
9.6%
|
|
0.0
Pts
|
Core Earnings Per
Share
|
|
$2.42
|
|
$1.67
|
|
45%
|
|
$4.16
|
|
$3.40
|
|
22%
|
Operating Cash
Flow Before Pension Contributions
|
|
$1,809
|
|
$3,480
|
|
(48)%
|
|
$2,921
|
|
$4,004
|
|
(27)%
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From
Operations
|
|
$1,787
|
|
$1,716
|
|
4%
|
|
$3,329
|
|
$3,244
|
|
3%
|
Operating
Margin
|
|
8.1%
|
|
7.9%
|
|
0.2
Pts
|
|
7.8%
|
|
8.0%
|
|
(0.2)
Pts
|
Net
Earnings
|
|
$1,653
|
|
$1,088
|
|
52%
|
|
$2,618
|
|
$2,194
|
|
19%
|
Earnings Per
Share
|
|
$2.24
|
|
$1.41
|
|
59%
|
|
$3.50
|
|
$2.85
|
|
23%
|
Operating Cash
Flow
|
|
$1,809
|
|
$3,467
|
|
(48)%
|
|
$2,921
|
|
$3,991
|
|
(27)%
|
* Non-GAAP
measures (core operating earnings, core operating margin and core
earnings per share) exclude certain components of pension and post
retirement benefit expense that management believes are not
reflective of underlying business performance. Complete definitions
of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures
Disclosures."
|
The Boeing Company [NYSE: BA] reported second-quarter core
earnings per share (non-GAAP) of $2.42, reflecting strong performance and
favorable tax items (Table 1). Second-quarter 2014 results included
a $272 million after-tax charge
($0.37 per share) on the KC-46A
Tanker program reflecting the cost of additional engineering and
systems installation work required to complete the Engineering and
Manufacturing Development contract. Favorable tax items include the
previously announced tax benefit of $116
million for the 2007-2008 tax settlement, as well as an
additional tax benefit of $408
million in the second quarter.
Core earnings per share guidance for 2014 increased to between
$7.90 and $8.10, from $7.15 to $7.35,
reflecting the $408 million tax
benefits, strong operating performance and the KC-46A Tanker
charge. GAAP earnings per share guidance for 2014 increased to
between $6.85 and $7.05.
"Strong operating performance across our production programs and
services businesses drove revenue and earnings-per-share growth and
healthy operating cash flow, which supported $1.5 billion in additional share repurchases in
the quarter," said Boeing Chairman and Chief Executive Officer
Jim McNerney. "We delivered our
first 787-9 and our 8,000th 737, successfully completed
a key missile defense intercept test, and delivered our
100th EA-18G Growler to the U.S. Navy."
"While challenges resolving engineering and systems installation
issues on our tanker test aircraft are resulting in higher spending
to maintain schedule, the issues are well understood and we remain
on path to begin flight testing fully provisioned tankers the first
part of next year," McNerney said.
"With 783 new commercial airplane orders to date this year and
significant contracts in the quarter for military aircraft and
satellites, our backlog remains large and diverse. Overall, our
strong first-half financial performance, sustained focus on growth
and productivity, and positive market outlook support our increased
earnings guidance for the year," he said.
Table 2. Cash
Flow
|
|
Second
Quarter
|
|
First
Half
|
(Millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Operating Cash
Flow Before Pension Contributions*
|
|
$1,809
|
|
$3,480
|
|
$2,921
|
|
$4,004
|
Pension
Contributions
|
|
|
|
($13)
|
|
|
|
($13)
|
Operating Cash
Flow
|
|
$1,809
|
|
$3,467
|
|
$2,921
|
|
$3,991
|
Less Additions to
Property, Plant & Equipment
|
|
($449)
|
|
($455)
|
|
($946)
|
|
($976)
|
Free Cash
Flow*
|
|
$1,360
|
|
$3,012
|
|
$1,975
|
|
$3,015
|
Operating cash flow in the quarter was $1.8 billion, reflecting commercial airplane
production rates, strong operating performance and timing of
receipts and expenditures (Table 2). During the quarter, the
company repurchased 11.4 million shares for $1.5 billion, leaving $6.8
billion remaining under the current repurchase authorization
expected to be completed over approximately the next two years. The
company also paid $0.5 billion in
dividends in the quarter, reflecting an approximately 50 percent
increase in dividends per share compared to the same period of the
prior year.
Table 3. Cash,
Marketable Securities and Debt Balances
|
|
Quarter-End
|
(Billions)
|
|
Q2
14
|
|
Q1
14
|
Cash
|
|
$7.5
|
|
$6.9
|
Marketable
Securities1
|
|
$3.8
|
|
$5.3
|
Total
|
|
$11.3
|
|
$12.2
|
Debt
Balances:
|
|
|
|
|
The Boeing Company,
net of intercompany loans to BCC
|
|
$6.4
|
|
$6.3
|
Boeing Capital,
including intercompany loans
|
|
$2.5
|
|
$2.6
|
Total Consolidated
Debt
|
|
$8.9
|
|
$8.9
|
1
Marketable securities consists primarily of time deposits due
within one year classified as "short-term
investments."
|
Cash and investments in marketable securities totaled
$11.3 billion at quarter-end (Table
3), down from $12.2 billion at the
beginning of the quarter, primarily due to the share repurchases.
