Boeing Reports
Strong First-Quarter Results; Raises Cash Flow and EPS Guidance
CHICAGO, April 25, 2018
/PRNewswire/ --
- Revenue increased to $23.4
billion reflecting 184 commercial
deliveries and higher
defense and services volume
- GAAP EPS of $4.15 and core EPS
(non-GAAP)* of $3.64 on strong
performance across the company
- Strong operating cash flow of $3.1
billion; repurchased 8.9 million shares for $3.0 billion
- Backlog grew to $486 billion,
including over 5,800 commercial aircraft
- Cash and marketable securities of $9.9 billion provide strong liquidity
- Operating cash flow, EPS and Commercial Airplanes margin
guidance increased on performance
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Table 1. Summary Financial
Results |
First
Quarter |
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|
(Dollars in Millions, except per
share data) |
2018 |
|
2017 |
|
Change |
|
|
|
|
|
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Revenues |
$23,382 |
|
$21,961 |
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6% |
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|
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GAAP |
|
|
|
|
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Earnings From Operations |
$2,875 |
|
$2,206 |
|
30% |
|
Operating Margin |
12.3% |
|
10.0% |
|
2.3 Pts |
|
Net Earnings |
$2,477 |
|
$1,579 |
|
57% |
|
Earnings Per Share |
$4.15 |
|
$2.54 |
|
63% |
|
Operating Cash Flow |
$3,136 |
|
$2,098 |
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49% |
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Non-GAAP* |
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Core Operating Earnings |
$2,510 |
|
$1,860 |
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35% |
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Core Operating Margin |
10.7% |
|
8.5% |
|
2.2 Pts |
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Core Earnings Per Share |
$3.64 |
|
$2.17 |
|
68% |
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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 first-quarter revenue of
$23.4 billion reflecting higher
commercial deliveries and mix, defense contract volume and services
growth (Table 1). GAAP earnings per share increased to $4.15 and core earnings per share (non-GAAP)*
increased to $3.64 reflecting strong
performance across the company.
The company's cash flow guidance is increased to between
$15.0 and $15.5 billion, driven by improved performance.
Full year EPS guidance is increased by $0.50 to between $16.40 and $16.60,
and core earnings per share (non-GAAP)* guidance is increased to
between $14.30 and $14.50 on performance.
"Across Boeing, our teams performed at a high level in the
quarter, driving revenue and earnings growth at all three business
units, increasing profitability and operating cash flow, and
delivering more value to our customers," said Boeing Chairman,
President and Chief Executive Officer Dennis Muilenburg. "Customers continue to
recognize the value of our products and services, with strong
orders booked in the quarter for defense, services and commercial
offerings, including 221 net commercial aircraft orders."
"During the quarter we captured important new business,
including an initial contract for 28 F/A-18 Super Hornets for
Kuwait, a Ground-based Midcourse
Defense program contract extension from the Missile Defense Agency,
and we delivered the first Space Launch System intertank hardware
to NASA. We achieved the first flight of the 737 MAX 7, and
delivered the first 787-10 Dreamliner and the first 737 MAX 9.
Within our services business, we received a follow-on contract to
support the Royal Canadian Air Force's Chinook fleet, captured a
landing gear exchange contract for Aeromexico, and released
Self-Service Analytics to complement our digital solutions
portfolio. All of these milestones demonstrated the value we bring
to our customers through the strength of our One Boeing offerings."
"Our team's strong first-quarter performance, combined with the
positive market outlook across our businesses and our confidence in
executing on our production and development programs, gives us a
solid foundation to raise our guidance for the year. Going forward,
we remain focused on our disciplined growth strategy, improved
profitability and cash flow to ensure we meet our commitments to
our customers and our shareholders."
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Table 2. Cash Flow |
First
Quarter |
(Millions) |
2018 |
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2017 |
Operating Cash Flow |
$3,136 |
|
$2,098 |
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Less Additions to Property, Plant
& Equipment |
($394) |
|
($466) |
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Free Cash Flow* |
$2,742 |
|
$1,632 |
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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 of $3.1 billion reflects planned higher commercial
airplane production rates, improved performance, and favorable
timing of receipts and expenditures (Table 2). During the quarter,
the company repurchased 8.9 million shares for $3.0 billion, leaving $15.0 billion remaining under the current
repurchase authorization which is expected to be completed over
approximately the next two years. The company also paid
$1.0 billion in dividends in the
quarter, reflecting a 20 percent increase in dividends per share
compared to the same period of the prior year.
