TIDMBOE
Boeing Reports Record 2013 Revenue, EPS and Backlog and Provides 2014 Guidance
CHICAGO, Jan. 29, 2014 --
Fourth-Quarter 2013
* Core EPS (non-GAAP)* rose 29 percent to $1.88 on strong operating
performance; GAAP EPS of $1.61
* Revenue increased 7 percent to $23.8 billion reflecting higher deliveries
Full Year 2013
* Core EPS increased 20 percent to a record $7.07 on record revenue of $86.6
billion; GAAP EPS of $5.96
* Operating cash flow before pension contributions* grew to $9.7 billion;
GAAP operating cash flow of $8.2 billion
* Backlog grew to a record $441 billion, including $135 billion of net orders
during the year
Outlook for 2014
* 2014 Core EPS guidance of between $7.00 and $7.20; GAAP EPS guidance of
between $6.10 and $6.30
* Revenue guidance of between $87.5 and $90.5 billion with commercial
deliveries of between 715 and 725
Table 1.
Summary Financial Results Fourth Quarter Full Year
(Dollars in Millions,
except per share data) 2013 2012 Change 2013 2012 Change
Revenues $23,785 $22,302 7% $86,623 $81,698 6%
Non-GAAP*
Core Operating Earnings $1,838 $1,836 0% $7,876 $7,189 10%
Core Operating Margin 7.7% 8.2% (0.5) Pts 9.1% 8.8% 0.3 Pts
Core Earnings Per Share $1.88 $1.46 29% $7.07 $5.88 20%
Operating Cash Flow
Before Pension Contributions $1,409 $4,204 (66)% $9,721 $9,058 7%
GAAP
Earnings From Operations $1,515 $1,624 (7)% $6,562 $6,290 4%
Operating Margin 6.4% 7.3% (0.9) Pts 7.6% 7.7% (0.1) Pts
Net Earnings $1,233 $978 26% $4,585 $3,900 18%
Earnings Per Share $1.61 $1.28 26% $5.96 $5.11 17%
Operating Cash Flow $1,380 $4,167 (67)% $8,179 $7,508 9%
* 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 fourth-quarter revenue of $23.8 billion
and core earnings per share (non-GAAP) that increased 29 percent* to $1.88,
driven by strong performance across the company's businesses and higher
deliveries (Table 1). Fourth-quarter core operating earnings (non-GAAP) of $1.8
billion includes a $406 million non-cash charge to settle A-12 litigation
dating back to 1991, retiring a longstanding risk to the company. Excluding the
A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent*
to $2.2 billion and core operating margin increased to 9.4 percent*. Core and
GAAP earnings per share includes a charge of $0.34 per share related to A-12
partially offset by a benefit of $0.28 per share for a tax regulation change.
Revenue rose 6 percent in the full year to a record $86.6 billion and core
earnings per share increased 20 percent* to a record $7.07. Full-year 2013 GAAP
earnings per share was $5.96.
Core earnings per share guidance for 2014 is set at between $7.00 and $7.20,
while GAAP earnings per share guidance is established at between $6.10 and
$6.30. Revenue guidance is between $87.5 and $90.5 billion, including
commercial deliveries of between 715 and 725. Operating cash flow before
pension contributions* is expected to be approximately $7 billion, while
operating cash flow guidance is set at approximately $6.25 billion.
"Strong fourth-quarter results underscored an outstanding full year of core
operating performance that drove record revenue and earnings and increased
returns to shareholders," said Boeing Chairman and Chief Executive Officer Jim
McNerney.
"Our Commercial Airplanes business accelerated delivery of its record backlog
by successfully increasing production rates while also achieving important
development milestones on the 737 MAX and 787-9 and launching the new 787-10
and 777X models with an unprecedented customer response. Our Defense, Space &
Security unit overcame a tough operating environment to record expanded
revenue, earnings and margins while executing to our commitments on the KC-46A
tanker and developing and delivering important new capabilities to customers,
such as the P-8 maritime aircraft and the Inmarsat-5 satellite," said McNerney.
"For 2014, we remain focused on maintaining our commercial airplanes market
leadership, strengthening and repositioning our defense, space and security
business and continuing to meet the needs of our customers by improving
productivity, executing to development plans and delivering our unmatched
portfolio of innovative aerospace products and services."
