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News Releases/Statements
Boeing Reports Strong Third-Quarter Results and Raises 2013 EPS Guidance

CHICAGO, Oct. 23, 2013 /PRNewswire/ --

  • Core EPS (non-GAAP)* rose 16 percent to $1.80 on strong operating performance; GAAP EPS of $1.51
  • Revenue increased 11 percent to $22.1 billion reflecting higher commercial deliveries
  • Backlog grew to a record $415 billion, including $27 billion of net orders during the quarter
  • Operating cash flow before pension contributions* increased to $4.3 billion
  • 2013 Core EPS guidance increased to between $6.50 and $6.65; GAAP EPS to between $5.40 and $5.55
                                         

Table 1. Summary Financial Results

 

Third Quarter

     

Nine Months

   

(Dollars in Millions, except per share data)

 

2013

 

2012

 

Change

 

2013

 

2012

 

Change

                         

Revenues

   

$22,130

     

$20,008

   

11%

   

$62,838

     

$59,396

   

6%

                         

Non-GAAP*

                       

Core Operating Earnings

   

$2,143

     

$1,793

   

20%

   

$6,038

     

$5,353

   

13%

Core Operating Margin

 

9.7

%

 

9.0

%

 

0.7 Pts

 

9.6

%

 

9.0

%

 

0.6 Pts

Core Earnings Per Share

   

$1.80

     

$1.55

   

16%

   

$5.20

     

$4.43

   

17%

Operating Cash Flow Before Pension Contributions

   

$4,308

     

$2,346

   

84%

   

$8,312

     

$4,854

   

71%

GAAP

                       

Earnings From Operations

   

$1,803

     

$1,559

   

16%

   

$5,047

     

$4,666

   

8%

Operating Margin

 

8.1

%

 

7.8

%

 

0.3 Pts

 

8.0

%

 

7.9

%

 

0.1 Pts

Net Earnings

   

$1,158

     

$1,032

   

12%

   

$3,352

     

$2,922

   

15%

Earnings Per Share

   

$1.51

     

$1.35

   

12%

   

$4.36

     

$3.84

   

14%

Operating Cash Flow

   

$2,808

     

$1,596

   

76%

   

$6,799

     

$3,341

   

104%

* Non-GAAP measures (core operating earnings, core operating margin and core earnings per share) exclude certain components of pension and post retirement benefit expense that the company believes are not reflective of underlying business performance. Complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."

The Boeing Company (NYSE: BA) reported third-quarter core earnings per share (non-GAAP) increased 16 percent* to $1.80, driven by strong performance across the company's businesses (Table 1). Third-quarter core operating earnings (non-GAAP) increased 20 percent* to $2.1 billion from the same period of the prior year. Third-quarter revenue was $22.1 billion, GAAP earnings from operations was $1.8 billion and earnings per share was $1.51. Core earnings per share guidance increased to between $6.50 and $6.65 and

GAAP earnings per share guidance increased to between $5.40 and $5.55, reflecting the strong performance. The company also increased its 2013 operating cash flow outlook to greater than $7 billion, which includes $1.5 billion of discretionary pension contributions, and reaffirmed its 2013 revenue guidance.

"Consistently strong operating performance is driving higher earnings, revenue and cash flow as we deliver on our record backlog and return increased value to shareholders," said Boeing Chairman, President and CEO Jim McNerney. "During the quarter, Commercial Airplanes completed the first flight of the 787-9 and delivered 170 airplanes, while Defense, Space & Security maintained solid performance and captured $7 billion in new orders. Despite the uncertainty of the U.S. defense market, overall our customer-focused business strategies and disciplined execution on our programs are producing the results we expect, and our strong year-to-date performance and positive outlook allow us to increase our 2013 guidance for earnings and operating cash flow."

