Boeing Reports
Second-Quarter Results
CHICAGO, July 29, 2020 /PRNewswire/ --
- Financial results continue to be significantly impacted by
COVID-19 and the 737 MAX grounding
- Revenue of $11.8 billion, GAAP
loss per share of ($4.20) and core
(non-GAAP)* loss per share of ($4.79)
- Operating cash flow of ($5.3) billion; cash and marketable
securities of $32.4 billion
- Total backlog of $409 billion,
including more than 4,500 commercial airplanes
Table 1. Summary Financial Results |
Second
Quarter |
|
|
|
First Half |
|
|
(Dollars in Millions, except per share
data) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$11,807 |
|
$15,751 |
|
(25)% |
|
$28,715 |
|
$38,668 |
|
(26)% |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
Loss From Operations |
($2,964) |
|
($3,380) |
|
NM |
|
($4,317) |
|
($1,030) |
|
NM |
Operating Margin |
(25.1)% |
|
(21.5)% |
|
NM |
|
(15.0)% |
|
(2.7)% |
|
NM |
Net Loss |
($2,395) |
|
($2,942) |
|
NM |
|
($3,036) |
|
($793) |
|
NM |
Loss Per Share |
($4.20) |
|
($5.21) |
|
NM |
|
($5.31) |
|
($1.40) |
|
NM |
Operating Cash Flow |
($5,280) |
|
($590) |
|
NM |
|
($9,582) |
|
$2,198 |
|
NM |
Non-GAAP* |
|
|
|
|
|
|
|
|
|
|
|
Core Operating Loss |
($3,319) |
|
($3,745) |
|
NM |
|
($5,019) |
|
($1,759) |
|
NM |
Core Operating Margin |
(28.1)% |
|
(23.8)% |
|
NM |
|
(17.5)% |
|
(4.5)% |
|
NM |
Core Loss Per Share |
($4.79) |
|
($5.82) |
|
NM |
|
($6.49) |
|
($2.60) |
|
NM |
|
*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
$11.8 billion, GAAP loss per
share of ($4.20) and core loss per
share (non-GAAP)* of ($4.79),
primarily reflecting the impacts of COVID-19 and the 737 MAX
grounding (Table 1). Boeing recorded operating cash flow of
($5.3) billion.
"We remained focused on the health of our employees and
communities while proactively taking action to navigate the
unprecedented commercial market impacts from the COVID-19
pandemic," said Boeing President and Chief Executive Officer
Dave Calhoun. "We're working closely
with our customers, suppliers and global partners to manage the
challenges to our industry, bridge to recovery and rebuild to be
stronger on the other side."
In the second quarter, Boeing restarted production operations
across key sites following temporary pauses to protect its
workforce and introduce rigorous new health and safety procedures.
Despite the challenges, Boeing continued to deliver across key
commercial, defense, space and services programs. The company also
resumed early stages of production on the 737 program with a focus
on safety, quality and operational excellence. Following the lead
of global regulators, Boeing made steady progress toward the safe
return to service of the 737, including completion of FAA
certification flight tests.
To align to the sharp reduction in commercial market demand in
light of COVID-19, the company is taking several actions including
further adjusting commercial airplane production rates and reducing
employment levels.
"The diversity of our balanced portfolio and our government
services, defense and space programs provide some critical
stability for us in the near-term as we take tough but necessary
steps to adapt for new market realities," Calhoun said. "We are
taking the right action to ensure we're well positioned for the
future by strengthening our culture, improving transparency,
rebuilding trust and transforming our business to become a better,
more sustainable Boeing. Air travel has always proven to be
resilient - and so has Boeing."
Table 2. Cash Flow |
Second
Quarter |
|
First Half |
(Millions) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating Cash Flow |
($5,280) |
|
($590) |
|
($9,582) |
|
$2,198 |
Less Additions to Property, Plant &
Equipment |
($348) |
|
($421) |
|
($776) |
|
($922) |
Free Cash Flow* |
($5,628) |
|
($1,011) |
|
($10,358) |
|
$1,276 |
|
*Non-GAAP measure; complete
definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP
Measures Disclosures." |
Operating cash flow was ($5.3)
billion in the quarter, primarily reflecting lower
commercial deliveries and services volume due to COVID-19 and the
737 MAX grounding, as well as timing of receipts and expenditures
(Table 2).
