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 27, 2016, reporting Boeing's financial results for the first quarter of 2016, furnished herewith. |
THE BOEING COMPANY | ||||
(Registrant) | ||||
/s/ Robert E. Verbeck | ||||
Robert E. Verbeck | ||||
Senior Vice President, Finance and Corporate Controller | ||||
April 27, 2016 |
Exhibit Number | Description | |
99.1 | Press release issued by The Boeing Company dated April 27, 2016, reporting Boeing’s financial results for the first quarter of 2016, furnished herewith. |
Exhibit 99.1 | ||
![]() | News Release | |
Boeing Corporate Offices 100 North Riverside Plaza Chicago, IL 60606-1596 www.boeing.com |
▪ | Revenue increased to $22.6 billion |
▪ | Solid core EPS (non-GAAP)* of $1.74 after $0.24 KC-46 charge; GAAP EPS of $1.83 |
▪ | Strong operating cash flow of $1.2 billion; repurchased 28.6 million shares for $3.5 billion |
▪ | Backlog remains robust at $480 billion with over 5,700 commercial airplane orders |
▪ | Revenue, margins, EPS and operating cash flow guidance reaffirmed |
Table 1. Summary Financial Results | First Quarter | ||||||||||
(Dollars in Millions, except per share data) | 2016 | 2015 | Change | ||||||||
Revenues | $22,632 | $22,149 | 2% | ||||||||
Non-GAAP* | |||||||||||
Core Operating Earnings | $1,694 | $2,132 | (21)% | ||||||||
Core Operating Margin | 7.5 | % | 9.6 | % | (2.1) Pts | ||||||
Core Earnings Per Share | $1.74 | $1.97 | (12)% | ||||||||
GAAP | |||||||||||
Earnings From Operations | $1,788 | $2,019 | (11)% | ||||||||
Operating Margin | 7.9 | % | 9.1 | % | (1.2) Pts | ||||||
Net Earnings | $1,219 | $1,336 | (9)% | ||||||||
Earnings Per Share | $1.83 | $1.87 | (2)% | ||||||||
Operating Cash Flow | $1,231 | $88 | 1,299% |
Table 2. Cash Flow | First Quarter | |||||||
(Millions) | 2016 | 2015 | ||||||
Operating Cash Flow | $1,231 | $88 | ||||||
Less Additions to Property, Plant & Equipment | ($748 | ) | ($574 | ) | ||||
Free Cash Flow* | $483 | ($486 | ) |
Table 3. Cash, Marketable Securities and Debt Balances | Quarter-End | |||||||
(Billions) | Q1 16 | Q4 15 | ||||||
Cash | $7.9 | $11.3 | ||||||
Marketable Securities1 | $0.5 | $0.8 | ||||||
Total | $8.4 | $12.1 | ||||||
Debt Balances: | ||||||||
The Boeing Company, net of intercompany loans to BCC | $7.6 | $7.6 | ||||||
Boeing Capital, including intercompany loans | $2.4 | $2.4 | ||||||
Total Consolidated Debt | $10.0 | $10.0 |
Table 4. Commercial Airplanes | First Quarter | ||||||||||
(Dollars in Millions) | 2016 | 2015 | Change | ||||||||
Commercial Airplanes Deliveries | 176 | 184 | (4)% | ||||||||
Revenues | $14,399 | $15,381 | (6)% | ||||||||
Earnings from Operations | $1,033 | $1,617 | (36)% | ||||||||
Operating Margin | 7.2 | % | 10.5 | % | (3.3) Pts |
Table 5. Defense, Space & Security | First Quarter | ||||||||||
(Dollars in Millions) | 2016 | 2015 | Change | ||||||||
Revenues1 | |||||||||||
Boeing Military Aircraft | $3,659 | $2,726 | 34% | ||||||||
Network & Space Systems | $1,735 | $1,732 | — | ||||||||
Global Services & Support | $2,562 | $2,251 | 14% | ||||||||
Total BDS Revenues | $7,956 | $6,709 | 19% | ||||||||
Earnings from Operations1 | |||||||||||
Boeing Military Aircraft | $334 | $259 | 29% | ||||||||
Network & Space Systems | $148 | $167 | (11)% | ||||||||
Global Services & Support | $340 | $317 | 7% | ||||||||
Total BDS Earnings from Operations | $822 | $743 | 11% | ||||||||
Operating Margin | 10.3 | % | 11.1 | % | (0.8) Pts |
Table 6. Additional Financial Information | First Quarter | |||||||
(Dollars in Millions) | 2016 | 2015 | ||||||
Revenues | ||||||||
Boeing Capital | $64 | $86 | ||||||
Unallocated items, eliminations and other | $213 | ($27 | ) | |||||
Earnings from Operations | ||||||||
Boeing Capital | $5 | $20 | ||||||
Unallocated pension/postretirement | $94 | ($113 | ) | |||||
