Boeing Reports Strong Third-Quarter Results and Raises 2014 EPS Guidance
Core EPS (non-GAAP)* rose 19 percent to $2.14 on strong operating performance;
GAAP EPS of $1.86
Revenue increased 7 percent to $23.8 billion reflecting higher deliveries
Backlog grew to a record $490 billion with over 5,500 commercial airplane
orders
Solid operating cash flow before pension contributions* of $1.7 billion
Repurchased 8 million shares for $1 billion
2014 Core EPS guidance increased $0.20 to between $8.10 and $8.30
CHICAGO, Oct. 22, 2014 --
Table 1.
Summary
Financial
Results Third Quarter Nine months
(Dollars in
Millions,
except per
share data) 2014 2013 Change 2014 2013 Change
Revenues $23,784 $22,130 7% $66,294 $62,838 5%
Non-GAAP*
Core Operating
Earnings $2,430 $2,143 13% $6,516 $6,038 8%
Core Operating
Margin 10.2% 9.7% 0.5 Pts 9.8% 9.6% 0.2 Pts
Core Earnings
Per Share $2.14 $1.80 19% $6.30 $5.20 21%
Operating Cash
Flow Before
Pension
Contributions $1,689 $4,308 (61)% $4,610 $8,312 (45)%
GAAP
Earnings From
Operations $2,119 $1,803 18% $5,448 $5,047 8%
Operating
Margin 8.9% 8.1% 0.8 Pts 8.2% 8.0% 0.2 Pts
Net Earnings $1,362 $1,158 18% $3,980 $3,352 19%
Earnings Per
Share $1.86 $1.51 23% $5.36 $4.36 23%
Operating Cash
Flow $939 $2,808 (67)% $3,860 $6,799 (43)%
* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on
page 6, "Non-GAAP Measures Disclosures."
The Boeing Company [NYSE: BA] reported third-quarter revenue increased 7
percent to $23.8 billion on higher deliveries (Table 1). Core earnings per
share (non-GAAP) increased 19 percent* to $2.14, driven by strong performance
across the company's businesses. Third-quarter core operating earnings
(non-GAAP) increased 13 percent* to $2.4 billion from the same period of the
prior year. GAAP earnings per share was $1.86 and GAAP earnings from operations
was $2.1 billion.
Core earnings per share guidance for 2014 increased to between $8.10 and $8.30,
from $7.90 to $8.10 on continued strong operating performance. GAAP earnings
per share guidance for 2014 increased to between $6.90 and $7.10, from $6.85 to
$7.05. Operating cash flow before pension contributions* guidance increased to
greater than $7 billion. Commercial Airplanes operating margin guidance
increased to approximately 10.5 percent.
"Continued strong operating performance across our production and services
businesses drove significant growth in earnings-per-share, and enabled us to
continue to capture new business, pushing our order backlog to a record $490
billion," said Boeing Chairman and CEO Jim McNerney. "We added net new orders
for 501 commercial airplanes, launched the high-capacity 737 MAX 200, captured
a NASA contract for the Commercial Crew program, and returned $1.5 billion to
shareholders through dividends and share repurchases."
"With three solid quarters behind us and confidence in our ongoing performance,
we are increasing our earnings per share outlook for 2014, as our team remains
focused on providing value to our customers and shareholders, profitably
ramping up airplane production, executing on our development programs, and
driving productivity and affordability throughout the enterprise," McNerney
said.
Table 2. Cash Flow Third Quarter Nine months
(Millions) 2014 2013 2014 2013
Operating Cash Flow Before Pension
Contributions* $1,689 $4,308 $4,610 $8,312
Pension Contributions ($750) ($1,500) ($750) ($1,513)
Operating Cash Flow $939 $2,808 $3,860 $6,799
Less Additions to Property, Plant &
Equipment ($622) ($484) ($1,568) ($1,460)
Free Cash Flow* $317 $2,324 $2,292 $5,339
Operating cash flow before pension contributions* in the quarter was $1.7
billion, reflecting commercial airplane production rates, strong operating
performance and timing of receipts and expenditures (Table 2). During the
quarter, the company repurchased 8 million shares for $1 billion, leaving $5.8
billion remaining under the current repurchase authorization expected to be
completed over approximately the next one to two years. The company also paid
$0.5 billion in dividends in the quarter.
