Boeing Reports
Second-Quarter Results
-- Revenue increased 11 percent to $24.5
billion reflecting record commercial deliveries
-- Core EPS (non-GAAP)* of $1.62;
GAAP EPS of $1.59
-- Strong operating cash flow of $3.3
billion on higher volume and improved productivity
-- Backlog remains strong at $489
billion with nearly 5,700 commercial airplane orders
-- Repurchased 14 million shares for $2.0
billion
-- Cash & marketable securities of $9.6
billion provide strong liquidity
-- EPS guidance updated for KC-46 charge that offset strong
performance; cash guidance unchanged
CHICAGO, July 22, 2015 --
Table 1. Summary Financial Results |
|
Second
Quarter |
|
|
First Half |
|
|
(Dollars in Millions, except per share
data) |
|
2015 |
|
2014 |
|
Change |
2015 |
|
2014 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
$24,543 |
|
|
$22,045 |
|
11% |
|
|
$46,692 |
|
|
$42,510 |
|
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP* |
|
|
|
|
|
|
|
|
|
|
|
|
Core Operating Earnings |
|
|
$1,713 |
|
|
$1,991 |
|
(14)% |
|
|
$3,845 |
|
|
$4,086 |
|
(6)% |
Core Operating Margin |
|
7.0% |
|
9.0% |
|
(2.0) Pts |
|
8.2% |
|
9.6% |
|
(1.4) Pts |
Core Earnings Per Share |
|
|
$1.62 |
|
|
$2.42 |
|
(33)% |
|
|
$3.59 |
|
|
$4.16 |
|
(14)% |
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Operations |
|
|
$1,683 |
|
|
$1,787 |
|
(6)% |
|
|
$3,702 |
|
|
$3,329 |
|
11% |
Operating Margin |
|
6.9% |
|
8.1% |
|
(1.2) Pts |
|
7.9% |
|
7.8% |
|
0.1 Pts |
Net Earnings |
|
|
$1,110 |
|
|
$1,653 |
|
(33)% |
|
|
$2,446 |
|
|
$2,618 |
|
(7)% |
Earnings Per Share |
|
|
$1.59 |
|
|
$2.24 |
|
(29)% |
|
|
$3.46 |
|
|
$3.50 |
|
(1)% |
Operating Cash Flow |
|
|
$3,297 |
|
|
$1,809 |
|
82% |
|
|
$3,385 |
|
|
$2,921 |
|
16% |
* 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 second-quarter revenue
increased 11 percent to $24.5 billion
on record commercial deliveries (Table 1). Second quarter 2015
results included the previously announced $536 million after-tax charge ($0.77 per share) on the KC-46 Tanker program
reflecting higher estimated costs. Core earnings per share
(non-GAAP)* guidance for 2015 has been adjusted to between
$7.70 and $7.90 per share, from
$8.20 and $8.40, to reflect the
impact of the second quarter 2015 KC-46 Tanker charge ($0.77 per share), partially offset by strong
performance ($0.27 per share). GAAP
earnings per share has been adjusted to between $7.60 and $7.80, from $8.10 and $8.30.
"Record commercial airplane deliveries to customers worldwide
drove solid revenue growth, and the strength of our overall
portfolio and diligent focus produced significant operating cash
flow during the quarter," said Boeing President and Chief Executive
Officer Dennis Muilenburg. "Strong
operating performance across our commercial and defense production
programs partially offset the tanker charge and enabled us to
maintain our commitments to return cash to our shareholders and
invest in innovation and our people."
"Overall, our outlook for the second half of the year remains
positive. On the tanker program, we are investing the necessary
resources to keep this vitally important program on schedule for
our customer. We have a clear understanding of the work to be done
and we are confident that the long-term financial value of the
program will reward our additional investment."
"With our sustained focus on productivity and growth, we will
continue to profitably deliver on our large and diverse backlog,
capture new orders, and deliver increasing value to all of our
stakeholders."