Other unallocated items and eliminations | ($166 | ) | ($248 | ) | ||||
Other income/(loss), net | $26 | ($12 | ) | |||||
Interest and debt expense | ($73 | ) | ($61 | ) | ||||
Effective tax rate | 30.0 | % | 31.3 | % |
Table 7. 2016 Financial Outlook | Current | ||
(Dollars in Billions, except per share data) | Guidance | ||
The Boeing Company | |||
Revenue | $93.0 - 95.0 | ||
Core Earnings Per Share* | $8.15 - 8.35 | ||
GAAP Earnings Per Share | $8.45 - 8.65 | ||
Operating Cash Flow | ~$10.0 | ||
Commercial Airplanes | |||
Deliveries | 740 - 745 | ||
Revenue | $64.0 - 65.0 | ||
Operating Margin | ~9.0% | ||
Defense, Space & Security | |||
Revenue | |||
Boeing Military Aircraft | ~$12.3 | ||
Network & Space Systems | ~$7.3 | ||
Global Services & Support | ~$9.4 | ||
Total BDS Revenue | $28.5 - 29.5 | ||
Operating Margin | |||
Boeing Military Aircraft | ~10.0% | ||
Network & Space Systems | ~9.0% | ||
Global Services & Support | ~11.5% | ||
Total BDS Operating Margin | >10.0% | ||
Boeing Capital | |||
Portfolio Size | Stable | ||
Revenue | ~$0.3 | ||
Pre-Tax Earnings | ~$0.05 | ||
Research & Development | ~ $3.6 | ||
Capital Expenditures | ~ $2.8 | ||
Pension Expense 1 | ~ $2.1 | ||
Effective Tax Rate | ~ 30.0% |
Investor Relations: | Troy Lahr or Ben Hackman (312) 544-2140 | |
Communications: | Bernard Choi (312) 544-2002 |
Three months ended March 31 | |||||||
(Dollars in millions, except per share data) | 2016 | 2015 | |||||
Sales of products | $19,885 | $19,485 | |||||
Sales of services | 2,747 | 2,664 | |||||
Total revenues | 22,632 | 22,149 | |||||
Cost of products | (16,945 | ) | (16,380 | ) | |||
Cost of services | (2,136 | ) | (2,100 | ) | |||
Boeing Capital interest expense | (16 | ) | (16 | ) | |||
Total costs and expenses | (19,097 | ) | (18,496 | ) | |||
3,535 | 3,653 | ||||||
Income from operating investments, net | 54 | 79 | |||||
General and administrative expense | (888 | ) | (945 | ) | |||
Research and development expense, net | (917 | ) | (769 | ) | |||
Gain on dispositions, net | 4 | 1 | |||||
Earnings from operations | 1,788 | 2,019 | |||||
Other income/(loss), net | 26 | (12 | ) | ||||
Interest and debt expense | (73 | ) | (61 | ) | |||
Earnings before income taxes | 1,741 | 1,946 | |||||
Income tax expense | (522 | ) | (610 | ) | |||
Net earnings | $1,219 | $1,336 | |||||
Basic earnings per share | $1.85 | $1.89 | |||||
Diluted earnings per share | $1.83 | $1.87 | |||||
Cash dividends paid per share | $1.09 | $0.91 | |||||
Weighted average diluted shares (millions) | 665.8 | 714.2 |
(Dollars in millions, except per share data) | March 31 2016 | December 31 2015 | |||||
Assets | |||||||
Cash and cash equivalents | $7,886 | $11,302 | |||||
Short-term and other investments | 466 | 750 | |||||
Accounts receivable, net | 9,711 | 8,713 | |||||
Current portion of customer financing, net | 258 | 212 | |||||
Inventories, net of advances and progress billings | 47,266 | 47,257 | |||||
Total current assets | 65,587 | 68,234 | |||||
Customer financing, net | 2,980 | 3,358 | |||||
Property, plant and equipment, net of accumulated depreciation of $16,476 and $16,286 | 12,269 | 12,076 | |||||
Goodwill | 5,132 | 5,126 | |||||
Acquired intangible assets, net | 2,594 | 2,657 | |||||
Deferred income taxes | 267 | 265 | |||||
Investments | 1,297 | 1,284 | |||||
Other assets, net of accumulated amortization of $478 and $451 | 1,421 | 1,408 | |||||
Total assets | $91,547 | $94,408 | |||||
Liabilities and equity | |||||||
Accounts payable | $11,558 | $10,800 | |||||
Accrued liabilities | 12,790 | 14,014 | |||||
Advances and billings in excess of related costs | 23,926 | 24,364 | |||||
Short-term debt and current portion of long-term debt | 1,243 | 1,234 | |||||
Total current liabilities | 49,517 | 50,412 | |||||
