Boeing
Reports Fourth-Quarter Results and Provides 2017 Guidance
CHICAGO, Jan. 25, 2017
Fourth-Quarter
2016
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Operating cash flow of $2.8
billion driven by solid operating performance
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GAAP EPS of $2.59 and core EPS
(non-GAAP)* of $2.47 on solid
execution
Full-Year 2016
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Revenue of $94.6 billion
reflecting 926 commercial and defense aircraft deliveries and
services growth
-
Record operating cash flow of $10.5
billion; repurchased 55.1 million shares for $7.0 billion
-
Backlog remains robust at $473
billion with more than 5,700 commercial airplane
orders
-
Cash and marketable securities of $10.0
billion provide strong liquidity
Outlook for
2017
-
Operating cash flow expected to increase to approximately
$10.75 billion
-
2017 GAAP EPS of between $10.25 and
$10.45; core EPS (non-GAAP)* of between $9.10 and $9.30
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Table 1. Summary Financial Results |
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Fourth Quarter |
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Full
Year |
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(Dollars in Millions, except per
share data) |
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2016 |
2015 |
Change |
2016 |
2015 |
Change |
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Revenues |
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$23,286 |
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$23,573 |
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(1)% |
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$94,571 |
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$96,114 |
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(2)% |
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GAAP |
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Earnings From Operations |
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$2,183 |
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$1,161 |
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88% |
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$5,834 |
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$7,443 |
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(22)% |
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Operating Margin |
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9.4% |
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4.9% |
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4.5 Pts |
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6.2% |
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7.7% |
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(1.5) Pts |
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Net Earnings |
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$1,631 |
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$1,026 |
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59% |
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$4,895 |
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$5,176 |
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(5)% |
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Earnings Per Share |
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$2.59 |
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$1.51 |
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72% |
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$7.61 |
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$7.44 |
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2% |
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Operating Cash Flow |
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$2,832 |
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$3,119 |
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(9)% |
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$10,499 |
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$9,363 |
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12% |
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Non-GAAP* |
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Core Operating Earnings |
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$2,064 |
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$1,259 |
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64% |
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$5,464 |
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$7,741 |
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(29)% |
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Core Operating Margin |
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8.9% |
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5.3% |
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3.6 Pts |
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5.8% |
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8.1% |
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(2.3) Pts |
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Core Earnings Per Share |
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$2.47 |
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$1.60 |
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54% |
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$7.24 |
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$7.72 |
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(6)% |
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* Non-GAAP measures. Complete definitions of
Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures
Disclosures." |
The Boeing Company [NYSE: BA] reported fourth-quarter revenue of
$23.3 billion with GAAP earnings per
share of $2.59 and core earnings per
share (non-GAAP)* of $2.47 reflecting
overall solid execution on production programs and services (Table
1).
Revenue was $94.6 billion for the
full year reflecting strong commercial deliveries and services
growth across the company. GAAP earnings per share totaled
$7.61 and core earnings per share
(non-GAAP)* totaled $7.24.
Guidance for 2017 is set at between $10.25 and $10.45 for GAAP earnings per share and
between $9.10 and $9.30 for core
earnings per share (non-GAAP)*. Revenue guidance is between
$90.5 and $92.5 billion, including
increased commercial deliveries of between 760 and 765. Operating
cash flow is expected to increase by approximately $250 million to $10.75 billion and capital
expenditures are expected to decline by approximately $300 million to $2.3 billion.
"With solid fourth quarter operating performance and a sharp
strategic focus, we extended our aerospace market leadership in our
centennial year and positioned Boeing for continued growth and
success in our second century," said Chairman, President and Chief
Executive Officer Dennis
Muilenburg.
"We led the industry in commercial airplane deliveries for the
fifth consecutive year, achieved healthy sales in our defense,
space and services segments, and produced record operating cash
flow, which fueled investment in innovation and our people and
generated significant returns to shareholders."
"Looking forward, our team is intent on accelerating
productivity and program execution to deliver increasing cash and
profitability from our large and diverse order backlog of nearly
$500 billion, standing up our new
integrated services business, and capturing an even greater share
of the the growing global aerospace market to deliver superior
value to our customers, shareholders and employees."
