UNITED STATES SECURITIES AND EXCHANGE COMMISSION | ||||
Washington, D.C. 20549 | ||||
FORM 8-K |
THE BOEING COMPANY | ||
(Exact name of registrant as specified in its charter) |
Commission file number 1-442 |
Delaware | 91-0425694 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
100 N. Riverside, Chicago, IL | 60606-1596 | |||
(Address of principal executive offices) | (Zip Code) | |||
(312) 544-2000 | ||||
(Registrant's telephone number, including area code) | ||||
c | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
c | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
c | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
c | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release issued by The Boeing Company dated April 22, 2015, reporting Boeing's financial results for the first quarter of 2015, furnished herewith. |
THE BOEING COMPANY | ||||
(Registrant) | ||||
/s/ Robert E. Verbeck | ||||
Robert E. Verbeck | ||||
Vice President of Finance and Corporate Controller | ||||
April 22, 2015 |
Exhibit Number | Description | |
99.1 | Press release issued by The Boeing Company dated April 22, 2015, reporting Boeing’s financial results for the first quarter of 2015, furnished herewith. |
Exhibit 99.1 | ||
![]() | News Release | |
Boeing Corporate Offices 100 North Riverside Plaza Chicago, IL 60606-1596 www.boeing.com |
▪ | Core EPS (non-GAAP) rose 12 percent* to $1.97 on strong operating performance; GAAP EPS of $1.87 |
▪ | Revenue increased 8 percent to $22.1 billion reflecting higher commercial deliveries |
▪ | Backlog remains strong at $495 billion with over 5,700 commercial airplane orders |
▪ | Repurchased 17 million shares for $2.5 billion |
▪ | Cash & marketable securities of $9.6 billion provide strong liquidity |
▪ | 2015 financial and deliveries outlook reaffirmed |
Table 1. Summary Financial Results | First Quarter | ||||||||||
(Dollars in Millions, except per share data) | 2015 | 2014 | Change | ||||||||
Revenues | $22,149 | $20,465 | 8% | ||||||||
Non-GAAP* | |||||||||||
Core Operating Earnings | $2,132 | $2,095 | 2% | ||||||||
Core Operating Margin | 9.6 | % | 10.2 | % | (0.6) Pts | ||||||
Core Earnings Per Share | $1.97 | $1.76 | 12% | ||||||||
GAAP | |||||||||||
Earnings From Operations | $2,019 | $1,542 | 31% | ||||||||
Operating Margin | 9.1 | % | 7.5 | % | 1.6 Pts | ||||||
Net Earnings | $1,336 | $965 | 38% | ||||||||
Earnings Per Share | $1.87 | $1.28 | 46% | ||||||||
Operating Cash Flow | $88 | $1,112 | (92)% |
Table 2. Cash Flow | First Quarter | |||||||
(Millions) | 2015 | 2014 | ||||||
Operating Cash Flow | $88 | $1,112 | ||||||
Less Additions to Property, Plant & Equipment | ($574 | ) | ($497 | ) | ||||
Free Cash Flow* | ($486 | ) | $615 |
Table 3. Cash, Marketable Securities and Debt Balances | Quarter-End | |||||||
(Billions) | Q1 15 | Q4 14 | ||||||
Cash | $8.6 | $11.7 | ||||||
Marketable Securities1 | $1.0 | $1.4 | ||||||
Total | $9.6 | $13.1 | ||||||
Debt Balances: | ||||||||
The Boeing Company, net of intercompany loans to BCC | $6.6 | $6.7 | ||||||
Boeing Capital, including intercompany loans | $2.4 | $2.4 | ||||||
Total Consolidated Debt | $9.0 | $9.1 |
Table 4. Commercial Airplanes | First Quarter | ||||||||||
