CHICAGO, Oct. 28, 2020 /PRNewswire/ --
- Financial results continue to be significantly impacted by
COVID-19 and the 737 MAX grounding
- Proactively managing liquidity and transforming for the
future
- Revenue of $14.1 billion, GAAP
loss per share of ($0.79) and core
(non-GAAP)* loss per share of ($1.39)
- Operating cash flow of ($4.8) billion; cash and marketable
securities of $27.1 billion
- Total backlog of $393 billion,
including more than 4,300 commercial airplanes
Table 1. Summary
Financial Results
|
Third
Quarter
|
|
|
|
Nine
Months
|
|
|
(Dollars in
Millions, except per share data)
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$14,139
|
|
$19,980
|
|
(29)%
|
|
$42,854
|
|
$58,648
|
|
(27)%
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Earnings
From Operations
|
($401)
|
|
$1,259
|
|
NM
|
|
($4,718)
|
|
$229
|
|
NM
|
Operating
Margin
|
(2.8)%
|
|
6.3%
|
|
NM
|
|
(11.0)%
|
|
0.4%
|
|
NM
|
Net
(Loss)/Earnings
|
($466)
|
|
$1,167
|
|
NM
|
|
($3,502)
|
|
$374
|
|
NM
|
(Loss)/Earnings
Per Share
|
($0.79)
|
|
$2.05
|
|
NM
|
|
($6.10)
|
|
$0.66
|
|
NM
|
Operating Cash
Flow
|
($4,819)
|
|
($2,424)
|
|
NM
|
|
($14,401)
|
|
($226)
|
|
NM
|
Non-GAAP*
|
|
|
|
|
|
|
|
|
|
|
|
Core Operating
(Loss)/Earnings
|
($754)
|
|
$895
|
|
NM
|
|
($5,773)
|
|
($864)
|
|
NM
|
Core Operating
Margin
|
(5.3)%
|
|
4.5%
|
|
NM
|
|
(13.5)%
|
|
(1.5)%
|
|
NM
|
Core
(Loss)/Earnings Per Share
|
($1.39)
|
|
$1.45
|
|
NM
|
|
($7.88)
|
|
($1.13)
|
|
NM
|
|
*Non-GAAP measure;
complete definitions of Boeing's non-GAAP measures are on page 5,
"Non-GAAP Measures
Disclosures."
|
The Boeing Company [NYSE: BA] reported third-quarter revenue of
$14.1 billion, GAAP loss per
share of ($0.79) and core loss per
share (non-GAAP)* of ($1.39),
reflecting lower commercial deliveries and services volume
primarily due to COVID-19 (Table 1). Boeing recorded operating
cash flow of ($4.8) billion.
"The global pandemic continued to add pressure to our business
this quarter, and we're aligning to this new reality by closely
managing our liquidity and transforming our enterprise to be
sharper, more resilient and more sustainable for the long term,"
said Boeing President and Chief Executive Officer Dave Calhoun. "Our diverse portfolio, including
our government services, defense and space programs, continues to
provide some stability for us as we adapt and rebuild for the other
side of the pandemic. We remain focused on the health and safety of
our employees and their communities. I'm proud of the dedication
and commitment our teams have demonstrated as they continued to
deliver for our customers in this challenging environment. Despite
the near-term headwinds, we remain confident in our long term
future and are focused on sustaining critical investments in our
business and the meaningful actions we are taking to strengthen our
safety culture, improve transparency and rebuild trust."
Following the lead of global regulators, Boeing made steady
progress toward the safe return to service of the 737 MAX,
including rigorous certification and validation flights conducted
by the U.S. Federal Aviation Administration, Transport Canada and
the European Union Aviation Safety Agency. The Joint Operational
Evaluation Board, featuring civil aviation authorities from
the United States, Canada, Brazil, and the European Union, also conducted
its evaluations of updated crew training. The 737 MAX has now
completed around 1,400 test and check flights and more than 3,000
flight hours as it progresses through the robust and comprehensive
certification process.
To adapt to the market impacts of COVID-19 and position the
company for the future, Boeing continued its business
transformation across five key areas including its infrastructure
footprint, overhead and organizational structure, portfolio and
investment mix, supply chain health and operational excellence. As
the company resizes its operations to align with market realities,
Boeing expects to continue lowering overall staffing levels through
natural attrition as well as voluntary and involuntary workforce
reductions, and recorded additional severance costs in the third
quarter.
