CHICAGO, July 27, 2016
/PRNewswire/ --
- Revenue increased to $24.8
billion on strong commercial deliveries and services
growth
- Loss of $0.37 per share
(GAAP) and core (non-GAAP)* loss of $0.44 per share reflect $3.23 per share impact related to previously
announced 787 R&D reclassification and 747 &
Tanker charges
- Strong operating cash flow of $3.2
billion; repurchased 15 million shares for $2.0 billion
- Backlog remains robust at $472
billion with nearly 5,700 commercial airplane
orders
- Cash and marketable securities of $9.3 billion provide strong
liquidity
- Reaffirmed cash & revenue guidance; EPS
reflects reclassification, charges, solid performance
& tax
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Table 1. Summary
Financial Results
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Second
Quarter
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First
Half
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(Dollars in
Millions, except per share data)
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2016
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2015
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Change
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2016
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2015
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Change
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Revenues
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$24,755
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$24,543
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1%
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$47,387
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$46,692
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1%
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GAAP
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Earnings/(Loss)
From Operations
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($419)
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$1,683
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(125)%
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$1,369
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$3,702
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(63)%
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Operating
Margin
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(1.7)%
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6.9%
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(8.6)
Pts
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2.9%
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7.9%
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(5.0)
Pts
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Net
Earnings/(Loss)
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($234)
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$1,110
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(121)%
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$985
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$2,446
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(60)%
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Earnings/(Loss)
Per Share
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($0.37)
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$1.59
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(123)%
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$1.51
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$3.46
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(56)%
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Operating Cash
Flow
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$3,234
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$3,297
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(2)%
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$4,465
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$3,385
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32%
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Non-GAAP*
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Core Operating
Earnings/(Loss)
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($488)
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$1,713
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(128)%
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$1,206
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$3,845
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(69)%
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Core Operating
Margin
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(2.0)%
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7.0%
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(9.0)
Pts
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2.5%
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8.2%
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(5.7)
Pts
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Core
Earnings/(Loss) Per Share
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($0.44)
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$1.62
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(127)%
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$1.35
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$3.59
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(62)%
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*
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Non-GAAP measures.
Complete definitions of Boeing's non-GAAP measures are on page 7,
"Non-GAAP Measures Disclosures."
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The Boeing Company [NYSE: BA] reported second-quarter revenue of
$24.8 billion on strong commercial
deliveries and services growth (Table 1). GAAP loss per share of
$0.37 and core loss per share
(non-GAAP)* of $0.44 reflect the
previously announced 787 cost reclassification ($1.33 per share) and charges on the 747 program
($1.28 per share) and the KC-46
Tanker program ($0.62 per share),
partially offset by solid execution and higher volume.
"The underlying operating performance of the company remains
solid with our commercial and defense teams again delivering strong
revenues and operating cash flow. Actions taken during the quarter
that impacted our earnings were the right, proactive steps to
reduce risk and strengthen our position for the future," said
Chairman, President and Chief Executive Officer Dennis Muilenburg. "Our strong cash generation
also supported our ongoing commitment to invest in product
innovation and in our people, and return substantial cash to
shareholders through stock repurchases and dividends."
"As we look forward to the second half of the year, we
anticipate continued strong operating performance across our
production and services programs on generally healthy demand for
our broad portfolio of market-leading offerings. Our commercial
airplane development programs remain on track and we have
successfully completed the flight testing required for customer
approval of key KC-46 production milestones."
"Overall our teams remain intensely focused on improving
productivity and quality, building out our large and diverse
backlog, investing in future growth, and delivering increasing
value to all of our stakeholders."
GAAP earnings per share guidance for 2016 has been adjusted to
between $6.40 and $6.60 from
$8.45 and $8.65 and core earnings per
share (non-GAAP)* guidance has been adjusted to between
$6.10 and $6.30 from $8.15 and $8.35 to reflect the impact of the 787
R&D reclassification and the 747 and Tanker charges, solid
performance and tax benefits.
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Table 2. Cash
Flow
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Second
Quarter
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First
Half
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(Millions)
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2016
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2015
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2016
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2015
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Operating Cash
Flow
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$3,234
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$3,297
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$4,465
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$3,385
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Less Additions to
Property, Plant & Equipment
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($671)
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($692)
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($1,419)
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($1,266)
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Free Cash
Flow*
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$2,563
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$2,605
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$3,046
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$2,119
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*
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Non-GAAP measures.
Complete definitions of Boeing's non-GAAP measures are on page 7,
"Non-GAAP Measures Disclosures."
