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BOEING COMPANY - Final Results

Wednesday, January 30, 2013 9:25 AM


Boeing Reports Record Revenue and Backlog and Provides 2013 Guidance

CHICAGO, Jan. 30, 2013 --

Fourth-Quarter 2012

* Core EPS (non-GAAP)* of $1.46 on strong operating performance; GAAP EPS of

$1.28

* Revenue rose to $22.3 billion on increased commercial airplane deliveries

Full Year 2012

* Core EPS (non-GAAP)* of $5.88 on record revenue of $81.7 billion; GAAP EPS

of $5.11

* Operating cash flow rose to $7.5 billion, including $1.6 billion of pension

contributions

* Backlog grew to a record $390 billion including $114 billion of orders

during the year

Outlook for 2013

* Core EPS (non-GAAP)* guidance of $6.10 to $6.30; GAAP EPS guidance of $5.00

to $5.20

* Operating cash flow guidance of greater than $6.5 billion includes $1.5

billion of pension contributions

Table 1.  Summary Financial                                                    
Results                                                                        
                                         
(Dollars in Millions,       Fourth Quarter                       Full Year  
 except per share data)    2012      2011    Change          2012      2011    Change 
                                                                               
Revenues                 $22,302   $19,555     14%        $81,698   $68,735      19%       
Non-GAAP *                                                                     
Core Operating Earnings   $1,841    $1,690      9%         $7,210    $6,361      13%       
Core Operating Margin        8.3%      8.6%  (0.3)Pts         8.8%      9.3%   (0.5)Pts
Core Earnings Per Share    $1.46     $1.92    (24%)         $5.88     $5.79
      2%        
Operating Cash Flow                                                            
 Before Pension 
 Contributions            $4,204    $2,962     42%         $9,058    $4,554      99%       
                                                                               
GAAP                                                                           
Earnings From Operations  $1,629    $1,597      2%         $6,311    $5,844
      8%        
Operating Margin             7.3%      8.2%  (0.9)Pts         7.7%      8.5%   (0.8)Pts
Net Income                  $978    $1,393    (30%)        $3,900    $4,018      (3%)      
Earnings per Share         $1.28     $1.84    (30%)         $5.11     $5.34      (4%)      
Operating Cash Flow       $4,167    $2,931     42%         $7,508    $4,023      87%       
                                                                               
                                                                               
* Non-GAAP measures. New non-GAAP earnings 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 use of non-GAAP measures begin on page 7, "Non-GAAP Measure           
Disclosures."                                                                  
The Boeing Company (NYSE: BA) reported record fourth-quarter revenue of $22.3
billion (Table 1) and core operating earnings (non-GAAP) that increased by 9
percent to $1.8 billion, driven by strong performance across the company's
businesses and higher deliveries of commercial airplanes. Fourth-quarter 2012
core earnings per share (non-GAAP) of $1.46 increased 4 percent* from the same
period last year when excluding a $0.52 per share impact related to a favorable
tax settlement recognized in the fourth-quarter 2011. The company reported
fourth-quarter earnings from operations of $1.6 billion and earnings per share
of $1.28.
Core operating earnings (non-GAAP) rose 13 percent in the full-year to $7.2
billion, compared to $6.4 billion in 2011. 2012 core earnings per share
(non-GAAP) of $5.88 increased 12 percent* from 2011 when excluding the impact
of the 2011 favorable tax settlement ($0.53 per share for the year). Full-year
2012 revenue was a record $81.7 billion, with earnings from operations of $6.3
billion and earnings per share of $5.11.
Core earnings per share guidance (non-GAAP) for 2013 is set at between $6.10
and $6.30, while earnings per share guidance is established at between $5.00
and $5.20. Revenue guidance is between $82 and $85 billion and operating cash
flow is expected to be greater than $6.5 billion, which includes $1.5 billion
of discretionary pension contributions.
"Strong fourth-quarter operating performance capped a year of significant
growth and solid execution, driving higher earnings and cash flow for our
company," said Boeing Chairman, President and Chief Executive Officer Jim
McNerney. "In a year of considerable achievement, Boeing was the commercial
aviation market leader for both orders and deliveries, with more than 600
airplanes delivered, including the first three Charleston-built 787
Dreamliners. Significant new international orders for Defense, Space & Security
and more than 900 orders for the 737 MAX also contributed to our record company
backlog."
"Our first order of business for 2013 is to resolve the battery issue on the
787 and return the airplanes safely to service with our customers. At the same
time, we remain focused on our ongoing priorities of profitable ramp up in
commercial airplane production, successful execution of our development
programs, and continued growth in core, adjacent and international defense
and
space markets."
Table 2.  Cash Flow                                                            
                                                                               
