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2014

Boeing Reports Strong Third-Quarter Results and Raises 2013 EPS Guidance

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

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






















Table 1. Summary Financial Results


Third Quarter




Nine Months



(Dollars in Millions, except per share data)


2013


2012


Change


2013


2012


Change














Revenues



$22,130




$20,008



11%



$62,838




$59,396



6%














Non-GAAP*













Core Operating Earnings



$2,143




$1,793



20%



$6,038




$5,353



13%

Core Operating Margin


9.7

%


9.0

%


0.7 Pts


9.6

%


9.0

%


0.6 Pts

Core Earnings Per Share



$1.80




$1.55



16%



$5.20




$4.43



17%

Operating Cash Flow Before Pension Contributions



$4,308




$2,346



84%



$8,312




$4,854



71%

GAAP













Earnings From Operations



$1,803




$1,559



16%



$5,047




$4,666



8%

Operating Margin


8.1

%


7.8

%


0.3 Pts


8.0

%


7.9

%


0.1 Pts

Net Earnings



$1,158




$1,032



12%



$3,352




$2,922



15%

Earnings Per Share



$1.51




$1.35



12%



$4.36




$3.84



14%

Operating Cash Flow



$2,808




$1,596



76%



$6,799




$3,341



104%

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

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

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

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



















Table 2. Cash Flow


Third Quarter


Nine Months

(Millions)


2013


2012


2013


2012

Operating Cash Flow Before Pension Contributions*



$4,308




$2,346




$8,312




$4,854


 Pension Contributions



($1,500)




($750)




($1,513)




($1,513)


Operating Cash Flow



$2,808




$1,596




$6,799




$3,341


Less Additions to Property, Plant & Equipment



($484)




($428)




($1,460)




($1,208)


Free Cash Flow*



$2,324




$1,168




$5,339




$2,133


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











Table 3. Cash, Marketable Securities and Debt Balances


Quarter-End

(Billions)


Q3 13


Q2 13

Cash



$10.0




$8.7


Marketable Securities1



$5.9




$5.6


Total



$15.9




$14.3


Debt Balances:





The Boeing Company, net of intercompany loans to BCC



$7.0




$7.0


Boeing Capital Corporation, including intercompany loans



$2.6




$2.6


Total Consolidated Debt



$9.6




$9.6


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

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

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

Segment Results

Commercial Airplanes























Table 4. Commercial Airplanes


Third Quarter




Nine Months



(Dollars in Millions)


2013


2012


Change


2013


2012


Change














Commercial Airplanes Deliveries


170



149



14%


476



436



9%















Revenues



$13,987




$12,186



15%



$38,301




$34,966



10%


Earnings from Operations



$1,617




$1,153



40%



$4,289




$3,445



24 %


Operating Margins


11.6

%


9.5

%


2.1 Pts


11.2

%


9.9

%


1.3

Pts

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

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

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

Boeing Defense, Space & Security























Table 5. Defense, Space & Security

Third Quarter




Nine Months



(Dollars in Millions)

2013


2012


Change


2013


2012


Change

Revenues












Boeing Military Aircraft


$3,543




$3,710



(5)%




$11,541




$11,982



(4)%


Network & Space Systems


$2,231




$2,055



9%




$6,240




$5,887



6%


Global Services & Support


$2,272




$2,074



10%




$6,561




$6,395



3%


Total BDS Revenues


$8,046




$7,839



3%




$24,342




$24,264




Earnings from Operations












Boeing Military Aircraft


$221




$424



(48)%




$1,024




$1,176



(13)%


Network & Space Systems


$193




$179



8%




$486




$424



15%


Global Services & Support


$259




$224



16%




$771




$717



8%


Total BDS Earnings from Operations


$673




$827



(19)%




$2,281




$2,317



(2)%
























Operating Margins

8.4

%


10.5

%


(2.1) Pts



9.4

%


9.5

%


(0.1) Pts


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

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

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

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

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

Additional Financial Information


















Table 6. Additional Financial Information


Third Quarter


Nine Months

(Dollars in Millions)


2013


2012


2013


2012

Revenues









Boeing Capital Corporation



$94




$101




$303




$339


Other segment



$26




$27




$80




$79


Unallocated items and eliminations



($23)




($145)




($188)




($252)


Earnings from Operations









Boeing Capital Corporation



$35




$28




$98




$100


Other segment income/(expense)



$44




($74)




($57)




($217)


  Unallocated items and eliminations included in core operating earnings



($226)




($141)




($573)




($292)


  Unallocated pension/postretirement expense



($340)




($234)