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Operating cash flow in the quarter was $3.2 billion, largely reflecting commercial
airplane production rates and solid operating performance (Table
2). During the quarter, the company repurchased 15.3 million shares
for $2.0 billion, leaving
$8.5 billion remaining under the
current repurchase authorization which is expected to be completed
over approximately the next two years. The company also paid
$691 million in dividends in the
quarter, reflecting an approximately 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
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Quarter-End
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(Billions)
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Q2
16
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Q1
16
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Cash
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$8.6
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$7.9
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Marketable
Securities1
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$0.7
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$0.5
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Total
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$9.3
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$8.4
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Debt
Balances:
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The Boeing Company,
net of intercompany loans to BCC
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$8.7
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$7.6
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Boeing Capital,
including intercompany loans
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$2.3
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$2.4
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Total Consolidated
Debt
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$11.0
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$10.0
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1
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Marketable
securities consists primarily of time deposits due within one year
classified as "short-term investments."
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Cash and investments in marketable securities totaled
$9.3 billion, up from $8.4 billion at the beginning of the quarter.
Debt was $11.0 billion, up from the
beginning of the quarter, primarily due to the issuance of new debt
(Table 3).
Total company backlog at quarter-end was $472 billion, down from $480 billion at the beginning of the quarter, and
included net orders for the quarter of $17
billion.
Segment Results
Commercial Airplanes
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Table 4.
Commercial Airplanes
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Second
Quarter
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First
Half
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(Dollars in
Millions)
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2016
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2015
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Change
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2016
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2015
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Change
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Commercial
Airplanes Deliveries
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199
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197
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1%
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375
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381
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(2)%
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Revenues
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$17,456
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$16,877
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3%
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$31,855
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$32,258
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(1)%
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Earnings/(Loss)
from Operations
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($973)
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$1,206
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(181)%
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$60
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$2,823
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(98)%
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Operating
Margin
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(5.6)%
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7.1%
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(12.7)
Pts
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0.2%
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8.8%
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(8.6)
Pts
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Commercial Airplanes second-quarter revenue increased 3 percent
to $17.5 billion on higher volume and
mix (Table 4). Second-quarter operating margin was negative 5.6
percent, reflecting previously announced R&D reclassification
of $1,235 million on the 787 program,
a pre-tax charge of $1,188 million on
the 747 program, and a pre-tax charge of $354 million on the KC-46 Tanker program. The
results also reflect higher planned R&D and solid execution.
Second-quarter operating margin excluding the reclassification and
charges (non-GAAP)* was 10.3%.
During the quarter, the 787 program reached a 12 per month
delivery rate and the company opened the new 777X Composite Wing
Center in Everett. The 737 program rolled out the first two 737 MAX
production airplanes and has captured over 3,200 orders for the 737
MAX since launch, including an order for 100 737 MAX 200 airplanes
from Vietjet during the quarter. The 737 MAX development program is
progressing smoothly and entry into service is being
accelerated.
Commercial Airplanes booked 152 net orders during the quarter.
Backlog remains strong with nearly 5,700 airplanes valued at
$417 billion.
Defense, Space & Security
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Table 5. Defense,
Space & Security
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Second
Quarter
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First
Half
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(Dollars in
Millions)
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2016
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2015
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Change
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2016
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2015
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Change
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Revenues1
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Boeing Military
Aircraft
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$2,979
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$3,474
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(14)%
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$6,638
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$6,200
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7%
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Network &
Space Systems
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$1,810
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$1,938
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(7)%
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$3,545
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$3,670
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(3)%
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Global
Services & Support
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$2,385
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$2,132
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12%
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$4,947
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$4,383
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13%
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Total BDS
Revenues
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$7,174
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$7,544
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(5)%
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$15,130
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$14,253
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6%
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Earnings from
Operations1
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Boeing Military
Aircraft
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$175
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$121
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45%
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$509
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$380
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34%
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Network &
Space Systems
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$153
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$151
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1%
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$301
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$318
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(5)%
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Global
Services & Support
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$265
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$274
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(3)%
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$605
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$591
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2%
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Total BDS Earnings
from Operations
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$593
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$546
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9%
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$1,415
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$1,289
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10%
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Operating
Margin
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8.3%
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7.2%
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1.1
Pts
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9.4%
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9.0%
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0.4
Pts
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1
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During the first
quarter of 2016, certain programs were realigned between Boeing
Military Aircraft and Global Services & Support.
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Defense, Space & Security's second-quarter revenue was
$7.2 billion. Second-quarter
operating margin was 8.3 percent, reflecting the previously
announced $219 million pre-tax charge
recorded at Boeing Military Aircraft on the KC-46 Tanker program
(Table 5).
Boeing Military Aircraft (BMA) second-quarter revenue was
$3.0 billion, reflecting lower
planned C-17 and Chinook deliveries. Operating margin was 5.9
percent, reflecting the KC-46 Tanker charge. During the quarter,
BMA was awarded contracts for 24 Apache and 12 Chinook
helicopters.
Network & Space Systems (N&SS) second-quarter revenue
was $1.8 billion. Operating margin
increased to 8.5 percent, reflecting performance and timing on
United Launch Alliance launches.
Global Services & Support (GS&S) second-quarter revenue
increased to $2.4 billion, reflecting
higher volume in Aircraft Modernization & Sustainment.
Operating margin was 11.1 percent largely reflecting contract
mix.