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2. Cash Flow |
|
Second
Quarter |
|
First Half |
(Millions) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Operating Cash Flow |
|
|
$3,297 |
|
|
|
$1,809 |
|
|
|
$3,385 |
|
|
|
$2,921 |
|
Less Additions to Property, Plant &
Equipment |
|
|
($692) |
|
|
|
($449) |
|
|
|
($1,266) |
|
|
|
($946) |
|
Free Cash Flow* |
|
|
$2,605 |
|
|
|
$1,360 |
|
|
|
$2,119 |
|
|
|
$1,975 |
|
Operating cash flow in the quarter was $3.3 billion, reflecting commercial airplane
production rates and strong operating performance (Table 2). During
the quarter, the company repurchased 14 million shares for
$2.0 billion, leaving $7.5 billion remaining under the current
repurchase authorization which is expected to be completed over
approximately the next two years. The company also paid
$0.6 billion in dividends in the
quarter, reflecting an approximately 25 percent increase in
dividends per share compared to the same period of the prior
year.
|
|
|
|
|
|
|
|
|
Table 3. Cash, Marketable Securities and Debt
Balances |
|
Quarter-End |
(Billions) |
|
Q2 15 |
|
Q1 15 |
Cash |
|
|
$9.1 |
|
|
|
$8.6 |
|
Marketable Securities1 |
|
|
$0.5 |
|
|
|
$1.0 |
|
Total |
|
|
$9.6 |
|
|
|
$9.6 |
|
Debt Balances: |
|
|
|
|
The Boeing Company, net of intercompany loans to
BCC |
|
|
$6.6 |
|
|
|
$6.6 |
|
Boeing Capital, including intercompany loans |
|
|
$2.4 |
|
|
|
$2.4 |
|
Total Consolidated Debt |
|
|
$9.0 |
|
|
|
$9.0 |
|
|
1Marketable securities
consists primarily of time deposits due within one year classified
as "short-term investments." |
Cash and investments in marketable securities totaled
$9.6 billion and debt totaled
$9.0 billion, both unchanged from the
beginning of the quarter (Table 3).
Total company backlog at quarter-end was $489 billion, down from $495 billion at the beginning of the quarter, and
included net orders for the quarter of $18
billion.
Segment Results
Commercial Airplanes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4. Commercial Airplanes |
|
Second
Quarter |
|
|
|
First Half |
|
|
(Dollars in Millions) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Airplanes Deliveries |
|
197 |
|
181 |
|
9% |
|
381 |
|
342 |
|
11% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
$16,877 |
|
|
$14,304 |
|
18% |
|
|
$32,258 |
|
|
$27,041 |
|
19% |
Earnings from Operations |
|
|
$1,206 |
|
|
$1,550 |
|
(22)% |
|
|
$2,823 |
|
|
$3,052 |
|
(8) % |
Operating Margin |
|
|
7.1% |
|
|
10.8% |
|
(3.7) Pts |
|
|
8.8% |
|
|
11.3% |
|
(2.5) Pts |
Commercial Airplanes second-quarter revenue increased 18 percent
to $16.9 billion on higher delivery
volume and mix (Table 4). Second-quarter operating margin was 7.1
percent, reflecting the previously announced $513 million pre-tax charge on the KC-46 Tanker
program and the dilutive impact of higher 787 and 747 deliveries
partially offset by strong performance on production programs.
During the quarter, Commercial Airplanes captured orders for 116
737 MAX airplanes. The 737 program has won over 2,800 firm orders
for the 737 MAX since launch. Also during the quarter, the company
started assembly of the first 737 MAX airplane and the 787-10
program completed its Critical Design Review which indicated the
program's design is sound and development is on schedule.
Commercial Airplanes booked 171 net orders during the quarter.
Backlog remains strong with nearly 5,700 airplanes valued at
$431 billion.
