EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO   News Release

 

 

 

The Boeing Company

100 North Riverside Plaza

Chicago, IL 60606-1596

www.boeing.com

Boeing Posts Quarterly Loss on Strike Impact and Charges

 

•  

Fourth-quarter revenues declined to $12.7 billion from $17.5 billion as labor strike pushed airplane deliveries out of the quarter

 

•  

Fourth-quarter EPS declined to loss of $0.08 per share, reduced by an estimated total of $1.79 due to strike, 747 charge and litigation-related reserve

 

•  

Backlog grew 8 percent in 2008 to a record $352 billion

 

•  

2009 EPS guidance of $5.05 to $5.35 underpins a solid foundation in challenging times

Table 1. Summary Financial Results

 

     4th Quarter     Change     Full Year     Change  

(Millions, except per share data)

    2008     2007       2008     2007    

Revenues

    $ 12,680     $ 17,477     (27 )%   $ 60,925     $ 66,387     (8 )%

Earnings/(Loss) From Operations

    $ (205 )   $ 1,516     N.A.     $ 3,988     $ 5,830     (32 )%

Operating Margin

     -1.6 %     8.7 %   N.A.       6.5 %     8.8 %   (2.3 )Pts

Reported Net Income/(Loss)

   $ (56 )   $ 1,033     N.A.     $ 2,702     $ 4,074     (34 )%

Reported Earnings/(Loss) per Share

    $ (0.08 )   $ 1.36     N.A.     $ 3.71     $ 5.28     (30 )%

Operating Cash Flow

    $ (1,641 )   $ 1,893     N.A.     $ (401 )   $ 9,584     N.A.  

CHICAGO, Jan. 28, 2009 – The Boeing Company’s [NYSE: BA] fourth-quarter net income declined to a loss of $56 million, or $0.08 per share, reflecting the now-settled machinists’ strike (EPS impact estimated at $1.09 per share), a charge related to the 747 ($0.61 per share) and a litigation-related reserve ($0.09 per share).

Revenues for the quarter declined 27 percent to $12.7 billion, due primarily to the effects of the strike which reduced commercial airplane deliveries by approximately 70 units and revenues by an estimated $4.3 billion (Table 1).

For the full year of 2008, net income fell 34 percent to $2.7 billion, EPS was $3.71 per share, and revenue fell 8 percent to $60.9 billion. Full-year results were impacted by the strike, the 747 charge, the litigation-related reserve, and higher costs for AEW&C announced in the second quarter, which together reduced full-year EPS by an estimated $2.56 per share. This was partially offset by lower pension and deferred compensation expenses.

 

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“The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs,” said Chairman, President, and Chief Executive Officer Jim McNerney. “Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times.”

Fourth-quarter operating cash outflow was $1.6 billion, primarily reflecting the effects of the strike (Table 2). Operating cash outflow for the year was $0.4 billion, and free cash flow* was negative $2.1 billion. Total company backlog at year-end was a record $352 billion, up 8 percent in 2008 driven by commercial airplane orders and new IDS contract awards.

Table 2. Cash Flow

 

      4th Quarter     Full Year  

(Millions)

    2008     2007     2008     2007  

Operating Cash Flow 1

    $ (1,641 )   $ 1,893     $ (401 )   $ 9,584  

Less Additions to Property, Plant & Equipment

    $ (445 )   $ (449 )   $ (1,674 )   $ (1,731 )
                                

Free Cash Flow*

    $ (2,086 )   $ 1,444     $ (2,075 )   $ 7,853  

 

1

Operating cash flow includes $531 in qualified pension plan contributions in 2008 and $580 in 2007.

*

Non-GAAP measure. A complete definition and reconciliation of Boeing’s use of non-GAAP measures, identified by an asterisk (*), is found on page 8, “Non-GAAP Measure Disclosure.”

Cash and investments in marketable securities totaled $3.6 billion at quarter end, down from the end of the third quarter, reflecting strike impacts, previously announced business acquisitions and scheduled debt repayments (Table 3). The company converted most of its marketable securities positions into cash during the quarter.