Deferred income taxes | 2,297 | 2,392 | |||||
Accrued retiree health care | 6,614 | 6,616 | |||||
Accrued pension plan liability, net | 18,196 | 17,783 | |||||
Other long-term liabilities | 2,096 | 2,078 | |||||
Long-term debt | 8,721 | 8,730 | |||||
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 | 4,784 | 4,834 | |||||
Treasury stock, at cost - 372,446,158 and 345,637,354 shares | (32,939 | ) | (29,568 | ) | |||
Retained earnings | 39,975 | 38,756 | |||||
Accumulated other comprehensive loss | (12,838 | ) | (12,748 | ) | |||
Total shareholders’ equity | 4,043 | 6,335 | |||||
Noncontrolling interests | 63 | 62 | |||||
Total equity | 4,106 | 6,397 | |||||
Total liabilities and equity | $91,547 | $94,408 |
Three months ended March 31 | |||||||
(Dollars in millions) | 2016 | 2015 | |||||
Cash flows – operating activities: | |||||||
Net earnings | $1,219 | $1,336 | |||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Non-cash items – | |||||||
Share-based plans expense | 51 | 50 | |||||
Depreciation and amortization | 443 | 459 | |||||
Investment/asset impairment charges, net | 33 | 17 | |||||
Customer financing valuation benefit | (2 | ) | (2 | ) | |||
Gain on dispositions, net | (4 | ) | (1 | ) | |||
Other charges and credits, net | 84 | 76 | |||||
Excess tax benefits from share-based payment arrangements | (44 | ) | (112 | ) | |||
Changes in assets and liabilities – | |||||||
Accounts receivable | (1,002 | ) | (389 | ) | |||
Inventories, net of advances and progress billings | (56 | ) | (1,822 | ) | |||
Accounts payable | 960 | 848 | |||||
Accrued liabilities | (467 | ) | (900 | ) | |||
Advances and billings in excess of related costs | (435 | ) | (422 | ) | |||
Income taxes receivable, payable and deferred | 273 | 443 | |||||
Other long-term liabilities | (116 | ) | (82 | ) | |||
Pension and other postretirement plans | 79 | 608 | |||||
Customer financing, net | 276 | 31 | |||||
Other | (61 | ) | (50 | ) | |||
Net cash provided by operating activities | 1,231 | 88 | |||||
Cash flows – investing activities: | |||||||
Property, plant and equipment additions | (748 | ) | (574 | ) | |||
Property, plant and equipment reductions | 11 | ||||||
Contributions to investments | (204 | ) | (807 | ) | |||
Proceeds from investments | 493 | 1,159 | |||||
Other | 10 | 8 | |||||
Net cash used by investing activities | (438 | ) | (214 | ) | |||
Cash flows – financing activities: | |||||||
New borrowings | 115 | 761 | |||||
Debt repayments | (128 | ) | (813 | ) | |||
Stock options exercised | 42 | 231 | |||||
Excess tax benefits from share-based payment arrangements | 44 | 112 | |||||
Employee taxes on certain share-based payment arrangements | (76 | ) | (87 | ) | |||
Common shares repurchased | (3,501 | ) | (2,500 | ) | |||
Dividends paid | (717 | ) | (639 | ) | |||
Net cash used by financing activities | (4,221 | ) | (2,935 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 12 | (17 | ) | ||||
Net decrease in cash and cash equivalents | (3,416 | ) | (3,078 | ) | |||
Cash and cash equivalents at beginning of year | 11,302 | 11,733 | |||||
Cash and cash equivalents at end of period | $7,886 | $8,655 |
Three months ended March 31 | |||||||
(Dollars in millions) | 2016 | 2015 | |||||
Revenues: | |||||||
Commercial Airplanes | $14,399 | $15,381 | |||||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 3,659 | 2,726 | |||||
Network & Space Systems | 1,735 | 1,732 | |||||
Global Services & Support | 2,562 | 2,251 | |||||
Total Defense, Space & Security | 7,956 | 6,709 | |||||
Boeing Capital | 64 | 86 | |||||
Unallocated items, eliminations and other | 213 | (27 | ) | ||||
Total revenues | $22,632 | $22,149 | |||||
Earnings from operations: | |||||||
Commercial Airplanes | $1,033 | $1,617 | |||||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 334 | 259 | |||||
