TIDMBOE
Boeing Reports Strong Fourth-Quarter Results and Provides 2012 Guidance
CHICAGO, Jan. 25, 2012 --
Fourth-Quarter 2011
- Earnings per share rose to $1.84, driven by strong core performance
- EPS includes favorable tax settlement of $0.52 compared with $0.50 in 2010
- Revenue rose to $19.6 billion on increased commercial airplane deliveries
Full Year 2011
- Earnings per share increased 20 percent to $5.34 on record revenue of
$68.7 billion
- Operating cash flow increased 36 percent to $4.0 billion
- Backlog grew to a record $356 billion including $103 billion of orders during
the year
Outlook for 2012
- EPS guidance of between $4.05 and $4.25 reflects strong operating
performance offset by $0.83 of higher pension expense
- Revenue guidance established at between $78 and $80 billion
- Operating cash flow guidance set at greater than $5.0 billion includes $1.5
billion of discretionary pension contributions
Table 1. Summary Financial Results
Fourth Quarter Full Year
(Dollars in Millions,
except per share data) 2011 2010 Change 2011 2010 Change
Revenues $19,555 $16,550 18% $68,735 $64,306 7%
Earnings From Operations $1,597 $1,103 45% $5,844 $4,971 18%
Operating Margin 8.2% 6.7% 1.5 Pts 8.5% 7.7% 0.8 Pts
Net Income $1,393 $1,164 20% $4,018 $3,307 21%
Earnings per Share $1.84 $1.56 18% $5.34 $4.45 20%
Operating Cash Flow $2,931 $1,116 NM $4,023 $2,952 36%
The Boeing Company (NYSE: BA) reported fourth-quarter net income rose to $1.4 billion,
or $1.84 per share, on revenue of $19.6 billion. The results reflect continued strong
core performance across the company's businesses, a $0.52 per share impact related to a
favorable tax settlement, and higher pension expense (Table 1). Fourth-quarter 2010
results included a $0.50 per share favorable tax settlement.
Net income for the full year increased to $4.0 billion, or $5.34 per share, on
revenue of $68.7 billion, which included the impact of the favorable tax settlement
($0.53 per share for the year). Full-year 2010 results included the $0.50 per share
favorable tax settlement and a $0.20 per share tax charge resulting from health care
legislation.
Earnings guidance for 2012 has been established at between $4.05 and $4.25 per share
reflecting solid core performance and higher pension expense. Revenue guidance for 2012
is between $78 and $80 billion.
"Strong fourth-quarter operating performance, record revenue and backlog, and
expanded earnings and cash flow capped a year of substantial progress for Boeing in
2011," said Jim McNerney, Boeing chairman, president, and chief executive officer. "Major
accomplishments of our team during the year included certifying and delivering the first
787s and 747-8s, winning the U.S. Air Force Tanker program, launching the 737 MAX, and
securing both an important U.S. missile defense contract and a key agreement for F-15s to
Saudi Arabia."
"We enter 2012 with renewed momentum, and proven business and product strategies.
With a record backlog and intense focus on productivity, we are well positioned to
deliver growth and increased competitiveness, even as we face constrained U.S. defense
spending and pension headwinds. Our priorities for the year are to continue with
disciplined increases in production rates for our commercial airplane customers, and to
build on our strong position in defense, space and security with aggressive pursuit of
growth in core, adjacent and international markets," he said.
Table 2. Cash Flow
Fourth Quarter Full Year
(Millions) 2011 2010 2011 2010
Operating Cash Flow $2,931 $1,116 $4,023 $2,952
Less Additions to Property, Plant &
Equipment ($571) ($400) ($1,713) ($1,125)
Free Cash Flow* $2,360 $716 $2,310 $1,827
* Non-GAAP measure. A complete definition of Boeing's use of non-GAAP
measures, identified by an asterisk (*), is found on page 9, "Non-GAAP
Measure Disclosures."
