TIDMBOE
Boeing Reports Strong First-Quarter Results
Core EPS (non-GAAP)* of $1.76 on continued strong operating performance; GAAP
EPS of $1.28
Revenue increased 8 percent to $20.5 billion reflecting higher commercial
deliveries
Operating cash flow increased significantly to $1.1 billion
Repurchased 19.4 million shares for $2.5 billion
Backlog of $440 billion includes $19 billion of net orders during the quarter
2014 core EPS guidance increased to between $7.15 and $7.35 to reflect a tax
settlement
CHICAGO, April 23, 2014 --
Table 1. Summary Financial Results First Quarter
(Dollars in Millions, except per share data) 2014 2013 Change
Revenues $20,465 $18,893 8%
Non-GAAP*
Core Operating Earnings $2,095 $1,867 12%
Core Operating Margin 10.2% 9.9% 0.3 Pts
Core Earnings Per Share $1.76 $1.73 2%
Operating Cash Flow Before Pension Contributions $1,112 $524 112%
GAAP
Earnings From Operations $1,542 $1,528 1%
Operating Margin 7.5% 8.1% (0.6) Pts
Net Earnings $965 $1,106 (13)%
Earnings Per Share $1.28 $1.44 (11)%
Operating Cash Flow $1,112 $524 112%
* 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 first-quarter revenue increased 8
percent to $20.5 billion on higher commercial volume (Table 1). Core earnings
per share (non-GAAP) increased 14 percent* to $1.76 when excluding a benefit of
$0.19 per share for the 2012 research and development tax credit recorded in
the first quarter of 2013. First-quarter 2014 core operating earnings
(non-GAAP) increased 12 percent to $2.1 billion and core operating margin
(non-GAAP) increased to 10.2 percent reflecting continued strong operating
performance. GAAP earnings from operations included previously announced
non-cash charges totaling $334 million ($0.29 per share) for retirement plan
changes.
Core earnings per share guidance for 2014 increased to between $7.15 and $7.35,
from $7.00 to $7.20, to reflect the benefit of a tax settlement to be
recognized in the second quarter of 2014. GAAP earnings per share guidance for
2014 is reaffirmed at between $6.10 to $6.30 as the tax settlement benefit was
offset by the retirement plan charges. GAAP pension expense guidance for 2014
is now at approximately $3.2 billion, up from $3.1 billion, to reflect the
retirement plan charges. The company reaffirmed its 2014 revenue, operating
cash flow and deliveries guidance.
"Disciplined execution across our production and development programs produced
strong first quarter results," said Boeing Chairman and Chief Executive Officer
Jim McNerney. "We measurably increased revenue, core operating earnings and
cash flow, and expanded core operating margins. This financial and operational
strength enabled the return of more than $3 billion to shareholders in the
quarter through share repurchase and an increased dividend, even as we
continued to invest in our future."
"Our outlook for the full year remains positive on the strength of demand for
our fuel-efficient new commercial airplanes, our solid position in global
defense, space and security markets, and our enterprise focus on meeting
customer commitments, improving productivity and profitably delivering the
growth in our sizable backlog," McNerney said.
Table 2. Cash Flow First Quarter
(Millions) 2014 2013
Operating Cash Flow Before Pension Contributions* $1,112 $524
Pension Contributions - -
Operating Cash Flow $1,112 $524
Less Additions to Property, Plant & Equipment ($497) ($521)
Free Cash Flow* $615 $3
Operating cash flow in the quarter was $1.1 billion, reflecting commercial
airplane production rates, strong core operating performance and timing of
receipts and expenditures (Table 2). During the quarter, the company
repurchased 19.4 million shares for $2.5 billion, leaving $8.3 billion
remaining under the current repurchase authorization expected to be completed
over the next 2-3 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) Q1 14 Q4 13
Cash $6.9 $9.1
Marketable Securities(1) $5.3 $6.2
Total $12.2 $15.3
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $6.3 $7.0
Boeing Capital Corporation, including intercompany loans $2.6 $2.6
Total Consolidated Debt $8.9 $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 $12.2 billion at
quarter-end (Table 3), down from $15.3 billion at the beginning of the year,
primarily due to the share repurchases and the pay-down of maturing debt. Debt
was $8.9 billion, down from $9.6 billion at the beginning of the year,
primarily due to maturities.
