Boeing Reports
Third-Quarter Results
CHICAGO, Oct. 28, 2020 /PRNewswire/ --
- Financial results continue to be significantly impacted by
COVID-19 and the 737 MAX grounding
- Proactively managing liquidity and transforming for the
future
- Revenue of $14.1 billion, GAAP
loss per share of ($0.79) and core
(non-GAAP)* loss per share of ($1.39)
- Operating cash flow of ($4.8) billion; cash and marketable
securities of $27.1 billion
- Total backlog of $393 billion,
including more than 4,300 commercial airplanes
Table 1. Summary Financial Results |
Third
Quarter |
|
|
|
Nine Months |
|
|
(Dollars in Millions, except per share
data) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$14,139 |
|
$19,980 |
|
(29)% |
|
$42,854 |
|
$58,648 |
|
(27)% |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Earnings From Operations |
($401) |
|
$1,259 |
|
NM |
|
($4,718) |
|
$229 |
|
NM |
Operating Margin |
(2.8)% |
|
6.3% |
|
NM |
|
(11.0)% |
|
0.4% |
|
NM |
Net (Loss)/Earnings |
($466) |
|
$1,167 |
|
NM |
|
($3,502) |
|
$374 |
|
NM |
(Loss)/Earnings Per Share |
($0.79) |
|
$2.05 |
|
NM |
|
($6.10) |
|
$0.66 |
|
NM |
Operating Cash Flow |
($4,819) |
|
($2,424) |
|
NM |
|
($14,401) |
|
($226) |
|
NM |
Non-GAAP* |
|
|
|
|
|
|
|
|
|
|
|
Core Operating (Loss)/Earnings |
($754) |
|
$895 |
|
NM |
|
($5,773) |
|
($864) |
|
NM |
Core Operating Margin |
(5.3)% |
|
4.5% |
|
NM |
|
(13.5)% |
|
(1.5)% |
|
NM |
Core (Loss)/Earnings Per Share |
($1.39) |
|
$1.45 |
|
NM |
|
($7.88) |
|
($1.13) |
|
NM |
|
*Non-GAAP measure; complete
definitions of Boeing's non-GAAP measures are on page 5, "Non-GAAP
Measures Disclosures." |
The Boeing Company [NYSE: BA] reported third-quarter revenue of
$14.1 billion, GAAP loss per
share of ($0.79) and core loss per
share (non-GAAP)* of ($1.39),
reflecting lower commercial deliveries and services volume
primarily due to COVID-19 (Table 1). Boeing recorded operating
cash flow of ($4.8) billion.
"The global pandemic continued to add pressure to our business
this quarter, and we're aligning to this new reality by closely
managing our liquidity and transforming our enterprise to be
sharper, more resilient and more sustainable for the long term,"
said Boeing President and Chief Executive Officer Dave Calhoun. "Our diverse portfolio, including
our government services, defense and space programs, continues to
provide some stability for us as we adapt and rebuild for the other
side of the pandemic. We remain focused on the health and safety of
our employees and their communities. I'm proud of the dedication
and commitment our teams have demonstrated as they continued to
deliver for our customers in this challenging environment. Despite
the near-term headwinds, we remain confident in our long term
future and are focused on sustaining critical investments in our
business and the meaningful actions we are taking to strengthen our
safety culture, improve transparency and rebuild trust."
Following the lead of global regulators, Boeing made steady
progress toward the safe return to service of the 737 MAX,
including rigorous certification and validation flights conducted
by the U.S. Federal Aviation Administration, Transport Canada and
the European Union Aviation Safety Agency. The Joint Operational
Evaluation Board, featuring civil aviation authorities from
the United States, Canada, Brazil, and the European Union, also conducted
its evaluations of updated crew training. The 737 MAX has now
completed around 1,400 test and check flights and more than 3,000
flight hours as it progresses through the robust and comprehensive
certification process.
To adapt to the market impacts of COVID-19 and position the
company for the future, Boeing continued its business
transformation across five key areas including its infrastructure
footprint, overhead and organizational structure, portfolio and
investment mix, supply chain health and operational excellence. As
the company resizes its operations to align with market realities,
Boeing expects to continue lowering overall staffing levels through
natural attrition as well as voluntary and involuntary workforce
reductions, and recorded additional severance costs in the third
quarter.
