BOEING 
By CHICAGO, Jan. 29, 2014 /PRNewswire/ --
Fourth-Quarter 2013
-- Core EPS (non-GAAP)* rose 29 percent to $1.88 on strong operating
performance; GAAP EPS of $1.61
-- Revenue increased 7 percent to $23.8 billion reflecting higher
deliveries
Full Year 2013
-- Core EPS increased 20 percent to a record $7.07 on record revenue of
$86.6 billion; GAAP EPS of $5.96
-- Operating cash flow before pension contributions* grew to $9.7 billion;
GAAP operating cash flow of $8.2 billion
-- Backlog grew to a record $441 billion, including $135 billion of net
orders during the year
Outlook for 2014
-- 2014 Core EPS guidance of between $7.00 and $7.20; GAAP EPS guidance of
between $6.10 and $6.30
-- Revenue guidance of between $87.5 and $90.5 billion with commercial
deliveries of between 715 and 725
Table 1. Summary
Financial
Results Fourth Quarter Full Year
-------------- ---------
(Dollars in
Millions, except
per share data) 2013 2012 Change 2013 2012 Change
---- ----
Revenues 7% 6%
$23,785 $22,302 $86,623 $81,698
Non-GAAP*
--------
Core Operating
Earnings 0% 10%
$1,838 $1,836 $7,876 $7,189
Core Operating
Margin 7.7% 8.2% (0.5) Pts 9.1% 8.8% 0.3 Pts
Core Earnings Per
Share 29% 20%
$1.88 $1.46 $7.07 $5.88
Operating Cash
Flow Before
Pension
Contributions (66)% 7%
$1,409 $4,204 $9,721 $9,058
GAAP
----
Earnings From
Operations (7)% 4%
$1,515 $1,624 $6,562 $6,290
Operating Margin 6.4% 7.3% (0.9) Pts 7.6% 7.7% (0.1) Pts
Net Earnings 26% 18%
$1,233 $978 $4,585 $3,900
Earnings Per
Share 26% 17%
$1.61 $1.28 $5.96 $5.11
Operating Cash
Flow (67)% 9%
$1,380 $4,167 $8,179 $7,508
--- ------ ------ ------ ------
* 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 management
believes are not reflective
of underlying business
performance. Complete
definitions of Boeing's non-
GAAP measures are on page 7,
"Non-GAAP Measures
Disclosures."
The Boeing Company (NYSE: BA) reported fourth-quarter revenue of $23.8 billion and core earnings per share (non-GAAP) that increased 29 percent* to $1.88, driven by strong performance across the company's businesses and higher deliveries (Table 1). Fourth-quarter core operating earnings (non-GAAP) of $1.8 billion includes a $406 million non-cash charge to settle A-12 litigation dating back to 1991, retiring a longstanding risk to the company. Excluding the A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent* to $2.2 billion and core operating margin increased to 9.4 percent*. Core and GAAP earnings per share includes a charge of $0.34 per share related to A-12 partially offset by a benefit of $0.28 per share for a tax regulation change.
Revenue rose 6 percent in the full year to a record $86.6 billion and core earnings per share increased 20 percent* to a record $7.07. Full-year 2013 GAAP earnings per share was $5.96.
Core earnings per share guidance for 2014 is set at between $7.00 and $7.20, while GAAP earnings per share guidance is established at between $6.10 and $6.30. Revenue guidance is between $87.5 and $90.5 billion, including commercial deliveries of between 715 and 725. Operating cash flow before pension contributions* is expected to be approximately $7 billion, while operating cash flow guidance is set at approximately $6.25 billion.
"Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders," said Boeing Chairman and Chief Executive Officer Jim McNerney.
"Our Commercial Airplanes business accelerated delivery of its record backlog by successfully increasing production rates while also achieving important development milestones on the 737 MAX and 787-9 and launching the new 787-10 and 777X models with an unprecedented customer response. Our Defense, Space & Security unit overcame a tough operating environment to record expanded revenue, earnings and margins while executing to our commitments on the KC-46A tanker and developing and delivering important new capabilities to customers, such as the P-8 maritime aircraft and the Inmarsat-5 satellite," said McNerney.
