Exhibit
99.1
Boeing Reports First-Quarter Results
▪ |
Financial results significantly impacted by COVID-19 and the 737 MAX grounding
|
▪ |
Revenue of $16.9
billion, GAAP loss per share of ($1.11) and core (non-GAAP)* loss per share of ($1.70) |
▪ |
Operating cash flow of ($4.3) billion; cash and marketable securities of $15.5 billion |
▪ |
Total backlog of
$439 billion, including over 5,000 commercial airplanes |
Table 1. Summary Financial Results |
First Quarter |
|||||
(Dollars in Millions, except per share data) |
2020 |
2019 |
Change | |||
Revenues |
$16,908
|
$22,917
|
(26)% | |||
GAAP |
||||||
(Loss)/Earnings
From Operations |
($1,353) |
$2,350 |
NM
| |||
Operating Margin |
(8.0)%
|
10.3%
|
NM | |||
Net
(Loss)/Earnings |
(641) |
$2,149 |
NM
| |||
(Loss)/Earnings Per Share |
($1.11)
|
$3.75
|
NM | |||
Operating
Cash Flow |
($4,302) |
$2,788 |
NM
| |||
Non-GAAP* |
||||||
Core
Operating (Loss)/Earnings |
($1,700) |
$1,986 |
NM
| |||
Core Operating Margin |
(10.1)%
|
8.7%
|
NM | |||
Core (Loss)/Earnings Per Share |
($1.70)
|
$3.16
|
NM | |||
*Non-GAAP measure; complete
definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures
Disclosures."
CHICAGO, April 29, 2020 – The Boeing Company
[NYSE: BA] reported first-quarter revenue of $16.9 billion, GAAP loss per share of ($1.11) and core loss per share (non-GAAP)* of ($1.70), primarily reflecting the impacts of COVID-19 and the 737 MAX
grounding (Table 1). Boeing recorded operating cash flow of ($4.3)
billion.
“The COVID-19 pandemic is affecting every aspect of our business, including airline customer demand, production continuity and supply chain
stability,” said Boeing President and CEO David Calhoun. “Our primary focus is the health and safety of our people and communities while we take tough but necessary action to navigate this unprecedented health crisis and adapt for a
changed marketplace.”
As the pandemic continues to reduce airline
passenger traffic, Boeing sees significant impact on the demand for new commercial airplanes and services, with airlines delaying purchases for new jets, slowing delivery schedules and deferring elective maintenance. To align the business for the
new market reality, Boeing is taking several actions that include reducing commercial airplane production rates. The company also announced a leadership and organizational restructuring to streamline roles and responsibilities, and plans to reduce
overall staffing levels with a voluntary layoff program and additional workforce actions as necessary.
1
Boeing has also taken action to manage near-term liquidity, as it has drawn on a term loan facility; reduced operating costs and discretionary spending; extended the existing pause on share repurchases and
suspended dividends until further notice; reduced or deferred research and development and capital expenditures; and eliminated CEO and Chairman pay for the year. Access to additional liquidity will be critical for Boeing and the aerospace
manufacturing sector to bridge to recovery, and the company is actively exploring all of the available options. Boeing believes it will be able to obtain sufficient liquidity to fund its
operations.
“While COVID-19 is adding unprecedented pressure to our business, we
remain confident in our long term future,” said Calhoun. “We continue to support our defense customers in their critical national security missions. We are progressing toward the safe return to service of the 737 MAX, and we are
driving safety, quality and operational excellence into all that we do every day. Air travel has always been resilient, our portfolio of products and technology is well positioned, and we are confident we will emerge from the crisis and thrive again
as a leader of our industry.”
Table 2. Cash Flow |
First Quarter | |||||||
(Millions) |
2020 |
2019 | ||||||
Operating Cash Flow |
($4,302 |
) |
$2,788 |
|||||
Less Additions to
Property, Plant & Equipment |
($428 |
) |
($501 |
) | ||||
Free Cash Flow* |
($4,730
|
)
|
$2,287
|
|||||
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures
Disclosures."
