Boeing Reports Solid Third Quarter; Reaffirms Cash and Raises Revenue and EPS Guidance

Oct 24, 2018

CHICAGO, Oct. 24, 2018 /PRNewswire/ --

  • Revenue increased to $25.1 billion driven by higher defense and services volume
  • GAAP EPS of $4.07 and core EPS (non-GAAP)* of $3.58 on solid execution across the company
  • Strong operating cash flow of $4.6 billion; repurchased 7.0 million shares for $2.5 billion
  • Total backlog grew to $491 billion, including more than 5,800 commercial airplanes
  • Cash and marketable securities of $10.0 billion provide strong liquidity
  • Reaffirmed cash guidance; raised revenue and EPS guidance; updated segment margin guidance

 


















Table 1. Summary Financial
Results


Third Quarter




Nine Months



(Dollars in Millions, except per share
data)


2018


2017


Change


2018


2017


Change














Revenues


$25,146


$24,223


4%


$72,786


$69,235


5%














GAAP













Earnings From Operations


$2,227


$2,630


(15)%


$7,812


$7,366


6%

Operating Margin


8.9%


10.9%


(2.0) Pts


10.7%


10.6%


0.1 Pts

Net Earnings


$2,363


$1,810


31%


$7,036


$5,138


37%

Earnings Per Share


$4.07


$2.99


36%


$11.95


$8.39


42%

Operating Cash Flow


$4,559


$3,396


34%


$12,375


$10,443


19%

Non-GAAP*













Core Operating Earnings


$1,890


$2,284


(17)%


$6,793


$6,317


8%

Core Operating Margin


7.5%


9.4%


(1.9) Pts


9.3%


9.1%


0.2 Pts

Core Earnings Per Share


$3.58


$2.62


37%


$10.55


$7.28


45%


*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."     

The Boeing Company [NYSE: BA] reported third-quarter revenue of $25.1 billion driven by higher defense volume and services growth (Table 1). GAAP earnings per share increased to $4.07 and core earnings per share (non-GAAP)* increased to $3.58 primarily driven by strong operating performance at Commercial Airplanes and a tax benefit related to a tax settlement ($0.71 per share). Results also reflect charges related to planned investments in the newly awarded T-X Trainer and MQ-25 programs ($0.93 per share). Boeing delivered strong operating cash flow of $4.6 billion, repurchased $2.5 billion of shares, and paid $1.0 billion of dividends.

The company's revenue guidance increased $1.0 billion to between $98.0 and $100.0 billion, driven by defense volume and services growth, inclusive of the KLX acquisition. Operating cash flow guidance is reaffirmed at $15.0 to $15.5 billion. Full year GAAP earnings per share guidance is increased to between $16.90 and $17.10 from between $16.40 and $16.60 and core earnings per share (non-GAAP)* guidance is increased to between $14.90 and $15.10 from between $14.30 and $14.50 driven by a lower-than-expected tax rate and improved performance at Commercial Airplanes.

"Our teams continued to perform at a high level during the quarter, driving solid operating performance and robust cash generation, and continuing to deliver on our One Boeing advantage by bringing the best of Boeing to our customers," said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg.

"During the quarter we captured important new defense business, winning and investing in the MQ-25 and T-X programs and securing the MH-139 contract, clearly demonstrating the value Boeing brings to customers while positioning us well for future growth opportunities. Within the Commercial Airplanes business, the 777X static test airplane was completed and moved into test setup and the team's focus on execution across our production programs continued to drive outstanding performance and strong operating margins. Our Global Services business continues to deliver on total lifecycle value to our customers, with key wins in the quarter including P-8 Poseidon training contracts for the U.S. Navy and Royal Australian Air Force and an order from GECAS for 20 737-800 Boeing Converted Freighters. Additionally, we began integrating new data analytics tools, powered by Boeing AnalytX, into all Boeing Defence Australia support contracts, enhancing its position as a leading fleet services provider in the region."

"This strong underlying performance, along with growth across our businesses we've seen throughout the year, give us confidence to raise our 2018 revenue and earnings guidance and reaffirm our operating cash flow guidance."