Backlog at Defense, Space & Security was $55 billion, of which 37 percent represents
orders from international customers.
Additional Financial Information
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Table 6.
Additional Financial Information
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Second
Quarter
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First
Half
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(Dollars in
Millions)
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2016
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2015
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2016
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2015
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Revenues
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Boeing
Capital
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$84
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$115
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$148
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$201
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Unallocated items,
eliminations and other
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$41
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$7
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$254
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($20)
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Earnings from
Operations
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Boeing
Capital
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$18
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$11
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$23
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$31
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Unallocated
pension/postretirement
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$69
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($30)
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$163
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($143)
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Other unallocated
items and eliminations
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($126)
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($50)
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($292)
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($298)
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Other income,
net
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$13
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$15
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$39
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$3
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Interest and debt
expense
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($73)
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($75)
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($146)
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($136)
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Effective tax
rate
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51.1%
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31.6%
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21.9%
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31.5%
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At quarter-end, Boeing Capital's net portfolio balance was
$3 billion, down from the beginning
of the quarter. Total pension expense for the second quarter was
$463 million, down from $523 million in the same period of the prior
year. Other unallocated items and eliminations decreased from the
same period in the prior year primarily due to higher deferred
compensation expense and elimination of intercompany profit. The
effective tax rate for the second quarter was increased from the
same period in the prior year primarily due to lower pre-tax
income. During the quarter, the company adopted a new accounting
standard for share-based compensation payments which resulted in a
$54 million tax benefit ($0.08 per share).
Outlook
The company's 2016 updated financial and delivery guidance
(Table 7) reflects the impact of the 787 R&D reclassification
and the 747 and Tanker charges, solid performance and tax
benefits.
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Table 7. 2016
Financial Outlook
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Current
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Prior
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(Dollars in
Billions, except per share data)
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Guidance
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Guidance
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The Boeing
Company
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Revenue
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$93.0 -
95.0
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$93.0 -
95.0
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GAAP Earnings Per
Share
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$6.40 -
6.60
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$8.45 -
8.65
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Core Earnings Per
Share*
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$6.10 -
6.30
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$8.15 -
8.35
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Operating Cash
Flow
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~$10.0
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~$10.0
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Commercial
Airplanes
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Deliveries
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740 - 745
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740 - 745
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Revenue
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$64.0 -
65.0
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$64.0 -
65.0
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Operating
Margin
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4.5% -
5.0
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~9.0%
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Defense, Space
& Security
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Revenue
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Boeing Military
Aircraft
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~$12.3
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~$12.3
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Network &
Space Systems
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~$7.3
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~$7.3
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Global
Services & Support
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~$9.4
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~$9.4
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Total BDS
Revenue
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$28.5 -
29.5
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$28.5 -
29.5
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Operating
Margin
|
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Boeing Military
Aircraft
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~9.5%
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~10.0%
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Network &
Space Systems
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~9.0%
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~9.0%
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Global
Services & Support
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~12.0%
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~11.5%
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Total BDS Operating
Margin
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>10.0%
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|
>10.0%
|
|
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Boeing
Capital
|
|
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Portfolio
Size
|
Stable
|
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Stable
|
Revenue
|
~$0.3
|
|
~$0.3
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Pre-Tax
Earnings
|
~$0.05
|
|
~$0.05
|
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Research &
Development
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~
$4.8
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|
~ $3.6
|
Capital
Expenditures
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~ $2.8
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|
~ $2.8
|
Pension Expense
1
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~ $2.1
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|
~ $2.1
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Effective Tax
Rate
|
~
23.0%
|
|
~ 30.0%
|
|
|
1
|
Approximately ($0.1)
billion is expected to be recorded in unallocated items and
eliminations
|
*
|
Non-GAAP measures.
Complete definitions of Boeing's non-GAAP measures are on page 7,
"Non-GAAP Measures Disclosures."
|
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information
determined under U.S. generally accepted accounting principles
(GAAP) with certain non-GAAP financial information. The non-GAAP
financial information presented excludes certain significant items
that may not be indicative of, or are unrelated to, results from
our ongoing business operations. We believe that these non-GAAP
measures provide investors with additional insight into the
company's ongoing business performance. These non-GAAP measures
should not be considered in isolation or as a substitute for the
related GAAP measures, and other companies may define such measures
differently. We encourage investors to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure. The following definitions are
provided:
Core Operating Earnings/(Loss), Core Operating Margin and Core
Earnings/(Loss) Per Share
Core operating earnings/(loss) is defined as GAAP
earnings/(loss) from operations excluding unallocated
pension and post-retirement expense. Core operating margin is
defined as core operating earnings/(loss) expressed as a percentage
of revenue. Core earnings/(loss) per share is defined as GAAP
diluted earnings/(loss) per share excluding the net earnings
per share impact of unallocated pension and post-retirement
expense. Unallocated pension and post-retirement expense
represents the portion of pension and other post-retirement costs
that are not recognized by business segments for segment reporting
purposes. Pension costs, comprising service and prior service costs
computed in accordance with Generally Accepted Accounting
Principles in the United States of
America (GAAP) are allocated to Commercial Airplanes.