Total company backlog at quarter-end was a $440 billion, down slightly from the
beginning of the year, and included net orders for the quarter of $19 billion.
Segment Results
Boeing Commercial Airplanes
Table 4. Boeing Commercial Airplanes First Quarter
(Dollars in Millions) 2014 2013 Change
Commercial Airplanes Deliveries 161 137 18%
Revenues $12,737 $10,690 19%
Earnings from Operations $1,502 $1,219 23%
Operating Margin 11.8% 11.4% 0.4 Pts
Boeing Commercial Airplanes first-quarter revenue increased to $12.7 billion on
higher 787 and 737 deliveries. First-quarter operating margin improved to 11.8
percent reflecting the delivery volume and mix and lower period costs partially
offset by higher R&D (Table 4).
During the quarter, the 787 program reached a 10 per month production rate and
completed preliminary design review on the 787-10. The company selected the
Everett, Washington site as the location for a new composite wing center for
the 777X. In April, the 737 program reached a production rate of 42 per month.
Commercial Airplanes booked 235 net orders during the quarter. Backlog remains
strong with over 5,100 airplanes valued at $374 billion.
Boeing Defense, Space & Security
Table 5. Defense, Space & Security First Quarter
(Dollars in Millions) 2014 2013 Change
Revenues(1)
Boeing Military Aircraft $3,458 $3,980 (13)%
Network & Space Systems $1,876 $1,960 (4)%
Global Services & Support $2,299 $2,170 6%
Total BDS Revenues $7,633 $8,110 (6)%
Earnings from Operations(1)
Boeing Military Aircraft $332 $427 (22)%
Network & Space Systems $168 $156 8%
Global Services & Support $278 $249 12%
Total BDS Earnings from Operations $778 $832 (6)%
Operating Margin 10.2% 10.3% (0.1) Pts
(1) During the first quarter of 2014, certain programs were realigned between
Boeing Military Aircraft and Global Services & Support. See page 15 of this
release for additional information.
Boeing Defense, Space & Security's first-quarter revenue was $7.6 billion with
an operating margin of 10.2 percent (Table 5).
Boeing Military Aircraft (BMA) first-quarter revenue declined to $3.5 billion,
as the first quarter of 2013 included revenue associated with F-15 development
milestones and due to fewer P-8 deliveries in the first quarter of 2014.
Operating margin was 9.6 percent, reflecting strong performance offset by a
previously announced C-17 inventory-related charge. During the quarter, BMA was
awarded a contract for 16 P-8A Poseidon aircraft from the U.S. Navy and a
contract for 82 Apache Block III helicopters from the U.S. Army.
Network & Space Systems (N&SS) first-quarter revenue was $1.9 billion,
reflecting lower satellites volume, and operating margin increased to 9.0
percent on strong performance. During the quarter, N&SS completed on-orbit
testing of the first Inmarsat-5 satellite.
Global Services & Support (GS&S) first-quarter revenue increased to $2.3
billion, reflecting higher volume in maintenance, modifications and upgrades.
Operating margin increased to 12.1 percent on improved performance in
integrated logistics. During the quarter, GS&S was awarded a contract to
provide maintenance training devices for the U.S. Navy's P-8A Poseidon
aircraft.
Backlog at Defense, Space & Security was $66 billion, of which 35 percent
represents orders with international customers.
Additional Financial Information
Table 6. Additional Financial Information First Quarter
(Dollars in Millions) 2014 2013
Revenues
Boeing Capital Corporation $82 $105
Other segment $20 $27
Unallocated items and eliminations ($7) ($39)
Earnings from Operations
Boeing Capital Corporation $44 $44
Other segment income/(expense) ($62) ($58)
Unallocated items and eliminations excluding unallocated
pension/postretirement expense ($167) ($170)
Unallocated pension/postretirement expense ($553) ($339)
Other income, net $9 $9
Interest and debt expense ($92) ($99)
Effective tax rate 33.9% 23.1%
At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was
$3.5 billion down from $3.9 billion at the beginning of the year. BCC's
debt-to-equity ratio was 5.0-to-1.