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Table 2. Cash Flow |
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Fourth Quarter |
Full
Year |
(Millions) |
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2016 |
2015 |
2016 |
2015 |
Operating Cash Flow |
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$2,832 |
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$3,119 |
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$10,499 |
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$9,363 |
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Less Additions to Property, Plant & Equipment |
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($599) |
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($623) |
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($2,613) |
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($2,450) |
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Free Cash Flow* |
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$2,233 |
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$2,496 |
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$7,886 |
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$6,913 |
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* Non-GAAP measures. Complete definitions of
Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures
Disclosures." |
Operating cash flow in the quarter of $2.8 billion was driven by solid operating
performance, disciplined cash management, and a slight impact from
timing of receipts and expenditures (Table 2). During the quarter,
the company repurchased 3.7 million shares for $500 million and paid $672
million in dividends. For the full year, the company
repurchased 55.1 million shares for $7.0
billion and paid $2.8 billion
in dividends. Based on strong cash generation and confidence in the
company's outlook, the board of directors in December increased the
quarterly dividend per share by 30 percent and renewed the share
repurchase program to $14 billion.
Share repurchases under the new authorization are expected to be
made over the next 24 to 30 months.
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Table 3. Cash, Marketable Securities and Debt
Balances |
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Quarter-End |
(Billions) |
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Q4
16 |
Q3
16 |
Cash |
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$8.8 |
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$9.0 |
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Marketable Securities1 |
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$1.2 |
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$0.7 |
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Total |
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$10.0 |
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$9.7 |
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Debt Balances: |
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The Boeing Company, net of intercompany loans to
BCC |
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$7.1 |
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$8.1 |
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Boeing Capital, including intercompany loans |
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$2.9 |
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$2.4 |
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Total Consolidated Debt |
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$10.0 |
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$10.5 |
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1 Marketable securities consists
primarily of time deposits due within one year classified as
"short-term investments." |
Cash and investments in marketable securities totaled
$10.0 billion, up from $9.7 billion at the beginning of the quarter
(Table 3). Debt was $10.0 billion,
down from the beginning of the quarter, due to repayment of
debt.
Total company backlog at quarter-end was $473 billion, up from $462
billion at the beginning of the quarter, and included net
orders for the quarter of $32
billion.
Segment Results
Commercial Airplanes
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Table 4. Commercial Airplanes |
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Fourth Quarter |
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Full
Year |
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(Dollars in Millions) |
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2016 |
2015 |
Change |
2016 |
2015 |
Change |
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Commercial Airplanes Deliveries |
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185 |
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182 |
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2% |
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748 |
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762 |
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(2)% |
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Revenues |
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$16,241 |
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$16,098 |
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1% |
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$65,069 |
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$66,048 |
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(1)% |
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Earnings from Operations |
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$1,473 |
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$566 |
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160% |
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$3,130 |
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$5,157 |
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(39)% |
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Operating Margin |
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9.1% |
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3.5% |
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5.6 Pts |
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4.8% |
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7.8% |
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(3.0) Pts |
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Commercial Airplanes fourth-quarter revenue increased to
$16.2 billion on higher planned
delivery volume and mix (Table 4). Fourth-quarter operating margin
was 9.1 percent, reflecting delivery mix, lower R&D and
improved performance, partially offset by a $243 million pre-tax charge on the KC-46 Tanker
program primarily related to additional effort to incorporate
previously identified changes into initial production aircraft.
During the quarter, Boeing delivered the 500th 787 Dreamliner
and began final assembly of the first 787-10 aircraft. The 737
program has captured more than 3,600 orders for the 737 MAX,
including recent 737 MAX 8 orders from GE Capital Aviation Services
for 75 airplanes and SpiceJet for 100 airplanes.
Commercial Airplanes booked 288 net orders during the quarter.
Backlog remains strong with more than 5,700 airplanes valued at
$416 billion.