Table 3. Cash, Marketable Securities and Debt Balances Quarter-End
(Billions) Q3 14 Q2 14
Cash $6.7 $7.5
Marketable Securities(1) $3.4 $3.8
Total $10.1 $11.3
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $6.4 $6.4
Boeing Capital, including intercompany loans $2.5 $2.5
Total Consolidated Debt $8.9 $8.9
(1) Marketable securities consists primarily of time deposits due within one year
classified as "short-term investments."
Cash and investments in marketable securities totaled $10.1 billion at
quarter-end (Table 3), down from $11.3 billion at the beginning of the quarter.
Debt was $8.9 billion, unchanged from the beginning of the quarter.
Total company backlog at quarter-end was a record $490 billion, up from $440
billion at the beginning of the quarter, and included net orders for the
quarter of $73 billion.
Segment Results
Commercial Airplanes
Table 4.
Commercial
Airplanes Third Quarter Nine months
(Dollars in
Millions) 2014 2013 Change 2014 2013 Change
Commercial
Airplanes
Deliveries 186 170 9% 528 476 11%
Revenues $16,110 $13,987 15% $43,151 $38,301 13%
Earnings from
Operations $1,797 $1,617 11% $4,849 $4,289 13%
Operating
Margin 11.2% 11.6% (0.4) Pts 11.2% 11.2% 0.0 Pts
Commercial Airplanes third-quarter revenue increased 15 percent to a record
$16.1 billion on higher deliveries. Third-quarter operating margin was 11.2
percent, reflecting the dilutive impact of 787 and 747-8 deliveries and higher
period costs partially offset by the delivery volume and continued strong
operating performance (Table 4).
During the quarter, the company launched the 737 MAX 200 with a commitment from
Ryanair for 100 airplanes. The 737 program has won nearly 2,300 firm orders for
the 737 MAX since launch. Due to the continued strong demand for the 737 family
of airplanes, the company intends to increase the 737 production rate from 42
to 47 per month in 2017, with recently announced plans to increase to 52 per
month in 2018. Also during the quarter, the first GEnx-powered 787-9 Dreamliner
was delivered.
Commercial Airplanes booked 501 net orders during the quarter. Backlog remains
strong with over 5,500 airplanes valued at a record $430 billion.
Defense, Space & Security
Table 5. Defense, Space
& Security Third Quarter Nine months
(Dollars in Millions) 2014 2013 Change 2014 2013 Change
Revenues(1)
Boeing Military Aircraft $3,537 $3,438 3% $10,518 $11,059 (5)%
Network & Space Systems $2,027 $2,231 (9)% $5,823 $6,240 (7)%
Global Services & $2,349 $2,377 (1)% $6,952 $7,043 (1)%
Support
Total BDS Revenues $7,913 $8,046 (2)% $23,293 $24,342 (4)%
Earnings from Operations(1)
Boeing Military Aircraft $440 $245 80% $937 $1,058 (11)%
Network & Space Systems $189 $193 (2)% $507 $486 4%
Global Services & $227 $235 (3)% $772 $737 5%
Support
Total BDS Earnings from $856 $673 27% $2,216 $2,281 (3)%
Operations
Operating Margin 10.8% 8.4% 2.4 Pts 9.5% 9.4% 0.1 Pts
(1) During the first quarter of 2014, certain programs were realigned between
Boeing Military Aircraft and Global Services & Support.
Defense, Space & Security's third-quarter revenue was $7.9 billion with an
operating margin of 10.8 percent (Table 5).
Boeing Military Aircraft (BMA) third-quarter revenue was $3.5 billion,
reflecting higher P-8 deliveries. Operating margin increased to 12.4 percent,
reflecting improved performance. During the quarter, BMA delivered the first
U.S Army Multiyear II configured Chinook.
