EX-99.1 2 dex991.htm PRESS RELEASE DATED JANUARY 27, 2010 Press Release dated January 27, 2010

Exhibit 99.1

LOGO

 

    The Boeing Company
    100 North Riverside Plaza
   

Chicago, IL 60606-1596

www.boeing.com

Boeing Reports Strong 2009 Revenue & Cash Flow on Solid Core Performance

Fourth-Quarter 2009

•  

Revenue grew to $17.9 billion and operating margin grew to 9.4 percent, driving net income to $1.75 per share

 

•  

Operating cash flow increased to $3.2 billion

Full-Year 2009

•  

Revenue grew to $68.3 billion while earnings reflected solid core operating performance affected by previously announced events

 

•  

Operating cash flow of $5.6 billion reflects strong management of working capital

 

•  

Cash and marketable securities of $11.2 billion provides strong liquidity for 2010

 

•  

Backlog of $316 billion – over four times current annual revenue

Outlook

•  

2010 EPS guidance of $3.70 to $4.00 reflects lower volumes and considers risks

Table 1. Summary Financial Results

 

     Fourth Quarter     Change     Full Year     Change  

(Dollars in Millions, except per share data)

    2009     2008       2009     2008    

Revenues

    $ 17,937      $ 12,664      42 %    $ 68,281      $ 60,909      12 % 

Earnings/(Loss) From Operations

    $ 1,693      $ (243 )    NA      $ 2,096      $ 3,950      (47 )% 

Operating Margin

      9.4 %      (1.9 )%    11.3 Pts      3.1 %      6.5 %    (3.4 )Pts 

Net Income/(Loss)

    $ 1,268      $ (86 )    NA      $ 1,312      $ 2,672      (51 )% 

Earnings/(Loss) per Share

    $ 1.75      $ (0.12 )    NA      $ 1.84      $ 3.67      (50 )% 

Operating Cash Flow

    $ 3,212      $ (1,641 )    NA      $ 5,603      $ (401 )    NA   

CHICAGO, January 27, 2010 – The Boeing Company [NYSE: BA] reported fourth-quarter net income of $1.3 billion, or $1.75 per share, as revenue rose 42 percent to $17.9 billion. Current period results reflect solid performance across core businesses and represent a significant improvement over the year-ago quarter, which included a labor strike and a charge on the 747 program (Table 1).

Revenue for the full year reached a record $68.3 billion on higher commercial deliveries and growth in Defense, Space & Security. Earnings for the year declined to $1.84 per share due to a combined $3.58 per share impact from previously announced 787 and 747 events in Commercial Airplanes. Earnings for 2008 of $3.67 per share included a combined $2.56 per share impact primarily due to a labor strike and charges on the 747 program.

 

1

Earnings guidance for 2010 has been established at $3.70 to $4.00 per share, reflecting the previously announced 777 production rate reduction, reduced scope on Army modernization and missile defense programs, and some consideration for development program and market risks.

“We put a strong finish on 2009 by getting the 787 in the air and generating solid core operating performance across the company,” said Jim McNerney, Boeing chairman, president and chief executive officer. “Focus areas for 2010 are to continue our strong operational performance, certify and deliver the 787 and 747-8, and further reposition our defense, space and security business. While the challenges ahead are significant, I believe we have the people and the resources we need to be successful and to begin consistently delivering on this company’s great potential.”

Boeing’s quarterly operating cash flow was $3.2 billion, which includes higher cash receipts than the strike-affected period a year ago partially offset by continued investment in development programs (Table 2). For the full year, operating cash flow was $5.6 billion. Free cash flow* was $3.0 billion in the quarter and $4.4 billion for the year.

Table 2. Cash Flow

 

     Fourth Quarter     Full Year  

(Millions)

    2009     2008     2009     2008  

Operating Cash Flow1

   $ 3,212      $ (1,641 )    $ 5,603      $ (401 ) 

Less Additions to Property, Plant & Equipment

    $ (221 )    $ (445 )    $ (1,186 )    $ (1,674 ) 
                                

Free Cash Flow*

    $ 2,991      $ (2,086 )    $ 4,417      $ (2,075 ) 
                                

 

1

Operating cash flow for the full year includes cash contributions to pension plans of $82 million in 2009 and $531 million in 2008.

* 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 $11.2 billion at year-end, up 70 percent in the quarter. The cash position was improved by the issuance of $2.2 billion in debt during the quarter and disciplined operational management (Table 3).