Defense, Space & Security
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Table 5. Defense, Space & Security |
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Fourth Quarter |
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Full
Year |
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(Dollars in Millions) |
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2016 |
2015 |
Change |
2016 |
2015 |
Change |
Revenues1 |
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Boeing Military Aircraft |
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$2,617 |
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$3,187 |
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(18)% |
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$12,515 |
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$13,424 |
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(7)% |
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Network & Space Systems |
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$1,800 |
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$1,954 |
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(8)% |
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$7,046 |
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$7,751 |
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(9)% |
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Global Services & Support |
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$2,443 |
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$2,644 |
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(8)% |
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$9,937 |
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$9,213 |
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8% |
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Total BDS Revenues |
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$6,860 |
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$7,785 |
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(12)% |
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$29,498 |
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$30,388 |
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(3)% |
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Earnings from
Operations1 |
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Boeing Military Aircraft |
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$288 |
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$437 |
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(34)% |
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$1,231 |
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$1,311 |
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(6)% |
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Network & Space Systems |
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$157 |
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$163 |
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(4)% |
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$493 |
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$726 |
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(32)% |
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Global Services & Support |
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$364 |
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$363 |
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— |
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$1,284 |
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$1,237 |
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4% |
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Total BDS Earnings from Operations |
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$809 |
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$963 |
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(16)% |
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$3,008 |
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$3,274 |
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(8)% |
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Operating Margin |
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11.8% |
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12.4% |
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(0.6) Pts |
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10.2% |
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10.8% |
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(0.6) Pts |
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1 During the first quarter of
2016, certain programs were realigned between Boeing Military
Aircraft and Global Services & Support. |
Defense, Space & Security's fourth-quarter revenue was
$6.9 billion (Table 5).
Fourth-quarter operating margin was 11.8 percent, reflecting a
$69 million pre-tax charge on the
KC-46 Tanker program at BMA, partially offset by solid
execution.
Boeing Military Aircraft (BMA) fourth-quarter revenue was
$2.6 billion, reflecting lower
planned deliveries and mix, with operating margin of 11.0 percent.
During the quarter, pending international sales of F-15 and F/A-18
fighter jets and Chinook and Apache helicopters were approved by
the U.S. State Department, reaching the final stage of the U.S.
foreign military sales process before contract negotiations.
Network & Space Systems (N&SS) fourth-quarter revenue
was $1.8 billion, largely reflecting
lower satellite volume, with an operating margin of 8.7 percent.
During the quarter, the eighth Wideband Global SATCOM satellite was
launched with an upgraded digital payload.
Global Services & Support (GS&S) fourth-quarter revenue
was $2.4 billion, reflecting lower
volume in Aircraft Modernization & Sustainment. Operating
margin was 14.9 percent largely reflecting contract
mix. During the quarter, GS&S completed digital flight
deck upgrades to the first of 14 NATO Airborne Warnings and Control
Systems (AWACS) aircraft.
Backlog at Defense, Space & Security was $57 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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Fourth Quarter |
Full
Year |
(Dollars in Millions) |
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2016 |
2015 |
2016 |
2015 |
Revenues |
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Boeing Capital |
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$87 |
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$98 |
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$298 |
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$413 |
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Unallocated items, eliminations and other |
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$98 |
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($408) |
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($294) |
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($735) |
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Earnings from Operations |
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Boeing Capital |
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$23 |
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$9 |
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$59 |
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$50 |
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Unallocated pension/postretirement |
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$119 |
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($98) |
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$370 |
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($298) |
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Other unallocated items and eliminations |
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($241) |
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($279) |
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($733) |
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($740) |
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Other (loss)/income, net |
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($1) |
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$10 |
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$40 |
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($13) |
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Interest and debt expense |
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($79) |
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($72) |
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($306) |
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($275) |
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Effective tax rate |
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22.4% |
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6.6% |
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12.1% |
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27.7% |
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At quarter-end, Boeing Capital's net portfolio balance was
$4.1 billion. Total pension expense
for the fourth quarter was $434
million, down from $529
million in the same period of the prior year. Unallocated
items, eliminations and other revenue increased from the same
period in the prior year primarily due to timing of eliminations
for intercompany aircraft deliveries. The effective tax rate for
the fourth quarter increased from the same period in the prior year
primarily due to the reinstatement of the full year research tax
credit recorded in the fourth quarter of 2015.
Outlook
The company's 2017 financial and delivery guidance (Table 7)
reflects continued solid performance across the company.
