Exhibit
99.1
Boeing Reports Fourth-Quarter Results
Fourth Quarter 2019
▪ |
Financial results continue to be significantly impacted by the 737 MAX
grounding |
▪ |
Revenue of $17.9
billion, GAAP loss per share of ($1.79) and core (non-GAAP)* loss per share of ($2.33) |
Full-Year 2019
▪ |
Revenue of
$76.6 billion, GAAP loss per share of ($1.12) and core (non-GAAP)* loss per share of ($3.47) |
▪ |
Operating cash flow of ($2.4) billion; cash and marketable securities of $10.0 billion |
▪ |
Total backlog of
$463 billion, including over 5,400 commercial airplanes |
Table 1. Summary Financial Results |
Fourth Quarter |
Full Year |
||||||||||||||||||
(Dollars in Millions, except per share data) |
2019 |
2018 |
Change |
2019 |
2018 |
Change | ||||||||||||||
Revenues |
$17,911 |
$28,341 |
(37)%
|
$76,559 |
$101,127 |
(24)% | ||||||||||||||
GAAP |
||||||||||||||||||||
(Loss)/Earnings
From Operations |
($2,204 |
) |
$4,175 |
NM |
($1,975 |
) |
$11,987 |
NM
| ||||||||||||
Operating Margin |
(12.3
|
)% |
14.7
|
% |
NM
|
(2.6
|
)% |
11.9
|
% |
NM | ||||||||||
Net
(Loss)/Earnings |
($1,010 |
) |
$3,424 |
NM |
($636 |
) |
$10,460 |
NM
| ||||||||||||
(Loss)/Earnings Per Share |
($1.79 |
) |
$5.93 |
NM
|
($1.12 |
) |
$17.85 |
NM | ||||||||||||
Operating
Cash Flow |
($2,220 |
) |
$2,947 |
NM |
($2,446 |
) |
$15,322 |
NM
| ||||||||||||
Non-GAAP* |
||||||||||||||||||||
Core
Operating (Loss)/Earnings |
($2,526 |
) |
$3,867 |
NM |
($3,390 |
) |
$10,660 |
NM
| ||||||||||||
Core Operating Margin |
(14.1
|
)% |
13.6
|
% |
NM
|
(4.4
|
)% |
10.5
|
% |
NM | ||||||||||
Core (Loss)/Earnings Per Share |
($2.33 |
) |
$5.48 |
NM
|
($3.47 |
) |
$16.01 |
NM | ||||||||||||
*Non-GAAP measure; complete
definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures
Disclosures."
CHICAGO, January 29, 2020 – The Boeing Company
[NYSE: BA] reported fourth-quarter revenue of $17.9 billion, GAAP loss per share of ($1.79) and core loss per share (non-GAAP)* of ($2.33), primarily reflecting the impacts of the 737 MAX grounding (Table 1). Boeing recorded operating cash flow of ($2.2) billion and paid
$1.2 billion of
dividends.
"We recognize we have a lot of work to do," said Boeing President and Chief
Executive Officer David Calhoun. “We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in
everything we do. Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and
disciplined recovery process.”
1
Table 2. Cash Flow |
Fourth Quarter |
Full Year | ||||||||||||||
(Millions) |
2019 |
2018 |
2019 |
2018 | ||||||||||||
Operating Cash Flow |
($2,220 |
) |
$2,947 |
($2,446 |
) |
$15,322 |
||||||||||
Less Additions to
Property, Plant & Equipment |
($447 |
) |
($495 |
) |
($1,834 |
) |
($1,722 |
) | ||||||||
Free Cash Flow* |
($2,667
|
)
|
$2,452
|
($4,280
|
)
|
$13,600
|
||||||||||
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures
Disclosures."
Operating cash flow was ($2.2) billion in the quarter, primarily reflecting the impact of the
737 MAX grounding as well as timing of receipts and expenditures (Table 2). During the quarter, the company paid $1.2 billion of
dividends.
Table 3. Cash, Marketable Securities and Debt Balances |
Quarter-End | |||||||
(Billions) |
Q4 19 |
Q3 19 | ||||||
Cash |
$9.5
|
$9.8
|
||||||
Marketable
Securities1 |
$0.5 |
$1.1 |
||||||
Total |
$10.0
|
$10.9
|
||||||
Debt
Balances: |
||||||||
The
Boeing Company, net of intercompany loans to BCC |
$25.3 |
$22.8 |
||||||
Boeing Capital,
including intercompany loans |
$2.0 |
$1.9 |
||||||
Total Consolidated Debt |
$27.3 |
$24.7 |
||||||
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, compared to $10.9
billion at the beginning of the quarter (Table 3). Debt was $27.3 billion, up
from $24.7 billion at the beginning of the quarter primarily due to increased commercial paper
borrowings.
