Boeing Reports Strong Third-Quarter Results and Raises 2014 EPS Guidance

Core EPS (non-GAAP)* rose 19 percent to $2.14 on strong operating performance; GAAP EPS of $1.86

Revenue increased 7 percent to $23.8 billion reflecting higher deliveries

Backlog grew to a record $490 billion with over 5,500 commercial airplane orders

Solid operating cash flow before pension contributions* of $1.7 billion

Repurchased 8 million shares for $1 billion

2014 Core EPS guidance increased $0.20 to between $8.10 and $8.30

Oct 22, 2014, 07:30 ET from Boeing

CHICAGO, Oct. 22, 2014 /PRNewswire/ --

























Table 1. Summary Financial Results


Third Quarter




Nine months



(Dollars in Millions, except per share data)


2014


2013


Change


2014


2013


Change














Revenues



$23,784




$22,130



7%




$66,294




$62,838



5%















Non-GAAP*













Core Operating Earnings



$2,430




$2,143



13%




$6,516




$6,038



8%


Core Operating Margin


10.2%



9.7%



0.5 Pts



9.8%



9.6%



0.2 Pts


Core Earnings Per Share



$2.14




$1.80



19%




$6.30




$5.20



21%


Operating Cash Flow Before Pension Contributions



$1,689




$4,308



(61)%




$4,610




$8,312



(45)%


GAAP













Earnings From Operations



$2,119




$1,803



18%




$5,448




$5,047



8%


Operating Margin


8.9%



8.1%



0.8 Pts



8.2%



8.0%



0.2 Pts


Net Earnings



$1,362




$1,158



18%




$3,980




$3,352



19%


Earnings Per Share



$1.86




$1.51



23%




$5.36




$4.36



23%


Operating Cash Flow



$939




$2,808



(67)%




$3,860




$6,799



(43)%


* 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 revenue increased 7 percent to $23.8 billion on higher deliveries (Table 1). Core earnings per share (non-GAAP) increased 19 percent* to $2.14, driven by strong performance across the company's businesses. Third-quarter core operating earnings (non-GAAP) increased 13 percent* to $2.4 billion from the same period of the prior year. GAAP earnings per share was $1.86 and GAAP earnings from operations was $2.1 billion.

Core earnings per share guidance for 2014 increased to between $8.10 and $8.30, from $7.90 to $8.10 on continued strong operating performance. GAAP earnings per share guidance for 2014 increased to between $6.90 and $7.10, from $6.85 to $7.05. Operating cash flow before pension contributions* guidance increased to greater than $7 billion. Commercial Airplanes operating margin guidance increased to approximately 10.5 percent.

"Continued strong operating performance across our production and services businesses drove significant growth in earnings-per-share, and enabled us to continue to capture new business, pushing our order backlog to a record $490 billion," said Boeing Chairman and CEO Jim McNerney. "We added net new orders for 501 commercial airplanes, launched the high-capacity 737 MAX 200, captured a NASA contract for the Commercial Crew program, and returned $1.5 billion to shareholders through dividends and share repurchases."

"With three solid quarters behind us and confidence in our ongoing performance, we are increasing our earnings per share outlook for 2014, as our team remains focused on providing value to our customers and shareholders, profitably ramping up airplane production, executing on our development programs, and driving productivity and affordability throughout the enterprise," McNerney said.



















Table 2. Cash Flow


Third Quarter


Nine months

(Millions)


2014


2013


2014


2013

Operating Cash Flow Before Pension Contributions*



$1,689




$4,308




$4,610




$8,312


Pension Contributions



($750)




($1,500)




($750)




($1,513)


Operating Cash Flow



$939




$2,808




$3,860




$6,799


Less Additions to Property, Plant & Equipment



($622)




($484)




($1,568)




($1,460)


Free Cash Flow*



$317




$2,324




$2,292




$5,339


Operating cash flow before pension contributions* in the quarter was $1.7 billion, reflecting commercial airplane production rates, strong operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 8 million shares for $1 billion, leaving $5.8 billion remaining under the current repurchase authorization expected to be completed over approximately the next one to two years. The company also paid $0.5 billion in dividends in the quarter.