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Table 3. Cash, Marketable
Securities and Debt Balances |
Quarter-End |
(Billions) |
Q1 18 |
|
Q4 17 |
Cash |
$9.2 |
|
$8.8 |
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Marketable
Securities1 |
$0.7 |
|
$1.2 |
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Total |
$9.9 |
|
$10.0 |
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Debt Balances: |
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The Boeing Company, net of
intercompany loans to BCC |
$10.0 |
|
$8.6 |
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Boeing Capital, including intercompany
loans |
$2.5 |
|
$2.5 |
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Total Consolidated Debt |
$12.5 |
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$11.1 |
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1 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
$9.9 billion, compared to
$10.0 billion at the beginning of the
quarter (Table 3). Debt was $12.5
billion, up from $11.1 billion
at the beginning of the quarter, primarily due to the issuance of
new debt.
Total company backlog at quarter-end was $486 billion and included net orders for the
quarter of $34 billion. Backlog was
up from $475 billion at the beginning
of the quarter, which has been adjusted to reflect the adoption of
the new revenue recognition standard (ASC 606).
Segment Results
Commercial Airplanes
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Table 4. Commercial Airplanes |
First
Quarter |
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(Dollars in Millions) |
2018 |
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2017 |
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Change |
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Commercial Airplanes Deliveries |
184 |
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169 |
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9% |
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Revenues |
$13,652 |
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$12,953 |
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5% |
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Earnings from Operations |
$1,508 |
|
$870 |
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73% |
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Operating Margin |
11.0% |
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6.7% |
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4.3 Pts |
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Commercial Airplanes first-quarter revenue was $13.7 billion reflecting higher deliveries and
mix (Table 4). First-quarter operating margin increased to 11.0
percent, reflecting strong operating performance on production
programs.
During the quarter, Commercial Airplanes delivered 184
airplanes, including delivery of the first 787-10 Dreamliner to
Singapore Airlines and delivery of the first 737 MAX 9 to Lion Air
Group. The 737 program reached additional milestones during the
quarter, including first flight of the 737 MAX 7 and firm
configuration of the 737 MAX 10. The 737 program has captured over
4,400 orders since launch for the 737 MAX, including a recent order
from Jet Airways for 75 additional airplanes. Reflecting the
strength of the cargo market, we now plan to increase the
production rate on the 767 program from 2.5 to 3 per month
beginning in 2020. Development on the 777X program remains on track
as production began on the first 777X fuselage for structural
testing.
Commercial Airplanes booked 221 net orders during the quarter.
Backlog remains robust with over 5,800 airplanes valued at
$415 billion.
Defense, Space & Security
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Table 5. Defense, Space & Security |
First
Quarter |
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(Dollars in Millions) |
2018 |
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2017 |
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Change |
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Revenues |
$5,762 |
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$5,112 |
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13% |
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Earnings from Operations |
$649 |
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$549 |
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18% |
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Operating Margin |
11.3% |
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10.7% |
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0.6 Pts |
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Defense, Space & Security first-quarter revenue increased to
$5.8 billion driven by C-17,
international fighters, and weapons volume (Table 5). First-quarter
operating margin increased to 11.3 percent on solid execution and
mix.
During the quarter, Defense, Space & Security was awarded an
initial contract for 28 F/A-18 Super Hornets for Kuwait, a contract for the final C-17 for
India, and an extension for
Ground-based Midcourse Defense development and sustainment from the
Missile Defense Agency. We continue to progress on development
programs as the KC-46 Tanker program completed fuel on-load
certification testing, the first Space Launch System intertank
hardware was delivered to NASA, and the second Commercial Crew
spacecraft successfully achieved power-on.
Backlog at Defense, Space & Security was $50 billion, of which 36 percent represents
orders from international customers.