                                                 Fourth Quarter     Full Year
(Millions)                                        2012   2011     2012     2011 
Operating Cash Flow Before 
 Pension Contributions*                         $4,204 $2,962   $9,058   $4,554  
   Pension Contributions                          ($37)  ($31) ($1,550)   ($531)  
Operating Cash Flow                             $4,167 $2,931   $7,508   $4,023  

Less Additions to Property,

    Plant & Equipment                            ($495) ($571) ($1,703) ($1,713)
Free Cash Flow*                                 $3,672 $2,360   $5,805   $2,310  

Operating cash flow in the quarter was $4.2 billion, driven by higher commercial airplane deliveries, continued strong operating performance and timing of receipts and expenditures. Free cash flow was $3.7 billion in the quarter (Table 2).

Table 3.  Cash, Marketable Securities and Debt Balances                        
                                                                               
                                                                   Quarter-End  
(Billions)                                                         4Q12   3Q12  
Cash                                                              $10.3   $6.6  
Marketable Securities(1)                                           $3.2   $4.6  
   Total                                                          $13.5  $11.2 
                                                                               
Debt Balances:                                                                 
The Boeing Company                                                 $7.9   $8.6  
Boeing Capital Corporation                                         $2.5   $2.6  
   Total Consolidated Debt                                        $10.4  $11.2 
                                                                               

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

Cash and investments in marketable securities totaled $13.5 billion at year-end (Table 3), up from $11.2 billion at the beginning of the quarter. Debt was $10.4 billion, down from $11.2 at the beginning of the quarter.

Total company backlog at year-end was a record $390 billion, up from $378 billion at the beginning of the quarter, and included net orders for the quarter of $35 billion. Backlog is up $35 billion from prior year-end, reflecting $114 billion of net orders in 2012.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes Operating                                    
   
Results                                                                        
                                                                               
                                Fourth Quarter                Full Year               
(Dollars in Millions)            2012    2011   Change      2012    2011     Change       
                                                                               
Commercial Airplanes 
 Deliveries                       165     128    29%          601     477      26%     
                                                                               
Revenues                      $14,161 $10,695    32%      $49,127 $36,171      36%     
Earnings from Operations       $1,266    $981    29%       $4,711  $3,495      35%     
                                                                               
Operating Margins                 8.9%    9.2% (0.3) Pts      9.6%    9.7%    (0.1) Pts  
                                                                         
Boeing Commercial Airplanes fourth-quarter revenue increased to $14.2 billion
and full-year revenue increased to a record $49.1 billion on higher delivery
volume. Fourth-quarter operating margin was 8.9 percent and full-year operating
margin was 9.6 percent, both reflecting the dilutive impact of 787 and 747-8
deliveries and higher period costs partially offset by the higher volume and
lower R&D (Table 4).
During the quarter, Commercial Airplanes achieved a five-per-month production
rate on the 787 program and, as of year-end, had won over 1,000 firm orders for
the 737 MAX since launch. The 737 program broke the company's single-year
record for both orders and deliveries in 2012. During the year, Commercial
Airplanes delivered the first 747-8 Intercontinental, began major assembly on
the 787-9 and successfully executed a total of five production rate increases.
On January 16, 2013, the Federal Aviation Administration (FAA) issued an
airworthiness directive that resulted in all in-service 787s temporarily
ceasing operations. The company is committed to working with the FAA and other
applicable regulatory authorities to return aircraft to service with the full
confidence of customers and the traveling public. While production continues on
the 787, the company is suspending deliveries until clearance is granted by the
FAA.

Commercial Airplanes booked 394 net orders during the quarter. Backlog remains strong with nearly 4,400 airplanes valued at a record $319 billion.