Table 3. Cash, Marketable Securities and Debt Balances


Quarter-End

(Billions)


Q3 14


Q2 14

Cash



$6.7




$7.5


Marketable Securities1



$3.4




$3.8


Total



$10.1




$11.3


Debt Balances:





The Boeing Company, net of intercompany loans to BCC



$6.4




$6.4


Boeing Capital, including intercompany loans



$2.5




$2.5


Total Consolidated Debt



$8.9




$8.9


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

Cash and investments in marketable securities totaled $10.1 billion at quarter-end (Table 3), down from $11.3 billion at the beginning of the quarter. Debt was $8.9 billion, unchanged from the beginning of the quarter.

Total company backlog at quarter-end was a record $490 billion, up from $440 billion at the beginning of the quarter, and included net orders for the quarter of $73 billion.

Segment Results

Commercial Airplanes

























Table 4. Commercial Airplanes


Third Quarter




Nine months



(Dollars in Millions)


2014


2013


Change


2014


2013


Change














Commercial Airplanes Deliveries


186



170



9%



528



476



11%















Revenues



$16,110




$13,987



15%




$43,151




$38,301



13%


Earnings from Operations



$1,797




$1,617



11%




$4,849




$4,289



13 %


Operating Margin


11.2%



11.6%



(0.4) Pts



11.2%



11.2%



0.0 Pts


Commercial Airplanes third-quarter revenue increased 15 percent to a record $16.1 billion on higher deliveries. Third-quarter operating margin was 11.2 percent, reflecting the dilutive impact of 787 and 747-8 deliveries and higher period costs partially offset by the delivery volume and continued strong operating performance (Table 4).

During the quarter, the company launched the 737 MAX 200 with a commitment from Ryanair for 100 airplanes. The 737 program has won nearly 2,300 firm orders for the 737 MAX since launch. Due to the continued strong demand for the 737 family of airplanes, the company intends to increase the 737 production rate from 42 to 47 per month in 2017, with recently announced plans to increase to 52 per month in 2018. Also during the quarter, the first GEnx-powered 787-9 Dreamliner was delivered.

Commercial Airplanes booked 501 net orders during the quarter. Backlog remains strong with over 5,500 airplanes valued at a record $430 billion.

Defense, Space & Security
























Table 5. Defense, Space & Security

Third Quarter




Nine months



(Dollars in Millions)

2014


2013


Change


2014


2013


Change

Revenues1












Boeing Military Aircraft


$3,537




$3,438



3%




$10,518




$11,059



(5)%


Network & Space Systems


$2,027




$2,231



(9)%




$5,823




$6,240



(7)%


Global Services & Support


$2,349




$2,377



(1)%




$6,952




$7,043



(1)%


Total BDS Revenues


$7,913




$8,046



(2)%




$23,293




$24,342



(4)%


Earnings from Operations1












Boeing Military Aircraft


$440




$245



80%




$937




$1,058



(11)%


Network & Space Systems


$189




$193



(2)%




$507




$486



4%


Global Services & Support


$227




$235



(3)%




$772




$737



5%


Total BDS Earnings from Operations


$856




$673



27%




$2,216




$2,281



(3)%


Operating Margin

10.8%



8.4%



2.4 Pts



9.5%



9.4%



0.1 Pts


1 During the first quarter of 2014, certain programs were realigned between Boeing Military Aircraft and Global Services & Support.

Defense, Space & Security's third-quarter revenue was $7.9 billion with an operating margin of 10.8 percent (Table 5).

Boeing Military Aircraft (BMA) third-quarter revenue was $3.5 billion, reflecting higher P-8 deliveries. Operating margin increased to 12.4 percent, reflecting improved performance. During the quarter, BMA delivered the first U.S Army Multiyear II configured Chinook.

