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BOE Boeing Co.

220.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Boeing Co. LSE:BOE London Ordinary Share COM STK USD5 (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 220.00 210.00 230.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Boeing Co 3rd Quarter Results

26/10/2016 12:30pm

UK Regulatory


 
TIDMBOE 
 
Boeing Reports Third-Quarter Results and Raises Full Year Guidance 
 
CHICAGO, Oct. 26, 2016 -- 
 
  * Strong operating cash flow of $3.2 billion; repurchased 7.6 million shares 
    for $1.0 billion 
  * GAAP EPS of $3.60 and core EPS (non-GAAP)* of $3.51 on solid execution and 
    tax items 
  * Revenue of $23.9 billion on timing of aircraft deliveries 
  * Backlog remains robust at $462 billion with more than 5,600 commercial 
    airplane orders 
  * Cash and marketable securities of $9.7 billion provide strong liquidity 
  * 2016 revenue guidance increased $500 million on higher deliveries 
  * 2016 GAAP EPS and core EPS (non-GAAP)* guidance increased $0.70for 
    additionaltaxadjustment 
 
Table 1. Summary     Third Quarter                   Nine months 
Financial 
Results 
 
(Dollars in         2016      2015      Change     2016      2015      Change 
Millions, except 
per share data) 
 
Revenues           $23,898   $25,849       (8)%   $71,285   $72,541       (2)% 
 
GAAP 
 
Earnings From       $2,282    $2,580      (12)%    $3,651    $6,282      (42)% 
Operations 
 
Operating Margin      9.5%     10.0%  (0.5) Pts      5.1%      8.7%  (3.6) Pts 
 
Net Earnings        $2,279    $1,704        34%    $3,264    $4,150      (21)% 
 
Earnings Per         $3.60     $2.47        46%     $5.04     $5.92      (15)% 
Share 
 
Operating Cash      $3,202    $2,859        12%    $7,667    $6,244        23% 
Flow 
 
Non-GAAP* 
 
Core Operating      $2,194    $2,637      (17)%    $3,400    $6,482      (48)% 
Earnings 
 
Core Operating        9.2%     10.2%  (1.0) Pts      4.8%      8.9%  (4.1) Pts 
Margin 
 
Core Earnings        $3.51     $2.52        39%     $4.79     $6.11      (22)% 
Per Share 
 
 
 
* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on 
page 6, "Non-GAAP Measures Disclosures." 
 
The Boeing Company [NYSE: BA] reported third-quarter GAAP earnings per share of 
$3.60 and core earnings per share (non-GAAP)* of $3.51 reflecting overall solid 
execution on production programs and services, favorable tax items ($0.98 per 
share), and timing of aircraft deliveries (Table 1). 
 
Revenue guidance has been increased $500 million to between $93.5 and $95.5 
billion on higher commercial deliveries. GAAP earnings per share guidance for 
2016 has been increased to between $7.10 and $7.30 from $6.40 and $6.60 and 
core earnings per share (non-GAAP)* guidance has been increased to between 
$6.80 and $7.00 from $6.10 and $6.30 to reflect a favorable $0.70 per share tax 
basis adjustment. The third quarter favorable tax adjustment for a 2011-2012 
tax settlement of $0.28 per share was previously announced in the second 
quarter of 2016 and was reflected in prior guidance. 
 
"Solid operating performance across our commercial and defense and space 
businesses in the third quarter again generated strong cash flow for Boeing, 
which continues to fuel investments in our future and enable us to deliver 
compelling returns to our shareholders," said Chairman, President and Chief 
Executive Officer Dennis Muilenburg. "We also captured key orders, reinforcing 
the strength of our large and diverse order backlog." 
 
"We achieved key milestones on the 737 MAX, 787-10 and other development 
programs, including the first KC-46 production contracts. Our teams remain 
focused on completing these development efforts and delivering better 
capabilities and economics to customers around the world." 
 
"We remain on track to deliver on our full-year commitments. At the same time, 
we are positioning Boeing for further growth through our intense focus on 
productivity, quality and safety across the company." 
 
