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| 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 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMBOE
Boeing Reports Strong Second-Quarter; Generated Robust Cash; Raises Revenue
Guidance
CHICAGO, July 25, 2018 --
* Revenue increased to $24.3 billion reflecting 194 commercial deliveries
and higher defense and services volume
* GAAP EPS of $3.73 and core EPS (non-GAAP)* of $3.33 on solid execution
across the company
* Strong operating cash flow of $4.7 billion; repurchased 8.6 million shares
for $3.0 billion
* Backlog grew to $488 billion, including nearly 5,900 commercial airplanes
* Cash and marketable securities of $9.8 billion provide strong liquidity
* Raised revenue and updated segment margin guidance
Table 1. Summary Financial Second Quarter First Half
Results
(Dollars in Millions, 2018 2017 Change 2018 2017 Change
except per share data)
Revenues $24,258 $23,051 5% $47,640 $45,012 6%
GAAP
Earnings From Operations $2,710 $2,530 7% $5,585 $4,736 18%
Operating Margin 11.2% 11.0% 0.2 11.7% 10.5% 1.2
Pts Pts
Net Earnings $2,196 $1,749 26% $4,673 $3,328 40%
Earnings Per Share $3.73 $2.87 30% $7.88 $5.41 46%
Operating Cash Flow $4,680 $4,949 (5)% $7,816 $7,047 11%
Non-GAAP*
Core Operating Earnings $2,393 $2,173 10% $4,903 $4,033 22%
Core Operating Margin 9.9% 9.4% 0.5 10.3% 9.0% 1.3
Pts Pts
Core Earnings Per Share $3.33 $2.49 34% $6.97 $4.67 49%
* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on
page 7, "Non-GAAP Measures Disclosures."
The Boeing Company [NYSE: BA] reported second-quarter revenue of $24.3 billion
reflecting higher commercial deliveries and mix, defense volume and services
growth (Table 1). GAAP earnings per share increased to $3.73 and core earnings
per share (non-GAAP)* increased to $3.33 reflecting solid execution across the
company. Results also reflect a charge related to the previously announced
Spirit litigation outcome ($0.21 per share). Boeing delivered strong operating
cash flow of $4.7 billion, repurchased $3.0 billion of shares, and paid $1.0
billion of dividends.
The company's revenue guidance increased $1 billion to between $97.0 and $99.0
billion, driven by defense volume and services growth. Commercial Airplanes
margin guidance is increased to greater than 11.5% on strong performance and
Defense, Space & Security margin guidance was adjusted to reflect the impact of
cost growth on the KC-46 Tanker program.
"We are seeing the results of our One Boeing approach as our teams work
together across the Boeing enterprise to deliver value to our customers and
grow our business. In the quarter, we generated improved revenue and earnings,
delivered strong cash and captured $27 billion in new orders," said Boeing
Chairman, President and Chief Executive Officer Dennis Muilenburg.
"We celebrated the first anniversary of the launch of Boeing Global Services
and the one-year revenue service anniversary of the 737 MAX. We booked 239 net
commercial airplane orders in the quarter, which included 59 787s - further
demonstrating the value this airplane family brings to our customers. Solid
progress continued on the 777X program with the first two test aircraft
currently being built in the factory. We finalized the production contract for
28 F/A-18 Super Hornets for Kuwait, completed production of the 100th P-8
Poseidon, and conducted two successful tests for the U.S. Air Force's Minuteman
III. Our services business delivered the first 737 Boeing Converted Freighter
and secured performance based logistics contracts to support rotorcraft in the
Netherlands. Additionally, customers continued to recognize the value of our
digital solutions with Etihad Airways signing a contract to implement our crew
management solutions."
"Continued services growth, increasing defense volume and strong performance of
our commercial business, as well as our positive market outlook, give us the
confidence to raise our revenue and Commercial Airplanes margin guidance for
the year. We remain focused on execution, driving innovation, continuing to
develop and maintain the best team and talent in the industry, and increasing
value for our customers, shareholders, employees and other stakeholders."