Boeing's quarterly operating cash flow was $2.9 billion, with strong operating
performance more than offsetting continued investment in the 787 and 747-8 programs. For
the full year, operating cash flow was $4.0 billion. Free cash flow* was $2.4 billion in
the quarter (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances
Quarter-End
(Billions) 4Q11 3Q11
Cash $10.1 $5.9
Marketable Securities (1) $1.2 $3.3
Total $11.3 $9.2
Debt Balances:
The Boeing Company $9.0 $9.0
Boeing Capital Corporation $3.4 $3.4
Total Consolidated Debt $12.4 $12.4
(1) Marketable securities consists primarily of time deposits due within
one year classified as "short-term investments."
Cash and investments in marketable securities totaled $11.3 billion at year-end
(Table 3), up from $9.2 billion at the beginning of the quarter. Debt was unchanged in
the quarter.
Total company backlog at year-end was a record $356 billion, up from $332 billion at
the beginning of the quarter. Net orders for the quarter were $42 billion and included a
significant mix of wide-body commercial airplanes. Backlog is up $34.6 billion from prior
year-end, reflecting $103 billion of net orders in 2011.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes Operating Results
Fourth Quarter Full Year
(Dollars in Millions) 2011 2010 Change 2011 2010 Change
Commercial Airplanes
Deliveries 128 116 10% 477 462 3%
Revenues $10,695 $8,184 31% $36,171 $31,834 14%
Earnings from Operations $981 $627 56% $3,495 $3,006 16%
Operating Margins 9.2% 7.7% 1.5 Pts 9.7% 9.4% 0.3 Pts
Boeing Commercial Airplanes fourth-quarter revenue increased by 31 percent to $10.7
billion on higher delivery volume and mix. Operating margin was 9.2 percent, reflecting
lower R&D partially offset by the dilutive impact of initial 787 and 747-8 deliveries and
higher period costs (Table 4).
For the full year, revenue increased by 14 percent on higher delivery volume,
increased services revenue and mix. Operating margin was 9.7 percent, reflecting improved
mix and lower R&D partially offset by higher period costs and the dilutive impact of
initial 787 and 747-8 deliveries.
During the quarter, the first 747-8 Freighter was delivered to Cargolux and the 747-8
Intercontinental achieved FAA certification. Also during the quarter, the company and the
International Association of Machinists & Aerospace Workers reached agreement on a
four-year contract extension primarily related to machinists in Puget Sound.
At year-end, the company had over 1,000 orders and commitments for the 737 MAX,
including 150 firm orders from launch customer Southwest Airlines.
Commercial Airplanes booked 379 net orders during the quarter and 805 during the full
year. Backlog remains strong with more than 3,700 airplanes valued at a record $296
billion.
Boeing Defense, Space & Security
Table 5. Defense, Space & Security Operating Results
Fourth Quarter Full Year
(Dollars in Millions) 2011 2010 Change 2011 2010 Change
Revenues
Boeing Military Aircraft $3,949 $3,627 9% $14,947 $14,238 5%
Network & Space Systems $1,967 $2,434 (19%) $8,673 $9,455 (8%)
Global Services & Support $2,555 $2,104 21% $8,356 $8,250 1%
Total BDS Revenues $8,471 $8,165 4% $31,976 $31,943 0%
Earnings from Operations
Boeing Military Aircraft $374 $315 19% $1,526 $1,250 22%
Network & Space Systems $170 $218 (22%) $690 $711 (3%)
Global Services & Support $321 $283 13% $942 $914 3%
Total BDS Earnings from
Operations $865 $816 6% $3,158 $2,875 10%
Operating Margins 10.2% 10.0% 0.2 Pts 9.9% 9.0% 0.9 Pts
Boeing Defense, Space & Security's fourth-quarter revenue increased by 4 percent to
$8.5 billion, while operating margin was 10.2 percent (Table 5).
For the full year, revenue was unchanged at $32.0 billion. Operating margin increased
to 9.9 percent, driven by higher Boeing Military Aircraft (BMA) margins.