Table 2. Cash Flow |
Third
Quarter |
|
Nine Months |
(Millions) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating Cash Flow |
($4,819) |
|
($2,424) |
|
($14,401) |
|
($226) |
Less Additions to Property, Plant &
Equipment |
($262) |
|
($465) |
|
($1,038) |
|
($1,387) |
Free Cash Flow* |
($5,081) |
|
($2,889) |
|
($15,439) |
|
($1,613) |
|
*Non-GAAP measure; complete
definitions of Boeing's non-GAAP measures are on page 5, "Non-GAAP
Measures Disclosures." |
Operating cash flow was ($4.8)
billion in the quarter, reflecting lower commercial
deliveries and services volume primarily due to COVID-19, as well
as timing of receipts and expenditures (Table 2).
Table 3. Cash, Marketable Securities and Debt
Balances |
Quarter-End |
(Billions) |
Q3 20 |
|
Q2 20 |
Cash |
$10.6 |
|
$20.0 |
Marketable Securities1 |
$16.5 |
|
$12.4 |
Total |
$27.1 |
|
$32.4 |
Debt Balances: |
|
|
|
The Boeing Company, net of intercompany loans to
BCC |
$59.1 |
|
$59.5 |
Boeing Capital, including intercompany loans |
$1.9 |
|
$1.9 |
Total Consolidated Debt |
$61.0 |
|
$61.4 |
|
1 Marketable
securities consists primarily of time deposits due within one year
classified as "short-term investments." |
Cash and investments in marketable securities decreased to
$27.1 billion, compared to
$32.4 billion at the beginning of the
quarter, primarily driven by operating cash outflows (Table
3). Debt was $61.0 billion, down from
$61.4 billion at the beginning of the
quarter due to the repayment of maturing debt.
Total company backlog at quarter-end was $393 billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes |
Third
Quarter |
|
|
|
Nine Months |
|
|
(Dollars in Millions) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Airplanes Deliveries |
28 |
|
62 |
|
(55)% |
|
98 |
|
301 |
|
(67)% |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$3,596 |
|
$8,249 |
|
(56)% |
|
$11,434 |
|
$24,793 |
|
(54)% |
Loss from Operations |
($1,369) |
|
($40) |
|
NM |
|
($6,199) |
|
($3,813) |
|
NM |
Operating Margin |
(38.1)% |
|
(0.5)% |
|
NM |
|
(54.2)% |
|
(15.4)% |
|
NM |
Commercial Airplanes third-quarter revenue decreased to
$3.6 billion, reflecting lower
delivery volume primarily due to COVID-19 impacts as well as 787
quality issues and associated rework. Third-quarter operating
margin decreased to (38.1) percent, primarily driven by lower
delivery volume, as well as $590
million of abnormal production costs related to the 737
program.
Commercial Airplanes added the final 777X flight test airplane
to the test program and the GE9X engine received FAA certification.
In October, the company decided it will consolidate 787 production
in South Carolina in mid-2021,
which did not have a significant financial impact on the program in
the third quarter. Commercial Airplanes delivered 28 airplanes
during the quarter, and backlog included over 4,300 airplanes
valued at $313 billion.
Defense, Space & Security
Table 5. Defense, Space & Security |
Third
Quarter |
|
|
|
Nine Months |
|
|
(Dollars in Millions) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$6,848 |
|
$7,002 |
|
(2)% |
|
$19,478 |
|
$20,168 |
|
(3)% |
Earnings from Operations |
$628 |
|
$754 |
|
(17)% |
|
$1,037 |
|
$2,581 |
|
(60)% |
Operating Margin |
9.2% |
|
10.8% |
|
(1.6) Pts |
|
5.3% |
|
12.8% |
|
(7.5) Pts |
Defense, Space & Security third-quarter revenue decreased to
$6.8 billion, primarily due to
derivative aircraft award timing, partially offset by higher
fighter volume (Table 5). Third-quarter operating margin decreased
to 9.2 percent reflecting less favorable performance, including
a $67 million KC-46A Tanker charge.
During the quarter, Defense, Space & Security received an
award for eight F-15EX advanced fighter aircraft for the U.S. Air
Force and a contract extension for the International Space Station
for NASA, as well as contracts for nine additional MH-47G Block II
Chinook helicopters for the U.S. Army Special Operations and four
additional 702X satellites. Also in the quarter, the U.S. Air Force
and Boeing team was awarded the Collier Trophy for aerospace
excellence for the X-37B autonomous spaceplane. Significant
milestones included inducting the 20th U.S. Navy
F/A-18 into the Service Life Modification program as well as
delivering the first Bell Boeing V-22 Osprey to Japan and the first MH-47G Block II Chinook to
the U.S. Army Special Operations.
