Boeing Reports
Second-Quarter Results
CHICAGO, July 24, 2019 /PRNewswire/ --
- Continue to engage global regulators and customers on safe
return to service of the 737 MAX
- Recorded charge and increased costs related to the 737 MAX,
as previously announced
- Revenue of $15.8 billion
reflecting 737 MAX impacts and higher defense and services
volume
- Loss of ($5.21) per share
(GAAP) and core (non-GAAP)* loss of ($5.82) per share
- Operating cash flow of ($0.6) billion; paid $1.2 billion of dividends
- Total backlog of $474 billion,
including more than 5,500 commercial airplanes
- Cash and marketable securities of $9.6 billion provide strong liquidity
- Previously issued 2019 guidance does not reflect 737 MAX
impacts; new guidance to be issued at a future date
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Table 1. Summary Financial Results |
Second
Quarter |
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|
First Half |
|
|
(Dollars in Millions, except per share
data) |
2019 |
|
2018 |
|
Change |
|
2019 |
|
2018 |
|
Change |
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Revenues |
$15,751 |
|
$24,258 |
|
(35)% |
|
$38,668 |
|
$47,640 |
|
(19)% |
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GAAP |
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|
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(Loss)/Earnings From Operations |
($3,380) |
|
$2,710 |
|
NM |
|
($1,030) |
|
$5,585 |
|
NM |
Operating Margin |
(21.5)% |
|
11.2% |
|
NM |
|
(2.7)% |
|
11.7% |
|
NM |
Net (Loss)/Earnings |
($2,942) |
|
$2,196 |
|
NM |
|
($793) |
|
$4,673 |
|
NM |
(Loss)/Earnings Per Share |
($5.21) |
|
$3.73 |
|
NM |
|
($1.40) |
|
$7.88 |
|
NM |
Operating Cash Flow |
($590) |
|
$4,680 |
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NM |
|
$2,198 |
|
$7,816 |
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NM |
Non-GAAP* |
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Core Operating (Loss)/Earnings |
($3,745) |
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$2,393 |
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NM |
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($1,759) |
|
$4,903 |
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NM |
Core Operating Margin |
(23.8)% |
|
9.9% |
|
NM |
|
(4.5)% |
|
10.3% |
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NM |
Core (Loss)/Earnings Per Share |
($5.82) |
|
$3.33 |
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NM |
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($2.60) |
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$6.97 |
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NM |
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*Non-GAAP measure; 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 of
$15.8 billion, GAAP loss per
share of ($5.21) and core loss per
share (non-GAAP)* of ($5.82),
reflecting the previously announced 737 MAX charge (which reduced
revenue by $5.6 billion and earnings
by $8.74 per share) as well as lower
737 deliveries partially offset by higher defense and services
volume (Table 1). Boeing recorded operating cash flow of
($0.6) billion and paid $1.2 billion of dividends.
The previously issued 2019 financial guidance does not reflect
737 MAX impacts. Due to the uncertainty of the timing and
conditions surrounding return to service of the 737 MAX fleet, new
guidance will be issued at a future date. Boeing is working very
closely with the FAA on the process they have laid out to certify
the 737 MAX software update and safely return the MAX to service.
Disciplined development and testing is underway and we will submit
the final software package to the FAA once we have satisfied all of
their certification requirements. Regulatory authorities will
determine the process for certifying the MAX software and training
updates as well as the timing for lifting the grounding order.
"This is a defining moment for Boeing and we remain focused on
our enduring values of safety, quality, and integrity in all that
we do, as we work to safely return the 737 MAX to service," said
Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. "During these challenging
times, teams across our enterprise continue to perform at a high
level while delivering on commitments and capturing new
opportunities driven by strong, long-term fundamentals."
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Table 2. Cash Flow |
Second
Quarter |
|
First Half |
(Millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Operating Cash Flow |
($590) |
|
$4,680 |
|
$2,198 |
|
$7,816 |
Less Additions to Property, Plant &
Equipment |
($421) |
|
($376) |
|
($922) |
|
($770) |
Free Cash Flow* |
($1,011) |
|
$4,304 |
|
$1,276 |
|
$7,046 |
|
*Non-GAAP measure; complete
definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP
Measures Disclosures." |
Operating cash flow was ($0.6)
billion in the quarter, primarily reflecting lower 737
deliveries and production rate as well as timing of receipts and
expenditures (Table 2). During the quarter, the company paid
$1.2 billion of dividends, reflecting
a 20 percent increase in dividends per share compared to the same
period of the prior year.