Debt was $8.9 billion, unchanged from
the beginning of the quarter.
Total company backlog of $440
billion was unchanged from the beginning of the quarter, and
included net orders for the quarter of $23
billion.
Segment Results
Commercial Airplanes
Table 4.
Commercial Airplanes
|
|
Second
Quarter
|
|
|
|
First
Half
|
|
|
(Dollars in
Millions)
|
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Airplanes Deliveries
|
|
181
|
|
169
|
|
7%
|
|
342
|
|
306
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$14,304
|
|
$13,624
|
|
5%
|
|
$27,041
|
|
$24,314
|
|
11%
|
Earnings from
Operations
|
|
$1,550
|
|
$1,453
|
|
7%
|
|
$3,052
|
|
$2,672
|
|
14 %
|
Operating
Margin
|
|
10.8%
|
|
10.7%
|
|
0.1
Pts
|
|
11.3%
|
|
11.0%
|
|
0.3Pts
|
Commercial Airplanes second-quarter revenue increased 5 percent
to $14.3 billion on higher
deliveries. Second-quarter operating margin was 10.8 percent,
reflecting the delivery volume and strong performance offset by the
$238 million pre-tax charge on the
KC-46A Tanker program (Table 4). During the quarter, Commercial
Airplanes delivered the first 787-9 Dreamliner and the 787 program
received 330-minute ETOPS certification. In July, Emirates Airline
and Qatar Airways finalized orders totaling 200 777X airplanes and
Monarch Airlines announced a commitment to purchase 30 737 MAX
airplanes.
Commercial Airplanes booked 264 net orders during the quarter.
Backlog remains strong with over 5,200 airplanes valued at a record
$377 billion.
Defense, Space & Security
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 5. Defense,
Space & Security
|
|
Second
Quarter
|
|
|
|
First
Half
|
|
|
(Dollars in
Millions)
|
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
Revenues1
|
|
|
|
|
|
|
|
|
|
|
|
|
Boeing Military
Aircraft
|
|
$3,523
|
|
$3,641
|
|
(3)%
|
|
$6,981
|
|
$7,621
|
|
(8)%
|
Network & Space
Systems
|
|
$1,920
|
|
$2,049
|
|
(6)%
|
|
$3,796
|
|
$4,009
|
|
(5)%
|
Global Services &
Support
|
|
$2,304
|
|
$2,496
|
|
(8)%
|
|
$4,603
|
|
$4,666
|
|
(1)%
|
Total BDS
Revenues
|
|
$7,747
|
|
$8,186
|
|
(5)%
|
|
$15,380
|
|
$16,296
|
|
(6)%
|
Earnings from
Operations1
|
|
|
|
|
|
|
|
|
|
|
|
|
Boeing Military
Aircraft
|
|
$165
|
|
$386
|
|
(57)%
|
|
$497
|
|
$813
|
|
(39)%
|
Network & Space
Systems
|
|
$150
|
|
$137
|
|
9%
|
|
$318
|
|
$293
|
|
9%
|
Global Services &
Support
|
|
$267
|
|
$253
|
|
6%
|
|
$545
|
|
$502
|
|
9%
|
Total BDS Earnings
from Operations
|
|
$582
|
|
$776
|
|
(25)%
|
|
$1,360
|
|
$1,608
|
|
(15)%
|
Operating
Margin
|
|
7.5%
|
|
9.5%
|
|
(2.0)Pts
|
|
8.8%
|
|
9.9%
|
|
(1.1)Pts
|
1
During the first quarter of 2014, certain programs were
realigned between Boeing Military Aircraft and Global Services
& Support.
|
Defense, Space & Security's second-quarter revenue was
$7.7 billion. Operating margin was
7.5 percent, reflecting the $187
million pre-tax charge recorded at BMA on the KC-46A Tanker
program partially offset by strong operating performance (Table
5).
Boeing Military Aircraft (BMA) second-quarter revenue was
$3.5 billion, reflecting fewer C-17
and P-8 deliveries partially offset by higher F-15 deliveries.
Operating margin of 4.7 percent was impacted by the charge on the
KC-46A Tanker program. During the quarter, BMA was awarded a
contract for 44 E/A-18 and F/A-18 aircraft from the U.S. Navy.
Network & Space Systems (N&SS) second-quarter revenue
was $1.9 billion, reflecting lower
commercial satellites volume, and operating margin increased to 7.8
percent. During the quarter, N&SS completed a successful
Missile Defense System intercept in flight test.