Global Services
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Table 6. Global Services |
First
Quarter |
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(Dollars in Millions) |
2018 |
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2017 |
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Change |
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Revenues |
$3,943 |
|
$3,653 |
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8% |
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Earnings from Operations |
$644 |
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$623 |
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3% |
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Operating Margin |
16.3% |
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17.1% |
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(0.8) Pts |
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Global Services first-quarter revenue increased to $3.9 billion, reflecting growth in commercial
services (Table 6). First-quarter operating margin was 16.3 percent
reflecting product and services mix.
During the quarter, Global Services was awarded a follow-on
contract from the Royal Canadian Air Force to provide full system
logistics, engineering support, supply chain, data analytics and
training services to their fleet of Chinooks. Global Services also
captured a contract from the Royal Saudi Air Force for F-15 repair
support services and a contract from Aeromexico for the 787 landing
gear exchange program. As part of Boeing AnalytX, we released
Self-Service Analytics to complement our digital solutions
portfolio, allowing customers to access data to develop deeper
insights into their operations.
Additional Financial Information
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Table 7. Additional Financial
Information |
First
Quarter |
(Dollars in Millions) |
2018 |
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2017 |
Revenues |
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Boeing Capital |
$65 |
|
$92 |
|
Unallocated items, eliminations and other |
($40) |
|
$151 |
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Earnings from Operations |
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Boeing Capital |
$20 |
|
$39 |
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FAS/CAS service cost adjustment |
$365 |
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$346 |
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Other unallocated items and eliminations |
($311) |
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($221) |
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Other income, net |
$66 |
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$26 |
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Interest and debt expense |
($102) |
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($87) |
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Effective tax rate |
12.8% |
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26.4% |
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At quarter-end, Boeing Capital's net portfolio balance was
$2.9 billion. Total pension expense
for the first quarter was $40
million, down from $97 million
in the same period of the prior year. Revenue in other unallocated
items and eliminations decreased primarily due to the sale of
aircraft previously leased to customers in the first quarter of
2017. The effective tax rate for the first quarter decreased from
the same period in the prior year primarily due to the reduction of
the federal tax rate to 21%.
Outlook
The Company's 2018 guidance is updated below (Table 8).
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Table 8. 2018 Financial
Outlook |
Current |
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Prior |
(Dollars in Billions, except per
share data) |
Guidance |
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Guidance |
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The Boeing Company |
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Revenue |
$96.0 - 98.0 |
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$96.0 - 98.0 |
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GAAP Earnings Per Share |
$16.40 - 16.60 |
|
$15.90 - 16.10 |
Core Earnings Per Share* |
$14.30 - 14.50 |
|
$13.80 - 14.00 |
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Operating Cash Flow |
$15.0 - 15.5 |
|
~$15.0 |
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Commercial Airplanes |
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Deliveries |
810 - 815 |
|
810 - 815 |
Revenue |
$59.5 - 60.5 |
|
$59.5 - 60.5 |
Operating Margin |
~11.5% |
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>11.0% |
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Defense, Space &
Security |
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Revenue |
$21.5 - 22.5 |
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$21.5 - 22.5 |
Operating Margin |
~11.0% |
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~11.0% |
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Global Services |
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Revenue |
$15.0 - 15.5 |
|
$15.0 - 15.5 |
Operating Margin |
~15.5% |
|
~15.5% |
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Boeing Capital |
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Portfolio Size |
Stable |
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Stable |
Revenue |
~$0.2 |
|
~$0.2 |
Pre-Tax Earnings |
~$0.05 |
|
~$0.05 |
