UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 25, 2012
THE BOEING COMPANY
(Exact name of registrant as specified in its charter)
Commission file number 1-442
Delaware | 91-0425694 | |
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(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
100 N. Riverside, Chicago, IL | 60606-1596 | |
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(Address of principal executive offices) | (Zip Code) |
(312) 544-2000
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
(a) On July 25, 2012, The Boeing Company issued a press release reporting its financial results for the second quarter of 2012. A copy of the Companys press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits
99.1 Press Release issued by The Boeing Company dated July 25, 2012, reporting Boeings financial results for the second quarter of 2012, furnished herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
THE BOEING COMPANY
(Registrant)
/s/ Diana L. Sands |
Diana L. Sands |
Vice President of Finance & Corporate Controller
Date: July 25, 2012
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EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Press release issued by The Boeing Company dated July 25, 2012, reporting Boeings financial results for the second quarter of 2012, furnished herewith. |
Exhibit 99.1
![]() |
News Release | |
Boeing Corporate Offices 100 North Riverside Plaza Chicago, IL 60606-1596 www.boeing.com |
Boeing Reports Second-Quarter Results and Raises 2012 EPS Guidance
n | Earnings per share rose to $1.27, reflecting strong core operating performance |
n | Revenue grew to $20.0 billion on increased commercial airplane deliveries |
n | Backlog of $374 billion includes $13 billion of new orders |
n | $1.7 billion of operating cash flow before pension contributions* of $0.8 billion |
n | Cash and marketable securities of $10.3 billion provide strong liquidity |
n | 2012 EPS guidance increased to between $4.40 and $4.60 |
Table 1. Summary Financial Results
Second Quarter | Change | First Half | Change | |||||||||||||||||||||
(Dollars in Millions, except per share data) |
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
Revenues |
$ | 20,005 | $ | 16,543 | 21 | % | $ | 39,388 | $ | 31,453 | 25 | % | ||||||||||||
Earnings From Operations |
$ | 1,548 | $ | 1,534 | 1 | % | $ | 3,118 | $ | 2,534 | 23 | % | ||||||||||||
Operating Margin |
7.7 | % | 9.3 | % | (1.6 | ) Pts | 7.9 | % | 8.1 | % | (0.2 | ) Pts | ||||||||||||
Net Income |
$ | 967 | $ | 941 | 3 | % | $ | 1,890 | $ | 1,527 | 24 | % | ||||||||||||
Earnings per Share |
$ | 1.27 | $ | 1.25 | 2 | % | $ | 2.49 | $ | 2.04 | 22 | % | ||||||||||||
Operating Cash Flow Before Pension Contributions* |
$ | 1,671 | $ | 1,596 | 5 | % | $ | 2,508 | $ | 643 | NM | |||||||||||||
Operating Cash Flow |
$ | 908 | $ | 1,596 | (43 | %) | $ | 1,745 | $ | 643 | NM |
* Non-GAAP measure. Complete definitions of Boeing's use of non-GAAP measures, identified by an asterisk (*), are found on page 7, "Non-GAAP Measure Disclosures."
CHICAGO, July 25, 2012 The Boeing Company [NYSE: BA] reported that second-quarter net income rose to $1.0 billion, or $1.27 per share, on revenue of $20.0 billion. Earnings per share rose 2 percent, reflecting continued strong core performance across the companys businesses, which more than offset higher pension expense (Table 1). Earnings per share guidance for 2012 increased to between $4.40 and $4.60 reflecting the strong core operating performance. The company also increased its revenue guidance to between $79.5 and $81.5 billion on higher Defense, Space & Security revenues, and reaffirmed its 2012 operating cash flow outlook.
Increased revenues and strong operating performance across both our major businesses drove significantly improved first-half 2012 results for Boeing, said Chairman, President and Chief Executive Officer Jim McNerney. Commercial airplane
1
deliveries increased 27 percent in the second quarter, and our defense, space and security business also produced higher revenues and strong margins in a difficult market environment. As a result of this solid first-half performance, we have strengthened our outlook for the year, and our people remain focused on disciplined execution, quality and productivity, and meeting customer commitments, McNerney said.