Network & Space Systems (N&SS) third-quarter revenue was $2.0 billion, reflecting timing on United Launch Alliance (ULA) launches and lower government satellite volume. Operating margin increased to 9.3 percent, reflecting strong performance. During the quarter, N&SS was awarded a contract for NASA's Commercial Crew program.

Global Services & Support (GS&S) third-quarter revenue was $2.3 billion on lower volume, and operating margin was 9.7 percent reflecting delivery mix. During the quarter, GS&S delivered the first upgraded French Airborne Warning and Control System (AWACS) aircraft.

Backlog at Defense, Space & Security was $60 billion, of which 37 percent represents orders with international customers.

Additional Financial Information



















Table 6. Additional Financial Information


Third Quarter


Nine months

(Dollars in Millions)


2014


2013


2014


2013

Revenues









Boeing Capital



$91




$94




$263




$303


Unallocated items, eliminations and other



($330)




$3




($413)




($108)


Earnings from Operations









Boeing Capital



($11)




$35




$66




$98


Unallocated items, eliminations and other excluding unallocated pension/postretirement



($212)




($182)




($615)




($630)


Unallocated pension/postretirement



($311)




($340)




($1,068)




($991)


Other income/(loss), net



($9)




$19




$11




$41


Interest and debt expense



($79)




($95)




($252)




($290)


Effective tax rate


32.9%



32.8%



23.6%



30.1%


At quarter-end, Boeing Capital's net portfolio balance was $3.5 billion. Unallocated items, eliminations and other third-quarter revenue decreased from the same period in the prior year due to the elimination of intersegment revenue for two aircraft delivered under operating leases (Table 6). Total pension expense for the third quarter was $715 million, down from $775 million in the same period of the prior year.

Outlook

The company's 2014 financial guidance (Table 7) reflects continued strong performance in both businesses.






Table 7. 2014 Financial Outlook

Current


Prior

(Dollars in Billions, except per share data)

Guidance


Guidance





The Boeing Company




Revenue

$87.5 - 90.5


$87.5 - 90.5

   Core Earnings Per Share*

$8.10 - 8.30


$7.90 - 8.10

GAAP Earnings Per Share

$6.90 - 7.10


$6.85 - 7.05

  Operating Cash Flow Before Pension Contributions*

> $7


~ $7

  Operating Cash Flow 1

> $6.25


~ $6.25





Commercial Airplanes




  Deliveries 2

715 - 725


715 - 725

Revenue

$57.5 - 59.5


$57.5 - 59.5

Operating Margin

~ 10.5%


> 10.0%





Defense, Space & Security (revised for business realignment)




Revenue




Boeing Military Aircraft

~ $13.7


~ $14.2

Network & Space Systems

~ $7.7


~ $7.7

Global Services & Support

~ $9.1


~ $8.6





Total BDS Revenue

$30 - 31


$30 - 31





Operating Margin




Boeing Military Aircraft

~ 9.0%


~ 9.0%

Network & Space Systems

~ 8.5%


~ 8.5%

Global Services & Support

~ 11.0%


~ 11.0%





Total BDS Operating Margin

~ 9.5%


~ 9.5%





Boeing Capital




Portfolio Size

Lower


Lower

Revenue

~ $0.3


~ $0.3

Pre-Tax Earnings

~ $0.05


~ $0.05





Research & Development

~ $3.2


~ $3.2

Capital Expenditures

~ $2.3


~ $2.5

Pension Expense 3

~ $3.3


~ $3.2

Effective Tax Rate 4

~ 23%


~ 23%

1 After discretionary cash pension contributions of $0.75 billion for the current and prior guidance and assuming new aircraft financings of approximately $0.5 billion for the current guidance and under $0.5 billion for the prior guidance

2 Assumes approximately 110 787 deliveries for the current and prior guidance

3 Approximately $1.5 billion for the current guidance and $1.3 billion for the prior guidance is expected to be recorded in unallocated items and eliminations

4 Assumes the extension of the research and development tax credit

* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 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. 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.