Defense, Space & Security
Table 5. Defense, Space & Security |
|
Second
Quarter |
|
|
|
First Half |
|
|
(Dollars in Millions) |
|
2015 |
|
2014 |
|
Change |
|
2015 |
|
2014 |
|
Change |
Revenues1 |
|
|
|
|
|
|
|
|
|
|
|
Boeing Military Aircraft |
|
|
$3,488 |
|
|
$3,520 |
|
(1)% |
|
|
$6,232 |
|
|
$6,975 |
|
(11)% |
Network & Space Systems |
|
|
$1,938 |
|
|
$1,920 |
|
1% |
|
|
$3,670 |
|
|
$3,796 |
|
(3)% |
Global Services & Support |
|
|
$2,118 |
|
|
$2,307 |
|
(8)% |
|
|
$4,351 |
|
|
$4,609 |
|
(6)% |
Total BDS Revenues |
|
|
$7,544 |
|
|
$7,747 |
|
(3)% |
|
|
$14,253 |
|
|
$15,380 |
|
(7)% |
Earnings from Operations1 |
|
|
|
|
|
|
|
|
|
|
|
|
Boeing Military Aircraft |
|
|
$123 |
|
|
$164 |
|
(25)% |
|
|
$384 |
|
|
$496 |
|
(23)% |
Network & Space Systems |
|
|
$151 |
|
|
$150 |
|
1% |
|
|
$318 |
|
|
$318 |
|
—% |
Global Services & Support |
|
|
$272 |
|
|
$268 |
|
1% |
|
|
$587 |
|
|
$546 |
|
8% |
Total BDS Earnings from Operations |
|
|
$546 |
|
|
$582 |
|
(6)% |
|
|
$1,289 |
|
|
$1,360 |
|
(5)% |
Operating Margin |
|
7.2% |
|
7.5% |
|
(0.3) Pts |
|
9.0% |
|
8.8% |
|
0.2 Pts |
|
1 During the
first quarter of 2015, certain programs were realigned between
Boeing Military Aircraft and Global Services &
Support. |
Defense, Space & Security's second-quarter revenue was
$7.5 billion. Second quarter
operating margin was 7.2 percent, reflecting the previously
announced $322 million pre-tax charge
recorded at BMA on the KC-46 Tanker program partially offset by
strong performance on production programs and mix (Table 5).
Boeing Military Aircraft (BMA) second-quarter revenue was
$3.5 billion, reflecting planned
timing of deliveries and mix. Operating margin was 3.5 percent,
reflecting the KC-46 Tanker program charge partially offset by
strong performance on production programs. During the quarter, BMA
was awarded contracts for six C-17 Globemaster III airlifters.
Network & Space Systems (N&SS) second-quarter revenue
was $1.9 billion and operating margin
was unchanged at 7.8 percent. During the quarter, NASA awarded
Boeing the first ever commercial contract for a human spaceflight
mission as part of the existing Commercial Crew contract.
Global Services & Support (GS&S) second-quarter revenue
was $2.1 billion, reflecting lower
volume in Aircraft Modernization and Sustainment. Operating margin
increased to 12.8 percent on improved program mix. During the
quarter, GS&S was awarded an F-15 international services
contract extension.
Backlog at Defense, Space & Security was $58 billion, of which 39 percent represents
orders from international customers.
Additional Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6. Additional Financial
Information |
|
Second
Quarter |
|
First Half |
(Dollars in Millions) |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Revenues |
|
|
|
|
|
|
|
|
Boeing Capital |
|
|
$115 |
|
|
$90 |
|
|
$201 |
|
|
$172 |
Unallocated items, eliminations and other |
|
|
$7 |
|
|
($96) |
|
|
($20) |
|
|
($83) |
Earnings from Operations |
|
|
|
|
|
|
|
|
Boeing Capital |
|
|
$11 |
|
|
$33 |
|
|
$31 |
|
|
$77 |
Unallocated pension/postretirement |
|
|
($30) |
|
|
($204) |
|
|
($143) |
|
|
($757) |
Other unallocated items and eliminations |
|
|
($50) |
|
|
($174) |
|
|
($298) |
|
|
($403) |
Other income, net |
|
|
$15 |
|
|
$11 |
|
|
$3 |
|
|
$20 |
Interest and debt expense |
|
|
($75) |
|
|
($81) |
|
|
($136) |
|
|
($173) |
Effective tax rate |
|
31.6% |
|
3.7% |
|
31.5% |
|
17.6% |
At quarter-end, Boeing Capital's net portfolio balance was
$3.3 billion, down from $3.4 billion at the beginning of the quarter
(Table 6). Total pension expense for the second quarter was
$523 million, down from $693 million in the same period of the prior
year. Other unallocated items and eliminations totaled $50 million at quarter end, down from
$174 million in the same period of
the prior year, primarily due to lower elimination of intercompany
profit and deferred compensation expense. The company's effective
income tax rate was 31.6 percent at quarter end, up from 3.7
percent in the same period of the prior year. The second quarter
2014 effective income tax rate included $524
million in tax benefits.