($991)




($687)


Other income, net



$19




$17




$41




$39


Interest and debt expense



($95)




($110)




($290)




($330)


Effective tax rate


32.8

%


29.5

%


30.1

%


33.1

%

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

Outlook

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




Table 7. Financial Outlook


(Dollars in Billions, except per share data)

2013



The Boeing Company


     Revenue

$83 - 86

       Core Earnings Per Share*

$6.50 - 6.65

     Earnings Per Share

$5.40 - 5.55

       Operating Cash Flow Before Pension Contributions*

> $8.5

Operating Cash Flow 1

> $7



Boeing Commercial Airplanes


Deliveries 2

635 - 645

     Revenue

$51 - 53

     Operating Margin

> 10.0%



Boeing Defense, Space & Security


Revenue


  Boeing Military Aircraft

~$16.0

  Network & Space Systems

~$7.8

  Global Services & Support

~$8.2



Total BDS Revenue

$31.5 - 32.5



Operating Margin


  Boeing Military Aircraft

~ 9.0%

  Network & Space Systems

~ 7.5%

  Global Services & Support

~ 11.5%



Total BDS Operating Margin

> 9.25%



Boeing Capital Corporation


Portfolio Size

Lower

Revenue

~ $0.4

Pre-Tax Earnings

~ $0.05



Research & Development

~ $3.2

Capital Expenditures

~ $2.3

Pension Expense 3

~ $3.2

Effective Tax Rate

~ 31%

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

2 Assumes greater than 60 787 deliveries.

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

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

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

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

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

Non-GAAP Measures Disclosures

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

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

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

Operating Cash Flow Before Pension Contributions

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

Free Cash Flow

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

Caution Concerning Forward-Looking Statements

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

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

 

Contact:






Investor Relations:


Troy Lahr or Matt Welch (312) 544-2140

Communications:


Chaz Bickers (312) 544-2002

 

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


















Nine months ended September 30


Three months ended September 30

(Dollars in millions, except per share data)

2013



2012



2013



2012


Sales of products


$55,310




$51,441




$19,754




$17,415


Sales of services

7,528



7,955



2,376



2,593


Total revenues

62,838



59,396



22,130



20,008










Cost of products

(47,030)



(43,103)



(16,865)



(14,683)


Cost of services

(5,795)



(6,431)



(1,791)



(2,089)


Boeing Capital interest expense

(55)



(85)



(18)



(27)


Total costs and expenses

(52,880)



(49,619)



(18,674)



(16,799)



9,958



9,777



3,456



3,209


Income from operating investments, net

147



211



59



120


General and administrative expense

(2,856)



(2,774)



(956)



(916)


Research and development expense, net

(2,223)



(2,545)



(755)



(853)


Gain/(loss) on dispositions, net

21



(3)



(1)



(1)


Earnings from operations

5,047



4,666



1,803



1,559


Other income, net

41



39



19



17


Interest and debt expense

(290)



(330)



(95)



(110)


Earnings before income taxes

4,798



4,375



1,727



1,466


Income tax expense

(1,445)



(1,450)



(567)



(432)


Net earnings from continuing operations

3,353



2,925



1,160



1,034


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

(1)



(3)



(2)



(2)


Net earnings


$3,352




$2,922




$1,158




$1,032


Basic earnings per share from continuing operations


$4.40




$3.86




$1.53




$1.36


Net loss on disposal of discontinued operations, net of taxes








Basic earnings per share


$4.40




$3.86




$1.53




$1.36


Diluted earnings per share from continuing operations


$4.36




$3.84




$1.51




$1.35


Net loss on disposal of discontinued operations, net of taxes








Diluted earnings per share


$4.36




$3.84




$1.51




$1.35


Cash dividends paid per share


$1.455




$1.32




$0.485




$0.44


Weighted average diluted shares (millions)

769.8



762.3



769.1



765.2


 

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









(Dollars in millions, except per share data)

September 30 2013



December 31 2012


Assets




Cash and cash equivalents


$10,041




$10,341


Short-term and other investments

5,870



3,217


Accounts receivable, net

6,652



5,608


Current portion of customer financing, net

316



364


Deferred income taxes

43



28


Inventories, net of advances and progress billings

41,240



37,751


Total current assets

64,162



57,309


Customer financing, net

3,903



4,056


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

9,987



9,660


Goodwill

5,047



5,035


Acquired intangible assets, net

2,962



3,111


Deferred income taxes

5,957



6,753


Investments

1,168



1,180


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

1,447



1,792


Total assets


$94,633




$88,896


Liabilities and equity




Accounts payable


$10,657




$9,394


Accrued liabilities

12,384



12,995


Advances and billings in excess of related costs

20,216



16,672


Deferred income taxes and income taxes payable

5,504



4,485


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

919



1,436


Total current liabilities

49,680



44,982


Accrued retiree health care

7,415



7,528


Accrued pension plan liability, net

18,559



19,651


Non-current income taxes payable

299



366


Other long-term liabilities

936



1,429


Long-term debt

8,677



8,973


Shareholders' equity:




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

5,061



5,061


Additional paid-in capital

4,295



4,122


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

(16,865)



(15,937)


Retained earnings

32,647



30,037


Accumulated other comprehensive loss

(16,187)



(17,416)


  Total shareholders' equity

8,951



5,867


  Noncontrolling interest

116



100


  Total equity

9,067



5,967


  Total liabilities and equity


$94,633




$88,896


 

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










Nine months ended September 30

(Dollars in millions)

2013



2012


Cash flows – operating activities:




Net earnings


$3,352




$2,922


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




Non-cash items –




  Share-based plans expense

156



148


  Depreciation and amortization

1,323



1,313


  Investment/asset impairment charges, net

38



59


  Customer financing valuation benefit

(7)



(4)


  Loss on disposal of discontinued operations

1



5


  (Gain)/loss on dispositions, net

(21)



3


  Other charges and credits, net

48



559


  Excess tax benefits from share-based payment arrangements

(86)



(43)


Changes in assets and liabilities –




  Accounts receivable

(1,006)



150


  Inventories, net of advances and progress billings

(3,631)



(4,588)


  Accounts payable

943



857


  Accrued liabilities

(338)



(123)


  Advances and billings in excess of related costs

3,543



123


  Income taxes receivable, payable and deferred

1,336



1,085


  Other long-term liabilities

(52)



22


  Pension and other postretirement plans

954



571


  Customer financing, net

223



254


  Other

23



28


    Net cash provided by operating activities

6,799



3,341


Cash flows – investing activities:




Property, plant and equipment additions

(1,460)



(1,208)


Property, plant and equipment reductions

47



29


Acquisitions, net of cash acquired

(26)



(18)


Contributions to investments

(9,640)



(10,331)


Proceeds from investments

6,997



6,941


Purchase of distribution rights




(6)


    Net cash used by investing activities

(4,082)



(4,593)


Cash flows – financing activities:




New borrowings

547



34


Debt repayments

(1,397)



(1,273)


Repayments of distribution rights financing

(139)



(72)


Stock options exercised, other

871



96


Excess tax benefits from share-based payment arrangements

86



43


Employee taxes on certain share-based payment arrangements

(60)



(72)


Common shares repurchased

(1,799)




Dividends paid

(1,102)



(990)


   Net cash used by financing activities

(2,993)



(2,234)


Effect of exchange rate changes on cash and cash equivalents

(24)



19


Net decrease in cash and cash equivalents

(300)



(3,467)


Cash and cash equivalents at beginning of year


$10,341




$10,049


Cash and cash equivalents at end of period


$10,041




$6,582


 

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


















Nine months ended September 30


Three months ended September 30

(Dollars in millions)

2013



2012



2013



2012


Revenues:








Commercial Airplanes


$38,301




$34,966




$13,987




$12,186


Defense, Space & Security:








Boeing Military Aircraft

11,541



11,982



3,543



3,710


Network & Space Systems

6,240



5,887



2,231



2,055


Global Services & Support

6,561



6,395



2,272



2,074


Total Defense, Space & Security

24,342



24,264



8,046



7,839


Boeing Capital

303



339



94



101


Other segment

80



79



26



27


Unallocated items and eliminations

(188)



(252)



(23)



(145)


Total revenues


$62,838




$59,396




$22,130




$20,008


Earnings from operations:








Commercial Airplanes


$4,289




$3,445




$1,617




$1,153


Defense, Space & Security:








Boeing Military Aircraft

1,024



1,176



221



424


Network & Space Systems

486



424



193



179


Global Services & Support

771



717



259



224


Total Defense, Space & Security

2,281



2,317



673



827


Boeing Capital

98



100



35



28


Other segment

(57)



(217)



44



(74)


Unallocated items and eliminations

(1,564)



(979)



(566)



(375)


Earnings from operations

5,047



4,666



1,803



1,559


Other income, net

41



39



19



17


Interest and debt expense

(290)



(330)



(95)



(110)


Earnings before income taxes

4,798



4,375



1,727



1,466


Income tax expense

(1,445)



(1,450)



(567)