Table 3. Cash, Marketable Securities and Debt Balances

 

     Quarter-End

(Billions)

    4Q08    3Q08

Cash

    $ 3.3    $ 4.2

Marketable Securities1

    $ 0.3    $ 3.0
             

Total

    $ 3.6    $ 7.2

Debt Balances:

      

The Boeing Company

    $ 3.9    $ 3.9

Boeing Capital Corporation

    $ 3.6    $ 3.7
             

Total Consolidated Debt

    $ 7.5    $ 7.6

 

1

Marketable securities consists primarily of investment-grade instruments classified as “short-term investments” and “investments.”

Share repurchase activity totaled 7.6 million shares for $335 million during the quarter and 42.1 million shares for $2.9 billion during the year.

 

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Segment Results

Commercial Airplanes

Boeing Commercial Airplanes (BCA) fourth-quarter revenues were $4.6 billion, 48 percent below the same period last year, driven by reduced deliveries due to the strike that affected production of all commercial airplane programs (Table 4). Losses from operations totaled $968 million compared with earnings of $973 million in the year-ago period. The strike reduced fourth-quarter earnings by an estimated $1.2 billion, net of recovery of galley-delayed deliveries from the third quarter, while a charge for a reach-forward loss on the 747 program reduced earnings by $685 million.

Table 4. Commercial Airplanes Operating Results

 

      4th Quarter     Change     Full Year     Change  

(Millions, except deliveries & margin percent)

    2008     2007       2008     2007    

Commercial Airplanes Deliveries

      50       112     (55 )%     375       441     (15 )%

Revenues

    $ 4,589     $ 8,866     (48 )%   $ 28,263     $ 33,386     (15 )%

Earnings/(Loss) from Operations

    $ (968 )   $ 973     N.A.     $ 1,186     $ 3,584     (67 )%

Operating Margins

      (21.1 )%     11.0 %   N.A.       4.2 %     10.7 %   (6.5 )Pts

For the year, BCA revenues decreased 15 percent to $28.3 billion on an estimated 105 fewer airplane deliveries due to the strike. Operating earnings decreased 67 percent to $1.2 billion while margins were 4.2 percent, driven by the strike, infrastructure cost absorption and additional 747 program costs. The strike reduced full-year earnings by an estimated $1.8 billion.

BCA booked 44 gross orders during the quarter and 669 during the year. Contractual backlog rose to a record $279 billion, increasing 9 percent for the year to approximately eight times BCA’s annual revenues.

As announced on November 14, the company expects deliveries of the 747-8 freighter to begin in the third quarter of 2010 and deliveries of the 747-8 Intercontinental passenger model to begin in the second quarter of 2011. The schedule change was caused by design changes, limited availability of engineering resources inside the company and the machinists strike. Since November, a full assessment of the supply chain impacts of these and other additional design changes, coupled with increased pension costs, has resulted in the company recording a reach-forward loss of $685 million in the fourth quarter.

The 787 Dreamliner made progress during the quarter despite the labor strike. Key milestones included FAA approval of the scheduled maintenance program that defines the tasks and service intervals operators will use to maintain the 787, and a

 

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successful wing-box destruction test, a key step toward validating the structural integrity of the airplane. Also during the quarter, the company discovered a requirement to replace certain fasteners, and has now largely finished replacing them on the first two flight test airplanes. As announced in December, the company expects first flight of the 787 to occur in the second quarter of 2009 and deliveries to begin in the first quarter of 2010. The 787 program has won 895 net orders from 58 customers to date, which includes the recent removal from the books of one customer’s order for airplanes that were scheduled for delivery late in the next decade.

Integrated Defense Systems

Boeing Integrated Defense Systems (IDS) fourth-quarter revenues were $8.0 billion and operating margins were 11.0 percent, reflecting strong program performance across IDS’s balanced portfolio of programs.

For the year, IDS revenue held steady at $32.0 billion with operating margins of 10.1 percent due to solid performance across IDS, including a reduction of 0.8 points due to the second-quarter AEW&C charge.