                                 

Table 2. Cash Flow

 

Third Quarter

 

Nine Months

(Millions)

 

2013

 

2012

 

2013

 

2012

Operating Cash Flow Before Pension Contributions*

   

$4,308

     

$2,346

     

$8,312

     

$4,854

 

 Pension Contributions

   

($1,500)

     

($750)

     

($1,513)

     

($1,513)

 

Operating Cash Flow

   

$2,808

     

$1,596

     

$6,799

     

$3,341

 

Less Additions to Property, Plant & Equipment

   

($484)

     

($428)

     

($1,460)

     

($1,208)

 

Free Cash Flow*

   

$2,324

     

$1,168

     

$5,339

     

$2,133

 

Operating cash flow before pension contributions* in the quarter was $4.3 billion, reflecting higher commercial airplane production rates, strong core operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 7.6 million shares for $0.8 billion and paid $0.4 billion in dividends, reflecting an 11 percent increase in dividends paid compared to the same period of the prior year.

                 

Table 3. Cash, Marketable Securities and Debt Balances

 

Quarter-End

(Billions)

 

Q3 13

 

Q2 13

Cash

   

$10.0

     

$8.7

 

Marketable Securities1

   

$5.9

     

$5.6

 

Total

   

$15.9

     

$14.3

 

Debt Balances:

       

The Boeing Company, net of intercompany loans to BCC

   

$7.0

     

$7.0

 

Boeing Capital Corporation, including intercompany loans

   

$2.6

     

$2.6

 

Total Consolidated Debt

   

$9.6

     

$9.6

 

1 Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."

Cash and investments in marketable securities totaled $15.9 billion at quarter-end (Table 3), up from $14.3 billion at the beginning of the quarter. Debt was $9.6 billion, unchanged from the beginning of the quarter.

Total company backlog at quarter-end was a record $415 billion, up from $410 billion at the beginning of the quarter, and included net orders for the quarter of $27 billion.

Segment Results

Commercial Airplanes

                                           

Table 4. Commercial Airplanes

 

Third Quarter

     

Nine Months

   

(Dollars in Millions)

 

2013

 

2012

 

Change

 

2013

 

2012

 

Change

                         

Commercial Airplanes Deliveries

 

170

   

149

   

14%

 

476

   

436

   

9%

 
                         

Revenues

   

$13,987

     

$12,186

   

15%

   

$38,301

     

$34,966

   

10%

 

Earnings from Operations

   

$1,617

     

$1,153

   

40%

   

$4,289

     

$3,445

   

24 %

 

Operating Margins

 

11.6

%

 

9.5

%

 

2.1 Pts

 

11.2

%

 

9.9

%

 

1.3

Pts

Boeing Commercial Airplanes third-quarter revenue increased to $14.0 billion and operating margin improved to 11.6 percent on higher delivery volume and continued strong operating performance (Table 4).

During the quarter, the 787-9 completed first flight. With the successful launch of the 787-10 and continued strong demand for the 787 family of airplanes, the company intends to increase the 787 production rate from 10 to 12 per month in 2016, with plans to increase to 14 per month before the end of the decade.

Commercial Airplanes booked 200 net orders during the quarter. Backlog remains strong with nearly 4,800 airplanes valued at a record $345 billion.

Boeing Defense, Space & Security

                                           

Table 5. Defense, Space & Security

Third Quarter

     

Nine Months

   

(Dollars in Millions)

2013

 

2012

 

Change

 

2013

 

2012

 

Change

Revenues

                     

Boeing Military Aircraft

 

$3,543

     

$3,710

   

(5)%

     

$11,541

     

$11,982

   

(4)%

 

Network & Space Systems

 

$2,231

     

$2,055

   

9%

     

$6,240

     

$5,887

   

6%

 

Global Services & Support

 

$2,272

     

$2,074

   

10%

     

$6,561

     

$6,395

   

3%

 

Total BDS Revenues

 

$8,046

     

$7,839

   

3%

     

$24,342

     

$24,264

   

 

Earnings from Operations

                     

Boeing Military Aircraft

 

$221

     

$424

   

(48)%

     

$1,024

     

$1,176

   

(13)%

 

Network & Space Systems

 

$193

     

$179

   

8%

     

$486

     

$424

   

15%

 

Global Services & Support

 

$259

     

$224

   

16%

     

$771

     

$717

   

8%

 

Total BDS Earnings from Operations

 

$673

     

$827

   

(19)%

     

$2,281

     

$2,317

   

(2)%

 
                                           

Operating Margins

8.4

%

 

10.5

%

 

(2.1) Pts

   

9.4

%

 

9.5

%

 

(0.1) Pts

 

Boeing Defense, Space & Security's third-quarter revenue was $8.0 billion, while operating margin was 8.4 percent (Table 5).