Total company backlog at quarter-end was $463 billion and included net orders for the quarter of $13
billion.
2
Segment
Results
Commercial
Airplanes
Table 4. Commercial Airplanes |
Fourth Quarter |
Full Year |
||||||||||||||||||
(Dollars in Millions) |
2019 |
2018 |
Change |
2019 |
2018 |
Change | ||||||||||||||
Commercial Airplanes Deliveries |
79 |
238 |
(67)%
|
380 |
806 |
(53)% | ||||||||||||||
Revenues |
$7,462 |
$16,531 |
(55)%
|
$32,255 |
$57,499 |
(44)% | ||||||||||||||
(Loss)/Earnings from
Operations |
($2,844 |
) |
$2,600 |
NM |
($6,657 |
) |
$7,830 |
NM
| ||||||||||||
Operating Margin |
(38.1 |
)% |
15.7 |
% |
NM |
(20.6 |
)% |
13.6 |
% |
NM | ||||||||||
Commercial Airplanes fourth-quarter revenue was $7.5 billion and fourth-quarter
operating margin decreased to (38.1) percent reflecting lower 737 deliveries
and an additional pre-tax charge of $2.6 billion related to estimated potential concessions and other considerations to customers related to the 737 MAX grounding (Table 4). The estimated
costs to produce 737 aircraft included in the accounting quantity increased by $2.6 billion during the quarter, primarily to reflect updated production and delivery assumptions. In addition, the suspension of 737 MAX production and a gradual
resumption of production at low production rates will result in approximately $4 billion of abnormal production costs that will be expensed as incurred, primarily in
2020.
Commercial Airplanes delivered 79 airplanes during the quarter,
including 45 787's, and captured orders for 30 737 MAX aircraft at the Dubai Air Show and 2 777 freighters for Lufthansa. The 787 program also booked 36 net orders in the quarter. As previously announced, the 787 production rate will be reduced from
the current rate of 14 airplanes per month to 12 airplanes per month in late 2020. Based on the current environment and near-term market outlook, the production rate is expected to be further adjusted to 10 airplanes per month in early 2021, and
return to 12 airplanes per month in 2023. The first flight of the 777X was completed on January 25, and first delivery is targeted for
2021.
Commercial Airplanes backlog included over 5,400 airplanes valued at
$377 billion.
3
Defense, Space & Security
Table 5. Defense, Space & Security |
Fourth Quarter |
Full Year |
||||||||||||||||||
(Dollars in Millions) |
2019 |
2018 |
Change |
2019 |
2018 |
Change | ||||||||||||||
Revenues |
$5,962 |
$6,874 |
(13)%
|
$26,227 |
$26,392 |
(1%) | ||||||||||||||
Earnings
from Operations |
$31 |
$771 |
(96)% |
$2,608 |
$1,657 |
57%
| ||||||||||||||
Operating Margin |
0.5 |
% |
11.2 |
% |
(10.7) Pts |
9.9 |
% |
6.3 |
% |
3.6 Pts | ||||||||||
Defense, Space & Security fourth-quarter revenue decreased to $6.0 billion primarily driven by lower volume across the portfolio as well as the impact of a
Commercial Crew charge (Table 5). Fourth-quarter operating margin decreased to
0.5 percent due to a $410 million pre-tax Commercial Crew charge primarily to
provision for an additional uncrewed mission for the Commercial Crew program, performance and mix. NASA is evaluating the data received during the December 2019 mission to determine if another
uncrewed mission is required.
During the quarter, Defense, Space &
Security received an award for 10 Space Launch System core stages and up to 8 Exploration Upper Stages. Defense, Space & Security also received contracts for the remanufacture of 47 AH-64E Apache helicopters for three countries and to upgrade
the NATO Airborne Warning & Control System fleet. Significant milestones achieved during the quarter included the delivery of the first modified MV-22 Osprey to the U.S. Marine Corps and delivery of the first P-8A Poseidon aircraft to the United
Kingdom Royal Air Force. Defense, Space & Security also conducted a Commercial Crew spacecraft uncrewed Orbital Flight Test.
Backlog at Defense, Space & Security was $64 billion, of which 29 percent represents
orders from customers outside the U.S.