Operating Cash Flow Before Pension Contributions

Operating cash flow before pension contributions is defined as GAAP operating cash flow without 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 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 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 Rob Martin (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)

2014



2013



2014



2013


Sales of products


$58,920




$55,310




$21,378




$19,754


Sales of services

7,374



7,528



2,406



2,376


Total revenues

66,294



62,838



23,784



22,130










Cost of products

(50,023)



(47,030)



(18,091)



(16,865)


Cost of services

(5,965)



(5,795)



(1,966)



(1,791)


Boeing Capital interest expense

(53)



(55)



(18)



(18)


Total costs and expenses

(56,041)



(52,880)



(20,075)



(18,674)



10,253



9,958



3,709



3,456


Income from operating investments, net

212



147



92



59


General and administrative expense

(2,727)



(2,856)



(932)



(956)


Research and development expense, net

(2,292)



(2,223)



(750)



(755)


Gain/(loss) on dispositions, net

2



21






(1)


Earnings from operations

5,448



5,047



2,119



1,803


Other income/(loss), net

11



41



(9)



19


Interest and debt expense

(252)



(290)



(79)



(95)


Earnings before income taxes

5,207



4,798



2,031



1,727


Income tax expense

(1,227)



(1,445)



(669)



(567)


Net earnings from continuing operations

3,980



3,353



1,362



1,160


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




(1)






(2)


Net earnings


$3,980




$3,352




$1,362




$1,158


Basic earnings per share from continuing operations


$5.43




$4.40




$1.88




$1.53


Net loss on disposal of discontinued operations, net of taxes








Basic earnings per share


$5.43




$4.40




$1.88




$1.53


Diluted earnings per share from continuing operations


$5.36




$4.36




$1.86




$1.51


Net loss on disposal of discontinued operations, net of taxes








Diluted earnings per share


$5.36




$4.36




$1.86




$1.51


Cash dividends paid per share


$2.19




$1.455




$0.73




$0.485


Weighted average diluted shares (millions)

742.3



769.8



731.9



769.1


 

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









(Dollars in millions, except per share data)

September 30 2014



December 31 2013


Assets




Cash and cash equivalents


$6,655




$9,088


Short-term and other investments

3,422



6,170


Accounts receivable, net

7,799



6,546


Current portion of customer financing, net

257



344


Deferred income taxes

27



14


Inventories, net of advances and progress billings

47,058



42,912


Total current assets

65,218



65,074


Customer financing, net

3,347



3,627


Property, plant and equipment, net of accumulated depreciation of $15,645 and $15,070

10,707



10,224


Goodwill

5,131



5,043


Acquired intangible assets, net

2,954



3,052


Deferred income taxes

2,546



2,939


Investments

1,203



1,204


Other assets, net of accumulated amortization of $447 and $448

1,547



1,500


Total assets


$92,653




$92,663


Liabilities and equity




Accounts payable


$11,136




$9,498


Accrued liabilities

12,677



14,131


Advances and billings in excess of related costs

21,127



20,027


Deferred income taxes and income taxes payable

6,685



6,267


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

1,579



1,563


Total current liabilities

53,204



51,486


Accrued retiree health care

6,494



6,528


Accrued pension plan liability, net

9,262



10,474


Non-current income taxes payable

709



156


Other long-term liabilities

1,046



950


Long-term debt

7,301



8,072


Shareholders' equity:




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

5,061



5,061


Additional paid-in capital

4,572



4,415


Treasury stock, at cost – 298,419,764 and 264,882,461 shares

(22,349)



(17,671)


Retained earnings

35,880



32,964


Accumulated other comprehensive loss

(8,653)



(9,894)