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Table 7. 2017 Financial
Outlook |
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(Dollars in Billions, except per
share data) |
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2017 |
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The Boeing Company |
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Revenue |
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$90.5 - 92.5 |
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GAAP Earnings Per Share |
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$10.25 - 10.45 |
Core Earnings Per Share* |
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$9.10 - 9.30 |
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Operating Cash Flow |
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~$10.75 |
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Commercial Airplanes |
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Deliveries |
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760 - 765 |
Revenue |
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$62.5 - 63.5 |
Operating Margin |
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9.5% - 10.0 |
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Defense, Space &
Security |
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Revenue |
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Boeing Military Aircraft |
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~$11.5 |
Network & Space Systems |
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~$7.0 |
Global Services &
Support |
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~$10.0 |
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Total BDS Revenue |
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$28.0 - 29.0 |
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Operating Margin |
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Boeing Military Aircraft |
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~12.0% |
Network & Space Systems |
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~9.0% |
Global Services &
Support |
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>12.5% |
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Total BDS Operating Margin |
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~11.5% |
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Boeing Capital |
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Portfolio Size |
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Stable |
Revenue |
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~$0.3 |
Pre-Tax Earnings |
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~$0.05 |
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Research & Development |
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~ $3.6 |
Capital Expenditures |
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~ $2.3 |
Pension Expense 1 |
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~ $0.7 |
Effective Tax Rate |
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~ 32.0% |
1 Approximately ($0.9) 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, Core Operating Margin and Core Earnings
Per Share
Core operating earnings is defined as GAAP earnings from
operations excluding unallocated pension and post-retirement
expense. Core operating margin is defined as core operating
earnings expressed as a percentage of revenue. Core earnings per
share is defined as GAAP diluted earnings per share
excluding the net earnings per share impact of unallocated
pension and post-retirement expense. Unallocated pension and
post-retirement expense represents the portion of pension and
other post-retirement costs that are not recognized by business