Boeing Defense, Space & Security

Table 5.  Defense, Space & Security Operating                              
   
Results                                                                        
                                                                               
                                Fourth Quarter                   Full Year               
(Dollars in Millions)            2012   2011    Change          2012    2011      Change        
Revenues                                                                       
   Boeing Military Aircraft     $4,157 $3,949      5%         $16,384 $14,947       10%     
   Network & Space Systems      $1,912 $1,961     (2%)         $7,584  $8,654      (12%)   
   Global Services & Support    $2,274 $2,561    (11%)         $8,639  $8,375        3%      
Total BDS Revenues              $8,343 $8,471     (2%)        $32,607 $31,976        2%      
                                                                               
Earnings from Operations                                                       
   Boeing Military Aircraft       $336   $374    (10%)         $1,581  $1,526        4%      
   Network & Space Systems        $118   $168    (30%)           $478    $679      (30%)   
   Global Services & Support      $297   $323     (8%)         $1,009    $953        6%      
Total BDS Earnings from 
 Operations                       $751   $865    (13%)         $3,068  $3,158       (3%)    
                                                                               
Operating Margins                 9.0%   10.2%  (1.2) Pts         9.4%    9.9%    (0.5) Pts
                                                                         

Boeing Defense, Space & Security's (BDS) fourth-quarter revenue was $8.3 billion, while operating margin was 9.0 percent (Table 5). For the full year, revenue was $32.6 billion, while operating margin was 9.4 percent.

Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.2
billion, driven primarily by the KC-46 Tanker and P-8A programs. Operating
margin decreased to 8.1 percent, driven by delivery mix. During the quarter,
the U.S. Navy ordered 13 additional F/A-18 aircraft and BMA started production
of the first KC-46 Tanker refueling boom.

Network & Space Systems (N&SS) fourth-quarter revenue was $1.9 billion. Operating margin decreased to 6.2 percent, reflecting lower earnings on Ground-based Midcourse Defense and several satellite programs. During the quarter, N&SS was awarded a contract with NASA for the Space Launch System (SLS) and completed the preliminary design review for the SLS core stage and avionics.

Global Services & Support (GS&S) fourth-quarter revenue decreased to $2.3 billion, primarily due to lower revenue in integrated logistics. Operating margin increased to 13.1 percent, reflecting improved performance in integrated logistics. During the quarter, GS&S was awarded the C-17 Globemaster III Integrated Sustainment Program from the U.S. Air Force and a contract to upgrade 68 F-15s for an international customer.

Backlog at BDS was $71 billion, more than two times projected 2013 revenue.

Additional Financial Information

Table 6.  Additional Financial Information                            
                                                                      
                                       Fourth Quarter       Full Year      
(Dollars in Millions)                   2012   2011       2012     2011  
                                                                      
Revenues                                                              

Boeing Capital Corporation $116 $104 $441 $520

    Other segment                        $40    $43      $133       $150  

Unallocated items and eliminations ($358) $242 ($610) ($82)

                                                                      
Earnings from Operations                                              
    Boeing Capital Corporation          ($20)  ($20)       $82      $113  
    Other segment                        $44    $55      ($159)      $66   
    Unallocated items and eliminations ($412) ($284)   ($1,391)    ($988)
                                                                      
                                                                      
Other income, net                        $23   ($29)       $62       $47   
Interest and debt expense              ($117) ($124)     ($463)    ($498)
Effective tax rate                      36.3%   3.9%      34.0%     25.6% 
                                                                      

At year-end, Boeing Capital Corporation's (BCC) portfolio balance was $4.1 billion, unchanged from the beginning of the quarter and down from $4.3 billion at the beginning of the year. BCC's debt-to-equity ratio was 5.0-to-1.

The loss in unallocated items and eliminations increased due to higher pension
expense. Total pension expense for the fourth quarter was $576 million up from
$344 million in the same period last year.
The company's income tax expense was $557 million in the quarter, compared to
$57 million in the same period of last year. Fourth-quarter 2011 included a
$397 million non-cash gain due to an IRS settlement. The full year effective
tax rate was 34 percent compared with 25.6 percent in 2011.