Table 2. Cash Flow


Third Quarter


Nine Months

(Millions)


2018


2017


2018

2017

Operating Cash Flow


$4,559


$3,396


$12,375


$10,443

Less Additions to Property, Plant & Equipment


($457)


($399)


($1,227)


($1,304)

Free Cash Flow*


$4,102


$2,997


$11,148


$9,139


*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."     

Operating cash flow in the quarter increased to $4.6 billion, primarily driven by timing of receipts and expenditures as well as planned higher commercial airplane production rates and strong operating performance (Table 2). During the quarter, the company repurchased 7.0 million shares for $2.5 billion, leaving $9.6 billion remaining under the current repurchase authorization which is expected to be completed over approximately the next 12 to 18 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 Balances


Quarter-End

(Billions)


Q3 18

Q2 18

Cash


$8.0


$8.1

Marketable Securities1


$2.0


$1.7

Total


$10.0


$9.8

Debt Balances:





The Boeing Company, net of intercompany loans to BCC


$9.4


$9.6

Boeing Capital, including intercompany loans


$2.5


$2.5

Total Consolidated Debt


$11.9


$12.1


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

Cash and investments in marketable securities totaled $10.0 billion, compared to $9.8 billion at the beginning of the quarter (Table 3). Debt was relatively stable at $11.9 billion.

Total company backlog at quarter-end was $491 billion, up from $488 billion at the beginning of the quarter, and included net orders for the quarter of $28 billion.

Segment Results

Commercial Airplanes


















Table 4. Commercial Airplanes


Third Quarter




Nine Months



(Dollars in Millions)


2018


2017


Change


2018


2017


Change














Commercial Airplanes Deliveries


190


202


(6)%


568


554


3%














Revenues


$15,276


$15,393


(1)%


$43,409


$42,626


2%

Earnings from Operations


$2,023


$1,513


34%


$5,175


$3,665


41%

Operating Margin


13.2%


9.8%


3.4 Pts


11.9%


8.6%


3.3 Pts

Commercial Airplanes third-quarter revenue of $15.3 billion was relatively unchanged, reflecting lower deliveries largely offset by mix (Table 4). Third-quarter operating margin increased to 13.2 percent, reflecting higher 787 margin and strong operating performance on production programs, partially offset by $112 million of cost growth on the KC-46 Tanker program due to higher than expected effort to meet customer requirements to support delivery of the initial aircraft, as well as due to incremental delays in certification and testing.

During the quarter, Commercial Airplanes delivered 190 airplanes, including 57 737 MAX airplanes. The 777X program remains on track for delivery in 2020 as the static test airplane was completed and moved into test setup and the first two flight test airplanes were in production.

Commercial Airplanes booked 171 net orders during the quarter, valued at $13 billion. The 787 program has captured more than 100 orders in 2018 and nearly 1,400 orders since its launch. Backlog remains robust with more than 5,800 airplanes valued at $413 billion. Commercial Airplanes revenue guidance is reaffirmed at between $59.5 and $60.5 billion and margin guidance is increased to between 12% and 12.5% from greater than 11.5% on strong performance.

Defense, Space & Security

















Table 5. Defense, Space &
Security


Third Quarter




Nine Months



(Dollars in Millions)


2018


2017


Change


2018


2017


Change














Revenues


$5,729


$5,050


13%


$17,084


$15,304


12%

Earnings from Operations


($245)


$486


NM


$925


$1,649


NM

Operating Margin


(4.3)%


9.6%


(13.9) Pts


5.4%


10.8%


(5.4) Pts

Defense, Space & Security third-quarter revenue increased to $5.7 billion driven by increased volume across government satellites, KC-46 Tanker, F/A-18 and weapons (Table 5). Third-quarter operating margin was (4.3) percent, primarily reflecting $691 million of charges related to planned investments in the T-X and MQ-25 programs and $64 million related to cost growth on the KC-46 Tanker program.