Table 3. Cash, Marketable Securities and Debt
Balances |
Quarter-End |
(Billions) |
Q2 20 |
|
Q1 20 |
Cash |
$20.0 |
|
$15.0 |
Marketable Securities1 |
$12.4 |
|
$0.5 |
Total |
$32.4 |
|
$15.5 |
Debt Balances: |
|
|
|
The Boeing Company, net of intercompany loans to
BCC |
$59.5 |
|
$36.9 |
Boeing Capital, including intercompany loans |
$1.9 |
|
$2.0 |
Total Consolidated Debt |
$61.4 |
|
$38.9 |
|
1 Marketable securities
consists primarily of time deposits due within one year classified
as "short-term investments." |
Cash and investments in marketable securities increased to
$32.4 billion, compared to
$15.5 billion at the beginning of the
quarter, driven by the issuance of new debt (Table 3). Debt was
$61.4 billion, up from $38.9 billion at the beginning of the quarter due
to the issuance of new debt, partially offset by repayment of
maturing debt.
Total company backlog at quarter-end was $409 billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes |
Second
Quarter |
|
|
|
First Half |
|
|
(Dollars in Millions) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Airplanes Deliveries |
20 |
|
90 |
|
(78)% |
|
70 |
|
239 |
|
(71)% |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$1,633 |
|
$4,722 |
|
(65)% |
|
$7,838 |
|
$16,544 |
|
(53)% |
Loss from Operations |
($2,762) |
|
($4,946) |
|
NM |
|
($4,830) |
|
($3,773) |
|
NM |
Operating Margin |
(169.1)% |
|
(104.7)% |
|
NM |
|
(61.6)% |
|
(22.8)% |
|
NM |
Commercial Airplanes second-quarter revenue and operating margin
decreased reflecting lower delivery volume, partially offset by a
lower 737 MAX customer consideration charge of $551 million in the quarter compared to a
$5.6 billion charge in the same
period last year. Second-quarter operating margin was also
negatively impacted by $712 million
of abnormal production costs related to the 737 program,
$468 million of severance expense and
$133 million of abnormal production
costs from the temporary suspension of operations in response to
COVID-19.
The 737 program resumed early stages of production in May and
expects to continue to produce at low rates for the remainder of
2020. The COVID-19 pandemic has significantly impacted air travel
and reduced near-term demand, resulting in lower production and
delivery rate assumptions. Commercial Airplanes expects to
gradually increase the 737 production rate to 31 per month by the
beginning of 2022, with further gradual increases to correspond
with market demand. Estimated potential concessions and other
considerations to customers related to the 737 MAX grounding
increased by $551 million in the
quarter. There was no material change to estimated abnormal
production costs.
Commercial Airplanes has further updated its production rate
assumptions this quarter to reflect impacts of COVID-19 on its
demand outlook, and will continue to assess them on an ongoing
basis. The 787 production rate will be reduced to 6 per month in
2021. The 777/777X combined production rate will be gradually
reduced to 2 per month in 2021, with 777X first delivery targeted
for 2022. At this time, production rate assumptions have not
changed on the 767 and 747 programs.
Commercial Airplanes delivered 20 airplanes during the quarter,
and backlog included over 4,500 airplanes valued at $326 billion.
Defense, Space & Security
Table 5. Defense, Space & Security |
Second
Quarter |
|
|
|
First Half |
|
|
(Dollars in Millions) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$6,588 |
|
$6,579 |
|
— |
|
$12,630 |
|
$13,166 |
|
(4)% |
Earnings from Operations |
$600 |
|
$975 |
|
(38)% |
|
$409 |
|
$1,827 |
|
(78)% |
Operating Margin |
9.1% |
|
14.8% |
|
(5.7) Pts |
|
3.2% |
|
13.9% |
|
(10.7) Pts |
Defense, Space & Security second-quarter revenue was
$6.6 billion, reflecting COVID-19
impact on derivative aircraft programs, partially offset by higher
volume across the remainder of the portfolio (Table 5).
Second-quarter operating margin decreased to 9.1 percent primarily
due to a gain on sale of property in the second quarter of 2019 and
a $151 million KC-46A Tanker charge
primarily driven by additional fixed cost allocation resulting from
lower commercial airplane production volume due to COVID-19.