Network & Space Systems (N&SS) third-quarter revenue was $2.0 billion,
reflecting timing on United Launch Alliance (ULA) launches and lower government
satellite volume. Operating margin increased to 9.3 percent, reflecting strong
performance. During the quarter, N&SS was awarded a contract for NASA's
Commercial Crew program.
Global Services & Support (GS&S) third-quarter revenue was $2.3 billion on
lower volume, and operating margin was 9.7 percent reflecting delivery mix.
During the quarter, GS&S delivered the first upgraded French Airborne Warning
and Control System (AWACS) aircraft.
Backlog at Defense, Space & Security was $60 billion, of which 37 percent
represents orders with international customers.
Additional Financial Information
Table 6. Additional Financial Information Third Quarter Nine months
(Dollars in Millions) 2014 2013 2014 2013
Revenues
Boeing Capital $91 $94 $263 $303
Unallocated items, eliminations and other ($330) $3 ($413) ($108)
Earnings from Operations
Boeing Capital ($11) $35 $66 $98
Unallocated items, eliminations and other
excluding unallocated pension/ ($212) ($182) ($615) ($630)
postretirement
Unallocated pension/postretirement ($311) ($340 ($1,068) ($991)
Other income/(loss), net ($9) $19 $11 $41
Interest and debt expense ($79) ($95) ($252) ($290)
Effective tax rate 32.9% 32.8% 23.6% 30.1%
At quarter-end, Boeing Capital's net portfolio balance was $3.5 billion.
Unallocated items, eliminations and other third-quarter revenue decreased from
the same period in the prior year due to the elimination of intersegment
revenue for two aircraft delivered under operating leases (Table 6). Total
pension expense for the third quarter was $715 million, down from $775 million
in the same period of the prior year.
Outlook
The company's 2014 financial guidance (Table 7) reflects continued strong
performance in both businesses.
Table 7. 2014 Financial Outlook Current Prior
(Dollars in Billions, except per share data) Guidance Guidance
The Boeing Company
Revenue $87.5 - 90.5 $87.5 - 90.5
Core Earnings Per Share* $8.10 - 8.30 $7.90 - 8.10
GAAP Earnings Per Share $6.90 - 7.10 $6.85 - 7.05
Operating Cash Flow Before Pension Contributions* greater than $7 ~ $7
Operating Cash Flow(1) greater than $6.25 ~ $6.25
Commercial Airplanes
Deliveries(2) 715 - 725 715 - 725
Revenue $57.5 - 59.5 $57.5 - 59.5
Operating Margin ~ 10.5% greater than 10.0%
Defense, Space & Security (revised for business
realignment)
Revenue
Boeing Military Aircraft ~ $13.7 ~ $14.2
Network & Space Systems ~ $7.7 ~ $7.7
Global Services & Support ~ $9.1 ~ $8.6
Total BDS Revenue $30 - 31 $30 - 31
Operating Margin
Boeing Military Aircraft ~ 9.0% ~ 9.0%
Network & Space Systems ~ 8.5% ~ 8.5%
Global Services & Support ~ 11.0% ~ 11.0%
Total BDS Operating Margin ~ 9.5% ~ 9.5%
Boeing Capital
Portfolio Size Lower Lower
Revenue ~ $0.3 ~ $0.3
Pre-Tax Earnings ~ $0.05 ~ $0.05
Research & Development ~ $3.2 ~ $3.2
Capital Expenditures ~ $2.3 ~ $2.5
Pension Expense(3) ~ $3.3 ~ $3.2
Effective Tax Rate(4) ~ 23% ~ 23%
(1) After discretionary cash pension contributions of $0.75 billion for the
current and prior guidance and assuming new aircraft financings of
approximately $0.5 billion for the current guidance and under $0.5 billion for
the prior guidance
(2) Assumes approximately 110 787 deliveries for the current and prior guidance
(3) Approximately $1.5 billion for the current guidance and $1.3 billion for the
prior guidance 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 6, "Non-GAAP Measures Disclosures."