Operating cash flow was ($4.3) billion in the quarter, primarily reflecting the impact of the
737 MAX grounding and COVID-19, as well as timing of receipts and expenditures (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances |
Quarter-End | |||||||
(Billions) |
Q1 20 |
Q4 19 | ||||||
Cash |
$15.0
|
$9.5
|
||||||
Marketable
Securities1 |
$0.5 |
$0.5 |
||||||
Total |
$15.5
|
$10.0
|
||||||
Debt
Balances: |
||||||||
The
Boeing Company, net of intercompany loans to BCC |
$36.9 |
$25.3 |
||||||
Boeing Capital,
including intercompany loans |
$2.0 |
$2.0 |
||||||
Total Consolidated Debt |
$38.9 |
$27.3 |
||||||
1 Marketable securities consists primarily of time deposits due within one year classified as "short-term
investments."
Cash and investments in marketable securities increased to
$15.5 billion, compared to $10.0 billion at the beginning of the quarter, primarily due to increased debt balance (Table 3). Debt was $38.9 billion, up from $27.3 billion at the beginning of the quarter primarily due to the draw down of a
term loan facility, partially offset by debt repayments.
Total company backlog at
quarter-end was $439 billion.
2
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes |
First Quarter |
|||||||||
(Dollars in Millions) |
2020 |
2019 |
Change | |||||||
Commercial Airplanes Deliveries |
50 |
149 |
(66)% | |||||||
Revenues |
$6,205 |
$11,822 |
(48)% | |||||||
(Loss)/Earnings from
Operations |
($2,068 |
) |
$1,173 |
NM
| ||||||
Operating Margin |
(33.3 |
)% |
9.9 |
% |
NM | |||||
Commercial Airplanes first-quarter revenue was $6.2 billion reflecting lower deliveries driven by the 737 MAX grounding as well as impacts of COVID-19 (Table 4). First-quarter operating margin decreased to
(33.3) percent due to lower delivery volume, $797 million of abnormal production costs from the temporary suspension of 737 MAX
production, a $336 million charge related to 737 Next Generation frame fitting component (pickle fork) repair costs, lower 787 margins primarily due to COVID-19, and $137 million of abnormal production costs from the temporary suspension of Puget
Sound operations in response to COVID-19.
COVID-19 has adversely impacted
the 737 program due to a slower than previously planned production rate ramp-up driven by commercial airline industry uncertainty. To reflect COVID-19 impacts on the demand environment, 737 MAX aircraft production will resume at low rates in 2020 as
timing and conditions of return to service are better understood and gradually increase to 31 per month during 2021, with
further gradual increases to correspond with market demand. The estimated abnormal production costs from the temporary suspension of 737 MAX production have increased by approximately $1 billion due to updated production rate assumptions, bringing
the estimated total to approximately $5 billion. There was no material change to estimated potential concessions and other considerations to customers related to the 737 MAX
grounding.
Commercial Airplanes has updated its production rate
assumptions to reflect impacts from COVID-19 on its operations and demand outlook, and will continue to assess them on an ongoing basis. The 787 production rate will be reduced from 14 per month to 10 per month in 2020, and gradually reduced to 7
per month by 2022. The 777/777X combined production rate will be reduced to 3 per month in 2021. At this time, production rate assumptions have not changed on the 767 and 747
programs.
Commercial Airplanes delivered 50 airplanes during the quarter,
including 29 787s. Commercial Airplanes captured an order for 12 787 aircraft for All Nippon Airways, and produced the
1000th 787 at Boeing South Carolina. Commercial Airplanes backlog
included over 5,000 airplanes valued at $352 billion.