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Table 3. Cash, Marketable Securities and Debt
Balances |
Quarter-End |
(Billions) |
Q2 19 |
|
Q1 19 |
Cash |
$9.2 |
|
$6.8 |
Marketable Securities1 |
$0.4 |
|
$0.9 |
Total |
$9.6 |
|
$7.7 |
Debt Balances: |
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The Boeing Company, net of intercompany loans to
BCC |
$17.3 |
|
$12.6 |
Boeing Capital, including intercompany loans |
$1.9 |
|
$2.1 |
Total Consolidated Debt |
$19.2 |
|
$14.7 |
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1 Marketable 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, compared to
$7.7 billion at the beginning of the
quarter (Table 3). Debt was $19.2
billion, up from $14.7 billion
at the beginning of the quarter primarily due to the issuance of
new debt.
Total company backlog at quarter-end remained healthy at
$474 billion and included net orders
of $9 billion.
Segment Results
Commercial Airplanes
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Table 4. Commercial Airplanes |
Second
Quarter |
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First Half |
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|
(Dollars in Millions) |
2019 |
|
2018 |
|
Change |
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2019 |
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2018 |
|
Change |
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Commercial Airplanes Deliveries |
90 |
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194 |
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(54)% |
|
239 |
|
378 |
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(37)% |
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Revenues |
$4,722 |
|
13,952 |
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(66)% |
|
$16,544 |
|
$26,897 |
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(38)% |
(Loss)/Earnings from Operations |
($4,946) |
|
$1,785 |
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NM |
|
($3,773) |
|
$3,197 |
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NM |
Operating Margin |
(104.7)% |
|
12.8% |
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NM |
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(22.8)% |
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11.9% |
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NM |
Commercial Airplanes second-quarter revenue was $4.7 billion reflecting the previously announced
737 MAX charge and lower 737 deliveries partially offset by
favorable mix (Table 4). Second-quarter operating margin was
(104.7) percent reflecting the previously announced 737 MAX charge
and lower 737 deliveries partially offset by a higher margin on the
787 program.
During the quarter, Commercial Airplanes delivered 90 airplanes,
including 42 787s, and captured orders for two 777 freighters for
DHL and six 767 freighters for FedEx. Highlights from the Paris Air
Show included a letter of intent from IAG for 200 737 MAX airplanes
as well as several wide body commitments. The 777X program is
progressing well through pre-flight testing. While the company
is still targeting late 2020 for first delivery of the 777X, there
is significant risk to this schedule given engine challenges, which
are delaying first flight until early 2020.
Commercial Airplanes backlog remains healthy with more than
5,500 airplanes valued at $390
billion.
Defense, Space & Security
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Table 5. Defense, Space & Security |
Second
Quarter |
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|
First Half |
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|
(Dollars in Millions) |
2019 |
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2018 |
|
Change |
|
2019 |
|
2018 |
|
Change |
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Revenues |
$6,612 |
|
$6,100 |
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8% |
|
$13,223 |
|
$12,581 |
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5% |
Earnings from Operations |
$975 |
|
$376 |
|
159% |
|
$1,822 |
|
$1,133 |
|
61% |
Operating Margin |
14.7% |
|
6.2% |
|
8.5 Pts |
|
13.8% |
|
9.0% |
|
4.8 Pts |
Defense, Space & Security second-quarter revenue increased
to $6.6 billion primarily driven by
higher volume across derivative aircraft, satellites, and weapons
(Table 5). Second-quarter operating margin increased to 14.7
percent primarily due to a gain on sale of property and lower cost
growth on the KC-46 Tanker program compared to the second quarter
of 2018.
During the quarter, Defense, Space & Security received
contracts for MH-47G Block II Chinook for the U.S. Army Special
Operations, F/A-18 service life modification for the U.S. Navy,
Joint Direct Attack Munition for the U.S. Air Force, and Wideband
Global Satellite Communication for the U.S. Air Force. Significant
milestones achieved during the quarter included completion of the
first T-X Trainer flight test on contract with the U.S. Air Force
and the final parachute test for the Commercial Crew
spacecraft.
Backlog at Defense, Space & Security was $64 billion, of which 31 percent represents
orders from customers outside the U.S.