Backlog at Defense, Space & Security was $62 billion, of which 30 percent represents
orders from customers outside the U.S.
Global Services
Table 6. Global Services |
Third
Quarter |
|
|
|
Nine Months |
|
|
(Dollars in Millions) |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$3,694 |
|
$4,658 |
|
(21)% |
|
$11,810 |
|
$13,820 |
|
(15)% |
Earnings from Operations |
$271 |
|
$673 |
|
(60)% |
|
$307 |
|
$2,013 |
|
(85%) |
Operating Margin |
7.3% |
|
14.4% |
|
(7.1) Pts |
|
2.6% |
|
14.6% |
|
(12.0) Pts |
Global Services third-quarter revenue decreased to $3.7 billion, driven by lower commercial services
volume due to COVID-19, partially offset by higher government
services volume (Table 6). Third-quarter operating margin decreased
to 7.3 percent primarily due to lower commercial services volume
and additional severance costs.
During the quarter, Global Services signed an agreement with
GECAS for 11 737-800 Boeing Converted Freighters, secured a
six-year P-8A support contract for the Royal Australian Air Force,
and was awarded F-15EX training and services support contracts by
the U.S. Air Force. Global Services also delivered the first P-8A
Operational Flight Trainer for the United Kingdom Royal Air
Force.
Additional Financial Information
Table 7. Additional Financial
Information |
Third
Quarter |
|
Nine Months |
(Dollars in Millions) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues |
|
|
|
|
|
|
|
Boeing Capital |
$71 |
|
$66 |
|
$205 |
|
$207 |
Unallocated items, eliminations and other |
($70) |
|
$5 |
|
($73) |
|
($340) |
Earnings from Operations |
|
|
|
|
|
|
|
Boeing Capital |
$30 |
|
$29 |
|
$47 |
|
$86 |
FAS/CAS service cost adjustment |
$353 |
|
$364 |
|
$1,055 |
|
$1,093 |
Other unallocated items and eliminations |
($314) |
|
($521) |
|
($965) |
|
($1,731) |
Other income, net |
$119 |
|
$121 |
|
$325 |
|
$334 |
Interest and debt expense |
($643) |
|
($203) |
|
($1,458) |
|
($480) |
Effective tax rate |
49.6% |
|
0.8% |
|
40.1% |
|
(350.6)% |
At quarter-end, Boeing Capital's net portfolio balance was
$2.0 billion. The change in revenue
and earnings from other unallocated items and eliminations was
primarily due to the timing of cost allocations. Earnings from
other unallocated items and eliminations was also impacted by lower
enterprise research and development expense. Interest and debt
expense increased due to higher debt balances. The third quarter
effective tax rate reflects tax benefits related to the five 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 pages 12-13.
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 financing 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) |
|
|
Nine months
ended
September 30 |
|
Three months
ended
September 30 |
(Dollars in millions, except per share
data) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Sales of products |
$34,656 |
|
$50,514 |
|
$11,402 |
|
$17,195 |
Sales of services |
8,198 |
|
8,134 |
|
2,737 |
|
2,785 |
Total revenues |
42,854 |
|
58,648 |
|
14,139 |
|
19,980 |
|
|
|
|
|
|
|
|
Cost of products |
(36,001) |
|
(46,584) |
|
(10,910) |
|
(14,674) |
Cost of services |
(6,817) |
|
(6,752) |
|
(2,185) |
|
(2,241) |
Boeing Capital interest expense |
(33) |
|
(49) |
|
(10) |
|
(15) |
Total costs and expenses |
(42,851) |
|
(53,385) |
|
(13,105) |
|
(16,930) |
|
3 |
|
5,263 |
|
1,034 |
|
3,050 |
Loss from operating investments, net |
(61) |
|
(3) |
|
(14) |
|
(8) |
General and administrative expense |
(2,989) |
|