Table 5. Integrated Defense Systems Operating Results

 

     4th Quarter     Change     Full Year     Change  

(Millions, except margin percent)

    2008     2007       2008     2007    

Revenues

             

Boeing Military Aircraft

    $ 3,166     $ 3,618     (12 )%   $ 13,492     $ 13,740     (2 )%

Network & Space Systems

    $ 2,859     $ 2,842     1 %   $ 11,338     $ 11,475     (1 )%

Global Services & Support

    $ 2,016     $ 1,898     6 %   $ 7,217     $ 6,837     6 %
                                            

Total IDS Revenues

    $ 8,041     $ 8,358     (4 )%   $ 32,047     $ 32,052     (0 )%

Earnings from Operations

             

Boeing Military Aircraft

    $ 354     $ 398     (11 )%   $ 1,276     $ 1,649     (23 )%

Network & Space Systems

    $ 228     $ 292     (22 )%   $ 1,033     $ 862     20 %

Global Services & Support

    $ 299     $ 289     3 %   $ 923     $ 929     (1 )%
                                            

Total IDS Earnings from Operations

    $ 881     $ 979     (10 )%   $ 3,232     $ 3,440     (6 )%

Operating Margins

      11.0 %     11.7 %   (0.7 )Pts     10.1 %     10.7 %   (0.6 )Pts

Boeing Military Aircraft fourth-quarter operating margins expanded to 11.2 percent for the quarter due to strong execution across aircraft production programs. Revenue of $3.2 billion is down from the prior year due to delivery mix and volume.

For the quarter, revenues in Network & Space Systems increased slightly to $2.9 billion. Operating margins were 8.0 percent on solid performance across the segment’s broad array of programs. Ground-based Midcourse Defense successfully completed its most complex flight test to date, and Airborne Laser successfully completed the first ground test of the entire weapon system integrated aboard the aircraft.

 

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Global Services & Support again generated strong results from its broad portfolio of programs. Revenues for the quarter rose to $2.0 billion on growth in training systems and integrated logistics. Operating margins were 14.8 percent reflecting outstanding execution.

The IDS backlog of $73.0 billion remained stable during the quarter and increased for the full year. Significant new orders during the year included V-22 and CH-47 multi-year contracts, the F-22 sustainment contract, and key international orders.

Boeing Capital Corporation

Boeing Capital Corporation (BCC) reported fourth-quarter pre-tax earnings of $26 million, down from $30 million in the same period last year which included a significantly larger portfolio (Table 6). BCC’s portfolio balance at the end of the year was $6.0 billion, down from $6.5 billion at the beginning of the year primarily on normal portfolio run-off and depreciation. BCC contributed $32 million in cash dividends to Boeing during the quarter and $252 million in the year. BCC’s debt-to-equity ratio remained steady at 5.0-to-1.

Table 6. Boeing Capital Corporation Operating Results

 

     4th Quarter    Change     Full Year    Change  

(Millions)

    2008    2007      2008    2007   

Revenues

    $ 168    $ 196    (14 )%   $ 703    $ 815    (14 )%

Earnings from Operations

    $ 26    $ 30    (13 )%   $ 169    $ 234    (28 )%

Additional Information

The “Other” segment consists primarily of Boeing Engineering, Operations and Technology as well as certain results related to the consolidation of all business units. Other segment expense was $59 million in the fourth quarter, down from $166 million in the same period last year which included higher environmental expense.

Unallocated expense was $85 million, down from $300 million last year, driven by unallocated pension expense being lower by $127 million. Other unallocated includes a $101 million litigation-related reserve.

Fourth-quarter pension expense was $113 million, down from $301 million in the same quarter last year, of which $14 million was recorded in unallocated expense and

 

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the balance was recorded as expense in the business segments. At year-end, Boeing’s pension plans were funded at 83 percent of the projected benefit obligation resulting in a reduction of $8.2 billion to shareholders’ equity.

Income tax benefit was $216 million in the quarter, including $170 million for the full-year R&D tax credit that was signed into law during the quarter.

Outlook

The 2009 financial guidance reflects expectations for continued growth in BCA and IDS, reduced discretionary and capital spending, and restructuring of various internal organizations to drive higher levels of productivity. The company expects to issue 2010 financial guidance later in the year.

Boeing’s 2009 revenue guidance is $68 billion to $69 billion. Earnings-per-share guidance for 2009 is $5.05 to $5.35 per share. The financial guidance continues to assume stable delivery levels for in-production commercial airplanes over the next several years, but also considers operational and market risks. Operating cash flow is expected to be greater than $2.5 billion (Table 7), including discretionary pension contributions of approximately $0.5 billion and an assumption of $1 billion for new commercial airplane financings.

Commercial Airplanes’ 2009 delivery guidance is between 480 and 485 airplanes and is sold out. BCA’s 2009 revenue is expected to grow to between $34 billion and $35 billion, accompanied by margins of approximately 10 percent.