During the quarter, Defense, Space & Security won key franchise program awards, including the T-X Trainer and MH-139 helicopter for the U.S. Air Force, the MQ-25 unmanned aircraft for the U.S. Navy, and the fourth KC-46 Tanker production lot. Significant milestones during the quarter included first flights of the Apache and Chinook for the Indian Air Force and receipt of Supplemental Type Certification for the KC-46 Tanker program, signifying completion of FAA certification. We also completed the acquisition of Millennium Space Systems, which will provide customers with advanced small-satellite technologies and flexible solutions.

Backlog at Defense, Space & Security was $58 billion, of which 31 percent represents orders from customers outside the U.S. Defense, Space & Security revenue guidance increased to between $22.5 and $23.0 billion from between $22.0 and $23.0 billion driven by higher volume and margin guidance is adjusted to greater than 6.5% from between 10% and 10.5% primarily to account for the investments in the business.

Global Services


















Table 6. Global Services


Third Quarter




Nine Months



(Dollars in Millions)


2018


2017


Change


2018


2017


Change














Revenues


$4,091


$3,579


14%


$12,124


$10,784


12%

Earnings from Operations


$543


$495


10%


$1,790


$1,687


6%

Operating Margin


13.3%


13.8%


(0.5) Pts


14.8%


15.6%


(0.8) Pts

Global Services third-quarter revenue increased to $4.1 billion, primarily driven by higher parts volume (Table 6). Third-quarter operating margin was 13.3 percent reflecting mix and higher period costs.

During the quarter, Global Services was awarded P-8 training contracts for the U.S. Navy and Royal Australian Air Force, captured an order from GECAS for 20 737-800 converted freighters, and completed the first P-8A heavy maintenance check for the U.S. Navy. Global Services also secured contracts for F/A-18 spares for the Defense Logistics Agency and KC-46 Tanker services for Lots 3 and 4. In early October, Global Services completed the acquisition of KLX, which will enhance our services business and allow us to deliver greater value to customers.

Global Services revenue guidance increased to between $16.0 and $16.5 billion from between $15.5 and $16.0 billion driven by higher volume and margin guidance is reaffirmed at approximately 15.5%.

Additional Financial Information














Table 7. Additional Financial Information


Third Quarter


Nine Months

(Dollars in Millions)


2018


2017


2018


2017

Revenues









Boeing Capital


$77


$70


$214


$234

Unallocated items, eliminations and other


($27)


$131


($45)


$287

Earnings from Operations









Boeing Capital


$27


$23


$71


$87

FAS/CAS service cost adjustment


$337


$346


$1,019


$1,049

Other unallocated items and eliminations


($458)


($233)


($1,168)


($771)

Other income, net


$12


$40


$63


$91

Interest and debt expense


($106)


($87)


($317)


($267)

Effective tax rate


(10.8)%


29.9%


6.9%


28.5%

At quarter-end, Boeing Capital's net portfolio balance was $3.1 billion. Revenue in other unallocated items and eliminations decreased primarily due to the 2017 sale of aircraft previously leased to customers. The change in earnings from other unallocated items and eliminations is primarily due to timing of expense allocations. The effective tax rate for the third quarter decreased from the same period in the prior year primarily due to a $412 million benefit related to a 2013-2014 tax settlement and 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

$98.0 - 100.0


$97.0 - 99.0





GAAP Earnings Per Share

$16.90 - 17.10


$16.40 - 16.60

Core Earnings Per Share*

$14.90 - 15.10


$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

12.0 - 12.5%


>11.5%





Defense, Space & Security




Revenue

$22.5 - 23.0


$22.0 - 23.0

Operating Margin

>6.5%


10.0 - 10.5%





Global Services




Revenue

$16.0 - 16.5


$15.5 - 16.0

Operating Margin

~15.5%


~15.5%





Boeing Capital




Portfolio Size

Stable


Stable

Revenue

~$0.2


~$0.2

Pre-Tax Earnings

~$0.08


~$0.07





Research & Development

~$3.5


~$3.7

Capital Expenditures

~$2.0


~$2.2

Pension Expense 1

~$0.2


~$0.1

Effective Tax Rate

~9.5%


~16.0%


*Non-GAAP measure; 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 9-15: 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.