(2,857) |
|
(955) |
|
(1,001) |
Research and development expense, net |
(1,871) |
|
(2,470) |
|
(574) |
|
(778) |
Gain/(loss) on dispositions, net |
200 |
|
296 |
|
108 |
|
(4) |
(Loss)/earnings from operations |
(4,718) |
|
229 |
|
(401) |
|
1,259 |
Other income, net |
325 |
|
334 |
|
119 |
|
121 |
Interest and debt expense |
(1,458) |
|
(480) |
|
(643) |
|
(203) |
(Loss)/earnings before income taxes |
(5,851) |
|
83 |
|
(925) |
|
1,177 |
Income tax benefit/(expense) |
2,349 |
|
291 |
|
459 |
|
(10) |
Net (loss)/earnings |
(3,502) |
|
374 |
|
(466) |
|
1,167 |
Less: net loss attributable to noncontrolling
interest |
(49) |
|
|
|
(17) |
|
|
Net (loss)/earnings attributable to Boeing
Shareholders |
($3,453) |
|
$374 |
|
($449) |
|
$1,167 |
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share |
($6.10) |
|
$0.66 |
|
($0.79) |
|
$2.07 |
|
|
|
|
|
|
|
|
Diluted (loss)/earnings per share |
($6.10) |
|
$0.66 |
|
($0.79) |
|
$2.05 |
|
|
|
|
|
|
|
|
Weighted average diluted shares
(millions) |
566.3 |
|
570.4 |
|
566.6 |
|
569.2 |
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Financial Position |
(Unaudited) |
|
(Dollars in millions, except per share
data) |
September 30
2020 |
|
December 31
2019 |
Assets |
|
|
|
Cash and cash equivalents |
$10,564 |
|
$9,485 |
Short-term and other investments |
16,552 |
|
545 |
Accounts receivable, net |
2,762 |
|
3,266 |
Unbilled receivables, net |
8,860 |
|
9,043 |
Current portion of customer financing, net |
100 |
|
162 |
Inventories |
86,961 |
|
76,622 |
Other current assets, net |
5,213 |
|
3,106 |
Total current assets |
131,012 |
|
102,229 |
Customer financing, net |
2,010 |
|
2,136 |
Property, plant and equipment, net of accumulated
depreciation of $20,241 and $19,342 |
11,969 |
|
12,502 |
Goodwill |
8,071 |
|
8,060 |
Acquired intangible assets, net |
2,941 |
|
3,338 |
Deferred income taxes |
704 |
|
683 |
Investments |
1,052 |
|
1,092 |
Other assets, net of accumulated amortization of
$671 and $580 |
3,502 |
|
3,585 |
Total assets |
$161,261 |
|
$133,625 |
Liabilities and equity |
|
|
|
Accounts payable |
$14,479 |
|
$15,553 |
Accrued liabilities |
22,220 |
|
22,868 |
Advances and progress billings |
51,974 |
|
51,551 |
Short-term debt and current portion of long-term
debt |
3,634 |
|
7,340 |
Total current liabilities |
92,307 |
|
97,312 |
Deferred income taxes |
503 |
|
413 |
Accrued retiree health care |
4,429 |
|
4,540 |
Accrued pension plan liability, net |
15,343 |
|
16,276 |
Other long-term liabilities |
2,907 |
|
3,422 |
Long-term debt |
57,325 |
|
19,962 |
Total liabilities |
172,814 |
|
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 |
6,687 |
|
6,745 |
Treasury stock, at cost - 447,744,896 and
449,352,405 shares |
(54,819) |
|
(54,914) |
Retained earnings |
47,029 |
|
50,644 |
Accumulated other comprehensive loss |
(15,779) |
|
(16,153) |
Total shareholders' equity |
(11,821) |
|
(8,617) |
Noncontrolling interests |
268 |
|
317 |
Total equity |
(11,553) |
|
(8,300) |
Total liabilities and equity |
$161,261 |
|
$133,625 |
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Cash Flows |
(Unaudited) |
|
|
Nine months
ended
September 30 |
(Dollars in millions) |
2020 |
|
2019 |
Cash flows – operating
activities: |
|
|
|
Net (loss)/earnings |
($3,502) |
|
$374 |
Adjustments to reconcile net loss to net cash
(used)/provided by operating activities: |
|
|
|
Non-cash items – |
|
|
|
Share-based plans expense |
165 |
|
160 |
Depreciation and amortization |