Global Services
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Table 6. Global Services |
Second
Quarter |
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|
First Half |
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(Dollars in Millions) |
2019 |
|
2018 |
|
Change |
|
2019 |
|
2018 |
|
Change |
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Revenues |
$4,543 |
|
$4,097 |
|
11% |
|
$9,162 |
|
$8,047 |
|
14% |
Earnings from Operations |
$687 |
|
$604 |
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14% |
|
$1,340 |
|
$1,251 |
|
7% |
Operating Margin |
15.1% |
|
14.7% |
|
0.4 Pts |
|
14.6% |
|
15.5% |
|
(0.9) Pts |
Global Services second-quarter revenue increased to $4.5 billion, primarily driven by the acquisition
of Boeing Distribution Services, Inc. (formerly KLX) and higher
international government services volume (Table 6). Second-quarter
operating margin was relatively stable at 15.1 percent.
During the quarter, Global Services was awarded Performance
Based Logistics contracts for AH-64 Apache for the U.S. Army and
KC-767A Tanker for the Italian Air Force. At the Paris Air Show,
Global Services signed commitments with ASL Aviation Holdings and
GECAS for up to 45 737-800 converted freighters and announced
digital solution agreements with Delta Air Lines and JetBlue
Airways.
Additional Financial Information
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Table 7. Additional Financial
Information |
Second
Quarter |
|
First Half |
(Dollars in Millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues |
|
|
|
|
|
|
|
Boeing Capital |
$75 |
|
$72 |
|
$141 |
|
$137 |
Unallocated items, eliminations and other |
($201) |
|
$37 |
|
($402) |
|
($22) |
Earnings from Operations |
|
|
|
|
|
|
|
Boeing Capital |
$37 |
|
$24 |
|
$57 |
|
$44 |
FAS/CAS service cost adjustment |
$365 |
|
$317 |
|
$729 |
|
$682 |
Other unallocated items and eliminations |
($498) |
|
($396) |
|
($1,205) |
|
($722) |
Other income, net |
$107 |
|
($15) |
|
$213 |
|
$51 |
Interest and debt expense |
($154) |
|
($109) |
|
($277) |
|
($211) |
Effective tax rate |
14.2% |
|
15.1% |
|
27.5% |
|
13.9% |
At quarter-end, Boeing Capital's net portfolio balance was
$2.3 billion. Revenue in other
unallocated items and eliminations decreased primarily due to
reserves related to cost accounting litigation. The change in
earnings from other unallocated items and eliminations is primarily
due to increased enterprise research and development investment.
The effective tax rate for the second quarter decreased from the
same period in the prior year primarily due to lower pre-tax
earnings in the current year.
Outlook
The previously issued 2019 financial guidance does not reflect
737 MAX impacts. Due to the uncertainty of the timing and
conditions surrounding return to service of the 737 MAX fleet, new
guidance will be issued at a future date.
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information
determined under Generally Accepted Accounting Principles in
the United States of America
(GAAP) with certain non-GAAP financial information. The non-GAAP
financial information presented excludes certain significant items
that may not be indicative of, or are unrelated to, results from
our ongoing business operations. We believe that these non-GAAP
measures provide investors with additional insight into the
company's ongoing business performance. These non-GAAP measures
should not be considered in isolation or as a substitute for the
related GAAP measures, and other companies may define such measures
differently. We encourage investors to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure. The following definitions are
provided:
Core Operating (Loss)/Earnings, Core Operating Margin and Core
(Loss)/Earnings Per Share
Core operating (loss)/earnings is defined as GAAP
(loss)/earnings from operations excluding the FAS/CAS
service cost adjustment. The FAS/CAS service cost
adjustment represents the difference between the FAS pension
and postretirement service costs calculated under GAAP and costs
allocated to the business segments. Core operating margin is
defined as core operating (loss)/earnings expressed as a percentage
of revenue. Core (loss)/earnings per share is defined as GAAP
diluted (loss)/earnings per share excluding the net
(loss)/earnings per share impact of the FAS/CAS service cost
adjustment and Non-operating pension and postretirement
expenses. Non-operating pension and postretirement expenses
represent the components of net periodic benefit costs other than
service cost. Pension costs, comprising service and prior service
costs computed in accordance with GAAP are allocated to Commercial
Airplanes and BGS businesses supporting commercial customers.
Pension costs allocated to BDS and BGS businesses supporting
government customers are computed in accordance with U.S.