(Dollars in Millions) | 2015 | 2014 | Change | ||||||||
Commercial Airplanes Deliveries | 184 | 161 | 14% | ||||||||
Revenues | $15,381 | $12,737 | 21% | ||||||||
Earnings from Operations | $1,617 | $1,502 | 8% | ||||||||
Operating Margin | 10.5 | % | 11.8 | % | (1.3) Pts |
Table 5. Defense, Space & Security | First Quarter | |||||||||
(Dollars in Millions) | 2015 | 2014 | Change | |||||||
Revenues1 | ||||||||||
Boeing Military Aircraft | $2,744 | $3,455 | (21)% | |||||||
Network & Space Systems | $1,732 | $1,876 | (8)% | |||||||
Global Services & Support | $2,233 | $2,302 | (3)% | |||||||
Total BDS Revenues | $6,709 | $7,633 | (12)% | |||||||
Earnings from Operations1 | ||||||||||
Boeing Military Aircraft | $261 | $332 | (21)% | |||||||
Network & Space Systems | $167 | $168 | (1)% | |||||||
Global Services & Support | $315 | $278 | 13% | |||||||
Total BDS Earnings from Operations | $743 | $778 | (4)% | |||||||
Operating Margin | 11.1 | % | 10.2 | % | 0.9 Pts |
Table 6. Additional Financial Information | First Quarter | |||||||
(Dollars in Millions) | 2015 | 2014 | ||||||
Revenues | ||||||||
Boeing Capital | $86 | $82 | ||||||
Unallocated items, eliminations and other | ($27 | ) | $13 | |||||
Earnings from Operations | ||||||||
Boeing Capital | $20 | $44 | ||||||
Unallocated pension/postretirement | ($113 | ) | ($553 | ) | ||||
Other unallocated items and eliminations | ($248 | ) | ($229 | ) | ||||
Other (loss)/income, net | ($12 | ) | $9 | |||||
Interest and debt expense | ($61 | ) | ($92 | ) | ||||
Effective tax rate | 31.3 | % | 33.9 | % |
Table 7. 2015 Financial Outlook | |
(Dollars in Billions, except per share data) | 2015 |
The Boeing Company | |
Revenue | $94.5 - 96.5 |
Core Earnings Per Share* | $8.20 - 8.40 |
GAAP Earnings Per Share | $8.10 - 8.30 |
Operating Cash Flow | > $9 |
Commercial Airplanes | |
Deliveries | 750 - 755 |
Revenue | $64.5 - 65.5 |
Operating Margin | 9.5% - 10.0% |
Defense, Space & Security (revised for business realignment) | |
Revenue | |
Boeing Military Aircraft | ~$12.5 |
Network & Space Systems | ~$8.0 |
Global Services & Support | ~$9.5 |
Total BDS Revenue | $29.5 - 30.5 |
Operating Margin | |
Boeing Military Aircraft | ~9.5% |
Network & Space Systems | ~9.0% |
Global Services & Support | ~11.0% |
Total BDS Operating Margin | 9.75% - 10.0% |
Boeing Capital | |
Portfolio Size | Stable |
Revenue | ~$0.3 |
Pre-Tax Earnings | ~$0.05 |
Research & Development | ~ $3.5 |
Capital Expenditures | ~ $2.8 |
Pension Expense 1 | ~ $2.1 |
Effective Tax Rate 2 | ~ 30.5% |
Investor Relations: | Troy Lahr or Rob Martin (312) 544-2140 | |
Communications: | Bernard Choi (312) 544-2002 |
Three months ended March 31 | |||||||
(Dollars in millions, except per share data) | 2015 | 2014 | |||||
Sales of products | $19,485 | $18,015 | |||||
Sales of services | 2,664 | 2,450 | |||||
Total revenues | 22,149 | 20,465 | |||||
Cost of products | (16,380 | ) | (15,258 | ) | |||
Cost of services | (2,100 | ) | (2,020 | ) | |||
Boeing Capital interest expense | (16 | ) | (18 | ) | |||
Total costs and expenses | (18,496 | ) | (17,296 | ) | |||
3,653 | 3,169 | ||||||
Income from operating investments, net | 79 | 59 | |||||