Outlook

The company's current 2013 financial guidance (Table 7) assumes no significant
financial impact from the FAA directive. The guidance reflects continued strong
core performance, generating an expected 5 percent increase in core earnings
per share (non-GAAP).
Table 7.  Financial Outlook                                                
(Dollars in Billions, except per-share data)                     2013                
                                                                               
The Boeing Company                                                             
  Revenue                                                      $82 - 85        
  Core Earnings Per Share*                                   $6.10 - 6.30    
  Earnings Per Share                                         $5.00 - 5.20    
  Operating Cash Flow Before Pension Contributions*              > $8            
  Operating Cash Flow(1)                                         > $6.5          
                                                                               
Boeing Commercial Airplanes                                                    
  Deliveries (2)                                               635 - 645       
  Revenue                                                      $51 - 53        
  Operating Margin                                              ~ 9.5%          
                                                                               
Boeing Defense, Space & Security                                           
   
  Revenue                                                                      
    Boeing Military Aircraft                                  ~ $15.5         
    Network & Space Systems                                    ~ $7.3          
    Global Services & Support                                  ~ $8.2          
  Total BDS Revenue                                          $30.5 - 31.5    
                                                                               
  Operating Margin                                                             
    Boeing Military Aircraft                                    ~ 9.0%          
    Network & Space Systems                                     ~ 7.5%          
    Global Services & Support                                   ~ 10.5%         
  Total BDS Operating Margin                                    > 9.0%          
                                                                               
Boeing Capital Corporation                                                     
  Portfolio Size                                                 Lower           
  Revenue                                                      ~ $0.3          
  Return on Assets                                             ~ 0.5%          
                                                                               
Research & Development                                         ~ $3.4          
Capital Expenditures                                          $2.3 - 2.5      
Pension Expense (3)                                           ~  $3.2         
Effective Tax Rate                                              ~ 30%           
                                                                               

(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 begin on page 7, "Non-GAAP Measure Disclosures."

                               
                                                                               
Boeing's 2013 revenue guidance is between $82 and $85 billion. Core earnings
per share (non-GAAP) guidance for 2013 is set at between $6.10 and $6.30.
Earnings per share guidance is established at between $5.00 and $5.20. Total
pension expense in 2013 is expected to be approximately $3.2 billion (of which
approximately $1.8 billion is expected to be recorded in core operating
earnings with $1.4 billion recorded in unallocated items and eliminations).
Operating cash flow before pension contributions (non-GAAP) is expected to be
greater than $8 billion. Operating cash flow is expected to be greater than
$6.5 billion in 2013, including $1.5 billion of discretionary pension
contributions.
Commercial Airplanes' 2013 deliveries are expected to be between 635 and 645
airplanes, which includes greater than 60 787 deliveries. Commercial Airplanes'
2013 revenue is expected to be between $51 and $53 billion with operating
margins of approximately 9.5 percent.

Defense, Space & Security's revenue for 2013 is expected to be between $30.5 and $31.5 billion with operating margins greater than 9 percent.

Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2013, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation.

Boeing's 2013 R&D forecast is approximately $3.4 billion. Capital expenditures
for 2013 are expected to be between $2.3 and $2.5 billion. Boeing's effective
tax rate is expected to be approximately 30 percent in 2013 reflecting the
benefit of research and development credits for 2012 and 2013.

Non-GAAP Measure 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 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. The business segments have
traditionally been allocated pension and other post-retirement costs using U.S.
government Cost Accounting Standards (CAS), which employ different actuarial
assumptions and accounting conventions than GAAP. Beginning in 2013, pension
costs at Commercial Airplanes will be allocated based on GAAP service and prior
service costs instead of CAS. Defense Space & Security will continue to be
allocated CAS pension costs which are allocable to government contracts. Other
post-retirement costs will continue to be allocated to business segments based
on CAS, which is generally based on benefits paid. Management uses core
operating earnings, core operating margin and core earnings per share for
purposes of evaluating and forecasting underlying business performance.
Management believes these core earnings measures provide investors additional
insights into operational performance as they exclude unallocated pension and
post-retirement costs, which primarily represent costs driven by market factors
and costs not allocable to government contracts.

Increase in Core Earnings Per Share Excluding Favorable Tax Settlement

The company is disclosing the increase in core earnings per share in 2012 over
2011 excluding the impact of the favorable federal tax audit settlement in
fourth quarter 2011. The company believes it is useful to occasionally exclude
certain items that are not reflective of underlying business performance and
that can distort period to period performance comparisons. Management uses
similar measures for purposes of evaluating and forecasting underlying business
performance.