1,668 |
|
1,643 |
Investment/asset impairment charges, net |
317 |
|
106 |
Customer financing valuation adjustments |
12 |
|
249 |
Gain on dispositions, net |
(200) |
|
(296) |
Other charges and credits, net |
912 |
|
190 |
Changes in assets and liabilities – |
|
|
|
Accounts receivable |
125 |
|
315 |
Unbilled receivables |
56 |
|
(1,053) |
Advances and progress billings |
428 |
|
2,355 |
Inventories |
(9,653) |
|
(9,565) |
Other current assets |
319 |
|
(224) |
Accounts payable |
(3,303) |
|
1,626 |
Accrued liabilities |
967 |
|
5,495 |
Income taxes receivable, payable and deferred |
(2,404) |
|
(989) |
Other long-term liabilities |
(149) |
|
(577) |
Pension and other postretirement plans |
(556) |
|
(570) |
Customer financing, net |
108 |
|
391 |
Other |
289 |
|
144 |
Net cash used by operating activities |
(14,401) |
|
(226) |
Cash flows – investing activities: |
|
|
|
Property, plant and equipment additions |
(1,038) |
|
(1,387) |
Property, plant and equipment reductions |
275 |
|
334 |
Acquisitions, net of cash acquired |
|
|
(492) |
Contributions to investments |
(25,846) |
|
(1,439) |
Proceeds from investments |
9,772 |
|
967 |
Purchase of distribution rights |
|
|
(20) |
Other |
14 |
|
(10) |
Net cash used by investing activities |
(16,823) |
|
(2,047) |
Cash flows – financing activities: |
|
|
|
New borrowings |
42,362 |
|
19,621 |
Debt repayments |
(8,792) |
|
(8,978) |
Contributions from noncontrolling interests |
|
|
7 |
Stock options exercised |
31 |
|
51 |
Employee taxes on certain share-based payment
arrangements |
(169) |
|
(241) |
Common shares repurchased |
|
|
(2,651) |
Dividends paid |
(1,158) |
|
(3,473) |
Net cash provided by financing
activities |
32,274 |
|
4,336 |
Effect of exchange rate changes on cash and cash
equivalents, including restricted |
26 |
|
(27) |
Net increase in cash & cash equivalents,
including restricted |
1,076 |
|
2,036 |
Cash & cash equivalents, including restricted,
at beginning of year |
9,571 |
|
7,813 |
Cash & cash equivalents, including
restricted, at end of period |
10,647 |
|
9,849 |
Less restricted cash & cash equivalents,
included in Investments |
83 |
|
86 |
Cash and cash equivalents at end of
period |
$10,564 |
|
$9,763 |
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.
|
Nine months
ended
September 30 |
|
Three months
ended
September 30 |
(Dollars in millions) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues: |
|
|
|
|
|
|
|
Commercial Airplanes |
$11,434 |
|
$24,793 |
|
$3,596 |
|
$8,249 |
Defense, Space & Security |
19,478 |
|
20,168 |
|
6,848 |
|
7,002 |
Global Services |
11,810 |
|
13,820 |
|
3,694 |
|
4,658 |
Boeing Capital |
205 |
|
207 |
|
71 |
|
66 |
Unallocated items, eliminations and other |
(73) |
|
(340) |
|
(70) |
|
5 |
Total revenues |
$42,854 |
|
$58,648 |
|
$14,139 |
|
$19,980 |
Earnings/(loss) from operations: |
|
|
|
|
|
|
|
Commercial Airplanes |
($6,199) |
|
($3,813) |
|
($1,369) |
|
($40) |
Defense, Space & Security |
1,037 |
|
2,581 |
|
628 |
|
754 |
Global Services |
307 |
|
2,013 |
|
271 |
|
673 |
Boeing Capital |
47 |
|
86 |
|
30 |
|
29 |
Segment operating (loss)/earnings |
(4,808) |
|
867 |
|
(440) |
|
1,416 |
Unallocated items, eliminations and other |
(965) |
|
(1,731) |
|
(314) |
|
(521) |
FAS/CAS service cost adjustment |
1,055 |
|
1,093 |
|
353 |
|
364 |
(Loss)/earnings from operations |
(4,718) |
|
229 |
|
(401) |
|
1,259 |
Other income, net |
325 |
|
334 |
|
119 |
|
121 |
Interest and debt expense |