"For 2014, we remain focused on maintaining our commercial airplanes market leadership, strengthening and repositioning our defense, space and security business and continuing to meet the needs of our customers by improving productivity, executing to development plans and delivering our unmatched portfolio of innovative aerospace products and services."
Table 2. Cash Flow Fourth
Quarter Full Year
------- ---------
(Millions) 2013 2012 2013 2012
--------- ---- ---- ---- ----
Operating Cash Flow Before
Pension Contributions* $9,058
$1,409 $4,204 $9,721
Pension Contributions ($1,550)
($29) ($37) ($1,542)
---- ---- -------
Operating Cash Flow $7,508
$1,380 $4,167 $8,179
Less Additions to Property,
Plant & Equipment ($1,703)
($638) ($495) ($2,098)
----- ----- -------
Free Cash Flow* $5,805
$742 $3,672 $6,081
--- ---- ------ ------
Operating cash flow in the quarter was $1.4 billion, reflecting 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 $1.0 billion and paid $0.4 billion in dividends, reflecting a 10 percent increase in dividends paid compared to the same period of the prior year. Based on the strong cash generation and outlook, in December, the board of directors authorized an additional $10 billion share repurchase program and raised the quarterly dividend 50 percent.
Table 3. Cash, Marketable
Securities and Debt Balances Quarter-End
-----------
(Billions) Q4 13 Q3 13
--------- ----- -----
Cash
$9.1 $10.0
Marketable Securities(1)
$6.2 $5.9
---- ----
Total
$15.3 $15.9
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 $15.3 billion at year-end (Table 3), down from $15.9 billion at the beginning of the quarter. Debt was $9.6 billion, unchanged from the beginning of the quarter.
Total company backlog at year-end was a record $441 billion, up from $415 billion at the beginning of the quarter, and included net orders for the quarter of $48 billion. Backlog is up $51 billion from prior year-end, reflecting $135 billion of net orders in 2013.
Segment Results
Boeing Commercial Airplanes
Table
4.
Boeing
Commercial
Airplanes Fourth Quarter Full Year
-------------- ---------
(Dollars
in
Millions) 2013 2012 Change 2013 2012 Change
Commercial
Airplanes
Deliveries 172 165 4% 648 601 8%
Revenues 4% 8%
$14,680 $14,161 $52,981 $49,127
Earnings
from
Operations 19% 23 %
$1,506 $1,266 $5,795 $4,711
Operating
Margin 10.3% 8.9% 1.4 Pts 10.9% 9.6% 1.3 Pts
--------- ---- --- ------- ---- --- -------
Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7 billion and full-year revenue increased to a record $53 billion on higher delivery volume. Fourth-quarter operating margin improved to 10.3 percent and full-year operating margin grew to 10.9 percent on the higher volume, favorable delivery mix and continued strong operating performance (Table 4).
During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM).
Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.
Boeing Defense, Space & Security
Table Fourth
5. Quarter
Defense,
Space
&
Security Full Year
------- ---------
(Dollars
in
Millions) 2013 2012 Change 2013 2012 Change
--------- ---- ---- ------ ---- ---- ------
Revenues
Boeing
Military
Aircraft 9% (1)%
$4,395 $4,037 $15,936 $16,019
Network
&
Space
Systems 12% 8%
$2,272 $2,024 $8,512 $7,911
Global
Services
&
Support (4)% 1%
$2,188 $2,282 $8,749 $8,677
------ ------ ------ ------
Total
BDS
Revenues 6% 2%
$8,855 $8,343 $33,197 $32,607
Earnings
from
Operations
Boeing
Military
Aircraft 41% (2)%
$441 $313 $1,465 $1,489
Network
&
Space
Systems 69% 28%
$233 $138 $719 $562
Global
Services
&
Support (7)% 3%
$280 $300 $1,051 $1,017
---- ---- ------ ------
Total
BDS
Earnings
from
Operations 27% 5%
$954 $751 $3,235 $3,068
Operating
Margin 10.8% 9.0% 1.8 Pts 9.7% 9.4% 0.3 Pts
--------- ---- --- ------- --- --- -------
Boeing Defense, Space & Security's fourth-quarter revenue increased 6 percent to $8.9 billion, while operating margin increased to 10.8 percent (Table 5). For the full year, revenue increased 2 percent to $33.2 billion, while operating margin increased to 9.7 percent.
Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.4 billion, reflecting higher deliveries. Operating margin increased to 10.0 percent, reflecting the higher deliveries and strong performance. During the quarter, BMA achieved Initial Operating Capability (IOC) on the P-8A Poseidon aircraft.
Network & Space Systems (N&SS) fourth-quarter revenue increased to $2.3 billion, reflecting higher delivery volume and mix, and operating margin increased to 10.3 percent on strong performance. During the quarter, N&SS was awarded a contract for a fourth Inmarsat-5 satellite.
Global Services & Support (GS&S) fourth-quarter revenue was $2.2 billion, reflecting lower volume in integrated logistics. Operating margin was 12.8 percent. During the quarter, GS&S was awarded contracts for the B-52 and B-1 bomber modifications and upgrades.
Backlog at Defense, Space & Security was $67 billion, of which 37 percent represents orders with international customers.
Additional Financial Information
Table 6. Additional Financial Fourth
Information Quarter Full Year
------- ---------
(Dollars in Millions) 2013 2012 2013 2012
Revenues
Boeing Capital Corporation
$105 $129 $408 $468
Other segment
$22 $27 $102 $106
Unallocated items and eliminations
$123 ($358) ($65) ($610)
Earnings from Operations
Boeing Capital Corporation
$9 ($12) $107 $88
Other segment income/(expense)
($99) $31 ($156) ($186)
Unallocated items and eliminations
excluding unallocated pension/
postretirement expense
($532) ($200) ($1,105) ($492)
Unallocated pension/
postretirement expense
($323) ($212) ($1,314) ($899)
Other income, net
$15 $23 $56 $62
Interest and debt expense
($96) ($112) ($386) ($442)
Effective tax rate 14.0% 36.3% 26.4% 34.0%
------------------ ---- ---- ---- ----
At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was $3.9 billion down from $4.1 billion at the beginning of the quarter. BCC's debt-to-equity ratio was 5.0-to-1. Other segment earnings decreased $130 million in the quarter partly due to higher asset impairment expense.
Unallocated items and eliminations excluding unallocated pension/postretirement expense increased in the fourth quarter of 2013 primarily due to a $406 million charge associated with the A-12 settlement. Total pension expense for the fourth quarter was $717 million, up from $576 million in the same period last year. The company's income tax expense was $201 million in the quarter, compared to $557 million in the same period of the prior year, due to a $212 million benefit recorded in fourth-quarter 2013 for a tax regulation change.
Outlook
The company's 2014 financial guidance (Table 7) reflects continued strong performance in both businesses.
Table 7. Financial Outlook
(Dollars in Billions, except
per share data) 2014
---------------------------- ----
The Boeing Company
Revenue $87.5 - 90.5
Core Earnings Per Share* $7.00 - 7.20
Earnings Per Share $6.10 - 6.30
Operating Cash Flow Before
Pension Contributions* ~ $7
Operating Cash Flow (1) ~ $6.25
Boeing Commercial Airplanes
Deliveries (2) 715 - 725
Revenue $57.5 - 59.5
Operating Margin ~ 10%
Boeing Defense, Space &
Security
Revenue
Boeing Military Aircraft ~ $15
Network & Space Systems ~ $7.7
Global Services & Support ~ $7.8
Total BDS Revenue $30 - 31
Operating Margin
Boeing Military Aircraft ~ 9.5%
Network & Space Systems ~ 8.5%
Global Services & Support ~ 10.5%
Total BDS Operating Margin ~ 9.5%
Boeing Capital Corporation
Portfolio Size Lower
Revenue ~ $0.3
Pre-Tax Earnings ~ $0.05
Research & Development ~ $3.2
Capital Expenditures ~ $2.5
Pension Expense (3) ~ $3.1
Effective Tax Rate 4 ~ 31%
-------------------- ----
1 After discretionary cash pension
contributions of $0.75 billion
and assuming new aircraft
financings under $0.5 billion
2 Assumes approximately 110 787
deliveries
3 Approximately $1.1 billion is
expected to be recorded in
unallocated items and
eliminations
4 Assumes the extension of the
research and development tax
credit
* Non-GAAP measures. Complete
definitions of Boeing's non-
GAAP measures are on page 7,
"Non-GAAP Measures
Disclosures."