Boeing Military Aircraft (BMA) third-quarter revenue was $3.5 billion, primarily reflecting lower delivery volume. Operating margin decreased to 6.2 percent, impacted by mix and one-time charges on the F-15 and C-17 programs. During the quarter, BMA was awarded a low-rate initial production award for 13 P-8A Poseidon aircraft.

Network & Space Systems (N&SS) third-quarter revenue was $2.2 billion, reflecting higher sales of Delta inventory and revenue in the Space Launch System program, and operating margin was 8.7 percent. During the quarter, N&SS was awarded a contract by Mexico's Satmex for an additional 702 small satellite.

Global Services & Support (GS&S) third-quarter revenue was $2.3 billion, due to higher volume in maintenance, modifications & upgrades. Operating margin was 11.4 percent, reflecting strong performance. During the quarter, GS&S achieved first flight on the QF-16 unmanned aircraft and was also awarded a contract by the U.S. Air Force for 56 additional replacement wings for the A-10 aircraft.

Backlog at Defense, Space & Security was $70 billion, of which 38 percent represents orders with international customers.

Additional Financial Information

                                 

Table 6. Additional Financial Information

 

Third Quarter

 

Nine Months

(Dollars in Millions)

 

2013

 

2012

 

2013

 

2012

Revenues

               

Boeing Capital Corporation

   

$94

     

$101

     

$303

     

$339

 

Other segment

   

$26

     

$27

     

$80

     

$79

 

Unallocated items and eliminations

   

($23)

     

($145)

     

($188)

     

($252)

 

Earnings from Operations

               

Boeing Capital Corporation

   

$35

     

$28

     

$98

     

$100

 

Other segment income/(expense)

   

$44

     

($74)

     

($57)

     

($217)

 

  Unallocated items and eliminations included in core operating earnings

   

($226)

     

($141)

     

($573)

     

($292)

 

  Unallocated pension/postretirement expense

   

($340)

     

($234)

     

($991)

     

($687)

 

Other income, net

   

$19

     

$17

     

$41

     

$39

 

Interest and debt expense

   

($95)

     

($110)

     

($290)

     

($330)

 

Effective tax rate

 

32.8

%

 

29.5

%

 

30.1

%

 

33.1

%

At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was $4.1 billion and debt-to-equity ratio was 5.0-to-1. Other segment earnings improved $118 million in the quarter primarily due to an insurance recovery. Unallocated items and eliminations included in core operating earnings increased in the third quarter of 2013 partly due to higher deferred compensation expense as a result of stock price appreciation. Total pension expense for the third quarter was $775 million, up from $583 million in the same period last year. Unallocated pension expense included a charge related to the previously announced decision to end C-17 production in 2015 offset by a one-time prior period pension adjustment.

Outlook

The company's 2013 financial guidance (Table 7) has been updated to reflect continued strong performance in both businesses, generating an expected 12 percent year over year increase in core earnings per share (non-GAAP).

