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 26, 2017, reporting Boeing's financial results for the first quarter of 2017, furnished herewith. |
THE BOEING COMPANY | ||||
(Registrant) | ||||
/s/ Robert E. Verbeck | ||||
Robert E. Verbeck | ||||
Senior Vice President, Finance and Corporate Controller | ||||
April 26, 2017 |
Exhibit Number | Description | |
99.1 | Press Release issued by The Boeing Company dated April 26, 2017, reporting Boeing's financial results for the first quarter of 2017, furnished herewith. |
Exhibit 99.1 | ||
![]() | News Release | |
Boeing Corporate Offices 100 North Riverside Plaza Chicago, IL 60606-1596 www.boeing.com |
▪ | GAAP EPS of $2.34 and core EPS (non-GAAP)* of $2.01 on solid execution |
▪ | Revenue of $21.0 billion reflecting 210 commercial and defense aircraft deliveries and services |
▪ | Strong operating cash flow of $2.1 billion; repurchased 14.9 million shares for $2.5 billion |
▪ | Backlog grew to $480 billion, including $27 billion of net orders during the quarter |
▪ | Cash and marketable securities of $9.2 billion provide strong liquidity |
▪ | Revenue, margin, and operating cash guidance reaffirmed; EPS guidance increased by $0.10 on tax benefit |
Table 1. Summary Financial Results | First Quarter | ||||||||||
(Dollars in Millions, except per share data) | 2017 | 2016 | Change | ||||||||
Revenues | $20,976 | $22,632 | (7)% | ||||||||
GAAP | |||||||||||
Earnings From Operations | $2,024 | $1,788 | 13% | ||||||||
Operating Margin | 9.6 | % | 7.9 | % | 1.7 Pts | ||||||
Net Earnings | $1,451 | $1,219 | 19% | ||||||||
Earnings Per Share | $2.34 | $1.83 | 28% | ||||||||
Operating Cash Flow | $2,094 | $1,275 | 64% | ||||||||
Non-GAAP* | |||||||||||
Core Operating Earnings | $1,709 | $1,694 | 1% | ||||||||
Core Operating Margin | 8.1 | % | 7.5 | % | 0.6 Pts | ||||||
Core Earnings Per Share | $2.01 | $1.74 | 16% |
Table 2. Cash Flow | First Quarter | |||||||
(Millions) | 2017 | 2016 | ||||||
Operating Cash Flow | $2,094 | $1,275 | ||||||
Less Additions to Property, Plant & Equipment | ($466 | ) | ($748 | ) | ||||
Free Cash Flow* | $1,628 | $527 |
Table 3. Cash, Marketable Securities and Debt Balances | Quarter-End | |||||||
(Billions) | Q1 17 | Q4 16 | ||||||
Cash | $8.2 | $8.8 | ||||||
Marketable Securities1 | $1.0 | $1.2 | ||||||
Total | $9.2 | $10.0 | ||||||
Debt Balances: | ||||||||
The Boeing Company, net of intercompany loans to BCC | $7.7 | $7.1 | ||||||
Boeing Capital, including intercompany loans | $3.1 | $2.9 | ||||||
Total Consolidated Debt | $10.8 | $10.0 |
Table 4. Commercial Airplanes | First Quarter | ||||||||||
(Dollars in Millions) | 2017 | 2016 | Change | ||||||||
Commercial Airplanes Deliveries | 169 | 176 | (4)% | ||||||||
Revenues | $14,305 | $14,399 | (1)% | ||||||||
Earnings from Operations | $1,215 | $1,033 | 18% | ||||||||
Operating Margin | 8.5 | % | 7.2 | % | 1.3 Pts |
Table 5. Defense, Space & Security | First Quarter | ||||||||||
(Dollars in Millions) | 2017 | 2016 | Change | ||||||||
Revenues | |||||||||||
Boeing Military Aircraft | $2,636 | $3,659 | (28)% | ||||||||