Global Services & Support (GS&S) second-quarter revenue
was $2.3 billion, reflecting lower
volume in maintenance, modifications and upgrades. Operating margin
increased to 11.6 percent reflecting strong performance. During the
quarter, GS&S was awarded a 5 year contract to provide support
for Australia's Airborne Early
Warning & Control (AEW&C) aircraft.
Backlog at Defense, Space & Security was $63 billion, of which 36 percent represents
orders with international customers.
Additional Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6.
Additional Financial Information
|
|
Second
Quarter
|
|
First
Half
|
(Dollars in
Millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues
|
|
|
|
|
|
|
|
|
Boeing
Capital
|
|
$90
|
|
$104
|
|
$172
|
|
$209
|
Other
segment
|
|
$22
|
|
$27
|
|
$42
|
|
$54
|
Unallocated items and
eliminations
|
|
($118)
|
|
($126)
|
|
($125)
|
|
($165)
|
Earnings from
Operations
|
|
|
|
|
|
|
|
|
Boeing
Capital
|
|
$33
|
|
$19
|
|
$77
|
|
$63
|
Other segment
income/(expense)
|
|
($48)
|
|
($43)
|
|
($110)
|
|
($101)
|
Unallocated items and
eliminations excluding unallocated pension/postretirement
expense
|
|
($126)
|
|
($177)
|
|
($293)
|
|
($347)
|
Unallocated
pension/postretirement expense
|
|
($204)
|
|
($312)
|
|
($757)
|
|
($651)
|
Other income,
net
|
|
$11
|
|
$13
|
|
$20
|
|
$22
|
Interest and debt
expense
|
|
($81)
|
|
($96)
|
|
($173)
|
|
($195)
|
Effective tax
rate
|
|
3.7%
|
|
33.4%
|
|
17.6%
|
|
28.6%
|
At quarter-end, Boeing Capital's net portfolio balance was
$3.4 billion down from $3.5 billion at the beginning of the quarter.
Unallocated items and eliminations totaled $126 million at quarter end, down from
$177 million in the same period of
the prior year, primarily due to lower deferred compensation
expense. Total pension expense for the second quarter was
$693 million, down from $753 million in the same period of the prior
year. The company's effective income tax rate was 3.7 percent at
quarter end, down from 33.4 percent in the same period of the prior
year. The second quarter 2014 effective income tax rate included a
$265 million benefit for a tax basis
adjustment, $143 million benefit for
a 2009-2010 tax settlement and the previously announced benefit of
$116 million for the 2007-2008 tax
settlement.
Outlook
The company's 2014 financial guidance (Table 7) reflects
continued strong performance in both businesses.
|
|
|
Table 7. Financial
Outlook
|
|
(Dollars in
Billions, except per share data)
|
2014
|
|
|
The Boeing
Company
|
|
Revenue
|
$87.5 -
90.5
|
Core Earnings Per
Share*
|
$7.90 -
8.10
|
GAAP Earnings Per
Share
|
$6.85 -
7.05
|
Operating Cash Flow
Before Pension Contributions*
|
~ $7
|
Operating Cash Flow
1
|
~ $6.25
|
|
|
Commercial
Airplanes
|
|
Deliveries
2
|
715 - 725
|
Revenue
|
$57.5 -
59.5
|
Operating
Margin
|
> 10%
|
|
|
Defense, Space
& Security (revised for business realignment)
|
|
Revenue
|
|
Boeing Military
Aircraft
|
~ $14.2
|
Network & Space
Systems
|
~ $7.7
|
Global Services &
Support
|
~ $8.6
|
|
|
Total BDS
Revenue
|
$30 - 31
|
|
|
Operating
Margin
|
|
Boeing Military
Aircraft
|
~ 9.0%
|
Network & Space
Systems
|
~ 8.5%
|
Global Services &
Support
|
~ 11.0%
|
|
|
Total BDS Operating
Margin
|
~ 9.5%
|
|
|
Boeing
Capital
|
|
Portfolio
Size
|
Lower
|
Revenue
|
~ $0.3
|
Pre-Tax
Earnings
|
~ $0.05
|
|
|
Research &
Development
|
~ $3.2
|
Capital
Expenditures
|
~ $2.5
|
Pension Expense
3
|
~ $3.2
|
Effective Tax Rate
4
|
~ 23%
|
1 After
discretionary cash pension contributions of $0.75 billion and
assuming new aircraft financings under $0.5 billion
|
2
Assumes approximately 110 787 deliveries
|
3
Approximately $1.3 billion is expected to be recorded in
unallocated items and eliminations
|
4
Assumes the extension of the research and development tax
credit
|
* Non-GAAP
measures. Complete definitions of Boeing's non-GAAP measures are on
page 7, "Non-GAAP Measures Disclosures."
|
Boeing's core earnings per share guidance for 2014 increased to
between $7.90 and $8.10, from
$7.15 to $7.35, reflecting the $408
million tax benefits, strong operating performance and the
KC-46A Tanker charge. GAAP earnings per share guidance for 2014
increased to between $6.85 and
$7.05.