(1,458) |
|
(480) |
|
(643) |
|
(203) |
(Loss)/earnings before income taxes |
(5,851) |
|
83 |
|
(925) |
|
1,177 |
Income tax benefit/(expense) |
2,349 |
|
291 |
|
459 |
|
(10) |
Net (loss)/earnings |
(3,502) |
|
374 |
|
(466) |
|
1,167 |
Less: Net loss attributable to noncontrolling
interest |
(49) |
|
|
|
(17) |
|
|
Net (loss)/earnings attributable to Boeing
Shareholders |
($3,453) |
|
$374 |
|
($449) |
|
$1,167 |
Research and development expense, net: |
|
|
|
|
|
|
|
Commercial Airplanes |
$1,107 |
|
$1,529 |
|
$321 |
|
$467 |
Defense, Space & Security |
494 |
|
556 |
|
164 |
|
182 |
Global Services |
110 |
|
102 |
|
45 |
|
29 |
Other |
160 |
|
283 |
|
44 |
|
100 |
Total research and development expense,
net |
$1,871 |
|
$2,470 |
|
$574 |
|
$778 |
Unallocated items, eliminations and
other: |
|
|
|
|
|
|
|
Share-based plans |
($80) |
|
($57) |
|
($37) |
|
($21) |
Deferred compensation |
34 |
|
(154) |
|
(39) |
|
(25) |
Amortization of previously capitalized
interest |
(69) |
|
(68) |
|
(19) |
|
(23) |
Customer financing impairment |
|
|
(250) |
|
|
|
|
Research and development expense, net |
(160) |
|
(283) |
|
(44) |
|
(100) |
Eliminations and other unallocated items |
(690) |
|
(919) |
|
(175) |
|
(352) |
Sub-total (included in core operating
loss) |
(965) |
|
(1,731) |
|
(314) |
|
(521) |
Pension FAS/CAS service cost adjustment |
773 |
|
823 |
|
260 |
|
274 |
Postretirement FAS/CAS service cost
adjustment |
282 |
|
270 |
|
93 |
|
90 |
FAS/CAS service cost adjustment |
1,055 |
|
1,093 |
|
$353 |
|
$364 |
Total |
$90 |
|
($638) |
|
$39 |
|
($157) |
|
The Boeing Company
and Subsidiaries |
|
Operating and
Financial Data |
|
(Unaudited) |
|
|
Deliveries |
|
Nine months
ended
September 30 |
|
Three months
ended
September 30 |
|
Commercial Airplanes |
|
2020 |
|
2019 |
|
2020 |
|
|
2019 |
|
|
737 |
|
12 |
|
118 |
|
3 |
|
|
5 |
|
|
747 |
|
2 |
|
5 |
|
1 |
|
|
1 |
|
|
767 |
|
20 |
|
32 |
|
6 |
|
|
10 |
|
|
777 |
|
15 |
|
33 |
(1) |
5 |
|
|
11 |
|
|
787 |
|
49 |
|
113 |
|
13 |
|
|
35 |
|
|
Total |
|
98 |
|
301 |
|
28 |
|
|
62 |
|
Note: Aircraft accounted for as
revenues by BCA and as operating leases in consolidation identified
by parentheses |
|
|
|
|
|
|
|
|
|
|
|
|
Defense, Space & Security |
|
|
|
|
|
|
|
|
|
|
|
AH-64 Apache (New) |
|
18 |
|
27 |
|
7 |
|
|
17 |
|
|
AH-64 Apache (Remanufactured) |
|
44 |
|
56 |
|
12 |
|
|
21 |
|
|
C-17 Globemaster III |
|
— |
|
1 |
|
— |
|
|
1 |
|
|
C-40A |
|
— |
|
2 |
|
— |
|
|
2 |
|
|
CH-47 Chinook (New) |
|
19 |
|
13 |
|
4 |
|
|
6 |
|
|
CH-47 Chinook (Renewed) |
|
3 |
|
16 |
|
2 |
|
|
7 |
|
|
F-15 Models |
|
3 |
|
7 |
|
— |
|
|
2 |
|
|
F/A-18 Models |
|
14 |
|
16 |
|
5 |
|
|
6 |
|
|
KC-46A Tanker |
|
10 |
|
21 |
|
4 |
|
|
9 |
|
|
P-8 Models |
|
9 |
|
14 |
|
3 |
|
|
6 |
|
|
Commercial and Civil Satellites |
|
— |
|
1 |
|
— |
|
|
— |
|
|
|
Total backlog (Dollars
in millions) |
September 30
2020 |
|
December 31
2019 |
Commercial Airplanes |
$312,684 |
|
$376,593 |
Defense, Space & Security |
62,375 |
|
63,691 |
Global Services |
17,464 |
|
22,902 |
Unallocated items, eliminations and
other |
544 |
|
217 |
Total backlog |
$393,067 |
|
$463,403 |
|
|
|
|
Contractual backlog |
$368,916 |
|
$436,473 |
Unobligated backlog |
24,151 |
|
26,930 |
Total backlog |
$393,067 |
|
$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)/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 5 of this
release for additional information on the use of these non-GAAP
financial measures.