segments for segment reporting purposes. 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.
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 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) 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: |
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Investor Relations: |
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Troy Lahr or Ben Hackman (312) 544-2140 |
Communications: |
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Bernard Choi (312) 544-2002 |
The
Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited) |
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Twelve months ended
December 31 |
Three months ended
December 31 |
(Dollars in millions, except per
share data) |
2016 |
|
2015 |
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2016 |
|
2015 |
|
Sales of products |
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$84,399 |
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$85,255 |
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$20,836 |
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$20,847 |
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Sales of services |
10,172 |
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10,859 |
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2,450 |
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2,726 |
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Total revenues |
94,571 |
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96,114 |
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23,286 |
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23,573 |
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Cost of products |
(72,713) |
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(73,446) |
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(17,596) |
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(18,426) |
|
Cost of services |
(8,018) |
|
(8,578) |
|
(1,855) |
|
(2,201) |
|
Boeing Capital interest expense |
(59) |
|
(64) |
|
(13) |
|
(15) |
|
Total costs and expenses |
(80,790) |
|
(82,088) |
|
(19,464) |
|
(20,642) |
|
|
13,781 |
|
14,026 |
|
3,822 |
|
2,931 |
|
Income from operating investments, net |
303 |
|
274 |
|
83 |
|
67 |
|
General and administrative expense |
(3,616) |
|
(3,525) |
|
(999) |
|
(931) |
|
Research and development expense, net |
(4,627) |
|
(3,331) |
|
(726) |
|
(905) |
|
(Loss)/gain on dispositions, net |
(7) |
|
(1) |
|
3 |
|
(1) |
|
Earnings from operations |
5,834 |
|
7,443 |
|
2,183 |
|
1,161 |
|
Other income/(loss), net |
40 |
|
(13) |
|
(1) |
|
10 |
|
Interest and debt expense |
(306) |
|
(275) |
|
(79) |
|
(72) |
|
Earnings before income taxes |
5,568 |
|
7,155 |
|
2,103 |
|
1,099 |
|
Income tax expense |
(673) |
|
(1,979) |
|
(472) |
|
(73) |
|
Net earnings |
|
$4,895 |
|
|
$5,176 |
|
|
$1,631 |
|
|
$1,026 |
|
|
|
|
|
|
Basic earnings per share |
|
$7.70 |
|
|
$7.52 |
|
|
$2.63 |
|
|
$1.52 |
|
|
|
|
|
|
Diluted earnings per share |
|
$7.61 |
|
|
$7.44 |
|
|
$2.59 |
|
|
$1.51 |
|
|
|
|
|
|
Cash dividends paid per share |
|
$4.36 |
|
|
$3.64 |
|
|
$1.09 |
|
|
$0.91 |
|
|
|
|
|
|
Weighted average diluted shares (millions) |
643.8 |
|
696.1 |
|
630.3 |
|
681.2 |
|
The
Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited) |
|
|
|
|
|
|
|
(Dollars in millions, except per share
data) |
December 31
2016 |
|
December 31
2015 |
|
Assets |
|
|
Cash and cash equivalents |
|
$8,801 |
|
|
$11,302 |
|
Short-term and other investments |
1,228 |
|
750 |
|
Accounts receivable, net |
8,832 |
|
8,713 |
|
Current portion of customer financing, net |
428 |
|
212 |
|
Inventories, net of advances and progress
billings |
43,199 |
|
47,257 |
|
Total current assets |
62,488 |
|
68,234 |
|
Customer financing, net |