Table 3. Cash, Marketable Securities and Debt Balances

 

      Quarter-End

(Billions)

    4Q09    3Q09

Cash

    $ 9.2    $ 6.1

Marketable Securities1

    $ 2.0    $ 0.5
             

Total

    $ 11.2    $ 6.6

Debt Balances:

      

The Boeing Company

    $ 8.8    $ 7.6

Boeing Capital Corporation

    $ 4.1    $ 3.4
             

Total Consolidated Debt

    $ 12.9    $ 11.0
             

 

1

Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

 

2

Total company backlog at quarter-end was $316 billion, down 1 percent in the quarter, as backlog for both Commercial Airplanes and Defense, Space & Security declined during the period.

Segment Results

Commercial Airplanes

Boeing Commercial Airplane’s fourth-quarter revenue doubled to $9.2 billion. A labor strike reduced revenue in the year-ago period by an estimated $4.3 billion. The current period operating margins of 11.1 percent reflect strong operating performance and model mix, while earnings for the year-ago quarter were reduced by the labor strike and a 747 charge (Table 4).

For the full year, revenue rose to $34.1 billion on higher airplane deliveries partially offset by lower services volume. Commercial Airplanes posted a loss for the year of $0.6 billion driven by previously announced 787 and 747 impacts. The 787 impact, which reduced 2009 operating earnings by $2.7 billion, resulted from the reclassification of costs for the first three flight-test airplanes from program inventory to research and development expense. On the 747, higher costs and difficult market conditions resulted in previously announced charges totaling $1.4 billion. Combined, these events reduced the unit’s reported operating margin by 11.9 points.

Table 4. Commercial Airplanes Operating Results

 

     Fourth Quarter     Change     Full Year     Change  

(Dollars in Millions)

    2009     2008       2009     2008    

Commercial Airplanes Deliveries

      122        50      144 %      481        375      28 % 

Revenues

    $ 9,183      $ 4,589      100 %    $ 34,051      $ 28,263      20 % 

Earnings/(Loss) from Operations

    $ 1,020      $ (968 )    NA      $ (583 )    $ 1,186      NA   

Operating Margins

      11.1 %      (21.1 )%    NA        (1.7 )%      4.2 %    NA   

 

Commercial Airplanes booked 82 gross orders during the quarter while 20 others were removed from its order book. Contractual backlog remains strong with 3,375 airplanes valued at $250 billion, more than seven times the unit’s 2009 revenue.

The 787 program entered flight testing during the quarter with the first two airplanes completing first flights. The remaining four flight-test airplanes are expected to be flying by the end of the second quarter. First delivery is scheduled for the fourth quarter of 2010. During the quarter, the company completed its acquisition of Global

 

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Aeronautica and broke ground in South Carolina for the second 787 assembly line. Total firm orders for the 787 at quarter-end were 851 airplanes from 56 customers.

The 747-8 program expects its first flight in the near future which will begin the flight-test phase of the program. Initial delivery is expected in the fourth quarter of 2010.

Boeing Defense, Space & Security

Boeing Defense, Space & Security’s fourth-quarter revenue rose 6 percent to $8.5 billion on increased military aircraft deliveries and higher volume in services. Operating margins were 9.7 percent reflecting strong performance in Boeing Military Aircraft and Global Services & Support partially offset by additional costs on the Airborne Early Warning and Control (AEW&C) program which reduced margins by 1.6 points (Table 5).

For the full year, revenue increased by 5 percent to $33.7 billion on growth in Global Services & Support and Boeing Military Aircraft segments. Operating earnings grew 2 percent to $3.3 billion, producing operating margins of 9.8 percent.