Outlook
The company's 2015 financial and delivery guidance (Table 7)
reflects the impact of the KC-46 Tanker charge and continued strong
performance across the company.
|
|
|
|
Table 7. 2015 Financial Outlook |
Current |
|
Prior |
(Dollars in Billions, except per share
data) |
Guidance |
|
Guidance |
|
|
|
|
The Boeing Company |
|
|
|
Revenue |
$94.5 - 96.5 |
|
$94.5 - 96.5 |
Core Earnings Per Share* |
$7.70 - 7.90 |
|
$8.20 - 8.40 |
GAAP Earnings Per Share |
$7.60 - 7.80 |
|
$8.10 - 8.30 |
Operating Cash Flow |
> $9 |
|
> $9 |
|
|
|
|
Commercial Airplanes |
|
|
|
Deliveries |
750 - 755 |
|
750 - 755 |
Revenue |
$64.5 - 65.5 |
|
$64.5 - 65.5 |
Operating Margin |
~9.0% |
|
9.5% - 10.0% |
|
|
|
|
Defense, Space & Security (revised for
business realignment) |
|
|
|
Revenue |
|
|
|
Boeing Military Aircraft |
~$12.5 |
|
~$12.5 |
Network & Space Systems |
~$8.0 |
|
~$8.0 |
Global Services & Support |
~$9.5 |
|
~$9.5 |
|
|
|
|
Total BDS Revenue |
$29.5 - 30.5 |
|
$29.5 - 30.5 |
|
|
|
|
Operating Margin |
|
|
|
Boeing Military Aircraft |
~8% |
|
~9.5% |
Network & Space Systems |
~9.0% |
|
~9.0% |
Global Services & Support |
~11.5% |
|
~11.0% |
|
|
|
|
Total BDS Operating Margin |
~9.5% |
|
9.75% - 10.0% |
|
|
|
|
Boeing Capital |
|
|
|
Portfolio Size |
Stable |
|
Stable |
Revenue |
~$0.3 |
|
~$0.3 |
Pre-Tax Earnings |
~$0.05 |
|
~$0.05 |
|
|
|
|
Research & Development |
~ $3.5 |
|
~ $3.5 |
Capital Expenditures |
~ $2.8 |
|
~ $2.8 |
Pension Expense 1 |
~ $2.1 |
|
~ $2.1 |
Effective Tax Rate 2 |
~ 29.0% |
|
~ 30.5% |
|
|
1 |
Approximately $0.3 billion is
expected to be recorded in unallocated items and
eliminations |
2 |
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.
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,
epidemics, sanctions 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: |
|
Bernard Choi (312) 544-2002 |
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited) |
|
|
|
|
|
Six months ended
June 30 |
|
Three months
ended
June 30 |
(Dollars in millions, except per
share data) |
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Sales of products |
|
$41,408 |
|
|
|
$37,542 |
|
|
|
$21,923 |
|
|
|
$19,527 |
|
Sales of services |
5,284 |
|
|
4,968 |
|
|
2,620 |
|
|
2,518 |
|
Total revenues |
46,692 |
|
|
42,510 |
|
|
24,543 |
|
|
22,045 |
|
|
|
|
|
|
|
|
|
Cost of products |
(35,627) |
|
|
(31,932) |
|
|
(19,247) |
|
|
(16,674) |
|
Cost of services |
(4,186) |
|
|
(3,999) |
|
|
(2,086) |
|
|
(1,979) |
|
Boeing Capital interest expense |
(33) |
|
|
(35) |
|
|
(17) |
|
|
(17) |
|
Total costs and expenses |
(39,846) |
|
|
(35,966) |
|
|
(21,350) |
|
|
(18,670) |
|
|
6,846 |
|
|
6,544 |
|
|
3,193 |
|
|
3,375 |
|
Income from operating investments,
net |
129 |
|
|
120 |
|
|
50 |
|
|
61 |
|
General and administrative
expense |
(1,705) |
|
|
(1,795) |
|
|
(760) |
|
|
(918) |
|
Research and development expense,
net |
(1,569) |
|
|
(1,542) |
|
|
(800) |
|
|
(733) |
|
Gain on dispositions, net |
1 |
|
|
2 |
|
|
|
|
|
2 |
|
Earnings from operations |
3,702 |
|
|
3,329 |
|
|
1,683 |
|
|
1,787 |
|
Other income, net |
3 |
|
|
20 |
|
|
15 |
|
|
11 |
|
Interest and debt expense |
(136) |
|
|
(173) |
|
|
(75) |
|
|
(81) |
|
Earnings before income
taxes |
3,569 |
|
|
3,176 |
|
|
1,623 |
|
|
1,717 |
|
Income tax expense |
(1,123) |
|
|
(558) |
|
|
(513) |
|
|
(64) |
|
Net earnings |
|
$2,446 |
|
|
|
$2,618 |
|
|
|
$1,110 |
|
|
|
$1,653 |
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$3.50 |
|
|
|
$3.55 |
|
|
|
$1.61 |
|
|
|
$2.26 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$3.46 |
|
|
|
$3.50 |
|
|
|
$1.59 |
|
|
|
$2.24 |
|
|
|
|
|
|
|
|
|
Cash dividends paid per
share |
|
$1.82 |
|
|
|
$1.46 |
|
|
|
$0.91 |
|
|
|
$0.73 |
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
(millions) |
706.6 |
|
|
747.4 |
|
|
698.9 |
|
|