BMA fourth-quarter revenue increased to $3.9 billion, due to Airborne Early Warning &
Control (AEW&C) mix and higher KC-767 International Tanker deliveries partially offset by
fewer C-17 deliveries. Operating margin increased to 9.5 percent, reflecting strong
execution across various programs. Fourth-quarter 2010 included charges for higher costs
on the AEW&C program. During the quarter, the U.S. Government and Saudi Arabia reached
agreement on the purchase of 84 new F-15SA aircraft and upgrades to an additional 70
F-15Ss. Additionally, BMA was awarded the P-8A low rate initial production lot II
production award from the U.S. Navy.
Network & Space Systems (N&SS) fourth-quarter revenue decreased to $2.0 billion, due
to lower volume driven by termination of the Brigade Combat Team Modernization program.
Operating margin decreased to 8.6 percent, reflecting higher R&D. During the quarter,
N&SS was awarded the development and sustainment contract for Ground-based Midcourse
Defense from the U.S. Missile Defense Agency. Also during the quarter, N&SS delivered the
first 702 medium power satellite.
Global Services & Support (GS&S) fourth-quarter revenue increased to $2.6 billion,
due to higher revenues in integrated logistics. Operating margin decreased to 12.6
percent, reflecting the current defense contracting environment. During the quarter, GS&S
was awarded the C-17 Globemaster III Integrated Sustainment Program from the U.S. Air
Force.
Backlog at Defense, Space & Security was $60 billion.
Additional Financial Information
Table 6. Additional Financial Information
Fourth Quarter Full Year
(Dollars in Millions) 2011 2010 Change 2011 2010 Change
Revenues
Boeing Capital Corporation $116 $145 (20%) $532 $639 (17%)
Other segment $31 $31 $138 $138
Unallocated items and
eliminations $242 $25 ($82) ($248)
Earnings from Operations
Boeing Capital Corporation ($8) $6 NM $125 $152 (18%)
Other segment
income/(expense) $43 ($73) $54 ($327)
Unallocated items and
eliminations ($284) ($273) ($988) ($735)
Other income/(expense), net ($29) $32 $47 $52
Interest and debt expense ($124) ($132) ($498) ($516)
Effective tax rate 3.9% -16.3% 25.6% 26.5%
At year-end, Boeing Capital Corporation's (BCC) portfolio balance was $4.3 billion,
unchanged from the beginning of the quarter and down from $4.7 billion at the start of
the year. BCC's earnings decreased due to a smaller portfolio and higher asset
impairments. BCC's debt-to-equity ratio was unchanged at 6.2-to-1.
The "Other" segment includes unallocated activities of Engineering, Operations and
Technology, Shared Services Group as well as certain intercompany guarantees provided to
BCC. Other segment earnings of $43 million in the fourth quarter 2011 were driven by
assigning an upgraded credit rating category to certain financing receivables.
The loss in unallocated items and eliminations increased due to higher pension and
deferred compensation expense partially offset by a charitable trust contribution that
impacted fourth-quarter 2010. Total pension expense for the fourth quarter was $344
million, as compared to $254 million in the same period last year. A total of $291
million was allocated to the operating segments in the quarter, up from $244 million in
the same period last year, and $53 million was recognized in unallocated items, compared
to $10 million in the same period last year.
The company's income tax expense of $57 million in the quarter (compared to a benefit
of $163 million in the same period last year) included a $397 million non-cash gain due
to an IRS settlement for tax years 2004 through 2006. Fourth-quarter 2010 included a $371
million non-cash gain due to an IRS settlement and a benefit of $154 million due to the
extension of the R&D credit.
Outlook
The company's 2012 financial guidance (Table 7) reflects continued strong core
performance, generating a 7 percent increase in adjusted earnings per share*, which is
offset by higher pension expense and other items.