Commercial Airplanes operating margin guidance increased to
greater than 10 percent on strong operating performance.
Defense, Space & Security operating margin guidance is
unchanged at approximately 9.5 percent. Boeing Military Aircraft
operating margin guidance is lowered to approximately 9 percent.
Global Services & Support operating margin guidance increased
to approximately 11 percent reflecting strong performance.
Boeing's effective tax rate is now expected to be approximately
23 percent in 2014, down from approximately 29 percent, to reflect
the additional tax benefits recorded in the second quarter and
continues to assume the extension of the research and development
tax credit.
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information determined
under U.S. generally accepted accounting principles (GAAP) with
certain non-GAAP financial information. The non-GAAP financial
information presented excludes certain significant items that may
not be indicative of, or are unrelated to, results from our ongoing
business operations. We believe that these non-GAAP measures
provide investors with additional insight into the company's
ongoing business performance. These non-GAAP measures should not be
considered in isolation or as a substitute for the related GAAP
measures, and other companies may define such measures differently.
We encourage investors to review our financial statements and
publicly-filed reports in their entirety and not to rely on any
single financial measure. The following definitions are
provided:
Core Operating Earnings, Core Operating Margin and Core Earnings
Per Share
Core operating earnings is defined as GAAP earnings from
operations excluding unallocated pension and post-retirement
expense. Core operating margin is defined as core operating
earnings expressed as a percentage of revenue. Core earnings per
share is defined as GAAP diluted earnings per share
excluding the net earnings per share impact of unallocated
pension and post-retirement expense. Unallocated pension and
post-retirement expense represents the portion of pension and
other post-retirement costs that are not recognized by business
segments for segment reporting purposes. Management uses core
operating earnings, core operating margin and core earnings per
share for purposes of evaluating and forecasting underlying
business performance. Management believes these core earnings
measures provide investors additional insights into operational
performance as they exclude unallocated pension and post-retirement
costs, which primarily represent costs driven by market factors and
costs not allocable to government contracts. A reconciliation
between the GAAP and non-GAAP measures is provided on page
14.
Operating Cash Flow Before Pension Contributions
Operating cash flow before pension contributions is defined as GAAP
operating cash flow less pension contributions.
Management believes operating cash flow before pension
contributions provides additional insights into underlying business
performance. Management uses operating cash flow before pension
contributions as a measure to assess both business performance and
overall liquidity. Table 2 provides a reconciliation between GAAP
operating cash flow and operating cash flow before pension
contributions.
Free Cash Flow
Free cash flow is defined as GAAP operating cash flow less
capital expenditures for property, plant and equipment
additions. Management believes free cash flow provides
investors with an important perspective on the cash available for
shareholders, debt repayment, and acquisitions after making the
capital investments required to support ongoing business operations
and long term value creation. Free cash flow does not represent the
residual cash flow available for discretionary expenditures as it
excludes certain mandatory expenditures such as repayment of
maturing debt. Management uses free cash flow as a measure to
assess both business performance and overall liquidity. Table 2
provides a reconciliation between GAAP operating cash flow and free
cash flow.
Caution Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "may," "should," "expects," "intends," "projects,"
"plans," "believes," "estimates," "targets," "anticipates," and
similar expressions are used to identify these forward-looking
statements. Examples of forward-looking statements include
statements relating to our future financial condition and operating
results, as well as any other statement that does not directly
relate to any historical or current fact. Forward-looking
statements are based on our current expectations and assumptions,
which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict. Many factors could
cause actual results to differ materially and adversely from these
forward-looking statements. Among these factors are risks related
to: (1) general conditions in the economy and our industry,
including those due to regulatory changes; (2) our reliance on our
commercial airline customers; (3) the overall health of our
aircraft production system, planned production rate increases
across multiple commercial airline programs, our commercial
development and derivative aircraft programs, and our aircraft
being subject to stringent performance and reliability standards;
(4) changing budget and appropriation levels and acquisition
priorities of the U.S. government; (5) our dependence on U.S.
government contracts; (6) our reliance on fixed-price contracts;
(7) our reliance on cost-type contracts; (8) uncertainties
concerning contracts that include in-orbit incentive payments; (9)
our dependence on our subcontractors and suppliers, as well as the
availability of raw materials, (10) changes in accounting
estimates; (11) changes in the competitive landscape in our
markets; (12) our non-U.S. operations, including sales to non-U.S.
customers; (13) potential adverse developments in new or pending
litigation and/or government investigations; (14) customer and
aircraft concentration in Boeing Capital's customer financing
portfolio; (15) changes in our ability to obtain debt on
commercially reasonable terms and at competitive rates in order to
fund our operations and contractual commitments; (16) realizing the
anticipated benefits of mergers, acquisitions, joint
ventures/strategic alliances or divestitures; (17) the adequacy of
our insurance coverage to cover significant risk exposures; (18)
potential business disruptions, including those related to physical
security threats, information technology or cyber-attacks or
natural disasters; (19) work stoppages or other labor disruptions;
(20) significant changes in discount rates and actual investment
return on pension assets; (21) potential environmental liabilities;
and (22) threats to the security of our or our customers'
information.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. Any
forward-looking statement speaks only as of the date on which it is
made, and we assume no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by law.