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Research & Development |
~$3.7 |
|
~$3.7 |
Capital Expenditures |
~$2.2 |
|
~$2.2 |
Pension Expense 1 |
~$0.1 |
|
~$0.1 |
Effective Tax Rate |
~16.0% |
|
~16.0% |
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1 Approximately
$1.4 billion of pension expense is expected to be allocated to the
business segments |
* Non-GAAP measures. Complete
definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP
Measures Disclosures." |
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Non-GAAP Measures Disclosures
We supplement the reporting of our financial information
determined under Generally Accepted Accounting Principles in
the United States of America
(GAAP) with certain non-GAAP financial information. The non-GAAP
financial information presented excludes certain significant items
that may not be indicative of, or are unrelated to, results from
our ongoing business operations. We believe that these non-GAAP
measures provide investors with additional insight into the
company's ongoing business performance. These non-GAAP measures
should not be considered in isolation or as a substitute for the
related GAAP measures, and other companies may define such measures
differently. We encourage investors to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure. The following definitions are
provided:
Core Operating Earnings, Core Operating Margin and Core Earnings
Per Share
Core operating earnings is defined as GAAP earnings from
operations excluding the FAS/CAS service cost
adjustment. The FAS/CAS service cost adjustment
represents the difference between the FAS pension and
postretirement service costs calculated under GAAP and costs
allocated to the business segments. Core operating margin is
defined as core operating earnings expressed as a percentage of
revenue. Core earnings per share is defined as GAAP diluted
earnings per share excluding the net earnings per share impact
of the FAS/CAS service cost adjustment and Non-operating
pension and postretirement expenses. Non-operating pension and
postretirement expenses represent the components of net periodic
benefit costs other than service cost. Pension costs, comprising
service and prior service costs computed in accordance with GAAP
are allocated to Commercial Airplanes and BGS businesses supporting
commercial customers. Pension costs allocated to BDS and BGS
businesses supporting government customers are computed in
accordance with U.S. Government Cost Accounting Standards (CAS),
which employ different actuarial assumptions and accounting
conventions than GAAP. CAS costs are allocable to government
contracts. Other postretirement benefit costs are allocated to all
business segments based on CAS, which is generally based on
benefits paid. Management uses core operating earnings, core
operating margin and core earnings/per share for purposes of
evaluating and forecasting underlying business performance.
Management believes these core earnings measures provide investors
additional insights into operational performance as they exclude
non-service pension and post-retirement costs, which primarily
represent costs driven by market factors and costs not allocable to
government contracts. A reconciliation between the GAAP and
non-GAAP measures is provided on page 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 commercial aircraft production rate changes, 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) threats to the security of our or our
customers' information; (14) potential adverse developments in new
or pending litigation and/or government investigations; (15)
customer and aircraft concentration in our customer financing
portfolio; (16) changes in our ability to obtain debt on
commercially reasonable terms and at competitive rates; (17)
realizing the anticipated benefits of mergers, acquisitions, joint
ventures/strategic alliances or divestitures; (18) the adequacy of
our insurance coverage to cover significant risk exposures; (19)
potential business disruptions, including those related to physical
security threats, information technology or cyber-attacks,
epidemics, sanctions or natural disasters; (20) work stoppages or
other labor disruptions; (21) substantial pension and other
postretirement benefit obligations; (22) potential environmental
liabilities.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. Any
forward-looking statement speaks only as of the date on which it is
made, and we assume no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by law.
Contact: |
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Investor Relations: |
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Maurita Sutedja or Ben Hackman (312) 544-2140 |
Communications: |
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Allison Bone (312) 544-2002 |
The Boeing Company and
Subsidiaries
Consolidated Statements of Operations
(Unaudited)
In the first quarter of 2018, we adopted the following
Accounting Standards Updates (ASU), which are reflected in the
unaudited Consolidated Financial Statements on pages 9-14: ASU
2014-09, Revenue from Contracts with Customers (Topic
606); ASU 2017-07, Compensation - Retirement Benefits
(Topic 715): Improving the Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement Benefit Cost; ASU 2016-18
Statement of Cash Flows (Topic 230) Restricted Cash; and ASU
2018-02, Income Statement—Reporting Comprehensive Income (Topic
220): Reclassification of Certain Tax Effects from Accumulated
Other Comprehensive Income.