Table 2. Cash
Flow
|
Third
Quarter
|
|
Nine
Months
|
(Millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating Cash
Flow
|
($4,819)
|
|
($2,424)
|
|
($14,401)
|
|
($226)
|
Less Additions to
Property, Plant & Equipment
|
($262)
|
|
($465)
|
|
($1,038)
|
|
($1,387)
|
Free Cash
Flow*
|
($5,081)
|
|
($2,889)
|
|
($15,439)
|
|
($1,613)
|
|
*Non-GAAP measure;
complete definitions of Boeing's non-GAAP measures are on page 5,
"Non-GAAP Measures
Disclosures."
|
Operating cash flow was ($4.8)
billion in the quarter, reflecting lower commercial
deliveries and services volume primarily due to COVID-19, as well
as timing of receipts and expenditures (Table 2).
Table 3. Cash,
Marketable Securities and Debt Balances
|
Quarter-End
|
(Billions)
|
Q3
20
|
|
Q2
20
|
Cash
|
$10.6
|
|
$20.0
|
Marketable
Securities1
|
$16.5
|
|
$12.4
|
Total
|
$27.1
|
|
$32.4
|
Debt
Balances:
|
|
|
|
The Boeing Company,
net of intercompany loans to BCC
|
$59.1
|
|
$59.5
|
Boeing Capital,
including intercompany loans
|
$1.9
|
|
$1.9
|
Total Consolidated
Debt
|
$61.0
|
|
$61.4
|
|
1 Marketable securities consists
primarily of time deposits due within one year classified as
"short-term investments."
|
Cash and investments in marketable securities decreased to
$27.1 billion, compared to
$32.4 billion at the beginning of the
quarter, primarily driven by operating cash outflows (Table
3). Debt was $61.0 billion, down from
$61.4 billion at the beginning of the
quarter due to the repayment of maturing debt.
Total company backlog at quarter-end was $393 billion.
Segment Results
Commercial Airplanes
Table 4.
Commercial Airplanes
|
Third
Quarter
|
|
|
|
Nine
Months
|
|
|
(Dollars in
Millions)
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Airplanes Deliveries
|
28
|
|
62
|
|
(55)%
|
|
98
|
|
301
|
|
(67)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$3,596
|
|
$8,249
|
|
(56)%
|
|
$11,434
|
|
$24,793
|
|
(54)%
|
Loss from
Operations
|
($1,369)
|
|
($40)
|
|
NM
|
|
($6,199)
|
|
($3,813)
|
|
NM
|
Operating
Margin
|
(38.1)%
|
|
(0.5)%
|
|
NM
|
|
(54.2)%
|
|
(15.4)%
|
|
NM
|
Commercial Airplanes third-quarter revenue decreased to
$3.6 billion, reflecting lower
delivery volume primarily due to COVID-19 impacts as well as 787
quality issues and associated rework. Third-quarter operating
margin decreased to (38.1) percent, primarily driven by lower
delivery volume, as well as $590
million of abnormal production costs related to the 737
program.
Commercial Airplanes added the final 777X flight test airplane
to the test program and the GE9X engine received FAA certification.
In October, the company decided it will consolidate 787 production
in South Carolina in mid-2021,
which did not have a significant financial impact on the program in
the third quarter. Commercial Airplanes delivered 28 airplanes
during the quarter, and backlog included over 4,300 airplanes
valued at $313 billion.
Defense, Space & Security
Table 5. Defense,
Space & Security
|
Third
Quarter
|
|
|
|
Nine
Months
|
|
|
(Dollars in
Millions)
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$6,848
|
|
$7,002
|
|
(2)%
|
|
$19,478
|
|
$20,168
|
|
(3)%
|
Earnings from
Operations
|
$628
|
|
$754
|
|
(17)%
|
|
$1,037
|
|
$2,581
|
|
(60)%
|
Operating
Margin
|
9.2%
|
|
10.8%
|
|
(1.6)
Pts
|
|
5.3%
|
|
12.8%
|
|
(7.5)
Pts
|
Defense, Space & Security third-quarter revenue decreased to
$6.8 billion, primarily due to
derivative aircraft award timing, partially offset by higher
fighter volume (Table 5). Third-quarter operating margin decreased
to 9.2 percent reflecting less favorable performance, including
a $67 million KC-46A Tanker charge.
During the quarter, Defense, Space & Security received an
award for eight F-15EX advanced fighter aircraft for the U.S. Air
Force and a contract extension for the International Space Station
for NASA, as well as contracts for nine additional MH-47G Block II
Chinook helicopters for the U.S. Army Special Operations and four
additional 702X satellites. Also in the quarter, the U.S. Air Force
and Boeing team was awarded the Collier Trophy for aerospace
excellence for the X-37B autonomous spaceplane. Significant
milestones included inducting the 20th U.S. Navy
F/A-18 into the Service Life Modification program as well as
delivering the first Bell Boeing V-22 Osprey to
Japan and the first MH-47G Block
II Chinook to the U.S. Army Special Operations.