Contact:
|
|
|
|
Investor
Relations:
|
|
Troy Lahr or Matt
Welch (312) 544-2140
|
Communications:
|
|
Chaz Bickers (312)
544-2002
|
The Boeing Company
and Subsidiaries Consolidated Statements of
Operations (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
June 30
|
|
Three months
ended
June 30
|
(Dollars in
millions, except per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Sales of
products
|
$37,542
|
|
$35,556
|
|
$19,527
|
|
$19,238
|
Sales of
services
|
4,968
|
|
5,152
|
|
2,518
|
|
2,577
|
Total
revenues
|
42,510
|
|
40,708
|
|
22,045
|
|
21,815
|
|
|
|
|
|
|
|
|
Cost of
products
|
(31,932)
|
|
(30,165)
|
|
(16,674)
|
|
(16,437)
|
Cost of
services
|
(3,999)
|
|
(4,004)
|
|
(1,979)
|
|
(1,995)
|
Boeing Capital
interest expense
|
(35)
|
|
(37)
|
|
(17)
|
|
(18)
|
Total costs and
expenses
|
(35,966)
|
|
(34,206)
|
|
(18,670)
|
|
(18,450)
|
|
6,544
|
|
6,502
|
|
3,375
|
|
3,365
|
Income from operating
investments, net
|
120
|
|
88
|
|
61
|
|
43
|
General and
administrative expense
|
(1,795)
|
|
(1,900)
|
|
(918)
|
|
(929)
|
Research and
development expense, net
|
(1,542)
|
|
(1,468)
|
|
(733)
|
|
(763)
|
Gain on dispositions,
net
|
2
|
|
22
|
|
2
|
|
|
Earnings from
operations
|
3,329
|
|
3,244
|
|
1,787
|
|
1,716
|
Other income,
net
|
20
|
|
22
|
|
11
|
|
13
|
Interest and debt
expense
|
(173)
|
|
(195)
|
|
(81)
|
|
(96)
|
Earnings before
income taxes
|
3,176
|
|
3,071
|
|
1,717
|
|
1,633
|
Income tax
expense
|
(558)
|
|
(878)
|
|
(64)
|
|
(546)
|
Net earnings from
continuing operations
|
2,618
|
|
2,193
|
|
1,653
|
|
1,087
|
Net gain on disposal
of discontinued operations, net of taxes of $0, $0, $0 and
$0
|
|
|
1
|
|
|
|
1
|
Net
earnings
|
$2,618
|
|
$2,194
|
|
$1,653
|
|
$1,088
|
Basic earnings per
share from continuing operations
|
$3.55
|
|
$2.88
|
|
$2.26
|
|
$1.43
|
Net gain on disposal
of discontinued operations, net of taxes
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$3.55
|
|
$2.88
|
|
$2.26
|
|
$1.43
|
Diluted earnings
per share from continuing operations
|
$3.50
|
|
$2.85
|
|
$2.24
|
|
$1.41
|
Net gain on disposal
of discontinued operations, net of taxes
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
$3.50
|
|
$2.85
|
|
$2.24
|
|
$1.41
|
Cash dividends
paid per share
|
$1.46
|
|
$0.97
|
|
$0.73
|
|
$0.485
|
Weighted average
diluted shares (millions)
|
747.4
|
|
770.1
|
|
740.1
|
|
771.8
|
The Boeing Company
and Subsidiaries Consolidated Statements of Financial
Position (Unaudited)
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
|
June 30
2014
|
|
December 31
2013
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$7,533
|
|
$9,088
|
Short-term and other
investments
|
|
3,797
|
|
6,170
|
Accounts receivable,
net
|
|
7,694
|
|
6,546
|
Current portion of
customer financing, net
|
|
237
|
|
344
|
Deferred income
taxes
|
|
15
|
|
14
|
Inventories, net of
advances and progress billings
|
|
46,251
|
|
42,912
|
Total current
assets
|
|
65,527
|
|
65,074
|
Customer financing,
net
|
|
3,180
|
|
3,627
|
Property, plant and
equipment, net of accumulated depreciation of $15,424 and
$15,070
|
|
10,449
|
|
10,224
|
Goodwill
|
|
5,139
|
|
5,043
|
Acquired intangible
assets, net
|
|
3,004
|
|
3,052
|
Deferred income
taxes
|
|
2,664
|
|
2,939
|
Investments
|
|
1,196
|
|
1,204
|
Other assets, net of
accumulated amortization of $420 and $448
|
|
1,578
|
|
1,500
|
Total
assets
|
|
$92,737
|
|
$92,663
|
Liabilities and
equity
|
|
|
|
|
Accounts
payable
|
|
$11,060
|
|
$9,498
|
Accrued