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Three months
ended
March 31 |
(Dollars in millions, except per share
data) |
2018 |
|
2017 |
Sales of products |
$20,820 |
|
$19,367 |
Sales of services |
2,562 |
|
2,594 |
Total revenues |
23,382 |
|
21,961 |
|
|
|
|
Cost of products |
(16,816) |
|
(16,062) |
Cost of services |
(1,992) |
|
(1,998) |
Boeing Capital interest expense |
(16) |
|
(13) |
Total costs and expenses |
(18,824) |
|
(18,073) |
|
4,558 |
|
3,888 |
Income from operating investments, net |
74 |
|
81 |
General and administrative expense |
(997) |
|
(929) |
Research and development expense, net |
(764) |
|
(836) |
Gain on dispositions, net |
4 |
|
2 |
Earnings from operations |
2,875 |
|
2,206 |
Other income, net |
66 |
|
26 |
Interest and debt expense |
(102) |
|
(87) |
Earnings before income taxes |
2,839 |
|
2,145 |
Income tax expense |
(362) |
|
(566) |
Net earnings |
$2,477 |
|
$1,579 |
|
|
|
|
Basic earnings per share |
$4.19 |
|
$2.57 |
|
|
|
|
Diluted earnings per share |
$4.15 |
|
$2.54 |
|
|
|
|
Cash dividends paid per share |
$1.71 |
|
$1.42 |
|
|
|
|
Weighted average diluted shares
(millions) |
597.2 |
|
621.2 |
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Financial Position |
(Unaudited) |
|
(Dollars in millions, except per share
data) |
March 31
2018 |
|
December 31
2017 |
Assets |
|
|
|
Cash and cash equivalents |
$9,235 |
|
$8,813 |
Short-term and other investments |
656 |
|
1,179 |
Accounts receivable, net |
2,802 |
|
2,894 |
Unbilled receivables, net |
9,822 |
|
8,194 |
Current portion of customer financing, net |
244 |
|
309 |
Inventories |
61,303 |
|
61,388 |
Other current assets |
2,481 |
|
2,417 |
Total current assets |
86,543 |
|
85,194 |
Customer financing, net |
2,753 |
|
2,756 |
Property, plant and equipment, net of accumulated
depreciation of $17,894 and $17,641 |
12,628 |
|
12,672 |
Goodwill |
5,558 |
|
5,559 |
Acquired intangible assets, net |
2,525 |
|
2,573 |
Deferred income taxes |
325 |
|
321 |
Investments |
1,248 |
|
1,260 |
Other assets, net of accumulated amortization of
$514 and $482 |
1,969 |
|
2,027 |
Total assets |
$113,549 |
|
$112,362 |
Liabilities and equity |
|
|
|
Accounts payable |
$12,613 |
|
$12,202 |
Accrued liabilities |
10,983 |
|
13,069 |
Advances and progress billings |
49,955 |
|
48,042 |
Short-term debt and current portion of long-term
debt |
1,981 |
|
1,335 |
Total current liabilities |
75,532 |
|
74,648 |
Deferred income taxes |
2,001 |
|
2,188 |
Accrued retiree health care |
5,494 |
|
5,545 |
Accrued pension plan liability, net |
16,279 |
|
16,471 |
Other long-term liabilities |
2,474 |
|
2,015 |
Long-term debt |
10,471 |
|
9,782 |
Shareholders' equity: |
|
|
|
Common stock, par value $5.00 – 1,200,000,000
shares authorized; 1,012,261,159 shares issued |
5,061 |
|
5,061 |
Additional paid-in capital |
6,624 |
|
6,804 |
Treasury stock, at cost - 428,038,987 and
421,222,326 shares |
(46,396) |
|
(43,454) |
Retained earnings |
52,095 |
|
49,618 |
Accumulated other comprehensive loss |
(16,162) |
|
(16,373) |
Total shareholders' equity |
1,222 |
|
1,656 |
Noncontrolling interests |
76 |
|
57 |
Total equity |
1,298 |
|
1,713 |
Total liabilities and equity |
$113,549 |
|
$112,362 |
The Boeing Company
and Subsidiaries |
Consolidated
Statements of Cash Flows |