Table 2. Cash Flow                        Third Quarter        Nine months 
 
(Millions)                                2016     2015      2016       2015 
 
Operating Cash Flow                      $3,202   $2,859     $7,667     $6,244 
 
Less Additions to Property, Plant &      ($595)   ($561)   ($2,014)   ($1,827) 
Equipment 
 
Free Cash Flow*                          $2,607   $2,298     $5,653     $4,417 
 
 
 
* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on 
page 6, "Non-GAAP Measures Disclosures." 
 
Operating cash flow in the quarter was $3.2 billion, reflecting solid operating 
performance (Table 2). During the quarter, the company repurchased 7.6 million 
shares for $1.0 billion, leaving $7.5 billion remaining under the current 
repurchase authorization. The company also paid $0.7 billion in dividends in 
the quarter, reflecting an approximately 20 percent increase in dividends per 
share compared to the same period of the prior year. 
 
Table 3. Cash, Marketable Securities and Debt Balances    Quarter-End 
 
(Billions)                                               Q3 16   Q2 16 
 
Cash                                                      $9.0    $8.6 
 
Marketable Securities1                                    $0.7    $0.7 
 
Total                                                     $9.7    $9.3 
 
Debt Balances: 
 
The Boeing Company, net of intercompany loans to BCC      $8.1    $8.7 
 
Boeing Capital, including intercompany loans              $2.4    $2.3 
 
Total Consolidated Debt                                  $10.5   $11.0 
 
 
 
1 Marketable securities consists primarily of time deposits due within one year 
classified as "short-term investments." 
 
Cash and investments in marketable securities totaled $9.7 billion, up from 
$9.3 billion at the beginning of the quarter. Debt was $10.5 billion, down from 
the beginning of the quarter, due to repayment of debt (Table 3). 
 
Total company backlog at quarter-end was $462 billion, down from $472 billion 
at the beginning of the quarter, and included net orders for the quarter of $15 
billion. 
 
Segment Results 
 
Commercial Airplanes 
 
Table 4.            Third Quarter                   Nine months 
Commercial 
Airplanes 
 
(Dollars in        2016      2015      Change     2016      2015      Change 
Millions) 
 
Commercial            188       199       (6)%       563       580       (3)% 
Airplanes 
Deliveries 
 
Revenues          $16,973   $17,692       (4)%   $48,828   $49,950       (2)% 
 
Earnings from      $1,597    $1,768      (10)%    $1,657    $4,591      (64)% 
Operations 
 
Operating            9.4%     10.0%  (0.6) Pts      3.4%      9.2%  (5.8) Pts 
Margin 
 
Commercial Airplanes third-quarter revenue decreased to $17.0 billion on lower 
planned delivery volume (Table 4). Third-quarter operating margin was 9.4 
percent, reflecting delivery volume and mix, partially offset by lower period 
costs. 
 
During the quarter, we began production of the 500th 787 Dreamliner, completed 
service ready validation of the 737 MAX 8, and began production of the 737 MAX 
9. The 737 program has captured more than 3,300 orders for the 737 MAX since 
launch and the company remains on track to raise the production rate to 47 per 
month in the third quarter of 2017. During the quarter, we continued to grow 
our services business through an agreement with Japan Airlines to provide spare 
parts solutions. 
 
Commercial Airplanes booked 107 net orders during the quarter. Backlog remains 
strong with more than 5,600 airplanes valued at $409 billion. 
 
Defense, Space & Security 
 
Table 5. Defense,    Third Quarter                  Nine months 
Space & Security 
 
(Dollars in          2016     2015     Change     2016      2015      Change 
Millions) 
 
Revenues1 
 
Boeing Military     $3,260   $4,037      (19)%    $9,898   $10,237       (3)% 
Aircraft 
 
Network & Space     $1,701   $2,127      (20)%    $5,246    $5,797      (10)% 
Systems 
 
Global Services &   $2,547   $2,186        17%    $7,494    $6,569        14% 
Support 
 
Total BDS           $7,508   $8,350      (10)%   $22,638   $22,603          - 
Revenues 
 
Earnings from 
Operations1 
 
Boeing Military       $434     $494      (12)%      $943      $874         8% 
Aircraft 
 
Network & Space        $35     $245      (86)%      $336      $563      (40)% 
Systems 
 
Global Services &     $315     $283        11%      $920      $874         5% 
Support 
 
Total BDS             $784   $1,022      (23)%    $2,199    $2,311       (5)% 
Earnings from 
Operations 
 
Operating Margin     10.4%    12.2%  (1.8) Pts      9.7%     10.2%  (0.5) Pts 
 
 
 
1 During the first quarter of 2016, certain programs were realigned between 
Boeing Military Aircraft and Global Services & Support. 
 