3,773 |
|
3,358 |
|
Property, plant and equipment, net of accumulated
depreciation of $16,883 and $16,286 |
12,807 |
|
12,076 |
|
Goodwill |
5,324 |
|
5,126 |
|
Acquired intangible assets, net |
2,540 |
|
2,657 |
|
Deferred income taxes |
332 |
|
265 |
|
Investments |
1,317 |
|
1,284 |
|
Other assets, net of accumulated amortization of $497
and $451 |
1,416 |
|
1,408 |
|
Total assets |
|
$89,997 |
|
|
$94,408 |
|
Liabilities and equity |
|
|
Accounts payable |
|
$11,190 |
|
|
$10,800 |
|
Accrued liabilities |
14,691 |
|
14,014 |
|
Advances and billings in excess of related costs |
23,869 |
|
24,364 |
|
Short-term debt and current portion of long-term
debt |
384 |
|
1,234 |
|
Total current liabilities |
50,134 |
|
50,412 |
|
Deferred income taxes |
1,338 |
|
2,392 |
|
Accrued retiree health care |
5,916 |
|
6,616 |
|
Accrued pension plan liability, net |
19,943 |
|
17,783 |
|
Other long-term liabilities |
2,221 |
|
2,078 |
|
Long-term debt |
9,568 |
|
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 |
4,762 |
|
4,834 |
|
Treasury stock, at cost - 395,109,568 and 345,637,354
shares |
(36,097) |
|
(29,568) |
|
Retained earnings |
40,714 |
|
38,756 |
|
Accumulated other comprehensive loss |
(13,623) |
|
(12,748) |
|
Total shareholders' equity |
817 |
|
6,335 |
|
Noncontrolling interests |
60 |
|
62 |
|
Total equity |
877 |
|
6,397 |
|
Total liabilities and equity |
|
$89,997 |
|
|
$94,408 |
|
The Boeing Company
and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited) |
|
|
|
|
|
|
|
|
Twelve months ended
December 31 |
(Dollars in millions) |
2016 |
|
2015 |
|
Cash flows – operating
activities: |
|
|
Net earnings |
|
$4,895 |
|
|
$5,176 |
|
Adjustments to reconcile net earnings to net cash
provided by operating activities: |
|
|
Non-cash items – |
|
|
Share-based plans expense |
190 |
|
189 |
|
Depreciation and amortization |
1,910 |
|
1,833 |
|
Investment/asset impairment charges, net |
90 |
|
167 |
|
Customer financing valuation benefit |
(7) |
|
(5) |
|
Loss on dispositions, net |
7 |
|
1 |
|
Other charges and credits, net |
369 |
|
364 |
|
Excess tax benefits from share-based payment
arrangements |
|
|
(157) |
|
Changes in assets and liabilities – |
|
|
Accounts receivable |
112 |
|
(1,069) |
|
Inventories, net of advances and progress
billings |
3,755 |
|
(1,110) |
|
Accounts payable |
622 |
|
(238) |
|
Accrued liabilities |
726 |
|
2 |
|
Advances and billings in excess of related costs |
(493) |
|
1,192 |
|
Income taxes receivable, payable and deferred |
(810) |
|
477 |
|
Other long-term liabilities |
(68) |
|
46 |
|
Pension and other postretirement plans |
153 |
|
2,470 |
|
Customer financing, net |
(696) |
|
167 |
|
Other |
(256) |
|
(142) |
|
Net cash provided by operating
activities |
10,499 |
|
9,363 |
|
Cash flows – investing activities: |
|
|
Property, plant and equipment additions |
(2,613) |
|
(2,450) |
|
Property, plant and equipment reductions |
38 |
|
42 |
|
Acquisitions, net of cash acquired |
(297) |
|
(31) |
|
Contributions to investments |
(1,719) |
|
(2,036) |
|
Proceeds from investments |
1,209 |
|
2,590 |
|
Other |
2 |
|
39 |
|
Net cash used by investing
activities |
(3,380) |
|
(1,846) |
|
Cash flows – financing activities: |
|
|
New borrowings |
1,325 |
|
1,746 |
|
Debt repayments |
(1,359) |
|
(885) |
|
Repayments of distribution rights and other asset
financing |
(24) |
|
|
|
Stock options exercised |
321 |
|
399 |
|
Excess tax benefits from share-based payment
arrangements |
|
|
157 |
|
Employee taxes on certain share-based payment
arrangements |
(93) |
|
(96) |
|
Common shares repurchased |
(7,001) |
|
(6,751) |
|
Dividends paid |
(2,756) |
|
(2,490) |
|
Net cash used by financing
activities |
(9,587) |
|
(7,920) |
|
Effect of exchange rate changes on cash and cash