(Unaudited) |
|
|
Three months
ended
March 31 |
(Dollars in millions) |
2018 |
|
2017 |
Cash flows – operating
activities: |
|
|
|
Net earnings |
$2,477 |
|
$1,579 |
Adjustments to reconcile net earnings to net cash
provided by operating activities: |
|
|
|
Non-cash items – |
|
|
|
Share-based plans expense |
45 |
|
50 |
Depreciation and amortization |
501 |
|
468 |
Investment/asset impairment charges, net |
20 |
|
23 |
Customer financing valuation
(benefit)/expense |
(1) |
|
7 |
Gain on dispositions, net |
(4) |
|
(2) |
Other charges and credits, net |
60 |
|
58 |
Changes in assets and liabilities – |
|
|
|
Accounts receivable |
92 |
|
(264) |
Unbilled receivables |
(1,628) |
|
(568) |
Advances and progress billings |
1,917 |
|
1,375 |
Inventories |
283 |
|
(1,491) |
Other current assets |
(103) |
|
(117) |
Accounts payable |
591 |
|
616 |
Accrued liabilities |
(1,337) |
|
(282) |
Income taxes receivable, payable and deferred |
348 |
|
552 |
Other long-term liabilities |
(243) |
|
(72) |
Pension and other postretirement plans |
(50) |
|
10 |
Customer financing, net |
44 |
|
231 |
Other |
124 |
|
(75) |
Net cash provided by operating
activities |
3,136 |
|
2,098 |
Cash flows – investing activities: |
|
|
|
Property, plant and equipment additions |
(394) |
|
(466) |
Property, plant and equipment reductions |
27 |
|
9 |
Contributions to investments |
(249) |
|
(605) |
Proceeds from investments |
752 |
|
803 |
Purchase of distribution rights |
(20) |
|
|
Other |
3 |
|
(1) |
Net cash provided/(used) by investing
activities |
119 |
|
(260) |
Cash flows – financing activities: |
|
|
|
New borrowings |
2,687 |
|
872 |
Debt repayments |
(1,371) |
|
(34) |
Contributions from noncontrolling interests |
20 |
|
|
Stock options exercised |
51 |
|
174 |
Employee taxes on certain share-based payment
arrangements |
(226) |
|
(107) |
Common shares repurchased |
(3,000) |
|
(2,500) |
Dividends paid |
(1,006) |
|
(868) |
Net cash used by financing activities |
(2,845) |
|
(2,463) |
Effect of exchange rate changes on cash and cash
equivalents, including restricted |
8 |
|
20 |
Net increase/(decrease) in cash & cash
equivalents, including restricted |
418 |
|
(605) |
Cash & cash equivalents, including restricted,
at beginning of year |
8,887 |
|
8,869 |
Cash & cash equivalents, including
restricted, at end of period |
$9,305 |
|
$8,264 |
Less restricted cash & cash equivalents,
included in Investments |
70 |
|
74 |
Cash and cash equivalents at end of
period |
9,235 |
|
8,190 |
The Boeing Company
and Subsidiaries |
Summary of Business
Segment Data |
(Unaudited) |
|
|
Three months
ended
March 31 |
(Dollars in millions) |
2018 |
|
2017 |
Revenues: |
|
|
|
Commercial Airplanes |
$13,652 |
|
$12,953 |
Defense, Space & Security |
5,762 |
|
5,112 |
Global Services |
3,943 |
|
3,653 |
Boeing Capital |
65 |
|
92 |
Unallocated items, eliminations and other |
(40) |
|
151 |
Total revenues |
$23,382 |
|
$21,961 |
Earnings from operations: |
|
|
|
Commercial Airplanes |
$1,508 |
|
$870 |
Defense, Space & Security |
649 |
|
549 |
Global Services |
644 |
|
623 |
Boeing Capital |
20 |
|
39 |
Segment operating profit |
2,821 |
|
2,081 |
Unallocated items, eliminations and other |
(311) |
|
(221) |
FAS/CAS service cost adjustment |
365 |
|
346 |
Earnings from operations |