Nine months ended
September 30


Three months ended
September 30

(Dollars in millions, except per share data)

2018


2017


2018


2017

Sales of products

$64,848


$61,667


$22,463


$21,782

Sales of services

7,938


7,568


2,683


2,441

Total revenues

72,786


69,235


25,146


24,223









Cost of products

(53,134)


(50,936)


(18,882)


(18,050)

Cost of services

(6,215)


(5,742)


(2,140)


(1,879)

Boeing Capital interest expense

(51)


(53)


(18)


(27)

Total costs and expenses

(59,400)


(56,731)


(21,040)


(19,956)


13,386


12,504


4,106


4,267

Income from operating investments, net

112


169


32


49

General and administrative expense

(3,345)


(2,890)


(1,154)


(918)

Research and development expense, net

(2,417)


(2,417)


(826)


(768)

Gain on dispositions, net

76




69



Earnings from operations

7,812


7,366


2,227


2,630

Other income, net

63


91


12


40

Interest and debt expense

(317)


(267)


(106)


(87)

Earnings before income taxes

7,558


7,190


2,133


2,583

Income tax (expense)/benefit

(522)


(2,052)


230


(773)

Net earnings

$7,036


$5,138


$2,363


$1,810









Basic earnings per share

$12.08


$8.49


$4.11


$3.03









Diluted earnings per share

$11.95


$8.39


$4.07


$2.99









Cash dividends paid per share

$5.13


$4.26


$1.71


$1.42









Weighted average diluted shares (millions)

588.9


612.8


580.8


606.3

 

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited) 







(Dollars in millions, except per share data)

September 30


December 31

2018

2017

Assets




Cash and cash equivalents

$8,034


$8,813

Short-term and other investments

1,956


1,179

Accounts receivable, net

2,893


2,894

Unbilled receivables, net

9,936


8,194

Current portion of customer financing, net

431


309

Inventories

62,038


61,388

Other current assets

2,398


2,417

Total current assets

87,686


85,194

Customer financing, net

2,785


2,756

Property, plant and equipment, net of accumulated depreciation of $18,328 and $17,641

12,571


12,672

Goodwill

5,722


5,559

Acquired intangible assets, net

2,530


2,573

Deferred income taxes

323


321

Investments

1,190


1,260

Other assets, net of accumulated amortization of $466 and $482

1,852


2,027

Total assets

$114,659


$112,362

Liabilities and equity




Accounts payable

$13,663


$12,202

Accrued liabilities

12,869


13,069

Advances and progress billings

51,496


48,042

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

1,389


1,335

Total current liabilities

79,417


74,648

Deferred income taxes

1,738


2,188

Accrued retiree health care

5,394


5,545

Accrued pension plan liability, net

15,927


16,471

Other long-term liabilities

2,905


2,015

Long-term debt

10,487


9,782

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

6,714


6,804

Treasury stock, at cost - 443,262,126 and 421,222,326 shares

(51,781)


(43,454)

Retained earnings

54,666


49,618

Accumulated other comprehensive loss

(15,949)


(16,373)

Total shareholders' equity

(1,289)


1,656

Noncontrolling interests

80


57

Total equity

(1,209)


1,713

Total liabilities and equity

$114,659


$112,362

 

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)








Nine months ended
September 30

(Dollars in millions)

2018


2017

Cash flows – operating activities:




Net earnings

$7,036


$5,138

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




Non-cash items – 




Share-based plans expense

150


151

Depreciation and amortization

1,531


1,470

Investment/asset impairment charges, net

63


75

Customer financing valuation (benefit)/expense

(3)


4

Gain on dispositions, net

(76)



Other charges and credits, net

158


196

Changes in assets and liabilities – 




Accounts receivable

10


(558)

Unbilled receivables

(1,732)


(1,805)

Advances and progress billings

3,457


4,714

Inventories

(173)


(800)

Other current assets

(5)


(337)

Accounts payable

1,181


780

Accrued liabilities

890


(102)

Income taxes receivable, payable and deferred

(252)