Network & Space Systems | $1,564 | $1,735 | (10)% | ||||||||
Global Services & Support | $2,332 | $2,562 | (9)% | ||||||||
Total BDS Revenues | $6,532 | $7,956 | (18)% | ||||||||
Earnings from Operations | |||||||||||
Boeing Military Aircraft | $321 | $334 | (4)% | ||||||||
Network & Space Systems | $98 | $148 | (34)% | ||||||||
Global Services & Support | $318 | $340 | (6)% | ||||||||
Total BDS Earnings from Operations | $737 | $822 | (10)% | ||||||||
Operating Margin | 11.3 | % | 10.3 | % | 1.0 Pts |
Table 6. Additional Financial Information | First Quarter | |||||||
(Dollars in Millions) | 2017 | 2016 | ||||||
Revenues | ||||||||
Boeing Capital | $92 | $64 | ||||||
Unallocated items, eliminations and other | $47 | $213 | ||||||
Earnings from Operations | ||||||||
Boeing Capital | $39 | $5 | ||||||
Unallocated pension/postretirement | $315 | $94 | ||||||
Other unallocated items and eliminations | ($282 | ) | ($166 | ) | ||||
Other (loss)/income, net | $22 | $26 | ||||||
Interest and debt expense | ($87 | ) | ($73 | ) | ||||
Effective tax rate | 25.9 | % | 30.0 | % |
Table 7. 2017 Financial Outlook | Current | Prior | |
(Dollars in Billions, except per share data) | Guidance | Guidance | |
The Boeing Company | |||
Revenue | $90.5 - 92.5 | $90.5 - 92.5 | |
GAAP Earnings Per Share | $10.35 - 10.55 | $10.25 - 10.45 | |
Core Earnings Per Share* | $9.20 - 9.40 | $9.10 - 9.30 | |
Operating Cash Flow | ~$10.75 | ~$10.75 | |
Commercial Airplanes | |||
Deliveries | 760 - 765 | 760 - 765 | |
Revenue | $62.5 - 63.5 | $62.5 - 63.5 | |
Operating Margin | 9.5% - 10.0 | 9.5% - 10.0 | |
Defense, Space & Security | |||
Revenue | |||
Boeing Military Aircraft | ~$11.5 | ~$11.5 | |
Network & Space Systems | ~$7.0 | ~$7.0 | |
Global Services & Support | ~$10.0 | ~$10.0 | |
Total BDS Revenue | $28.0 - 29.0 | $28.0 - 29.0 | |
Operating Margin | |||
Boeing Military Aircraft | ~12.0% | ~12.0% | |
Network & Space Systems | ~9.0% | ~9.0% | |
Global Services & Support | >12.5% | >12.5% | |
Total BDS Operating Margin | ~11.5% | ~11.5% | |
Boeing Capital | |||
Portfolio Size | Stable | Stable | |
Revenue | ~$0.3 | ~$0.3 | |
Pre-Tax Earnings | ~$0.05 | ~$0.05 | |
Research & Development | ~ $3.6 | ~ $3.6 | |
Capital Expenditures | ~ $2.3 | ~ $2.3 | |
Pension Expense 1 | ~ $0.7 | ~ $0.7 | |
Effective Tax Rate | ~ 31.0% | ~ 32.0% |
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) | 2017 | 2016 | |||||
Sales of products | $18,512 | $19,885 | |||||
Sales of services | 2,464 | 2,747 | |||||
Total revenues | 20,976 | 22,632 | |||||
Cost of products | (15,363 | ) | (16,945 | ) | |||
Cost of services | (1,888 | ) | (2,136 | ) | |||
Boeing Capital interest expense | (13 | ) | (16 | ) | |||
Total costs and expenses | (17,264 | ) | (19,097 | ) | |||
3,712 | 3,535 | ||||||
Income from operating investments, net | 81 | 54 | |||||
General and administrative expense | (933 | ) | (888 | ) | |||
Research and development expense, net | (838 | ) | (917 | ) | |||
Gain on dispositions, net | 2 | 4 | |||||
Earnings from operations | 2,024 | 1,788 | |||||
Other income, net | 22 | 26 | |||||
Interest and debt expense | (87 | ) | (73 | ) | |||