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 13.
Operating Cash Flow Before Pension Contributions
Operating cash flow before pension contributions is defined as GAAP operating
cash flow without 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 without 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 Rob Martin (312) 544-2140
Communications: Chaz Bickers (312) 544-2002
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Nine months ended Three months ended
September 30 September 30
(Dollars in millions, except per
share data) 2014 2013 2014 2013
Sales of products $58,920 $55,310 $21,378 $19,754
Sales of services 7,374 7,528 2,406 2,376
Total revenues 66,294 62,838 23,784 22,130
Cost of products (50,023) (47,030) (18,091) (16,865)
Cost of services (5,965) (5,795) (1,966) (1,791)
Boeing Capital interest expense (53) (55) (18) (18)
Total costs and expenses (56,041) (52,880) (20,075) (18,674)
10,253 9,958 3,709 3,456
Income from operating investments,
net 212 147 92 59
General and administrative expense (2,727) (2,856) (932) (956)
Research and development expense, net (2,292) (2,223) (750) (755)
Gain/(loss) on dispositions, net 2 21 (1)
Earnings from operations 5,448 5,047 2,119 1,803
Other income/(loss), net 11 41 (9) 19
Interest and debt expense (252) (290) (79) (95)
Earnings before income taxes 5,207 4,798 2,031 1,727
Income tax expense (1,227) (1,445) (669) (567)
Net earnings from continuing
operations 3,980 3,353 1,362 1,160
Net loss on disposal of discontinued
operations, net of taxes of $0, $0,
$0 and $0 (1) (2)
Net earnings $3,980 $3,352 $1,362 $1,158
Basic earnings per share from
continuing operations $5.43 $4.40 $1.88 $1.53
Net loss on disposal of discontinued
operations, net of taxes
Basic earnings per share $5.43 $4.40 $1.88 $1.53
Diluted earnings per share from
continuing operations $5.36 $4.36 $1.86 $1.51
Net loss on disposal of discontinued
operations, net of taxes
Diluted earnings per share $5.36 $4.36 $1.86 $1.51
Cash dividends paid per share $2.19 $1.455 $0.73 $0.485
Weighted average diluted shares
(millions) 742.3 769.8 731.9 769.1
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data) September 30 December 31
2014 2013
Assets
Cash and cash equivalents $6,655 $9,088
Short-term and other investments 3,422 6,170
Accounts receivable, net 7,799 6,546
Current portion of customer financing, net 257 344
Deferred income taxes 27 14
Inventories, net of advances and progress billings 47,058 42,912
Total current assets 65,218 65,074
Customer financing, net 3,347 3,627
Property, plant and equipment, net of accumulated
depreciation of $15,645 and $15,070 10,707 10,224
Goodwill 5,131 5,043
Acquired intangible assets, net 2,954 3,052
Deferred income taxes 2,546 2,939
Investments 1,203 1,204
Other assets, net of accumulated amortization of $447
and $448 1,547 1,500
Total assets $92,653 $92,663
Liabilities and equity
Accounts payable $11,136 $9,498
Accrued liabilities 12,677 14,131
Advances and billings in excess of related costs 21,127 20,027
Deferred income taxes and income taxes payable 6,685 6,267
Short-term debt and current portion of long-term debt 1,579 1,563
Total current liabilities 53,204 51,486
Accrued retiree health care 6,494 6,528
Accrued pension plan liability, net 9,262 10,474
Non-current income taxes payable 709 156
Other long-term liabilities 1,046 950
Long-term debt 7,301 8,072
Shareholders' equity:
Common stock, par value $5.00 - 1,200,000,000 shares
authorized; 1,012,261,159 and 1,012,261,159 shares
issued 5,061 5,061
Additional paid-in capital 4,572 4,415
Treasury stock, at cost - 298,419,764 and 264,882,461
shares (22,349) (17,671)
Retained earnings 35,880 32,964
Accumulated other comprehensive loss (8,653) (9,894)
Total shareholders' equity 14,511 14,875
Noncontrolling interests 126 122
Total equity 14,637 14,997
Total liabilities and equity $92,653 $92,663
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended September 30
(Dollars in millions) 2014 2013
Cash flows - operating activities:
Net earnings $3,980 $3,352
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Non-cash items -
Share-based plans expense 152 156
Depreciation and amortization 1,378 1,323
Investment/asset impairment charges, net 140 38
Customer financing valuation benefit (26) (7)