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. 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 internally
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: Stephanie Pope or Matt Welch (312) 544-2140 Communications: Chaz Bickers (312) 544-2002

                               The Boeing Company and Subsidiaries            
                               Consolidated Statements of Operations            
                                          (Unaudited) 
                                                                               
                                         Twelve months ended  Three months ended
                                             December 31         December 31       
(Dollars in millions,                      2012      2011       2012     2011     
 except per share data)                                                                          
                                                                               
Sales of products                        $71,234   $57,401   $19,793  $16,960  
Sales of services                         10,464    11,334     2,509    2,595    
Total revenues                            81,698    68,735    22,302   19,555   
                                                                               
Cost of products                         (60,309)  (46,642)  (17,206) (14,307) 
Cost of services                          (8,247)   (9,097)   (1,816)  (1,920)  
Boeing Capital interest expense              (88)     (128)      (19)     (34)     
Total costs and expenses                 (68,644)  (55,867)  (19,041) (16,261) 
                                          13,054    12,868     3,261    3,294    
                                                                               
Income from operating investments, net       268       278        57       76       
General and administrative expense        (3,717)   (3,408)     (943)    (864)    
Research and development expense, net     (3,298)   (3,918)     (753)    (913)    
Gain on dispositions, net                      4        24         7        4        
                                                                               
Earnings from operations                   6,311     5,844     1,629    1,597    
Other income/(expense), net                   62        47        23      (29)     
Interest and debt expense                   (463)     (498)     (117)    (124)    
Earnings before income taxes               5,910     5,393     1,535    1,444    
Income tax expense                        (2,007)   (1,382)     (557)    

(57) Net earnings from continuing operations 3,903 4,011 978 1,387

Net (loss)/gain on disposal of                                             

discontinued operations, net of

 taxes of  $2, ($4), $0 and ($3)              (3)        7                 
6        
Net earnings                              $3,900    $4,018      $978   $1,393   
                                                                               

Basic earnings per share from

 continuing operations                     $5.15     $5.38     $1.29    $1.85    
Net (loss)/gain on disposal of 
 discontinued operations, net of taxes                0.01               0.01     
Basic earnings per share                   $5.15     $5.39     $1.29    $1.86    
Diluted earnings per share from 
 continuing operations                     $5.11     $5.33     $1.28    $1.83    
Net (loss)/gain on disposal of 
 discontinued operations, net of taxes                0.01               0.01     
Diluted earnings per share                 $5.11     $5.34     $1.28    $1.84    
Cash dividends paid per share              $1.76     $1.68     $0.44    $0.42    
Weighted average diluted shares 
 (millions)                                763.8     753.1     768.3    757.1    
                                                                     
                                                                               
                               The Boeing Company and Subsidiaries                                            
                           Consolidated Statements of Financial Position                                  
                                           (Unaudited)    
                                                                               
                                                        December 31  December 31
(Dollars in millions, except per share data)               2012         2011       
                                                                               
Assets                                                                         
Cash and cash equivalents                              $  10,341   $  10,049  
Short-term and other investments                           3,217       1,223      
Accounts receivable, net                                   5,608       5,793      
Current portion of customer financing, net                   364         476        
Deferred income taxes                                         28          29         
Inventories, net of advances and progress billings        37,751      32,240     
     Total current assets                                 57,309      49,810     
Customer financing, net                                    4,056       4,296      
                                                                               

Property, plant and equipment, net of accumulated

 depreciation of $14,645 and $13,993                       9,660       9,313      
Goodwill                                                   5,035       4,945      
Acquired intangible assets, net                            3,111       3,044      
Deferred income taxes                                      6,753       5,892      
Investments                                                1,180       1,043      
Other assets, net of accumulated amortization 
 of $504 and $717                                          1,792       1,643      
     Total assets                                       $ 88,896    $ 79,986   
                                                                               
Liabilities and equity                                                         
Accounts payable                                         $ 9,394     $ 8,406    
Accrued liabilities                                       12,995      12,239     
Advances and billings in excess of related costs          16,672      15,496     
Deferred income taxes and income taxes payable             4,485       

2,780 Short-term debt and current portion of long-term debt 1,436 2,353

     Total current liabilities                            44,982     
41,274     
                                                                               
Accrued retiree health care                                7,528       7,520      
Accrued pension plan liability, net                       19,651      16,537     
Non-current income taxes payable                             366         122        
Other long-term liabilities                                1,429         907        
Long-term debt                                             8,973      10,018     
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                              4,122       