Table 2. Cash Flow Fourth Quarter Full Year
(Millions) 2013 2012 2013 2012
Operating Cash Flow Before Pension Contributions* $1,409 $4,204 $9,721 $9,058
Pension Contributions ($29) ($37) ($1,542) ($1,550)
Operating Cash Flow $1,380 $4,167 $8,179 $7,508
Less Additions to Property, Plant & Equipment ($638) ($495) ($2,098) ($1,703)
Free Cash Flow* $742 $3,672 $6,081 $5,805
Operating cash flow in the quarter was $1.4 billion, reflecting commercial
airplane production rates, strong core operating performance and timing of
receipts and expenditures (Table 2). During the quarter, the company
repurchased 7.6 million shares for $1.0 billion and paid $0.4 billion in
dividends, reflecting a 10 percent increase in dividends paid compared to the
same period of the prior year. Based on the strong cash generation and outlook,
in December, the board of directors authorized an additional $10 billion share
repurchase program and raised the quarterly dividend 50 percent.
Table 3. Cash, Marketable Securities and Debt Balances Quarter-End
(Billions) Q4 13 Q3 13
Cash $9.1 $10.0
Marketable Securities(1) $6.2 $5.9
Total $15.3 $15.9
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $7.0 $7.0
Boeing Capital Corporation, including intercompany loans $2.6 $2.6
Total Consolidated Debt $9.6 $9.6
(1) Marketable securities consists primarily of time deposits due within one year
classified as "short-term investments."
Cash and investments in marketable securities totaled $15.3 billion at year-end
(Table 3), down from $15.9 billion at the beginning of the quarter. Debt was
$9.6 billion, unchanged from the beginning of the quarter.
Total company backlog at year-end was a record $441 billion, up from $415
billion at the beginning of the quarter, and included net orders for the
quarter of $48 billion. Backlog is up $51 billion from prior year-end,
reflecting $135 billion of net orders in 2013.
Segment Results
Boeing Commercial Airplanes
Table 4. Boeing Commercial Airplanes Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 Change 2013 2012 Change
Commercial Airplanes Deliveries 172 165 4% 648 601 8%
Revenues $14,680 $14,161 4% $52,981 $49,127 8%
Earnings from Operations $1,506 $1,266 19% $5,795 $4,711 23 %
Operating Margin 10.3% 8.9% 1.4 Pts 10.9% 9.6% 1.3 Pts
Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7 billion
and full-year revenue increased to a record $53 billion on higher delivery
volume. Fourth-quarter operating margin improved to 10.3 percent and full-year
operating margin grew to 10.9 percent on the higher volume, favorable delivery
mix and continued strong operating performance (Table 4).
During the quarter, the company launched the 777X with 259 orders and
commitments. During the year, the 787 program completed first flight of the
787-9, successfully launched the 787-10 and began operating at a 10 per month
production rate in final assembly. The 737 program delivered at a record
production rate of 38 per month and has won nearly 1,800 firm orders for the
737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered.
In January 2014, the company reached an eight-year contract extension through
2024 with the International Association of Machinists & Aerospace Workers
District 751 (IAM).
Commercial Airplanes booked 465 net orders during the quarter and 1,355 during
the year. Backlog remains strong with 5,080 airplanes valued at a record $374
billion.
Boeing Defense, Space & Security
Table 5. Defense, Space & Security Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 Change 2013 2012 Change
Revenues
Boeing Military Aircraft $4,395 $4,037 9% $15,936 $16,019 (1)%
Network & Space Systems $2,272 $2,024 12% $8,512 $7,911 8%
Global Services & Support $2,188 $2,282 (4)% $8,749 $8,677 1%
Total BDS Revenues $8,855 $8,343 6% $33,197 $32,607 2%
Earnings from Operations
Boeing Military Aircraft $441 $313 41% $1,465 $1,489 (2)%
Network & Space Systems $233 $138 69% $719 $562 28%
Global Services & Support $280 $300 (7)% $1,051 $1,017 3%
Total BDS Earnings from Operations $954 $751 27% $3,235 $3,068 5%
Operating Margin 10.8% 9.0% 1.8 Pts 9.7% 9.4% 0.3 Pts
Boeing Defense, Space & Security's fourth-quarter revenue increased 6 percent
to $8.9 billion, while operating margin increased to 10.8 percent (Table 5).