Government Cost Accounting Standards (CAS), which employ different
actuarial assumptions and accounting conventions than GAAP. CAS
costs are allocable to government contracts. Other postretirement
benefit costs are allocated to all business segments based on CAS,
which is generally based on benefits paid. Management uses core
operating (loss)/earnings, core operating margin and core
(loss)/earnings per share for purposes of evaluating and
forecasting underlying business performance. Management believes
these core (loss)/earnings measures provide investors additional
insights into operational performance as they exclude non-service
pension and post-retirement costs, which primarily represent costs
driven by market factors and costs not allocable to government
contracts. A reconciliation between the GAAP and non-GAAP measures
is provided on page 13-14.
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 of free cash flow to GAAP operating cash
flow.
Caution Concerning
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Words such as "may," "should," "expects," "intends,"
"projects," "plans," "believes," "estimates," "targets,"
"anticipates," and similar expressions generally identify these
forward-looking statements. Examples of forward-looking statements
include statements relating to our future financial condition and
operating results, as well as any other statement that does not
directly relate to any historical or current fact. Forward-looking
statements are based on expectations and assumptions that we
believe to be reasonable when made, but that may not prove to be
accurate. These statements are not guarantees and are subject to
risks, uncertainties, and changes in circumstances that are
difficult to predict. Many factors could cause actual results to
differ materially and adversely from these forward-looking
statements. Among these factors are risks related to: (1) the
timing and conditions surrounding the return to service of the 737
MAX fleet; (2) general conditions in the economy and our industry,
including those due to regulatory changes; (3) our reliance on our
commercial airline customers; (4) the overall health of our
aircraft production system, planned commercial aircraft production
rate changes, our commercial development and derivative aircraft
programs, and our aircraft being subject to stringent performance
and reliability standards; (5) changing budget and appropriation
levels and acquisition priorities of the U.S. government; (6) our
dependence on U.S. government contracts; (7) our reliance on
fixed-price contracts; (8) our reliance on cost-type contracts; (9)
uncertainties concerning contracts that include in-orbit incentive
payments; (10) our dependence on our subcontractors and suppliers,
as well as the availability of raw materials; (11) changes in
accounting estimates; (12) changes in the competitive landscape in
our markets; (13) our non-U.S. operations, including sales to
non-U.S. customers; (14) threats to the security of our or our
customers' information; (15) potential adverse developments in new
or pending litigation and/or government investigations; (16)
customer and aircraft concentration in our customer financing
portfolio; (17) changes in our ability to obtain debt on
commercially reasonable terms and at competitive rates; (18)
realizing the anticipated benefits of mergers, acquisitions, joint
ventures/strategic alliances or divestitures; (19) the adequacy of
our insurance coverage to cover significant risk exposures; (20)
potential business disruptions, including those related to physical
security threats, information technology or cyber-attacks,
epidemics, sanctions or natural disasters; (21) work stoppages or
other labor disruptions; (22) substantial pension and other
postretirement benefit obligations; and (23) potential
environmental liabilities.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. Any