3
Defense, Space & Security
Table 5. Defense, Space & Security |
First Quarter |
|||||||||
(Dollars in Millions) |
2020 |
2019 |
Change | |||||||
Revenues |
$6,042 |
$6,587 |
(8)% | |||||||
Earnings
from Operations |
($191 |
) |
$852 |
NM
| ||||||
Operating Margin |
(3.2 |
)% |
12.9 |
% |
NM | |||||
Defense, Space & Security first-quarter revenue decreased to $6.0 billion primarily driven by a charge on the KC-46A Tanker (Table 5). First-quarter operating margin decreased to (3.2) percent primarily due to a pre-tax charge of $827 million for the KC-46A Tanker, of which $551 million was driven by costs associated with the
agreement signed in April with the U.S. Air Force to develop and integrate a new Remote Vision System, while the remaining costs reflect productivity inefficiencies and COVID-19 related factory
disruption. A number of other programs were also impacted by COVID-19, further reducing margin in the quarter.
During the quarter, Defense, Space & Security received an award for 18 P-8A Poseidon maritime patrol aircraft, as well as a contract to develop a SB>1 DEFIANT™ prototype for the U.S. Army's
Future Long Range Assault Aircraft program. Defense, Space & Security also completed the System Design Review for MQ-25.
Backlog at Defense, Space & Security was $64 billion, of which 28 percent represents
orders from customers outside the U.S.
Global Services
Table 6. Global Services |
First Quarter |
|||||||||
(Dollars in Millions) |
2020 |
2019 |
Change | |||||||
Revenues |
$4,628 |
$4,619 |
— | |||||||
Earnings
from Operations |
$708 |
$653 |
8%
| |||||||
Operating Margin |
15.3 |
% |
14.1 |
% |
1.2 Pts | |||||
Global Services first-quarter revenue was
$4.6 billion, reflecting higher government services volume, largely offset by lower commercial services volume due to COVID-19. (Table 6). First-quarter
operating margin increased to 15.3 percent primarily due to favorable government
services performance.
During the
quarter, Global Services was awarded a P-8A integrated logistics services and site activation support contract modification from the U.S. Navy and the government of Australia and secured a logistics, components and services contract for the U.S.
Army AH-64 Apache fleet. At the Singapore Airshow, Global Services announced several consumable and expendable services agreements as well as digital solutions agreements with multiple Asia-Pacific airlines.
4
Additional Financial Information
Table 7. Additional Financial Information |
First Quarter | |||||||
(Dollars in Millions) |
2020 |
2019 | ||||||
Revenues |
||||||||
Boeing
Capital |
$65 |
$66 |
||||||
Unallocated items,
eliminations and other |
($32 |
) |
($177 |
) | ||||
Earnings from Operations |
||||||||
Boeing
Capital |
$24 |
$20 |
||||||
FAS/CAS service cost adjustment |
$347 |
$364 |
||||||
Other unallocated items
and eliminations |
($173 |
) |
($712 |
) | ||||
Other income, net |
$112 |
$106 |
||||||
Interest and
debt expense |
($262 |
) |
($123 |
) | ||||
Effective tax rate |
57.4 |
% |
7.9 |
% | ||||
At quarter-end, Boeing Capital's net portfolio balance was $2.2 billion. Revenue from other
unallocated items and eliminations increased 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 lower deferred compensation
expense and a customer financing impairment charge taken in the first quarter of 2019. Interest and debt expense increased due to higher debt balances. The first quarter effective tax rate reflects tax benefits related to the 5 year net operating
loss carryback provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act as well as the impact of pre-tax losses.
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.
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 COVID-19 pandemic and related government actions, including with respect to our operations, our liquidity and access to funding, the health of our customers and suppliers, and future
demand for our products and services; (2) the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, delays in the resumption of production, lower than planned production rates and/or delivery rates, and increased
considerations to customers and suppliers, (3) general conditions in the economy and our industry, including those due to regulatory changes; (4) our reliance on our commercial airline customers; (5) the overall health of our aircraft production
system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (6) changing budget and appropriation levels
and acquisition priorities of the U.S. government; (7) our dependence on U.S. government contracts; (8) our reliance on fixed-price contracts; (9) our reliance on cost-type contracts; (10) uncertainties concerning contracts that include in-orbit
incentive payments; (11) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (12) changes in accounting estimates; (13) changes in the competitive landscape in our markets; (14) our non-U.S. operations,
including sales to non-U.S. customers; (15) threats to the security of our or our customers’ information; (16) potential adverse developments in new or pending litigation and/or government investigations; (17) customer and aircraft
concentration in our customer financing portfolio; (18) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates; (19) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic
alliances or divestitures; (20) the adequacy of our insurance coverage to cover significant risk exposures; (21) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks,
epidemics, sanctions or natural disasters; (22) work stoppages or other labor disruptions; (23) substantial pension and other postretirement benefit obligations; and (24) potential environmental
liabilities.