Table 2. Cash Flow
Second Quarter | First Half | |||||||||||||||
(Millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
Operating Cash Flow Before Pension Contributions* |
$ | 1,671 | $ | 1,596 | $ | 2,508 | $ | 643 | ||||||||
Add Pension Contributions |
($ | 763 | ) | ($ | 763 | ) | ||||||||||
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Operating Cash Flow |
$ | 908 | $ | 1,596 | $ | 1,745 | $ | 643 | ||||||||
Less Additions to Property, Plant & Equipment |
($ | 356 | ) | ($ | 345 | ) | ($ | 780 | ) | ($ | 762 | ) | ||||
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Free Cash Flow* |
$ | 552 | $ | 1,251 | $ | 965 | ($ | 119 | ) | |||||||
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Boeings quarterly operating cash flow before pension contributions* was $1.7 billion. Operating cash flow was $0.9 billion, with higher commercial airplane deliveries and strong operating performance more than offsetting continued investment in the 787 program and discretionary pension funding. Free cash flow* was $0.6 billion in the quarter (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances
Quarter-End | ||||||||
(Billions) |
2Q12 | 1Q12 | ||||||
Cash |
$ | 6.3 | $ | 6.7 | ||||
Marketable Securities1 |
$ | 4.0 | $ | 3.8 | ||||
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Total |
$ | 10.3 | $ | 10.5 | ||||
Debt Balances: |
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The Boeing Company |
$ | 8.6 | $ | 9.0 | ||||
Boeing Capital Corporation |
$ | 2.6 | $ | 2.6 | ||||
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Total Consolidated Debt |
$ | 11.2 | $ | 11.6 | ||||
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1 Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."
Cash and investments in marketable securities totaled $10.3 billion at quarter-end (Table 3), down from $10.5 billion at the beginning of the quarter. Debt was $11.2 billion, down from $11.6 billion at the beginning of the quarter.
Total company backlog at quarter-end was $374 billion, down from $380 billion at the beginning of the quarter, and included net orders for the quarter of $13 billion.
2
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes Operating Results
Second Quarter | Change | First Half | Change | |||||||||||||||||||||
(Dollars in Millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
Commercial Airplanes Deliveries |
150 | 118 | 27 | % | 287 | 222 | 29 | % | ||||||||||||||||
Revenues |
$ | 11,843 | $ | 8,843 | 34 | % | $ | 22,780 | $ | 15,961 | 43 | % | ||||||||||||
Earnings from Operations |
$ | 1,211 | $ | 920 | 32 | % | $ | 2,292 | $ | 1,429 | 60 | % | ||||||||||||
Operating Margins |
10.2 | % | 10.4 | % | (0.2 | ) Pts | 10.1 | % | 9.0 | % | 1.1 | Pts |
Boeing Commercial Airplanes second-quarter revenue increased by 34 percent to $11.8 billion on higher delivery volume. Operating margin was 10.2 percent, reflecting higher period costs and the dilutive impact of 787 and 747-8 deliveries partially offset by the higher deliveries and lower R&D (Table 4).
During the quarter, final assembly of the first 787 built in South Carolina was completed and the first 747-8 Intercontinental passenger airplane was delivered.
Commercial Airplanes booked 28 net orders during the quarter. Backlog remains strong with approximately 4,000 airplanes valued at $302 billion.
3
Boeing Defense, Space & Security
Table 5. Defense, Space & Security Operating Results
Second Quarter | Change | First Half | Change | |||||||||||||||||||||
(Dollars in Millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
Revenues |
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Boeing Military Aircraft |
$ | 4,130 | $ | 3,642 | 13 | % | $ | 8,438 | $ | 7,034 | 20 | % | ||||||||||||
Network & Space Systems |
$ | 1,887 | $ | 2,078 | (9 | %) | $ | 3,682 | $ | 4,424 | (17 | %) | ||||||||||||
Global Services & Support |
$ | 2,175 | $ | 1,968 | 11 | % | $ | 4,305 | $ | 3,847 | 12 | % | ||||||||||||
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Total BDS Revenues |
$ | 8,192 | $ | 7,688 | 7 | % | $ | 16,425 | $ | 15,305 | 7 | % | ||||||||||||
Earnings from Operations |
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Boeing Military Aircraft |
$ | 363 | $ | 386 | (6 | %) | $ | 800 | $ | 755 | 6 | % | ||||||||||||
Network & Space Systems |
$ | 126 | $ | 192 | (34 | %) | $ | 199 | $ | 333 | (40 | %) | ||||||||||||
Global Services & Support |
$ | 259 | $ | 220 | 18 | % | $ | 491 | $ | 381 | 29 | % | ||||||||||||
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Total BDS Earnings from Operations |
$ | 748 | $ | 798 | (6 | %) | $ | 1,490 | $ | 1,469 | 1 | % | ||||||||||||
Operating Margins |
9.1 | % | 10.4 | % | (1.3 | ) Pts | 9.1 | % | 9.6 | % | (0.5 | ) Pts |
Boeing Defense, Space & Securitys second-quarter revenue increased to $8.2 billion, while operating margin was 9.1 percent (Table 5).