Earnings before income taxes | 1,959 | 1,741 | |||||
Income tax expense | (508 | ) | (522 | ) | |||
Net earnings | $1,451 | $1,219 | |||||
Basic earnings per share | $2.36 | $1.85 | |||||
Diluted earnings per share | $2.34 | $1.83 | |||||
Cash dividends paid per share | $1.42 | $1.09 | |||||
Weighted average diluted shares (millions) | 621.2 | 665.8 |
(Dollars in millions, except per share data) | March 31 2017 | December 31 2016 | |||||
Assets | |||||||
Cash and cash equivalents | $8,190 | $8,801 | |||||
Short-term and other investments | 1,015 | 1,228 | |||||
Accounts receivable, net | 9,335 | 8,832 | |||||
Current portion of customer financing, net | 580 | 428 | |||||
Inventories, net of advances and progress billings | 43,247 | 43,199 | |||||
Total current assets | 62,367 | 62,488 | |||||
Customer financing, net | 3,527 | 3,773 | |||||
Property, plant and equipment, net of accumulated depreciation of $17,156 and $16,883 | 12,842 | 12,807 | |||||
Goodwill | 5,342 | 5,324 | |||||
Acquired intangible assets, net | 2,496 | 2,540 | |||||
Deferred income taxes | 336 | 332 | |||||
Investments | 1,319 | 1,317 | |||||
Other assets, net of accumulated amortization of $527 and $497 | 1,444 | 1,416 | |||||
Total assets | $89,673 | $89,997 | |||||
Liabilities and equity | |||||||
Accounts payable | $11,964 | $11,190 | |||||
Accrued liabilities | 13,332 | 14,691 | |||||
Advances and billings in excess of related costs | 24,118 | 23,869 | |||||
Short-term debt and current portion of long-term debt | 367 | 384 | |||||
Total current liabilities | 49,781 | 50,134 | |||||
Deferred income taxes | 1,339 | 1,338 | |||||
Accrued retiree health care | 5,885 | 5,916 | |||||
Accrued pension plan liability, net | 19,796 | 19,943 | |||||
Other long-term liabilities | 2,285 | 2,221 | |||||
Long-term debt | 10,432 | 9,568 | |||||
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 | 4,604 | 4,762 | |||||
Treasury stock, at cost - 406,468,802 and 395,109,568 shares | (38,320 | ) | (36,097 | ) | |||
Retained earnings | 42,165 | 40,714 | |||||
Accumulated other comprehensive loss | (13,415 | ) | (13,623 | ) | |||
Total shareholders’ equity | 95 | 817 | |||||
Noncontrolling interests | 60 | 60 | |||||
Total equity | 155 | 877 | |||||
Total liabilities and equity | $89,673 | $89,997 |
Three months ended March 31 | |||||||
(Dollars in millions) | 2017 | 2016 | |||||
Cash flows – operating activities: | |||||||
Net earnings | $1,451 | $1,219 | |||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Non-cash items – | |||||||
Share-based plans expense | 50 | 51 | |||||
Depreciation and amortization | 471 | 443 | |||||
Investment/asset impairment charges, net | 23 | 33 | |||||
Customer financing valuation benefit | 7 | (2 | ) | ||||
Gain on dispositions, net | (2 | ) | (4 | ) | |||
Other charges and credits, net | 52 | 84 | |||||
Changes in assets and liabilities – | |||||||
Accounts receivable | (769 | ) | (1,002 | ) | |||
Inventories, net of advances and progress billings | (31 | ) | (56 | ) | |||
Accounts payable | 616 | 960 | |||||
Accrued liabilities | (613 | ) | (467 | ) | |||