Additional information concerning these and other factors can be found in our filings with the
Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no
obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
# #
#
Contact:
Investor Relations: |
Maurita Sutedja
or Keely Moos (312) 544-2140 | |
Communications: |
Michael Friedman [email protected]
| |
7
The Boeing Company and
Subsidiaries
Consolidated Statements of
Operations
(Unaudited)
Three months ended March
31 | |||||||
(Dollars in
millions, except per share data) |
2020
|
2019 |
|||||
Sales of products |
$14,191
|
$20,225 |
|||||
Sales of services |
2,717
|
2,692 |
|||||
Total
revenues |
16,908 |
22,917
|
|||||
Cost of
products |
(14,713
|
) |
(16,238 |
) | |||
Cost of services |
(2,043 |
) |
(2,389 |
) | |||
Boeing Capital interest expense |
(12 |
) |
(18
|
)
| |||
Total costs and
expenses |
(16,768 |
) |
(18,645 |
)
| |||
140 |
4,272
|
||||||
(Loss)/income from operating investments, net |
(2 |
) |
20 |
||||
General and
administrative expense |
(873
|
) |
(1,184 |
) | |||
Research and development expense, net |
(672 |
) |
(866 |
) | |||
Gain on dispositions, net |
54 |
108 |
|||||
(Loss)/earnings from operations |
(1,353
|
) |
2,350 |
||||
Other income,
net |
112
|
106 |
|||||
Interest and debt
expense |
(262
|
) |
(123 |
) | |||
(Loss)/earnings
before income taxes |
(1,503 |
)
|
2,333
|
||||
Income tax
benefit/(expense) |
862
|
(184 |
) | ||||
Net (loss)/earnings |
($641 |
) |
$2,149
|
||||
Less: net loss attributable to noncontrolling
interest |
($13 |
) |
|||||
Net (loss)/earnings attributable to Boeing Shareholders |
($628 |
) |
$2,149
|
||||
Basic (loss)/earnings per share |
($1.11 |
) |
$3.79
|
||||
Diluted (loss)/earnings per share |
($1.11 |
) |
$3.75
|
||||
Weighted average diluted shares (millions) |
565.9 |
572.4 |
|||||
8
The Boeing Company and Subsidiaries
Consolidated
Statements of Financial
Position
(Unaudited)
(Dollars in millions, except per
share data) |
March 31
2020 |
December 31
2019 |
|||||
Assets |
|||||||
Cash and cash equivalents |
$15,039 |
$9,485 |
|||||
Short-term and
other investments |
488
|
545 |
|||||
Accounts receivable, net |
3,211 |
3,266 |
|||||
Unbilled
receivables, net |
9,365
|
9,043 |
|||||
Current portion of customer financing, net |
149 |
162 |
|||||
Inventories
|
80,020
|
76,622 |
|||||
Other current assets,
net |
2,739
|
3,106 |
|||||
Total current assets |
111,011 |
102,229
|
|||||
Customer financing, net |
2,116 |
2,136 |
|||||
Property, plant
and equipment, net of accumulated depreciation of $19,591 and $19,342 |
12,405
|
12,502 |
|||||
Goodwill |
8,057 |
8,060 |
|||||
Acquired
intangible assets, net |
3,256
|
3,338 |
|||||
Deferred income taxes |
678 |
683 |
|||||
Investments
|
1,124
|
1,092 |
|||||
Other assets, net
of accumulated amortization of $611 and $580 |
4,428 |
3,585 |
|||||
Total assets |
$143,075 |
$133,625
|
|||||
Liabilities and
equity |
|||||||
Accounts
payable |
$14,963 |
$15,553 |
|||||
Accrued liabilities |
21,483 |
22,868 |
|||||
Advances and
progress billings |
52,883
|
51,551 |
|||||
Short-term debt and current portion
of long-term debt |
5,173
|
7,340 |
|||||
Total current liabilities |
94,502 |
97,312
|
|||||
Deferred income taxes |
336 |
413 |
|||||
Accrued retiree
health care |
4,483
|
4,540 |
|||||
Accrued pension plan liability, net |
15,962 |
16,276 |
|||||
Other long-term
liabilities |
3,398
|
3,422 |
|||||
Long-term debt |
33,754 |
19,962 |
|||||
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 |
6,595
|
6,745 |
|||||