liabilities
|
|
13,222
|
|
14,131
|
Advances and billings
in excess of related costs
|
|
21,244
|
|
20,027
|
Deferred income taxes
and income taxes payable
|
|
6,222
|
|
6,267
|
Short-term debt and
current portion of long-term debt
|
|
1,591
|
|
1,563
|
Total current
liabilities
|
|
53,339
|
|
51,486
|
Accrued retiree
health care
|
|
6,506
|
|
6,528
|
Accrued pension plan
liability, net
|
|
9,812
|
|
10,474
|
Non-current income
taxes payable
|
|
740
|
|
156
|
Other long-term
liabilities
|
|
864
|
|
950
|
Long-term
debt
|
|
7,292
|
|
8,072
|
Shareholders'
equity:
|
|
|
|
|
Common stock, par
value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares
issued
|
|
5,061
|
|
5,061
|
Additional paid-in
capital
|
|
4,524
|
|
4,415
|
Treasury stock, at
cost – 290,904,517 and 264,882,461 shares
|
|
(21,381)
|
|
(17,671)
|
Retained
earnings
|
|
34,516
|
|
32,964
|
Accumulated other
comprehensive loss
|
|
(8,659)
|
|
(9,894)
|
Total shareholders'
equity
|
|
14,061
|
|
14,875
|
Noncontrolling
interests
|
|
123
|
|
122
|
Total
equity
|
|
14,184
|
|
14,997
|
Total liabilities
and equity
|
|
$92,737
|
|
$92,663
|
The Boeing Company
and Subsidiaries Consolidated Statements of Cash
Flows (Unaudited)
|
|
Six months
ended
June 30
|
|
|
|
|
(Dollars in
millions)
|
2014
|
|
2013
|
Cash flows –
operating activities:
|
|
|
|
Net
earnings
|
$2,618
|
|
$2,194
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Non-cash items
–
|
|
|
|
Share-based plans
expense
|
101
|
|
107
|
Depreciation and
amortization
|
900
|
|
865
|
Investment/asset
impairment charges, net
|
36
|
|
26
|
Customer financing
valuation benefit
|
(26)
|
|
(5)
|
Gain on disposal of
discontinued operations
|
|
|
(1)
|
Gain on dispositions,
net
|
(2)
|
|
(22)
|
Other charges and
credits, net
|
87
|
|
31
|
Excess tax benefits
from share-based payment arrangements
|
(97)
|
|
(47)
|
Changes in assets and
liabilities –
|
|
|
|
Accounts
receivable
|
(1,286)
|
|
(550)
|
Inventories, net of
advances and progress billings
|
(3,402)
|
|
(2,614)
|
Accounts
payable
|
1,783
|
|
848
|
Accrued
liabilities
|
(913)
|
|
(682)
|
Advances and billings
in excess of related costs
|
1,217
|
|
1,472
|
Income taxes
receivable, payable and deferred
|
394
|
|
608
|
Other long-term
liabilities
|
(88)
|
|
(60)
|
Pension and other
postretirement plans
|
1,118
|
|
1,638
|
Customer financing,
net
|
466
|
|
188
|
Other
|
15
|
|
(5)
|
Net cash provided
by operating activities
|
2,921
|
|
3,991
|
Cash flows –
investing activities:
|
|
|
|
Property, plant and
equipment additions
|
(946)
|
|
(976)
|
Property, plant and
equipment reductions
|
17
|
|
44
|
Acquisitions, net of
cash acquired
|
(163)
|
|
(26)
|
Contributions to
investments
|
(5,657)
|
|
(7,045)
|
Proceeds from
investments
|
8,030
|
|
4,632
|
Net cash
provided/(used) by investing activities
|
1,281
|
|
(3,371)
|
Cash flows –
financing activities:
|
|
|
|
New
borrowings
|
85
|
|
531
|
Debt
repayments
|
(854)
|
|
(1,361)
|
Payments to
noncontrolling interests
|
(12)
|
|
|
Repayments of
distribution rights and other asset financing
|
(184)
|
|
(139)
|
Stock options
exercised, other
|
261
|
|
484
|
Excess tax benefits
from share-based payment arrangements
|
97
|
|
47
|
Employee taxes on
certain share-based payment arrangements
|
(88)
|
|
(57)
|
Common shares
repurchased
|
(3,998)
|
|
(1,000)
|
Dividends
paid
|
(1,071)
|
|
(735)
|
Net cash used by
financing activities
|
(5,764)
|
|
(2,230)
|
Effect of exchange
rate changes on cash and cash equivalents