Backlog at Defense, Space & Security was $62 billion, of which 30 percent represents
orders from customers outside the U.S.
Global Services
Table 6. Global
Services
|
Third
Quarter
|
|
|
|
Nine
Months
|
|
|
(Dollars in
Millions)
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$3,694
|
|
$4,658
|
|
(21)%
|
|
$11,810
|
|
$13,820
|
|
(15)%
|
Earnings from
Operations
|
$271
|
|
$673
|
|
(60)%
|
|
$307
|
|
$2,013
|
|
(85%)
|
Operating
Margin
|
7.3%
|
|
14.4%
|
|
(7.1)
Pts
|
|
2.6%
|
|
14.6%
|
|
(12.0)
Pts
|
Global Services third-quarter revenue decreased to $3.7 billion, driven by lower commercial services
volume due to COVID-19, partially offset by higher government
services volume (Table 6). Third-quarter operating margin decreased
to 7.3 percent primarily due to lower commercial services volume
and additional severance costs.
During the quarter, Global Services signed an agreement with
GECAS for 11 737-800 Boeing Converted Freighters, secured a
six-year P-8A support contract for the Royal Australian Air Force,
and was awarded F-15EX training and services support contracts by
the U.S. Air Force. Global Services also delivered the first P-8A
Operational Flight Trainer for the United Kingdom Royal Air
Force.
Additional Financial Information
Table 7.
Additional Financial Information
|
Third
Quarter
|
|
Nine
Months
|
(Dollars in
Millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
Boeing
Capital
|
$71
|
|
$66
|
|
$205
|
|
$207
|
Unallocated items,
eliminations and other
|
($70)
|
|
$5
|
|
($73)
|
|
($340)
|
Earnings from
Operations
|
|
|
|
|
|
|
|
Boeing
Capital
|
$30
|
|
$29
|
|
$47
|
|
$86
|
FAS/CAS service cost
adjustment
|
$353
|
|
$364
|
|
$1,055
|
|
$1,093
|
Other unallocated
items and eliminations
|
($314)
|
|
($521)
|
|
($965)
|
|
($1,731)
|
Other income,
net
|
$119
|
|
$121
|
|
$325
|
|
$334
|
Interest and debt
expense
|
($643)
|
|
($203)
|
|
($1,458)
|
|
($480)
|
Effective tax
rate
|
49.6%
|
|
0.8%
|
|
40.1%
|
|
(350.6)%
|
At quarter-end, Boeing Capital's net portfolio balance was
$2.0 billion. The change in revenue
and earnings from other unallocated items and eliminations was
primarily due to the timing of cost allocations. Earnings from
other unallocated items and eliminations was also impacted by lower
enterprise research and development expense. Interest and debt
expense increased due to higher debt balances. The third quarter
effective tax rate reflects tax benefits related to the five year
net operating loss carryback provision in the Coronavirus Aid,
Relief, and Economic Security (CARES) Act as well as the impact of
pre-tax losses.
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information
determined under Generally Accepted Accounting Principles in
the United States of America
(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 the FAS/CAS service cost
adjustment. The FAS/CAS service cost
adjustment represents the difference between the FAS
pension and postretirement service costs calculated under GAAP and
costs allocated to the business segments. 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 the FAS/CAS service cost
adjustment and Non-operating pension and
postretirement expenses. Non-operating pension and
postretirement expenses represent the components of net periodic
benefit costs other than service cost. Pension costs, comprising
service and prior service costs computed in accordance with GAAP
are allocated to Commercial Airplanes and BGS businesses supporting
commercial customers. Pension costs allocated to BDS and BGS
businesses supporting government customers are computed in
accordance with U.S. Government Cost Accounting Standards (CAS),
which employ different actuarial assumptions and accounting
conventions than GAAP. CAS costs are allocable to government
contracts. Other postretirement benefit costs are allocated to all
business segments based on CAS, which is generally based on
benefits paid. 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
non-service 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 pages 12-13.