Treasury stock, at cost - 447,947,807 and
449,352,405 shares |
(54,842 |
) |
(54,914 |
) | |||
Retained
earnings |
49,854
|
50,644 |
|||||
Accumulated other comprehensive
loss |
(16,333
|
) |
(16,153 |
) | |||
Total shareholders’ equity |
(9,665 |
)
|
(8,617
|
) |
|||
Noncontrolling
interests |
305
|
317 |
|||||
Total
equity |
(9,360
|
) |
(8,300 |
) | |||
Total liabilities and equity |
$143,075
|
$133,625 |
|||||
9
The Boeing Company and
Subsidiaries
Consolidated Statements of Cash
Flows
(Unaudited)
Three months ended March
31 | |||||||
(Dollars
in millions) |
2020
|
2019 |
|||||
Cash flows – operating activities: |
|||||||
Net (loss)/earnings |
($641 |
) |
$2,149 |
||||
Adjustments to
reconcile net earnings to net cash provided by operating activities: |
|||||||
Non-cash items – |
|||||||
Share-based
plans expense |
55
|
47 |
|||||
Depreciation and amortization |
556 |
521 |
|||||
Investment/asset
impairment charges, net |
26
|
34 |
|||||
Customer financing valuation adjustments |
249 |
||||||
Gain on
dispositions, net |
(54
|
) |
(108 |
) | |||
Other charges and credits, net |
97 |
74 |
|||||
Changes in
assets and liabilities – |
|||||||
Accounts receivable |
(54 |
) |
206 |
||||
Unbilled
receivables |
(402
|
) |
(183 |
) | |||
Advances and progress billings |
1,337 |
1,857 |
|||||
Inventories
|
(2,973
|
) |
(2,725 |
) | |||
Other current assets |
328 |
164 |
|||||
Accounts
payable |
(1,030
|
) |
1,624 |
||||
Accrued liabilities |
(583 |
) |
(919 |
) | |||
Income taxes
receivable, payable and deferred |
(892
|
) |
116 |
||||
Other long-term liabilities |
(69 |
) |
(281 |
) | |||
Pension and
other postretirement plans |
(179
|
) |
(188 |
) | |||
Customer financing, net |
23 |
152 |
|||||
Other |
153
|
(1 |
) | ||||
Net cash
(used)/provided by operating activities |
(4,302 |
) |
2,788 |
||||
Cash flows – investing activities: |
|||||||
Property, plant and equipment additions |
(428 |
) |
(501 |
) | |||
Property, plant
and equipment reductions |
58
|
110 |
|||||
Acquisitions, net of cash acquired |
(276 |
) | |||||
Contributions to
investments |
(244
|
) |
(457 |
) | |||
Proceeds from investments |
227 |
366 |
|||||
Other |
8 |
(9
|
)
| ||||
Net cash used by investing activities |
(379 |
) |
(767 |
)
| |||
Cash flows – financing activities: |
|||||||
New borrowings |
17,433 |
5,237 |
|||||
Debt
repayments |
(5,854
|
) |
(4,374 |
) | |||
Contributions from noncontrolling interests |
7 |
||||||
Stock options
exercised |
21
|
42 |
|||||
Employee taxes on certain share-based payment
arrangements |
(162 |
) |
(233 |
) | |||
Common shares
repurchased |
(2,341 |
) | |||||
Dividends paid |
(1,158 |
) |
(1,161 |
) | |||
Net cash provided/(used) by financing activities |
10,280 |
(2,823 |
) | ||||
Effect of exchange rate changes on
cash and cash equivalents, including restricted |
(47
|
) |
1 |
||||
Net increase/(decrease) in cash & cash equivalents, including restricted |
5,552 |
(801 |
) | ||||
Cash & cash equivalents, including restricted, at beginning of
year |
9,571
|
7,813 |
|||||
Cash & cash equivalents, including restricted, at end of period |
15,123 |
7,012
|
|||||
Less restricted cash & cash equivalents, included in
Investments |
84 |
176 |
|||||
Cash and cash equivalents at end of period |
$15,039 |
$6,836
|
|||||
10
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2020, certain programs were realigned between our Defense, Space & Security segment and Unallocated items, eliminations and other. Business segment data for 2019 has been
adjusted to reflect the realignment.