2,875 |
|
2,206 |
Other income, net |
66 |
|
26 |
Interest and debt expense |
(102) |
|
(87) |
Earnings before income taxes |
2,839 |
|
2,145 |
Income tax expense |
(362) |
|
(566) |
Net earnings |
$2,477 |
|
$1,579 |
|
|
|
|
Research and development expense, net: |
|
|
|
Commercial Airplanes |
$549 |
|
$625 |
Defense, Space & Security |
183 |
|
196 |
Global Services |
34 |
|
28 |
Other |
(2) |
|
(13) |
Total research and development expense,
net |
$764 |
|
$836 |
|
|
|
|
Unallocated items, eliminations and
other: |
|
|
|
Share-based plans |
($18) |
|
($21) |
Deferred compensation |
(29) |
|
(50) |
Amortization of previously capitalized
interest |
(25) |
|
(24) |
Eliminations and other unallocated items |
(239) |
|
(126) |
Sub-total (included in core operating
earnings) |
(311) |
|
(221) |
Pension FAS/CAS service cost adjustment |
283 |
|
262 |
Postretirement FAS/CAS service cost
adjustment |
82 |
|
84 |
FAS/CAS service cost adjustment |
$365 |
|
$346 |
Total |
$54 |
|
$125 |
The Boeing Company
and Subsidiaries |
Operating and
Financial Data |
(Unaudited) |
|
Deliveries |
|
Three months
ended
March 31 |
|
Commercial Airplanes |
|
2018 |
|
2017 |
|
737 |
|
132 |
|
113 |
|
747 |
|
2 |
|
1 |
(1) |
767 |
|
4 |
|
2 |
|
777 |
|
12 |
|
21 |
|
787 |
|
34 |
|
32 |
|
Total |
|
184 |
|
169 |
|
Note: Aircraft accounted for as
revenues by BCA and as a note receivable in consolidation
identified by parentheses |
|
|
|
|
|
|
Defense, Space & Security |
|
|
|
|
|
AH-64 Apache (New) |
|
|
|
3 |
|
AH-64 Apache (Remanufactured) |
|
6 |
|
13 |
|
C-17 Globemaster III |
|
|
|
|
|
CH-47 Chinook (New) |
|
4 |
|
3 |
|
CH-47 Chinook (Renewed) |
|
4 |
|
9 |
|
F-15 Models |
|
2 |
|
3 |
|
F/A-18 Models |
|
5 |
|
6 |
|
P-8 Models |
|
4 |
|
4 |
|
Commercial and Civil Satellites |
|
|
|
1 |
|
Military Satellites |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total backlog (Dollars in
millions) |
|
March 31
2018 |
|
Restated**
December 31
2017 |
|
Reported
December 31
2017 |
Commercial Airplanes |
|
$415,377 |
|
$411,188 |
|
$421,345 |
Defense, Space & Security |
|
50,404 |
|
44,049 |
|
49,577 |
Global Services |
|
20,464 |
|
19,605 |
|
17,223 |
Total backlog |
|
$486,245 |
|
$474,842 |
|
$488,145 |
|
|
|
|
|
|
|
Contractual backlog |
|
$461,742 |
|
$457,186 |
|
$470,241 |
Unobligated backlog |
|
24,503 |
|
17,656 |
|
17,904 |
Total backlog |
|
$486,245 |
|
$474,842 |
|
$488,145 |
|
** The restated backlog reflects
the impact of ASC 606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
2018
Guidance |
|
First Quarter
2018 |
|
First Quarter 2017 |
|
$ millions |
|
Per Share |
|
$ millions |
|
Per Share |
|
$ millions |
|
Per Share |
Revenues |
|
|
|
|
23,382 |
|
|
|
21,961 |
|
|
Earnings from operations
(GAAP) |
|
|
|
|
2,875 |
|
|
|
2,206 |
|
|
Operating margins |
|
|
|
|
12.3% |
|
|
|
10.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS service cost
adjustment: |
|
|
|
|
|
|
|
|
|
|
|
Pension FAS/CAS service cost
adjustment |
|
|
|
|
(283) |
|
|
|
(262) |
|
|
Postretirement FAS/CAS service cost
adjustment |
|
|
|
|
(82) |
|
|
|
(84) |
|
|
FAS/CAS service cost
adjustment |
~($1,395) |
|
|
|
(365) |
|
|
|
(346) |
|
|
Core operating earnings
(non-GAAP) |
|
|
|
|
$2,510 |
|
|
|
$1,860 |
|
|
Core operating margins
(non-GAAP) |
|
|
|
|
10.7% |
|