equivalents |
(33) |
|
(28) |
|
Net decrease in cash and cash equivalents |
(2,501) |
|
(431) |
|
Cash and cash equivalents at beginning of year |
11,302 |
|
11,733 |
|
Cash and cash equivalents at end of period |
|
$8,801 |
|
|
$11,302 |
|
The Boeing Company
and Subsidiaries
Summary of Business Segment Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31 |
Three months
ended
December 31 |
(Dollars in millions) |
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Revenues: |
|
|
|
|
Commercial Airplanes |
|
$65,069 |
|
|
$66,048 |
|
|
$16,241 |
|
|
$16,098 |
|
Defense, Space & Security: |
|
|
|
|
Boeing Military Aircraft |
12,515 |
|
13,424 |
|
2,617 |
|
3,187 |
|
Network & Space Systems |
7,046 |
|
7,751 |
|
1,800 |
|
1,954 |
|
Global Services & Support |
9,937 |
|
9,213 |
|
2,443 |
|
2,644 |
|
Total Defense, Space & Security |
29,498 |
|
30,388 |
|
6,860 |
|
7,785 |
|
Boeing Capital |
298 |
|
413 |
|
87 |
|
98 |
|
Unallocated items, eliminations and other |
(294) |
|
(735) |
|
98 |
|
(408) |
|
Total revenues |
|
$94,571 |
|
|
$96,114 |
|
|
$23,286 |
|
|
$23,573 |
|
Earnings from operations: |
|
|
|
|
Commercial Airplanes |
|
$3,130 |
|
|
$5,157 |
|
|
$1,473 |
|
|
$566 |
|
Defense, Space & Security: |
|
|
|
|
Boeing Military Aircraft |
1,231 |
|
1,311 |
|
288 |
|
437 |
|
Network & Space Systems |
493 |
|
726 |
|
157 |
|
163 |
|
Global Services & Support |
1,284 |
|
1,237 |
|
364 |
|
363 |
|
Total Defense, Space & Security |
3,008 |
|
3,274 |
|
809 |
|
963 |
|
Boeing Capital |
59 |
|
50 |
|
23 |
|
9 |
|
Segment operating profit |
6,197 |
|
8,481 |
|
2,305 |
|
1,538 |
|
Unallocated items, eliminations and other |
(363) |
|
(1,038) |
|
(122) |
|
(377) |
|
Earnings from operations |
5,834 |
|
7,443 |
|
2,183 |
|
1,161 |
|
Other income/(loss), net |
40 |
|
(13) |
|
(1) |
|
10 |
|
Interest and debt expense |
(306) |
|
(275) |
|
(79) |
|
(72) |
|
Earnings before income taxes |
5,568 |
|
7,155 |
|
2,103 |
|
1,099 |
|
Income tax expense |
(673) |
|
(1,979) |
|
(472) |
|
(73) |
|
Net earnings |
|
$4,895 |
|
|
$5,176 |
|
|
$1,631 |
|
|
$1,026 |
|
|
|
|
|
|
Research and development expense, net: |
|
|
|
|
Commercial Airplanes |
|
$3,755 |
|
|
$2,340 |
|
|
$561 |
|
|
$627 |
|
Defense, Space & Security |
919 |
|
986 |
|
169 |
|
271 |
|
Other |
(47) |
|
5 |
|
(4) |
|
7 |
|
Total research and development expense,
net |
|
$4,627 |
|
|
$3,331 |
|
|
$726 |
|
|
$905 |
|
|
|
|
|
|
Unallocated items, eliminations and other |
|
|
|
|
Share-based plans |
|
($66) |
|
|
($76) |
|
|
($16) |
|
|
($19) |
|
Deferred compensation |
(46) |
|
(63) |
|
(8) |
|
(53) |
|
Amortization of previously capitalized interest |
(94) |
|
(90) |
|
(23) |
|
(20) |
|
Eliminations and other unallocated items |
(527) |
|
(511) |
|
(194) |
|
(187) |
|
Sub-total (included in core operating
earnings) |
(733) |
|
(740) |
|
(241) |
|
(279) |
|
Pension |
217 |
|
(421) |
|
88 |
|
(128) |
|
Postretirement |
153 |
|
123 |
|
31 |
|
30 |
|
Total unallocated items, eliminations and
other |
|
($363) |
|
|
($1,038) |
|
|
($122) |
|
|
($377) |
|
The Boeing Company
and Subsidiaries
Operating and Financial Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Deliveries |
|
Twelve months ended
December 31 |
Three months
ended
December 31 |
Commercial Airplanes |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
737 |
|
490 |
|
495 |
|
122 |
|
120 |
|
747 |
|
9 |
(3) |
18 |
(3) |
1 |
|
5 |
(2) |
767 |
|
13 |
|
16 |
|
3 |
|
2 |
|
777 |
|
99 |
|
98 |
|
26 |
|
21 |
|
787 |
|
137 |
|
135 |
|
33 |
|
34 |
|
Total |
|
748 |
|
762 |
|
185 |
|
182 |
|
Note: Deliveries under operating lease
are identified by parentheses. |
|
|
|
|
|
|
Defense, Space & Security |
|
|
|
|
|
Boeing Military Aircraft |
|
|
|
|
|
AH-64 Apache (New) |
|
31 |
|
23 |
|
6 |
|
5 |