Global Services
Table 6. Global Services |
Fourth Quarter |
Full Year |
||||||||||||||||||
(Dollars in Millions) |
2019 |
2018 |
Change |
2019 |
2018 |
Change | ||||||||||||||
Revenues |
$4,648 |
$4,908 |
(5)%
|
$18,468 |
$17,056 |
8% | ||||||||||||||
Earnings
from Operations |
$684 |
$737 |
(7)% |
$2,697 |
$2,536 |
6%
| ||||||||||||||
Operating Margin |
14.7 |
% |
15.0 |
% |
(0.3) Pts |
14.6 |
% |
14.9 |
% |
(0.3) Pts | ||||||||||
Global Services fourth-quarter revenue was
$4.6 billion, primarily driven by lower commercial services volume (Table 6). Fourth-quarter operating margin decreased to 14.7 percent primarily due to a charge related to the retirement of the Aviall brand and mix
of products and services, partially offset by a gain on divestiture.
During the quarter, Global Services was awarded V-22 support contracts for Japan and the U.S. and AH-64 and CH-47 global support for the U.S. Army. Global Services signed a multi-year Landing Gear Exchange
services agreement with LATAM Airlines Group and a 5-year digital navigation renewal agreement with Saudi Arabian Airlines. Global Services also expanded its digital offerings by launching ForeFlight Dispatch and signed a contract with Flexjet to be
the inaugural customer.
4
Additional Financial Information
Table 7. Additional Financial Information |
Fourth Quarter |
Full Year | ||||||||||||||
(Dollars in Millions) |
2019 |
2018 |
2019 |
2018 | ||||||||||||
Revenues |
||||||||||||||||
Boeing
Capital |
$37 |
$60 |
$244 |
$274 |
||||||||||||
Unallocated items,
eliminations and other |
($198 |
) |
($32 |
) |
($635 |
) |
($94 |
) | ||||||||
Earnings from Operations |
||||||||||||||||
Boeing
Capital |
($58 |
) |
$8 |
$28 |
$79 |
|||||||||||
FAS/CAS service cost adjustment |
$322 |
$308 |
$1,415 |
$1,327 |
||||||||||||
Other unallocated items
and eliminations |
($339 |
) |
($249 |
) |
($2,066 |
) |
($1,442 |
) | ||||||||
Other income, net |
$104 |
$29 |
$438 |
$92 |
||||||||||||
Interest and
debt expense |
($242 |
) |
($158 |
) |
($722 |
) |
($475 |
) | ||||||||
Effective tax rate |
56.9 |
% |
15.4 |
% |
71.8 |
% |
9.9 |
% | ||||||||
At quarter-end, Boeing Capital's net portfolio balance was $2.3 billion. Revenue in other
unallocated items and eliminations decreased primarily due to the timing of eliminations for intercompany aircraft deliveries. The change in earnings from other unallocated items and eliminations is primarily due to higher deferred compensation
expense and increased enterprise research and development investment. Interest and debt expense increased due to higher debt balances. The fourth quarter 2019 effective tax rate reflects a $371 million tax benefit related to the settlement of state
tax audits as well as the impact of pre-tax
losses.
5
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 (Loss)/Earnings, Core Operating Margin and Core (Loss)/Earnings Per Share
Core operating (loss)/earnings is defined as GAAP (loss)/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 (loss)/earnings expressed as a percentage of revenue. Core (loss)/earnings per share is defined as GAAP diluted (loss)/earnings per share excluding the net (loss)/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 (loss)/earnings, core operating margin and core (loss)/earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core (loss)/earnings measures provide investors additional
insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and
non-GAAP measures is provided on page 13-14.
Free Cash
Flow
Free cash flow is GAAP operating cash flow reduced by capital expenditures for
property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the
cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available
for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation
of free cash flow to GAAP operating cash flow.