Unallocated items and eliminations increased in the first quarter of 2014
primarily due to previously announced non-cash charges totaling $334 million
for retirement plan changes. Total pension expense for the first quarter was
$1,035 million, up from $791 million in the same period last year. The
company's income tax expense was $494 million in the quarter, compared to $332
million in the same period of the prior year, as a $145 million benefit for the
2012 research and development credit was reflected in the first quarter of
2013.
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* $7.15 - 7.35
GAAP 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 (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 9.5%
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) $3.2
Effective Tax Rate (4) 29%
(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 $7.15
and $7.35, from $7.00 to $7.20, to reflect the benefit of a tax settlement to
be recognized in the second quarter of 2014. GAAP earnings per share guidance
for 2014 is reaffirmed at between $6.10 and $6.30 as the tax settlement benefit
was offset by the retirement plan charges. Total GAAP pension expense guidance
for 2014 is now at approximately $3.2 billion, up from $3.1 billion to reflect
the retirement plan charges. The pension expense expected to be included in
unallocated items and eliminations is approximately $1.3 billion, up from $1.1
billion.
Boeing Military Aircraft revenue for 2014 is now expected to be approximately
$14.2 billion, down from $15.0 billion, and Global Support & Services revenue
is now expected to be approximately $8.6 billion, up from $7.8 billion, both
reflecting a business realignment completed during the quarter.
Boeing's effective tax rate is now expected to be approximately 29 percent in
2014, down from approximately 31 percent, to reflect the benefit of the tax
settlement 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.
Increase in Core Earnings Per Share Excluding First Quarter 2013 Benefit for
2012 Research and Development Tax Credit
The company is disclosing the increase in core operating earnings per share in
the first quarter of 2014 over the first quarter of 2013 excluding the benefit
for the 2012 research and development tax credit recorded in the first 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 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)
Three months ended
March 31
(Dollars in millions, except per share data) 2014 2013
Sales of products $18,015 $16,318
Sales of services 2,450 2,575
Total revenues 20,465 18,893
Cost of products (15,258) (13,728)
Cost of services (2,020) (2,009)
Boeing Capital interest expense (18) (19)
Total costs and expenses (17,296) (15,756)
3,169 3,137
Income from operating investments, net 59 45
General and administrative expense (877) (971)
Research and development expense, net (809) (705)
Gain on dispositions, net 22
Earnings from operations 1,542 1,528
Other income, net 9 9
Interest and debt expense (92) (99)
Earnings before income taxes 1,459 1,438
Income tax expense (494) (332)
Net earnings from continuing operations 965 1,106
Net gain on disposal of discontinued operations, net of
taxes
Net earnings $965 $1,106
Basic earnings per share from continuing operations $1.30 $1.45
Net gain on disposal of discontinued operations, net of
taxes
Basic earnings per share $1.30 $1.45
Diluted earnings per share from continuing operations $1.28 $1.44
Net gain on disposal of discontinued operations, net of
taxes
Diluted earnings per share $1.28 $1.44
Cash dividends paid per share $0.73 $0.49
Weighted average diluted shares (millions) 754.1 768.7
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
March 31 December 31
(Dollars in millions, except per share data) 2014 2013
Assets
Cash and cash equivalents $6,942 $9,088
Short-term and other investments 5,282 6,170
Accounts receivable, net 7,341 6,546
Current portion of customer financing, net 256 344
Deferred income taxes 15 14
Inventories, net of advances and progress billings 44,941 42,912
Total current assets 64,777 65,074
Customer financing, net 3,280 3,627
Property, plant and equipment, net of accumulated depreciation
of $15,281 and $15,070 10,263 10,224
Goodwill 5,046 5,043