Network & Space Systems | 148 | 167 | |||||
Global Services & Support | 340 | 317 | |||||
Total Defense, Space & Security | 822 | 743 | |||||
Boeing Capital | 5 | 20 | |||||
Segment operating profit | 1,860 | 2,380 | |||||
Unallocated items, eliminations and other | (72 | ) | (361 | ) | |||
Earnings from operations | 1,788 | 2,019 | |||||
Other income/(loss), net | 26 | (12 | ) | ||||
Interest and debt expense | (73 | ) | (61 | ) | |||
Earnings before income taxes | 1,741 | 1,946 | |||||
Income tax expense | (522 | ) | (610 | ) | |||
Net earnings | $1,219 | $1,336 | |||||
Research and development expense, net: | |||||||
Commercial Airplanes | $671 | $543 | |||||
Defense, Space & Security | 258 | 224 | |||||
Other | (12 | ) | 2 | ||||
Total research and development expense, net | $917 | $769 | |||||
Unallocated items, eliminations and other: | |||||||
Share-based plans | ($23 | ) | ($21 | ) | |||
Deferred compensation | 16 | (58 | ) | ||||
Amortization of previously capitalized interest | (30 | ) | (29 | ) | |||
Eliminations and other unallocated items | (129 | ) | (140 | ) | |||
Sub-total (included in core operating earnings) | (166 | ) | (248 | ) | |||
Pension | 45 | (152 | ) | ||||
Postretirement | 49 | 39 | |||||
Total unallocated items, eliminations and other | ($72 | ) | ($361 | ) |
Deliveries | Three months ended March 31 | |||||
Commercial Airplanes | 2016 | 2015 | ||||
737 | 121 | 121 | ||||
747 | 1 | 4 | ||||
767 | 1 | 5 | ||||
777 | 23 | 24 | ||||
787 | 30 | 30 | ||||
Total | 176 | 184 | ||||
Note: Deliveries under operating lease are identified by parentheses. | ||||||
Defense, Space & Security | ||||||
Boeing Military Aircraft | ||||||
AH-64 Apache (New) | 7 | 6 | ||||
AH-64 Apache (Remanufactured) | 11 | 10 | ||||
C-17 Globemaster III | 3 | 1 | ||||
CH-47 Chinook (New) | 3 | 6 | ||||
CH-47 Chinook (Renewed) | 9 | 4 | ||||
F-15 Models | 4 | 1 | ||||
F/A-18 Models | 8 | 11 | ||||
P-8 Models | 4 | 2 | ||||
Global Services & Support | ||||||
AEW&C | ||||||
C-40A | 1 | |||||
Network & Space Systems | ||||||
Commercial and Civil Satellites | 1 | |||||
Military Satellites | ||||||
Contractual backlog (Dollars in billions) | March 31 2016 | December 31 2015 | ||||||
Commercial Airplanes | $423.0 | $431.4 | ||||||
Defense, Space & Security: | ||||||||
Boeing Military Aircraft | 22.1 | 19.9 | ||||||
Network & Space Systems | 8.0 | 7.4 | ||||||
Global Services & Support | 17.1 | 17.9 | ||||||
Total Defense, Space & Security | 47.2 | 45.2 | ||||||
Total contractual backlog | $470.2 | $476.6 | ||||||
Unobligated backlog | $9.8 | $12.7 | ||||||
Total backlog | $480.0 | $489.3 | ||||||
Workforce | 159,100 | 161,400 |
First Quarter | Guidance | ||||||||||
2016 | 2015 | 2016 | |||||||||
Revenues | $22,632 | $22,149 | |||||||||
GAAP Earnings From Operations | $1,788 | $2,019 | |||||||||
GAAP Operating Margin | 7.9 | % | 9.1 | % | |||||||
Unallocated Pension/Postretirement Expense | ($94 | ) | $113 | ~($300) | |||||||
Core Operating Earnings (non-GAAP) | $1,694 | $2,132 | |||||||||
Core Operating Margin (non-GAAP) | 7.5 | % | 9.6 | % | |||||||
Increase/(Decrease) in GAAP Earnings From Operations | (11 | %) | |||||||||
Increase/(Decrease) in Core Operating Earnings (non-GAAP) | (21 | %) | |||||||||
GAAP Diluted Earnings Per Share | $1.83 | $1.87 | $8.45 - $8.65 | ||||||||
Unallocated Pension/Postretirement Expense1 | ($0.09 | ) | $0.10 | ($0.30 | ) | ||||||
Core Earnings Per Share (non-GAAP) | $1.74 | $1.97 | $8.15 - $8.35 | ||||||||
Weighted Average Diluted Shares (millions) | 665.8 | 714.2 | 645 - 650 | ||||||||
Increase/(Decrease) in GAAP Earnings Per Share | (2 | %) | |||||||||
Increase/(Decrease) in Core Earnings Per Share (non-GAAP) | (12 | %) |
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