Defense, Space & Security's third-quarter revenue was $7.5 billion. 
Third-quarter operating margin was 10.4 percent, reflecting solid execution and 
the impact of the Commercial Crew program (Table 5). 
 
Boeing Military Aircraft (BMA) third-quarter revenue was $3.3 billion, 
reflecting fewer C-17 deliveries and volume on F-15. Operating margin increased 
to 13.3 percent, reflecting program mix. During the quarter, BMA was awarded a 
contract from the U.S. Air Force for low-rate initial production of 19 KC-46 
Tanker aircraft and received an agreement from the U.K. Ministry of Defence to 
purchase 50 Apache attack helicopters and nine P-8 Poseidon aircraft. 
 
Network & Space Systems (N&SS) third-quarter revenue decreased to $1.7 billion 
with an operating margin of 2.1 percent, primarily reflecting the charge on the 
Commercial Crew development program. The charge includes a $124 million 
reversal of cumulative pre-tax earnings recorded in prior periods and a $38 
million pre-tax reach-forward loss, and was largely driven by delays in 
completion of engineering and supply chain activities. During the quarter, N&SS 
announced an award for a 702MP satellite with a new digital payload offering 
twice the capacity of previous designs. 
 
Global Services & Support (GS&S) third-quarter revenue increased to $2.5 
billion, reflecting higher volume in Aircraft Modernization & Sustainment and 
Training Systems & Government Services. Operating margin was 12.4 percent 
largely reflecting contract mix. During the quarter, GS&S was awarded contracts 
from the Defense Logistics Agency for F/A-18 spare parts. 
 
Backlog at Defense, Space & Security was $53 billion, of which 38 percent 
represents orders from international customers. 
 
Additional Financial Information 
 
Table 6. Additional Financial Information    Third Quarter      Nine months 
 
(Dollars in Millions)                        2016     2015     2016     2015 
 
Revenues 
 
Boeing Capital                                 $63     $114     $211     $315 
 
Unallocated items, eliminations and other   ($646)   ($307)   ($392)   ($327) 
 
Earnings from Operations 
 
Boeing Capital                                 $13      $10      $36      $41 
 
Unallocated pension/postretirement             $88    ($57)     $251   ($200) 
 
Other unallocated items and eliminations    ($200)   ($163)   ($492)   ($461) 
 
Other income/(loss), net                        $2    ($26)      $41    ($23) 
 
Interest and debt expense                    ($81)    ($67)   ($227)   ($203) 
 
Effective tax rate                          (3.4)%    31.5%     5.8%    31.5% 
 
At quarter-end, Boeing Capital's net portfolio balance was $3.7 billion, up 
from the beginning of the quarter. Total pension expense for the third quarter 
was $453 million, down from $529 million in the same period of the prior year. 
Other unallocated items and eliminations revenue decreased from the same period 
in the prior year primarily due to the elimination of intercompany revenue for 
three aircraft delivered under operating leases. The effective tax rate for the 
third quarter decreased from the same period in the prior year primarily due to 
the favorable $440 million tax basis adjustment and the previously announced 
$177 million for the 2011-2012 tax settlement. 
 
Outlook 
 
The company's 2016 updated financial and delivery guidance (Table 7) reflects 
higher commercial deliveries and the impact of the tax basis adjustment. 
 