Table 2. Cash Flow Second Quarter First Half
(Millions) 2018 2017 2018 2017
Operating Cash Flow $4,680 $4,949 $7,816 $7,047
Less Additions to Property, Plant & Equipment ($376) ($439) ($770) ($905)
Free Cash Flow* $4,304 $4,510 $7,046 $6,142
* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on
page 7, "Non-GAAP Measures Disclosures."
Operating cash flow in the quarter of $4.7 billion reflects planned higher
commercial airplane production rates, strong operating performance, and timing
of receipts and expenditures (Table 2). During the quarter, the company
repurchased 8.6 million shares for $3.0 billion, leaving $12.0 billion
remaining under the current repurchase authorization which is expected to be
completed over approximately the next 18 to 24 months. The company also paid
$1.0 billion in dividends in the quarter, reflecting a 20 percent increase in
dividends per share compared to the same period of the prior year.
Table 3. Cash, Marketable Securities and Debt Quarter-End
Balances
(Billions) Q2 18 Q1 18
Cash $8.1 $9.2
Marketable Securities1 $1.7 $0.7
Total $9.8 $9.9
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $9.6 $10.0
Boeing Capital, including intercompany loans $2.5 $2.5
Total Consolidated Debt $12.1 $12.5
1 Marketable securities consists primarily of time deposits due within one year
classified as "short-term investments."
Cash and investments in marketable securities totaled $9.8 billion, compared to
$9.9 billion at the beginning of the quarter (Table 3). Debt was $12.1 billion,
down from $12.5 billion at the beginning of the quarter due to repayment of
debt.
Total company backlog at quarter-end was $488 billion, up from $486 billion at
the beginning of the quarter, and included net orders for the quarter of $27
billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Second Quarter First Half
Airplanes
(Dollars in Millions) 2018 2017 Change 2018 2017 Change
Commercial Airplanes 194 183 6% 378 352 7%
Deliveries
Revenues $14,481 $14,280 1% $28,133 $27,233 3%
Earnings from Operations $1,644 $1,282 28% $3,152 $2,152 46%
Operating Margin 11.4% 9.0% 2.4 11.2% 7.9% 3.3
Pts Pts
Commercial Airplanes second-quarter revenue was $14.5 billion reflecting higher
deliveries and mix (Table 4). Second-quarter operating margin increased to 11.4
percent, reflecting strong operating performance on production programs,
including a higher 787 margin, partially offset by a charge of $307 million
related to cost growth on the KC-46 Tanker program. This cost growth was
primarily due to higher estimated costs of incorporating changes into six
flight test and two early build aircraft as well as additional costs as we
progress through late stage testing and the certification process. We continue
to make steady progress towards final certification for KC-46 Tanker and
recently completed all flight tests required to deliver the first aircraft,
which is expected to be in October this year as now agreed upon with the U.S.
Air Force.
During the quarter, Commercial Airplanes delivered 194 airplanes, including
delivery of the first 737 MAX airplanes to Jet Airways, Ethiopian Airlines, and
Xiamen Airlines. The 737 MAX program celebrated the one year anniversary of
entering revenue flight service and continues to be well received in the market
with over 4,600 orders since its launch. The 777X program remains on track for
delivery in 2020 as the first two test airplanes moved into the low-rate
initial production line.
Commercial Airplanes booked 239 net orders during the quarter, including 91
widebodies. Backlog remains robust with nearly 5,900 airplanes valued at $416
billion.
Defense, Space & Security
Table 5. Defense, Space & Second Quarter First Half
Security
(Dollars in Millions) 2018 2017 Change 2018 2017 Change
Revenues $5,593 $5,142 9% $11,355 $10,254 11%
Earnings from Operations $521 $614 (15)% $1,170 $1,163 1%
Operating Margin 9.3% 11.9% (2.6) 10.3% 11.3% (1.0)
Pts Pts
Defense, Space & Security second-quarter revenue increased to $5.6 billion
driven by F/A-18 and weapons volume (Table 5). Second-quarter operating margin
was 9.3 percent, primarily reflecting KC-46 Tanker cost growth of $111 million,
partially offset by solid execution and favorable mix.