Pension costs allocated to BDS segments 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 unallocated pension and
post-retirement costs, which primarily represent costs driven by
market factors and costs not allocable to government contracts. A
reconciliation between the GAAP and non-GAAP measures is provided
on page 14.
Commercial Airplanes Operating Margin Excluding the
Reclassification and Charges
Commercial Airplanes GAAP operating margin for the three months
ended June 30, 2016 includes research
and development expense of $1,235
million related to the reclassification of costs associated
with two 787 flight test aircraft from program inventory, a
reach-forward loss on the 747 program of $1,188 million, and a reach-forward loss recorded
at Commercial Airplanes on the KC-46 Tanker program of $354 million. Management uses Commercial
Airplanes operating margin excluding the reclassification and
charges for the purpose of evaluating underlying business
performance for the three months ended June
30, 2016. Management believes that this measure also helps
investors assess overall trends in our operational performance and
provide additional context for year over year financial results. A
reconciliation between the GAAP and non-GAAP measures is provided
on page 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 between GAAP operating cash flow and free
cash flow.
Caution Concerning Forward-Looking
Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Words such as "may," "should," "expects," "intends,"
"projects," "plans," "believes," "estimates," "targets,"
"anticipates," and similar expressions are used to identify these
forward-looking statements. Examples of forward-looking statements
include statements relating to our future financial condition and
operating results, as well as any other statement that does not
directly relate to any historical or current fact. Forward-looking
statements are based on our current expectations and assumptions,
which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict. Many factors could
cause actual results to differ materially and adversely from these
forward-looking statements. Among these factors are risks related
to: (1) general conditions in the economy and our industry,
including those due to regulatory changes; (2) our reliance on our
commercial airline customers; (3) the overall health of our
aircraft production system, planned production rate increases
across multiple commercial airline programs, our commercial
development and derivative aircraft programs, and our aircraft
being subject to stringent performance and reliability standards;
(4) changing budget and appropriation levels and acquisition
priorities of the U.S. government; (5) our dependence on U.S.
government contracts; (6) our reliance on fixed-price contracts;
(7) our reliance on cost-type contracts; (8) uncertainties
concerning contracts that include in-orbit incentive payments; (9)
our dependence on our subcontractors and suppliers, as well as the
availability of raw materials, (10) changes in accounting
estimates; (11) changes in the competitive landscape in our
markets; (12) our non-U.S. operations, including sales to non-U.S.
customers; (13) potential adverse developments in new or pending
litigation and/or government investigations; (14) customer and
aircraft concentration in Boeing Capital's customer financing
portfolio; (15) changes in our ability to obtain debt on
commercially reasonable terms and at competitive rates in order to
fund our operations and contractual commitments; (16) realizing the
anticipated benefits of mergers, acquisitions, joint
ventures/strategic alliances or divestitures; (17) the adequacy of
our insurance coverage to cover significant risk exposures; (18)
potential business disruptions, including those related to physical