Boeing Military Aircraft (BMA) second-quarter revenue increased to $4.1 billion, primarily due to higher delivery volume. Operating margin decreased 1.8 points to 8.8 percent, as strong execution across various programs was more than offset by an inventory adjustment on A160. During the quarter, BMA was awarded the Apache Block III low rate initial production contract with the U.S. Army.
Network & Space Systems (N&SS) second-quarter revenue decreased to $1.9 billion, driven by lower volume on Brigade Combat Team Modernization. Operating margin was 6.7 percent, reflecting lower earnings in United Launch Alliance. During the quarter, N&SS was awarded its first international cybersecurity contract.
Global Services & Support (GS&S) second-quarter revenue increased to $2.2 billion, due to higher volume in integrated logistics. Operating margin was 11.9 percent, reflecting improved performance in maintenance, modification and upgrades. During the quarter, GS&S was awarded the F-15 Singapore follow-on performance-based logistics contract.
Backlog at Defense, Space & Security remained at $72 billion, more than two times the units projected 2012 revenue.
4
Additional Financial Information
Table 6. Additional Financial Information
Second Quarter | Change | First Half | Change | |||||||||||||||||||||
(Dollars in Millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
Revenues |
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Boeing Capital Corporation |
$ | 99 | $ | 147 | (33 | %) | $ | 224 | $ | 290 | (23 | %) | ||||||||||||
Other segment |
$ | 42 | $ | 38 | $ | 66 | $ | 74 | ||||||||||||||||
Unallocated items and eliminations |
($ | 171 | ) | ($ | 173 | ) | ($ | 107 | ) | ($ | 177 | ) | ||||||||||||
Earnings from Operations |
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Boeing Capital Corporation |
$ | 31 | $ | 62 | (50 | %) | $ | 69 | $ | 114 | (39 | %) | ||||||||||||
Other segment expense |
($ | 50 | ) | ($ | 58 | ) | ($ | 129 | ) | ($ | 80 | ) | ||||||||||||
Unallocated items and eliminations |
($ | 392 | ) | ($ | 188 | ) | ($ | 604 | ) | ($ | 398 | ) | ||||||||||||
Other income, net |
$ | 10 | $ | 14 | $ | 22 | $ | 27 | ||||||||||||||||
Interest and debt expense |
($ | 112 | ) | ($ | 123 | ) | ($ | 231 | ) | ($ | 253 | ) | ||||||||||||
Effective tax rate |
33.1 | % | 33.9 | % | 35.0 | % | 33.7 | % |
At quarter-end, Boeing Capital Corporations (BCC) portfolio balance was $4.1 billion, down from $4.2 billion at the beginning of the quarter on portfolio run-off and asset sales. BCCs debt-to-equity ratio was 5.0-to-1.
The Other segment includes unallocated activities of Engineering, Operations and Technology, Shared Services Group as well as certain intercompany guarantees provided to BCC. Other segment expense was $50 million in the quarter.
The loss in unallocated items and eliminations increased due to higher pension expense. Total pension expense for the second quarter was $593 million, as compared to $389 million in the same period last year.
5
Outlook
The companys 2012 financial guidance (Table 7) has been updated to reflect the strong core performance in both businesses.