740.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Boeing Company
and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited) |
|
|
|
|
|
|
|
|
(Dollars in millions, except per share
data) |
June 30
2015 |
|
|
December 31
2014 |
|
Assets |
|
|
|
Cash and cash equivalents |
|
$9,157 |
|
|
|
$11,733 |
|
Short-term and other investments |
468 |
|
|
1,359 |
|
Accounts receivable, net |
7,927 |
|
|
7,729 |
|
Current portion of customer financing, net |
209 |
|
|
190 |
|
Deferred income taxes |
17 |
|
|
18 |
|
Inventories, net of advances and progress
billings |
49,028 |
|
|
46,756 |
|
Total current assets |
66,806 |
|
|
67,785 |
|
Customer financing, net |
3,175 |
|
|
3,371 |
|
Property, plant and equipment, net of accumulated
depreciation of $15,997 and $15,689 |
11,338 |
|
|
11,007 |
|
Goodwill |
5,126 |
|
|
5,119 |
|
Acquired intangible assets, net |
2,763 |
|
|
2,869 |
|
Deferred income taxes |
6,264 |
|
|
6,576 |
|
Investments |
1,256 |
|
|
1,154 |
|
Other assets, net of accumulated amortization of
$419 and $479 |
1,374 |
|
|
1,317 |
|
Total assets |
|
$98,102 |
|
|
|
$99,198 |
|
Liabilities and equity |
|
|
|
Accounts payable |
|
$11,531 |
|
|
|
$10,667 |
|
Accrued liabilities |
13,226 |
|
|
13,343 |
|
Advances and billings in excess of related
costs |
23,373 |
|
|
23,175 |
|
Deferred income taxes and income taxes
payable |
8,894 |
|
|
8,603 |
|
Short-term debt and current portion of long-term
debt |
112 |
|
|
929 |
|
Total current liabilities |
57,136 |
|
|
56,717 |
|
Accrued retiree health care |
6,777 |
|
|
6,802 |
|
Accrued pension plan liability, net |
17,537 |
|
|
17,182 |
|
Non-current income taxes payable |
389 |
|
|
358 |
|
Other long-term liabilities |
1,052 |
|
|
1,208 |
|
Long-term debt |
8,904 |
|
|
8,141 |
|
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 |
4,721 |
|
|
4,625 |
|
Treasury stock, at cost – 331,193,968 and
305,533,606 shares |
(27,463) |
|
|
(23,298) |
|
Retained earnings |
37,365 |
|
|
36,180 |
|
Accumulated other comprehensive loss |
(13,420) |
|
|
(13,903) |
|
Total shareholders' equity |
6,264 |
|
|
8,665 |
|
Noncontrolling interests |
43 |
|
|
125 |
|
Total equity |
6,307 |
|
|
8,790 |
|
Total liabilities and equity |
|
$98,102 |
|
|
|
$99,198 |
|
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited) |
|
|
|
|
|
|
|
|
|
Six months ended
June 30 |
(Dollars in millions) |
2015 |
|
|
2014 |
|
Cash flows – operating activities: |
|
|
|
Net earnings |
|
$2,446 |
|
|
|
$2,618 |
|
Adjustments to reconcile net earnings to net cash
provided by operating activities: |
|
|
|
Non-cash items – |
|
|
|
Share-based plans expense |
94 |
|
|
101 |
|
Depreciation and amortization |
912 |
|
|
900 |
|
Investment/asset impairment charges, net |
74 |
|
|
36 |
|
Customer financing valuation benefit |
(5) |
|
|
(26) |
|
Gain on dispositions, net |
(1) |
|
|
(2) |
|
Other charges and credits, net |
140 |
|
|
87 |
|
Excess tax benefits from share-based payment
arrangements |
(124) |
|
|
(97) |
|
Changes in assets and liabilities – |
|
|
|
Accounts receivable |
(313) |
|
|
(1,286) |
|
Inventories, net of advances and progress
billings |
(2,395) |
|
|
(3,402) |
|
Accounts payable |
888 |
|
|
1,783 |
|
Accrued liabilities |
(177) |
|
|
(913) |
|
Advances and billings in excess of related
costs |
195 |
|
|
1,217 |
|
Income taxes receivable, payable and deferred |
482 |
|
|
394 |
|
Other long-term liabilities |
(17) |
|
|
(88) |
|
Pension and other postretirement plans |
1,244 |
|
|
1,118 |
|
Customer financing, net |
19 |
|
|
466 |
|
Other |
(77) |
|
|
15 |
|
Net cash provided by operating
activities |
3,385 |
|
|
2,921 |
|
Cash flows – investing activities: |
|
|
|
Property, plant and equipment additions |
(1,266) |
|
|
(946) |
|
Property, plant and equipment reductions |
20 |
|
|
17 |
|
Acquisitions, net of cash acquired |
(23) |
|
|
(163) |
|
Contributions to investments |