(432)


Net earnings from continuing operations

3,353



2,925



1,160



1,034


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

(1)



(3)



(2)



(2)


Net earnings


$3,352




$2,922




$1,158




$1,032










Research and development expense, net:








Commercial Airplanes


$1,297




$1,638




$432




$534


Defense, Space & Security

892



868



313



306


Other

34



39



10



13


Total research and development expense, net


$2,223




$2,545




$755




$853










Unallocated items and eliminations:








Share-based plans


($74)




($64)



(21)



(23)


Deferred compensation

(165)



(49)



(63)



(15)


Capitalized interest

(52)



(53)



(18)



(16)


Eliminations and other

(282)



(126)



(124)



(87)


  Sub-total (included in core operating earnings)

(573)



(292)



(226)



(141)


Pension

(1,045)



(608)



(356)



(204)


Postretirement

54



(79)



16



(30)


Total unallocated items and eliminations


($1,564)




($979)




($566)




($375)


 

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
















Deliveries


Nine months ended September 30


Three months ended September 30

Commercial Airplanes


2013




2012



2013




2012


737


330




310



112




102


747


16




21



4




8


767


17




20



5




7


777


73




62



26




20


787


40


(1)


23



23




12


Total


476




436



170




149


Note: Deliveries under operating lease are identified by parentheses.

















Defense, Space & Security











Boeing Military Aircraft











F/A-18 Models


36




36



12




12


F-15E Eagle


3




8








C-17 Globemaster III


8




8



2




3


CH-47 Chinook


32




40



15




18


AH-64 Apache


31




13



11




10


P-8 Models


7




3



2




2


AEW&C






2




















Network & Space Systems











Commercial and Civil Satellites


1




3





2

Military Satellites


1




6


1




3






























Contractual backlog (Dollars in billions)


September 30 2013



June 30

2013



March 31

2013



December 31

2012


  Commercial Airplanes



$344.3




$337.7




$322.0




$317.3


  Defense, Space & Security:









    Boeing Military Aircraft


26.4



26.5



26.6



29.2


    Network & Space Systems


9.9



10.2



9.6



10.1


    Global Services & Support


14.6



14.8



15.4



15.8


  Total Defense, Space & Security


50.9



51.5



51.6



55.1


Total contractual backlog



$395.2




$389.2




$373.6




$372.4


Unobligated backlog



$19.9




$21.1




$18.1




$17.9


Total backlog



$415.1




$410.3




$391.7




$390.3


Workforce


170,800



172,200



173,100



174,400






























 

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

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

(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin and core earnings per share with the most directly comparable GAAP financial measures, earnings from operations, operating margin and diluted earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial measures.




















Nine months ended September 30


Three months ended September 30



2013


2012


2013


2012


Revenues


$62,838




$59,396




$22,130




$20,008












GAAP Earnings From Operations


$5,047




$4,666




$1,803




$1,559



GAAP Operating Margin

8.0

%


7.9

%


8.1

%


7.8

%











Unallocated Pension/Postretirement Expense


$991




$687




$340




$234



Core Operating Earnings (non-GAAP)


$6,038




$5,353




$2,143




$1,793



Core Operating Margin (non-GAAP)

9.6

%


9.0

%


9.7

%


9.0

%











GAAP Diluted Earnings Per Share


$4.36




$3.84




$1.51




$1.35












Unallocated Pension/Postretirement Expense1


$0.84




$0.59




$0.29




$0.20












Core Earnings Per Share (non-GAAP)


$5.20




$4.43




$1.80




$1.55





















Weighted Average Diluted Shares (millions)

769.8



762.3



769.1



765.2



Increase in GAAP Earnings Per Share

14

%




12

%




Increase in Core Earnings Per Share

17

%




16

%




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

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

2013 Increase in Core Earnings Per Share

(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin and core earnings per share with the most directly comparable GAAP financial measures, earnings from operations, operating margin and diluted earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial measures.













Year Ended December 31, 2012


Year Ended December 31, 2013 Guidance




Earnings Per Share


Earnings Per Share


GAAP Diluted Earnings Per Share



$5.11



$5.40 - 5.55



Unallocated Pension/Postretirement Expense


0.77


a

1.10


b

Core Earnings Per Share (non-GAAP)



$5.88



$6.50 - 6.65









Weighted average diluted shares (millions)


763.8



768.0



2013 Change in GAAP Earnings per Share




~ 7%



2013 Increase in Core Earnings per Share




~ 12%





a

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



b

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

SOURCE Boeing



RELATED LINKS
http://www.boeing.com

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