Boeing's 2014 revenue guidance is established at between $87.5 and $90.5 billion. Core earnings per share guidance is set at between $7.00 and $7.20, and earnings per share guidance is expected to be between $6.10 and $6.30. Total company 2014 operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow is expected to be approximately $6.25 billion in 2014, including $0.75 billion of discretionary pension contributions. Total company pension expense in 2014 is expected to be approximately $3.1 billion (of which approximately $2.0 billion is expected to be recorded in core operating earnings and $1.1 billion recorded in unallocated items and eliminations).
Commercial Airplanes' 2014 deliveries are expected to be between 715 and 725, which includes approximately 110 787 deliveries. Revenue at Commercial Airplanes is expected to be between $57.5 and $59.5 billion with operating margins of approximately 10 percent. Defense, Space & Security's revenue for 2014 is expected to be between $30 and $31 billion with operating margins of approximately 9.5 percent.
Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2014, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation. Boeing's 2014 R&D forecast is approximately $3.2 billion, and capital expenditures for 2014 are expected to be approximately $2.5 billion. Boeing's effective tax rate is expected to be approximately 31 percent in 2014, which assumes the extension of the research and development tax credit.
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. A reconciliation between the GAAP and non-GAAP measures is provided on page 14.
Core Operating Margin and the Increase in Core Operating Earnings Excluding A-12 Settlement Charge
The company is disclosing the core operating margin and the increase in core operating earnings in the fourth quarter of 2013 over the fourth quarter of 2012 excluding the A-12 settlement charge in the fourth quarter of 2013. Management believes it is useful to occasionally exclude certain items that are not reflective of underlying performance and that can distort period to period performance comparisons. Management uses similar measures for purposes of evaluating and forecasting underlying business performance. A reconciliation between the GAAP and non-GAAP measures is provided on page 14.
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)
Twelve months Three months
ended December 31 ended December 31
(Dollars
in
millions,
except
per
share
data) 2013 2012 2013 2012
--------- ---- ---- ---- ----
Sales
of
products
$76,792 $71,234 $21,482 $19,793
Sales
of
services 9,831 10,464 2,303 2,509
-------- ----- ------ ----- -----
Total
revenues 86,623 81,698 23,785 22,302
Cost
of
products (65,640) (60,309) (18,610) (17,206)
Cost
of
services (7,553) (8,247) (1,758) (1,816)
Boeing
Capital
interest
expense (75) (109) (20) (24)
-------- --- ---- --- ---
Total
costs
and
expenses (73,268) (68,665) (20,388) (19,046)
-------- ------- ------- ------- -------
13,355 13,033 3,397 3,256
Income
from
operating
investments,
net 214 268 67 57
General
and
administrative
expense (3,956) (3,717) (1,100) (943)
Research
and
development
expense,
net (3,071) (3,298) (848) (753)
Gain/
(loss)
on
dispositions,
net 20 4 (1) 7
-------------
Earnings
from
operations 6,562 6,290 1,515 1,624
Other
income,
net 56 62 15 23
Interest
and
debt
expense (386) (442) (96) (112)
-------- ---- ---- --- ----
Earnings
before
income
taxes 6,232 5,910 1,434 1,535
Income
tax
expense (1,646) (2,007) (201) (557)
------- ------ ------ ---- ----
Net
earnings
from
continuing
operations 4,586 3,903 1,233 978
Net
loss $0
on and
disposal $2
of
discontinued
operations,
net
of
taxes
of (1) (3)
------------- --- ---
Net
earnings
$4,585 $3,900 $1,233 $978
=== ====== ====== ====== ====
Basic
earnings
per
share
from
continuing
operations
$6.03 $5.15 $1.63 $1.29
Net loss on disposal
of discontinued