1,507

Other long-term liabilities

1


25

Pension and other postretirement plans

(89)


(550)

Customer financing, net

(175)


634

Other

403


(99)

   Net cash provided by operating activities

12,375


10,443

Cash flows – investing activities:




Property, plant and equipment additions

(1,227)


(1,304)

Property, plant and equipment reductions

117


30

Acquisitions, net of cash acquired

(250)



Contributions to investments

(2,145)


(2,815)

Proceeds from investments

1,369


2,612

Purchase of distribution rights

(56)


(131)

Other

(5)


7

   Net cash used by investing activities

(2,197)


(1,601)

Cash flows – financing activities:




New borrowings

4,696


876

Debt repayments

(4,029)


(83)

Contributions from noncontrolling interests

35



Stock options exercised

70


291

Employee taxes on certain share-based payment arrangements

(247)


(118)

Common shares repurchased

(8,415)


(7,500)

Dividends paid

(2,976)


(2,575)

   Net cash used by financing activities

(10,866)


(9,109)

Effect of exchange rate changes on cash and cash equivalents, including restricted

(37)


73

Net decrease in cash & cash equivalents, including restricted

(725)


(194)

Cash & cash equivalents, including restricted, at beginning of year

8,887


8,869

Cash & cash equivalents, including restricted, at end of period

8,162


8,675

Less restricted cash & cash equivalents, included in Investments

128


106

Cash and cash equivalents at end of period

$8,034


$8,569

 

The Boeing Company and Subsidiaries

Summary of Business Segment Data

(Unaudited)














Nine months ended
September 30


Three months ended
September 30

(Dollars in millions)

2018


2017


2018


2017

Revenues:








Commercial Airplanes

$43,409


$42,626


$15,276


$15,393

Defense, Space & Security

17,084


15,304


5,729


5,050

Global Services

12,124


10,784


4,091


3,579

Boeing Capital

214


234


77


70

Unallocated items, eliminations and other

(45)


287


(27)


131

Total revenues

$72,786


$69,235


$25,146


$24,223

Earnings/(loss) from operations:








Commercial Airplanes

$5,175


$3,665


$2,023


$1,513

Defense, Space & Security

925


1,649


(245)


486

Global Services

1,790


1,687


543


495

Boeing Capital

71


87


27


23

Segment operating profit

7,961


7,088


2,348


2,517

Unallocated items, eliminations and other

(1,168)


(771)


(458)


(233)

FAS/CAS service cost adjustment

1,019


1,049


337


346

Earnings from operations

7,812


7,366


2,227


2,630

Other income, net

63


91


12


40

Interest and debt expense

(317)


(267)


(106)


(87)

Earnings before income taxes

7,558


7,190


2,133


2,583

Income tax (expense)/benefit

(522)


(2,052)


230


(773)

Net earnings

$7,036


$5,138


$2,363


$1,810









Research and development expense, net:








Commercial Airplanes

$1,616


$1,755


$517


$538

Defense, Space & Security

613


599


211


207

Global Services

119


101


48


38

Other

69


(38)


50


(15)

Total research and development expense, net

$2,417


$2,417


$826


$768








Unallocated items, eliminations and other:








Share-based plans

($60)


($67)


($24)


($21)

Deferred compensation

(112)


(174)


(56)


(78)

Amortization of previously capitalized interest

(67)


(68)


(19)


(22)

Eliminations and other unallocated items

(929)


(462)


(359)


(112)

Sub-total (included in core operating earnings)

(1,168)


(771)


(458)


(233)

Pension FAS/CAS service cost adjustment

780


811


260


271

Postretirement FAS/CAS service cost adjustment

239


238


77


75

FAS/CAS service cost adjustment

$1,019


$1,049


$337


$346

Total

($149)


$278


($121)


$113

  

The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)










Deliveries


Nine months ended
September 30



Three months ended
September 30

Commercial Airplanes


2018


2017



2018


2017

737


407


381



138


145

747


5


8

(1)


2


4

767


13


7



4


2

777


37


58



12


16

787


106


100



34


35

Total


568


554



190


202

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)