(1,205) |
|
|
(5,657) |
|
Proceeds from investments |
2,040 |
|
|
8,030 |
|
Other |
22 |
|
|
|
|
Net cash (used)/provided by investing
activities |
(412) |
|
|
1,281 |
|
Cash flows – financing activities: |
|
|
|
New borrowings |
761 |
|
|
85 |
|
Debt repayments |
(846) |
|
|
(854) |
|
Repayments of distribution rights and other asset
financing |
|
|
|
(184) |
|
Stock options exercised |
276 |
|
|
261 |
|
Excess tax benefits from share-based payment
arrangements |
124 |
|
|
97 |
|
Employee taxes on certain share-based payment
arrangements |
(90) |
|
|
(88) |
|
Common shares repurchased |
(4,501) |
|
|
(3,998) |
|
Dividends paid |
(1,264) |
|
|
(1,071) |
|
Other |
|
|
|
(12) |
|
Net cash used by financing activities |
(5,540) |
|
|
(5,764) |
|
Effect of exchange rate changes on cash and cash
equivalents |
(9) |
|
|
7 |
|
Net decrease in cash and cash
equivalents |
(2,576) |
|
|
(1,555) |
|
Cash and cash equivalents at beginning of
year |
11,733 |
|
|
9,088 |
|
Cash and cash equivalents at end of
period |
|
$9,157 |
|
|
|
$7,533 |
|
|
|
|
|
|
|
|
|
|
|
|
The Boeing Company
and Subsidiaries
Summary of Business Segment Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
June 30 |
|
Three months
ended
June 30 |
(Dollars in millions) |
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Revenues: |
|
|
|
|
|
|
|
Commercial Airplanes |
|
$32,258 |
|
|
|
$27,041 |
|
|
|
$16,877 |
|
|
|
$14,304 |
|
Defense, Space & Security: |
|
|
|
|
|
|
|
Boeing Military Aircraft |
6,232 |
|
|
6,975 |
|
|
3,488 |
|
|
3,520 |
|
Network & Space Systems |
3,670 |
|
|
3,796 |
|
|
1,938 |
|
|
1,920 |
|
Global Services & Support |
4,351 |
|
|
4,609 |
|
|
2,118 |
|
|
2,307 |
|
Total Defense, Space & Security |
14,253 |
|
|
15,380 |
|
|
7,544 |
|
|
7,747 |
|
Boeing Capital |
201 |
|
|
172 |
|
|
115 |
|
|
90 |
|
Unallocated items, eliminations and other |
(20) |
|
|
(83) |
|
|
7 |
|
|
(96) |
|
Total revenues |
|
$46,692 |
|
|
|
$42,510 |
|
|
|
$24,543 |
|
|
|
$22,045 |
|
Earnings from operations: |
|
|
|
|
|
|
|
Commercial Airplanes |
|
$2,823 |
|
|
|
$3,052 |
|
|
|
$1,206 |
|
|
|
$1,550 |
|
Defense, Space & Security: |
|
|
|
|
|
|
|
Boeing Military Aircraft |
384 |
|
|
496 |
|
|
123 |
|
|
164 |
|
Network & Space Systems |
318 |
|
|
318 |
|
|
151 |
|
|
150 |
|
Global Services & Support |
587 |
|
|
546 |
|
|
272 |
|
|
268 |
|
Total Defense, Space & Security |
1,289 |
|
|
1,360 |
|
|
546 |
|
|
582 |
|
Boeing Capital |
31 |
|
|
77 |
|
|
11 |
|
|
33 |
|
Unallocated items, eliminations and other |
(441) |
|
|
(1,160) |
|
|
(80) |
|
|
(378) |
|
Earnings from operations |
3,702 |
|
|
3,329 |
|
|
1,683 |
|
|
1,787 |
|
Other income, net |
3 |
|
|
20 |
|
|
15 |
|
|
11 |
|
Interest and debt expense |
(136) |
|
|
(173) |
|
|
(75) |
|
|
(81) |
|
Earnings before income taxes |
3,569 |
|
|
3,176 |
|
|
1,623 |
|
|
1,717 |
|
Income tax expense |
(1,123) |
|
|
(558) |
|
|
(513) |
|
|
(64) |
|
Net earnings |
|
$2,446 |
|
|
|
$2,618 |
|
|
|
$1,110 |
|
|
|
$1,653 |
|
|
|
|
|
|
|
|
|
Research and development expense, net: |
|
|
|
|
|
|
|
Commercial Airplanes |
|
$1,097 |
|
|
|
$970 |
|
|
|
$554 |
|
|
|
$441 |
|
Defense, Space & Security |
474 |
|
|
577 |
|
|
250 |
|
|
297 |
|
Other |
(2) |
|
|
(5) |
|
|
(4) |
|
|
(5) |
|
Total research and development expense,
net |
|
$1,569 |
|
|
|
$1,542 |
|
|
|
$800 |
|
|
|
$733 |
|
|
|
|
|
|
|
|
|
Unallocated items, eliminations and other: |
|
|
|
|
|
|
|
Share-based plans |
|
($37) |
|
|
|
($44) |
|
|
|
($16) |
|
|
|
($20) |
|
Deferred compensation |
(48) |
|
|
(19) |
|
|
10 |
|
|
(26) |
|
Amortization of previously capitalized
interest |
(49) |
|
|
(36) |
|
|
(20) |
|
|
(18) |
|
Eliminations and other unallocated items |
(164) |
|
|
(304) |
|
|
(24) |
|
|
(110) |
|
Sub-total (included in core operating
earnings) |
(298) |
|
|
(403) |
|
|
(50) |
|
|
(174) |
|
Pension |
(209) |
|
|
(804) |