security threats, information technology or cyber-attacks,
epidemics, sanctions or natural disasters; (19) work stoppages or
other labor disruptions; (20) significant changes in discount rates
and actual investment return on pension assets; (21) potential
environmental liabilities; and (22) threats to the security of our
or our customers' information.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. Any
forward-looking statement speaks only as of the date on which it is
made, and we assume no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by law.
Contact:
|
|
|
|
|
|
Investor Relations:
|
|
Troy Lahr or Ben
Hackman (312) 544-2140
|
Communications:
|
|
Bernard Choi
(312) 544-2002
|
The Boeing Company
and Subsidiaries
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
June 30
|
Three months
ended
June 30
|
(Dollars in
millions, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Sales of
products
|
|
$42,069
|
|
|
$41,408
|
|
|
$22,184
|
|
|
$21,923
|
|
Sales of
services
|
5,318
|
|
5,284
|
|
2,571
|
|
2,620
|
|
Total
revenues
|
47,387
|
|
46,692
|
|
24,755
|
|
24,543
|
|
|
|
|
|
|
Cost of
products
|
(37,210)
|
|
(35,627)
|
|
(20,265)
|
|
(19,247)
|
|
Cost of
services
|
(4,180)
|
|
(4,186)
|
|
(2,044)
|
|
(2,086)
|
|
Boeing Capital
interest expense
|
(32)
|
|
(33)
|
|
(16)
|
|
(17)
|
|
Total costs and
expenses
|
(41,422)
|
|
(39,846)
|
|
(22,325)
|
|
(21,350)
|
|
|
5,965
|
|
6,846
|
|
2,430
|
|
3,193
|
|
Income from operating
investments, net
|
151
|
|
129
|
|
97
|
|
50
|
|
General and
administrative expense
|
(1,694)
|
|
(1,705)
|
|
(806)
|
|
(760)
|
|
Research and
development expense, net
|
(3,044)
|
|
(1,569)
|
|
(2,127)
|
|
(800)
|
|
(Loss)/gain on
dispositions, net
|
(9)
|
|
1
|
|
(13)
|
|
|
|
Earnings/(loss)
from operations
|
1,369
|
|
3,702
|
|
(419)
|
|
1,683
|
|
Other income,
net
|
39
|
|
3
|
|
13
|
|
15
|
|
Interest and debt
expense
|
(146)
|
|
(136)
|
|
(73)
|
|
(75)
|
|
Earnings/(loss)
before income taxes
|
1,262
|
|
3,569
|
|
(479)
|
|
1,623
|
|
Income tax
(expense)/benefit
|
(277)
|
|
(1,123)
|
|
245
|
|
(513)
|
|
Net
earnings/(loss)
|
|
$985
|
|
|
$2,446
|
|
|
($234)
|
|
|
$1,110
|
|
|
|
|
|
|
Basic
earnings/(loss) per share
|
|
$1.52
|
|
|
$3.50
|
|
|
($0.37)
|
|
|
$1.61
|
|
|
|
|
|
|
Diluted
earnings/(loss) per share
|
|
$1.51
|
|
|
$3.46
|
|
|
($0.37)
|
|
|
$1.59
|
|
|
|
|
|
|
Cash dividends
paid per share
|
|
$2.18
|
|
|
$1.82
|
|
|
$1.09
|
|
|
$0.91
|
|
|
|
|
|
|
Weighted average
diluted shares (millions)
|
654.9
|
|
706.6
|
|
636.3
|
**
|
698.9
|
|
|
|
**
|
As a result of
incurring a net loss for the three months ended June 30, 2016,
potential common shares of 6.7 million were excluded from diluted
earnings per share.
|
The Boeing Company
and Subsidiaries
|
Consolidated
Statements of Financial Position
|
(Unaudited)
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
June 30
2016
|
|
December 31
2015
|
|
Assets
|
|
|
Cash and cash
equivalents
|
|
$8,605
|
|
|
$11,302
|
|
Short-term and other
investments
|
660
|
|
750
|
|
Accounts receivable,
net
|
9,809
|
|
8,713
|
|
Current portion of
customer financing, net
|
251
|
|
212
|
|
Inventories, net of
advances and progress billings
|
44,182
|
|
47,257
|
|
Total current
assets
|
63,507
|
|
68,234
|
|
Customer financing,
net
|
2,909
|
|
3,358
|
|
Property, plant and
equipment, net of accumulated depreciation of $16,641 and
$16,286
|
12,533
|
|
12,076
|
|
Goodwill
|
5,128
|
|
5,126
|
|
Acquired intangible
assets, net
|
2,544
|
|
2,657
|
|
Deferred income
taxes
|
267
|
|
265
|
|
Investments
|
1,312
|
|
1,284
|
|
Other assets, net of
accumulated amortization of $451 and $451
|
1,409
|
|
1,408
|
|
Total
assets
|
|
$89,609
|
|
|
$94,408
|
|
Liabilities and
equity
|
|
|
Accounts
payable
|
|
$11,748
|
|
|
$10,800
|
|
Accrued
liabilities
|
13,534
|
|
14,014
|
|
Advances and billings
in excess of related costs
|
23,409
|
|
24,364
|
|