IDS revenue guidance for 2009 is between $33 billion and $34 billion, with operating margins of approximately 10 percent.

The company expects that it will finance some commercial airplane deliveries beginning in the first quarter of 2009. At this time, we expect that the amount of financing in 2009 will exceed normal portfolio runoff due to depreciation and prepayments, modestly increasing the portfolio size at BCC.

Boeing’s 2009 R&D forecast is between $3.6 billion and $3.8 billion. Annual capital expenditures are expected to be approximately $1.4 billion in 2009.

The company’s non-cash pension expense is expected to be approximately $1.0 billion in 2009, reflecting negative asset returns in 2008, a reduction in the assumed long-term rate of return from 8.25 percent to 8.0 percent and a decrease in the discount rate to 6.1 percent from 6.2 percent.

 

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Table 7. Financial Outlook

 

(Billions, except per share data)

    2009

The Boeing Company

   

Revenues

    $68 - $69

Earnings Per Share (GAAP)

    $5.05 - $5.35

Operating Cash Flow1

    > $2.5

Boeing Commercial Airplanes

   

Deliveries

    480 - 485

Revenues

    $34 - $35

Operating Margin

    ~ 10%

Integrated Defense Systems

   

Revenues

   

Boeing Military Aircraft

    ~ $14.0

Network & Space Systems

    ~ $11.5

Global Services & Support

    ~ $8.0
    

Total IDS Revenues

    $33 - $34

Operating Margin

   

Boeing Military Aircraft

    ~ 10%

Network & Space Systems

    ~ 9%

Global Services & Support

    ~ 11.5%
    

Total IDS Operating Margin

    ~ 10%

Boeing Capital Corporation

   

Portfolio Size

    Modest increase

Revenue

    ~ $0.6

Return on Assets

    > 1.0%

Research & Development

    $3.6 - $3.8

Capital Expenditures

    ~ $1.4

 

1

After pension contributions of $0.5 billion and assumed $1 billion for new aircraft financings in 2009.

 

7

Non-GAAP Measure Disclosure

Management believes that the non-GAAP (Generally Accepted Accounting Principles) measures (indicated by an asterisk *) used in this report provide investors with important perspectives into the company’s ongoing business performance. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently. The following definitions are provided:

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.

 

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Forward-Looking Information Is Subject to Risk and Uncertainty

Certain statements in this press release may be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “targets,” and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based upon assumptions about future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak to events only as of the date they are made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. Specific factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, those set forth below and other important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission: the effect of economic conditions in the United States and globally; the adequacy of coverage, by allowance for losses, of risks related to our non-U.S. accounts receivable being payable in U.S. dollars; the continued operation, viability and growth of Commercial Airplanes revenues and successful execution of our backlog in this segment; the effects of customers cancelling, modifying and/or rescheduling contractual orders; the timing and effects of decisions to complete or launch a Commercial Airplanes program; the ability to successfully develop and timely produce the 787 and 747-8 aircraft; the effect on our revenues of political and legal processes; changing defense priorities; and associated budget reductions by U.S. and international government customers affecting Boeing defense programs; our relationship with our union-represented workforce and the negotiation of collective bargaining agreements; the continuation of long-term trends in passenger traffic and revenue yields in the airline industry; the impact of volatile fuel prices and the airline industry’s response; the effect of declines in aircraft valuation; the impact on our revenues or operating results of airline bankruptcies; the continuation of historical costs for fleet support services; the receipt of estimated award and incentive fees on U.S. government contracts; the future demand for commercial satellites and projections of future order flow; the potential for technical or quality issues on development programs, including the Airborne Early Warning and Control program, International Tanker, other fixed-price development programs, or commercial satellite programs, to affect schedule and cost estimates, or cause us to incur a material charge or experience a termination for default; the outcome of any litigation and/or government investigation in which we are a party, and other contingencies; returns on pension fund assets, impacts of future interest rate changes on pension obligations and rising healthcare costs; the amounts and effects of underinsured operations, including satellite launches; the scope, nature or impact of acquisition or disposition activity and investment in any joint ventures/strategic alliances, including Sea Launch and United Launch Alliance, and indemnifications related thereto; and the expected cash expenditures and charges associated with the exit of the Connexion by Boeing business.