Loss on disposal of discontinued operations 1
Gain on dispositions, net (2) (21)
Other charges and credits, net 145 48
Excess tax benefits from share-based payment
arrangements (104) (86)
Changes in assets and liabilities -
Accounts receivable (1,385) (1,006)
Inventories, net of advances and progress billings (4,425) (3,631)
Accounts payable 1,819 943
Accrued liabilities (1,054) (338)
Advances and billings in excess of related costs 1,100 3,543
Income taxes receivable, payable and deferred 887 1,336
Other long-term liabilities (42) (52)
Pension and other postretirement plans 746 954
Customer financing, net 494 223
Other 57 23
Net cash provided by operating activities 3,860 6,799
Cash flows - investing activities:
Property, plant and equipment additions (1,568) (1,460)
Property, plant and equipment reductions 27 47
Acquisitions, net of cash acquired (163) (26)
Contributions to investments (7,874) (9,640)
Proceeds from investments 10,608 6,997
Receipt of economic development program funds 4
Net cash provided/(used) by investing activities 1,034 (4,082)
Cash flows - financing activities:
New borrowings 105 547
Debt repayments (910) (1,397)
Payments to noncontrolling interests (12)
Repayments of distribution rights and other asset (184) (139)
financing
Stock options exercised, other 293 871
Excess tax benefits from share-based payment
arrangements 104 86
Employee taxes on certain share-based payment
arrangements (94) (60)
Common shares repurchased (5,000) (1,799)
Dividends paid (1,596) (1,102)
Net cash used by financing activities (7,294) (2,993)
Effect of exchange rate changes on cash and cash
equivalents (33) (24)
Net decrease in cash and cash equivalents (2,433) (300)
Cash and cash equivalents at beginning of year 9,088 10,341
Cash and cash equivalents at end of period $6,655 $10,041
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Nine months ended September 30 Three months ended September 30
(Dollars in millions) 2014 2013 2014 2013
Revenues:
Commercial Airplanes $43,151 $38,301 $16,110 $13,987
Defense, Space & Security:
Boeing Military Aircraft 10,518 11,059 3,537 3,438
Network & Space Systems 5,823 6,240 2,027 2,231
Global Services & Support 6,952 7,043 2,349 2,377
Total Defense, Space & Security 23,293 24,342 7,913 8,046
Boeing Capital 263 303 91 94
Unallocated items, eliminations
and other (413) (108) (330) 3
Total revenues $66,294 $62,838 $23,784 $22,130
Earnings from operations:
Commercial Airplanes $4,849 $4,289 $1,797 $1,617
Defense, Space & Security:
Boeing Military Aircraft 937 1,058 440 245
Network & Space Systems 507 486 189 193
Global Services & Support 772 737 227 235
Total Defense, Space & Security 2,216 2,281 856 673
Boeing Capital 66 98 (11) 35
Unallocated items, eliminations
and other (1,683) (1,621) (523) (522)
Earnings from operations 5,448 5,047 2,119 1,803
Other income/(loss), net 11 41 (9) 19
Interest and debt expense (252) (290) (79) (95)
Earnings before income taxes 5,207 4,798 2,031 1,727
Income tax expense (1,227) (1,445) (669) (567)
Net earnings from continuing
operations 3,980 3,353 1,362 1,160
Net loss on disposal of
discontinued operations, net of
taxes of $0, $0, $0 and $0 (1) (2)
Net earnings $3,980 $3,352 $1,362 $1,158
Research and development expense,
net:
Commercial Airplanes $1,422 $1,297 $452 $432
Defense, Space & Security 866 892 289 313
Other 4 34 9 10
Total research and development $2,292 $2,223 $750 $755
expense, net
Unallocated items, eliminations
and other:
Share-based plans ($66) ($74) ($22) ($21)
Deferred compensation (22) (165) (3) (63)
Amortization of previously
capitalized interest (55) (52) (19) (18)
Eliminations and other unallocated
items (472) (339) (168) (80)
Sub-total (included in core
operating earnings) (615) (630) (212) (182)
Pension (1,135) (1,045) (331) (356)
Postretirement 67 54 20 16
Total unallocated items,
eliminations and other ($1,683) ($1,621) ($523) ($522)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries Nine months ended September 30 Three months ended September 30
Commercial Airplanes 2014 2013 2014 2013
737 359 330 120 112
747 12 (2) 16 6 (2) 4
767 3 17 2 5
777 75 73 27 26
787 79 40 (1) 31 23
Total 528 476 186 170
Note: Deliveries under operating lease are identified by parentheses.