Table 7. 2016 Financial Outlook                Current        Prior 
 
(Dollars in Billions, except per share data)   Guidance      Guidance 
 
The Boeing Company 
 
Revenue                                      $93.5 - 95.5  $93.0 - 95.0 
 
GAAP Earnings Per Share                      $7.10 - 7.30  $6.40 - 6.60 
 
Core Earnings Per Share*                     $6.80 - 7.00  $6.10 - 6.30 
 
Operating Cash Flow                             $10.0        $10.0 
 
Commercial Airplanes 
 
Deliveries                                    745 - 750     740 - 745 
 
Revenue                                      $64.5 - 65.5  $64.0 - 65.0 
 
Operating Margin                              4.5% - 5.0    4.5% - 5.0 
 
Defense, Space & Security 
 
Revenue 
 
Boeing Military Aircraft                        $12.4        $12.3 
 
Network & Space Systems                         $7.0         $7.3 
 
Global Services & Support                       $9.6         $9.4 
 
Total BDS Revenue                            $28.5 - 29.5  $28.5 - 29.5 
 
Operating Margin 
 
Boeing Military Aircraft                        9.5%         9.5% 
 
Network & Space Systems                         7.5%         9.0% 
 
Global Services & Support                       12.5%        12.0% 
 
Total BDS Operating Margin                      >10.0%        >10.0% 
 
Boeing Capital 
 
Portfolio Size                                  Stable        Stable 
 
Revenue                                         $0.3         $0.3 
 
Pre-Tax Earnings                                $0.05        $0.05 
 
Research & Development                           $4.8         $4.8 
 
Capital Expenditures                             $2.8         $2.8 
 
Pension Expense 1                                $2.1         $2.1 
 
Effective Tax Rate                              14.0%        23.0% 
 
 
 
1 Approximately ($0.1) billion is expected to be recorded in unallocated items 
and eliminations 
 
*    Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are 
on page 6, "Non-GAAP Measures Disclosures." 
 
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. Pension costs, comprising service and 
prior service costs computed in accordance with Generally Accepted Accounting 
Principles in the United States of America (GAAP) are allocated to Commercial 
Airplanes. Pension costs allocated to BDS segments are computed in accordance 
with U.S. Government Cost Accounting Standards (CAS), which employ different 
actuarial assumptions and accounting conventions than GAAP. CAS costs are 
allocable to government contracts. Other postretirement benefit costs are 
allocated to all business segments based on CAS, which is generally based on 
benefits paid. Management uses core operating 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 13. 
 
Free Cash Flow 
 
Free cash flow is defined as GAAP operating cash flow without 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 budget and appropriation levels and 
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, epidemics, 
sanctions 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 Ben Hackman (312) 544-2140 
 
Communications:      Bernard Choi (312) 544-2002 
 
 
 
                     The Boeing Company and Subsidiaries 
 
                    Consolidated Statements of Operations 
 
                                 (Unaudited) 
 
                                       Nine months ended   Three months ended 
                                         September 30         September 30 
 
(Dollars in millions, except per          2016      2015      2016      2015 
share data) 
 
Sales of products                      $63,563   $64,408   $21,494   $23,000 
 
Sales of services                        7,722     8,133     2,404     2,849 
 
Total revenues                          71,285    72,541    23,898    25,849 
 
Cost of products                      (55,117)  (55,020)  (17,907)  (19,393) 
 
Cost of services                       (6,163)   (6,377)   (1,983)   (2,191) 
 
Boeing Capital interest expense           (46)      (49)      (14)      (16) 
 
Total costs and expenses              (61,326)  (61,446)  (19,904)  (21,600) 
 
                                         9,959    11,095     3,994     4,249 
 
Income from operating investments,         220       207        69        78 
net 
 
General and administrative expense     (2,617)   (2,594)     (923)     (889) 
 
Research and development expense, net  (3,901)   (2,426)     (857)     (857) 
 
(Loss)/gain on dispositions, net          (10)                 (1)       (1) 
 
Earnings from operations                 3,651     6,282     2,282     2,580 
 
Other income/(loss), net                    41      (23)         2      (26) 
 
Interest and debt expense                (227)     (203)      (81)      (67) 
 
Earnings before income taxes             3,465     6,056     2,203     2,487 
 
Income tax (expense)/benefit             (201)   (1,906)        76     (783) 
 
Net earnings                            $3,264    $4,150    $2,279    $1,704 
 
Basic earnings per share                 $5.09     $5.99     $3.64     $2.50 
 
Diluted earnings per share               $5.04     $5.92     $3.60     $2.47 
 
Cash dividends paid per share            $3.27     $2.73     $1.09     $0.91 
 
Weighted average diluted shares          647.9     700.9     632.7     689.0 
(millions) 
 
 
 