operations, net of
taxes
--------------------
Basic
earnings
per
share
$6.03 $5.15 $1.63 $1.29
=== ===== ===== ===== =====
Diluted
earnings
per
share
from
continuing
operations
$5.96 $5.11 $1.61 $1.28
Net loss on disposal
of discontinued
operations, net of
taxes
--------------------
Diluted
earnings
per
share
$5.96 $5.11 $1.61 $1.28
=== ===== ===== ===== =====
Cash
dividends
paid
per
share
$1.94 $1.76 $0.485 $0.44
=== ===== ===== ====== =====
Weighted
average
diluted
shares
(millions) 769.5 763.8 768.4 768.3
========== ===== ===== ===== =====
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in
millions,
except per
share data) December 31 December 31
2013 2012
---- ----
Assets
Cash and cash equivalents
$9,088 $10,341
Short-term and
other
investments 6,170 3,217
Accounts
receivable, net 6,546 5,608
Current portion
of customer
financing, net 344 364
Deferred income
taxes 14 28
Inventories, net
of advances and
progress
billings 42,912 37,751
---------------- ------ ------
Total current
assets 65,074 57,309
Customer
financing, net 3,627 4,056
Property, plant
and equipment,
net of
accumulated
depreciation of
$15,070 and
$14,645 10,224 9,660
Goodwill 5,043 5,035
Acquired
intangible
assets, net 3,052 3,111
Deferred income
taxes 2,939 6,753
Investments 1,204 1,180
Other assets,
net of
accumulated
amortization of
$448 and $504 1,500 1,792
---------------- ----- -----
Total assets
$92,663 $88,896
=== ======= =======
Liabilities and equity
Accounts payable
$9,498 $9,394
Accrued
liabilities 14,131 12,995
Advances and
billings in
excess of
related costs 20,027 16,672
Deferred income
taxes and
income taxes
payable 6,267 4,485
Short-term debt
and current
portion of
long-term debt 1,563 1,436
--------------- ----- -----
Total current
liabilities 51,486 44,982
Accrued retiree
health care 6,528 7,528
Accrued pension
plan liability,
net 10,474 19,651
Non-current
income taxes
payable 156 366
Other long-term
liabilities 950 1,429
Long-term debt 8,072 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 4,415 4,122
Treasury stock,
at cost -
264,882,461 and
256,630,628
shares (17,671) (15,937)
Retained
earnings 32,964 30,037
Accumulated
other
comprehensive
loss (9,894) (17,416)
-------------- ------ -------
Total
shareholders'
equity 14,875 5,867
Noncontrolling
interest 122 100
-------------- --- ---
Total equity 14,997 5,967
Total liabilities and equity
$92,663 $88,896
=== ======= =======
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Twelve months ended
December 31
(Dollars in
millions) 2013 2012
----------- ---- ----
Cash flows - operating activities:
Net earnings
$4,585 $3,900
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Non-cash items -
Share-based
plans expense 206 193
Depreciation and
amortization 1,844 1,811
Investment/asset
impairment
charges, net 96 84
Customer
financing
valuation
benefit (11) (10)
Loss on disposal
of discontinued
operations 1 5
Gain on
dispositions,
net (20) (4)
Other charges and
credits, net 528 694
Excess tax
benefits from
share-based
payment
arrangements (128) (45)
Changes in assets and liabilities -
Accounts
receivable (879) (27)
Inventories, net
of advances and
progress
billings (5,562) (5,681)
Accounts payable (298) 1,199
Accrued
liabilities 883 801
Advances and
billings in
excess of
related costs 3,353 1,177
Income taxes
receivable,
payable and
deferred 1,445 1,605
Other long-term
liabilities 2 157
Pension and other
postretirement
plans 1,720 1,288
Customer
financing, net 391 407
Other 23 (46)
-----
Net cash provided
by operating
activities 8,179 7,508
----------------- ----- -----
Cash flows - investing activities:
Property, plant
and equipment
additions (2,098) (1,703)
Property, plant
and equipment
reductions 51 97
Acquisitions, net
of cash acquired (26) (124)
Contributions to
investments (15,394) (12,921)
Proceeds from
investments 12,453 10,901
Purchase of
distribution