Advances and billings in excess of related costs | 249 | (435 | ) | ||||
Income taxes receivable, payable and deferred | 495 | 273 | |||||
Other long-term liabilities | (72 | ) | (116 | ) | |||
Pension and other postretirement plans | 10 | 79 | |||||
Customer financing, net | 232 | 276 | |||||
Other | (75 | ) | (61 | ) | |||
Net cash provided by operating activities | 2,094 | 1,275 | |||||
Cash flows – investing activities: | |||||||
Property, plant and equipment additions | (466 | ) | (748 | ) | |||
Property, plant and equipment reductions | 9 | 11 | |||||
Contributions to investments | (605 | ) | (204 | ) | |||
Proceeds from investments | 803 | 493 | |||||
Other | (3 | ) | 10 | ||||
Net cash used by investing activities | (262 | ) | (438 | ) | |||
Cash flows – financing activities: | |||||||
New borrowings | 872 | 115 | |||||
Debt repayments | (34 | ) | (128 | ) | |||
Stock options exercised | 174 | 42 | |||||
Employee taxes on certain share-based payment arrangements | (107 | ) | (76 | ) | |||
Common shares repurchased | (2,500 | ) | (3,501 | ) | |||
Dividends paid | (868 | ) | (717 | ) | |||
Net cash used by financing activities | (2,463 | ) | (4,265 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 20 | 12 | |||||
Net decrease in cash and cash equivalents | (611 | ) | (3,416 | ) | |||
Cash and cash equivalents at beginning of year | 8,801 | 11,302 | |||||
Cash and cash equivalents at end of period | $8,190 | $7,886 |
Three months ended March 31 | |||||||
(Dollars in millions) | 2017 | 2016 | |||||
Revenues: | |||||||
Commercial Airplanes | $14,305 | $14,399 | |||||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 2,636 | 3,659 | |||||
Network & Space Systems | 1,564 | 1,735 | |||||
Global Services & Support | 2,332 | 2,562 | |||||
Total Defense, Space & Security | 6,532 | 7,956 | |||||
Boeing Capital | 92 | 64 | |||||
Unallocated items, eliminations and other | 47 | 213 | |||||
Total revenues | $20,976 | $22,632 | |||||
Earnings from operations: | |||||||
Commercial Airplanes | $1,215 | $1,033 | |||||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 321 | 334 | |||||
Network & Space Systems | 98 | 148 | |||||
Global Services & Support | 318 | 340 | |||||
Total Defense, Space & Security | 737 | 822 | |||||
Boeing Capital | 39 | 5 | |||||
Segment operating profit | 1,991 | 1,860 | |||||
Unallocated items, eliminations and other | 33 | (72 | ) | ||||
Earnings from operations | 2,024 | 1,788 | |||||
Other income, net | 22 | 26 | |||||
Interest and debt expense | (87 | ) | (73 | ) | |||
Earnings before income taxes | 1,959 | 1,741 | |||||
Income tax expense | (508 | ) | (522 | ) | |||
Net earnings | $1,451 | $1,219 | |||||
Research and development expense, net: | |||||||
Commercial Airplanes | $636 | $671 | |||||
Defense, Space & Security | 213 | 258 | |||||
Other | (11 | ) | (12 | ) | |||
Total research and development expense, net | $838 | $917 | |||||
Unallocated items, eliminations and other | |||||||
Share-based plans | ($21 | ) | ($23 | ) | |||
Deferred compensation | (50 | ) | 16 | ||||
Amortization of previously capitalized interest | (31 | ) | (30 | ) | |||