|
7
|
|
(37)
|
Net decrease in
cash and cash equivalents
|
(1,555)
|
|
(1,647)
|
Cash and cash
equivalents at beginning of year
|
9,088
|
|
10,341
|
Cash and cash
equivalents at end of period
|
$7,533
|
|
$8,694
|
The Boeing Company
and Subsidiaries Summary of Business Segment
Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30
|
|
Three months ended
June 30
|
(Dollars in
millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
Commercial
Airplanes
|
$27,041
|
|
$24,314
|
|
$14,304
|
|
$13,624
|
Defense, Space &
Security:
|
|
|
|
|
|
|
Boeing Military
Aircraft
|
6,981
|
|
7,621
|
|
3,523
|
|
3,641
|
Network & Space
Systems
|
3,796
|
|
4,009
|
|
1,920
|
|
2,049
|
Global Services &
Support
|
4,603
|
|
4,666
|
|
2,304
|
|
2,496
|
Total Defense, Space
& Security
|
15,380
|
|
16,296
|
|
7,747
|
|
8,186
|
Boeing
Capital
|
172
|
|
209
|
|
90
|
|
104
|
Other
segment
|
42
|
|
54
|
|
22
|
|
27
|
Unallocated items and
eliminations
|
(125)
|
|
(165)
|
|
(118)
|
|
(126)
|
Total
revenues
|
$42,510
|
|
$40,708
|
|
$22,045
|
|
$21,815
|
Earnings from
operations:
|
|
|
|
|
|
|
Commercial
Airplanes
|
$3,052
|
|
$2,672
|
|
$1,550
|
|
$1,453
|
Defense, Space &
Security:
|
|
|
|
|
|
|
Boeing Military
Aircraft
|
497
|
|
813
|
|
165
|
|
386
|
Network & Space
Systems
|
318
|
|
293
|
|
150
|
|
137
|
Global Services &
Support
|
545
|
|
502
|
|
267
|
|
253
|
Total Defense, Space
& Security
|
1,360
|
|
1,608
|
|
582
|
|
776
|
Boeing
Capital
|
77
|
|
63
|
|
33
|
|
19
|
Other
segment
|
(110)
|
|
(101)
|
|
(48)
|
|
(43)
|
Unallocated items and
eliminations
|
(1,050)
|
|
(998)
|
|
(330)
|
|
(489)
|
Earnings from
operations
|
3,329
|
|
3,244
|
|
1,787
|
|
1,716
|
Other income,
net
|
20
|
|
22
|
|
11
|
|
13
|
Interest and debt
expense
|
(173)
|
|
(195)
|
|
(81)
|
|
(96)
|
Earnings before
income taxes
|
3,176
|
|
3,071
|
|
1,717
|
|
1,633
|
Income tax
expense
|
(558)
|
|
(878)
|
|
(64)
|
|
(546)
|
Net earnings from
continuing operations
|
2,618
|
|
2,193
|
|
1,653
|
|
1,087
|
Net gain on disposal
of discontinued operations, net of taxes of $0, $0, $0 and
$0
|
|
1
|
|
|
|
1
|
Net
earnings
|
$2,618
|
|
$2,194
|
|
$1,653
|
|
$1,088
|
|
|
|
|
|
|
|
Research and
development expense, net:
|
|
|
|
|
|
|
Commercial
Airplanes
|
$970
|
|
$865
|
|
$441
|
|
$446
|
Defense, Space &
Security
|
577
|
|
579
|
|
297
|
|
307
|
Other
|
(5)
|
|
24
|
|
(5)
|
|
10
|
Total research and
development expense, net
|
$1,542
|
|
$1,468
|
|
$733
|
|
$763
|
|
|
|
|
|
|
|
Unallocated items and
eliminations:
|
|
|
|
|
|
|
Share-based
plans
|
($44)
|
|
($53)
|
|
($20)
|
|
($22)
|
Deferred
compensation
|
(19)
|
|
(102)
|
|
(26)
|
|
(46)
|
Amortization of
previously capitalized interest
|
(36)
|
|
(34)
|
|
(18)
|
|
(17)
|
Eliminations and
other
|
(194)
|
|
(158)
|
|
(62)
|
|
(92)
|
Sub-total
(included in core operating earnings)
|
(293)
|
|
(347)
|
|
(126)
|
|
(177)
|
Pension
|
(804)
|
|
(689)
|
|
(228)
|
|
(331)
|
Postretirement
|
47
|
|
38
|
|
24
|
|
19
|
Total unallocated
items and eliminations
|
($1,050)
|
|
($998)
|
|
($330)
|
|
($489)
|
The Boeing Company
and Subsidiaries Operating and Financial
Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deliveries
|
|
Six months ended
June 30
|
|
Three months ended
June 30
|
Commercial
Airplanes
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
737
|
|
239
|
|
218
|
|
124
|
|
116
|
|
747
|
|
6
|
|
12
|
|
2
|
|
6
|
|
767
|
|
1
|
|
12
|
|
1
|
|
8
|
|
777
|
|
48
|
|
47
|
|
24
|
|
23
|
|
787
|
|
48
|
|
17
|
(1)
|
30
|
|