Short-term debt and
current portion of long-term debt
|
1,168
|
|
1,234
|
|
Total current
liabilities
|
49,859
|
|
50,412
|
|
Deferred income
taxes
|
2,422
|
|
2,392
|
|
Accrued retiree
health care
|
6,586
|
|
6,616
|
|
Accrued pension plan
liability, net
|
18,200
|
|
17,783
|
|
Other long-term
liabilities
|
2,048
|
|
2,078
|
|
Long-term
debt
|
9,847
|
|
8,730
|
|
Shareholders'
equity:
|
|
|
Common stock, par
value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares
issued
|
5,061
|
|
5,061
|
|
Additional paid-in
capital
|
4,778
|
|
4,834
|
|
Treasury stock, at
cost - 386,402,793 and 345,637,354 shares
|
(34,821)
|
|
(29,568)
|
|
Retained
earnings
|
38,362
|
|
38,756
|
|
Accumulated other
comprehensive loss
|
(12,795)
|
|
(12,748)
|
|
Total shareholders'
equity
|
585
|
|
6,335
|
|
Noncontrolling
interests
|
62
|
|
62
|
|
Total
equity
|
647
|
|
6,397
|
|
Total liabilities
and equity
|
|
$89,609
|
|
|
$94,408
|
|
The Boeing Company
and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Six months
ended
June 30
|
(Dollars in
millions)
|
2016
|
|
2015
|
|
Cash
flows – operating activities:
|
|
|
Net
earnings/(loss)
|
|
$985
|
|
|
$2,446
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
Non-cash items
–
|
|
|
Share-based plans
expense
|
97
|
|
94
|
|
Depreciation and
amortization
|
890
|
|
912
|
|
Investment/asset
impairment charges, net
|
50
|
|
74
|
|
Customer financing
valuation benefit
|
(4)
|
|
(5)
|
|
Gain/(loss) on
dispositions, net
|
9
|
|
(1)
|
|
Other charges and
credits, net
|
141
|
|
140
|
|
Excess tax benefits
from share-based payment arrangements
|
|
|
(124)
|
|
Changes in assets and
liabilities –
|
|
|
Accounts
receivable
|
(503)
|
|
(313)
|
|
Inventories, net of
advances and progress billings
|
3,004
|
|
(2,395)
|
|
Accounts
payable
|
1,221
|
|
888
|
|
Accrued
liabilities
|
(269)
|
|
(177)
|
|
Advances and billings
in excess of related costs
|
(954)
|
|
195
|
|
Income taxes
receivable, payable and deferred
|
(494)
|
|
482
|
|
Other long-term
liabilities
|
(103)
|
|
(17)
|
|
Pension and other
postretirement plans
|
181
|
|
1,244
|
|
Customer financing,
net
|
275
|
|
19
|
|
Other
|
(61)
|
|
(77)
|
|
Net cash
provided by operating activities
|
4,465
|
|
3,385
|
|
Cash flows –
investing activities:
|
|
|
Property, plant and
equipment additions
|
(1,419)
|
|
(1,266)
|
|
Property, plant and
equipment reductions
|
13
|
|
20
|
|
Acquisitions, net of
cash acquired
|
|
|
(23)
|
|
Contributions to
investments
|
(657)
|
|
(1,205)
|
|
Proceeds from
investments
|
705
|
|
2,040
|
|
Other
|
8
|
|
22
|
|
Net cash
used by investing activities
|
(1,350)
|
|
(412)
|
|
Cash flows –
financing activities:
|
|
|
New
borrowings
|
1,323
|
|
761
|
|
Debt
repayments
|
(267)
|
|
(846)
|
|
Stock options
exercised
|
147
|
|
276
|
|
Excess tax benefits
from share-based payment arrangements
|
|
|
124
|
|
Employee taxes on
certain share-based payment arrangements
|
(79)
|
|
(90)
|
|
Common shares
repurchased
|
(5,501)
|
|
(4,501)
|
|
Dividends
paid
|
(1,408)
|
|
(1,264)
|
|
Other
|
(24)
|
|
|
|
Net cash
used by financing activities
|
(5,809)
|
|
(5,540)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(3)
|
|
(9)
|
|
Net decrease in
cash and cash equivalents
|
(2,697)
|
|
(2,576)
|
|
Cash and cash
equivalents at beginning of year
|
11,302
|
|
11,733
|
|
Cash and cash
equivalents at end of period
|
|
$8,605
|
|
|
$9,157
|
|
The Boeing Company
and Subsidiaries
|
Summary of
Business Segment Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended
June 30
|
Three months
ended
June 30
|
(Dollars in
millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues:
|
|
|
|
|
Commercial
Airplanes
|
|
$31,855
|
|
|
$32,258
|
|
|
$17,456
|
|
|
$16,877
|
|
Defense,
Space & Security:
|
|
|
|
|
Boeing Military
Aircraft
|
6,638
|
|
6,200
|
|
2,979
|
|
3,474
|
|
Network &
Space Systems
|
3,545
|
|
3,670
|
|
1,810
|
|
1,938