General and administrative expense | (945 | ) | (877 | ) | |||
Research and development expense, net | (769 | ) | (809 | ) | |||
Gain on dispositions, net | 1 | ||||||
Earnings from operations | 2,019 | 1,542 | |||||
Other (loss)/income, net | (12 | ) | 9 | ||||
Interest and debt expense | (61 | ) | (92 | ) | |||
Earnings before income taxes | 1,946 | 1,459 | |||||
Income tax expense | (610 | ) | (494 | ) | |||
Net earnings | $1,336 | $965 | |||||
Basic earnings per share | $1.89 | $1.30 | |||||
Diluted earnings per share | $1.87 | $1.28 | |||||
Cash dividends paid per share | $0.91 | $0.73 | |||||
Weighted average diluted shares (millions) | 714.2 | 754.1 |
(Dollars in millions, except per share data) | March 31 2015 | December 31 2014 | |||||
Assets | |||||||
Cash and cash equivalents | $8,655 | $11,733 | |||||
Short-term and other investments | 976 | 1,359 | |||||
Accounts receivable, net | 8,087 | 7,729 | |||||
Current portion of customer financing, net | 184 | 190 | |||||
Deferred income taxes | 17 | 18 | |||||
Inventories, net of advances and progress billings | 48,502 | 46,756 | |||||
Total current assets | 66,421 | 67,785 | |||||
Customer financing, net | 3,301 | 3,371 | |||||
Property, plant and equipment, net of accumulated depreciation of $15,880 and $15,689 | 11,172 | 11,007 | |||||
Goodwill | 5,105 | 5,119 | |||||
Acquired intangible assets, net | 2,809 | 2,869 | |||||
Deferred income taxes | 6,485 | 6,576 | |||||
Investments | 1,154 | 1,154 | |||||
Other assets, net of accumulated amortization of $506 and $479 | 1,328 | 1,317 | |||||
Total assets | $97,775 | $99,198 | |||||
Liabilities and equity | |||||||
Accounts payable | $11,497 | $10,667 | |||||
Accrued liabilities | 11,958 | 13,343 | |||||
Advances and billings in excess of related costs | 22,752 | 23,175 | |||||
Deferred income taxes and income taxes payable | 8,916 | 8,603 | |||||
Short-term debt and current portion of long-term debt | 133 | 929 | |||||
Total current liabilities | 55,256 | 56,717 | |||||
Accrued retiree health care | 6,789 | 6,802 | |||||
Accrued pension plan liability, net | 17,362 | 17,182 | |||||
Non-current income taxes payable | 352 | 358 | |||||
Other long-term liabilities | 1,081 | 1,208 | |||||
Long-term debt | 8,905 | 8,141 | |||||
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 | 4,657 | 4,625 | |||||
Treasury stock, at cost – 318,257,541 and 305,533,606 shares | (25,513 | ) | (23,298 | ) | |||
Retained earnings | 37,516 | 36,180 | |||||
Accumulated other comprehensive loss | (13,815 | ) | (13,903 | ) | |||
Total shareholders’ equity | 7,906 | 8,665 | |||||
Noncontrolling interests | 124 | 125 | |||||
Total equity | 8,030 | 8,790 | |||||
Total liabilities and equity | $97,775 | $99,198 |
Three months ended March 31 | |||||||
(Dollars in millions) | 2015 | 2014 | |||||
Cash flows – operating activities: | |||||||
Net earnings | $1,336 | $965 | |||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Non-cash items – | |||||||
Share-based plans expense | 50 | 52 | |||||
Depreciation and amortization | 459 | 448 | |||||
Investment/asset impairment charges, net | 17 | 29 | |||||
Customer financing valuation benefit | (2 | ) | (23 | ) | |||