Total shareholders' equity

14,511



14,875


Noncontrolling interests

126



122


Total equity

14,637



14,997


Total liabilities and equity


$92,653




$92,663


 

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










Nine months ended September 30

(Dollars in millions)

2014



2013


Cash flows – operating activities:




Net earnings


$3,980




$3,352


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




Non-cash items –




Share-based plans expense

152



156


Depreciation and amortization

1,378



1,323


Investment/asset impairment charges, net

140



38


Customer financing valuation benefit

(26)



(7)


Loss on disposal of discontinued operations




1


Gain on dispositions, net

(2)



(21)


Other charges and credits, net

145



48


Excess tax benefits from share-based payment arrangements

(104)



(86)


Changes in assets and liabilities –




Accounts receivable

(1,385)



(1,006)


Inventories, net of advances and progress billings

(4,425)



(3,631)


Accounts payable

1,819



943


Accrued liabilities

(1,054)



(338)


Advances and billings in excess of related costs

1,100



3,543


Income taxes receivable, payable and deferred

887



1,336


Other long-term liabilities

(42)



(52)


Pension and other postretirement plans

746



954


Customer financing, net

494



223


Other

57



23


Net cash provided by operating activities

3,860



6,799


Cash flows – investing activities:




Property, plant and equipment additions

(1,568)



(1,460)


Property, plant and equipment reductions

27



47


Acquisitions, net of cash acquired

(163)



(26)


Contributions to investments

(7,874)



(9,640)


Proceeds from investments

10,608



6,997


Receipt of economic development program funds

4





Net cash provided/(used) by investing activities

1,034



(4,082)


Cash flows – financing activities:




New borrowings

105



547


Debt repayments

(910)



(1,397)


Payments to noncontrolling interests

(12)





Repayments of distribution rights and other asset financing

(184)



(139)


Stock options exercised, other

293



871


Excess tax benefits from share-based payment arrangements

104



86


Employee taxes on certain share-based payment arrangements

(94)



(60)


Common shares repurchased

(5,000)



(1,799)


Dividends paid

(1,596)



(1,102)


Net cash used by financing activities

(7,294)



(2,993)


Effect of exchange rate changes on cash and cash equivalents

(33)



(24)


Net decrease in cash and cash equivalents

(2,433)



(300)


Cash and cash equivalents at beginning of year

9,088



10,341


Cash and cash equivalents at end of period


$6,655




$10,041


 

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


















Nine months ended September 30


Three months ended September 30

(Dollars in millions)

2014



2013



2014



2013


Revenues:








Commercial Airplanes


$43,151




$38,301




$16,110




$13,987


Defense, Space & Security:








Boeing Military Aircraft

10,518



11,059



3,537



3,438


Network & Space Systems

5,823



6,240



2,027



2,231


Global Services & Support

6,952



7,043



2,349



2,377


Total Defense, Space & Security

23,293



24,342



7,913



8,046


Boeing Capital

263



303



91



94


Unallocated items, eliminations and other

(413)



(108)



(330)



3


Total revenues


$66,294




$62,838




$23,784




$22,130


Earnings from operations:








Commercial Airplanes


$4,849




$4,289




$1,797




$1,617


Defense, Space & Security:








Boeing Military Aircraft

937



1,058



440



245


Network & Space Systems

507



486



189



193


Global Services & Support

772



737



227



235


Total Defense, Space & Security

2,216



2,281



856



673


Boeing Capital

66



98



(11)



35


Unallocated items, eliminations and other

(1,683)



(1,621)



(523)



(522)


Earnings from operations

5,448



5,047



2,119



1,803


Other income/(loss), net

11



41



(9)



19


Interest and debt expense

(252)



(290)



(79)



(95)


Earnings before income taxes

5,207



4,798



2,031



1,727


Income tax expense

(1,227)



(1,445)



(669)



(567)


Net earnings from continuing operations

3,980



3,353



1,362



1,160


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



(1)