# # #

Contact:

 

Investor Relations:   Diana Sands or Rob Young (312) 544-2140
Communications:   Todd Blecher (312) 544-2002

 

9

The Boeing Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

 

     Twelve months ended
December 31		     Three months ended
December 31		  

(Dollars in millions except per share data)

    2008     2007     2008     2007  

Sales of products

    $ 50,196     $ 57,049     $ 9,803     $ 14,856  

Sales of services

      10,729       9,338       2,877     $ 2,621  
                                

Total revenues

      60,925       66,387       12,680       17,477  

Cost of products

      (41,662 )     (45,375 )     (8,926 )     (11,904 )

Cost of services

      (8,445 )     (7,732 )     (2,266 )     (2,346 )

Boeing Capital Corporation interest expense

      (223 )     (295 )     (50 )     (70 )
                                

Total costs and expenses

      (50,330 )     (53,402 )     (11,242 )     (14,320 )
                                
     10,595       12,985       1,438       3,157  

Income from operating investments, net

      241       188       46       88  

General and administrative expense

      (3,084 )     (3,531 )     (734 )     (796 )

Research and development expense, net

      (3,768 )     (3,850 )     (957 )     (993 )

Gain on dispositions/business shutdown, net

      4       38       2       60  
                                

Earnings/(loss) from operations

      3,988       5,830       (205 )     1,516  

Other income/(expense), net

      247       484       (10 )     129  

Interest and debt expense

      (202 )     (196 )     (57 )     (57 )
                                

Earnings/(loss) before income taxes

      4,033       6,118       (272 )     1,588  

Income tax (expense)/benefit

      (1,349 )     (2,060 )     216       (561 )
                                

Net earnings/(loss) from continuing operations

      2,684       4,058       (56 )     1,027  

Net gain on disposal of discontinued operations, net of taxes of $10, $9 and $3

      18       16         6  
                                

Net earnings/(loss)

    $ 2,702     $ 4,074     $ (56 )   $ 1,033  
                                

Basic earnings/(loss) per share from continuing operations

    $ 3.73     $ 5.36     $ (0.08 )   $ 1.38  

Net gain on disposal of discontinued operations, net of taxes

      0.02       0.02         0.01  
                                

Basic earnings/(loss) per share

    $ 3.75     $ 5.38     $ (0.08 )   $ 1.39  
                                

Diluted earnings/(loss) per share from continuing operations

    $ 3.69     $ 5.26     $ (0.08 )   $ 1.35  

Net gain on disposal of discontinued operations, net of taxes

      0.02       0.02         0.01  
                                

Diluted earnings/(loss) per share

    $ 3.71     $ 5.28     $ (0.08 )   $ 1.36  
                                

Cash dividends paid per share

    $ 1.60     $ 1.40     $ 0.40     $ 0.35  
                                

Weighted average diluted shares (millions)

      729.0       772.5       706.0       761.0  
                                

The numerator used to compute diluted earnings per share is as follows:

         
                                

Net earnings/(loss)

    $ 2,702     $ 4,074     $ (56 )   $ 1,033  

Expense related to diluted shares

        2      
                                

Total numerator

    $ 2,702     $ 4,076     $ (56 )   $ 1,033  
                                

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited)

 

(Dollars in millions except per share data)

    December 31
2008		     December 31
2007		  

Assets

     

Cash and cash equivalents

    $ 3,268     $ 7,042  

Short-term investments

      11       2,266  

Accounts receivable, net

      5,506       5,740  

Current portion of customer financing, net

      425       328  

Deferred income taxes

      1,151       2,341  

Inventories, net of advances and progress billings

      15,612       9,563  
                

Total current assets

      25,973       27,280  

Customer financing, net

      5,879       6,777  

Property, plant and equipment, net of accumulated depreciation of $12,280 and $11,915

      8,762       8,265  

Goodwill

      3,647       3,081  

Other acquired intangibles, net

      2,685       2,093  

Deferred income taxes

      4,106       197  

Investments

      1,328       4,111  

Pension plan assets, net

      16       5,924  

Other assets, net of accumulated amortization of $400 and $385

      1,405       1,258  
                

Total assets

    $ 53,801     $ 58,986  
                

Liabilities and Shareholders’ Equity

     