For the full year, revenue increased 2 percent to $33.2 billion, while
operating margin increased to 9.7 percent.
Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.4
billion, reflecting higher deliveries. Operating margin increased to 10.0
percent, reflecting the higher deliveries and strong performance. During the
quarter, BMA achieved Initial Operating Capability (IOC) on the P-8A Poseidon
aircraft.
Network & Space Systems (N&SS) fourth-quarter revenue increased to $2.3
billion, reflecting higher delivery volume and mix, and operating margin
increased to 10.3 percent on strong performance. During the quarter, N&SS was
awarded a contract for a fourth Inmarsat-5 satellite.
Global Services & Support (GS&S) fourth-quarter revenue was $2.2 billion,
reflecting lower volume in integrated logistics. Operating margin was 12.8
percent. During the quarter, GS&S was awarded contracts for the B-52 and B-1
bomber modifications and upgrades.
Backlog at Defense, Space & Security was $67 billion, of which 37 percent
represents orders with international customers.
Additional Financial Information
Table 6. Additional Financial Information Fourth Quarter Full Year
(Dollars in Millions) 2013 2012 2013 2012
Revenues
Boeing Capital Corporation $105 $129 $408 $468
Other segment $22 $27 $102 $106
Unallocated items and eliminations $123 ($358) ($65) ($610)
Earnings from Operations
Boeing Capital Corporation $9 ($12) $107 $88
Other segment income/(expense) ($99) $31 ($156) ($186)
Unallocated items and eliminations
excluding unallocated
pension/postretirement expense ($532) ($200) ($1,105) ($492)
Unallocated pension/postretirement
expense ($323) ($212) ($1,314) ($899)
Other income, net $15 $23 $56 $62
Interest and debt expense ($96) ($112) ($386) ($442)
Effective tax rate 14.0% 36.3% 26.4% 34.0%
At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was
$3.9 billion down from $4.1 billion at the beginning of the quarter. BCC's
debt-to-equity ratio was 5.0-to-1. Other segment earnings decreased $130
million in the quarter partly due to higher asset impairment expense.
Unallocated items and eliminations excluding unallocated pension/postretirement
expense increased in the fourth quarter of 2013 primarily due to a $406 million
charge associated with the A-12 settlement. Total pension expense for the
fourth quarter was $717 million, up from $576 million in the same period last
year. The company's income tax expense was $201 million in the quarter,
compared to $557 million in the same period of the prior year, due to a $212
million benefit recorded in fourth-quarter 2013 for a tax regulation change.
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* $7.00 - 7.20
Earnings Per Share $6.10 - 6.30
Operating Cash Flow Before Pension Contributions* $7
Operating Cash Flow (1) $6.25
Boeing Commercial Airplanes
Deliveries (2) 715 - 725
Revenue $57.5 - 59.5
Operating Margin 10%
Boeing Defense, Space & Security
Revenue
Boeing Military Aircraft $15
Network & Space Systems $7.7
Global Services & Support $7.8
Total BDS Revenue $30 - 31
Operating Margin
Boeing Military Aircraft 9.5%
Network & Space Systems 8.5%
Global Services & Support 10.5%
Total BDS Operating Margin 9.5%
Boeing Capital Corporation
Portfolio Size Lower
Revenue $0.3
Pre-Tax Earnings $0.05
Research & Development $3.2
Capital Expenditures $2.5
Pension Expense (3) $3.1
Effective Tax Rate (4) 31%
(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 $1.1 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 2014 revenue guidance is established at between $87.5 and $90.5
billion. Core earnings per share guidance is set at between $7.00 and $7.20,
and earnings per share guidance is expected to be between $6.10 and $6.30.
Total company 2014 operating cash flow before pension contributions is expected
to be approximately $7 billion, while operating cash flow is expected to be
approximately $6.25 billion in 2014, including $0.75 billion of discretionary
pension contributions. Total company pension expense in 2014 is expected to be
approximately $3.1 billion (of which approximately $2.0 billion is expected to
be recorded in core operating earnings and $1.1 billion recorded in unallocated
items and eliminations).