|
AH-64 Apache (Remanufactured) |
|
34 |
|
38 |
|
7 |
|
5 |
|
C-17 Globemaster III |
|
4 |
|
5 |
|
|
|
|
|
CH-47 Chinook (New) |
|
25 |
|
41 |
|
8 |
|
6 |
|
CH-47 Chinook (Renewed) |
|
25 |
|
16 |
|
2 |
|
10 |
|
F-15 Models |
|
15 |
|
12 |
|
4 |
|
4 |
|
F/A-18 Models |
|
25 |
|
35 |
|
5 |
|
7 |
|
P-8 Models |
|
18 |
|
14 |
|
5 |
|
4 |
|
|
|
|
|
|
|
Global Services & Support |
|
|
|
|
|
AEW&C |
|
0 |
|
1 |
|
|
|
1 |
|
C-40A |
|
1 |
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
Network & Space Systems |
|
|
|
|
|
Commercial and Civil Satellites |
|
5 |
|
3 |
|
2 |
|
2 |
|
Military Satellites |
|
2 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual backlog (Dollars
in billions) |
|
|
December 31
2016 |
|
September 30
2016 |
|
December 31
2015 |
Commercial Airplanes |
|
|
$416.2 |
|
$408.8 |
|
$431.4 |
Defense, Space & Security: |
|
|
|
|
|
|
|
Boeing Military Aircraft |
|
|
21.4 |
|
20.8 |
|
19.9 |
Network & Space Systems |
|
|
5.1 |
|
6.5 |
|
7.4 |
Global Services & Support |
|
|
15.6 |
|
12.8 |
|
17.9 |
Total Defense, Space &
Security** |
|
|
42.1 |
|
40.1 |
|
45.2 |
Total contractual backlog |
|
|
$458.3 |
|
$448.9 |
|
$476.6 |
Unobligated backlog |
|
|
$15.2 |
|
$13.1 |
|
$12.7 |
Total backlog |
|
|
$473.5 |
|
$462.0 |
|
$489.3 |
Workforce |
|
|
150,500 |
|
154,700 |
|
161,400 |
** 2016 backlog includes adjustments related to prior
periods. |
The Boeing
Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial
measures core operating earnings, core operating margin, and core
earnings per share with the most directly comparable GAAP financial
measures, earnings from operations, operating margin, and diluted
earnings per share. See page 7 of this release for additional
information on the use of these non-GAAP financial measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions, except per share
data) |
Fourth Quarter |
|
Full
Year |
|
Guidance |
|
2016 |
2015 |
2016 |
2015 |
2017 |
Revenues |
|
$23,286 |
|
|
$23,573 |
|
|
$94,571 |
|
|
$96,114 |
|
|
|
|
|
|
|
|
GAAP Earnings From Operations |
|
$2,183 |
|
|
$1,161 |
|
|
$5,834 |
|
|
$7,443 |
|
|
Increase/(Decrease) in GAAP Earnings From
Operations |
88% |
|
|
|
(22%) |
|
|
|
|
GAAP Operating Margin |
9.4% |
|
4.9% |
|
6.2% |
|
7.7% |
|
|
|
|
|
|
|
|
Unallocated Pension (Income)/Expense |
|
($88) |
|
|
$128 |
|
|
($217) |
|
|
$421 |
|
|
Unallocated Other Postretirement Benefit
Income |
|
($31) |
|
|
($30) |
|
|
($153) |
|
|
($123) |
|
|
Unallocated Pension and Other Postretirement
Benefit (Income)/Expense |
|
($119) |
|
|
$98 |
|
|
($370) |
|
|
$298 |
|
~($1,075) |
Core Operating Earnings (non-GAAP) |
|
$2,064 |
|
|
$1,259 |
|
|
$5,464 |
|
|
$7,741 |
|
|
Increase/(Decrease) in Core Operating Earnings
(non-GAAP) |
64% |
|
|
|
(29%) |
|
|
|
|
Core Operating Margin (non-GAAP) |
8.9% |
|
5.3% |
|
5.8% |
|
8.1% |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted Earnings Per Share |
|
$2.59 |
|
|
$1.51 |
|
|
$7.61 |
|
|
$7.44 |
|
$10.25 -
$10.45 |
Unallocated Pension (Income)/Expense |
|
($0.14) |
|
|
$0.18 |
|
|
($0.33) |
|
|
$0.61 |
|
|
Unallocated Postretirement Benefit
(Income)/Expense |
|
($0.05) |
|
|
($0.04) |
|
|
($0.24) |
|
|
($0.18) |
|
($1.15) |
Provision for deferred income taxes on
adjustments (1) |
|
$0.07 |
|
|
($0.05) |
|
|
$0.20 |
|
|
($0.15) |
|
|
Core Earnings Per Share (non-GAAP) |
|
$2.47 |
|
|
$1.60 |
|
|
$7.24 |
|
|
$7.72 |
|
$9.10 -
$9.30 |
|
|
|
|
|
|
Weighted Average Diluted Shares (millions) |
630.3 |
|
681.2 |
|
643.8 |
|
696.1 |
|
605 -
610 |
Increase/(Decrease) in GAAP Earnings Per
Share |
72% |
|
|
2% |
|
|
|
Increase/(Decrease) in Core Earnings Per Share
(non-GAAP) |
54% |
|
|
(6%) |
|
|
|
|
|
|
|
|
|
(1) The
income tax impact is calculated using the tax rate in effect for
the non-GAAP adjustments. |