   

Table 7. Financial Outlook

 

(Dollars in Billions, except per share data)

2013

   

The Boeing Company

 

     Revenue

$83 - 86

       Core Earnings Per Share*

$6.50 - 6.65

     Earnings Per Share

$5.40 - 5.55

       Operating Cash Flow Before Pension Contributions*

> $8.5

Operating Cash Flow 1

> $7

   

Boeing Commercial Airplanes

 

Deliveries 2

635 - 645

     Revenue

$51 - 53

     Operating Margin

> 10.0%

   

Boeing Defense, Space & Security

 

Revenue

 

  Boeing Military Aircraft

~$16.0

  Network & Space Systems

~$7.8

  Global Services & Support

~$8.2

   

Total BDS Revenue

$31.5 - 32.5

   

Operating Margin

 

  Boeing Military Aircraft

~ 9.0%

  Network & Space Systems

~ 7.5%

  Global Services & Support

~ 11.5%

   

Total BDS Operating Margin

> 9.25%

   

Boeing Capital Corporation

 

Portfolio Size

Lower

Revenue

~ $0.4

Pre-Tax Earnings

~ $0.05

   

Research & Development

~ $3.2

Capital Expenditures

~ $2.3

Pension Expense 3

~ $3.2

Effective Tax Rate

~ 31%

1 After discretionary cash pension contributions of $1.5 billion and assuming new aircraft financings under $0.5 billion.

2 Assumes greater than 60 787 deliveries.

3 Approximately $1.4 billion is expected to be recorded in unallocated items and eliminations.

* Non-GAAP measures. Complete definitions of Boeing's use of non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."

Core earnings per share guidance for 2013 increased to between $6.50 and $6.65, up from between $6.20 and $6.40, and earnings per share guidance increased to between $5.40 and $5.55, up from between $5.10 and $5.30, both reflecting the strong operating performance. Total company 2013 operating cash flow before pension contributions (non-GAAP) is now expected to be greater than $8.5 billion, up from greater than $8.0 billion. Operating cash flow is now expected to be greater than $7 billion in 2013, up from greater than $6.5 billion, including $1.5 billion of discretionary pension contributions.

Commercial Airplanes' operating margin increased to greater than 10.0 percent, up from greater than 9.5 percent. Defense, Space & Security's operating margin increased to greater than 9.25 percent, up from greater than 9.0 percent, reflecting higher margins in Global Services & Support.

Boeing Capital Corporation revenue increased to approximately $0.4 billion, up from approximately $0.3 billion. Research and development expense for 2013 is now expected to be approximately $3.2 billion, down from approximately $3.3 billion.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding unallocated pension and post-retirement expense. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of unallocated pension and post-retirement expense. Unallocated pension and post-retirement expense represents the portion of pension and other post-retirement costs that are not recognized by business segments for segment reporting purposes. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude unallocated pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts.

Operating Cash Flow Before Pension Contributions

Operating cash flow before pension contributions is defined as GAAP operating cash flow less pension contributions. Management believes operating cash flow before pension contributions provides additional insights into underlying business performance. Management uses operating cash flow before pension contributions as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and operating cash flow before pension contributions.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow less capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

Caution Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) general conditions in the economy and our industry, including those due to regulatory changes; (2) our reliance on our commercial airline customers; (3) the overall health of our aircraft production system, planned production rate increases across multiple commercial airline programs, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (4) changing acquisition priorities of the U.S. government; (5) our dependence on U.S. government contracts; (6) our reliance on fixed-price contracts; (7) our reliance on cost-type contracts; (8) uncertainties concerning contracts that include in-orbit incentive payments; (9) our dependence on our subcontractors and suppliers, as well as the availability of raw materials, (10) changes in accounting estimates; (11) changes in the competitive landscape in our markets; (12) our non-U.S. operations, including sales to non-U.S. customers; (13) potential adverse developments in new or pending litigation and/or government investigations; (14) customer and aircraft concentration in Boeing Capital's customer financing portfolio; (15) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates in order to fund our operations and contractual commitments; (16) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (17) the adequacy of our insurance coverage to cover significant risk exposures; (18) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks or natural disasters; (19) work stoppages or other labor disruptions; (20) significant changes in discount rates and actual investment return on pension assets; (21) potential environmental liabilities; and (22) threats to the security of our or our customers' information.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Contact:

   
     

Investor Relations:

 

Troy Lahr or Matt Welch (312) 544-2140

Communications:

 