Commercial Airplanes' 2014 deliveries are expected to be between 715 and 725,
which includes approximately 110 787 deliveries. Revenue at Commercial
Airplanes is expected to be between $57.5 and $59.5 billion with operating
margins of approximately 10 percent. Defense, Space & Security's revenue for
2014 is expected to be between $30 and $31 billion with operating margins of
approximately 9.5 percent.
Boeing Capital Corporation expects that its aircraft finance portfolio will
continue to decline in 2014, as new aircraft financing of less than $0.5
billion is expected to be lower than normal portfolio runoff through customer
payments and depreciation. Boeing's 2014 R&D forecast is approximately $3.2
billion, and capital expenditures for 2014 are expected to be approximately
$2.5 billion. Boeing's effective tax rate is expected to be approximately 31
percent in 2014, which assumes 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.
Core Operating Margin and the Increase in Core Operating Earnings Excluding
A-12 Settlement Charge
The company is disclosing the core operating margin and the increase in core
operating earnings in the fourth quarter of 2013 over the fourth quarter of
2012 excluding the A-12 settlement charge in the fourth quarter of 2013.
Management believes it is useful to occasionally exclude certain items that are
not reflective of underlying performance and that can distort period to period
performance comparisons. Management uses similar measures for purposes of
evaluating and forecasting underlying business performance. 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 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)
Twelve months Three months
ended December 31 ended December 31
(Dollars in millions, except per share data) 2013 2012 2013 2012
Sales of products $76,792 $71,234 $21,482 $19,793
Sales of services 9,831 10,464 2,303 2,509
Total revenues 86,623 81,698 23,785 22,302
Cost of products (65,640) (60,309) (18,610) (17,206)
Cost of services (7,553) (8,247) (1,758) (1,816)
Boeing Capital interest expense (75) (109) (20) (24)
Total costs and expenses (73,268) (68,665) (20,388) (19,046)
13,355 13,033 3,397 3,256
Income from operating investments, net 214 268 67 57
General and administrative expense (3,956) (3,717) (1,100) (943)
Research and development expense, net (3,071) (3,298) (848) (753)
Gain/(loss) on dispositions, net 20 4 (1) 7
Earnings from operations 6,562 6,290 1,515 1,624
Other income, net 56 62 15 23
Interest and debt expense (386) (442) (96) (112)
Earnings before income taxes 6,232 5,910 1,434 1,535
Income tax expense (1,646) (2,007) (201) (557)
Net earnings from continuing operations 4,586 3,903 1,233 978
Net loss on disposal of discontinued
operations, net of taxes of $0 and $2 (1) (3)
Net earnings $4,585 $3,900 $1,233 $978
Basic earnings per share from continuing
operations $6.03 $5.15 $1.63 $1.29
Net loss on disposal of discontinued
operations, net of taxes
Basic earnings per share $6.03 $5.15 $1.63 $1.29
Diluted earnings per share from continuing
operations $5.96 $5.11 $1.61 $1.28
Net loss on disposal of discontinued
operations, net of taxes
Diluted earnings per share $5.96 $5.11 $1.61 $1.28
Cash dividends paid per share $1.94 $1.76 $0.485 $0.44
Weighted average diluted shares (millions) 769.5 763.8 768.4 768.3
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
December 31 December 31
(Dollars in millions, except per share data) 2013 2012
Assets
Cash and cash equivalents $9,088 $10,341
Short-term and other investments 6,170 3,217
Accounts receivable, net 6,546 5,608
Current portion of customer financing, net 344 364
Deferred income taxes 14 28
Inventories, net of advances and progress billings 42,912 37,751
Total current assets 65,074 57,309
Customer financing, net 3,627 4,056
Property, plant and equipment, net of accumulated
depreciation of $15,070 and $14,645 10,224 9,660
Goodwill 5,043 5,035
Acquired intangible assets, net 3,052 3,111
Deferred income taxes 2,939 6,753
Investments 1,204 1,180
Other assets, net of accumulated amortization of $448 and $504 1,500 1,792
Total assets $92,663 $88,896
Liabilities and equity
Accounts payable $9,498 $9,394
Accrued liabilities 14,131 12,995
Advances and billings in excess of related costs 20,027 16,672
Deferred income taxes and income taxes payable 6,267 4,485
Short-term debt and current portion of long-term debt 1,563 1,436
Total current liabilities 51,486 44,982
Accrued retiree health care 6,528 7,528
Accrued pension plan liability, net 10,474 19,651
Non-current income taxes payable 156 366
Other long-term liabilities 950 1,429
Long-term debt 8,072 8,973
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 4,415 4,122
Treasury stock, at cost - 264,882,461 and 256,630,628 shares (17,671) (15,937)
Retained earnings 32,964 30,037