During the quarter, Defense, Space & Security finalized a production contract
for 28 F/A-18 Super Hornets for Kuwait, received contracts for 18 additional F/
A-18 Super Hornets and 3 P-8 Poseidon aircraft for the U.S Navy, and was
awarded a multi-year contract for 58 V-22 Osprey aircraft. Significant
milestones during the quarter included induction of the first F/A-18 aircraft
into the Service Life Modification program, two successful tests for the U.S.
Air Force's Minuteman III, and the completion of the 100th P-8 Poseidon
aircraft. On the commercial satellites side, we successfully completed O3b
mPOWER preliminary design review with SES.
Backlog at Defense, Space & Security was $52 billion, of which 35 percent
represents orders from international customers.
Global Services
Table 6. Global Second Quarter First Half
Services
(Dollars in Millions) 2018 2017 Change 2018 2017 Change
Revenues $4,090 $3,552 15% $8,033 $7,205 11%
Earnings from $603 $569 6% $1,247 $1,192 5%
Operations
Operating Margin 14.7% 16.0% (1.3) 15.5% 16.5% (1.0)
Pts Pts
Global Services second-quarter revenue increased to $4.1 billion, reflecting
growth across the portfolio (Table 6). Second-quarter operating margin was 14.7
percent reflecting product and services mix.
During the quarter, Global Services was awarded an F/A-18 depot maintenance
contract for the U.S. Navy and Marine Corps and secured rotorcraft performance
based logistics contracts for the Netherlands. Global Services also contracted
to implement crew management solutions at Etihad Airways and captured a Global
Fleet Care contract for Primera Air's 737 fleet. Global Services also entered
into an agreement to acquire KLX Aerospace which will broaden our range of
offerings and increase customer value, and agreed to a strategic partnership
with Safran for auxiliary power units as we strengthen Boeing's vertical
capabilities and expand our services portfolio.
Additional Financial Information
Table 7. Additional Financial Information Second Quarter First Half
(Dollars in Millions) 2018 2017 2018 2017
Revenues
Boeing Capital $72 $72 $137 $164
Unallocated items, eliminations and other $22 $5 ($18) $156
Earnings from Operations
Boeing Capital $24 $25 $44 $64
FAS/CAS service cost adjustment $317 $357 $682 $703
Other unallocated items and eliminations ($399) ($317) ($710) ($538)
Other (loss)/income, net ($15) $25 $51 $51
Interest and debt expense ($109) ($93) ($211) ($180)
Effective tax rate 15.1% 29.0% 13.9% 27.8%
At quarter-end, Boeing Capital's net portfolio balance was $3.0 billion. Total
pension expense for the second quarter was $70 million, down from $94 million
in the same period of the prior year. The change in earnings from other
unallocated items and eliminations is primarily due to the previously announced
litigation charge. The effective tax rate for the second quarter decreased from
the same period in the prior year primarily due to the reduction of the federal
tax rate to 21%.
Outlook
The Company's 2018 guidance is updated below (Table 8).
Table 8. 2018 Financial Outlook Current Prior
(Dollars in Billions, except per share data) Guidance Guidance
The Boeing Company
Revenue $97.0 - 99.0 $96.0 - 98.0
GAAP Earnings Per Share $16.40 - 16.60 $16.40 - 16.60
Core Earnings Per Share* $14.30 - 14.50 $14.30 - 14.50
Operating Cash Flow $15.0 - 15.5 $15.0 - 15.5
Commercial Airplanes
Deliveries 810 - 815 810 - 815
Revenue $59.5 - 60.5 $59.5 - 60.5
Operating Margin >11.5% 11.5%
Defense, Space & Security
Revenue $22.0 - 23.0 $21.5 - 22.5
Operating Margin 10.0 - 10.5% 11.0%
Global Services
Revenue $15.5 - 16.0 $15.0 - 15.5
Operating Margin 15.5% 15.5%
Boeing Capital
Portfolio Size Stable Stable
Revenue $0.2 $0.2
Pre-Tax Earnings $0.07 $0.05
Research & Development $3.7 $3.7
Capital Expenditures $2.2 $2.2
Pension Expense 1 $0.1 $0.1
Effective Tax Rate 16.0% 16.0%
* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on
page 7, "Non-GAAP Measures Disclosures."