Free Cash Flow
Free cash flow is GAAP operating cash
flow reduced by capital expenditures for property,
plant and equipment. 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 of free cash flow to GAAP
operating 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 generally 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 expectations and assumptions that we
believe to be reasonable when made, but that 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) the
COVID-19 pandemic and related government actions, including with
respect to our operations, our liquidity, the health of our
customers and suppliers, and future demand for our products and
services; (2) the 737 MAX, including the timing and conditions of
737 MAX regulatory approvals, lower than planned production rates
and/or delivery rates, and increased considerations to customers
and suppliers, (3) general conditions in the economy and our
industry, including those due to regulatory changes; (4) our
reliance on our commercial airline customers; (5) the overall
health of our aircraft production system, planned commercial
aircraft production rate changes, our commercial development and
derivative aircraft programs, and our aircraft being subject to
stringent performance and reliability standards; (6) changing
budget and appropriation levels and acquisition priorities of the
U.S. government; (7) our dependence on U.S. government contracts;
(8) our reliance on fixed-price contracts; (9) our reliance on
cost-type contracts; (10) uncertainties concerning contracts that
include in-orbit incentive payments; (11) our dependence on our
subcontractors and suppliers, as well as the availability of raw
materials; (12) changes in accounting estimates; (13) changes in
the competitive landscape in our markets; (14) our non-U.S.
operations, including sales to non-U.S. customers; (15) threats to
the security of our or our customers' information; (16) potential
adverse developments in new or pending litigation and/or government
investigations; (17) customer and aircraft concentration in our
customer financing portfolio; (18) changes in our ability to obtain
debt financing on commercially reasonable terms and at competitive
rates; (19) realizing the anticipated benefits of mergers,
acquisitions, joint ventures/strategic alliances or divestitures;
(20) the adequacy of our insurance coverage to cover significant
risk exposures; (21) potential business disruptions, including
those related to physical security threats, information technology
or cyber-attacks, epidemics, sanctions or natural disasters; (22)
work stoppages or other labor disruptions; (23) substantial pension
and other postretirement benefit obligations; and (24) potential
environmental liabilities.
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:
|
|
Maurita Sutedja or
Keely Moos (312) 544-2140
|
Communications:
|
|
Michael
Friedman media@boeing.com
|
The Boeing Company
and Subsidiaries
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
Nine months
ended
September
30
|
|
Three months
ended
September
30
|
(Dollars in
millions, except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Sales of
products
|
$34,656
|
|
$50,514
|
|
$11,402
|
|
$17,195
|
Sales of
services
|
8,198
|
|
8,134
|
|
2,737
|
|
2,785
|
Total
revenues
|
42,854
|
|
58,648
|
|
14,139
|
|
19,980
|
|
|
|
|
|
|
|
|
Cost of
products
|
(36,001)
|
|
(46,584)
|
|
(10,910)
|
|
(14,674)
|
Cost of
services
|
(6,817)
|
|
(6,752)
|
|
(2,185)
|
|
(2,241)
|
Boeing Capital
interest expense
|
(33)
|
|
(49)
|
|
(10)
|
|
(15)
|
Total costs and
expenses
|
(42,851)
|
|
(53,385)
|
|
(13,105)
|
|
(16,930)
|
|
3
|
|
5,263
|
|
1,034
|
|
3,050
|