Accumulated other comprehensive loss (9,894) (17,416)
Total shareholders' equity 14,875 5,867
Noncontrolling interest 122 100
Total equity 14,997 5,967
Total liabilities and equity $92,663 $88,896
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Twelve months ended
December 31
(Dollars in millions) 2013 2012
Cash flows - operating activities:
Net earnings $4,585 $3,900
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Non-cash items -
Share-based plans expense 206 193
Depreciation and amortization 1,844 1,811
Investment/asset impairment charges, net 96 84
Customer financing valuation benefit (11) (10)
Loss on disposal of discontinued operations 1 5
Gain on dispositions, net (20) (4)
Other charges and credits, net 528 694
Excess tax benefits from share-based payment arrangements (128) (45)
Changes in assets and liabilities -
Accounts receivable (879) (27)
Inventories, net of advances and progress billings (5,562) (5,681)
Accounts payable (298) 1,199
Accrued liabilities 883 801
Advances and billings in excess of related costs 3,353 1,177
Income taxes receivable, payable and deferred 1,445 1,605
Other long-term liabilities 2 157
Pension and other postretirement plans 1,720 1,288
Customer financing, net 391 407
Other 23 (46)
Net cash provided by operating activities 8,179 7,508
Cash flows - investing activities:
Property, plant and equipment additions (2,098) (1,703)
Property, plant and equipment reductions 51 97
Acquisitions, net of cash acquired (26) (124)
Contributions to investments (15,394) (12,921)
Proceeds from investments 12,453 10,901
Purchase of distribution rights (140) (7)
Net cash used by investing activities (5,154) (3,757)
Cash flows - financing activities:
New borrowings 571 60
Debt repayments (1,434) (2,076)
Repayments of distribution rights and other asset financing (280) (228)
Stock options exercised, other 1,097 120
Excess tax benefits from share-based payment arrangements 128 45
Employee taxes on certain share-based payment arrangements (63) (76)
Common shares repurchased (2,801)
Dividends paid (1,467) (1,322)
Net cash used by financing activities (4,249) (3,477)
Effect of exchange rate changes on cash and cash equivalents (29) 18
Net (decrease)/increase in cash and cash equivalents (1,253) 292
Cash and cash equivalents at beginning of year 10,341 10,049
Cash and cash equivalents at end of period $9,088 $10,341
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Twelve months ended Three months ended
December 31 December 31
(Dollars in millions) 2013 2012 2013 2012
Revenues:
Commercial Airplanes $52,981 $49,127 $14,680 $14,161
Defense, Space & Security:
Boeing Military Aircraft 15,936 16,019 4,395 4,037
Network & Space Systems 8,512 7,911 2,272 2,024
Global Services & Support 8,749 8,677 2,188 2,282
Total Defense, Space & Security 33,197 32,607 8,855 8,343
Boeing Capital 408 468 105 129
Other segment 102 106 22 27
Unallocated items and eliminations (65) (610) 123 (358)
Total revenues $86,623 $81,698 $23,785 $22,302
Earnings from operations:
Commercial Airplanes $5,795 $4,711 $1,506 $1,266
Defense, Space & Security:
Boeing Military Aircraft 1,465 1,489 441 313
Network & Space Systems 719 562 233 138
Global Services & Support 1,051 1,017 280 300
Total Defense, Space & Security 3,235 3,068 954 751
Boeing Capital 107 88 9 (12)
Other segment (156) (186) (99) 31
Unallocated items and eliminations (2,419) (1,391) (855) (412)
Earnings from operations 6,562 6,290 1,515 1,624
Other income, net 56 62 15 23
Interest and debt expense (386) (442) (96) (112)
Earnings before income taxes 6,232 5,910 1,434 1,535
Income tax expense (1,646) (2,007) (201) (557)
Net earnings from continuing operations 4,586 3,903 1,233 978
Net loss on disposal of discontinued operations,
net of taxes of $0 and $2 (1) (3)
Net earnings $4,585 $3,900 $1,233 $978
Research and development expense, net:
Commercial Airplanes $1,807 $2,049 $510 $411
Defense, Space & Security 1,215 1,189 323 321
Other 49 60 15 21
Total research and development expense, net $3,071 $3,298 $848 $753
Unallocated items and eliminations:
Share-based plans ($95) ($81) ($21) ($17)
Deferred compensation (238) (75) (73) (26)
Capitalized interest (69) (70) (17) (17)
Eliminations and other (703) (266) (421) (140)
Sub-total (included in core operating earnings) (1,105) (492) (532) (200)
Pension (1,374) (787) (329) (179)
Postretirement 60 (112) 6 (33)
Total unallocated items and eliminations ($2,419) ($1,391) ($855) ($412)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Twelve months ended Three months ended
Deliveries December 31 December 31
Commercial Airplanes 2013 2012 2013 2012
737 440 415 110 105
747 24 31 8 10
767 21 26 4 6
777 98 83 25 21
787 65 (1) 46 (3) 25 23 (3)
Total 648 601 172 165
Note: Deliveries under operating lease are identified by parentheses.