During the quarter, Defense, Space & Security received an
award for three additional MQ-25 unmanned aerial refueling aircraft
for the U.S. Navy, as well as contracts for Cruise Missile Systems
for the U.S. Navy and a contract for 24 AH-64E Apache helicopters
for the Kingdom of Morocco.
Defense, Space & Security completed Critical Design Review for
the T-7A advanced trainer, achieved first flight and delivery of
the F/A-18 U.S. Navy Block III Super Hornet, and achieved first
flight of the F-15 Qatar Advanced aircraft. Defense, Space &
Security also delivered the 100th U.S. Navy P-8A
Poseidon, the 400th V-22 Osprey, and the
2,500th AH-64 Apache.
Backlog at Defense, Space & Security was $64 billion, of which 31 percent represents
orders from customers outside the U.S.
Global Services
Table 6. Global Services |
Second
Quarter |
|
|
|
First Half |
|
|
(Dollars in Millions) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$3,488 |
|
$4,543 |
|
(23)% |
|
$8,116 |
|
$9,162 |
|
(11)% |
(Loss)/Earnings from Operations |
($672) |
|
$687 |
|
NM |
|
$36 |
|
$1,340 |
|
NM |
Operating Margin |
(19.3)% |
|
15.1% |
|
NM |
|
0.4% |
|
14.6% |
|
NM |
Global Services second-quarter revenue decreased to $3.5 billion, driven by lower commercial services
volume due to COVID-19, partially offset by higher government
services volume (Table 6). Second-quarter operating margin
decreased to (19.3) percent primarily due to lower commercial
services volume, less favorable mix of products and services, and
$923 million of charges related to
asset impairments and severance costs as a result of the COVID-19
market environment.
During the quarter, Global Services was awarded a contract
modification for P-8A integrated logistics support for the U.S.
Navy. Global Services captured an order for four 767-300 freighter
conversions for DHL and was awarded a contract for F-15
pre-delivery training support for the Qatar Emiri Air Force. Global
Services also delivered the first F/A-18 Super Hornet test aircraft
modified for the U.S. Navy Blue Angels.
Additional Financial Information
Table 7. Additional Financial
Information |
Second
Quarter |
|
First Half |
(Dollars in Millions) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues |
|
|
|
|
|
|
|
Boeing Capital |
$69 |
|
$75 |
|
$134 |
|
$141 |
Unallocated items, eliminations and other |
$29 |
|
($168) |
|
($3) |
|
($345) |
Earnings from Operations |
|
|
|
|
|
|
|
Boeing Capital |
($7) |
|
$37 |
|
$17 |
|
$57 |
FAS/CAS service cost adjustment |
$355 |
|
$365 |
|
$702 |
|
$729 |
Other unallocated items and eliminations |
($478) |
|
($498) |
|
($651) |
|
($1,210) |
Other income, net |
$94 |
|
$107 |
|
$206 |
|
$213 |
Interest and debt expense |
($553) |
|
($154) |
|
($815) |
|
($277) |
Effective tax rate |
30.0% |
|
14.2% |
|
38.4% |
|
27.5% |
At quarter-end, Boeing Capital's net portfolio balance was
$2.1 billion. Revenue from other
unallocated items and eliminations increased primarily due to
reserves related to cost accounting litigation recorded in the
second quarter of 2019. Interest and debt expense increased due to
higher debt balances. The second quarter effective tax rate
reflects tax benefits related to the 5 year net operating loss
carryback provision in the Coronavirus Aid, Relief, and Economic
Security (CARES) Act as well as the impact of pre-tax losses.
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 Earnings, Core Operating Margin and Core Earnings
Per Share
Core operating earnings is defined as GAAP 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 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 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 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
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.
Free Cash Flow
Free cash flow is GAAP operating cash flow reduced by
capital expenditures for property, plant and equipment.