1 Approximately $1.4 billion of pension expense is expected to be allocated to
the business segments
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information determined under
Generally Accepted Accounting Principles in the United States of America (GAAP)
with certain non-GAAP financial information. The non-GAAP financial information
presented excludes certain significant items that may not be indicative of, or
are unrelated to, results from our ongoing business operations. We believe that
these non-GAAP measures provide investors with additional insight into the
company's ongoing business performance. These non-GAAP measures should not be
considered in isolation or as a substitute for the related GAAP measures, and
other companies may define such measures differently. We encourage investors to
review our financial statements and publicly-filed reports in their entirety
and not to rely on any single financial measure. The following definitions are
provided:
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
Core operating earnings is defined as GAAP earnings from operations excluding
the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment
represents the difference between the FAS pension and postretirement service
costs calculated under GAAP and costs allocated to the business segments. Core
operating margin is defined as core operating 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 the FAS/CAS
service cost adjustment and Non-operating pension and postretirement expenses.
Non-operating pension and postretirement expenses represent the components of
net periodic benefit costs other than service cost. Pension costs, comprising
service and prior service costs computed in accordance with GAAP are allocated
to Commercial Airplanes and BGS businesses supporting commercial customers.
Pension costs allocated to BDS and BGS businesses supporting government
customers are computed in accordance with U.S. Government Cost Accounting
Standards (CAS), which employ different actuarial assumptions and accounting
conventions than GAAP. CAS costs are allocable to government contracts. Other
postretirement benefit costs are allocated to all business segments based on
CAS, which is generally based on benefits paid. Management uses core operating
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 non-service pension and post-retirement
costs, which primarily represent costs driven by market factors and costs not
allocable to government contracts. A reconciliation between the GAAP and
non-GAAP measures is provided on pages 14-15.
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 generally identify these
forward-looking statements. Examples of forward-looking statements include
statements relating to our future financial condition and operating results, as
well as any other statement that does not directly relate to any historical or
current fact. Forward-looking statements are based on expectations and
assumptions that we believe to be reasonable when made, but that may not prove
to be accurate. These statements are not guarantees and are subject to risks,
uncertainties, and changes in circumstances that are difficult to predict. Many
factors could cause actual results to differ materially and adversely from
these forward-looking statements. Among these factors are risks related to: (1)
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 commercial
aircraft production rate changes, 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)
threats to the security of our or our customers' information; (14) potential
adverse developments in new or pending litigation and/or government
investigations; (15) customer and aircraft concentration in our customer
financing portfolio; (16) changes in our ability to obtain debt on commercially
reasonable terms and at competitive rates; (17) realizing the anticipated
benefits of mergers, acquisitions, joint ventures/strategic alliances or
divestitures; (18) the adequacy of our insurance coverage to cover significant
risk exposures; (19) potential business disruptions, including those related to
physical security threats, information technology or cyber-attacks, epidemics,
sanctions or natural disasters; (20) work stoppages or other labor disruptions;
(21) substantial pension and other postretirement benefit obligations; (22)
potential environmental liabilities.
Additional information concerning these and other factors can be found in our
filings with the Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K. Any forward-looking statement speaks only as of the date on which
it is made, and we assume no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events, or otherwise,
except as required by law.
Contact:
Investor Relations: Maurita Sutedja or Ben Hackman (312) 544-2140
Communications: Allison Bone (312) 544-2002
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
In the first quarter of 2018, we adopted the following Accounting Standards
Updates (ASU), which are reflected in the unaudited Consolidated Financial
Statements on pages 9-14: ASU 2014-09, Revenue from Contracts with Customers
(Topic 606); ASU 2017-07, Compensation - Retirement Benefits (Topic 715):
Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost; ASU 2016-18 Statement of Cash Flows (Topic 230)
Restricted Cash; and ASU 2018-02, Income Statement-Reporting Comprehensive
Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated
Other Comprehensive Income.