forward-looking statement speaks only as of the date on which it is
made, and we assume no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by law.
Contact: |
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Investor Relations: |
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Maurita Sutedja or Keely Moos (312) 544-2140 |
Communications: |
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Chaz Bickers (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) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Sales of products |
$33,319 |
|
$42,385 |
|
$13,094 |
|
$21,565 |
Sales of services |
5,349 |
|
5,255 |
|
2,657 |
|
2,693 |
Total revenues |
38,668 |
|
47,640 |
|
15,751 |
|
24,258 |
|
|
|
|
|
|
|
|
Cost of products |
(31,910) |
|
(34,252) |
|
(15,672) |
|
(17,436) |
Cost of services |
(4,511) |
|
(4,075) |
|
(2,122) |
|
(2,083) |
Boeing Capital interest expense |
(34) |
|
(33) |
|
(16) |
|
(17) |
Total costs and expenses |
(36,455) |
|
(38,360) |
|
(17,810) |
|
(19,536) |
|
2,213 |
|
9,280 |
|
(2,059) |
|
4,722 |
Income/(loss) from operating investments, net |
5 |
|
80 |
|
(15) |
|
6 |
General and administrative expense |
(1,856) |
|
(2,191) |
|
(672) |
|
(1,194) |
Research and development expense, net |
(1,692) |
|
(1,591) |
|
(826) |
|
(827) |
Gain on dispositions, net |
300 |
|
7 |
|
192 |
|
3 |
(Loss)/earnings from operations |
(1,030) |
|
5,585 |
|
(3,380) |
|
2,710 |
Other income/(loss), net |
213 |
|
51 |
|
107 |
|
(15) |
Interest and debt expense |
(277) |
|
(211) |
|
(154) |
|
(109) |
(Loss)/earnings before income taxes |
(1,094) |
|
5,425 |
|
(3,427) |
|
2,586 |
Income tax benefit/(expense) |
301 |
|
(752) |
|
485 |
|
(390) |
Net (loss)/earnings |
($793) |
|
$4,673 |
|
($2,942) |
|
$2,196 |
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share |
($1.40) |
|
$7.97 |
|
($5.21) |
|
$3.77 |
|
|
|
|
|
|
|
|
Diluted (loss)/earnings per share |
($1.40) |
|
$7.88 |
|
($5.21) |
|
$3.73 |
|
|
|
|
|
|
|
|
Weighted average diluted shares
(millions) |
566.6 |
|
592.9 |
|
565.3 |
|
588.7 |
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Financial Position |
(Unaudited) |
|
(Dollars in millions, except per share
data) |
June 30
2019 |
|
December 31
2018 |
Assets |
|
|
|
Cash and cash equivalents |
$9,167 |
|
$7,637 |
Short-term and other investments |
439 |
|
927 |
Accounts receivable, net |
3,291 |
|
3,879 |
Unbilled receivables, net |
10,247 |
|
10,025 |
Current portion of customer financing, net |
171 |
|
460 |
Inventories |
68,492 |
|
62,567 |
Other current assets |
3,304 |
|
2,335 |
Total current assets |
95,111 |
|
87,830 |
Customer financing, net |
2,139 |
|
2,418 |
Property, plant and equipment, net of accumulated
depreciation of $18,855 and $18,568 |
12,601 |
|
12,645 |
Goodwill |
8,051 |
|
7,840 |
Acquired intangible assets, net |
3,761 |
|
3,429 |
Deferred income taxes |
357 |
|
284 |
Investments |
1,142 |
|
1,087 |
Other assets, net of accumulated amortization of
$523 and $503 |
3,099 |
|
1,826 |
Total assets |
$126,261 |
|
$117,359 |
Liabilities and equity |
|
|
|
Accounts payable |
$15,267 |
|
$12,916 |
Accrued liabilities |
20,042 |
|
14,808 |
Advances and progress billings |
52,523 |
|
50,676 |
Short-term debt and current portion of long-term
debt |
4,357 |
|
3,190 |
Total current liabilities |
92,189 |
|
81,590 |
Deferred income taxes |
|
|
1,736 |
Accrued retiree health care |
4,486 |
|
4,584 |
Accrued pension plan liability, net |
14,831 |
|
15,323 |
Other long-term liabilities |
4,839 |
|
3,059 |
Long-term debt |
14,859 |
|
10,657 |
Shareholders' equity: |
|
|
|
Common stock, par value $5.00 – 1,200,000,000
shares authorized; 1,012,261,159 shares issued |
5,061 |
|
5,061 |
Additional paid-in capital |
6,638 |
|
6,768 |
Treasury stock, at cost - 449,558,553 and
444,619,970 shares |
(54,932) |
|
(52,348) |
Retained earnings |
52,819 |
|
55,941 |
Accumulated other comprehensive loss |
(14,908) |
|
(15,083) |
Total shareholders' equity |
(5,322) |
|
339 |