Chaz Bickers (312) 544-2002

The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

                               
 

Nine months ended September 30

 

Three months ended September 30

(Dollars in millions, except per share data)

2013

   

2012

   

2013

   

2012

 

Sales of products

 

$55,310

     

$51,441

     

$19,754

     

$17,415

 

Sales of services

7,528

   

7,955

   

2,376

   

2,593

 

Total revenues

62,838

   

59,396

   

22,130

   

20,008

 
               

Cost of products

(47,030)

   

(43,103)

   

(16,865)

   

(14,683)

 

Cost of services

(5,795)

   

(6,431)

   

(1,791)

   

(2,089)

 

Boeing Capital interest expense

(55)

   

(85)

   

(18)

   

(27)

 

Total costs and expenses

(52,880)

   

(49,619)

   

(18,674)

   

(16,799)

 
 

9,958

   

9,777

   

3,456

   

3,209

 

Income from operating investments, net

147

   

211

   

59

   

120

 

General and administrative expense

(2,856)

   

(2,774)

   

(956)

   

(916)

 

Research and development expense, net

(2,223)

   

(2,545)

   

(755)

   

(853)

 

Gain/(loss) on dispositions, net

21

   

(3)

   

(1)

   

(1)

 

Earnings from operations

5,047

   

4,666

   

1,803

   

1,559

 

Other income, net

41

   

39

   

19

   

17

 

Interest and debt expense

(290)

   

(330)

   

(95)

   

(110)

 

Earnings before income taxes

4,798

   

4,375

   

1,727

   

1,466

 

Income tax expense

(1,445)

   

(1,450)

   

(567)

   

(432)

 

Net earnings from continuing operations

3,353

   

2,925

   

1,160

   

1,034

 

Net loss on disposal of discontinued operations, net of taxes of $0, $2, $0 and $1

(1)

   

(3)

   

(2)

   

(2)

 

Net earnings

 

$3,352

     

$2,922

     

$1,158

     

$1,032

 

Basic earnings per share from continuing operations

 

$4.40

     

$3.86

     

$1.53

     

$1.36

 

Net loss on disposal of discontinued operations, net of taxes

             

Basic earnings per share

 

$4.40

     

$3.86

     

$1.53

     

$1.36

 

Diluted earnings per share from continuing operations

 

$4.36

     

$3.84

     

$1.51

     

$1.35

 

Net loss on disposal of discontinued operations, net of taxes

             

Diluted earnings per share

 

$4.36

     

$3.84

     

$1.51

     

$1.35

 

Cash dividends paid per share

 

$1.455

     

$1.32

     

$0.485

     

$0.44

 

Weighted average diluted shares (millions)

769.8

   

762.3

   

769.1

   

765.2

 

The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)

               

(Dollars in millions, except per share data)

September 30 2013

   

December 31 2012

 

Assets

     

Cash and cash equivalents

 

$10,041

     

$10,341

 

Short-term and other investments

5,870

   

3,217

 

Accounts receivable, net

6,652

   

5,608

 

Current portion of customer financing, net

316

   

364

 

Deferred income taxes

43

   

28

 

Inventories, net of advances and progress billings

41,240

   

37,751

 

Total current assets

64,162

   

57,309

 

Customer financing, net

3,903

   

4,056

 

Property, plant and equipment, net of accumulated depreciation of $14,938 and $14,645

9,987

   

9,660

 

Goodwill

5,047

   

5,035

 

Acquired intangible assets, net

2,962

   

3,111

 

Deferred income taxes

5,957

   

6,753

 

Investments

1,168

   

1,180

 

Other assets, net of accumulated amortization of $493 and $504

1,447

   

1,792

 

Total assets

 

$94,633

     

$88,896

 

Liabilities and equity

     

Accounts payable

 

$10,657

     

$9,394

 

Accrued liabilities

12,384

   

12,995

 

Advances and billings in excess of related costs

20,216

   

16,672

 

Deferred income taxes and income taxes payable

5,504

   

4,485

 

Short-term debt and current portion of long-term debt

919

   