Six months ended Three months ended
June 30 June 30
(Dollars in millions, except per share 2018 2017 2018 2017
data)
Sales of products $42,385 $39,885 $21,565 $20,518
Sales of services 5,255 5,127 2,693 2,533
Total revenues 47,640 45,012 24,258 23,051
Cost of products (34,252) (32,886) (17,436) (16,824)
Cost of services (4,075) (3,863) (2,083) (1,865)
Boeing Capital interest expense (33) (26) (17) (13)
Total costs and expenses (38,360) (36,775) (19,536) (18,702)
9,280 8,237 4,722 4,349
Income from operating investments, net 80 120 6 39
General and administrative expense (2,191) (1,972) (1,194) (1,043)
Research and development expense, net (1,591) (1,649) (827) (813)
Gain/(loss) on dispositions, net 7 3 (2)
Earnings from operations 5,585 4,736 2,710 2,530
Other income/(loss), net 51 51 (15) 25
Interest and debt expense (211) (180) (109) (93)
Earnings before income taxes 5,425 4,607 2,586 2,462
Income tax expense (752) (1,279) (390) (713)
Net earnings $4,673 $3,328 $2,196 $1,749
Basic earnings per share $7.97 $5.47 $3.77 $2.91
Diluted earnings per share $7.88 $5.41 $3.73 $2.87
Cash dividends paid per share $3.42 $2.84 $1.71 $1.42
Weighted average diluted shares 592.9 615.3 588.7 609.6
(millions)
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data) June 30 December 31
2018 2017
Assets
Cash and cash equivalents $8,121 $8,813
Short-term and other investments 1,649 1,179
Accounts receivable, net 2,823 2,894
Unbilled receivables, net 9,868 8,194
Current portion of customer financing, net 294 309
Inventories 61,250 61,388
Other current assets 2,396 2,417
Total current assets 86,401 85,194
Customer financing, net 2,817 2,756
Property, plant and equipment, net of accumulated 12,605 12,672
depreciation of $18,137 and $17,641
Goodwill 5,550 5,559
Acquired intangible assets, net 2,494 2,573
Deferred income taxes 325 321
Investments 1,203 1,260
Other assets, net of accumulated amortization of $523 and 1,800 2,027
$482
Total assets $113,195 $112,362
Liabilities and equity
Accounts payable $12,904 $12,202
Accrued liabilities 12,240 13,069
Advances and progress billings 50,970 48,042
Short-term debt and current portion of long-term debt 1,611 1,335
Total current liabilities 77,725 74,648
Deferred income taxes 1,900 2,188
Accrued retiree health care 5,444 5,545
Accrued pension plan liability, net 16,118 16,471
Other long-term liabilities 2,875 2,015
Long-term debt 10,507 9,782
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 6,676 6,804
Treasury stock, at cost - 436,377,479 and 421,222,326 (49,342) (43,454)
shares
Retained earnings 52,303 49,618
Accumulated other comprehensive loss (16,139) (16,373)
Total shareholders' equity (1,441) 1,656
Noncontrolling interests 67 57
Total equity (1,374) 1,713
Total liabilities and equity $113,195 $112,362
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six months ended
June 30
(Dollars in millions) 2018 2017
Cash flows - operating activities:
Net earnings $4,673 $3,328
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Non-cash items -
Share-based plans expense 98 98
Depreciation and amortization 1,008 956
Investment/asset impairment charges, net 44 46
Customer financing valuation (benefit)/expense (2) 5
Gain on dispositions, net (7)
Other charges and credits, net 112 135
Changes in assets and liabilities -
Accounts receivable 62 (163)
Unbilled receivables (1,675) (950)
Advances and progress billings 2,931 3,916
Inventories 408 (1,036)
Other current assets 2 (148)
Accounts payable 682 419
Accrued liabilities (922) (570)
Income taxes receivable, payable and deferred 269 774
Other long-term liabilities (65) (18)
Pension and other postretirement plans (57) 13
Customer financing, net (97) 342
Other 352 (100)
Net cash provided by operating activities 7,816 7,047
Cash flows - investing activities:
Property, plant and equipment additions (770) (905)
Property, plant and equipment reductions 41 25
Contributions to investments (1,537) (1,820)