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
COVID-19 pandemic and related government actions, including with
respect to our operations, our liquidity, the health of our
customers and suppliers, and future demand for our products and
services; (2) the 737 MAX, including the timing and conditions of
737 MAX regulatory approvals, lower than planned production rates
and/or delivery rates, and increased considerations to customers
and suppliers, (3) general conditions in the economy and our
industry, including those due to regulatory changes; (4) our
reliance on our commercial airline customers; (5) 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; (6) changing
budget and appropriation levels and acquisition priorities of the
U.S. government; (7) our dependence on U.S. government contracts;
(8) our reliance on fixed-price contracts; (9) our reliance on
cost-type contracts; (10) uncertainties concerning contracts that
include in-orbit incentive payments; (11) our dependence on our
subcontractors and suppliers, as well as the availability of raw
materials; (12) changes in accounting estimates; (13) changes in
the competitive landscape in our markets; (14) our non-U.S.
operations, including sales to non-U.S. customers; (15) threats to
the security of our or our customers' information; (16) potential
adverse developments in new or pending litigation and/or government
investigations; (17) customer and aircraft concentration in our
customer financing portfolio; (18) changes in our ability to obtain
debt on commercially reasonable terms and at competitive rates;
(19) realizing the anticipated benefits of mergers, acquisitions,
joint ventures/strategic alliances or divestitures; (20) the
adequacy of our insurance coverage to cover significant risk
exposures; (21) potential business disruptions, including those
related to physical security threats, information technology or
cyber-attacks, epidemics, sanctions or natural disasters; (22) work
stoppages or other labor disruptions; (23) substantial pension and
other postretirement benefit obligations; and (24) 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: |
|
|
|
|
|
Investor Relations: |
|
Maurita Sutedja or Keely Moos (312) 544-2140 |
Communications: |
|
Michael Friedman media@boeing.com |
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) |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Sales of products |
$23,254 |
|
$33,319 |
|
$9,063 |
|
$13,094 |
|
Sales of services |
5,461 |
|
5,349 |
|
2,744 |
|
2,657 |
|
Total revenues |
28,715 |
|
38,668 |
|
11,807 |
|
15,751 |
|
|
|
|
|
|
|
|
|
|
Cost of products |
(25,091) |
|
(31,910) |
|
(10,378) |
|
(15,672) |
|
Cost of services |
(4,632) |
|
(4,511) |
|
(2,589) |
|
(2,122) |
|
Boeing Capital interest expense |
(23) |
|
(34) |
|
(11) |
|
(16) |
|
Total costs and expenses |
(29,746) |
|
(36,455) |
|
(12,978) |
|
(17,810) |
|
|
(1,031) |
|
2,213 |
|
(1,171) |
|
(2,059) |
|
(Loss)/income from operating investments, net |
(47) |
|
5 |
|
(45) |
|
(15) |
|
General and administrative expense |
(2,034) |
|
(1,856) |
|
(1,161) |
|
(672) |
|
Research and development expense, net |
(1,297) |
|
(1,692) |
|
(625) |
|
(826) |
|
Gain on dispositions, net |
92 |
|
300 |
|
38 |
|
192 |
|
Loss from operations |
(4,317) |
|
(1,030) |
|
(2,964) |
|
(3,380) |
|
Other income, net |
206 |
|
213 |
|
94 |
|
107 |
|
Interest and debt expense |