Table 5. Boeing Defense, Space & Security Operating Results

 

     Fourth Quarter      Change        Full Year      Change   

(Dollars in Millions)

      2009        2008          2009        2008     

Revenues

             

Boeing Military Aircraft

    $ 3,733      $ 3,142      19 %    $ 14,057      $ 13,311      6 % 

Network & Space Systems

    $ 2,385      $ 2,861      (17) %    $ 10,877      $ 11,346      (4 )% 

Global Services & Support

    $ 2,429      $ 2,038      19 %    $ 8,727      $ 7,390      18 % 
                                    

Total BDS Revenues

    $ 8,547      $ 8,041      6 %    $ 33,661      $ 32,047      5 % 

Earnings from Operations

             

Boeing Military Aircraft

    $ 353      $ 348      1 %    $ 1,513      $ 1,277      18 % 

Network & Space Systems

    $ 141      $ 228      (38) %    $ 839      $ 1,034      (19) % 

Global Services & Support

    $ 335      $ 305      10 %    $ 947      $ 921      3 % 
                                    

Total BDS Earnings from Operations

    $ 829      $ 881      (6) %    $ 3,299      $ 3,232      2 % 

Operating Margins

      9.7 %      11.0 %    (1.3) Pts      9.8 %      10.1 %    (0.3 )Pts 

Boeing Military Aircraft (BMA) fourth-quarter revenue rose 19 percent to $3.7 billion and operating margin was 9.5 percent, reflecting higher aircraft deliveries, improved delivery mix and strong execution across its programs, partially offset by higher costs on the AEW&C program which reduced BMA margins by 3.5 points. During the quarter, BMA delivered 32 aircraft, the EA-18G was approved for full-rate production, and the C-17 won new international orders.

Network & Space Systems fourth-quarter revenue was $2.4 billion, reduced primarily by lower volume on combat systems and missile defense. Operating margin

 

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was 5.9 percent reflecting solid performance across the segment’s array of programs partially offset by a write-down of Delta II inventory and a contract settlement in satellites. During the quarter, the Brigade Combat Team Modernization Increment 1 was approved to enter low rate initial production.

Global Services & Support (GS&S) revenue increased 19 percent on higher volume across its broad portfolio of services and logistics products. During the quarter, GS&S operating margins were 13.8 percent driven by strong operating performance. In this segment, the KC-135 Programmed Depot Maintenance contract award was reinstated, and the company was awarded several Department of Energy Smart Grid grants.

Backlog at Defense, Space & Security is $64.8 billion, approximately two times expected 2010 revenue. The reduction in backlog was driven by run-off of multi-year contracts that exceeded additions to backlog and by termination of a portion of the Brigade Combat Team Modernization contract due to changing US defense priorities.

Boeing Capital Corporation

Boeing Capital Corporation (BCC) reported fourth-quarter pre-tax earnings of $14 million compared to $19 million in the same period last year (Table 6). During the quarter, BCC’s portfolio balance declined slightly to $5.7 billion, down from $6.0 billion at the beginning of the year and from $6.1 billion at the end of the third quarter, on customer payments and depreciation. BCC contributed $93 million in cash dividends to the company during the full year. BCC’s debt-to-equity ratio increased to 5.8-to-1.

Table 6. Boeing Capital Corporation Operating Results

 

     Fourth Quarter    Change     Full Year    Change  

(Dollars in Millions)

    2009    2008      2009    2008   

Revenues

    $ 164    $ 168    (2) %    $ 660    $ 703    (6) % 

Earnings from Operations

    $ 14    $ 19    (26) %    $ 126    $ 162    (22) % 

Additional Information

The “Other” segment consists primarily of Boeing Engineering, Operations and Technology, as well as certain results related to the financial consolidation of all

 

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business units. Other segment expense was $47 million in the fourth quarter, down from $74 million in the same period last year.

Total pension expense for the fourth quarter was $223 million, as compared to $113 million in the same period last year. A total of $264 million was recognized in the operating segments in the quarter (up from $99 million in the same period last year), partially offset by a $41 million contribution to earnings in unallocated items. The company made a discretionary contribution of 29.2 million shares of Boeing common stock, valued at $1.5 billion, to its pension plans during the quarter.

Unallocated expense was $123 million, up from $101 million in the same quarter last year, driven by higher deferred compensation expense partially offset by lower unallocated pension expense and intersegment eliminations.

Interest expense for the quarter was $110 million, up from $57 million in the same period last year due to additional debt issued in 2009. Other income/(expense) decreased $23 million driven by lower interest earned on cash balances.

Outlook

The company’s 2010 financial guidance reflects solid operating performance amid lower volumes, higher pension expense and continued investment in development programs (Table 7).

Boeing’s 2010 revenue guidance is $64 billion to $66 billion and reflects previously announced production rate reductions on 777 and reduced scope on Army modernization and missile defense. Earnings guidance for 2010 of $3.70 to $4.00 per share reflects the lower revenue and includes some consideration for development program and market risks. Operating cash flow is expected to be approximately zero in 2010, including less than $100 million of pension contributions, as the company continues to build inventory on key development programs.