Table 7. Financial Outlook
(Dollars in Billions, except per-share data) | 2012 | |
The Boeing Company |
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Revenue |
$79.5 - 81.5 | |
Earnings Per Share (GAAP) |
$4.40 - 4.60 | |
Operating Cash Flow 1 |
> $5.0 | |
Boeing Commercial Airplanes |
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Deliveries 2 |
585 - 600 | |
Revenue |
$47.5 - 49.5 | |
Operating Margin |
~ 9.0% | |
Boeing Defense, Space & Security |
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Revenue |
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Boeing Military Aircraft |
~ $16.0 | |
Network & Space Systems |
~ $7.25 | |
Global Services & Support |
~ $8.5 | |
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Total BDS Revenue |
$31.5 - 32.0 | |
Operating Margin |
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Boeing Military Aircraft |
~ 9.25% | |
Network & Space Systems |
~ 6.5% | |
Global Services & Support |
~ 11.0% | |
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Total BDS Operating Margin |
> 9.0% | |
Boeing Capital Corporation |
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Portfolio Size |
Lower | |
Revenue |
~ $0.4 | |
Return on Assets |
~ 0.5% | |
Research & Development |
$3.3 - 3.5 | |
Capital Expenditures |
~ $2.0 | |
Pension Expense 3 |
$2.5 |
1 After discretionary cash pension contributions of $1.5 billion and assuming new aircraft financings under $0.5 billion.
2 2012 is sold out and includes an expected 70 to 85 787 and 747-8 deliveries, of which approximately half are 787 aircraft.
3 Approximately $0.8 billion is expected to be recorded in unallocated items and eliminations.
Earnings per share guidance for 2012 increased to between $4.40 and $4.60, up from between $4.15 and $4.35, reflecting the strong core operating performance. Total company 2012 revenue increased to between $79.5 and $81.5 billion, from between $78 and $80 billion, on higher Defense, Space & Security revenues.
Commercial Airplanes operating margin improved to approximately 9 percent, from between 8.5 and 9 percent, reflecting the strong core performance.
6
Defense, Space & Securitys revenue increased to between $31.5 and $32 billion, from between $30 and $30.5 billion, reflecting increased volume.
Non-GAAP Measure Disclosures
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 companys 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:
Operating Cash Flow Before Pension Contributions
Operating cash flow before pension contributions is defined as GAAP operating cash flow less pension contributions. Management believes operating cash flow before pension contributions provides additional insights into underlying business performance. Table 2 provides a reconciliation between GAAP operating cash flow and operating cash flow before pension contributions.
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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Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as may, should, expects, intends, projects, plans, believes, estimates, targets, anticipates, and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, 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 risks related to: (1) general conditions in the economy and our industry, including those due to regulatory changes; (2) our reliance on our commercial airline customers; (3) our commercial development programs, planned production rate increases across multiple commercial airline programs and the overall health of our aircraft production system; (4) changing acquisition priorities of the U.S. government; (5) our dependence on U.S. government contracts; (6) our reliance on fixed-price contracts; (7) our reliance on cost-type contracts; (8) uncertainties concerning contracts that include in-orbit incentive payments; (9) our dependence on our subcontractors and suppliers, as well as the availability of raw materials, (10) changes in accounting estimates; (11) changes in the competitive landscape in our markets; (12) our non-U.S. operations, including sales to non-U.S. customers; (13) potential adverse developments in new or pending litigation and/or government investigations; (14) customer and aircraft concentration in Boeing Capitals customer financing portfolio; (15) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates in order to fund our operations and contractual commitments; (16) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (17) the adequacy of our insurance coverage to cover significant risk exposures; (18) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks or natural disasters; (19) work stoppages or other labor disruptions; (20) significant changes in discount rates and actual investment return on pension assets; (21) potential environmental liabilities; and (22) threats to the security of our or our customers information.