rights (140) (7)
---- ---
Net cash used by
investing
activities (5,154) (3,757)
---------------- ------ ------
Cash flows - financing activities:
New borrowings 571 60
Debt repayments (1,434) (2,076)
Repayments of
distribution
rights and other
asset financing (280) (228)
Stock options
exercised, other 1,097 120
Excess tax
benefits from
share-based
payment
arrangements 128 45
Employee taxes on
certain share-
based payment
arrangements (63) (76)
Common shares
repurchased (2,801)
Dividends paid (1,467) (1,322)
-------------- ------ ------
Net cash used by
financing
activities (4,249) (3,477)
---------------- ------ ------
Effect of
exchange rate
changes on cash
and cash
equivalents (29) 18
---------------- --- ---
Net
(decrease)/increase
in cash and cash
equivalents (1,253) 292
Cash and cash
equivalents at
beginning of
year 10,341 10,049
------ ------
Cash and cash equivalents at
end of period
$9,088 $10,341
=== ====== =======
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Twelve months ended Three months ended
December 31 December 31
(Dollars in
millions) 2013 2012 2013 2012
----------- ---- ---- ---- ----
Revenues:
Commercial Airplanes
$52,981 $49,127 $14,680 $14,161
Defense, Space & Security:
Boeing
Military
Aircraft 15,936 16,019 4,395 4,037
Network &
Space
Systems 8,512 7,911 2,272 2,024
Global
Services &
Support 8,749 8,677 2,188 2,282
----------- ----- ----- ----- -----
Total
Defense,
Space &
Security 33,197 32,607 8,855 8,343
Boeing
Capital 408 468 105 129
Other
segment 102 106 22 27
Unallocated
items and
eliminations (65) (610) 123 (358)
--- ---- --- ----
Total revenues
$86,623 $81,698 $23,785 $22,302
=== ======= ======= ======= =======
Earnings from operations:
Commercial Airplanes
$5,795 $4,711 $1,506 $1,266
Defense, Space & Security:
Boeing
Military
Aircraft 1,465 1,489 441 313
Network &
Space
Systems 719 562 233 138
Global
Services &
Support 1,051 1,017 280 300
----------- ----- ----- --- ---
Total
Defense,
Space &
Security 3,235 3,068 954 751
Boeing
Capital 107 88 9 (12)
Other
segment (156) (186) (99) 31
Unallocated
items and
eliminations (2,419) (1,391) (855) (412)
------------- ------ ------ ---- ----
Earnings
from
operations 6,562 6,290 1,515 1,624
Other
income,
net 56 62 15 23
Interest
and debt
expense (386) (442) (96) (112)
--------- ---- ---- --- ----
Earnings
before
income
taxes 6,232 5,910 1,434 1,535
Income tax
expense (1,646) (2,007) (201) (557)
---------- ------ ------ ---- ----
Net
earnings
from
continuing
operations 4,586 3,903 1,233 978
Net loss on
disposal
of
discontinued
operations,
net of
taxes of
$0 and $2 (1) (3)
-------------
Net earnings
$4,585 $3,900 $1,233 $978
=== ====== ====== ====== ====
Research and development expense,
net:
Commercial Airplanes
$1,807 $2,049 $510 $411
Defense,
Space &
Security 1,215 1,189 323 321
Other 49 60 15 21
--- --- --- ---
Total research and
development expense,
net
$3,071 $3,298 $848 $753
=== ====== ====== ==== ====
Unallocated items and eliminations:
Share-based plans
($95) ($81) ($21) ($17)
Deferred
compensation (238) (75) (73) (26)
Capitalized
interest (69) (70) (17) (17)
Eliminations
and other (703) (266) (421) (140)
------------ ---- ---- ---- ----
Sub-total
(included
in core
operating
earnings) (1,105) (492) (532) (200)
Pension (1,374) (787) (329) (179)
Postretirement 60 (112) 6 (33)
--- ---- --- ---
Total unallocated
items and
eliminations
($2,419) ($1,391) ($855) ($412)
=== ======= ======= ===== =====
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries Twelve months Three
ended months
ended
December 31 December 31
----------- -----------
Commercial
Airplanes 2013 2012 2013 2012
---------- ---- ---- ---- ----
737 440 415 110 105
747 24 31 8 10
767 21 26 4 6
777 98 83 25 21
787 65 (1) 46 (3) 25 23 (3)
--- --
Total 648 601 172 165
===== === === === ===
Note: Deliveries under
operating lease are
identified by
parentheses.