The company expects that 2011 revenue will be higher than 2010, primarily driven by higher estimates of 787 and 747-8 deliveries. Combining higher estimated deliveries with plans for R&D and other factors, operating cash flow in 2011 is expected to be greater than $5 billion.

Commercial Airplanes’ 2010 delivery guidance is established at between 460 and 465 airplanes (reflecting fewer twin-aisle deliveries) and is sold out. It includes the first few 787 and 747-8 deliveries, which are expected to begin in the fourth quarter.

 

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The unit’s 2010 revenue is expected to be $31 billion to $32 billion with operating margins between 6.5 percent and 7.5 percent.

Defense, Space & Security’s revenue for 2010 is expected to be $32 billion to $33 billion with operating margins of approximately 10 percent.

Boeing Capital Corporation expects that its aircraft finance portfolio will continue to reduce as its expected new aircraft financing for 2010 is less than $0.5 billion, below normal portfolio runoff through customer payments and depreciation. BCC’s debt-to-equity ratio is expected to return to the 5.0-to-1 level in the second half of 2010.

 

Table 7. Financial Outlook

(Dollars in Billions, except per-share data)

    2010

The Boeing Company

   

Revenue

    $64 - $66

Earnings Per Share (GAAP)

    $3.70 - $4.00

Operating Cash Flow 1

    ~ $0

Boeing Commercial Airplanes

   

Deliveries

    460 - 465

Revenue

    $31 - $32

Operating Margin

    6.5% - 7.5%

Boeing Defense, Space & Security

   

Revenue

   

Boeing Military Aircraft

    ~ $15

Network & Space Systems

    ~ $9

Global Services & Support

    ~ $8.5
    

Total BDS Revenue

    $32 - $33

Operating Margin

   

Boeing Military Aircraft

    ~ 10.5%

Network & Space Systems

    ~ 8.5%

Global Services & Support

    ~ 11%
    

Total BDS Operating Margin

    ~ 10%

Boeing Capital Corporation

   

Portfolio Size

    Lower

Revenue

    ~ $0.6

Return on Assets

    > 1.0%

Research & Development

    $3.9 - $4.1

Capital Expenditures

    ~ $1.9

 

1

After cash pension contributions of less than $0.1 billion and assuming new aircraft financings under $0.5 billion.

Boeing’s 2010 R&D forecast is $3.9 billion to $4.1 billion on continued investment in development programs, including an operating model adjustment to better balance future R&D efforts at Commercial Airplanes. R&D is expected to

 

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decrease significantly in 2011. Capital expenditures for 2010 are expected to be approximately $1.9 billion reflecting the bulk of capital investments required for the second 787 assembly line in South Carolina. Capital expenditures in 2011 are expected to be lower than in 2010.

The company’s non-cash pension expense is expected to be approximately $1.2 billion in 2010.

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.

 

8

Forward-Looking Information Is Subject to Risk and Uncertainty

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “should,” “expects,” “intends,” “projects,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding our guidance relating to 2010 and 2011 financial and operating performance, 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: (1) general conditions in the economy and our industry, including those due to regulatory changes; (2) risks attributable to our reliance on our commercial customers, our suppliers and the worldwide market; (3) risks related to our dependence on U.S. government contracts; (4) our reliance on fixed-price contracts, which could subject us to losses in the event of cost overruns; (5) risks related to cost-type contracts; (6) uncertainties concerning contracts that include in-orbit incentive payments; (7) changes in accounting estimates; (8) significant changes in discount rates and actual investment return on pension assets; (9) work stoppages or other labor disruptions; (10) changes in the competitive landscape in the markets in which we operate; (11) risks related to our doing business in other countries, including sales to non-U.S. customers; (12) potential adverse developments in new or pending litigation and/or government investigations; (13) changes in the financial condition or regulatory landscape of the commercial airline industry as they relate to Boeing Capital Corporation; (14) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates in order to fund our operations and contractual commitments; (15) risks related to realizing the anticipated benefits of merger, acquisitions, joint ventures/strategic alliance or divestitures; (16) adequacy of our insurance coverage to cover significant risk exposures; and (17) potential business disruptions related to physical security threats, IT attacks or natural disasters.

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 publicly update any forward-looking statement, except as required by law.