Loss from operating
investments, net
|
(61)
|
|
(3)
|
|
(14)
|
|
(8)
|
General and
administrative expense
|
(2,989)
|
|
(2,857)
|
|
(955)
|
|
(1,001)
|
Research and
development expense, net
|
(1,871)
|
|
(2,470)
|
|
(574)
|
|
(778)
|
Gain/(loss) on
dispositions, net
|
200
|
|
296
|
|
108
|
|
(4)
|
(Loss)/earnings
from operations
|
(4,718)
|
|
229
|
|
(401)
|
|
1,259
|
Other income,
net
|
325
|
|
334
|
|
119
|
|
121
|
Interest and debt
expense
|
(1,458)
|
|
(480)
|
|
(643)
|
|
(203)
|
(Loss)/earnings
before income taxes
|
(5,851)
|
|
83
|
|
(925)
|
|
1,177
|
Income tax
benefit/(expense)
|
2,349
|
|
291
|
|
459
|
|
(10)
|
Net
(loss)/earnings
|
(3,502)
|
|
374
|
|
(466)
|
|
1,167
|
Less: net loss
attributable to noncontrolling interest
|
(49)
|
|
|
|
(17)
|
|
|
Net
(loss)/earnings attributable to Boeing Shareholders
|
($3,453)
|
|
$374
|
|
($449)
|
|
$1,167
|
|
|
|
|
|
|
|
|
Basic
(loss)/earnings per share
|
($6.10)
|
|
$0.66
|
|
($0.79)
|
|
$2.07
|
|
|
|
|
|
|
|
|
Diluted
(loss)/earnings per share
|
($6.10)
|
|
$0.66
|
|
($0.79)
|
|
$2.05
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares (millions)
|
566.3
|
|
570.4
|
|
566.6
|
|
569.2
|
The Boeing Company
and Subsidiaries
|
Consolidated
Statements of Financial Position
|
(Unaudited)
|
|
(Dollars in
millions, except per share data)
|
September
30
2020
|
|
December
31
2019
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$10,564
|
|
$9,485
|
Short-term and other
investments
|
16,552
|
|
545
|
Accounts receivable,
net
|
2,762
|
|
3,266
|
Unbilled receivables,
net
|
8,860
|
|
9,043
|
Current portion of
customer financing, net
|
100
|
|
162
|
Inventories
|
86,961
|
|
76,622
|
Other current assets,
net
|
5,213
|
|
3,106
|
Total current
assets
|
131,012
|
|
102,229
|
Customer financing,
net
|
2,010
|
|
2,136
|
Property, plant and
equipment, net of accumulated depreciation of $20,241 and
$19,342
|
11,969
|
|
12,502
|
Goodwill
|
8,071
|
|
8,060
|
Acquired intangible
assets, net
|
2,941
|
|
3,338
|
Deferred income
taxes
|
704
|
|
683
|
Investments
|
1,052
|
|
1,092
|
Other assets, net of
accumulated amortization of $671 and $580
|
3,502
|
|
3,585
|
Total
assets
|
$161,261
|
|
$133,625
|
Liabilities and
equity
|
|
|
|
Accounts
payable
|
$14,479
|
|
$15,553
|
Accrued
liabilities
|
22,220
|
|
22,868
|
Advances and progress
billings
|
51,974
|
|
51,551
|
Short-term debt and
current portion of long-term debt
|
3,634
|
|
7,340
|
Total current
liabilities
|
92,307
|
|
97,312
|
Deferred income
taxes
|
503
|
|
413
|
Accrued retiree
health care
|
4,429
|
|
4,540
|
Accrued pension plan
liability, net
|
15,343
|
|
16,276
|
Other long-term
liabilities
|
2,907
|
|
3,422
|
Long-term
debt
|
57,325
|
|
19,962
|
Total
liabilities
|
172,814
|
|
141,925
|
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
|
6,687
|
|
6,745
|
Treasury stock, at
cost - 447,744,896 and 449,352,405 shares
|
(54,819)
|
|
(54,914)
|
Retained
earnings
|
47,029
|
|
50,644
|
Accumulated other
comprehensive loss
|
(15,779)
|
|
(16,153)
|
Total shareholders'
equity
|
(11,821)
|
|
(8,617)
|
Noncontrolling
interests
|
268
|
|
317
|
Total
equity
|
(11,553)
|
|
(8,300)
|
Total liabilities
and equity
|
$161,261
|
|
$133,625
|
The Boeing Company
and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
|
Nine months
ended
September
30
|
(Dollars in
millions)
|
2020
|
|
2019
|
Cash
flows – operating activities:
|
|
|
|
Net
(loss)/earnings
|
($3,502)
|
|
$374
|
Adjustments to
reconcile net loss to net cash (used)/provided by operating
activities:
|
|
|
|
Non-cash items
–
|
|
|
|
Share-based plans
expense
|
165
|
|
160
|
Depreciation and
amortization
|
1,668
|
|
1,643
|
Investment/asset
impairment charges, net
|
317
|