Table 7. Financial Outlook
(Dollars in Billions, except per-share data) 2012
The Boeing Company
Revenue $78 - 80
Earnings Per Share (GAAP) $4.05 - 4.25
Operating Cash Flow (1) > $5.0
Boeing Commercial Airplanes
Deliveries (2) 585 - 600
Revenue $47.5 - 49.5
Operating Margin 8.5% - 9%
Boeing Defense, Space & Security
Revenue
Boeing Military Aircraft $15.0
Network & Space Systems $7.25
Global Services & Support $8.0
Total BDS Revenue $30.0 - 30.5
Operating Margin
Boeing Military Aircraft 9.25%
Network & Space Systems 7.5%
Global Services & Support 10.5%
Total BDS Operating Margin > 9.0%
Boeing Capital Corporation
Portfolio Size Lower
Revenue $0.4
Return on Assets 0.5%
Research & Development $3.3 - 3.5
Capital Expenditures $2.0
Pension Expense $2.6
(1) After discretionary cash pension contributions of $1.5 billion and
assuming new aircraft financings under $0.5 billion.
(2) 2012 is sold out and includes an expected 70 to 85 787 and 747-8
deliveries, of which approximately half are 787 aircraft.
* Non-GAAP measure. A complete definition of Boeing's use of non-GAAP
measures, identified by an asterisk (*), is found on page 9, "Non-GAAP
Measure Disclosures." A complete reconciliation is attached to this
release.
Boeing's 2012 revenue guidance is between $78 and $80 billion. Earnings guidance for
2012 is established at between $4.05 and $4.25 per share. Total pension expense in 2012
is expected to be $2.6 billion (of which approximately $1.0 billion is expected to be
recorded in unallocated items and eliminations) or $2.21 per share, an increase of $0.83
per share from 2011. Operating cash flow is expected to be greater than $5.0 billion in
2012, including $1.5 billion of discretionary pension contributions.
Commercial Airplanes' 2012 deliveries are expected to be between 585 and 600
airplanes and is sold out. This includes an expected 70 to 85 787 and 747-8 deliveries,
of which approximately half are 787 aircraft. Commercial Airplanes' 2012 revenue is
expected to be between $47.5 and $49.5 billion with operating margins between 8.5 and 9
percent.
Defense, Space & Security's revenue for 2012 is expected to be between $30.0 and
$30.5 billion with operating margins greater than 9.0 percent.
Boeing Capital Corporation expects that its aircraft finance portfolio will continue
to decline in 2012, as new aircraft financing of less than $0.5 billion is expected to be
lower than normal portfolio runoff through customer payments and depreciation. BCC's
debt-to-equity ratio is expected to return to 5.0-to-1 in the first quarter of 2012 due
to the repayment of maturing debt.
Boeing's 2012 R&D forecast is between $3.3 and $3.5 billion. Capital expenditures for
2012 are expected to be approximately $2.0 billion.
Non-GAAP Measure Disclosures
Management believes that the non-GAAP (Generally Accepted Accounting Principles)
measures (indicated by an asterisk *) used in this report provide investors with
important perspectives into the company's ongoing business performance. The company does
not intend for the information to be considered in isolation or as a substitute for the
related GAAP measures. Other companies may define the measures differently. The following
definitions are provided:
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 internally to assess both business performance and overall liquidity. Table 2
provides a reconciliation between GAAP operating cash flow and free cash flow.
Increase in Adjusted Earnings Per Share
Adjusted earnings per share is defined as GAAP diluted earnings per share adjusted
for certain significant charges or credits. Management believes the increase in adjusted
earnings per share is important to understanding the company's on-going operations and
provide additional insights into underlying business performance. Significant charges or
credits are described in the attachments to this release which provide reconciliations
between GAAP earnings per share and adjusted earnings per share.