|
|
(57) |
|
|
(228) |
|
Postretirement |
66 |
|
|
47 |
|
|
27 |
|
|
24 |
|
Total unallocated items, eliminations and
other |
|
($441) |
|
|
|
($1,160) |
|
|
|
($80) |
|
|
|
($378) |
|
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deliveries |
|
Six months
ended
June 30 |
|
Three months ended
June 30 |
|
Commercial Airplanes |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
737 |
|
249 |
|
|
239 |
|
|
128 |
|
|
124 |
|
|
747 |
|
9 |
|
|
6 |
|
|
5 |
|
|
2 |
|
|
767 |
|
9 |
|
|
1 |
|
|
4 |
|
|
1 |
|
|
777 |
|
50 |
|
|
48 |
|
|
26 |
|
|
24 |
|
|
787 |
|
64 |
|
|
48 |
|
|
34 |
|
|
30 |
|
|
Total |
|
381 |
|
|
342 |
|
|
197 |
|
|
181 |
|
|
Note: Deliveries under operating
lease are identified by parentheses. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense, Space & Security |
|
|
|
|
|
|
|
|
|
Boeing Military Aircraft |
|
|
|
|
|
|
|
|
|
AH-64 Apache (New) |
|
12 |
|
|
19 |
|
|
6 |
|
|
9 |
|
|
AH-64 Apache (Remanufactured) |
|
23 |
|
|
25 |
|
|
13 |
|
|
11 |
|
|
C-17 Globemaster III |
|
3 |
|
|
5 |
|
|
2 |
|
|
2 |
|
|
CH-47 Chinook (New) |
|
21 |
|
|
32 |
|
|
15 |
|
|
15 |
|
|
CH-47 Chinook (Renewed) |
|
5 |
|
|
|
|
|
1 |
|
|
|
|
F-15 Models |
|
5 |
|
|
8 |
|
|
4 |
|
|
4 |
|
|
F/A-18 Models |
|
20 |
|
|
23 |
|
|
9 |
|
|
12 |
|
|
P-8 Models |
|
6 |
|
|
2 |
|
|
4 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
Global Services & Support |
|
|
|
|
|
|
|
|
|
AEW&C |
|
|
|
|
2 |
|
|
|
|
|
1 |
|
|
C-40A |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network & Space Systems |
|
|
|
|
|
|
|
|
|
Commercial and Civil Satellites |
|
1 |
|
|
2 |
|
|
1 |
|
|
2 |
|
|
Military Satellites |
|
1 |
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual backlog (Dollars in
billions) |
|
June 30
2015 |
|
|
March 31
2015 |
|
|
December 31
2014 |
|
|
Commercial Airplanes |
|
|
$430.8 |
|
|
|
$435.0 |
|
|
|
$440.1 |
|
|
Defense, Space & Security: |
|
|
|
|
|
|
|
Boeing Military Aircraft |
|
22.8 |
|
|
21.3 |
|
|
21.1 |
|
|
Network & Space Systems |
|
9.1 |
|
|
9.4 |
|
|
8.9 |
|
|
Global Services & Support |
|
16.5 |
|
|
16.9 |
|
|
16.9 |
|
|
Total Defense, Space &
Security |
|
48.4 |
|
|
47.6 |
|
|
46.9 |
|
|
Total contractual backlog |
|
|
$479.2 |
|
|
|
$482.6 |
|
|
|
$487.0 |
|
|
Unobligated backlog |
|
|
$9.6 |
|
|
|
$12.5 |
|
|
|
$15.3 |
|
|
Total backlog |
|
|
$488.8 |
|
|
|
$495.1 |
|
|
|
$502.3 |
|
|
Workforce |
|
163,500 |
|
|
163,100 |
|
|
165,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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The Boeing Company
and Subsidiaries |
Reconciliation of
Non-GAAP Measures |
Core Operating
Earnings, Core Operating Margin and Core Earnings Per
Share |
(Unaudited) |
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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. |
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Second
Quarter |
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First Half |
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Guidance |
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2015 |
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2014 |
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2015 |
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2014 |
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2015 |
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Revenues |
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$24,543 |
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$22,045 |
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$46,692 |
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$42,510 |
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GAAP Earnings From Operations |
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$1,683 |
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$1,787 |