1,436

 

Total current liabilities

49,680

   

44,982

 

Accrued retiree health care

7,415

   

7,528

 

Accrued pension plan liability, net

18,559

   

19,651

 

Non-current income taxes payable

299

   

366

 

Other long-term liabilities

936

   

1,429

 

Long-term debt

8,677

   

8,973

 

Shareholders' equity:

     

Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued

5,061

   

5,061

 

Additional paid-in capital

4,295

   

4,122

 

Treasury stock, at cost - 260,351,104 and 256,630,628 shares

(16,865)

   

(15,937)

 

Retained earnings

32,647

   

30,037

 

Accumulated other comprehensive loss

(16,187)

   

(17,416)

 

  Total shareholders' equity

8,951

   

5,867

 

  Noncontrolling interest

116

   

100

 

  Total equity

9,067

   

5,967

 

  Total liabilities and equity

 

$94,633

     

$88,896

 

The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

               
 

Nine months ended September 30

(Dollars in millions)

2013

   

2012

 

Cash flows – operating activities:

     

Net earnings

 

$3,352

     

$2,922

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

     

Non-cash items –

     

  Share-based plans expense

156

   

148

 

  Depreciation and amortization

1,323

   

1,313

 

  Investment/asset impairment charges, net

38

   

59

 

  Customer financing valuation benefit

(7)

   

(4)

 

  Loss on disposal of discontinued operations

1

   

5

 

  (Gain)/loss on dispositions, net

(21)

   

3

 

  Other charges and credits, net

48

   

559

 

  Excess tax benefits from share-based payment arrangements

(86)

   

(43)

 

Changes in assets and liabilities –

     

  Accounts receivable

(1,006)

   

150

 

  Inventories, net of advances and progress billings

(3,631)

   

(4,588)

 

  Accounts payable

943

   

857

 

  Accrued liabilities

(338)

   

(123)

 

  Advances and billings in excess of related costs

3,543

   

123

 

  Income taxes receivable, payable and deferred

1,336

   

1,085

 

  Other long-term liabilities

(52)

   

22

 

  Pension and other postretirement plans

954

   

571

 

  Customer financing, net

223

   

254

 

  Other

23

   

28

 

    Net cash provided by operating activities

6,799

   

3,341

 

Cash flows – investing activities:

     

Property, plant and equipment additions

(1,460)

   

(1,208)

 

Property, plant and equipment reductions

47

   

29

 

Acquisitions, net of cash acquired

(26)

   

(18)

 

Contributions to investments

(9,640)

   

(10,331)

 

Proceeds from investments

6,997

   

6,941

 

Purchase of distribution rights

     

(6)

 

    Net cash used by investing activities

(4,082)

   

(4,593)

 

Cash flows – financing activities:

     

New borrowings

547

   

34

 

Debt repayments

(1,397)

   

(1,273)

 

Repayments of distribution rights financing

(139)

   

(72)

 

Stock options exercised, other

871

   

96

 

Excess tax benefits from share-based payment arrangements

86

   

43

 

Employee taxes on certain share-based payment arrangements

(60)

   

(72)

 

Common shares repurchased

(1,799)

     

Dividends paid

(1,102)

   

(990)

 

   Net cash used by financing activities

(2,993)

   

(2,234)

 

Effect of exchange rate changes on cash and cash equivalents

(24)

   

19

 

Net decrease in cash and cash equivalents

(300)

   

(3,467)

 

Cash and cash equivalents at beginning of year

 

$10,341

     

$10,049

 

Cash and cash equivalents at end of period

 

$10,041

     

$6,582

 

The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)

                               
 

Nine months ended September 30

 

Three months ended September 30

(Dollars in millions)

2013

   

2012

   

2013

   

2012

 

Revenues:

             

Commercial Airplanes

 

$38,301

     

$34,966

     

$13,987

     

$12,186

 

Defense, Space & Security:

             

Boeing Military Aircraft

11,541

   

11,982

   

3,543

   

3,710

 