|
|
Global
Services & Support
|
4,947
|
|
4,383
|
|
2,385
|
|
2,132
|
|
Total Defense,
Space & Security
|
15,130
|
|
14,253
|
|
7,174
|
|
7,544
|
|
Boeing
Capital
|
148
|
|
201
|
|
84
|
|
115
|
|
Unallocated items,
eliminations and other
|
254
|
|
(20)
|
|
41
|
|
7
|
|
Total
revenues
|
|
$47,387
|
|
|
$46,692
|
|
|
$24,755
|
|
|
$24,543
|
|
Earnings/(loss) from
operations:
|
|
|
|
|
Commercial
Airplanes
|
|
$60
|
|
|
$2,823
|
|
|
($973)
|
|
|
$1,206
|
|
Defense,
Space & Security:
|
|
|
|
|
Boeing Military
Aircraft
|
509
|
|
380
|
|
175
|
|
121
|
|
Network &
Space Systems
|
301
|
|
318
|
|
153
|
|
151
|
|
Global
Services & Support
|
605
|
|
591
|
|
265
|
|
274
|
|
Total Defense,
Space & Security
|
1,415
|
|
1,289
|
|
593
|
|
546
|
|
Boeing
Capital
|
23
|
|
31
|
|
18
|
|
11
|
|
Segment operating
profit/(loss)
|
1,498
|
|
4,143
|
|
(362)
|
|
1,763
|
|
Unallocated items,
eliminations and other
|
(129)
|
|
(441)
|
|
(57)
|
|
(80)
|
|
Earnings/(loss)
from operations
|
1,369
|
|
3,702
|
|
(419)
|
|
1,683
|
|
Other income,
net
|
39
|
|
3
|
|
13
|
|
15
|
|
Interest and debt
expense
|
(146)
|
|
(136)
|
|
(73)
|
|
(75)
|
|
Earnings/(loss)
before income taxes
|
1,262
|
|
3,569
|
|
(479)
|
|
1,623
|
|
Income tax
(expense)/benefit
|
(277)
|
|
(1,123)
|
|
245
|
|
(513)
|
|
Net
earnings/(loss)
|
|
$985
|
|
|
$2,446
|
|
|
($234)
|
|
|
$1,110
|
|
|
|
|
|
|
Research and
development expense, net:
|
|
|
|
|
Commercial
Airplanes
|
|
$2,548
|
|
|
$1,097
|
|
|
$1,877
|
|
|
$554
|
|
Defense,
Space & Security
|
521
|
|
474
|
|
263
|
|
250
|
|
Other
|
(25)
|
|
(2)
|
|
(13)
|
|
(4)
|
|
Total research and
development expense, net
|
|
$3,044
|
|
|
$1,569
|
|
|
$2,127
|
|
|
$800
|
|
|
|
|
|
|
Unallocated items,
eliminations and other:
|
|
|
|
|
Share-based
plans
|
|
($41)
|
|
|
($37)
|
|
|
($18)
|
|
|
($16)
|
|
Deferred
compensation
|
(5)
|
|
(48)
|
|
(21)
|
|
10
|
|
Amortization of
previously capitalized interest
|
(48)
|
|
(49)
|
|
(18)
|
|
(20)
|
|
Eliminations and
other unallocated items
|
(198)
|
|
(164)
|
|
(69)
|
|
(24)
|
|
Sub-total
(included in core operating earnings)
|
(292)
|
|
(298)
|
|
(126)
|
|
(50)
|
|
Pension
|
79
|
|
(209)
|
|
34
|
|
(57)
|
|
Postretirement
|
84
|
|
66
|
|
35
|
|
27
|
|
Total unallocated
items, eliminations and other
|
|
($129)
|
|
|
($441)
|
|
|
($57)
|
|
|
($80)
|
|
The Boeing Company
and Subsidiaries
|
Operating and
Financial Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Deliveries
|
|
Six months
ended
June 30
|
Three months
ended
June 30
|
Commercial
Airplanes
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
737
|
|
248
|
|
249
|
|
127
|
|
128
|
|
747
|
|
3
|
|
9
|
|
2
|
|
5
|
|
767
|
|
5
|
|
9
|
|
4
|
|
4
|
|
777
|
|
51
|
|
50
|
|
28
|
|
26
|
|
787
|
|
68
|
|
64
|
|
38
|
|
34
|
|
Total
|
|
375
|
|
381
|
|
199
|
|
197
|
|
Note: Deliveries
under operating lease are identified by parentheses.
|
|
|
|
|
|
|
Defense, Space &
Security
|
|
|
|
|
|
Boeing Military
Aircraft
|
|
|
|
|
|
AH-64 Apache
(New)
|
|
15
|
|
12
|
|
8
|
|
6
|
|
AH-64 Apache
(Remanufactured)
|
|
18
|
|
23
|
|
7
|
|
13
|
|
C-17 Globemaster
III
|
|
4
|
|
3
|
|
1
|
|
2
|
|
CH-47 Chinook
(New)
|
|
10
|
|
21
|
|
7
|
|
15
|
|
CH-47 Chinook
(Renewed)
|
|
16
|
|
5
|
|
7
|
|
1
|
|
F-15
Models
|
|
7
|
|
5
|
|
3
|
|
4
|
|
F/A-18
Models
|
|
14
|
|
20
|
|
6
|
|
9
|
|
P-8 Models
|
|
9
|
|
6
|
|
5
|
|
4
|
|
|
|
|
|
|
|
Global Services &
Support
|
|
|
|
|
|
AEW&C
|
|
|
|
|
|
|
|
|
|
C-40A
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
Network & Space
Systems
|
|
|
|
|
|
Commercial and Civil
Satellites
|
|
1
|
|
1
|
|
|
1
|
|
Military
Satellites
|
|
1
|
|
1
|
|
1
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual
backlog (Dollars in billions)
|
|
|
|
June 30
2016
|
|
December 31
2015
|
|
Commercial
Airplanes
|
|
|
|
|
$416.6
|
|
|
$431.4
|
|
Defense, Space &
Security:
|
|
|
|
|
|
Boeing Military
Aircraft
|
|