Gain on disposal of discontinued operations | (1 | ) | |||||
Gain on dispositions, net | (1 | ) | |||||
Other charges and credits, net | 76 | 47 | |||||
Excess tax benefits from share-based payment arrangements | (112 | ) | (68 | ) | |||
Changes in assets and liabilities – | |||||||
Accounts receivable | (389 | ) | (792 | ) | |||
Inventories, net of advances and progress billings | (1,822 | ) | (2,049 | ) | |||
Accounts payable | 848 | 1,350 | |||||
Accrued liabilities | (900 | ) | (1,385 | ) | |||
Advances and billings in excess of related costs | (422 | ) | 1,085 | ||||
Income taxes receivable, payable and deferred | 443 | 455 | |||||
Other long-term liabilities | (82 | ) | (124 | ) | |||
Pension and other postretirement plans | 608 | 733 | |||||
Customer financing, net | 31 | 408 | |||||
Other | (50 | ) | (18 | ) | |||
Net cash provided by operating activities | 88 | 1,112 | |||||
Cash flows – investing activities: | |||||||
Property, plant and equipment additions | (574 | ) | (497 | ) | |||
Property, plant and equipment reductions | 15 | ||||||
Contributions to investments | (807 | ) | (2,737 | ) | |||
Proceeds from investments | 1,159 | 3,625 | |||||
Other | 8 | ||||||
Net cash (used)/provided by investing activities | (214 | ) | 406 | ||||
Cash flows – financing activities: | |||||||
New borrowings | 761 | 51 | |||||
Debt repayments | (813 | ) | (757 | ) | |||
Stock options exercised | 231 | 109 | |||||
Excess tax benefits from share-based payment arrangements | 112 | 68 | |||||
Employee taxes on certain share-based payment arrangements | (87 | ) | (84 | ) | |||
Common shares repurchased | (2,500 | ) | (2,500 | ) | |||
Dividends paid | (639 | ) | (540 | ) | |||
Other | (15 | ) | |||||
Net cash used by financing activities | (2,935 | ) | (3,668 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (17 | ) | 4 | ||||
Net decrease in cash and cash equivalents | (3,078 | ) | (2,146 | ) | |||
Cash and cash equivalents at beginning of year | 11,733 | 9,088 | |||||
Cash and cash equivalents at end of period | $8,655 | $6,942 |
Three months ended March 31 | |||||||
(Dollars in millions) | 2015 | 2014 | |||||
Revenues: | |||||||
Commercial Airplanes | $15,381 | $12,737 | |||||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 2,744 | 3,455 | |||||
Network & Space Systems | 1,732 | 1,876 | |||||
Global Services & Support | 2,233 | 2,302 | |||||
Total Defense, Space & Security | 6,709 | 7,633 | |||||
Boeing Capital | 86 | 82 | |||||
Unallocated items, eliminations and other | (27 | ) | 13 | ||||
Total revenues | $22,149 | $20,465 | |||||
Earnings from operations: | |||||||
Commercial Airplanes | $1,617 | $1,502 | |||||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 261 | 332 | |||||
Network & Space Systems | 167 | 168 | |||||
Global Services & Support | 315 | 278 | |||||
Total Defense, Space & Security | 743 | 778 | |||||
Boeing Capital | 20 | 44 | |||||
Unallocated items, eliminations and other | (361 | ) | (782 | ) | |||
Earnings from operations | 2,019 | 1,542 | |||||
Other (loss)/income, net | (12 | ) | 9 | ||||
Interest and debt expense | (61 | ) | (92 | ) | |||
Earnings before income taxes | 1,946 | 1,459 | |||||