Network & Space Systems

6,240

   

5,887

   

2,231

   

2,055

 

Global Services & Support

6,561

   

6,395

   

2,272

   

2,074

 

Total Defense, Space & Security

24,342

   

24,264

   

8,046

   

7,839

 

Boeing Capital

303

   

339

   

94

   

101

 

Other segment

80

   

79

   

26

   

27

 

Unallocated items and eliminations

(188)

   

(252)

   

(23)

   

(145)

 

Total revenues

 

$62,838

     

$59,396

     

$22,130

     

$20,008

 

Earnings from operations:

             

Commercial Airplanes

 

$4,289

     

$3,445

     

$1,617

     

$1,153

 

Defense, Space & Security:

             

Boeing Military Aircraft

1,024

   

1,176

   

221

   

424

 

Network & Space Systems

486

   

424

   

193

   

179

 

Global Services & Support

771

   

717

   

259

   

224

 

Total Defense, Space & Security

2,281

   

2,317

   

673

   

827

 

Boeing Capital

98

   

100

   

35

   

28

 

Other segment

(57)

   

(217)

   

44

   

(74)

 

Unallocated items and eliminations

(1,564)

   

(979)

   

(566)

   

(375)

 

Earnings from operations

5,047

   

4,666

   

1,803

   

1,559

 

Other income, net

41

   

39

   

19

   

17

 

Interest and debt expense

(290)

   

(330)

   

(95)

   

(110)

 

Earnings before income taxes

4,798

   

4,375

   

1,727

   

1,466

 

Income tax expense

(1,445)

   

(1,450)

   

(567)

   

(432)

 

Net earnings from continuing operations

3,353

   

2,925

   

1,160

   

1,034

 

Net loss on disposal of discontinued operations, net of taxes of $0, $2, $0 and $1

(1)

   

(3)

   

(2)

   

(2)

 

Net earnings

 

$3,352

     

$2,922

     

$1,158

     

$1,032

 
               

Research and development expense, net:

             

Commercial Airplanes

 

$1,297

     

$1,638

     

$432

     

$534

 

Defense, Space & Security

892

   

868

   

313

   

306

 

Other

34

   

39

   

10

   

13

 

Total research and development expense, net

 

$2,223

     

$2,545

     

$755

     

$853

 
               

Unallocated items and eliminations:

             

Share-based plans

 

($74)

     

($64)

   

(21)

   

(23)

 

Deferred compensation

(165)

   

(49)

   

(63)

   

(15)

 

Capitalized interest

(52)

   

(53)

   

(18)

   

(16)

 

Eliminations and other

(282)

   

(126)

   

(124)

   

(87)

 

  Sub-total (included in core operating earnings)

(573)

   

(292)

   

(226)

   

(141)

 

Pension

(1,045)

   

(608)

   

(356)

   

(204)

 

Postretirement

54

   

(79)

   

16

   

(30)

 

Total unallocated items and eliminations

 

($1,564)

     

($979)

     

($566)

     

($375)

 

The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)

                             

Deliveries

 

Nine months ended September 30

 

Three months ended September 30

Commercial Airplanes

 

2013

     

2012

   

2013

     

2012

 

737

 

330

     

310

   

112

     

102

 

747

 

16

     

21

   

4

     

8

 

767

 

17

     

20

   

5

     

7

 

777

 

73

     

62

   

26

     

20

 

787

 

40

 

(1)

 

23

   

23

     

12

 

Total

 

476

     

436

   

170

     

149

 

Note: Deliveries under operating lease are identified by parentheses.