Acquired intangible assets, net 2,996 3,052
Deferred income taxes 2,463 2,939
Investments 1,208 1,204
Other assets, net of accumulated amortization of $478 and $448 1,542 1,500
Total assets $91,575 $92,663
Liabilities and equity
Accounts payable $10,779 $9,498
Accrued liabilities 12,219 14,131
Advances and billings in excess of related costs 21,112 20,027
Deferred income taxes and income taxes payable 6,732 6,267
Short-term debt and current portion of long-term debt 1,660 1,563
Total current liabilities 52,502 51,486
Accrued retiree health care 6,515 6,528
Accrued pension plan liability, net 9,676 10,474
Non-current income taxes payable 166 156
Other long-term liabilities 808 950
Long-term debt 7,275 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 4,441 4,415
Treasury stock, at cost - 281,510,590 and 264,882,461 shares (20,028) (17,671)
Retained earnings 33,929 32,964
Accumulated other comprehensive loss (8,883) (9,894)
Total shareholders' equity 14,520 14,875
Noncontrolling interest 113 122
Total equity 14,633 14,997
Total liabilities and equity $91,575 $92,663
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
March 31
(Dollars in millions) 2014 2013
Cash flows - operating activities:
Net earnings $965 $1,106
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Non-cash items -
Share-based plans expense 52 58
Depreciation and amortization 448 429
Investment/asset impairment charges, net 29 26
Customer financing valuation benefit (23) (3)
Gain on disposal of discontinued operations (1)
Gain on dispositions, net (22)
Other charges and credits, net 47 53
Excess tax benefits from share-based payment arrangements (68) (23)
Changes in assets and liabilities -
Accounts receivable (792) (437)
Inventories, net of advances and progress billings (2,049) (3,000)
Accounts payable 1,350 654
Accrued liabilities (1,385) (1,133)
Advances and billings in excess of related costs 1,085 1,833
Income taxes receivable, payable and deferred 455 214
Other long-term liabilities (124) (73)
Pension and other postretirement plans 733 821
Customer financing, net 408 24
Other (18) (3)
Net cash provided by operating activities 1,112 524
Cash flows - investing activities:
Property, plant and equipment additions (497) (521)
Property, plant and equipment reductions 15 33
Acquisitions, net of cash acquired (26)
Contributions to investments (2,737) (2,955)
Proceeds from investments 3,625 2,655
Net cash provided/(used) by investing activities 406 (814)
Cash flows - financing activities:
New borrowings 51 15
Debt repayments (757 (1,262)
Payments to noncontrolling interests (12)
Repayments of distribution rights and other asset
financing (3) (138)
Stock options exercised, other 109 76
Excess tax benefits from share-based payment arrangements 68 23
Employee taxes on certain share-based payment arrangements (84) (52)
Common shares repurchased (2,500)
Dividends paid (540) (367)
Net cash used by financing activities (3,668) (1,705)
Effect of exchange rate changes on cash and cash equivalents 4 (11)
Net decrease in cash and cash equivalents (2,146) (2,006)
Cash and cash equivalents at beginning of year 9,088 10,341
Cash and cash equivalents at end of period $6,942 $8,335
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Three months ended
March 31
(Dollars in millions) 2014 2013
Revenues:
Commercial Airplanes $12,737 $10,690
Defense, Space & Security:
Boeing Military Aircraft 3,458 3,980
Network & Space Systems 1,876 1,960
Global Services & Support 2,299 2,170
Total Defense, Space & Security 7,633 8,110
Boeing Capital 82 105
Other segment 20 27
Unallocated items and eliminations (7) (39)
Total revenues $20,465 $18,893
Earnings from operations:
Commercial Airplanes $1,502 $1,219
Defense, Space & Security:
Boeing Military Aircraft 332 427
Network & Space Systems 168 156
Global Services & Support 278 249
Total Defense, Space & Security 778 832
Boeing Capital 44 44
Other segment (62) (58)
Unallocated items and eliminations (720) (509)
Earnings from operations 1,542 1,528
Other income, net 9 9
Interest and debt expense (92) (99)
Earnings before income taxes 1,459 1,438
Income tax expense (494) (332)
Net earnings from continuing operations 965 1,106
Net gain on disposal of discontinued operations, net of
taxes