|
106
|
Customer financing
valuation adjustments
|
12
|
|
249
|
Gain on dispositions,
net
|
(200)
|
|
(296)
|
Other charges and
credits, net
|
912
|
|
190
|
Changes in assets and
liabilities –
|
|
|
|
Accounts
receivable
|
125
|
|
315
|
Unbilled
receivables
|
56
|
|
(1,053)
|
Advances and progress
billings
|
428
|
|
2,355
|
Inventories
|
(9,653)
|
|
(9,565)
|
Other current
assets
|
319
|
|
(224)
|
Accounts
payable
|
(3,303)
|
|
1,626
|
Accrued
liabilities
|
967
|
|
5,495
|
Income taxes
receivable, payable and deferred
|
(2,404)
|
|
(989)
|
Other long-term
liabilities
|
(149)
|
|
(577)
|
Pension and other
postretirement plans
|
(556)
|
|
(570)
|
Customer financing,
net
|
108
|
|
391
|
Other
|
289
|
|
144
|
Net cash used by
operating activities
|
(14,401)
|
|
(226)
|
Cash flows –
investing activities:
|
|
|
|
Property, plant and
equipment additions
|
(1,038)
|
|
(1,387)
|
Property, plant and
equipment reductions
|
275
|
|
334
|
Acquisitions, net of
cash acquired
|
|
|
(492)
|
Contributions to
investments
|
(25,846)
|
|
(1,439)
|
Proceeds from
investments
|
9,772
|
|
967
|
Purchase of
distribution rights
|
|
|
(20)
|
Other
|
14
|
|
(10)
|
Net cash used by
investing activities
|
(16,823)
|
|
(2,047)
|
Cash flows –
financing activities:
|
|
|
|
New
borrowings
|
42,362
|
|
19,621
|
Debt
repayments
|
(8,792)
|
|
(8,978)
|
Contributions from
noncontrolling interests
|
|
|
7
|
Stock options
exercised
|
31
|
|
51
|
Employee taxes on
certain share-based payment arrangements
|
(169)
|
|
(241)
|
Common shares
repurchased
|
|
|
(2,651)
|
Dividends
paid
|
(1,158)
|
|
(3,473)
|
Net cash provided
by financing activities
|
32,274
|
|
4,336
|
Effect of exchange
rate changes on cash and cash equivalents, including
restricted
|
26
|
|
(27)
|
Net increase in
cash & cash equivalents, including restricted
|
1,076
|
|
2,036
|
Cash & cash
equivalents, including restricted, at beginning of year
|
9,571
|
|
7,813
|
Cash & cash
equivalents, including restricted, at end of period
|
10,647
|
|
9,849
|
Less restricted cash
& cash equivalents, included in Investments
|
83
|
|
86
|
Cash and cash
equivalents at end of period
|
$10,564
|
|
$9,763
|
The Boeing Company and
Subsidiaries
Summary of Business Segment
Data
(Unaudited)
Effective at the beginning of 2020, certain programs were
realigned between our Defense, Space & Security segment and
Unallocated items, eliminations and other. Business segment data
for 2019 has been adjusted to reflect the realignment.
|
Nine months
ended
September
30
|
|
Three months
ended
September
30
|
(Dollars in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
Commercial
Airplanes
|
$11,434
|
|
$24,793
|
|
$3,596
|
|
$8,249
|
Defense, Space &
Security
|
19,478
|
|
20,168
|
|
6,848
|
|
7,002
|
Global
Services
|
11,810
|
|
13,820
|
|
3,694
|
|
4,658
|
Boeing
Capital
|
205
|
|
207
|
|
71
|
|
66
|
Unallocated items,
eliminations and other
|
(73)
|
|
(340)
|
|
(70)
|
|
5
|
Total
revenues
|
$42,854
|
|
$58,648
|
|
$14,139
|
|
$19,980
|
Earnings/(loss) from
operations:
|
|
|
|
|
|
|
|
Commercial
Airplanes
|
($6,199)
|
|
($3,813)
|
|
($1,369)
|
|
($40)
|
Defense, Space &
Security
|
1,037
|
|
2,581
|
|
628
|
|
754
|
Global
Services
|
307
|
|
2,013
|
|
271
|
|
673
|
Boeing
Capital
|
47
|
|
86
|
|
30
|
|
29
|
Segment operating
(loss)/earnings
|
(4,808)
|
|
867
|
|
(440)
|
|
1,416
|
Unallocated items,
eliminations and other
|
(965)
|
|
(1,731)
|
|
(314)
|
|
(521)
|
FAS/CAS service cost
adjustment
|
1,055
|
|
1,093
|
|
353
|
|
364
|
(Loss)/earnings
from operations
|
(4,718)
|
|
229
|
|
(401)
|
|
1,259
|
Other income,
net
|
325
|
|
334
|
|
119
|
|
121
|
Interest and debt
expense
|
(1,458)
|
|
(480)
|
|
(643)
|
|
(203)
|