4,033

Treasury stock, at cost - 256,630,628

    and 267,556,388 shares                               (15,937)    

(16,603)

   Retained earnings                                      30,037      

27,524

   Accumulated other comprehensive loss                  (17,416)    

(16,500)

      Total shareholders' equity                           5,867      
3,515      
      Noncontrolling interest                                100         93         
      Total equity                                         5,967       3,608      
      Total liabilities and equity                      $ 88,896    $
79,986   
                                                                               
                             The Boeing Company and Subsidiaries                                            
                            Consolidated Statements of Cash Flows                                          
                                       (Unaudited) 
                                                           Twelve months ended            
                                                                December 31      
(Dollars in millions)                                         2012     2011    
                                                                               
Cash flows - operating activities:                                         
   
                                                                               
    Net earnings                                              $ 3,900     $ 4,018 
                                                                               
    Adjustments to reconcile net earnings to net cash                          
provided by operating activities:                                              
                                                                               
      Non-cash items -                                                         
           Share-based plans expense                               193        186     
           Depreciation and amortization                         1,811      1,675   
           Investment/asset impairment charges, net                 84        119     
           Customer financing valuation benefit                    (10)      (269)   
           Loss/(gain) on disposal of discontinued operations        5        (11)    
           Gain on dispositions, net                                (4)       (24)    
           Other charges and credits, net                          694        500     
           Excess tax benefits from share-based payment                
            arrangements                                           (45)       (36)                 
                                                                               
       Changes in assets and liabilities -                                     
           Accounts receivable                                     (27)      (292)   
           Inventories, net of advances and progress billings   (5,681)   (10,012)
           Accounts payable                                      1,199      1,164   
           Accrued liabilities                                     801        237     
           Advances and billings in excess of related costs      1,177      3,173   
           Income taxes receivable, payable and deferred         1,605      1,262   
           Other long-term liabilities                             157        127     
           Pension and other postretirement plans                1,288      2,126   
           Customer financing, net                                 407         (6)     
           Other                                                   (46)        86      
                                                                               
             Net cash provided by operating activities           7,508      4,023   
                                                                               
Cash flows - investing activities:                                             
    Property, plant and equipment additions                     (1,703)    

(1,713)

    Property, plant and equipment reductions                        97         94      
    Acquisitions, net of cash acquired                            (124)       (42)    
    Contributions to investments                               (12,921)   

(6,796)

    Proceeds from investments                                   10,901     

10,757

    Receipt of economic development program funds                              69      
    Purchase of distribution rights                                 (7)              
                                                                               
              Net cash (used)/provided by investing activities  (3,757)     2,369   
                                                                               
Cash flows - financing activities:                                         
   
    New borrowings                                                  60        799     
    Debt repayments                                             (2,076)      (930)   
    Repayments of distribution rights financing                   (228)     

(451)

    Stock options exercised, other                                 120      

114

Excess tax benefits from share-based payment arrangements 45

36

Employee taxes on certain share-based payment

     arrangements                                                  (76)       (24)    
    Dividends paid                                              (1,322)    (1,244) 
                                                                               
               Net cash used by financing activities            (3,477)    (1,700) 
                                                                               
Effect of exchange rate changes on cash and cash equivalents        18         (2)     
Net increase in cash and cash equivalents                          292      4,690   
Cash and cash equivalents at beginning of year                  10,049      5,359   
Cash and cash equivalents at end of period                    $ 10,341   $
10,049
                                                                               
                                 The Boeing Company and Subsidiaries                                            
                                   Summary of Business Segment Data                                               
                                             (Unaudited)              
                                                                               
                                    Twelve months ended      Three months ended     
                                       December 31              December 31            
(Dollars in millions)               2012          2011       2012        2011       
Revenues:                                                                      
   Commercial Airplanes          $ 49,127      $ 36,171   $ 14,161    $ 10,695   
   Defense, Space & Security:                                                  

Boeing Military Aircraft 16,384 14,947 4,157 3,949

      
      Network & Space Systems       7,584         8,654      1,912       1,961      
      Global Services & 
       Support                      8,639         8,375      2,274       2,561      
   Total Defense, Space & 
    Security                       32,607        31,976      8,343       8,471      
   Boeing Capital                     441           520        116         104        
   Other segment                      133           150         40          43         
   Unallocated items and 
    eliminations                     (610)         (82)       (358)        242        
Total revenues                   $ 81,698      $ 68,735   $ 22,302    $ 19,555   
                                                                               