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$3,702 |
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$3,329 |
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GAAP Operating Margin |
6.9% |
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8.1% |
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7.9% |
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7.8% |
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Unallocated Pension/Postretirement
Expense |
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$30 |
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$204 |
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$143 |
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$757 |
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$110 |
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Core Operating Earnings (non-GAAP) |
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$1,713 |
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$1,991 |
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$3,845 |
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$4,086 |
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Core Operating Margin (non-GAAP) |
7.0 |
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9.0% |
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8.2% |
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9.6% |
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Increase/(Decrease) in GAAP Earnings From
Operations |
(6%) |
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11% |
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Increase/(Decrease) in Core Operating Earnings
(non-GAAP) |
(14%) |
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(6%) |
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GAAP Diluted Earnings Per Share |
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$1.59 |
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$2.24 |
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$3.46 |
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$3.50 |
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$7.60 - $7.80 |
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Unallocated Pension/Postretirement
Expense1 |
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$0.03 |
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$0.18 |
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$0.13 |
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$0.66 |
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$0.10 |
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Core Earnings Per Share (non-GAAP) |
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$1.62 |
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$2.42 |
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$3.59 |
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$4.16 |
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$7.70 - $7.90 |
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Weighted Average Diluted Shares
(millions) |
698.9 |
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740.1 |
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706.6 |
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747.4 |
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695
- 700 |
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Increase/(Decrease) in GAAP Earnings Per
Share |
(29%) |
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(1%) |
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Increase/(Decrease) in Core Earnings Per Share
(non-GAAP) |
(33%) |
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(14%) |
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1 Earnings per
share impact is presented net of the federal statutory tax rate of
35.0 percent. |
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