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 update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
# # #
Contact: | ||
Investor Relations: | Stephanie Pope or Jennifer Mack (312) 544-2140 | |
Communications: | Chaz Bickers (312) 544-2002 |
8
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Six months ended June 30 |
Three months ended June 30 |
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(Dollars in millions, except per share data) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
Sales of products |
$ | 34,026 | $ | 25,534 | $ | 17,341 | $ | 13,640 | ||||||||
Sales of services |
5,362 | 5,919 | 2,664 | 2,903 | ||||||||||||
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Total revenues |
39,388 | 31,453 | 20,005 | 16,543 | ||||||||||||
Cost of products |
(28,420 | ) | (20,329 | ) | (14,759 | ) | (10,823 | ) | ||||||||
Cost of services |
(4,342 | ) | (4,858 | ) | (1,962 | ) | (2,348 | ) | ||||||||
Boeing Capital interest expense |
(47 | ) | (62 | ) | (19 | ) | (29 | ) | ||||||||
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Total costs and expenses |
(32,809 | ) | (25,249 | ) | (16,740 | ) | (13,200 | ) | ||||||||
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6,579 | 6,204 | 3,265 | 3,343 | |||||||||||||
Income from operating investments, net |
91 | 150 | 45 | 88 | ||||||||||||
General and administrative expense |
(1,858 | ) | (1,736 | ) | (903 | ) | (870 | ) | ||||||||
Research and development expense, net |
(1,692 | ) | (2,104 | ) | (857 | ) | (1,047 | ) | ||||||||
(Loss)/gain on dispositions, net |
(2 | ) | 20 | (2 | ) | 20 | ||||||||||
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Earnings from operations |
3,118 | 2,534 | 1,548 | 1,534 | ||||||||||||
Other income, net |
22 | 27 | 10 | 14 | ||||||||||||
Interest and debt expense |
(231 | ) | (253 | ) | (112 | ) | (123 | ) | ||||||||
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Earnings before income taxes |
2,909 | 2,308 | 1,446 | 1,425 | ||||||||||||
Income tax expense |
(1,018 | ) | (778 | ) | (479 | ) | (483 | ) | ||||||||
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Net earnings from continuing operations |
1,891 | 1,530 | 967 | 942 | ||||||||||||
Net loss on disposal of discontinued operations, net of taxes of $1, $1, $0 and $0 |
(1 | ) | (3 | ) | (1 | ) | ||||||||||
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Net earnings |
$ | 1,890 | $ | 1,527 | $ | 967 | $ | 941 | ||||||||
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Basic earnings per share from continuing operations |
$ | 2.51 | $ | 2.06 | $ | 1.28 | $ | 1.27 | ||||||||
Net loss on disposal of discontinued operations, net of taxes |
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Basic earnings per share |
$ | 2.51 | $ | 2.06 | $ | 1.28 | $ | 1.27 | ||||||||
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Diluted earnings per share from continuing operations |
$ | 2.49 | $ | 2.04 | $ | 1.27 | $ | 1.25 | ||||||||
Net loss on disposal of discontinued operations, net of taxes |
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Diluted earnings per share |
$ | 2.49 | $ | 2.04 | $ | 1.27 | $ | 1.25 | ||||||||
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Cash dividends paid per share |
$ | 0.88 | $ | 0.84 | $ | 0.44 | $ | 0.42 | ||||||||
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Weighted average diluted shares (millions) |
760.7 | 750.8 | 762.0 | 752.6 | ||||||||||||
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The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data) |
June 30 2012 |
December 31 2011 |
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Assets |
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Cash and cash equivalents |
$ | 6,305 | $ | 10,049 | ||||
Short-term and other investments |
4,002 | 1,223 | ||||||
Accounts receivable, net |
5,894 | 5,793 | ||||||
Current portion of customer financing, net |
344 | 476 | ||||||
Deferred income taxes |
30 | 29 | ||||||
Inventories, net of advances and progress billings |
35,033 | 32,240 | ||||||
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Total current assets |
51,608 | 49,810 | ||||||
Customer financing, net |
4,068 | 4,296 | ||||||
Property, plant and equipment, net of accumulated depreciation of $14,385 and $13,993 |
9,453 | 9,313 | ||||||