Net earnings $965 $1,106
Research and development expense, net:
Commercial Airplanes $529 $419
Defense, Space & Security 280 272
Other 14
Total research and development expense, net $809 $705
Unallocated items and eliminations:
Share-based plans ($24) ($31)
Deferred compensation 7 (56)
Capitalized interest (18) (17)
Eliminations and other (132) (66)
Sub-total (included in core operating earnings) (167) (170)
Pension (576) (358)
Postretirement 23 19
Total unallocated items and eliminations ($720) ($509)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Three months ended
Deliveries March 31
Commercial Airplanes 2014 2013
737 115 102
747 4 6
767 4
777 24 24
787 18 1
Total 161 137
Defense, Space & Security
Boeing Military Aircraft
F/A-18 Models 11 12
F-15E Eagle 4 3
C-17 Globemaster III 3 3
CH-47 Chinook 17 9
AH-64 Apache 10 15
P-8 Models 2
Global Services & Support
AEW&C 1
Network & Space Systems
Commercial and Civil Satellites 1
March 31 December 31
Contractual backlog (Dollars in billions) 2014 2013
Commercial Airplanes $374.0 $373.0
Defense, Space & Security:
Boeing Military Aircraft 23.2 23.6
Network & Space Systems 9.4 9.8
Global Services & Support 16.1 16.2
Total Defense, Space & Security 48.7 49.6
Total contractual backlog $422.7 $422.6
Unobligated backlog $17.1 $18.3
Total backlog $439.8 $440.9
Workforce 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
Increase in Core EPS Excluding First Quarter 2013 Benefit for 2012 Research and
Development Tax Credit
(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 the increase in Core EPS Excluding First Quarter 2013 Benefit for 2012
Research and Development Tax Credit 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.
First Quarter Guidance
2014 2013 2014
Revenues $20,465 $18,893
GAAP Earnings From Operations $1,542 $1,528
GAAP Operating Margin 7.5% 8.1%
Unallocated Pension/Postretirement Expense $553 $339 $1,215
Core Operating Earnings (non-GAAP) $2,095 $1,867
Core Operating Margin (non-GAAP) 10.2% 9.9%
Increase/(Decrease) in GAAP Earnings From Operations 1%
GAAP Diluted Earnings Per Share $1.28 $1.44 $6.10 - 6.30
Unallocated Pension/Postretirement Expense(1) $0.48 $0.29 $1.05
Core Earnings Per Share (non-GAAP) $1.76 $1.73 $7.15 - 7.35
First Quarter 2013 Benefit for 2012 Research and
Development Tax Credit(2) - $0.19
Core Earnings Per Share Excluding First Quarter
2013 Benefit for 2012 Research and Development
Tax Credit $1.76 $1.54
Weighted Average Diluted Shares (millions) 754.1 768.7 750 - 755
Increase in GAAP Earnings Per Share -11%
Increase in Core Earnings Per Share 2%
Increase in Core Earnings Per Share Excluding First
Quarter 2013 Benefit for 2012 Research and
Development Tax Credit 14%
(1) Earnings per share impact is presented net of the federal statutory tax rate
of 35.0 percent.
(2) Earnings per share impact of $145 million tax benefit in the first quarter of
2013 due to the retroactive reinstatement of the 2012 research and development
tax credit under the American Taxpayer Relief Act of 2012.
The Boeing Company and Subsidiaries
Defense, Space & Security Realignment
(Unaudited)
Effective during the first quarter of 2014, certain programs were realigned
among Defense, Space & Security segments. The Airborne Warning and Control
Systems and Airborne Early Warning and Control aircraft programs and the F-22
Modernization program were realigned from Boeing Military Aircraft to Global
Services & Support. Business segment data for 2013 has been adjusted as follows
to reflect the realignment.
As Reported in 2013 As Reported in 2014
(Dollars in millions) Revenue Earnings Revenue Earnings
First Quarter 2013
Boeing Military Aircraft $4,109 $430 $3,980 $427
Global Services & Support 2,041 246 2,170 249
Second Quarter 2013
Boeing Military Aircraft 3,889 373 3,641 386
Global Services & Support 2,248 266 2,496 253
Third Quarter 2013
Boeing Military Aircraft 3,543 221 3,438 220
Global Services & Support 2,272 259 2,377 260
Fourth Quarter 2013
Boeing Military Aircraft 4,395 441 4,226 491
Global Services & Support 2,188 280 2,357 230
Full Year 2013
Boeing Military Aircraft $15,936 $1,465 $15,285 $1,524
Global Services & Support 8,749 1,051 9,400 992
SOURCE Boeing
END
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