         
                     

Defense, Space & Security

                   

Boeing Military Aircraft

                   

F/A-18 Models

 

36

     

36

   

12

     

12

 

F-15E Eagle

 

3

     

8

             

C-17 Globemaster III

 

8

     

8

   

2

     

3

 

CH-47 Chinook

 

32

     

40

   

15

     

18

 

AH-64 Apache

 

31

     

13

   

11

     

10

 

P-8 Models

 

7

     

3

   

2

     

2

 

AEW&C

         

2

               
                     

Network & Space Systems

                   

Commercial and Civil Satellites

 

1

     

3

       

2

Military Satellites

 

1

     

6

 

1

     

3

                     
 
                                 

Contractual backlog (Dollars in billions)

 

September 30 2013

   

June 30

2013

   

March 31

2013

   

December 31

2012

 

  Commercial Airplanes

   

$344.3

     

$337.7

     

$322.0

     

$317.3

 

  Defense, Space & Security:

               

    Boeing Military Aircraft

 

26.4

   

26.5

   

26.6

   

29.2

 

    Network & Space Systems

 

9.9

   

10.2

   

9.6

   

10.1

 

    Global Services & Support

 

14.6

   

14.8

   

15.4

   

15.8

 

  Total Defense, Space & Security

 

50.9

   

51.5

   

51.6

   

55.1

 

Total contractual backlog

   

$395.2

     

$389.2

     

$373.6

     

$372.4

 

Unobligated backlog

   

$19.9

     

$21.1

     

$18.1

     

$17.9

 

Total backlog

   

$415.1

     

$410.3

     

$391.7

     

$390.3

 

Workforce

 

170,800

   

172,200

   

173,100

   

174,400

 
                                                       

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

(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 6 of this release for additional information on the use of these non-GAAP financial measures.

                                 
 

Nine months ended September 30

 

Three months ended September 30

 
 

2013

 

2012

 

2013

 

2012

 

Revenues

 

$62,838

     

$59,396

     

$22,130

     

$20,008

   
                 

GAAP Earnings From Operations

 

$5,047

     

$4,666

     

$1,803

     

$1,559

   

GAAP Operating Margin

8.0

%

 

7.9

%

 

8.1

%

 

7.8

%

 
                 

Unallocated Pension/Postretirement Expense

 

$991

     

$687

     

$340

     

$234

   

Core Operating Earnings (non-GAAP)

 

$6,038

     

$5,353

     

$2,143

     

$1,793

   

Core Operating Margin (non-GAAP)

9.6

%

 

9.0

%

 

9.7

%

 

9.0

%

 
                 

GAAP Diluted Earnings Per Share

 

$4.36

     

$3.84

     

$1.51

     

$1.35

   
                 

Unallocated Pension/Postretirement Expense1

 

$0.84

     

$0.59

     

$0.29

     

$0.20

   
                 

Core Earnings Per Share (non-GAAP)

 

$5.20

     

$4.43

     

$1.80

     

$1.55

   
                 
                 

Weighted Average Diluted Shares (millions)

769.8

   

762.3

   

769.1

   

765.2

   

Increase in GAAP Earnings Per Share

14

%

     

12

%

     

Increase in Core Earnings Per Share

17

%

     

16

%

     

1 Earnings per share impact is presented net of the federal statutory tax rate of 35.0 percent.

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

2013 Increase in Core Earnings Per Share

(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 6 of this release for additional information on the use of these non-GAAP financial measures.

                 
   

Year Ended December 31, 2012

 

Year Ended December 31, 2013 Guidance

 
   

Earnings Per Share

 

Earnings Per Share

 

GAAP Diluted Earnings Per Share

   

$5.11

   

$5.40 - 5.55

   

Unallocated Pension/Postretirement Expense

 

0.77

 

a

1.10

 

b

Core Earnings Per Share (non-GAAP)

   

$5.88

   

$6.50 - 6.65

   
           

Weighted average diluted shares (millions)

 

763.8

   

768.0

   

2013 Change in GAAP Earnings per Share

     

~ 7%

   

2013 Increase in Core Earnings per Share

     

~ 12%

   
   

a

Represents the net earnings per share impact of unallocated pension and postretirement expense of $899 million, net of the federal statutory tax rate of 35.0 percent.

   

b

Represents the net earnings per share impact of unallocated pension and postretirement expense of approximately $1.3 billion, net of the federal statutory tax rate of 35.0 percent.

SOURCE Boeing

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