16
|
(1)
|
Total
|
|
342
|
|
306
|
|
181
|
|
169
|
|
Note: Deliveries
under operating lease are identified by parentheses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense, Space &
Security
|
|
|
|
|
|
|
|
|
|
Boeing Military
Aircraft
|
|
|
|
|
|
|
|
|
|
F/A-18
Models
|
|
23
|
|
24
|
|
12
|
|
12
|
|
F-15E
Eagle
|
|
8
|
|
3
|
|
4
|
|
|
|
C-17 Globemaster
III
|
|
5
|
|
6
|
|
2
|
|
3
|
|
CH-47
Chinook
|
|
32
|
|
17
|
|
15
|
|
8
|
|
AH-64
Apache
|
|
19
|
|
20
|
|
9
|
|
5
|
|
P-8 Models
|
|
2
|
|
5
|
|
2
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
Global Services &
Support
|
|
|
|
|
|
|
|
|
|
AEW&C
|
|
2
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network & Space
Systems
|
|
|
|
|
|
|
|
|
|
Commercial and Civil
Satellites
|
|
2
|
|
1
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
backlog (Dollars in billions)
|
|
June 30
2014
|
|
March 31
2014
|
|
December 31
2013
|
|
Commercial
Airplanes
|
|
|
$376.3
|
|
|
$374.0
|
|
|
$373.0
|
|
Defense, Space &
Security:
|
|
|
|
|
Boeing Military
Aircraft
|
|
23.8
|
|
23.2
|
|
23.6
|
|
Network & Space
Systems
|
|
9.6
|
|
9.4
|
|
9.8
|
|
Global Services &
Support
|
|
16.3
|
|
16.1
|
|
16.2
|
|
Total Defense, Space
& Security
|
|
49.7
|
|
48.7
|
|
49.6
|
|
Total contractual
backlog
|
|
|
$426.0
|
|
|
$422.7
|
|
|
$422.6
|
|
Unobligated
backlog
|
|
|
$14.3
|
|
|
$17.1
|
|
|
$18.3
|
|
Total
backlog
|
|
|
$440.3
|
|
|
$439.8
|
|
|
$440.9
|
|
Workforce
|
|
169,300
|
|
169,000
|
|
168,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Boeing Company
and Subsidiaries
|
Reconciliation of
Non-GAAP Measures
|
Core Operating
Earnings, Core Operating Margin and Core Earnings Per
Share
|
(Unaudited)
|
The tables provided
below reconcile the non-GAAP financial measures core operating
earnings, core operating margin and core earnings per share with
the most directly comparable GAAP financial measures, earnings from
operations, operating margin and diluted earnings per share. See
page 7 of this release for additional information on the use of
these non-GAAP financial measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
|
|
First
Half
|
|
Guidance
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
Revenues
|
$22,045
|
|
$21,815
|
|
$42,510
|
|
$40,708
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings From
Operations
|
$1,787
|
|
$1,716
|
|
$3,329
|
|
$3,244
|
|
|
GAAP Operating
Margin
|
8.1%
|
|
7.9%
|
|
7.8%
|
|
8.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
Pension/Postretirement Expense
|
$204
|
|
$312
|
|
$757
|
|
$651
|
|
~
$1,200
|
Core Operating
Earnings (non-GAAP)
|
$1,991
|
|
$2,028
|
|
$4,086
|
|
$3,895
|
|
|
Core Operating
Margin (non-GAAP)
|
9.0%
|
|
9.3%
|
|
9.6%
|
|
9.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in GAAP Earnings From
Operations
|
4%
|
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings Per Share
|
$2.24
|
|
$1.41
|
|
$3.50
|
|
$2.85
|
|
$6.85 -
$7.05
|
Unallocated
Pension/Postretirement Expense1
|
$0.18
|
|
$0.26
|
|
$0.66
|
|
$0.55
|
|
$1.05
|
Core Earnings Per
Share (non-GAAP)
|
$2.42
|
|
$1.67
|
|
$4.16
|
|
$3.40
|
|
$7.90 -
$8.10
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Diluted Shares (millions)
|
740.1
|
|
771.8
|
|
747.4
|
|
770.1
|
|
~
740
|
Increase in GAAP
Earnings Per Share
|
59%
|
|
|
|
23%
|
|
|
|
|
Increase in Core
Earnings Per Share
|
45%
|
|
|
|
22%
|
|
|
|
|
1
Earnings per share impact is presented net of the federal statutory
tax rate of 35.0 percent.
|
SOURCE Boeing