(815) |
|
(277) |
|
(553) |
|
(154) |
|
Loss before income taxes |
(4,926) |
|
(1,094) |
|
(3,423) |
|
(3,427) |
|
Income tax benefit |
1,890 |
|
301 |
|
1,028 |
|
485 |
|
Net loss |
(3,036) |
|
(793) |
|
(2,395) |
|
(2,942) |
|
Less: net loss attributable to noncontrolling
interest |
(32) |
|
|
|
(19) |
|
|
|
Net loss attributable to Boeing
Shareholders |
($3,004) |
|
($793) |
|
($2,376) |
|
($2,942) |
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
($5.31) |
|
($1.40) |
|
($4.20) |
|
($5.21) |
|
|
|
|
|
|
|
|
|
|
Diluted loss per share |
($5.31) |
|
($1.40) |
|
($4.20) |
|
($5.21) |
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
(millions) |
566.1 |
|
566.6 |
|
566.4 |
|
565.3 |
|
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Financial Position |
(Unaudited) |
|
(Dollars in millions, except per share
data) |
June 30
2020 |
|
December 31
2019 |
|
Assets |
|
|
|
|
Cash and cash equivalents |
$19,992 |
|
$9,485 |
|
Short-term and other investments |
12,438 |
|
545 |
|
Accounts receivable, net |
2,793 |
|
3,266 |
|
Unbilled receivables, net |
8,570 |
|
9,043 |
|
Current portion of customer financing, net |
115 |
|
162 |
|
Inventories |
83,745 |
|
76,622 |
|
Other current assets, net |
2,624 |
|
3,106 |
|
Total current assets |
130,277 |
|
102,229 |
|
Customer financing, net |
2,054 |
|
2,136 |
|
Property, plant and equipment, net of accumulated
depreciation of $19,863 and $19,342 |
12,182 |
|
12,502 |
|
Goodwill |
8,064 |
|
8,060 |
|
Acquired intangible assets, net |
3,019 |
|
3,338 |
|
Deferred income taxes |
729 |
|
683 |
|
Investments |
1,066 |
|
1,092 |
|
Other assets, net of accumulated amortization of
$617 and $580 |
5,481 |
|
3,585 |
|
Total assets |
$162,872 |
|
$133,625 |
|
Liabilities and equity |
|
|
|
|
Accounts payable |
$13,700 |
|
$15,553 |
|
Accrued liabilities |
22,493 |
|
22,868 |
|
Advances and progress billings |
53,367 |
|
51,551 |
|
Short-term debt and current portion of long-term
debt |
2,922 |
|
7,340 |
|
Total current liabilities |
92,482 |
|
97,312 |
|
Deferred income taxes |
404 |
|
413 |
|
Accrued retiree health care |
4,427 |
|
4,540 |
|
Accrued pension plan liability, net |
15,663 |
|
16,276 |
|
Other long-term liabilities |
2,821 |
|
3,422 |
|
Long-term debt |
58,457 |
|
19,962 |
|
Total liabilities |
174,254 |
|
141,925 |
|
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 |
6,648 |
|
6,745 |
|
Treasury stock, at cost - 447,840,938 and
449,352,405 shares |
(54,829) |
|
(54,914) |
|
Retained earnings |
47,478 |
|
50,644 |
|
Accumulated other comprehensive loss |
(16,025) |
|
(16,153) |
|
Total shareholders' equity |
(11,667) |
|
(8,617) |
|
Noncontrolling interests |
285 |
|
317 |
|
Total equity |
(11,382) |
|
(8,300) |
|
Total liabilities and equity |
$162,872 |
|
$133,625 |
|
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Cash Flows |
(Unaudited) |
|
|
Six months
ended
June 30 |
|
(Dollars in millions) |
2020 |
|
2019 |
|
Cash flows – operating
activities: |
|
|
|
|
Net loss |
($3,036) |
|
($793) |
|
Adjustments to reconcile net loss to net cash
(used)/provided by operating activities: |
|
|
|
|
Non-cash items – |
|
|
|
|
Share-based plans expense |
115 |
|
104 |
|
Depreciation and amortization |
1,103 |
|
1,067 |
|
Investment/asset impairment charges, net |
280 |
|
70 |
|
Customer financing valuation adjustments |
9 |
|
249 |
|
Gain on dispositions, net |
(92) |
|
(300) |
|