6
Caution Concerning Forward-Looking
Statements
This press release contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,”
“targets,” “anticipates,” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating
results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be
accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking
statements. Among these factors are risks related to: (1) the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, delays in the resumption of production, lower than planned production rates and/or delivery rates, and
increased considerations to customers and suppliers, (2) general conditions in the economy and our industry, including those due to regulatory changes; (3) our reliance on our commercial airline customers; (4) 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; (5) changing budget and
appropriation levels and acquisition priorities of the U.S. government; (6) our dependence on U.S. government contracts; (7) our reliance on fixed-price contracts; (8) our reliance on cost-type contracts; (9) uncertainties concerning contracts that
include in-orbit incentive payments; (10) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (11) changes in accounting estimates; (12) changes in the competitive landscape in our markets; (13) our
non-U.S. operations, including sales to non-U.S. customers; (14) threats to the security of our or our customers’ information; (15) potential adverse developments in new or pending litigation and/or government investigations; (16) customer and
aircraft concentration in our customer financing portfolio; (17) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates; (18) realizing the anticipated benefits of mergers, acquisitions, joint
ventures/strategic alliances or divestitures; (19) the adequacy of our insurance coverage to cover significant risk exposures; (20) potential business disruptions, including those related to physical security threats, information technology or
cyber-attacks, epidemics, sanctions or natural disasters; (21) work stoppages or other labor disruptions; (22) substantial pension and other postretirement benefit obligations; and (23) potential environmental
liabilities.
Additional information concerning these and other factors can be found in our filings with the
Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no
obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
# #
#
Contact:
Investor Relations: |
Maurita Sutedja
or Keely Moos (312) 544-2140 | |
Communications: |
Caroline Hutcheson
(312)
544-2002 | |
7
The Boeing Company and
Subsidiaries
Consolidated Statements of
Operations
(Unaudited)
Twelve months ended December
31 |
Three months ended December
31 | ||||||||||||||
(Dollars in
millions, except per share data) |
2019
|
2018 |
2019
|
2018 |
|||||||||||
Sales of
products |
$66,094
|
$90,229 |
$15,580
|
$25,381 |
|||||||||||
Sales of services |
10,465
|
10,898 |
2,331
|
2,960 |
|||||||||||
Total
revenues |
76,559 |
101,127
|
17,911 |
28,341
|
|||||||||||
Cost of products |
(62,877
|
) |
(72,922 |
) |
(16,293
|
) |
(19,788 |
) | |||||||
Cost of services |
(9,154 |
) |
(8,499 |
) |
(2,402 |
) |
(2,284 |
) | |||||||
Boeing
Capital interest expense |
(62 |
) |
(69
|
)
|
(13 |
) |
(18
|
)
| |||||||
Total costs and
expenses |
(72,093 |
) |
(81,490 |
)
|
(18,708 |
) |
(22,090 |
)
| |||||||
4,466 |
19,637
|
(797 |
)
|
6,251
|
|||||||||||
(Loss)/income from operating investments, net |
(4 |
) |
111 |
(1 |
) |
(1 |
) | ||||||||
General and administrative
expense |
(3,909
|
) |
(4,567 |
) |
(1,052
|
) |
(1,222 |
) | |||||||
Research and development expense, net |
(3,219 |
) |
(3,269 |
) |
(749 |
) |
(852 |
) | |||||||
Gain/(loss) on dispositions, net |
691 |
75 |
395 |
(1
|
)
| ||||||||||
(Loss)/earnings from operations |