Three months ended March
31 | |||||||
(Dollars
in millions) |
2020
|
2019 |
|||||
Revenues: |
|||||||
Commercial Airplanes |
$6,205 |
$11,822 |
|||||
Defense, Space
& Security |
6,042
|
6,587 |
|||||
Global Services |
4,628 |
4,619 |
|||||
Boeing
Capital |
65
|
66 |
|||||
Unallocated items, eliminations and
other |
(32
|
) |
(177 |
) | |||
Total revenues |
$16,908 |
$22,917
|
|||||
(Loss)/earnings from operations: |
|||||||
Commercial
Airplanes |
($2,068 |
) |
$1,173 |
||||
Defense, Space & Security |
(191 |
) |
852 |
||||
Global
Services |
708
|
653 |
|||||
Boeing Capital |
24
|
20 |
|||||
Segment
operating (loss)/profit |
(1,527
|
) |
2,698 |
||||
Unallocated items, eliminations and other |
(173 |
) |
(712 |
) | |||
FAS/CAS service cost adjustment |
347 |
364
|
|||||
(Loss)/earnings from operations |
(1,353 |
) |
2,350 |
||||
Other income,
net |
112
|
106 |
|||||
Interest and debt
expense |
(262
|
) |
(123 |
) | |||
(Loss)/earnings
before income taxes |
(1,503
|
) |
2,333 |
||||
Income tax
benefit/(expense) |
862
|
(184 |
) | ||||
Net
(loss)/earnings |
($641 |
) |
$2,149 |
||||
Less: Net loss attributable to
noncontrolling interest |
(13
|
) |
|||||
Net (loss)/earnings attributable to Boeing Shareholders |
(628 |
) |
2,149 |
||||
Research and development expense,
net: |
|||||||
Commercial
Airplanes |
$425 |
$564 |
|||||
Defense, Space & Security |
163 |
184 |
|||||
Global
Services |
30
|
40 |
|||||
Other |
54 |
78 |
|||||
Total research and development expense, net |
$672 |
$866
|
|||||
Unallocated items, eliminations and
other: |
|||||||
Share-based
plans |
($18 |
) |
($14 |
) | |||
Deferred compensation |
193 |
(102 |
) | ||||
Amortization of
previously capitalized interest |
(23
|
) |
(24 |
) | |||
Customer financing impairment |
(250 |
) | |||||
Research and
development expense, net |
(54
|
) |
(78 |
) | |||
Eliminations and other unallocated
items |
(271 |
) |
(244 |
) | |||
Sub-total (included in core operating earnings) |
(173 |
) |
(712 |
) | |||
Pension FAS/CAS service cost adjustment |
255 |
274 |
|||||
Postretirement
FAS/CAS service cost adjustment |
92
|
90 |
|||||
FAS/CAS service cost adjustment |
347 |
364 |
|||||
Total |
$174
|
($348 |
)
| ||||
11
The Boeing Company and Subsidiaries
Operating and
Financial Data
(Unaudited)
Deliveries |
Three
months ended March 31 |
||||||
Commercial Airplanes |
2020 |
2019
|
|||||
737 |
5
|
89
|
|||||
747 |
— |
2 |
|||||
767 |
10 |
12 |
|||||
777 |
6 |
10 |
(1) | ||||
787 |
29 |
36
|
|||||
Total |
50 |
149
|
|||||
Note:
Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses | |||||||