8




3

AH-64 Apache (Remanufactured)


12


43



6


15

CH-47 Chinook (New)


11


6



2


2

CH-47 Chinook (Renewed)


14


28



6


9

F-15 Models


8


11



3


4

F/A-18 Models


10


18



5


6

P-8 Models


10


14



2


5

Commercial and Civil Satellites


1


3



1


Military Satellites



















Total backlog (Dollars in millions)


September 30


December 31

2018

2017

Commercial Airplanes


$413,064


$410,526

Defense, Space & Security


57,875


44,049

Global Services


20,240


19,605

Total backlog


$491,179


$474,180






Contractual backlog


$462,468


$456,524

Unobligated backlog


28,711


17,656

Total backlog


$491,179


$474,180







 

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, except per share data)

2018 Guidance


Third Quarter 2018


Third Quarter 2017


$ millions

Per Share


$ millions

Per Share


$ millions


Per Share

Revenues




25,146



24,223



Earnings from operations (GAAP)




2,227



2,630



Operating margins




8.9%



10.9%













FAS/CAS service cost adjustment:










Pension FAS/CAS service cost adjustment




(260)



(271)



Postretirement FAS/CAS service cost adjustment




(77)



(75)



FAS/CAS service cost adjustment

~($1,395)



(337)



(346)



Core operating earnings (non-GAAP)




$1,890



$2,284



Core operating margins (non-GAAP)




7.5%



9.4%













Diluted earnings per share (GAAP)


$16.90 - 17.10



$4.07




$2.99

Pension FAS/CAS service cost adjustment

~($1,395)



($260)

(0.45)


($271)


(0.45)

Postretirement FAS/CAS service cost adjustment



(77)

(0.13)


(75)


(0.12)

Non-operating pension expense

~($90)



(50)

(0.09)


(26)


(0.05)

Non-operating postretirement expense



29

0.05


31


0.05

Provision for deferred income taxes on adjustments 1




75

0.13


119


0.20

Subtotal of adjustments


($2.00)


($283)

($0.49)


($222)


($0.37)

Core earnings per share (non-GAAP)


$14.90 - 15.10



$3.58




$2.62











Weighted average diluted shares (in millions)

585 - 590




580.8




606.3


1 The income tax impact is calculated using the U.S. corporate statutory tax rate.

 

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, except per share data)

2018 Guidance


Nine Months 2018


Nine Months 2017


$ millions

Per Share


$ millions


Per Share


$ millions


Per Share

Revenues




72,786




69,235



Earnings from operations (GAAP)




7,812




7,366



Operating margins




10.7%




10.6%














FAS/CAS service cost adjustment:











Pension FAS/CAS service cost adjustment




(780)




(811)



Postretirement FAS/CAS service cost adjustment




(239)




(238)



FAS/CAS service cost adjustment

~($1,395)



(1,019)




(1,049)



Core operating earnings (non-GAAP)




$6,793




$6,317



Core operating margins (non-GAAP)




9.3%




9.1%














Diluted earnings per share (GAAP)


$16.90 - 17.10




$11.95




$8.39

Pension FAS/CAS service cost adjustment

~($1,395)



($780)


(1.32)


($811)


(1.32)

Postretirement FAS/CAS service cost adjustment



(239)


(0.41)


(238)


(0.39)

Non-operating pension expense

~($90)



(98)


(0.17)


(88)


(0.15)

Non-operating postretirement expense



77


0.13


91


0.15

Provision for deferred income taxes on adjustments 1




218


0.37


366


0.60

Subtotal of adjustments


($2.00)


($822)


($1.40)


($680)


($1.11)

Core earnings per share (non-GAAP)


$14.90 - 15.10




$10.55




$7.28












Weighted average diluted shares (in millions)

585 - 590





588.9




612.8


1 The income tax impact is calculated using the U.S. corporate statutory tax rate .

 

Cision View original content:http://www.prnewswire.com/news-releases/boeing-reports-solid-third-quarter-reaffirms-cash-and-raises-revenue-and-eps-guidance-300736907.html

SOURCE Boeing

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