Accounts payable and other liabilities

    $ 17,571     $ 16,676  

Advances and billings in excess of related costs

      12,737       13,847  

Income taxes payable

      49       253  

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

      560       762  
                

Total current liabilities

      30,917       31,538  

Deferred income taxes

        1,190  

Accrued retiree health care

      7,322       7,007  

Accrued pension plan liability, net

      8,383       1,155  

Non-current income taxes payable

      1,154       1,121  

Other long-term liabilities

      337       516  

Long-term debt

      6,952       7,455  

Shareholders’ equity:

     

Common shares, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 and 1,012,261,159 shares issued

      5,061       5,061  

Additional paid-in capital

      3,456       4,757  

Treasury shares, at cost – 285,661,944 and 244,217,170

      (17,758 )     (14,842 )

Retained earnings

      22,705       21,376  

Accumulated other comprehensive loss

      (13,525 )     (4,596 )

ShareValue Trust shares – 28,460,769 and 31,362,850

      (1,203 )     (2,752 )
                

Total shareholders’ equity

      (1,264 )     9,004  
                

Total liabilities and shareholders’ equity

    $ 53,801     $ 58,986  
                

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

     Twelve months ended
December 31		  

(Dollars in millions)

    2008     2007  

Cash flows - operating activities:

     

Net earnings

    $ 2,702     $ 4,074  

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

     

Non-cash items –

     

Share-based plans expense

      209       287  

Depreciation

      1,325       1,334  

Amortization of other acquired intangibles

      166       152  

Amortization of debt discount/premium and issuance costs

      11       (1 )

Investment/asset impairment charges, net

      50       51  

Customer financing valuation provision/(benefit)

      62       (60 )

Gain on disposal of discontinued operations

      (28 )     (25 )

Gain on dispositions/business shutdown, net

      (4 )     (38 )

Other charges and credits, net

      116       197  

Excess tax benefits from share-based payment arrangements

      (100 )     (144 )

Changes in assets and liabilities –

     

Accounts receivable

      564       (392 )

Inventories, net of advances and progress billings

      (6,168 )     (1,577 )

Accounts payable and other liabilities

      856       928  

Advances and billings in excess of related costs

      (1,120 )     2,369  

Income taxes receivable, payable and deferred

      752       1,290  

Other long-term liabilities

      (211 )     71  

Pension and other postretirement plans

      14       (143 )

Customer financing, net

      432       1,458  

Other

      (29 )     (247 )
                

Net cash (used)/provided by operating activities

      (401 )     9,584  
                

Cash flows - investing activities:

     

Property, plant and equipment additions

      (1,674 )     (1,731 )

Property, plant and equipment reductions

      34       59  

Acquisitions, net of cash acquired

      (964 )     (75 )

Contributions to investments

      (6,673 )     (5,710 )

Proceeds from investments

      11,343       3,817  

Purchase of distribution rights

      (178 )     (182 )
                

Net cash provided/(used) by investing activities

      1,888       (3,822 )
                

Cash flows - financing activities:

     

New borrowings

      13       40  

Debt repayments

      (738 )     (1,406 )

Repayments of distribution rights financing

      (357 )  

Stock options exercised, other

      44       209  

Excess tax benefits from share-based payment arrangements

      100       144  

Employee taxes on certain share-based payment arrangements

      (135 )  

Common shares repurchased

      (2,937 )     (2,775 )

Dividends paid

      (1,192 )     (1,096 )
                

Net cash used by financing activities

      (5,202 )     (4,884 )
                

Effect of exchange rate changes on cash and cash equivalents

      (59 )     46  
                

Net (decrease)/increase in cash and cash equivalents

      (3,774 )     924  

Cash and cash equivalents at beginning of year

      7,042       6,118  
                

Cash and cash equivalents at end of year

    $ 3,268     $ 7,042  
                

The Boeing Company and Subsidiaries

Summary of Business Segment Data

(Unaudited)

 

     Twelve months ended
December 31		     Three months ended
December 31		  

(Dollars in millions)

    2008     2007     2008     2007  

Revenues:

         

Commercial Airplanes

    $ 28,263     $ 33,386     $ 4,589     $ 8,866  

Integrated Defense Systems:

         

Boeing Military Aircraft

      13,492       13,740       3,166       3,618  

Network and Space Systems

      11,338       11,475       2,859       2,842  

Global Services and Support

      7,217       6,837       2,016       1,898  
                                

Total Integrated Defense Systems

      32,047       32,052       8,041       8,358  

Boeing Capital Corporation

      703       815       168       196  

Other

      567       308       40       74  

Unallocated items and eliminations

      (655 )     (174 )     (158 )     (17 )
                                