Defense, Space &Security Boeing Military Aircraft
F/A-18 Models 48 48 12 12
F-15E Eagle 14 8 11
C-17 Globemaster III 10 10 2 2
CH-47 Chinook 44 51 12 11
AH-64 Apache 37 19 6 6
P-8 Models 11 5 4 2
AEW&C 3 1
Network & Space Systems Commercial and
Civil Satellites 3 3 2
Military Satellites 4 7 3 1
December 31 September 30 December 31
Contractual backlog (Dollars in billions) 2013 2013 2012
Commercial Airplanes $373.0 $344.3 $317.3
Defense, Space & Security:
Boeing Military Aircraft 24.8 26.4 29.2
Network & Space Systems 9.8 9.9 10.1
Global Services & Support 15.0 14.6 15.8
Total Defense, Space & Security 49.6 50.9 55.1
Total contractual backlog $422.6 $395.2 $372.4
Unobligated backlog $18.3 $19.9 $17.9
Total backlog $440.9 $415.1 $390.3
Workforce 168,400 170,800 174,400
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
Core Operating Margin and Increase in Core Operating Earnings Excluding
A-12 Settlement Charge
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core operating earnings, core
operating margin and core earnings per share as well as core operating margin and the increase in core
operating earnings excluding the A-12 settlement charge 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.
Fourth Quarter Full Year Guidance
2013 2012 2013 2012 2014
Revenues $23,785 $22,302 $86,623 $81,698
GAAP Earnings From Operations $1,515 $1,624 $6,562 $6,290
GAAP Operating Margin 6.4% 7.3% 7.6% 7.7%
Unallocated
Pension/Postretirement Expense $323 $212 $1,314 $899 $1,050
Core Operating Earnings (non-GAAP) $1,838 $1,836 $7,876 $7,189
Core Operating Margin (non-GAAP) 7.7% 8.2% 9.1% 8.8%
A-12 Settlement Charge $406 - $406 -
Core Operating Earnings Excluding
A-12 Settlement Charge $2,244 $1,836 $8,282 $7,189
Core Operating Margin Excluding A-12
Settlement Charge (non-GAAP) 9.4% 8.2% 9.6% 8.8%
Increase/(Decrease) in GAAP
Earnings From Operations (7%) 4%
Increase in Core Operating
Earnings Excluding A-12
Settlement Charge (non-GAAP) 22% 15%
GAAP Diluted Earnings Per Share $1.61 $1.28 $5.96 $5.11 $6.10 - 6.30
Unallocated Pension/Postretirement
Expense(1) $0.27 $0.18 $1.11 $0.77 $0.90
Core Earnings Per Share (non-GAAP) $1.88 $1.46 $7.07 $5.88 $7.00 - 7.20
Weighted Average Diluted Shares (millions) 768.4 768.3 769.5 763.8 750 - 755
Increase in GAAP Earnings Per Share 26% 17%
Increase in Core Earnings Per Share 29% 20%
(1) Earnings per share impact is presented net of the federal statutory tax rate
of 35.0 percent.
SOURCE Boeing
END
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