# # #

Contact:

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

    2009     2008     2009     2008  

Sales of products

    $ 57,032      $ 50,180      $ 14,934      $ 9,787   

Sales of services

      11,249        10,729        3,003        2,877   
                                

Total revenues

      68,281        60,909        17,937        12,664   

Cost of products

      (47,639 )      (41,662 )      (12,207 )      (8,926 ) 

Cost of services

      (8,726 )      (8,467 )      (2,258 )      (2,288 ) 

Boeing Capital Corporation interest expense

      (175 )      (223 )      (43 )      (50 ) 
                                

Total costs and expenses

      (56,540 )      (50,352 )      (14,508 )      (11,264 ) 
                                
     11,741        10,557        3,429        1,400   

Income from operating investments, net

      249        241        63        46   

General and administrative expense

      (3,364 )      (3,084 )      (780 )      (734 ) 

Research and development expense, net

      (6,506 )      (3,768 )      (1,002 )      (957 ) 

(Loss)/gain on dispositions, net

      (24 )      4        (17 )      2   
                                

Earnings/(loss) from operations

      2,096        3,950        1,693        (243 ) 

Other income/(loss), net

      (26 )      247        (33 )      (10 ) 

Interest and debt expense

      (339 )      (202 )      (110 )      (57 ) 
                                

Earnings/(loss) before income taxes

      1,731        3,995        1,550        (310 ) 

Income tax (expense)/benefit

      (396 )      (1,341 )      (267 )      224   
                                

Net earnings/(loss) from continuing operations

      1,335        2,654        1,283        (86 ) 

Net (loss)/gain on disposal of discontinued operations, net of taxes of $13, ($10), $8

      (23 )      18        (15 )   
                                

Net earnings/(loss)

    $ 1,312      $ 2,672      $ 1,268      $ (86 ) 
                                

Basic earnings/(loss) per share from continuing operations

    $ 1.89      $ 3.68      $ 1.79      $ (0.12 ) 

Net (loss)/gain on disposal of discontinued operations, net of taxes

      (0.03 )      0.02        (0.02 )   
                                

Basic earnings/(loss) per share

    $ 1.86      $ 3.70      $ 1.77      $ (0.12 ) 
                                

Diluted earnings/(loss) per share from continuing operations

    $ 1.87      $ 3.65      $ 1.77      $ (0.12 ) 

Net (loss)/gain on disposal of discontinued operations, net of taxes

      (0.03 )      0.02        (0.02 )   
                                

Diluted earnings/(loss) per share

    $ 1.84      $ 3.67      $ 1.75      $ (0.12 ) 
                                

Cash dividends paid per share

    $ 1.68      $ 1.60      $ 0.42      $ 0.40   
                                

Weighted average diluted shares (millions)

      713.4        729.0        723.9        706.0   
                                

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited)

 

(Dollars in millions, except per share data)

    December 31
2009		     December 31
2008		  

Assets

     

Cash and cash equivalents

      9,215      $ 3,268   

Short-term investments

      2,008        11   

Accounts receivable, net

      5,785        5,602   

Current portion of customer financing, net

      368        425   

Deferred income taxes

      966        1,046   

Inventories, net of advances and progress billings

      16,933        15,612   
                

Total current assets

      35,275        25,964   

Customer financing, net

      5,466        5,857   

Property, plant and equipment, net of accumulated depreciation of $12,795 and $12,280

      8,784        8,762   

Goodwill

      4,319        3,647   

Other acquired intangibles, net

      2,877        2,685   

Deferred income taxes

      3,062        4,114   

Investments

      1,030        1,328   

Pension plan assets, net

      16        16   

Other assets, net of accumulated amortization of $492 and $400

      1,224        1,406   
                

Total assets

    $ 62,053      $ 53,779   
                

Liabilities and shareholders’ equity

     

Accounts payable

      7,096      $ 5,871   

Other accrued liabilities

      12,822        11,564   

Advances and billings in excess of related costs

      12,076        12,737   

Income taxes payable

      182        41   

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

      707        560   
                

Total current liabilities

      32,883        30,773   

Accrued retiree health care

      7,049        7,322   

Accrued pension plan liability, net

      6,315        8,383   

Non-current income taxes payable

      827        1,154   

Other long-term liabilities

      537        337   

Long-term debt

      12,217        6,952   

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

      3,724        3,456   

Treasury shares, at cost – 256,406,709 and 285,661,944

      (15,911 )      (17,758 ) 