Defense, Space & Security |
|||||||
AH-64 Apache (New) |
2 |
6 |
|||||
AH-64 Apache
(Remanufactured) |
14 |
22 |
|||||
C-17 Globemaster III |
— |
— |
|||||
C-40A
|
— |
— |
|||||
CH-47 Chinook (New) |
9 |
7 |
|||||
CH-47 Chinook
(Renewed) |
1 |
4 |
|||||
F-15 Models |
— |
4 |
|||||
F/A-18
Models |
5 |
7 |
|||||
KC-46 Tanker |
5 |
7 |
|||||
P-8
Models |
3 |
3 |
|||||
Commercial and Civil Satellites |
— |
— |
|||||
Military
Satellites |
— |
— |
|||||
Total
backlog (Dollars in millions) |
March 31
2020 |
December 31
2019 |
||||||
Commercial
Airplanes |
$351,778
|
$376,593 |
||||||
Defense, Space & Security |
63,578 |
63,691 |
||||||
Global
Services |
22,747
|
22,902 |
||||||
Unallocated items, eliminations and
other |
491
|
217 |
||||||
Total backlog |
$438,594 |
$463,403
|
||||||
Contractual
backlog |
$414,165 |
$436,473 |
||||||
Unobligated backlog |
24,429
|
26,930 |
||||||
Total backlog |
$438,594 |
$463,403
|
||||||
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) |
First
Quarter 2020 |
First Quarter
2019 | ||||||||||||
$
millions |
Per
Share |
$
millions |
Per
Share |
|||||||||||
Revenues |
16,908 |
22,917
|
||||||||||||
(Loss)/earnings from operations
(GAAP) |
(1,353 |
) |
2,350 |
|||||||||||
Operating margin
(GAAP) |
(8.0 |
)%
|
10.3
|
% |
||||||||||
FAS/CAS
service cost adjustment: |
||||||||||||||
Pension FAS/CAS service cost
adjustment |
(255 |
) |
(274 |
) |
||||||||||
Postretirement FAS/CAS
service cost adjustment |
(92 |
) |
(90
|
)
|
||||||||||
FAS/CAS
service cost adjustment |
(347
|
) |
(364 |
) |
||||||||||
Core operating (loss)/earnings (non-GAAP) |
($1,700 |
) |
$1,986 |
|||||||||||
Core operating margin
(non-GAAP) |
(10.1 |
)% |
8.7 |
% |
||||||||||
Diluted (loss)/earnings per share
(GAAP) |
($1.11 |
) |
$3.75 |
|||||||||||
Pension FAS/CAS service
cost adjustment |
($255 |
) |
(0.45
|
) |
($274 |
) |
(0.48 |
) | ||||||
Postretirement FAS/CAS service cost
adjustment |
(92 |
) |
(0.16 |
) |
(90 |
) |
(0.16 |
) | ||||||
Non-operating pension
expense |
(87
|
) |
(0.16
|
) |
(93 |
) |
(0.16 |
) | ||||||
Non-operating postretirement
expense |
13 |
0.02 |
27 |
0.05 |
||||||||||
Provision for deferred
income taxes on adjustments 1 |
88 |
0.16 |
90
|
0.16
|
||||||||||
Subtotal of
adjustments |
($333 |
) |
($0.59 |
) |
($340 |
) |
($0.59 |
) | ||||||
Core (loss)/earnings per share (non-GAAP) |
($1.70 |
) |
$3.16 |
|||||||||||
Weighted average
diluted shares (in millions) |
565.9
|
572.4 |
||||||||||||
1 The income tax impact is calculated
using the U.S. corporate statutory tax
rate.
13