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) our commercial development programs, planned production rate increases
across multiple commercial airline programs and the overall health of our production
system; (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 Corporation'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: Scott Fitterer or Jennifer Mack (312) 544-2140
Communications: Chaz Bickers (312) 544-2002
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Twelve months ended Three months ended
December 31 December 31
(Dollars in millions, except per
share data) 2011 2010 2011 2010
Sales of products $57,401 $52,586 $16,960 $13,569
Sales of services 11,334 11,720 2,595 2,981
Total revenues 68,735 64,306 19,555 16,550
Cost of products (46,642) (42,194) (14,307) (11,025)
Cost of services (9,097) (9,489) (1,920) (2,352)
Boeing Capital Corporation
interest expense (128) (160) (34) (36)
Total costs and expenses (55,867) (51,843) (16,261) (13,413)
12,868 12,463 3,294 3,137
Income from operating
investments, net 278 267 76 80
General and administrative
expense (3,408) (3,644) (864) (977)
Research and development
expense, net (3,918) (4,121) (913) (1,134)
Gain/(loss) on dispositions, net 24 6 4 (3)
Earnings from operations 5,844 4,971 1,597 1,103
Other income/(expense), net 47 52 (29) 32
Interest and debt expense (498) (516) (124) (132)
Earnings before income taxes 5,393 4,507 1,444 1,003
Income tax (expense)/benefit (1,382) (1,196) (57) 163
Net earnings from continuing
operations 4,011 3,311 1,387 1,166
Net gain/(loss) on disposal of
discontinued operations, net of
taxes of ($4), $2, ($3) and $1 7 (4) 6 (2)
Net earnings $4,018 $3,307 $1,393 $1,164
Basic earnings per share from
continuing operations $5.38 $4.50 $1.85 $1.57
Net gain/(loss) on disposal of
discontinued operations, net of
taxes 0.01 (0.01) 0.01
Basic earnings per share $5.39 $4.49 $1.86 $1.57
Diluted earnings per share from
continuing operations $5.33 $4.46 $1.83 $1.56
Net gain/(loss) on disposal of
discontinued operations, net of
taxes 0.01 (0.01) 0.01
Diluted earnings per share $5.34 $4.45 $1.84 $1.56
Cash dividends paid per share $1.68 $1.68 $0.42 $0.42
Weighted average diluted shares
(millions) 753.1 744.3 757.1 747.0
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
December 31 December 31
(Dollars in millions, except per share data) 2011 2010
Assets
Cash and cash equivalents $ 10,049 $ 5,359
Short-term and other investments 1,223 5,158
Accounts receivable, net 5,793 5,422
Current portion of customer financing, net 476 285
Deferred income taxes 29 31
Inventories, net of advances and progress
billings 32,240 24,317
Total current assets 49,810 40,572
Customer financing, net 4,296 4,395
Property, plant and equipment, net of
accumulated depreciation of $13,993 and $13,322 9,313 8,931
Goodwill 4,945 4,937
Acquired intangible assets, net 3,044 2,979
Deferred income taxes 5,892 4,031
Investments 1,043 1,111
Other assets, net of accumulated amortization
of $717 and $630 1,643 1,609
Total assets $ 79,986 $ 68,565
Liabilities and equity
Accounts payable $ 8,406 $ 7,715
Accrued liabilities 12,239 13,802
Advances and billings in excess of related
costs 15,496 12,323
Deferred income taxes and income taxes payable 2,780 607
Short-term debt and current portion of
long-term debt 2,353 948
Total current liabilities 41,274 35,395
Accrued retiree health care 7,520 8,025
Accrued pension plan liability, net 16,537 9,800
Non-current income taxes payable 122 418
Other long-term liabilities 907 592
Long-term debt 10,018 11,473
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 4,033 3,866
Treasury stock, at cost - 267,556,388 and
277,002,059 shares (16,603) (17,187)
Retained earnings 27,524 24,784
Accumulated other comprehensive loss (16,500) (13,758)
Total shareholders' equity 3,515 2,766
Noncontrolling interest 93 96
Total equity 3,608 2,862
Total liabilities and equity $ 79,986 $ 68,565
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Twelve months ended
December 31
(Dollars in millions) 2011 2010
Cash flows - operating activities:
Net earnings $ 4,018 $ 3,307
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Non-cash items -
Share-based plans expense 186 215
Depreciation 1,457 1,510
Amortization of acquired intangible assets 203 217
Amortization of debt discount/premium and issuance
costs 15 19
Investment/asset impairment charges, net 119 174
Customer financing valuation provision (269) 51
(Gain)/loss on disposal of discontinued operations (11) 6
Gain on dispositions, net (24) (6)
Other charges and credits, net 500 512
Excess tax benefits from share-based payment
arrangements (36) (19)
Changes in assets and liabilities -
Accounts receivable (292) 8
Inventories, net of advances and progress billings (10,012) (7,387)
Accounts payable 1,164 313
Accrued liabilities 237 668
Advances and billings in excess of related costs 3,173 238
Income taxes receivable, payable and deferred 1,262 822
Other long-term liabilities 127 328
Pension and other postretirement plans 2,126 1,335
Customer financing, net (6) 717
Other 86 (76)
Net cash provided by operating activities 4,023 2,952
Cash flows - investing activities:
Property, plant and equipment additions (1,713) (1,125)
Property, plant and equipment reductions 94 63
Acquisitions, net of cash acquired (42) (932)
Contributions to investments (6,796) (15,548)
Proceeds from investments 10,757 12,425
Reimbursement of Sea Launch guarantee payments 82
Receipt of economic development program funds 69 206
Purchase of distribution rights (2)
Net cash provided/(used) by investing activities 2,369 (4,831)
Cash flows - financing activities:
New borrowings 799 41
Debt repayments (930) (689)
Repayments of distribution rights financing (451) (137)
Stock options exercised, other 114 87
Excess tax benefits from share-based payment
arrangements 36 19
Employee taxes on certain share-based payment
arrangements (24) (30)
Dividends paid (1,244) (1,253)
Net cash used by financing activities (1,700) (1,962)
Effect of exchange rate changes on cash and cash
equivalents (2) (15)
Net increase/(decrease) in cash and cash equivalents 4,690 (3,856)
Cash and cash equivalents at beginning of year 5,359 9,215
Cash and cash equivalents at end of period $ 10,049 $ 5,359
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Twelve months ended Three months ended
December 31 December 31
(Dollars in millions) 2011 2010 2011 2010
Revenues:
Commercial Airplanes $ 36,171 $ 31,834 $ 10,695 $ 8,184
Boeing Defense, Space &
Security:
Boeing Military Aircraft 14,947 14,238 3,949 3,627
Network & Space Systems 8,673 9,455 1,967 2,434
Global Services & Support 8,356 8,250 2,555 2,104
Total Boeing Defense, Space &
Security 31,976 31,943 8,471 8,165
Boeing Capital Corporation 532 639 116 145
Other segment 138 138 31 31
Unallocated items and
eliminations (82) (248) 242 25
Total revenues $ 68,735 $ 64,306 $ 19,555 $ 16,550
Earnings from operations:
Commercial Airplanes $ 3,495 $ 3,006 $ 981 $ 627
Boeing Defense, Space &
Security:
Boeing Military Aircraft 1,526 1,250 374 315
Network & Space Systems 690 711 170 218
Global Services & Support 942 914 321 283
Total Boeing Defense, Space &
Security 3,158 2,875 865 816
Boeing Capital Corporation 125 152 (8) 6
Other segment 54 (327) 43 (73)
Unallocated items and
eliminations (988) (735) (284) (273)
Earnings from operations 5,844 4,971 1,597 1,103
Other income/(expense), net 47 52 (29) 32
Interest and debt expense (498) (516) (124) (132)
Earnings before income taxes 5,393 4,507 1,444 1,003
Income tax (expense)/benefit (1,382) (1,196) (57) 163
Net earnings from continuing
operations 4,011 3,311 1,387 1,166
Net gain/(loss) on disposal of
discontinued operations, net of
taxes of ($4), $2, ($3) and $1 7 (4) 6 (2)
Net earnings $ 4,018 $ 3,307 $ 1,393 $ 1,164
Research and development
expense, net:
Commercial Airplanes $ 2,715 $ 2,975 $ 524 $ 873
Boeing Defense, Space &
Security:
Boeing Military Aircraft 541 589 172 130
Network & Space Systems 476 417 156 90
Global Services & Support 121 130 37 31
Total Boeing Defense, Space &
Security 1,138 1,136 365 251
Other segment 65 10 24 10
Total research and development