Noncontrolling interests |
379 |
|
71 |
Total equity |
(4,943) |
|
410 |
Total liabilities and equity |
$126,261 |
|
$117,359 |
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Cash Flows |
(Unaudited) |
|
|
Six months ended
June 30 |
(Dollars in millions) |
2019 |
|
2018 |
Cash flows – operating
activities: |
|
|
|
Net (loss)/earnings |
($793) |
|
$4,673 |
Adjustments to reconcile net earnings to net cash
provided by operating activities: |
|
|
|
Non-cash items – |
|
|
|
Share-based plans expense |
104 |
|
98 |
Depreciation and amortization |
1,067 |
|
1,008 |
Investment/asset impairment charges, net |
70 |
|
44 |
Customer financing valuation adjustments |
249 |
|
(2) |
Gain on dispositions, net |
(300) |
|
(7) |
Other charges and credits, net |
145 |
|
112 |
Changes in assets and liabilities – |
|
|
|
Accounts receivable |
588 |
|
62 |
Unbilled receivables |
(222) |
|
(1,675) |
Advances and progress billings |
1,842 |
|
2,931 |
Inventories |
(5,233) |
|
408 |
Other current assets |
(887) |
|
2 |
Accounts payable |
2,002 |
|
682 |
Accrued liabilities |
4,959 |
|
(922) |
Income taxes receivable, payable and deferred |
(921) |
|
269 |
Other long-term liabilities |
(509) |
|
(65) |
Pension and other postretirement plans |
(390) |
|
(57) |
Customer financing, net |
347 |
|
(97) |
Other |
80 |
|
352 |
Net cash provided by operating
activities |
2,198 |
|
7,816 |
Cash flows – investing activities: |
|
|
|
Property, plant and equipment additions |
(922) |
|
(770) |
Property, plant and equipment reductions |
331 |
|
41 |
Acquisitions, net of cash acquired |
(492) |
|
|
Contributions to investments |
(496) |
|
(1,537) |
Proceeds from investments |
758 |
|
1,028 |
Purchase of distribution rights |
(20) |
|
(56) |
Other |
(12) |
|
(1) |
Net cash used by investing activities |
(853) |
|
(1,295) |
Cash flows – financing activities: |
|
|
|
New borrowings |
11,670 |
|
3,648 |
Debt repayments |
(6,422) |
|
(2,708) |
Contributions from noncontrolling interests |
7 |
|
20 |
Stock options exercised |
47 |
|
61 |
Employee taxes on certain share-based payment
arrangements |
(238) |
|
(236) |
Common shares repurchased |
(2,651) |
|
(5,965) |
Dividends paid |
(2,317) |
|
(1,997) |
Net cash provided/(used) by financing
activities |
96 |
|
(7,177) |
Effect of exchange rate changes on cash and cash
equivalents, including restricted |
(2) |
|
(36) |
Net increase/(decrease) in cash & cash
equivalents, including restricted |
1,439 |
|
(692) |
Cash & cash equivalents, including restricted,
at beginning of year |
7,813 |
|
8,887 |
Cash & cash equivalents, including
restricted, at end of period |
9,252 |
|
8,195 |
Less restricted cash & cash equivalents,
included in Investments |
85 |
|
74 |
Cash and cash equivalents at end of
period |
$9,167 |
|
$8,121 |
The Boeing Company and
Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2019, all revenues and costs
associated with military derivative aircraft production are
reported in the Defense, Space & Security segment. Revenues and
costs associated with military derivative aircraft production were
previously reported in the Commercial Airplanes and Defense, Space
& Security segments. Business segment data for 2018 reflects
the realignment for military derivative aircraft as well as the
realignment of certain programs from Defense, Space & Security
to Global Services.
|
Six months ended
June 30 |
|
Three months
ended
June 30 |
(Dollars in millions) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues: |
|
|
|
|
|
|
|
Commercial Airplanes |
$16,544 |
|
$26,897 |
|
$4,722 |
|
$13,952 |
Defense, Space & Security |
13,223 |
|
12,581 |
|
6,612 |
|
6,100 |
Global Services |
9,162 |
|
8,047 |
|
4,543 |
|
4,097 |
Boeing Capital |
141 |
|
137 |
|
75 |
|
72 |
Unallocated items, eliminations and other |
(402) |
|
(22) |
|
(201) |
|
37 |
Total revenues |
$38,668 |
|
$47,640 |
|
$15,751 |
|
$24,258 |
(Loss)/earnings from operations: |
|
|
|
|
|
|
|
Commercial Airplanes |