Defense, Space & Security
Boeing Military Aircraft
F/A-18 Models 36 36 13 12
F-15E Eagle 10 3 2
C-17 Globemaster III 7 8 2 2
CH-47 Chinook 46 32 14 15
AH-64 Apache 30 31 11 11
P-8 Models 6 7 4 2
Global Services & Support
AEW&C 3 1
Network & Space Systems
Commercial and Civil
Satellites 3 1 1
Military Satellites 1 1
Contractual backlog
(Dollars in September 30 June 30 March 31 December 31
billions) 2014 2014 2014 2013
Commercial Airplanes $429.6 $376.3 $374.0 $373.0
Defense, Space &
Security:
Boeing Military 21.2 23.8 23.2 23.6
Aircraft
Network & Space 8.8 9.6 9.4 9.8
Systems
Global Services & 15.5 16.3 16.1 16.2
Support
Total Defense, Space 45.5 49.7 48.7 49.6
& Security
Total contractual $475.1 $426.0 $422.7 $422.6
backlog
Unobligated backlog $14.9 $14.3 $17.1 $18.3
Total backlog $490.0 $440.3 $439.8 $440.9
Workforce 168,000 169,300 169,000 168,400
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core
operating earnings, core operating margin and core earnings per share with the
most directly comparable GAAP financial measures, earnings from operations,
operating margin and diluted earnings per share. See page 6 of this release for
additional information on the use of these non-GAAP financial measures.
Third Quarter Nine Months Guidance
2014 2013 2014 2013 2014
Revenues $23,784 $22,130 $66,294 $62,838
GAAP Earnings From Operations $2,119 $1,803 $5,448 $5,047
GAAP Operating Margin 8.9% 8.1% 8.2% 8.0%
Unallocated Pension/Postretirement
Expense $311 $340 $1,068 $991 ~ $1,360
Core Operating Earnings (non-GAAP) $2,430 $2,143 $6,516 $6,038
Core Operating Margin (non-GAAP) 10.2% 9.7% 9.8% 9.6%
Increase/(Decrease) in GAAP Earnings
From Operations 18% 8%
Increase/(Decrease) in Core Operating
Earnings (non-GAAP) 13% 8%
GAAP Diluted Earnings Per Share $1.86 $1.51 $5.36 $4.36 $6.90 - $7.10
Unallocated Pension/Postretirement
Expense(1) $0.28 $0.29 $0.94 $0.84 $1.20
Core Earnings Per Share (non-GAAP) $2.14 $1.80 $6.30 $5.20 $8.10 - $8.30
Weighted Average Diluted Shares
(millions) 731.9 769.1 742.3 769.8 ~ 739
Increase/(Decrease) in GAAP Earnings
Per Share 23% 23%
Increase/(Decrease) in Core Earnings
Per Share (non-GAAP) 19% 21%
(1) Earnings per share impact is presented net of the federal statutory tax rate
of 35.0 percent.
SOURCE Boeing