Other charges and credits, net |
815 |
|
145 |
|
Changes in assets and liabilities – |
|
|
|
|
Accounts receivable |
143 |
|
588 |
|
Unbilled receivables |
285 |
|
(222) |
|
Advances and progress billings |
1,822 |
|
1,842 |
|
Inventories |
(6,741) |
|
(5,233) |
|
Other current assets |
433 |
|
(887) |
|
Accounts payable |
(3,181) |
|
2,002 |
|
Accrued liabilities |
514 |
|
4,959 |
|
Income taxes receivable, payable and deferred |
(1,894) |
|
(921) |
|
Other long-term liabilities |
(109) |
|
(509) |
|
Pension and other postretirement plans |
(357) |
|
(390) |
|
Customer financing, net |
62 |
|
347 |
|
Other |
247 |
|
80 |
|
Net cash (used)/provided by operating
activities |
(9,582) |
|
2,198 |
|
Cash flows – investing activities: |
|
|
|
|
Property, plant and equipment additions |
(776) |
|
(922) |
|
Property, plant and equipment reductions |
96 |
|
331 |
|
Acquisitions, net of cash acquired |
|
|
(492) |
|
Contributions to investments |
(12,557) |
|
(496) |
|
Proceeds from investments |
543 |
|
758 |
|
Purchase of distribution rights |
|
|
(20) |
|
Other |
8 |
|
(12) |
|
Net cash used by investing
activities |
(12,686) |
|
(853) |
|
Cash flows – financing activities: |
|
|
|
|
New borrowings |
42,302 |
|
11,670 |
|
Debt repayments |
(8,265) |
|
(6,422) |
|
Contributions from noncontrolling interests |
|
|
7 |
|
Stock options exercised |
27 |
|
47 |
|
Employee taxes on certain share-based payment
arrangements |
(164) |
|
(238) |
|
Common shares repurchased |
|
|
(2,651) |
|
Dividends paid |
(1,158) |
|
(2,317) |
|
Net cash provided by financing
activities |
32,742 |
|
96 |
|
Effect of exchange rate changes on cash and cash
equivalents, including restricted |
(11) |
|
(2) |
|
Net increase in cash & cash equivalents,
including restricted |
10,463 |
|
1,439 |
|
Cash & cash equivalents, including restricted,
at beginning of year |
9,571 |
|
7,813 |
|
Cash & cash equivalents, including
restricted, at end of period |
20,034 |
|
9,252 |
|
Less restricted cash & cash equivalents,
included in Investments |
42 |
|
85 |
|
Cash and cash equivalents at end of
period |
$19,992 |
|
$9,167 |
|
The Boeing Company and
Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2020, certain programs were
realigned between our Defense, Space & Security segment and
Unallocated items, eliminations and other. Business segment data
for 2019 has been adjusted to reflect the realignment.
|
Six months
ended
June 30 |
|
Three months
ended
June 30 |
(Dollars in millions) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues: |
|
|
|
|
|
|
|
Commercial Airplanes |
$7,838 |
|
$16,544 |
|
$1,633 |
|
$4,722 |
Defense, Space & Security |
12,630 |
|
13,166 |
|
6,588 |
|
6,579 |
Global Services |
8,116 |
|
9,162 |
|
3,488 |
|
4,543 |
Boeing Capital |
134 |
|
141 |
|
69 |
|
75 |
Unallocated items, eliminations and other |
(3) |
|
(345) |
|
29 |
|
(168) |
Total revenues |
$28,715 |
|
$38,668 |
|
$11,807 |
|
$15,751 |
Earnings/(loss) from operations: |
|
|
|
|
|
|
|
Commercial Airplanes |
($4,830) |
|
($3,773) |
|
($2,762) |
|
($4,946) |
Defense, Space & Security |
409 |
|
1,827 |
|
600 |
|
975 |
Global Services |
36 |
|
1,340 |
|
(672) |
|
687 |
Boeing Capital |
17 |
|
57 |
|
(7) |
|
37 |
Segment operating loss |
(4,368) |
|
(549) |
|
(2,841) |
|
(3,247) |
Unallocated items, eliminations and other |
(651) |
|
(1,210) |
|
(478) |
|
(498) |
FAS/CAS service cost adjustment |
702 |
|