($3,773) |
|
$3,197 |
|
($4,946) |
|
$1,785 |
Defense, Space & Security |
1,822 |
|
1,133 |
|
975 |
|
376 |
Global Services |
1,340 |
|
1,251 |
|
687 |
|
604 |
Boeing Capital |
57 |
|
44 |
|
37 |
|
24 |
Segment operating (loss)/profit |
(554) |
|
5,625 |
|
(3,247) |
|
2,789 |
Unallocated items, eliminations and other |
(1,205) |
|
(722) |
|
(498) |
|
(396) |
FAS/CAS service cost adjustment |
729 |
|
682 |
|
365 |
|
317 |
(Loss)/earnings from operations |
(1,030) |
|
5,585 |
|
(3,380) |
|
2,710 |
Other income/(loss), net |
213 |
|
51 |
|
107 |
|
(15) |
Interest and debt expense |
(277) |
|
(211) |
|
(154) |
|
(109) |
(Loss)/earnings before income taxes |
(1,094) |
|
5,425 |
|
(3,427) |
|
2,586 |
Income tax benefit/(expense) |
301 |
|
(752) |
|
485 |
|
(390) |
Net (loss)/earnings |
($793) |
|
$4,673 |
|
($2,942) |
|
$2,196 |
|
|
|
|
|
|
|
|
Research and development expense, net: |
|
|
|
|
|
|
|
Commercial Airplanes |
$1,062 |
|
$1,099 |
|
$498 |
|
$550 |
Defense, Space & Security |
384 |
|
402 |
|
196 |
|
219 |
Global Services |
73 |
|
71 |
|
33 |
|
37 |
Other |
173 |
|
19 |
|
99 |
|
21 |
Total research and development expense,
net |
$1,692 |
|
$1,591 |
|
$826 |
|
$827 |
|
|
|
|
|
|
|
|
Unallocated items, eliminations and
other: |
|
|
|
|
|
|
|
Share-based plans |
($36) |
|
($36) |
|
($22) |
|
($18) |
Deferred compensation |
(129) |
|
(56) |
|
(27) |
|
(27) |
Amortization of previously capitalized
interest |
(45) |
|
(48) |
|
(21) |
|
(23) |
Customer financing impairment |
(250) |
|
|
|
|
|
|
Research and development expense, net |
(173) |
|
(19) |
|
(99) |
|
(21) |
Eliminations and other unallocated items |
(572) |
|
(563) |
|
(329) |
|
(307) |
Sub-total (included in core operating
earnings) |
(1,205) |
|
(722) |
|
(498) |
|
(396) |
Pension FAS/CAS service cost adjustment |
549 |
|
520 |
|
275 |
|
237 |
Postretirement FAS/CAS service cost
adjustment |
180 |
|
162 |
|
90 |
|
80 |
FAS/CAS service cost adjustment |
729 |
|
682 |
|
$365 |
|
$317 |
Total |
($476) |
|
($40) |
|
($133) |
|
($79) |
The Boeing Company
and Subsidiaries |
Operating and
Financial Data |
(Unaudited) |
|
Deliveries |
Six months ended
June 30 |
|
Three months
ended
June 30 |
Commercial Airplanes |
2019 |
|
|
2018 |
|
2019 |
|
2018 |
737 |
113 |
|
|
269 |
|
24 |
|
137 |
747 |
4 |
|
|
3 |
|
2 |
|
1 |
767 |
22 |
|
|
9 |
|
10 |
|
5 |
777 |
22 |
(1) |
|
25 |
|
12 |
|
13 |
787 |
78 |
|
|
72 |
|
42 |
|
38 |
Total |
239 |
|
|
378 |
|
90 |
|
194 |
Note: Aircraft accounted for as
revenues by BCA and as operating leases in consolidation identified
by parentheses |
|
|
|
|
|
|
|
|
|
Defense, Space & Security |
|
|
|
|
|
|
|
|
AH-64 Apache (New) |
10 |
|
|
— |
|
4 |
|
— |
AH-64 Apache (Remanufactured) |
35 |
|
|
6 |
|
13 |
|
— |
CH-47 Chinook (New) |
7 |
|
|
9 |
|
— |
|
5 |
CH-47 Chinook (Renewed) |
9 |
|
|
8 |
|
5 |
|
4 |
F-15 Models |
5 |
|
|
5 |
|
1 |
|
3 |
F/A-18 Models |
10 |
|
|
5 |
|
3 |
|
— |
KC-46 Tanker |
12 |
|
|
— |
|
5 |
|
— |
P-8 Models |
8 |
|
|
8 |
|
5 |
|
4 |
Commercial and Civil Satellites |
1 |
|
|
— |
|
1 |
|
— |
Military Satellites |
— |
|
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total backlog (Dollars in
millions) |
|
June 30
2019 |
|
December 31
2018 |
Commercial Airplanes |
|
$390,405 |
|
$408,140 |
Defense, Space & Security |
|
63,872 |
|
61,277 |
Global Services |
|
19,974 |
|
21,064 |
Total backlog |
|
$474,251 |
|
$490,481 |
|
|
|
|
|
Contractual backlog |
|
$448,816 |
|
$462,070 |
Unobligated backlog |
|
25,435 |
|
28,411 |
Total backlog |
|
$474,251 |
|
$490,481 |
The Boeing Company and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial
measures core operating (loss)/earnings, core operating margin, and
core (loss)/earnings per share with the most directly comparable
GAAP financial measures, (loss)/earnings from operations, operating
margin, and diluted (loss)/earnings per share. See page 6 of this
release for additional information on the use of these non-GAAP
financial measures.