|
|
22.6
|
|
19.9
|
|
Network & Space
Systems
|
|
|
|
6.9
|
|
7.4
|
|
Global Services &
Support
|
|
|
|
16.9
|
|
17.9
|
|
Total Defense, Space
& Security
|
|
|
|
46.4
|
|
45.2
|
|
Total contractual
backlog
|
|
|
|
|
$463.0
|
|
|
$476.6
|
|
Unobligated
backlog
|
|
|
|
|
$9.2
|
|
|
$12.7
|
|
Total
backlog
|
|
|
|
|
$472.2
|
|
|
$489.3
|
|
Workforce
|
|
|
|
158,100
|
|
161,400
|
|
|
|
|
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, core earnings per share, and
Commercial Airplanes operating margin excluding the
reclassification and charges with the most directly comparable GAAP
financial measures, earnings from operations, operating margin,
diluted earnings per share and Commercial Airplanes operating
margin. See page 7 of this release for additional information on
the use of these non-GAAP financial measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per share data)
|
Second
Quarter
|
First
Half
|
Guidance
|
|
2016
|
2015
|
2016
|
2015
|
2016
|
Revenues
|
|
$24,755
|
|
|
$24,543
|
|
|
$47,387
|
|
|
$46,692
|
|
|
|
|
|
|
|
|
GAAP
Earnings/(Loss) From Operations
|
|
($419)
|
|
|
$1,683
|
|
|
$1,369
|
|
|
$3,702
|
|
|
Increase/(Decrease) in GAAP Earnings From
Operations
|
(125%)
|
|
|
|
(63%)
|
|
|
|
|
GAAP Operating
Margin
|
(1.7%)
|
|
6.9%
|
|
2.9%
|
|
7.9%
|
|
|
|
|
|
|
|
|
Unallocated
Pension (Income)/Expense
|
|
($34)
|
|
|
$57
|
|
|
($79)
|
|
|
$209
|
|
|
Unallocated Other
Postretirement Benefit Income
|
|
($35)
|
|
|
($27)
|
|
|
($84)
|
|
|
($66)
|
|
|
Unallocated
Pension and Other Postretirement Benefit
(Income)/Expense
|
|
($69)
|
|
|
$30
|
|
|
($163)
|
|
|
$143
|
|
~($300)
|
Core Operating
Earnings/(Loss) (non-GAAP)
|
|
($488)
|
|
|
$1,713
|
|
|
$1,206
|
|
|
$3,845
|
|
|
Increase/(Decrease) in Core Operating Earnings
(non-GAAP)
|
(128%)
|
|
|
|
(69%)
|
|
|
|
|
Core Operating
Margin (non-GAAP)
|
(2.0%)
|
|
7.0%
|
|
2.5%
|
|
8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted
Earnings/(Loss) Per Share
|
|
($0.37)
|
|
|
$1.59
|
|
|
$1.51
|
|
|
$3.46
|
|
$6.40 -
$6.60
|
Unallocated
Pension (Income)/Expense
|
|
($0.05)
|
|
|
$0.09
|
|
|
($0.12)
|
|
|
$0.29
|
|
|
Unallocated
Postretirement Benefit (Income)/Expense
|
|
($0.06)
|
|
|
($0.04)
|
|
|
($0.13)
|
|
|
($0.09)
|
|
($0.30)
|
Provision for
deferred income taxes on adjustments
(1)
|
|
$0.04
|
|
|
($0.02)
|
|
|
$0.09
|
|
|
($0.07)
|
|
|
Core
Earnings/(Loss) Per Share (non-GAAP)
|
|
($0.44)
|
|
|
$1.62
|
|
|
$1.35
|
|
|
$3.59
|
|
$6.10 -
$6.30
|
|
|
|
|
|
|
Weighted Average
Diluted Shares (millions)
|
636.3
|
**
|
698.9
|
|
654.9
|
|
706.6
|
|
645 -
650
|
Increase/(Decrease) in GAAP Earnings Per
Share
|
(123%)
|
|
|
(56%)
|
|
|
|
Increase/(Decrease) in Core Earnings Per Share
(non-GAAP)
|
(127%)
|
|
|
(62%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Airplanes Revenues
|
|
$17,456
|
|
|
|
|
|
GAAP Commercial
Airplanes Earnings/(Loss) from Operations
|
|
($973)
|
|
|
|
|
|
GAAP Commercial
Airplanes Operating margin
|
(5.6%)
|
|
|
|
|
|
|
|
|
|
|
|
Cost
reclassification of two 787 flight test aircraft
|
|
$1,235
|
|
|
|
|
|
Reach-forward loss
on 747 program
|
|
$1,188
|
|
|
|
|
|
Reach-forward loss
at Commercial Airplanes on KC-46 Tanker program
|
|
$354
|
|
|
|
|
|
Commercial
Airlines Earnings from Operations excluding the reclassification
and charges (non-GAAP)
|
|
$1,804
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Airplanes operating margin excluding the reclassification and
charges (non-GAAP)
|
10.3%
|
|
|
|
|
|
|
|
(1)
|
The income tax impact
is calculated using the tax rate in effect for the non-GAAP
adjustments.
|
**
|
As a result of
incurring a net loss for the three months ended June 30, 2016,
potential common shares of 6.7 million were excluded from diluted
earnings per share.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/boeing-reports-second-quarter-results-300304517.html
SOURCE Boeing