Income tax expense | (610 | ) | (494 | ) | |||
Net earnings | $1,336 | $965 | |||||
Research and development expense, net: | |||||||
Commercial Airplanes | $543 | $529 | |||||
Defense, Space & Security | 224 | 280 | |||||
Other | 2 | ||||||
Total research and development expense, net | $769 | $809 | |||||
Unallocated items, eliminations and other: | |||||||
Share-based plans | ($21 | ) | ($24 | ) | |||
Deferred compensation | (58 | ) | 7 | ||||
Amortization of previously capitalized interest | (29 | ) | (18 | ) | |||
Eliminations and other unallocated items | (140 | ) | (194 | ) | |||
Sub-total (included in core operating earnings) | (248 | ) | (229 | ) | |||
Pension | (152 | ) | (576 | ) | |||
Postretirement | 39 | 23 | |||||
Total unallocated items, eliminations and other | ($361 | ) | ($782 | ) |
Deliveries | Three months ended March 31 | ||||||
Commercial Airplanes | 2015 | 2014 | |||||
737 | 121 | 115 | |||||
747 | 4 | 4 | |||||
767 | 5 | ||||||
777 | 24 | 24 | |||||
787 | 30 | 18 | |||||
Total | 184 | 161 | |||||
Note: Deliveries under operating lease are identified by parentheses. | |||||||
Defense, Space & Security | |||||||
Boeing Military Aircraft | |||||||
AH-64 Apache (New) | 6 | 10 | |||||
AH-64 Apache (Remanufactured) | 10 | 14 | |||||
C-17 Globemaster III | 1 | 3 | |||||
CH-47 Chinook (New) | 6 | 17 | |||||
CH-47 Chinook (Renewed) | 4 | ||||||
F-15 Models | 1 | 4 | |||||
F/A-18 Models | 11 | 11 | |||||
P-8 Models | 2 | ||||||
Global Services & Support | |||||||
AEW&C | 1 | ||||||
C-40A | 1 | ||||||
Network & Space Systems | |||||||
Commercial and Civil Satellites | |||||||
Military Satellites | |||||||
Contractual backlog (Dollars in billions) | March 31 2015 | December 31 2014 | ||||||
Commercial Airplanes | $435.0 | $440.1 | ||||||
Defense, Space & Security: | ||||||||
Boeing Military Aircraft | 21.3 | 21.1 | ||||||
Network & Space Systems | 9.4 | 8.9 | ||||||
Global Services & Support | 16.9 | 16.9 | ||||||
Total Defense, Space & Security | 47.6 | 46.9 | ||||||
Total contractual backlog | $482.6 | $487.0 | ||||||
Unobligated backlog | $12.5 | $15.3 | ||||||
Total backlog | $495.1 | $502.3 | ||||||
Workforce | 163,100 | 165,500 |
First Quarter | Guidance | ||||||||||
2015 | 2014 | 2015 | |||||||||
Revenues | $22,149 | $20,465 | |||||||||
GAAP Earnings From Operations | $2,019 | $1,542 | |||||||||
GAAP Operating Margin | 9.1 | % | 7.5 | % | |||||||
Unallocated Pension/Postretirement Expense | $113 | $553 | $110 | ||||||||
Core Operating Earnings (non-GAAP) | $2,132 | $2,095 | |||||||||
Core Operating Margin (non-GAAP) | 9.6 | % | 10.2 | % | |||||||
Increase/(Decrease) in GAAP Earnings From Operations | 31 | % | |||||||||
Increase/(Decrease) in Core Operating Earnings (non-GAAP) | 2 | % | |||||||||
GAAP Diluted Earnings Per Share | $1.87 | $1.28 | $8.10 - $8.30 | ||||||||
Unallocated Pension/Postretirement Expense1 | $0.10 | $0.48 | $0.10 | ||||||||
Core Earnings Per Share (non-GAAP) | $1.97 | $1.76 | $8.20 - $8.40 | ||||||||
Weighted Average Diluted Shares (millions) | 714.2 | 754.1 | 695 - 700 | ||||||||
Increase/(Decrease) in GAAP Earnings Per Share | 46 | % | |||||||||
Increase/(Decrease) in Core Earnings Per Share (non-GAAP) | 12 | % |