expense, net $ 3,918 $ 4,121 $ 913 $ 1,134
Unallocated items and
eliminations:
Share-based plans $ (83) $ (136) $ (20) $ (24)
Deferred compensation (61) (112) (65) (28)
Pension (269) 54 (53) (10)
Post-retirement (248) (59) (40) (23)
Capitalized interest (51) (54) (12) (13)
Eliminations and other (276) (428) (94) (175)
Total $ (988) $ (735) $ (284) $ (273)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Twelve months ended Three months ended
Deliveries December 31 December 31
Commercial
Airplanes 2011 2010 2011 2010
737 372 376 91 95
747 9 9
767 20 12 6 3
777 73 74 20 18
787 3 2
Total 477 462 128 116
Boeing Defense,
Space & Security
Boeing Military
Aircraft
F/A-18 Models 49 50 11 11
F-15E Eagle 15 13 4 3
C-17 Globemaster 13 14 2 4
KC-767
International
Tanker 3 1 2 1
CH-47 Chinook 32 20 10 7
AH-64 Apache 13 2
AEW&C 3 4 1 1
Network & Space
Systems
Delta II 1 1
Delta IV 1
Commercial and
Civil Satellites 1 3 1 1
Military
Satellites 3 1 1
Contractual backlog December 31 September 30 December 31
(Dollars in billions) 2011 2011 2010
Commercial
Airplanes $293.3 $270.3 $255.6
Boeing Defense,
Space & Security:
Boeing Military
Aircraft 24.1 24.2 25.1
Network & Space
Systems 9.1 9.5 9.6
Global Services &
Support 13.2 12.9 13.7
Total Boeing
Defense, Space &
Security 46.4 46.6 48.4
Total contractual
backlog $339.7 $316.9 $304.0
Unobligated
backlog $15.8 $14.7 $16.9
Total backlog $355.5 $331.6 $320.9
Workforce 171,700 170,600 160,500
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
2012 Increase in Adjusted Earnings Per Share
(Unaudited)
In addition to disclosing results that are determined in accordance with U.S.
generally accepted accounting principles (GAAP), the company also discloses non-GAAP
results that exclude certain significant charges or credits or highlight certain
significant items that are important to an understanding of the company's ongoing
operations. The company provides reconciliations of its non-GAAP financial reporting
to the most comparable GAAP reporting. The company believes that discussion of
results excluding certain significant charges or credits provides additional insights
into underlying business performance. The company also believes that it is useful to
highlight the significant impact pensions and the higher tax rate and shares have on
the company's projected 2012 results. The determination of significant charges or
credits or exclusion of certain items may not be comparable to similarly titled
measures used by other companies and may vary from quarter to quarter.
Year Ended Year Ended
December 31, 2011 December 31, 2012 - Guidance
Earnings Per Share Earnings Per Share
GAAP Diluted
Earnings Per Share $5.34 $4.05 - 4.25
Favorable Tax
Settlement ($0.53) a
Increased Pension
Expense $0.83 b
Higher Tax Rate $0.12 c
Higher Shares $0.06 d
Adjusted Earnings
Per Share $4.81 $5.06 - 5.26
Weighted Average
Diluted Shares (in
millions) 753.1 762.0
2012 Decrease in
GAAP Earnings Per
Share ( 22%)
2012 Increase in
Adjusted Earnings
Per Share 7%
a Represents favorable tax settlement of $397 million recorded in 2011 related to
Internal Revenue Service (IRS) settlement for 2004 through 2006 tax years,
expressed as earnings-per-share.
b Represents pension expense increase of $934 million (2012 projection of $2,582
million vs. $1,648 million in 2011), expressed as earnings-per-share. The earnings
per share amount is presented net of income taxes of approximately 35 percent.
c Represents impact of higher tax rate (approximately 35 percent projection in 2012
vs. 33.0 percent in 2011) of $92 million, expressed as earnings-per-share. The
33.0 percent tax rate in 2011 represents the 2011 GAAP effective income tax rate
of 25.6 percent adjusted by 7.4 percent for the $397 million favorable IRS
settlement for 2004 through 2006 tax years. Our 2012 guidance assumes Congress
extends the R&D tax credit for 2012.
d Represents impact of higher weighted average diluted shares (762.0 million
projection in 2012 vs. 753.1 million in 2011), expressed as earnings-per-share.
SOURCE Boeing
END
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