(1,975
|
) |
11,987 |
(2,204
|
) |
4,175 |
|||||||||
Other income, net |
438
|
92 |
104
|
29 |
|||||||||||
Interest and debt
expense |
(722
|
) |
(475 |
) |
(242
|
) |
(158 |
) | |||||||
(Loss)/earnings before
income taxes |
(2,259 |
)
|
11,604
|
(2,342 |
)
|
4,046
|
|||||||||
Income tax
benefit/(expense) |
1,623
|
(1,144 |
) |
1,332
|
(622 |
) | |||||||||
Net (loss)/earnings |
($636 |
) |
$10,460
|
($1,010 |
) |
$3,424
|
|||||||||
Basic (loss)/earnings per share |
($1.12 |
) |
$18.05
|
($1.79 |
) |
$6.00
|
|||||||||
Diluted (loss)/earnings per share |
($1.12 |
) |
$17.85
|
($1.79 |
) |
$5.93
|
|||||||||
Weighted average diluted shares (millions) |
566.0 |
586.2 |
565.4 |
577.5 |
|||||||||||
8
The Boeing Company and Subsidiaries
Consolidated
Statements of Financial
Position
(Unaudited)
(Dollars in millions, except per
share data) |
December 31
2019 |
December 31
2018 |
|||||
Assets |
|||||||
Cash and cash equivalents |
$9,485 |
$7,637 |
|||||
Short-term and other
investments |
545
|
927 |
|||||
Accounts receivable, net |
3,266 |
3,879 |
|||||
Unbilled receivables,
net |
9,043
|
10,025 |
|||||
Current portion of customer financing, net |
162 |
460 |
|||||
Inventories |
76,622
|
62,567 |
|||||
Other current
assets |
3,106
|
2,335 |
|||||
Total current assets |
102,229 |
87,830
|
|||||
Customer financing, net |
2,136 |
2,418 |
|||||
Property, plant and equipment, net of
accumulated depreciation of $19,342 and $18,568 |
12,502
|
12,645 |
|||||
Goodwill |
8,060 |
7,840 |
|||||
Acquired intangible assets,
net |
3,338
|
3,429 |
|||||
Deferred income taxes |
683 |
284 |
|||||
Investments |
1,092
|
1,087 |
|||||
Other assets, net
of accumulated amortization of $580 and $503 |
3,585 |
1,826 |
|||||
Total assets |
$133,625 |
$117,359
|
|||||
Liabilities and
equity |
|||||||
Accounts payable |
$15,553 |
$12,916 |
|||||
Accrued liabilities |
22,868 |
14,808 |
|||||
Advances and progress
billings |
51,551
|
50,676 |
|||||
Short-term debt and current portion
of long-term debt |
7,340
|
3,190 |
|||||
Total current liabilities |
97,312 |
81,590
|
|||||
Deferred income taxes |
413 |
1,736 |
|||||
Accrued retiree health
care |
4,540
|
4,584 |
|||||
Accrued pension plan liability, net |
16,276 |
15,323 |
|||||
Other long-term
liabilities |
3,422
|
3,059 |
|||||
Long-term debt |
19,962 |
10,657 |
|||||
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 |
6,745
|
6,768 |
|||||
Treasury stock, at cost |
(54,914 |
) |
(52,348 |
) | |||
Retained earnings |
50,644
|
55,941 |
|||||
Accumulated other comprehensive
loss |
(16,153
|
) |
(15,083 |
) | |||
Total
shareholders’ equity |
(8,617 |
)
|
339
|
||||
Noncontrolling
interests |
317
|
71 |
|||||
Total
equity |
(8,300
|
) |
410 |
||||
Total liabilities and equity |
$133,625
|
$117,359 |
|||||
9
The Boeing Company and
Subsidiaries
Consolidated Statements of Cash
Flows
(Unaudited)
Twelve months ended December
31 | |||||||
(Dollars
in millions) |
2019
|
2018 |
|||||
Cash flows – operating activities: |
|||||||
Net (loss)/earnings |
($636 |
) |
$10,460 |
||||
Adjustments to reconcile net earnings to
net cash provided by operating activities: |
|||||||
Non-cash items – |
|||||||
Share-based plans
expense |
212
|
202 |
|||||
Depreciation and amortization |
2,271 |
2,114 |
|||||
Investment/asset impairment charges,
net |
443
|
93 |
|||||
Customer financing valuation adjustments |
250 |
(3 |
) | ||||
Gain on dispositions,
net |
(691
|
) |
(75 |
) | |||
Other charges and credits, net |
334 |
247 |
|||||
Changes in assets and liabilities
– |
|||||||
Accounts receivable |
603 |
(795 |
) | ||||
Unbilled
receivables |
982
|
(1,826 |
) | ||||
Advances and progress billings |
737 |
2,636 |
|||||
Inventories |
(12,391
|
) |
568 |
||||
Other current assets |
(682 |