Earnings from operations:                                                      
   Commercial Airplanes        $    4,711      $  3,495   $  1,266      $  981     
   Defense, Space & Security:                                                  
      Boeing Military Aircraft      1,581         1,526        336         374        
      Network & Space Systems         478           679        118         168        
      Global Services & 
       Support                      1,009           953        297         323        
   Total Defense, Space & 
    Security                        3,068         3,158        751         865        
   Boeing Capital                      82           113        (20)        (20)       
   Other segment                     (159)           66         44          55         
   Unallocated items and 
    eliminations                   (1,391)         (988)      (412)       (284)      
                                                                               
Earnings from operations            6,311         5,844      1,629       1,597      
Other income/(expense), net            62            47         23         (29)       
Interest and debt expense            (463)         (498)      (117)       (124)      
Earnings before income taxes        5,910         5,393      1,535       1,444      
Income tax expense                 (2,007)       (1,382)      (557)        (57)       
Net earnings from continuing        3,903         4,011        978       1,387      
operations                                                                     
                                                                               
Net (loss)/gain on disposal of                                                 
 discontinued operations, net              
 of taxes of $2, ($4), $0 and                                              
    
 ($3)                                  (3)            7                      6                 
Net earnings                   $    3,900      $  4,018   $    978   $   1,393 
                                                                               
Research and development                                                       
expense, net:                                                                  
   Commercial Airplanes        $    2,049      $  2,715     $  411      $  524     
   Defense, Space & Security        1,189         1,138        321         365        
   Other                               60            65         21          24         
                                                                               

Total research and development

 expense, net                  $    3,298    $    3,918   $    753    $    913   
                                                                               
Unallocated items and                                                          
eliminations:                                                                  
     Share-based plans          $     (81)       $  (83)    $  (17)     $  (20)    
     Deferred compensation            (75)          (61)       (26)        (65)       
     Capitalized interest             (70)          (51)       (17)        (12)       
     Eliminations and other          (266)         (276)      (140)        (94)       

Sub-total (included in core

    operating earnings)              (492)         (471)      (200)       (191)      
     Pension                         (787)         (269)      (179)        (53)       
     Post-retirement                 (112)         (248)       (33)        (40)       
Total unallocated items and 
eliminations                   $   (1,391)      $  (988)  $   (412)  $    (284)
                                                                   
                                The Boeing Company and Subsidiaries                                            
                                   Operating and Financial Data                                                   
                                           (Unaudited)     
                                                                               
                          Twelve months ended      Three months ended          
Deliveries                    December 31             December 31                 
Commercial Airplanes         2012     2011         2012          2011       
                                                                               
737                          415       372          105            91         
747                           31         9           10             9          
767                           26        20            6             6          
777                           83        73           21            20         
787                           46 (3)     3           23 (3)         2          
    Total                    601       477          165           128        
                                                                               
Note: Deliveries under operating lease are identified by parentheses.      
   
                                                                               
Defense, Space & Security                                                      
Boeing Military Aircraft                                                       
     F/A-18 Models            48        49           12            11         
     F-15 Models               8        15                          4          
     C-17 Globemaster         10        13            2             2          
     KC-767 International 
      Tanker                             3                          2          
     CH-47 Chinook            51        32           11            10         
     AH-64 Apache             19                      6                           
     AEW&C                     3         3            1             1          
     P-8A Poseidon             5                      2                           
                                                                               
Network & Space Systems                                                        
     Commercial and Civil 
      Satellites               3         1                          1          
     Military Satellites       7         3            1             1          
                                                                               
                                                                                                                     
Contractual backlog                 December 31  September 30     December 31
 (Dollars in billions)                 2012         2012             2011       
   Commercial Airplanes               $317.3       $305.4           $293.3     
   Defense, Space & Security:                                                                      
     Boeing Military Aircraft           29.7         28.5             24.1       
     Network & Space Systems             9.7          9.7              9.0        
     Global Services & Support          15.7         14.1             13.3       
   Total Defense, Space & Security      55.1         52.3             46.4       
Total contractual backlog             $372.4       $357.7           $339.7     
Unobligated backlog                    $17.9        $19.9            $15.8      
Total backlog                         $390.3       $377.6           $355.5     
Workforce                            174,400      175,400          171,700    

                                 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 7 of this release for additional information on the use of these non-GAAP financial measures.