(2)


Net earnings


$3,980




$3,352




$1,362




$1,158










Research and development expense, net:








Commercial Airplanes


$1,422




$1,297




$452




$432


Defense, Space & Security

866



892



289



313


Other

4



34



9



10


Total research and development expense, net


$2,292




$2,223




$750




$755










Unallocated items, eliminations and other:








Share-based plans


($66)




($74)




($22)




($21)


Deferred compensation

(22)



(165)



(3)



(63)


Amortization of previously capitalized interest

(55)



(52)



(19)



(18)


Eliminations and other unallocated items

(472)



(339)



(168)



(80)


Sub-total (included in core operating earnings)

(615)



(630)



(212)



(182)


Pension

(1,135)



(1,045)



(331)



(356)


Postretirement

67



54



20



16


Total unallocated items, eliminations and other


($1,683)




($1,621)




($523)




($522)


 

 


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















Deliveries


Nine months ended September 30


Three months ended September 30

Commercial Airplanes


2014



2013



2014



2013



737


359



330



120



112



747


12

(2)


16



6

(2)


4



767


3



17



2



5



777


75



73



27



26



787


79



40

(1)


31



23



Total


528



476



186



170



Note: Deliveries under operating lease are identified by parentheses.















Defense, Space & Security










Boeing Military Aircraft










F/A-18 Models


36



36



13



12



F-15E Eagle


10



3



2






C-17 Globemaster III


7



8



2



2



CH-47 Chinook


46



32



14



15



AH-64 Apache


30



31



11



11



P-8 Models


6



7



4



2













Global Services & Support










AEW&C


3






1
















Network & Space Systems










Commercial and Civil Satellites


3



1



1





Military Satellites




1





1































Contractual backlog (Dollars in billions)


September 30 2014



June 30 2014



March 31 2014



December 31 2013


Commercial Airplanes



$429.6




$376.3




$374.0




$373.0


Defense, Space & Security:









Boeing Military Aircraft


21.2



23.8



23.2



23.6


Network & Space Systems


8.8



9.6



9.4



9.8


Global Services & Support


15.5



16.3



16.1



16.2


Total Defense, Space & Security


45.5



49.7



48.7



49.6


Total contractual backlog



$475.1




$426.0




$422.7




$422.6


Unobligated backlog



$14.9




$14.3




$17.1




$18.3


Total backlog



$490.0




$440.3




$439.8




$440.9


Workforce


168,000



169,300



169,000



168,400

























 

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.



















Third Quarter


Nine Months


Guidance


2014


2013


2014


2013


2014

Revenues

$23,784


$22,130


$66,294


$62,838













GAAP Earnings From Operations

$2,119


$1,803


$5,448


$5,047



GAAP Operating Margin

8.9%


8.1%


8.2%


8.0%













Unallocated Pension/Postretirement Expense

$311


$340


$1,068


$991


~ $1,360

Core Operating Earnings (non-GAAP)

$2,430


$2,143


$6,516


$6,038



Core Operating Margin (non-GAAP)

10.2%


9.7%


9.8%


9.6%













Increase/(Decrease) in GAAP Earnings From Operations

18%




8%





Increase/(Decrease) in Core Operating Earnings (non-GAAP)

13%




8%















GAAP Diluted Earnings Per Share

$1.86


$1.51


$5.36


$4.36


$6.90 - $7.10

Unallocated Pension/Postretirement Expense1

$0.28


$0.29


$0.94


$0.84


$1.20

Core Earnings Per Share (non-GAAP)

$2.14


$1.80


$6.30


$5.20


$8.10 - $8.30











Weighted Average Diluted Shares (millions)

731.9


769.1


742.3


769.8


~ 739

Increase/(Decrease) in GAAP Earnings Per Share

23%




23%





Increase/(Decrease) in Core Earnings Per Share (non-GAAP)

19%




21%





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

 

SOURCE Boeing



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