(Loss)/earnings
before income taxes
|
(5,851)
|
|
83
|
|
(925)
|
|
1,177
|
Income tax
benefit/(expense)
|
2,349
|
|
291
|
|
459
|
|
(10)
|
Net
(loss)/earnings
|
(3,502)
|
|
374
|
|
(466)
|
|
1,167
|
Less: Net loss
attributable to noncontrolling interest
|
(49)
|
|
|
|
(17)
|
|
|
Net
(loss)/earnings attributable to Boeing Shareholders
|
($3,453)
|
|
$374
|
|
($449)
|
|
$1,167
|
Research and
development expense, net:
|
|
|
|
|
|
|
|
Commercial
Airplanes
|
$1,107
|
|
$1,529
|
|
$321
|
|
$467
|
Defense, Space &
Security
|
494
|
|
556
|
|
164
|
|
182
|
Global
Services
|
110
|
|
102
|
|
45
|
|
29
|
Other
|
160
|
|
283
|
|
44
|
|
100
|
Total research and
development expense, net
|
$1,871
|
|
$2,470
|
|
$574
|
|
$778
|
Unallocated items,
eliminations and other:
|
|
|
|
|
|
|
|
Share-based
plans
|
($80)
|
|
($57)
|
|
($37)
|
|
($21)
|
Deferred
compensation
|
34
|
|
(154)
|
|
(39)
|
|
(25)
|
Amortization of
previously capitalized interest
|
(69)
|
|
(68)
|
|
(19)
|
|
(23)
|
Customer financing
impairment
|
|
|
(250)
|
|
|
|
|
Research and
development expense, net
|
(160)
|
|
(283)
|
|
(44)
|
|
(100)
|
Eliminations and other
unallocated items
|
(690)
|
|
(919)
|
|
(175)
|
|
(352)
|
Sub-total
(included in core operating loss)
|
(965)
|
|
(1,731)
|
|
(314)
|
|
(521)
|
Pension FAS/CAS service
cost adjustment
|
773
|
|
823
|
|
260
|
|
274
|
Postretirement FAS/CAS
service cost adjustment
|
282
|
|
270
|
|
93
|
|
90
|
FAS/CAS service
cost adjustment
|
1,055
|
|
1,093
|
|
$353
|
|
$364
|
Total
|
$90
|
|
($638)
|
|
$39
|
|
($157)
|
|
The Boeing Company
and Subsidiaries
|
|
Operating and
Financial Data
|
|
(Unaudited)
|
|
|
Deliveries
|
|
Nine months
ended
September
30
|
|
Three months
ended
September
30
|
|
Commercial
Airplanes
|
|
2020
|
|
2019
|
|
2020
|
|
|
2019
|
|
|
737
|
|
12
|
|
118
|
|
3
|
|
|
5
|
|
|
747
|
|
2
|
|
5
|
|
1
|
|
|
1
|
|
|
767
|
|
20
|
|
32
|
|
6
|
|
|
10
|
|
|
777
|
|
15
|
|
33
|
(1)
|
5
|
|
|
11
|
|
|
787
|
|
49
|
|
113
|
|
13
|
|
|
35
|
|
|
Total
|
|
98
|
|
301
|
|
28
|
|
|
62
|
|
Note: Aircraft
accounted for as revenues by BCA and as operating leases in
consolidation identified by parentheses
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense, Space &
Security
|
|
|
|
|
|
|
|
|
|
|
|
AH-64 Apache
(New)
|
|
18
|
|
27
|
|
7
|
|
|
17
|
|
|
AH-64 Apache
(Remanufactured)
|
|
44
|
|
56
|
|
12
|
|
|
21
|
|
|
C-17 Globemaster
III
|
|
—
|
|
1
|
|
—
|
|
|
1
|
|
|
C-40A
|
|
—
|
|
2
|
|
—
|
|
|
2
|
|
|
CH-47 Chinook
(New)
|
|
19
|
|
13
|
|
4
|
|
|
6
|
|
|
CH-47 Chinook
(Renewed)
|
|
3
|
|
16
|
|
2
|
|
|
7
|
|
|
F-15
Models
|
|
3
|
|
7
|
|
—
|
|
|
2
|
|
|
F/A-18
Models
|
|
14
|
|
16
|
|
5
|
|
|
6
|
|
|
KC-46A
Tanker
|
|
10
|
|
21
|
|
4
|
|
|
9
|
|
|
P-8 Models
|
|
9
|
|
14
|
|
3
|
|
|
6
|
|
|
Commercial and Civil
Satellites
|
|
—
|
|
1
|
|
—
|
|
|
—
|
|
|
|
Total
backlog (Dollars in millions)
|
September
30
2020
|
|
December
31
2019
|
Commercial
Airplanes
|
$312,684
|
|
$376,593
|
Defense, Space &
Security
|
62,375
|
|
63,691
|
Global
Services
|
17,464
|
|
22,902
|
Unallocated items,
eliminations and other
|
544
|
|
217
|
Total
backlog
|
$393,067
|
|
$463,403
|
|
|
|
|
Contractual
backlog
|
$368,916
|
|
$436,473
|
Unobligated
backlog
|
24,151
|
|
26,930
|
Total
backlog
|
$393,067
|
|
$463,403
|
The Boeing Company and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial
measures core operating (loss)/earnings, core operating margin, and
core (loss)/earnings per share with the most directly comparable
GAAP financial measures, (loss)/earnings from operations, operating
margin, and diluted (loss)/earnings per share. See page 5 of this
release for additional information on the use of these non-GAAP
financial measures.