|
(Dollars in millions, except per share
data) |
Second Quarter
2019 |
|
Second Quarter
2018 |
|
$ millions |
|
Per Share |
|
$ millions |
|
Per Share |
Revenues |
15,751 |
|
|
|
24,258 |
|
|
(Loss)/earnings from operations (GAAP) |
(3,380) |
|
|
|
2,710 |
|
|
Operating margin (GAAP) |
(21.5)% |
|
|
|
11.2% |
|
|
|
|
|
|
|
|
|
|
FAS/CAS service cost adjustment: |
|
|
|
|
|
|
|
Pension FAS/CAS service cost adjustment |
(275) |
|
|
|
(237) |
|
|
Postretirement FAS/CAS service cost
adjustment |
(90) |
|
|
|
(80) |
|
|
FAS/CAS service cost adjustment |
(365) |
|
|
|
(317) |
|
|
Core operating (loss)/earnings
(non-GAAP) |
($3,745) |
|
|
|
$2,393 |
|
|
Core operating margin (non-GAAP) |
(23.8)% |
|
|
|
9.9% |
|
|
|
|
|
|
|
|
|
|
Diluted (loss)/earnings per share
(GAAP) |
|
|
($5.21) |
|
|
|
$3.73 |
Pension FAS/CAS service cost adjustment |
($275) |
|
(0.49) |
|
($237) |
|
(0.40) |
Postretirement FAS/CAS service cost
adjustment |
(90) |
|
(0.16) |
|
(80) |
|
(0.14) |
Non-operating pension expense |
(94) |
|
(0.17) |
|
(6) |
|
(0.01) |
Non-operating postretirement expense |
26 |
|
0.05 |
|
24 |
|
0.04 |
Provision for deferred income taxes on
adjustments 1 |
91 |
|
0.16 |
|
63 |
|
0.11 |
Subtotal of adjustments |
($342) |
|
($0.61) |
|
($236) |
|
($0.40) |
Core (loss)/earnings per share
(non-GAAP) |
|
|
($5.82) |
|
|
|
$3.33 |
|
|
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
|
|
565.3 |
|
|
|
588.7 |
|
1 The income tax
impact is calculated using the U.S. corporate statutory tax
rate. |
|
|
|
|
|
|
|
|
|
The Boeing Company and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial
measures core operating 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.
|
(Dollars in millions, except per share
data) |
First Half
2019 |
|
First Half 2018 |
|
$ millions |
|
Per Share |
|
$ millions |
|
Per Share |
Revenues |
38,668 |
|
|
|
47,640 |
|
|
(Loss)/earnings from operations (GAAP) |
(1,030) |
|
|
|
5,585 |
|
|
Operating margin (GAAP) |
(2.7)% |
|
|
|
11.7% |
|
|
|
|
|
|
|
|
|
|
FAS/CAS service cost adjustment: |
|
|
|
|
|
|
|
Pension FAS/CAS service cost adjustment |
(549) |
|
|
|
(520) |
|
|
Postretirement FAS/CAS service cost
adjustment |
(180) |
|
|
|
(162) |
|
|
FAS/CAS service cost adjustment |
(729) |
|
|
|
(682) |
|
|
Core operating (loss)/earnings
(non-GAAP) |
($1,759) |
|
|
|
$4,903 |
|
|
Core operating margin (non-GAAP) |
(4.5)% |
|
|
|
10.3% |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share (GAAP) |
|
|
($1.40) |
|
|
|
$7.88 |
Pension FAS/CAS service cost adjustment |
($549) |
|
(0.97) |
|
($520) |
|
(0.88) |
Postretirement FAS/CAS service cost
adjustment |
(180) |
|
(0.32) |
|
(162) |
|
(0.27) |
Non-operating pension expense |
(187) |
|
(0.32) |
|
(48) |
|
(0.08) |
Non-operating postretirement expense |
53 |
|
0.09 |
|
48 |
|
0.08 |
Provision for deferred income taxes on
adjustments 1 |
181 |
|
0.32 |
|
143 |
|
0.24 |
Subtotal of adjustments |
($682) |
|
($1.20) |
|
($539) |
|
($0.91) |
Core (loss)/earnings per share
(non-GAAP) |
|
|
($2.60) |
|
|
|
$6.97 |
|
|
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
|
|
566.6 |
|
|
|
592.9 |
|
1 The income tax
impact is calculated using the U.S. corporate statutory tax
rate. |
|
|
|
|
|
|
|
|
|