Retained earnings

      22,746        22,675   

Accumulated other comprehensive loss

      (11,877 )      (13,525 ) 

ShareValue Trust shares – 29,563,324 and 28,460,769

      (1,615 )      (1,203 ) 
                

Total Boeing shareholders’ equity

      2,128        (1,294 ) 

Noncontrolling interest

      97        152   
                

Total shareholders’ equity

      2,225        (1,142 ) 
                

Total liabilities and shareholders’ equity

    $ 62,053      $ 53,779   
                

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

     Twelve months ended
December 31		  

(Dollars in millions)

    2009     2008  

Cash flows - operating activities:

     

Net earnings

    $ 1,312      $ 2,672   

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

     

Non-cash items –

     

Share-based plans expense

      238        209   

Depreciation

      1,459        1,325   

Amortization of other acquired intangibles

      207        166   

Amortization of debt discount/premium and issuance costs

      12        11   

Investment/asset impairment charges, net

      151        50   

Customer financing valuation provision

      45        84   

Loss/(gain) on disposal of discontinued operations

      36        (28 ) 

Loss/(gain) on dispositions, net

      24        (4 ) 

Other charges and credits, net

      214        116   

Excess tax benefits from share-based payment arrangements

      (5 )      (100 ) 

Changes in assets and liabilities –

     

Accounts receivable

      (391 )      564   

Inventories, net of advances and progress billings

      (1,525 )      (6,168 ) 

Accounts payable

      1,141        318   

Other accrued liabilities

      1,327        554   

Advances and billings in excess of related costs

      (680 )      (1,120 ) 

Income taxes receivable, payable and deferred

      607        744   

Other long-term liabilities

      (12 )      (211 ) 

Pension and other postretirement plans

      1,140        14   

Customer financing, net

      104        432   

Other

      199        (29 ) 
                

Net cash provided/(used) by operating activities

      5,603        (401 ) 
                

Cash flows - investing activities:

     

Property, plant and equipment additions

      (1,186 )      (1,674 ) 

Property, plant and equipment reductions

      27        34   

Acquisitions, net of cash acquired

      (639 )      (964 ) 

Contributions to investments

      (2,629 )      (6,673 ) 

Proceeds from investments

      1,041        11,343   

Payments on Sea Launch guarantees

      (448 )   

Reimbursements of Sea Launch guarantee payments

      40     

Purchase of distribution rights

        (178 ) 
                

Net cash (used)/provided by investing activities

      (3,794 )      1,888   
                

Cash flows - financing activities:

     

New borrowings

      5,961        13   

Debt repayments

      (551 )      (738 ) 

Payments to non-controlling interests

      (40 )   

Repayments of distribution rights financing

        (357 ) 

Stock options exercised, other

      10        44   

Excess tax benefits from share-based payment arrangements

      5        100   

Employee taxes on certain share-based payment arrangements

      (21 )      (135 ) 

Common shares repurchased

      (50 )      (2,937 ) 

Dividends paid

      (1,220 )      (1,192 ) 
                

Net cash provided/(used) by financing activities

      4,094        (5,202 ) 
                

Effect of exchange rate changes on cash and cash equivalents

      44        (59 ) 
                

Net increase/(decrease) in cash and cash equivalents

      5,947        (3,774 ) 

Cash and cash equivalents at beginning of year

      3,268        7,042   
                

Cash and cash equivalents at end of period

    $ 9,215      $ 3,268   
                

The Boeing Company and Subsidiaries

Summary of Business Segment Data

(Unaudited)

 

     Twelve months ended
December 31		     Three months ended
December 31		  

(Dollars in millions)

    2009     2008     2009     2008  

Revenues:

         

Commercial Airplanes

    $ 34,051      $ 28,263      $ 9,183      $ 4,589   

Boeing Defense, Space & Security:

         

Boeing Military Aircraft

      14,057        13,311        3,733        3,142   

Network & Space Systems

      10,877        11,346        2,385        2,861   

Global Services & Support

      8,727        7,390        2,429        2,038   
                                

Total Boeing Defense, Space & Security

      33,661        32,047        8,547        8,041   

Boeing Capital Corporation

      660        703        164        168   

Other segment

      165        567        40        40   

Unallocated items and eliminations

      (256 )      (671 )      3        (174 ) 
                                