Eliminations and other unallocated items | (180 | ) | (129 | ) | |||
Sub-total (included in core operating earnings) | (282 | ) | (166 | ) | |||
Pension | 255 | 45 | |||||
Postretirement | 60 | 49 | |||||
Total unallocated items, eliminations and other | $33 | ($72 | ) |
Deliveries | Three months ended March 31 | ||||||
Commercial Airplanes | 2017 | 2016 | |||||
737 | 113 | 121 | |||||
747 | 1 | (1) | 1 | ||||
767 | 2 | 1 | |||||
777 | 21 | 23 | |||||
787 | 32 | 30 | |||||
Total | 169 | 176 | |||||
Note: Deliveries under operating lease are identified by parentheses. | |||||||
Defense, Space & Security | |||||||
Boeing Military Aircraft | |||||||
AH-64 Apache (New) | 3 | 7 | |||||
AH-64 Apache (Remanufactured) | 13 | 11 | |||||
C-17 Globemaster III | 3 | ||||||
CH-47 Chinook (New) | 3 | 3 | |||||
CH-47 Chinook (Renewed) | 9 | 9 | |||||
F-15 Models | 3 | 4 | |||||
F/A-18 Models | 6 | 8 | |||||
P-8 Models | 4 | 4 | |||||
Network & Space Systems | |||||||
Commercial and Civil Satellites | 1 | 1 | |||||
Military Satellites | |||||||
Contractual backlog (Dollars in billions) | March 31 2017 | December 31 2016 | ||||||
Commercial Airplanes | $415.1 | $416.2 | ||||||
Defense, Space & Security: | ||||||||
Boeing Military Aircraft | 23.4 | 21.4 | ||||||
Network & Space Systems | 6.0 | 5.1 | ||||||
Global Services & Support | 17.0 | 15.6 | ||||||
Total Defense, Space & Security | 46.4 | 42.1 | ||||||
Total contractual backlog | $461.5 | $458.3 | ||||||
Unobligated backlog | $18.0 | $15.2 | ||||||
Total backlog | $479.5 | $473.5 | ||||||
Workforce | 147,000 | 150,500 |
(Dollars in millions, except per share data) | First Quarter | Guidance | |||||||
2017 | 2016 | 2017 | |||||||
Revenues | $20,976 | $22,632 | |||||||
GAAP Earnings From Operations | $2,024 | $1,788 | |||||||
Increase/(Decrease) in GAAP Earnings From Operations | 13 | % | |||||||
GAAP Operating Margin | 9.6 | % | 7.9 | % | |||||
Unallocated Pension Income | ($255 | ) | ($45 | ) | |||||
Unallocated Other Postretirement Benefit Income | ($60 | ) | ($49 | ) | |||||
Unallocated Pension and Other Postretirement Benefit Income | ($315 | ) | ($94 | ) | ~($1,075) | ||||
Core Operating Earnings (non-GAAP) | $1,709 | $1,694 | |||||||
Increase/(Decrease) in Core Operating Earnings (non-GAAP) | 1 | % | |||||||
Core Operating Margin (non-GAAP) | 8.1 | % | 7.5 | % | |||||
GAAP Diluted Earnings Per Share | $2.34 | $1.83 | $10.35 - $10.55 | ||||||
Unallocated Pension Income | ($0.41 | ) | ($0.07 | ) | |||||
Unallocated Postretirement Benefit Income | ($0.10 | ) | ($0.07 | ) | ($1.15) | ||||
Provision for deferred income taxes on adjustments (1) | $0.18 | $0.05 | |||||||
Core Earnings Per Share (non-GAAP) | $2.01 | $1.74 | $9.20 - $9.40 | ||||||
Weighted Average Diluted Shares (millions) | 621.2 | 665.8 | 605 - 610 | ||||||
Increase/(Decrease) in GAAP Earnings Per Share | 28 | % | |||||||
Increase/(Decrease) in Core Earnings Per Share (non-GAAP) | 16 | % | |||||||
(1) The income tax impact is calculated using the tax rate in effect for the non-GAAP adjustments. |
7!E $YO;F4 )=&]P3W5TZRQO]JJVQ
M]3_[;$E/)_\ /'ZT=-^KS;