                      The Boeing Company and Subsidiaries 
 
                 Consolidated Statements of Financial Position 
 
                                  (Unaudited) 
 
(Dollars in millions, except per share data)         September 30  December 31 
                                                             2016         2015 
 
Assets 
 
Cash and cash equivalents                                  $8,986      $11,302 
 
Short-term and other investments                              682          750 
 
Accounts receivable, net                                    9,524        8,713 
 
Current portion of customer financing, net                    365          212 
 
Inventories, net of advances and progress billings         42,680       47,257 
 
Total current assets                                       62,237       68,234 
 
Customer financing, net                                     3,401        3,358 
 
Property, plant and equipment, net of accumulated          12,713       12,076 
depreciation of $16,752 and $16,286 
 
Goodwill                                                    5,128        5,126 
 
Acquired intangible assets, net                             2,488        2,657 
 
Deferred income taxes                                         265          265 
 
Investments                                                 1,303        1,284 
 
Other assets, net of accumulated amortization of            1,415        1,408 
$470 and $451 
 
Total assets                                              $88,950      $94,408 
 
Liabilities and equity 
 
Accounts payable                                          $11,968      $10,800 
 
Accrued liabilities                                        13,243       14,014 
 
Advances and billings in excess of related costs           22,646       24,364 
 
Short-term debt and current portion of long-term              632        1,234 
debt 
 
Total current liabilities                                  48,489       50,412 
 
Deferred income taxes                                       2,211        2,392 
 
Accrued retiree health care                                 6,544        6,616 
 
Accrued pension plan liability, net                        18,003       17,783 
 
Other long-term liabilities                                 1,729        2,078 
 
Long-term debt                                              9,824        8,730 
 
Shareholders' equity: 
 
Common stock, par value $5.00 - 1,200,000,000 shares        5,061        5,061 
authorized; 
1,012,261,159 shares issued 
 
Additional paid-in capital                                  4,808        4,834 
 
Treasury stock, at cost - 393,301,648 and                (35,763)     (29,568) 
345,637,354 shares 
 
Retained earnings                                          40,641       38,756 
 
Accumulated other comprehensive loss                     (12,658)     (12,748) 
 
Total shareholders' equity                                  2,089        6,335 
 
Noncontrolling interests                                       61           62 
 
Total equity                                                2,150        6,397 
 
Total liabilities and equity                              $88,950      $94,408 
 
 
 
                      The Boeing Company and Subsidiaries 
 
                     Consolidated Statements of Cash Flows 
 
                                  (Unaudited) 
 
                                                              Nine months ended 
                                                                September 30 
 
(Dollars in millions)                                            2016     2015 
 
Cash flows - operating activities: 
 
Net earnings                                                   $3,264   $4,150 
 
Adjustments to reconcile net earnings to net cash provided by 
operating activities: 
 
Non-cash items - 
 
Share-based plans expense                                         144      141 
 
Depreciation and amortization                                   1,364    1,349 
 
Investment/asset impairment charges, net                           61      124 
 
Customer financing valuation benefit                              (5)      (3) 
 
Loss on dispositions, net                                          10 
 
Other charges and credits, net                                    219      230 
 
Excess tax benefits from share-based payment arrangements                (139) 
 
Changes in assets and liabilities - 
 
Accounts receivable                                             (517)  (1,202) 
 
Inventories, net of advances and progress billings              4,334  (2,186) 
 
Accounts payable                                                1,366    1,058 
 
Accrued liabilities                                                82    (196) 
 
Advances and billings in excess of related costs              (1,717)      270 
 
Income taxes receivable, payable and deferred                   (725)      824 
 
Other long-term liabilities                                      (67)       40 
 
Pension and other postretirement plans                            144    1,837 
 
Customer financing, net                                         (195)       45 
 
Other                                                            (95)     (98) 
 
Net cash provided by operating activities                       7,667    6,244 
 
Cash flows - investing activities: 
 
Property, plant and equipment additions                       (2,014)  (1,827) 
 
Property, plant and equipment reductions                           14       24 
 
Acquisitions, net of cash acquired                                        (23) 
 
Contributions to investments                                    (928)  (1,341) 
 
Proceeds from investments                                         956    2,169 
 
Other                                                               8       33 
 
Net cash used by investing activities                         (1,964)    (965) 
 