|
|
8.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
(GAAP) |
|
|
$16.40 - 16.60 |
|
|
|
$4.15 |
|
|
|
$2.54 |
Pension FAS/CAS service cost
adjustment |
~($1,395) |
|
|
|
($283) |
|
(0.47) |
|
($262) |
|
(0.42) |
Postretirement FAS/CAS service cost
adjustment |
|
|
|
|
(82) |
|
(0.14) |
|
(84) |
|
(0.14) |
Non-operating pension expense |
~($170) |
|
|
|
(42) |
|
(0.07) |
|
(34) |
|
(0.06) |
Non-operating postretirement
expense |
|
|
|
|
24 |
|
0.04 |
|
30 |
|
0.05 |
Provision for deferred income taxes on
adjustments 1 |
|
|
|
|
80 |
|
0.13 |
|
122 |
|
0.20 |
Subtotal of adjustments |
|
|
($2.10) |
|
($303) |
|
($0.51) |
|
($228) |
|
($0.37) |
Core earnings per share
(non-GAAP) |
|
|
$14.30 - 14.50 |
|
|
|
$3.64 |
|
|
|
$2.17 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares (in
millions) |
585 - 590 |
|
|
|
|
|
597.2 |
|
|
|
621.2 |
|
1 The income tax
impact is calculated using the U.S. corporate statutory tax
rate in effect for non-GAAP adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Financial Position
The impact to our Condensed Consolidated Statement of Financial
Position as a result of adopting new accounting standards was as
follows:
|
|
|
|
|
|
(Dollars in millions) |
December 31, 2017 |
Assets |
Reported |
|
Impact of
New
Standards |
|
Restated |
Cash and cash equivalents |
$8,813 |
|
|
|
$8,813 |
Short-term and other investments |
1,179 |
|
|
|
1,179 |
Accounts receivable, net |
10,516 |
|
($7,622) |
|
2,894 |
Unbilled receivables, net |
|
|
8,194 |
|
8,194 |
Current portion of customer financing, net |
309 |
|
|
|
309 |
Inventories |
44,344 |
|
17,044 |
|
61,388 |
Other current assets |
|
|
2,417 |
|
2,417 |
Total current assets |
65,161 |
|
20,033 |
|
85,194 |
Customer financing, net |
2,740 |
|
16 |
|
2,756 |
Property, plant and equipment, net |
12,672 |
|
|
|
12,672 |
Goodwill |
5,559 |
|
|
|
5,559 |
Acquired intangible assets, net |
2,573 |
|
|
|
2,573 |
Deferred income taxes |
341 |
|
(20) |
|
321 |
Investments |
1,260 |
|
|
|
1,260 |
Other assets, net of accumulated amortization |
2,027 |
|
|
|
2,027 |
Total assets |
$92,333 |
|
$20,029 |
|
$112,362 |
Liabilities and equity |
|
|
|
|
|
Accounts payable |
$12,202 |
|
|
|
$12,202 |
Accrued liabilities |
15,292 |
|
(2,223) |
|
13,069 |
Advances and billings in excess of related
costs |
27,440 |
|
(27,440) |
|
|
Advances and progress billings |
|
|
48,042 |
|
48,042 |
Short-term debt and current portion of long-term
debt |
1,335 |
|
|
|
1,335 |
Total current liabilities |
56,269 |
|
18,379 |
|
74,648 |
Deferred income taxes |
1,839 |
|
349 |
|
2,188 |
Accrued retiree health care |
5,545 |
|
|
|
5,545 |
Accrued pension plan liability, net |
16,471 |
|
|
|
16,471 |
Other long-term liabilities |
2,015 |
|
|
|
2,015 |
Long-term debt |
9,782 |
|
|
|
9,782 |
Shareholders' equity: |
|
|
|
|
|
Common stock |
5,061 |
|
|
|
5,061 |
Additional paid-in capital |
6,804 |
|
|
|
6,804 |
Treasury stock, at cost |
(43,454) |
|
|
|
(43,454) |
Retained earnings |
45,320 |
|
4,298 |
|
49,618 |
Accumulated other comprehensive loss |
(13,376) |
|
(2,997) |
|
(16,373) |
Total shareholders' equity |
355 |
|
1,301 |
|
1,656 |
Noncontrolling interests |
57 |
|
|
|
57 |
Total equity |
412 |
|
1,301 |
|
1,713 |
Total liabilities and equity |
$92,333 |
|
$20,029 |
|
$112,362 |