) |
98 |
||||
Accounts payable |
1,600
|
2 |
|||||
Accrued liabilities |
7,781 |
1,117 |
|||||
Income taxes receivable, payable and
deferred |
(2,476
|
) |
(180 |
) | |||
Other long-term liabilities |
(621 |
) |
87 |
||||
Pension and other postretirement
plans |
(777
|
) |
(153 |
) | |||
Customer financing, net |
419 |
120 |
|||||
Other
|
196
|
610 |
|||||
Net cash
(used)/provided by operating activities |
(2,446 |
) |
15,322 |
||||
Cash flows – investing activities: |
|||||||
Property, plant and equipment additions |
(1,834 |
) |
(1,722 |
) | |||
Property, plant and equipment
reductions |
334
|
120 |
|||||
Acquisitions, net of cash acquired |
(455 |
) |
(3,230 |
) | |||
Proceeds from
dispositions |
464
|
||||||
Contributions to investments |
(1,658 |
) |
(2,607 |
) | |||
Proceeds from
investments |
1,759
|
2,898 |
|||||
Purchase of distribution rights |
(127 |
) |
(69 |
) | |||
Other |
(13 |
) |
(11
|
)
| |||
Net cash used by investing activities |
(1,530 |
) |
(4,621 |
)
| |||
Cash flows – financing activities: |
|||||||
New borrowings |
25,389 |
8,548 |
|||||
Debt repayments |
(12,171
|
) |
(7,183 |
) | |||
Contributions from noncontrolling interests |
7 |
35 |
|||||
Stock options exercised |
58
|
81 |
|||||
Employee taxes on certain share-based payment
arrangements |
(248 |
) |
(257 |
) | |||
Common shares
repurchased |
(2,651
|
) |
(9,000 |
) | |||
Dividends paid |
(4,630 |
) |
(3,946 |
) | |||
Other |
(15
|
) |
|||||
Net cash provided/(used) by financing activities |
5,739 |
(11,722 |
)
| ||||
Effect of
exchange rate changes on cash and cash equivalents, including restricted |
(5 |
) |
(53
|
)
| |||
Net
increase/(decrease) in cash & cash equivalents, including restricted |
1,758
|
(1,074 |
) | ||||
Cash & cash equivalents, including
restricted, at beginning of year |
7,813 |
8,887
|
|||||
Cash & cash equivalents, including restricted, at end of period |
9,571
|
7,813 |
|||||
Less restricted cash & cash
equivalents, included in Investments |
86
|
176 |
|||||
Cash and cash equivalents at end of period |
$9,485
|
$7,637 |
|||||
10
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2019, all revenues and costs associated with military derivative aircraft production are reported in the Defense, Space & Security segment. Revenues and costs associated
with military derivative aircraft production were previously reported in the Commercial Airplanes and Defense, Space & Security segments. Business segment data for 2018 reflects the realignment for military derivative aircraft as well as the
realignment of certain programs from Defense, Space & Security to Global Services.
Twelve months ended December
31 |
Three months ended December
31 | ||||||||||||||
(Dollars
in millions) |
2019
|
2018 |
2019
|
2018 |
|||||||||||
Revenues:
|
|||||||||||||||
Commercial Airplanes |
$32,255 |
$57,499 |
$7,462 |
$16,531 |
|||||||||||
Defense, Space &
Security |
26,227
|
26,392 |
5,962
|
6,874 |
|||||||||||
Global Services |
18,468 |
17,056 |
4,648 |
4,908 |
|||||||||||
Boeing Capital |
244
|
274 |
37
|
60 |
|||||||||||
Unallocated items, eliminations and
other |
(635
|
) |
(94 |
) |
(198
|
) |
(32 |
) | |||||||
Total revenues |
$76,559 |
$101,127
|
$17,911 |
$28,341
|
|||||||||||
(Loss)/earnings from operations: |
|||||||||||||||
Commercial Airplanes |
($6,657 |
) |
$7,830 |
($2,844 |
) |
$2,600 |
|||||||||
Defense, Space & Security |
2,608 |
1,657 |
31 |
771 |
|||||||||||
Global
Services |
2,697
|
2,536 |
684
|
737 |
|||||||||||
Boeing Capital |
28
|
79 |
(58
|
) |
8 |
||||||||||
Segment
operating (loss)/profit |
(1,324
|
) |
12,102 |
(2,187
|
) |
4,116
|
|||||||||
Unallocated items, eliminations and other |
(2,066 |
) |
(1,442 |
) |
(339 |
) |
(249 |
) | |||||||
FAS/CAS service cost adjustment |
1,415 |
1,327
|