729 |
|
355 |
|
365 |
Loss from operations |
(4,317) |
|
(1,030) |
|
(2,964) |
|
(3,380) |
Other income, net |
206 |
|
213 |
|
94 |
|
107 |
Interest and debt expense |
(815) |
|
(277) |
|
(553) |
|
(154) |
Loss before income taxes |
(4,926) |
|
(1,094) |
|
(3,423) |
|
(3,427) |
Income tax benefit |
1,890 |
|
301 |
|
1,028 |
|
485 |
Net loss |
(3,036) |
|
(793) |
|
(2,395) |
|
(2,942) |
Less: Net loss attributable to noncontrolling
interest |
(32) |
|
|
|
(19) |
|
|
Net loss attributable to Boeing
Shareholders |
($3,004) |
|
($793) |
|
($2,376) |
|
($2,942) |
Research and development expense, net: |
|
|
|
|
|
|
|
Commercial Airplanes |
$786 |
|
$1,062 |
|
$361 |
|
$498 |
Defense, Space & Security |
330 |
|
374 |
|
167 |
|
190 |
Global Services |
65 |
|
73 |
|
35 |
|
33 |
Other |
116 |
|
183 |
|
62 |
|
105 |
Total research and development expense,
net |
$1,297 |
|
$1,692 |
|
$625 |
|
$826 |
Unallocated items, eliminations and
other: |
|
|
|
|
|
|
|
Share-based plans |
($43) |
|
($36) |
|
($25) |
|
($22) |
Deferred compensation |
73 |
|
(129) |
|
(120) |
|
(27) |
Amortization of previously capitalized
interest |
(50) |
|
(45) |
|
(27) |
|
(21) |
Customer financing impairment |
|
|
(250) |
|
|
|
|
Research and development expense, net |
(116) |
|
(183) |
|
(62) |
|
(105) |
Eliminations and other unallocated items |
(515) |
|
(567) |
|
(244) |
|
(323) |
Sub-total (included in core operating
loss) |
(651) |
|
(1,210) |
|
(478) |
|
(498) |
Pension FAS/CAS service cost adjustment |
513 |
|
549 |
|
258 |
|
275 |
Postretirement FAS/CAS service cost
adjustment |
189 |
|
180 |
|
97 |
|
90 |
FAS/CAS service cost adjustment |
702 |
|
729 |
|
$355 |
|
$365 |
Total |
$51 |
|
($481) |
|
($123) |
|
($133) |
|
|
|
|
|
|
|
|
|
The Boeing Company
and Subsidiaries |
Operating and
Financial Data |
(Unaudited) |
|
Deliveries |
Six months
ended
June 30 |
|
Three months
ended
June 30 |
|
Commercial Airplanes |
2020 |
|
2019 |
|
2020 |
|
|
2019 |
|
737 |
9 |
|
113 |
|
4 |
|
|
24 |
|
747 |
1 |
|
4 |
|
1 |
|
|
2 |
|
767 |
14 |
|
22 |
|
4 |
|
|
10 |
|
777 |
10 |
|
22 |
(1) |
4 |
|
|
12 |
|
787 |
36 |
|
78 |
|
7 |
|
|
42 |
|
Total |
70 |
|
239 |
|
20 |
|
|
90 |
|
Note: Aircraft accounted for as
revenues by BCA and as operating leases in consolidation identified
by parentheses |
|
|
|
|
|
|
|
|
Defense, Space & Security |
|
|
|
|
|
|
|
AH-64 Apache (New) |
11 |
|
10 |
|
9 |
|
|
4 |
|
AH-64 Apache (Remanufactured) |
32 |
|
35 |
|
18 |
|
|
13 |
|
C-17 Globemaster III |
— |
|
— |
|
— |
|
|
— |
|
C-40A |
— |
|
— |
|
— |
|
|
— |
|
CH-47 Chinook (New) |
15 |
|
7 |
|
6 |
|
|
— |
|
CH-47 Chinook (Renewed) |
1 |
|
9 |
|
— |
|
|
5 |
|
F-15 Models |
3 |
|
5 |
|
3 |
|
|
1 |
|
F/A-18 Models |
9 |
|
10 |
|
4 |
|
|
3 |
|
KC-46 Tanker |
6 |
|
12 |
|
1 |
|
|
5 |
|
P-8 Models |
6 |
|
8 |
|
3 |
|
|
5 |
|
Commercial and Civil Satellites |
— |
|
1 |
|
— |
|
|
1 |
|
Military Satellites |
— |
|
— |
|
— |
|
|
— |
|
|
|
Total backlog (Dollars in
millions) |
June 30
2020 |
|
December 31
2019 |
Commercial Airplanes |
$325,674 |
|
$376,593 |
Defense, Space & Security |
64,286 |
|
63,691 |
Global Services |
18,168 |
|
22,902 |
Unallocated items, eliminations and
other |
522 |
|
217 |
Total backlog |
$408,650 |
|
$463,403 |
|
|
Contractual backlog |
$385,389 |
|
$436,473 |
Unobligated backlog |
23,261 |
|
26,930 |
Total backlog |
$408,650 |
|
$463,403 |
The Boeing Company and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial
measures core operating loss, core operating margin, and core loss
per share with the most directly comparable GAAP financial
measures, loss from operations, operating margin, and diluted loss
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
2020 |
|
Second Quarter
2019 |
|
$ millions |
|
Per Share |
|
$ millions |
|
Per share |
Revenues |
11,807 |
|
|
|
15,751 |
|
|
Loss from operations (GAAP) |
(2,964) |
|
|
|
(3,380) |
|
|
Operating margin (GAAP) |
(25.1)% |
|
|
|
(21.5%) |
|
|
|
|
|
|
|
|
|
|
FAS/CAS service cost adjustment: |
|
|
|
|
|
|
|
Pension FAS/CAS service cost adjustment |
(258) |
|
|
|
(275) |
|
|
Postretirement FAS/CAS service cost
adjustment |
(97) |
|
|
|
(90) |
|
|
FAS/CAS service cost adjustment |
(355) |
|
|
|
(365) |
|
|
Core operating loss (non-GAAP) |
($3,319) |
|
|
|
($3,745) |
|
|
Core operating margin (non-GAAP) |
(28.1)% |
|
|
|
(23.8%) |
|
|
|
|
|
|
|
|
|
|
Diluted loss per share (GAAP) |
|
|
($4.20) |
|
|
|
($5.21) |
Pension FAS/CAS service cost adjustment |
($258) |
|
(0.46) |
|
($275) |
|
(0.49) |
Postretirement FAS/CAS service cost
adjustment |
(97) |
|
(0.17) |
|
(90) |
|
(0.16) |
Non-operating pension expense |
(84) |
|
(0.14) |
|
(94) |
|
(0.17) |
Non-operating postretirement expense |
14 |
|
0.02 |
|
26 |
|
0.05 |
Provision for deferred income taxes on
adjustments 1 |
89 |
|
0.16 |
|
91 |
|
0.16 |
Subtotal of adjustments |
($336) |
|
($0.59) |
|
($342) |
|
($0.61) |
Core loss per share (non-GAAP) |
|
|
($4.79) |
|
|
|
($5.82) |
|
|
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
|
|
566.4 |
|
|
|
565.3 |
|
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 loss, core operating margin, and core loss
per share with the most directly comparable GAAP financial
measures, loss from operations, operating margin, and diluted loss
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
2020 |
|
First Half 2019 |
|
$ millions |
|
Per Share |
|
$ millions |
|
Per Share |
|
Revenues |
28,715 |
|
|
|
38,668 |
|
|
|
Loss from operations (GAAP) |
(4,317) |
|
|
|
(1,030) |
|
|
|
Operating margin (GAAP) |
(15.0)% |
|
|
|
(2.7%) |
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS service cost adjustment: |
|
|
|
|
|
|
|
|
Pension FAS/CAS service cost adjustment |
(513) |
|
|
|
(549) |
|
|
|
Postretirement FAS/CAS service cost
adjustment |
(189) |
|
|
|
(180) |
|
|
|
FAS/CAS service cost adjustment |
(702) |
|
|
|
(729) |
|
|
|
Core operating loss (non-GAAP) |
($5,019) |
|
|
|
($1,759) |
|
|
|
Core operating margin (non-GAAP) |
(17.5)% |
|
|
|
(4.5%) |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share (GAAP) |
|
|
($5.31) |
|
|
|
($1.40) |
|
Pension FAS/CAS service cost adjustment |
($513) |
|
(0.91) |
|
($549) |
|
(0.97) |
|
Postretirement FAS/CAS service cost
adjustment |
(189) |
|
(0.33) |
|
(180) |
|
(0.32) |
|
Non-operating pension expense |
(171) |
|
(0.30) |
|
(187) |
|
(0.32) |
|
Non-operating postretirement expense |
27 |
|
0.05 |
|
53 |
|
0.09 |
|
Provision for deferred income taxes on
adjustments 1 |
178 |
|
0.31 |
|
181 |
|
0.32 |
|
Subtotal of adjustments |
($668) |
|
($1.18) |
|
($682) |
|
($1.20) |
|
Core loss per share (non-GAAP) |
|
|
($6.49) |
|
|
|
($2.60) |
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
|
|
566.1 |
|
|
|
566.6 |
|
|
1 The income tax
impact is calculated using the U.S. corporate statutory tax
rate. |
|
|
|
|
|
|
|
|
|
|