Cash flows - financing activities: 
 
New borrowings                                                  1,323      761 
 
Debt repayments                                                 (836)    (864) 
 
Stock options exercised                                           192      331 
 
Excess tax benefits from share-based payment arrangements                  139 
 
Employee taxes on certain share-based payment arrangements       (83)     (93) 
 
Common shares repurchased                                     (6,501)  (6,001) 
 
Dividends paid                                                (2,084)  (1,882) 
 
Other                                                            (24) 
 
Net cash used by financing activities                         (8,013)  (7,609) 
 
Effect of exchange rate changes on cash and cash equivalents      (6)     (20) 
 
Net decrease in cash and cash equivalents                     (2,316)  (2,350) 
 
Cash and cash equivalents at beginning of year                 11,302   11,733 
 
Cash and cash equivalents at end of period                     $8,986   $9,383 
 
 
 
                      The Boeing Company and Subsidiaries 
 
                       Summary of Business Segment Data 
 
                                  (Unaudited) 
 
                                         Nine months ended   Three months ended 
                                           September 30         September 30 
 
(Dollars in millions)                       2016      2015      2016      2015 
 
Revenues: 
 
Commercial Airplanes                     $48,828   $49,950   $16,973   $17,692 
 
Defense, Space & Security: 
 
Boeing Military Aircraft                   9,898    10,237     3,260     4,037 
 
Network & Space Systems                    5,246     5,797     1,701     2,127 
 
Global Services & Support                  7,494     6,569     2,547     2,186 
 
Total Defense, Space & Security           22,638    22,603     7,508     8,350 
 
Boeing Capital                               211       315        63       114 
 
Unallocated items, eliminations and        (392)     (327)     (646)     (307) 
other 
 
Total revenues                           $71,285   $72,541   $23,898   $25,849 
 
Earnings from operations: 
 
Commercial Airplanes                      $1,657    $4,591    $1,597    $1,768 
 
Defense, Space & Security: 
 
Boeing Military Aircraft                     943       874       434       494 
 
Network & Space Systems                      336       563        35       245 
 
Global Services & Support                    920       874       315       283 
 
Total Defense, Space & Security            2,199     2,311       784     1,022 
 
Boeing Capital                                36        41        13        10 
 
Segment operating profit                   3,892     6,943     2,394     2,800 
 
Unallocated items, eliminations and        (241)     (661)     (112)     (220) 
other 
 
Earnings from operations                   3,651     6,282     2,282     2,580 
 
Other income/(loss), net                      41      (23)         2      (26) 
 
Interest and debt expense                  (227)     (203)      (81)      (67) 
 
Earnings before income taxes               3,465     6,056     2,203     2,487 
 
Income tax (expense)/benefit               (201)   (1,906)        76     (783) 
 
Net earnings                              $3,264    $4,150    $2,279    $1,704 
 
Research and development expense, net: 
 
Commercial Airplanes                      $3,194    $1,713      $646      $616 
 
Defense, Space & Security                    750       715       229       241 
 
Other                                       (43)       (2)      (18) 
 
Total research and development expense,   $3,901    $2,426      $857      $857 
net 
 
Unallocated items, eliminations and 
other 
 
Share-based plans                          ($50)     ($57)      ($9)     ($20) 
 
Deferred compensation                       (38)      (10)      (33)        38 
 
Amortization of previously capitalized      (71)      (70)      (23)      (21) 
interest 
 
Eliminations and other unallocated         (333)     (324)     (135)     (160) 
items 
 
Sub-total (included in core operating      (492)     (461)     (200)     (163) 
earnings) 
 
Pension                                      129     (293)        50      (84) 
 
Postretirement                               122        93        38        27 
 
Total unallocated items, eliminations     ($241)    ($661)    ($112)    ($220) 
and other 
 
 
 
                      The Boeing Company and Subsidiaries 
 
                         Operating and Financial Data 
 
                                  (Unaudited) 
 
Deliveries                   Nine months ended        Three months ended 
                               September 30              September 30 
 
Commercial Airplanes         2016     2015             2016            2015 
 
737                           368      375              120             126 
 
747                             8 (3)   13 (1)            5 (3)           4 (1) 
 
767                            10       14                5               5 
 
777                            73       77               22              27 
 
787                           104      101               36              37 
 
Total                         563      580              188             199 
 
Note: Deliveries under operating lease are identified by parentheses. 
 