Total revenues

    $ 60,925     $ 66,387     $ 12,680     $ 17,477  
                                

Earnings/(loss) from operations:

         

Commercial Airplanes

    $ 1,186     $ 3,584     $ (968 )     973  

Integrated Defense Systems:

         

Boeing Military Aircraft

      1,276       1,649       354       398  

Network and Space Systems

      1,033       862       228       292  

Global Services and Support

      923       929       299       289  
                                

Total Integrated Defense Systems

      3,232       3,440       881       979  

Boeing Capital Corporation

      169       234       26       30  

Other

      (292 )     (331 )     (59 )     (166 )

Unallocated items and eliminations

      (307 )     (1,097 )     (85 )     (300 )
                                

Earnings/(loss) from operations

      3,988       5,830       (205 )     1,516  

Other income/(expense), net

      247       484       (10 )     129  

Interest and debt expense

      (202 )     (196 )     (57 )     (57 )
                                

Earnings/(loss) before income taxes

      4,033       6,118       (272 )     1,588  

Income tax (expense)/benefit

      (1,349 )     (2,060 )     216       (561 )
                                

Net earnings/(loss) from continuing operations

      2,684       4,058       (56 )     1,027  

Net gain on disposal of discontinued operations, net of taxes of $10, $9 and $3

      18       16         6  
                                

Net earnings/(loss)

    $ 2,702     $ 4,074     $ (56 )   $ 1,033  
                                

Research and development expense:

         

Commercial Airplanes

    $ 2,838     $ 2,962       730     $ 770  

Integrated Defense Systems:

         

Boeing Military Aircraft

      482       450       120       110  

Network and Space Systems

      298       289       71       66  

Global Services and Support

      153       109       41       32  
                                

Total Integrated Defense Systems

      933       848       232       208  

Other

      (3 )     40       (5 )     15  
                                

Total research and development expense

    $ 3,768     $ 3,850     $ 957     $ 993  
                                

Unallocated items and eliminations:

         

Share-based plans

    $ (149 )   $ (233 )   $ (34 )   $ (6 )

Deferred compensation

      223       (51 )     87       66  

Pension

      (208 )     (561 )     (14 )     (141 )

Postretirement

      (79 )     (125 )     (19 )     (32 )

Capitalized interest

      (44 )     (53 )     (6 )     (17 )

Other

      (50 )     (74 )     (99 )     (170 )
                                

Total

    $ (307 )   $ (1,097 )   $ (85 )   $ (300 )
                                

The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)

 

      Twelve months ended
December 31		    Three months ended
December 31

Deliveries

    2008    2007    2008    2007

Commercial Airplanes

            

737 Next-Generation

    290    330    36    80

747

    14    16    1    4

767

    10    12    2    3

777

    61    83    11    25
                   

Total

    375    441    50    112
                   

Integrated Defense Systems

            

Boeing Military Aircraft

            

F/A-18 Models

    45    44    12    11

F-15E Eagle

    14    12    3    6

C-17 Globemaster

    16    16    4    4

KC-767 Tanker

    2         

CH-47 Chinook

    12    10    4    3

T-45TS Goshawk

    7    9    2    2

AH-64 Apache

    3    17    1   

C-40A Clipper

       3       1

Network and Space Systems

            

Delta II

    2    3    1    1

Commercial and Civil Satellites

    1    3      

Military Satellites

       1      

 

Contractual backlog (Dollars in billions)

    December 31
2008		    September 30
2008		    December 31
2007

Commercial Airplanes

   $ 278.6    $ 275.9    $ 255.2

Integrated Defense Systems:

        

Boeing Military Aircraft

     25.8      24.0      23.0

Network and Space Systems

     8.9      7.6      9.2

Global Services and Support

     10.6      9.8      9.6
                    

Total Integrated Defense Systems

     45.3      41.4      41.8
                    

Total contractual backlog

   $ 323.9    $ 317.3    $ 297.0
                    

Unobligated backlog

   $ 28.2    $ 32.1    $ 30.2
                    

Total backlog

   $ 352.1    $ 349.4    $ 327.2
                    

Workforce

     162,200      164,200      159,300