322 |
308
|
|||||||||||
(Loss)/earnings from operations |
(1,975 |
) |
11,987 |
(2,204 |
) |
4,175 |
|||||||||
Other income, net |
438
|
92 |
104
|
29 |
|||||||||||
Interest and debt
expense |
(722
|
) |
(475 |
) |
(242
|
) |
(158 |
) | |||||||
(Loss)/earnings before
income taxes |
(2,259
|
) |
11,604 |
(2,342
|
) |
4,046 |
|||||||||
Income tax
benefit/(expense) |
1,623
|
(1,144 |
) |
1,332
|
(622 |
) | |||||||||
Net (loss)/earnings |
($636 |
) |
$10,460
|
($1,010 |
) |
$3,424
|
|||||||||
Research and
development expense, net: |
|||||||||||||||
Commercial Airplanes |
$1,956 |
$2,188 |
$427 |
$572 |
|||||||||||
Defense, Space &
Security |
758
|
788 |
189
|
175 |
|||||||||||
Global Services |
121 |
161 |
19 |
42 |
|||||||||||
Other |
384
|
132 |
114
|
63 |
|||||||||||
Total research and development expense, net |
$3,219
|
$3,269 |
$749
|
$852 |
|||||||||||
Unallocated items, eliminations and
other: |
|||||||||||||||
Share-based plans |
($65 |
) |
($76 |
) |
($8 |
) |
($16 |
) | |||||||
Deferred compensation |
(174 |
) |
(19 |
) |
(20 |
) |
93 |
||||||||
Amortization of previously capitalized
interest |
(89
|
) |
(92 |
) |
(21
|
) |
(25 |
) | |||||||
Customer financing impairment |
(250 |
) |
|||||||||||||
Research and development expense,
net |
(384
|
) |
(132 |
) |
(97
|
) |
(63 |
) | |||||||
Eliminations and other unallocated
items |
(1,104 |
) |
(1,123 |
) |
(193 |
) |
(238 |
) | |||||||
Sub-total (included in core operating earnings) |
(2,066 |
) |
(1,442 |
) |
(339 |
) |
(249 |
) | |||||||
Pension FAS/CAS service cost adjustment |
1,071 |
1,005 |
248 |
225 |
|||||||||||
Postretirement FAS/CAS service cost
adjustment |
344
|
322 |
74
|
83 |
|||||||||||
FAS/CAS service cost adjustment |
1,415 |
1,327 |
$322
|
$308 |
|||||||||||
Total |
($651
|
) |
($115 |
)
|
($17
|
) |
$59 |
||||||||
11
The Boeing Company and
Subsidiaries
Operating and Financial
Data
(Unaudited)
Deliveries |
Twelve
months ended December 31 |
Three
months ended December 31 |
|||||||||||
Commercial Airplanes |
2019 |
2018
|
2019 |
2018
|
|||||||||
737 |
127
|
580
|
9
|
173
|
|||||||||
747 |
7 |
6 |
2 |
1 |
|||||||||
767 |
43 |
27 |
11 |
14 |
|||||||||
777 |
45 |
(2) |
48 |
12 |
(1) |
11 |
|||||||
787 |
158 |
145
|
45 |
39
|
|||||||||
Total |
380 |
806
|
79 |
238
|
|||||||||
Note:
Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses | |||||||||||||
Defense, Space & Security |
|||||||||||||
AH-64 Apache (New) |
37 |
— |
10 |
— |
|||||||||
AH-64 Apache
(Remanufactured) |
74 |
23 |
18 |
11 |
|||||||||
C-17 Globemaster III |
1 |
— |
— |
— |
|||||||||
C-40A |
2 |
— |
— |
— |
|||||||||
CH-47 Chinook (New) |
13 |
13 |
— |
2 |
|||||||||
CH-47 Chinook
(Renewed) |
22 |
17 |
6 |
3 |
|||||||||
F-15 Models |
11 |
10 |
4 |
2 |
|||||||||
F/A-18
Models |
23 |
17 |
7 |
7 |
|||||||||
KC-46 Tanker |
28 |
— |
7 |
— |
|||||||||
P-8
Models |
18 |
16 |
4 |
6 |
|||||||||
Commercial and Civil Satellites |
2 |
1 |
1 |
— |
|||||||||
Military
Satellites |
— |
1 |
— |
1 |
|||||||||
Total
backlog (Dollars in millions) |
December 31
2019 |
December 31
2018 |
||||||
Commercial
Airplanes |
$376,593
|
$408,140 |
||||||
Defense, Space & Security |
63,908 |
61,277 |
||||||
Global
Services |
22,902
|
21,064 |
||||||
Total backlog |
$463,403
|
$490,481 |
||||||
Contractual backlog |
$436,473 |
$462,070 |
||||||
Unobligated
backlog |
26,930 |
28,411
|
||||||
Total backlog |
$463,403
|
$490,481 |
||||||
12
The Boeing Company and
Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core operating (loss)/earnings, core
operating margin, and core (loss)/earnings per share with the most directly comparable GAAP financial measures, (loss)/earnings from operations, operating margin, and diluted (loss)/earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial
measures.