Proceeds from investments 1,028 1,441
Purchase of distribution rights (56) (131)
Other (1) 7
Net cash used by investing activities (1,295) (1,383)
Cash flows - financing activities:
New borrowings 3,648 874
Debt repayments (2,708) (56)
Contributions from noncontrolling interests 20
Stock options exercised 61 240
Employee taxes on certain share-based payment arrangements (236) (112)
Common shares repurchased (5,965) (5,000)
Dividends paid (1,997) (1,720)
Net cash used by financing activities (7,177) (5,774)
Effect of exchange rate changes on cash and cash equivalents, (36) 52
including restricted
Net decrease in cash & cash equivalents, including restricted (692) (58)
Cash & cash equivalents, including restricted, at beginning of 8,887 8,869
year
Cash & cash equivalents, including restricted, at end of 8,195 8,811
period
Less restricted cash & cash equivalents, included in 74 74
Investments
Cash and cash equivalents at end of period $8,121 $8,737
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Six months ended Three months ended
June 30 June 30
(Dollars in millions) 2018 2017 2018 2017
Revenues:
Commercial Airplanes $28,133 $27,233 $14,481 $14,280
Defense, Space & Security 11,355 10,254 5,593 5,142
Global Services 8,033 7,205 4,090 3,552
Boeing Capital 137 164 72 72
Unallocated items, eliminations and other (18) 156 22 5
Total revenues $47,640 $45,012 $24,258 $23,051
Earnings from operations:
Commercial Airplanes $3,152 $2,152 $1,644 $1,282
Defense, Space & Security 1,170 1,163 521 614
Global Services 1,247 1,192 603 569
Boeing Capital 44 64 24 25
Segment operating profit 5,613 4,571 2,792 2,490
Unallocated items, eliminations and other (710) (538) (399) (317)
FAS/CAS service cost adjustment 682 703 317 357
Earnings from operations 5,585 4,736 2,710 2,530
Other income/(loss), net 51 51 (15) 25
Interest and debt expense (211) (180) (109) (93)
Earnings before income taxes 5,425 4,607 2,586 2,462
Income tax expense (752) (1,279) (390) (713)
Net earnings $4,673 $3,328 $2,196 $1,749
Research and development expense, net:
Commercial Airplanes $1,099 $1,217 $550 $592
Defense, Space & Security 402 392 219 196
Global Services 71 63 37 35
Other 19 (23) 21 (10)
Total research and development expense, $1,591 $1,649 $827 $813
net
Unallocated items, eliminations and
other:
Share-based plans ($36) ($46) ($18) ($25)
Deferred compensation (56) (96) (27) (46)
Amortization of previously capitalized (48) (46) (23) (22)
interest
Eliminations and other unallocated items (570) (350) (331) (224)
Sub-total (included in core operating (710) (538) (399) (317)
earnings)
Pension FAS/CAS service cost adjustment 520 540 237 278
Postretirement FAS/CAS service cost 162 163 80 79
adjustment
FAS/CAS service cost adjustment $682 $703 $317 $357
Total ($28) $165 ($82) $40
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries Six months ended Three months ended
June 30 June 30
Commercial Airplanes 2018 2017 2018 2017
737 269 236 137 123
747 3 4 (1) 1 3
767 9 5 5 3
777 25 42 13 21
787 72 65 38 33
Total 378 352 194 183
Note: Aircraft accounted for as revenues by BCA and as a note receivable in
consolidation identified by parentheses
Defense, Space & Security
AH-64 Apache (New) - 5 - 2
AH-64 Apache (Remanufactured) 6 28 - 15
C-17 Globemaster III - - - -
CH-47 Chinook (New) 9 4 5 1
CH-47 Chinook (Renewed) 8 19 4 10
F-15 Models 5 7 3 4
F/A-18 Models 5 12 - 6
P-8 Models 8 9 4 5
Commercial and Civil Satellites - 3 - 2
Military Satellites - - - -
Total backlog (Dollars in millions) June 30 December 31
2018 2017
Commercial Airplanes $415,723 $410,446
Defense, Space & Security 51,925 44,049
Global Services 20,388 19,605
Total backlog $488,036 $474,100
Contractual backlog $464,237 $456,444
Unobligated backlog 23,799 17,656
Total backlog $488,036 $474,100
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 7 of this release
for additional information on the use of these non-GAAP financial measures.