   
                                                                               
                                                                               
                                               
                                                                               
Dollars in millions                    Fourth Quarter          Full Year 
(except per share data)               2012       2011       2012       2011    
                                                                               
    Revenues                        $22,302    $19,555    $81,698    $68,735   
                                                                               
    GAAP Earnings From Operations   $ 1,629    $ 1,597    $ 6,311    $ 5,844   
    GAAP Operating Margin               7.3%       8.2%       7.7%       8.5%      
                                                                               
    Unallocated Pension/             
     Postretirement Expense        $    212   $     93   $    899   $    517       
                                                                               
    Core Operating Earnings            
     (non-GAAP)                     $ 1,841    $ 1,690    $ 7,210    $ 6,361     
                                                                               
    Core Operating Margin                  
     (non-GAAP)                         8.3%       8.6%       8.8%       9.3%  
                                                                               
    GAAP Diluted Earnings Per             
     Share                            $1.28      $1.84      $5.11     

$5.34

                                                                               
    Unallocated Pension/              
     Postretirement Expense           $0.18 a    $0.08 b    $0.77 c   

$0.45 d

                                                                               
    Core Earnings Per Share               
    (non-GAAP)                        $1.46      $1.92      $5.88     

$5.79

                                                                               
    Favorable Tax Settlement                    ($0.52)e              ($0.53)e
                                                                               
                                      $1.46      $1.40      $5.88      $5.26     
                                                                               
    Weighted Average Diluted              
     Shares (in millions)             768.3      757.1      763.8     

753.1

                                                                               
    Decrease in GAAP Earnings Per                        
     Share                                         -30%                   

-4%

                                                                               
    Increase in Core Earnings Per                                              
     Share Excluding Favorable Tax                          
     Settlement                                      4%                   

12%

Represents the net earnings per share impact of unallocated pension and

a postretirement expense of $212 million. The earnings per share amount is

presented net of the federal statutory tax rate of 35.0 percent.

Represents the net earnings per share impact of unallocated pension and

b postretirement expense of $93 million. The earnings per share amount is

presented net of the federal statutory tax rate of 35.0 percent.

Represents the net earnings per share impact of unallocated pension and

c postretirement expense of $899 million. The earnings per share amount is

presented net of the federal statutory tax rate of 35.0 percent.

Represents the net earnings per share impact of unallocated pension and

d postretirement expense of $517 million. The earnings per share amount is

presented net of the federal statutory tax rate of 35.0 percent.

Represents favorable tax settlement of $397 million recorded in

e fourth-quarter 2011 related to Internal Revenue Service (IRS) settlement

    for 2004 through 2006 tax years, expressed as earnings-per-share.          
                                                                               
                                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 7 of this release for additional information on the use of these non-GAAP financial measures.

     
                                                                                
                            Year Ended                   Year Ended                    
                          December 31, 2012      December 31, 2013 - Guidance  
                         Earnings Per Share          Earnings Per Share            
                                                                                
    GAAP Diluted                             
     Earnings Per Share        $5.11                    $5.00 - 5.20          
                                                                                
    Unallocated Pension                                                         
     /Postretirement         
     Expense                   $0.77 a                      $1.10 b
                                                                                
    Core Earnings Per            
     Share (non-GAAP)          $5.88                    $6.10 - 6.30     
                                                                                 
    Weighted Average                                                            
    Diluted Shares                                
    (in millions)              763.8                        763.0         
                                                                                
    2013 Change in GAAP                                                              
     Earnings Per Share                                      ~ 0%     
                                                                                
    2013 Increase in                                                            
     Core Earnings Per                                                                
     Share                                                   ~ 5%          
                                                                                
    Represents the net earnings per share impact of unallocated pension and     
 a  postretirement expense of $899 million.  The earnings per share amount is   
    presented net of the federal statutory tax rate of 35.0 percent.            
                                                                                
    Represents the net earnings per share impact of unallocated pension and     
 b  postretirement expense of approximately $1.3 billion.  The earnings per     
    share amount is presented net of the federal statutory tax rate of 35.0     
    percent.                                    

SOURCE Boeing

(Source: PR Newswire )
(Source: Quotemedia)

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