(Dollars in millions, except per share
data) |
Third Quarter
2020 |
|
Third Quarter 2019 |
|
$ millions |
Per Share |
|
$ millions |
Per Share |
Revenues |
14,139 |
|
|
19,980 |
|
(Loss)/earnings from operations (GAAP) |
(401) |
|
|
1,259 |
|
Operating margin (GAAP) |
(2.8)% |
|
|
6.3% |
|
|
|
|
|
|
|
FAS/CAS service cost adjustment: |
|
|
|
|
|
Pension FAS/CAS service cost adjustment |
(260) |
|
|
(274) |
|
Postretirement FAS/CAS service cost
adjustment |
(93) |
|
|
(90) |
|
FAS/CAS service cost adjustment |
(353) |
|
|
(364) |
|
Core operating (loss)/earnings
(non-GAAP) |
($754) |
|
|
$895 |
|
Core operating margin (non-GAAP) |
(5.3)% |
|
|
4.5% |
|
|
|
|
|
|
|
Diluted (loss)/earnings per share
(GAAP) |
|
($0.79) |
|
|
$2.05 |
Pension FAS/CAS service cost adjustment |
($260) |
(0.46) |
|
($274) |
(0.48) |
Postretirement FAS/CAS service cost
adjustment |
(93) |
(0.16) |
|
(90) |
(0.16) |
Non-operating pension expense |
(84) |
(0.16) |
|
(93) |
(0.17) |
Non-operating postretirement expense |
10 |
0.02 |
|
27 |
0.05 |
Provision for deferred income taxes on
adjustments 1 |
90 |
0.16 |
|
90 |
0.16 |
Subtotal of adjustments |
($337) |
($0.60) |
|
($340) |
($0.60) |
Core (loss)/earnings per share
(non-GAAP) |
|
($1.39) |
|
|
$1.45 |
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
|
566.6 |
|
|
569.2 |
|
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)/earnings from operations, operating margin, and
diluted (loss)/earnings per share. See page 5 of this release for
additional information on the use of these non-GAAP financial
measures.
(Dollars in millions, except per share
data) |
Nine Months
2020 |
|
Nine Months 2019 |
|
$ millions |
Per Share |
|
$ millions |
Per Share |
Revenues |
42,854 |
|
|
58,648 |
|
(Loss)/earnings from operations (GAAP) |
(4,718) |
|
|
229 |
|
Operating margin (GAAP) |
(11.0)% |
|
|
0.4 % |
|
|
|
|
|
|
|
FAS/CAS service cost adjustment: |
|
|
|
|
|
Pension FAS/CAS service cost adjustment |
(773) |
|
|
(823) |
|
Postretirement FAS/CAS service cost
adjustment |
(282) |
|
|
(270) |
|
FAS/CAS service cost adjustment |
(1,055) |
|
|
(1,093) |
|
Core operating loss (non-GAAP) |
($5,773) |
|
|
($864) |
|
Core operating margin (non-GAAP) |
(13.5)% |
|
|
(1.5 %) |
|
|
|
|
|
|
|
Diluted (loss)/earnings per share
(GAAP) |
|
($6.10) |
|
|
$0.66 |
Pension FAS/CAS service cost adjustment |
($773) |
(1.36) |
|
($823) |
(1.45) |
Postretirement FAS/CAS service cost
adjustment |
(282) |
(0.50) |
|
(270) |
(0.47) |
Non-operating pension expense |
(255) |
(0.46) |
|
(280) |
(0.49) |
Non-operating postretirement expense |
37 |
0.07 |
|
80 |
0.14 |
Provision for deferred income taxes on
adjustments 1 |
267 |
0.47 |
|
272 |
0.48 |
Subtotal of adjustments |
($1,006) |
($1.78) |
|
($1,021) |
($1.79) |
Core loss per share (non-GAAP) |
|
($7.88) |
|
|
($1.13) |
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
|
566.3 |
|
|
570.4 |
|
1 The
income tax impact is calculated using the U.S. corporate statutory
tax rate. |
|
|
|
|
|
|
|