Defense,
Space
&
Security
--------
Boeing
Military
Aircraft
F/
A-
18
Models 48 48 12 12
F-
15E
Eagle 14 8 11
C-
17
Globemaster
III 10 10 2 2
CH-
47
Chinook 44 51 12 11
AH-
64
Apache 37 19 6 6
P-8
Models 11 5 4 2
AEW&C 3 1
Network
&
Space
Systems
Commercial
and
Civil
Satellites 3 3 2
Military
Satellites 4 7 3 1
Contractual backlog
(Dollars in billions) December 31 September 30
2013 2013
December 31
2012
--- ----
Commercial Airplanes $373.0
$344.3 $317.3
Defense, Space & Security:
Boeing Military Aircraft 24.8 26.4
29.2
Network & Space Systems 9.8 9.9
10.1
Global Services & Support 15.0 14.6
15.8
----
Total Defense, Space &
Security 49.6 50.9
55.1
---
Total contractual backlog $422.6
$395.2 $372.4
=== ====== ======
Unobligated backlog $18.3
$19.9 $17.9
=== ===== =====
Total backlog $440.9
$415.1 $390.3
=== ====== ======
Workforce 168,400 170,800
174,400
=== =======
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
Core Operating Margin and Increase in Core Operating Earnings Excluding A-12 Settlement Charge
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin and core earnings per share as well as
core operating margin and the increase in core operating earnings excluding the A-12 settlement charge with the most directly comparable GAAP financial
measures, earnings from operations, operating margin and diluted earnings per share. See page 7 of this release for additional information on the use of
these non-GAAP financial measures.
Fourth Quarter Full Year Guidance
-------------- --------- --------
2013 2012 2013 2012 2014
---- ---- ---- ---- ----
Revenues
$23,785 $22,302 $86,623 $81,698
GAAP Earnings From Operations
$1,515 $1,624 $6,562 $6,290
GAAP Operating Margin 6.4% 7.3% 7.6% 7.7%
Unallocated Pension/Postretirement Expense ~ $1,050
$323 $212 $1,314 $899
---- ---- ------ ----
Core Operating Earnings (non-GAAP)
$1,838 $1,836 $7,876 $7,189
Core Operating Margin (non-GAAP) 7.7% 8.2% 9.1% 8.8%
A-12 Settlement Charge - -
$406 $406
---- ----
Core Operating Earnings Excluding A-12 Settlement
Charge
$2,244 $1,836 $8,282 $7,189
Core Operating Margin Excluding A-12
Settlement Charge (non-GAAP) 9.4% 8.2% 9.6% 8.8%
Increase/(Decrease) in GAAP Earnings From
Operations (7%) 4%
Increase in Core Operating Earnings
Excluding A-12 Settlement Charge (non-
GAAP) 22% 15%
GAAP Diluted Earnings Per Share $6.10 - 6.30
$1.61 $1.28 $5.96 $5.11
Unallocated Pension/Postretirement Expense(1)
$0.27 $0.18 $1.11 $0.77 $0.90
----- ----- ----- ----- -----
Core Earnings Per Share (non-GAAP) $7.00 - 7.20
$1.88 $1.46 $7.07 $5.88
Weighted Average Diluted Shares (millions) 768.4 768.3 769.5 763.8 750 - 755
Increase in GAAP Earnings Per Share 26% 17%
Increase in Core Earnings Per Share 29% 20%
Earnings per share
impact is presented
net of the federal
statutory tax rate of
1 35.0 percent.
SOURCE Boeing