Defense, Space & Security 
 
Boeing Military Aircraft 
 
AH-64 Apache (New)             25       18               10               6 
 
AH-64 Apache                   27       33                9              10 
(Remanufactured) 
 
C-17 Globemaster III            4        5                                2 
 
CH-47 Chinook (New)            17       35                7              14 
 
CH-47 Chinook (Renewed)        23        6                7               1 
 
F-15 Models                    11        8                4               3 
 
F/A-18 Models                  20       28                6               8 
 
P-8 Models                     13       10                4               4 
 
Global Services & Support 
 
C-40A                                    1 
 
Network & Space Systems 
 
Commercial and Civil            3        1                2 
Satellites 
 
Military Satellites             2        1                1 
 
Contractual backlog                            September 30     December 31 
(Dollars in billions)                                  2016            2015 
 
Commercial Airplanes                                 $408.8          $431.4 
 
Defense, Space & Security: 
 
       Boeing Military                                 20.8            19.9 
Aircraft 
 
       Network & Space                                  6.5             7.4 
Systems 
 
       Global Services &                               12.8            17.9 
Support 
 
Total Defense, Space &                                 40.1            45.2 
Security 
 
Total contractual backlog                            $448.9          $476.6 
 
Unobligated backlog                                   $13.1           $12.7 
 
Total backlog                                        $462.0          $489.3 
 
Workforce                                           154,700         161,400 
 
                      The Boeing Company and Subsidiaries 
                      Reconciliation of Non-GAAP Measures 
                                  (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. 
 
(Dollars in millions,       Third Quarter        Nine months        Guidance 
except per share data) 
 
                            2016      2015      2016      2015        2016 
 
Revenues                   $23,898   $25,849   $71,285   $72,541 
 
GAAP Earnings From          $2,282    $2,580    $3,651    $6,282 
Operations 
 
Increase/(Decrease) in       (12%)               (42%) 
GAAP Earnings From 
Operations 
 
GAAP Operating Margin         9.5%     10.0%      5.1%      8.7% 
 
Unallocated Pension          ($50)       $84    ($129)      $293 
(Income)/Expense 
 
Unallocated Other            ($38)     ($27)    ($122)     ($93) 
Postretirement Benefit 
Income 
 
Unallocated Pension and      ($88)       $57    ($251)      $200     ($300) 
Other Postretirement 
Benefit (Income)/Expense 
 
Core Operating Earnings     $2,194    $2,637    $3,400    $6,482 
(non-GAAP) 
 
Increase/(Decrease) in       (17%)               (48%) 
Core Operating Earnings 
(non-GAAP) 
 
Core Operating Margin         9.2%     10.2%      4.8%      8.9% 
(non-GAAP) 
 
GAAP Diluted Earnings Per    $3.60     $2.47     $5.04     $5.92  $7.10 - $7.30 
Share 
 
Unallocated Pension        ($0.08)     $0.12   ($0.20)     $0.42 
(Income)/Expense 
 
Unallocated                ($0.06)   ($0.04)   ($0.19)   ($0.13)     ($0.30) 
Postretirement Benefit 
(Income)/Expense 
 
Provision for deferred       $0.05   ($0.03)     $0.14   ($0.10) 
income taxes on 
adjustments (1) 
 
Core Earnings Per Share      $3.51     $2.52     $4.79     $6.11  $6.80 - $7.00 
(non-GAAP) 
 
Weighted Average Diluted     632.7     689.0     647.9     700.9    645 - 650 
Shares (millions) 
 
Increase/(Decrease) in         46%               (15%) 
GAAP Earnings Per Share 
 
Increase/(Decrease) in         39%               (22%) 
Core Earnings Per Share 
(non-GAAP) 
 
 
 
 
   (1) The income tax impact is calculated using the tax rate in effect 
                                          for the non-GAAP adjustments. 
 
 
  SOURCE  Boeing 
 
 
 
 
 
 
END 
 

(END) Dow Jones Newswires

October 26, 2016 07:30 ET (11:30 GMT)

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