(Dollars in millions, 2018 Guidance Second Quarter Second Quarter
except per share data) 2018 2017
$ Per $ Per $ Per
millions Share millions Share millions Share
Revenues 24,258 23,051
Earnings from operations 2,710 2,530
(GAAP)
Operating margins 11.2% 11.0%
FAS/CAS service cost
adjustment:
Pension FAS/CAS service (237) (278)
cost adjustment
Postretirement FAS/CAS (80) (79)
service cost adjustment
FAS/CAS service cost (317) (357)
adjustment ($1,395)
Core operating earnings $2,393 $2,173
(non-GAAP)
Core operating margins 9.9% 9.4%
(non-GAAP)
Diluted earnings per $16.40 $3.73 $2.87
share (GAAP) - 16.60
Pension FAS/CAS service ($237) (0.40) ($278) (0.46)
cost adjustment ($1,395)
Postretirement FAS/CAS (80) (0.14) (79) (0.13)
service cost adjustment
Non-operating pension ($165) (6) (0.01) (28) (0.05)
expense
Non-operating 24 0.04 30 0.05
postretirement expense
Provision for deferred 63 0.11 125 0.21
income taxes on
adjustments 1
Subtotal of adjustments ($2.10) ($236) ($0.40) ($230) ($0.38)
Core earnings per share $14.30 $3.33 $2.49
(non-GAAP) - 14.50
Weighted average diluted 585 - 588.7 609.6
shares (in millions) 590
1 The income tax impact is calculated using the U.S. corporate statutory tax
rate in effect for non-GAAP adjustments.
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 7 of this release
for additional information on the use of these non-GAAP financial measures.
(Dollars in millions, 2018 Guidance First Half 2018 First Half 2017
except per share data)
$ Per $ Per $ Per
millions Share millions Share millions Share
Revenues 47,640 45,012
Earnings from operations 5,585 4,736
(GAAP)
Operating margins 11.7% 10.5%
FAS/CAS service cost
adjustment:
Pension FAS/CAS service (520) (540)
cost adjustment
Postretirement FAS/CAS (162) (163)
service cost adjustment
FAS/CAS service cost (682) (703)
adjustment ($1,395)
Core operating earnings $4,903 $4,033
(non-GAAP)
Core operating margins 10.3% 9.0%
(non-GAAP)
Diluted earnings per $16.40 $7.88 $5.41
share (GAAP) - 16.60
Pension FAS/CAS service ($520) (0.88) ($540) (0.88)
cost adjustment ($1,395)
Postretirement FAS/CAS (162) (0.27) (163) (0.26)
service cost adjustment
Non-operating pension ($165) (48) (0.08) (62) (0.10)
expense
Non-operating 48 0.08 60 0.10
postretirement expense
Provision for deferred 143 0.24 247 0.40
income taxes on
adjustments 1
Subtotal of adjustments ($2.10) ($539) ($0.91) ($458) ($0.74)
Core earnings per share $14.30 $6.97 $4.67
(non-GAAP) - 14.50
Weighted average diluted 585 - 592.9 615.3
shares (in millions) 590
1 The income tax impact is calculated using the U.S. corporate statutory tax
rate in effect for non-GAAP adjustments.
END
(END) Dow Jones Newswires
July 25, 2018 07:33 ET (11:33 GMT)
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