Total revenues

    $ 68,281      $ 60,909      $ 17,937      $ 12,664   
                                

Earnings/(loss) from operations:

         

Commercial Airplanes

    $ (583 )    $ 1,186      $ 1,020      $ (968 ) 

Boeing Defense, Space & Security:

         

Boeing Military Aircraft

      1,513        1,277        353        348   

Network & Space Systems

      839        1,034        141        228   

Global Services & Support

      947        921        335        305   
                                

Total Boeing Defense, Space & Security

      3,299        3,232        829        881   

Boeing Capital Corporation

      126        162        14        19   

Other segment

      (152 )      (307 )      (47 )      (74 ) 

Unallocated items and eliminations

      (594 )      (323 )      (123 )      (101 ) 
                                

Earnings/(loss) from operations

      2,096        3,950        1,693        (243 ) 

Other income/(loss), net

      (26 )      247        (33 )      (10 ) 

Interest and debt expense

      (339 )      (202 )      (110 )      (57 ) 
                                

Earnings/(loss) before income taxes

      1,731        3,995        1,550        (310 ) 

Income tax (expense)/benefit

      (396 )      (1,341 )      (267 )      224   
                                

Net earnings/(loss) from continuing operations

      1,335        2,654        1,283        (86 ) 

Net (loss)/gain on disposal of discontinued operations, net of taxes of $13, ($10), $8

      (23 )      18        (15 )   
                                

Net earnings/(loss)

    $ 1,312      $ 2,672      $ 1,268      $ (86 ) 
                                

Research and development expense, net:

         

Commercial Airplanes

    $ 5,383      $ 2,838      $ 741      $ 730   

Boeing Defense, Space & Security:

         

Boeing Military Aircraft

      541        479        111        118   

Network & Space Systems

      397        298        104        71   

Global Services & Support

      163        156        37        43   
                                

Total Boeing Defense, Space & Security

      1,101        933        252        232   

Other segment

      22        (3 )      9        (5 ) 
                                

Total research and development expense, net

    $ 6,506      $ 3,768      $ 1,002      $ 957   
                                

Unallocated items and eliminations:

         

Share-based plans expense

    $ (189 )    $ (149 )    $ (49 )    $ (34 ) 

Deferred compensation expense

      (158 )      223        (24 )      87   

Pension

      110        (208 )      41        (14 ) 

Post-retirement

      (93 )      (79 )      (32 )      (19 ) 

Capitalized interest

      (53 )      (44 )      (11 )      (6 ) 

Other

      (211 )      (66 )      (48 )      (115 ) 
                                

Total

    $ (594 )    $ (323 )    $ (123 )    $ (101 ) 
                                

The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)

 

     Twelve months ended
December 31		    Three months ended
December 31

Deliveries

    2009    2008    2009    2008

Commercial Airplanes

            

737 Next-Generation

    372    290    92    36

747

    8    14    2    1

767

    13    10    3    2

777

    88    61    25    11
                   

Total

    481    375    122    50
                   

Boeing Defense, Space & Security

            

Boeing Military Aircraft

            

F/A-18 Models

    49    45    13    12

F-15E Eagle

    13    14    3    3

C-17 Globemaster

    16    16    4    4

KC-767 Tanker

    2    2    1   

CH-47 Chinook

    11    12    7    4

T-45TS Goshawk

    7    7    1    2

AH-64 Apache

    23    3    3    1

Network & Space Systems

            

Delta II

    1    2    1    1

Delta IV

    1         

Commercial and Civil Satellites

    3    1    1   

Military Satellites

    3         

 

Contractual backlog (Dollars in billions)

    December 31
2009		    September 30
2009		    December 31
2008

Commercial Airplanes

    $ 250.5    $ 253.9    $ 278.6

Boeing Defense, Space & Security:

         

Boeing Military Aircraft

      26.3      26.1      25.7

Network & Space Systems

      7.7      7.8      8.9

Global Services & Support

      12.0      11.1      10.7
                    

Total Boeing Defense, Space & Security

      46.0      45.0      45.3
                    

Total contractual backlog

    $ 296.5    $ 298.9    $ 323.9
                    

Unobligated backlog

    $ 19.1    $ 21.1    $ 28.2
                    

Total backlog

    $ 315.6    $ 320.0    $ 352.1
                    

Workforce

      157,100      158,300      162,200