(Dollars in
millions, except per share data) |
Fourth
Quarter 2019 |
Fourth Quarter
2018 | ||||||||||||
$
millions |
Per
Share |
$
millions |
Per
Share |
|||||||||||
Revenues |
17,911 |
28,341
|
||||||||||||
(Loss)/earnings from operations
(GAAP) |
(2,204 |
) |
4,175 |
|||||||||||
Operating margin
(GAAP) |
(12.3 |
)%
|
14.7
|
% |
||||||||||
FAS/CAS
service cost adjustment: |
||||||||||||||
Pension FAS/CAS service cost
adjustment |
(248 |
) |
(225 |
) |
||||||||||
Postretirement FAS/CAS
service cost adjustment |
(74 |
) |
(83
|
)
|
||||||||||
FAS/CAS
service cost adjustment |
(322
|
) |
(308 |
) |
||||||||||
Core operating (loss)/earnings (non-GAAP) |
($2,526 |
) |
$3,867 |
|||||||||||
Core operating margin
(non-GAAP) |
(14.1 |
)% |
13.6 |
% |
||||||||||
Diluted (loss)/earnings per share
(GAAP) |
($1.79 |
) |
$5.93 |
|||||||||||
Pension FAS/CAS service
cost adjustment |
($248 |
) |
(0.44
|
) |
($225 |
) |
(0.39 |
) | ||||||
Postretirement FAS/CAS service cost
adjustment |
(74 |
) |
(0.13 |
) |
(83 |
) |
(0.14 |
) | ||||||
Non-operating pension
expense |
(94
|
) |
(0.17
|
) |
(45 |
) |
(0.08 |
) | ||||||
Non-operating postretirement
expense |
27 |
0.05 |
24 |
0.04 |
||||||||||
Provision for deferred
income taxes on adjustments 1 |
82 |
0.15 |
69
|
0.12
|
||||||||||
Subtotal of
adjustments |
($307 |
) |
($0.54 |
) |
($260 |
) |
($0.45 |
) | ||||||
Core (loss)/earnings per share (non-GAAP) |
($2.33 |
) |
$5.48 |
|||||||||||
Weighted average
diluted shares (in millions) |
565.4
|
577.5 |
||||||||||||
1 The income tax impact is calculated
using the U.S. corporate statutory tax
rate.
13
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core operating (loss)/earnings, core
operating margin, and core (loss)/earnings per share with the most directly comparable GAAP financial measures, (loss)/earnings from operations, operating margin, and diluted (loss)/earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial
measures.
(Dollars
in millions, except per share data) |
Full
Year 2019 |
Full Year
2018 | ||||||||||||
$
millions |
Per
Share |
$
millions |
Per
Share |
|||||||||||
Revenues
|
76,559 |
101,127
|
||||||||||||
(Loss)/earnings from operations
(GAAP) |
(1,975 |
) |
11,987 |
|||||||||||
Operating
margin (GAAP) |
(2.6 |
)%
|
11.9
|
% |
||||||||||
FAS/CAS
service cost adjustment: |
||||||||||||||
Pension FAS/CAS service cost
adjustment |
(1,071 |
) |
(1,005 |
) |
||||||||||
Postretirement FAS/CAS
service cost adjustment |
(344 |
) |
(322
|
)
|
||||||||||
FAS/CAS
service cost adjustment |
(1,415
|
) |
(1,327 |
) |
||||||||||
Core operating (loss)/earnings (non-GAAP) |
($3,390 |
) |
$10,660 |
|||||||||||
Core operating margin
(non-GAAP) |
(4.4 |
)% |
10.5 |
% |
||||||||||
Diluted (loss)/earnings per share
(GAAP) |
($1.12 |
) |
$17.85 |
|||||||||||
Pension FAS/CAS service
cost adjustment |
($1,071 |
) |
(1.89
|
) |
($1,005 |
) |
(1.71 |
) | ||||||
Postretirement FAS/CAS service cost
adjustment |
(344 |
) |
(0.61 |
) |
(322 |
) |
(0.55 |
) | ||||||
Non-operating pension
expense |
(374
|
) |
(0.66
|
) |
(143 |
) |
(0.24 |
) | ||||||
Non-operating postretirement
expense |
107 |
0.19 |
101 |
0.17 |
||||||||||
Provision for deferred
income taxes on adjustments 1 |
353 |
0.62 |
287
|
0.49
|
||||||||||
Subtotal of
adjustments |
($1,329 |
) |
($2.35 |
) |
($1,082 |
) |
($1.84 |
) | ||||||
Core (loss)/earnings per share (non-GAAP) |
($3.47 |
) |
$16.01 |
|||||||||||
Weighted average
diluted shares (in millions) |
566.0
|
586.2 |
||||||||||||
1 The income tax impact is calculated
using the U.S. corporate statutory tax rate.
14