(Dollars in
millions, except per share data)
|
Third Quarter
2020
|
|
Third Quarter
2019
|
|
$
millions
|
Per
Share
|
|
$ millions
|
Per Share
|
Revenues
|
14,139
|
|
|
19,980
|
|
(Loss)/earnings
from operations (GAAP)
|
(401)
|
|
|
1,259
|
|
Operating margin
(GAAP)
|
(2.8)%
|
|
|
6.3%
|
|
|
|
|
|
|
|
FAS/CAS service
cost adjustment:
|
|
|
|
|
|
Pension FAS/CAS service
cost adjustment
|
(260)
|
|
|
(274)
|
|
Postretirement FAS/CAS
service cost adjustment
|
(93)
|
|
|
(90)
|
|
FAS/CAS service
cost adjustment
|
(353)
|
|
|
(364)
|
|
Core operating
(loss)/earnings (non-GAAP)
|
($754)
|
|
|
$895
|
|
Core operating
margin (non-GAAP)
|
(5.3)%
|
|
|
4.5%
|
|
|
|
|
|
|
|
Diluted
(loss)/earnings per share (GAAP)
|
|
($0.79)
|
|
|
$2.05
|
Pension FAS/CAS service
cost adjustment
|
($260)
|
(0.46)
|
|
($274)
|
(0.48)
|
Postretirement FAS/CAS
service cost adjustment
|
(93)
|
(0.16)
|
|
(90)
|
(0.16)
|
Non-operating pension
expense
|
(84)
|
(0.16)
|
|
(93)
|
(0.17)
|
Non-operating
postretirement expense
|
10
|
0.02
|
|
27
|
0.05
|
Provision for deferred
income taxes on adjustments 1
|
90
|
0.16
|
|
90
|
0.16
|
Subtotal of
adjustments
|
($337)
|
($0.60)
|
|
($340)
|
($0.60)
|
Core
(loss)/earnings per share (non-GAAP)
|
|
($1.39)
|
|
|
$1.45
|
|
|
|
|
|
|
Weighted average
diluted shares (in millions)
|
|
566.6
|
|
|
569.2
|
|
1 The income tax impact is
calculated using the U.S. corporate statutory tax
rate.
|
The Boeing Company and
Subsidiaries
Reconciliation of Non-GAAP
Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial
measures core operating loss, core operating margin, and core loss
per share with the most directly comparable GAAP financial
measures, (loss)/earnings from operations, operating margin, and
diluted (loss)/earnings per share. See page 5 of this release for
additional information on the use of these non-GAAP financial
measures.
(Dollars in
millions, except per share data)
|
Nine Months
2020
|
|
Nine Months
2019
|
|
$
millions
|
Per
Share
|
|
$ millions
|
Per Share
|
Revenues
|
42,854
|
|
|
58,648
|
|
(Loss)/earnings
from operations (GAAP)
|
(4,718)
|
|
|
229
|
|
Operating margin
(GAAP)
|
(11.0)%
|
|
|
0.4
%
|
|
|
|
|
|
|
|
FAS/CAS service
cost adjustment:
|
|
|
|
|
|
Pension FAS/CAS service
cost adjustment
|
(773)
|
|
|
(823)
|
|
Postretirement FAS/CAS
service cost adjustment
|
(282)
|
|
|
(270)
|
|
FAS/CAS service
cost adjustment
|
(1,055)
|
|
|
(1,093)
|
|
Core operating
loss (non-GAAP)
|
($5,773)
|
|
|
($864)
|
|
Core operating
margin (non-GAAP)
|
(13.5)%
|
|
|
(1.5
%)
|
|
|
|
|
|
|
|
Diluted
(loss)/earnings per share (GAAP)
|
|
($6.10)
|
|
|
$0.66
|
Pension FAS/CAS service
cost adjustment
|
($773)
|
(1.36)
|
|
($823)
|
(1.45)
|
Postretirement FAS/CAS
service cost adjustment
|
(282)
|
(0.50)
|
|
(270)
|
(0.47)
|
Non-operating pension
expense
|
(255)
|
(0.46)
|
|
(280)
|
(0.49)
|
Non-operating
postretirement expense
|
37
|
0.07
|
|
80
|
0.14
|
Provision for deferred
income taxes on adjustments 1
|
267
|
0.47
|
|
272
|
0.48
|
Subtotal of
adjustments
|
($1,006)
|
($1.78)
|
|
($1,021)
|
($1.79)
|
Core loss per
share (non-GAAP)
|
|
($7.88)
|
|
|
($1.13)
|
|
|
|
|
|
|
Weighted average
diluted shares (in millions)
|
|
566.3
|
|
|
570.4
|
|
1 The income tax impact is
calculated using the U.S. corporate statutory tax
rate.
|
View original
content:http://www.prnewswire.com/news-releases/boeing-reports-third-quarter-results-301161630.html
SOURCE Boeing