Goodwill |
4,955 | 4,945 | ||||||
Acquired intangible assets, net |
2,980 | 3,044 | ||||||
Deferred income taxes |
5,781 | 5,892 | ||||||
Investments |
1,004 | 1,043 | ||||||
Other assets, net of accumulated amortization of $440 and $717 |
1,746 | 1,643 | ||||||
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Total assets |
$ | 81,595 | $ | 79,986 | ||||
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Liabilities and equity |
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Accounts payable |
$ | 9,273 | $ | 8,406 | ||||
Accrued liabilities |
11,699 | 12,239 | ||||||
Advances and billings in excess of related costs |
15,344 | 15,496 | ||||||
Deferred income taxes and income taxes payable |
3,668 | 2,780 | ||||||
Short-term debt and current portion of long-term debt |
2,466 | 2,353 | ||||||
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Total current liabilities |
42,450 | 41,274 | ||||||
Accrued retiree health care |
7,478 | 7,520 | ||||||
Accrued pension plan liability, net |
16,164 | 16,537 | ||||||
Non-current income taxes payable |
226 | 122 | ||||||
Other long-term liabilities |
650 | 907 | ||||||
Long-term debt |
8,735 | 10,018 | ||||||
Shareholders' equity: |
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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 |
4,018 | 4,033 | ||||||
Treasury stock, at cost 260,913,450 and 267,556,388 shares |
(16,202 | ) | (16,603 | ) | ||||
Retained earnings |
28,743 | 27,524 | ||||||
Accumulated other comprehensive loss |
(15,816 | ) | (16,500 | ) | ||||
|
|
|
|
|||||
Total shareholders equity |
5,804 | 3,515 | ||||||
Noncontrolling interest |
88 | 93 | ||||||
|
|
|
|
|||||
Total equity |
5,892 | 3,608 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 81,595 | $ | 79,986 | ||||
|
|
|
|
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six months ended June 30 |
||||||||
(Dollars in millions) |
2012 | 2011 | ||||||
Cash flows operating activities: |
||||||||
Net earnings |
$ | 1,890 | $ | 1,527 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
Non-cash items |
||||||||
Share-based plans expense |
99 | 96 | ||||||
Depreciation and amortization |
848 | 816 | ||||||
Investment/asset impairment charges, net |
45 | 16 | ||||||
Customer financing valuation provision |
(1 | ) | (65 | ) | ||||
Loss on disposal of discontinued operations |
2 | 4 | ||||||
Loss/(gain) on dispositions, net |
2 | (20 | ) | |||||
Other charges and credits, net |
361 | 223 | ||||||
Excess tax benefits from share-based payment arrangements |
(39 | ) | (32 | ) | ||||
Changes in assets and liabilities |
||||||||
Accounts receivable |
(310 | ) | (747 | ) | ||||
Inventories, net of advances and progress billings |
(2,737 | ) | (4,889 | ) | ||||
Accounts payable |
742 | 1,134 | ||||||
Accrued liabilities |
(594 | ) | (268 | ) | ||||
Advances and billings in excess of related costs |
(152 | ) | 626 | |||||
Income taxes receivable, payable and deferred |
705 | 685 | ||||||
Other long-term liabilities |
(15 | ) | 54 | |||||
Pension and other postretirement plans |
686 | 1,199 | ||||||
Customer financing, net |
216 | 210 | ||||||
Other |
(3 | ) | 74 | |||||
|
|
|
|
|||||
Net cash provided by operating activities |
1,745 | 643 | ||||||
|
|
|
|
|||||
Cash flows investing activities: |
||||||||
Property, plant and equipment additions |
(780 | ) | (762 | ) | ||||
Property, plant and equipment reductions |
16 | 19 | ||||||
Acquisitions, net of cash acquired |
(18 | ) | (16 | ) | ||||
Contributions to investments |
(6,396 | ) | (4,454 | ) | ||||
Proceeds from investments |
3,596 | 5,902 | ||||||
Receipt of economic development program funds |
69 | |||||||
Purchase of distribution rights |
(6 | ) | ||||||
|
|
|
|
|||||
Net cash (used)/provided by investing activities |
(3,588 | ) | 758 | |||||
|
|
|
|
|||||
Cash flows financing activities: |
||||||||
New borrowings |
24 | 36 | ||||||
Debt repayments |
(1,233 | ) | (851 | ) | ||||
Repayments of distribution rights financing |
(72 | ) | (406 | ) | ||||
Stock options exercised, other |
71 | 80 | ||||||
Excess tax benefits from share-based payment arrangements |
39 | 32 | ||||||
Employee taxes on certain share-based payment arrangements |
(68 | ) | (18 | ) | ||||
Dividends paid |
(658 | ) | (620 | ) | ||||
|
|
|
|
|||||
Net cash used by financing activities |
(1,897 | ) | (1,747 | ) | ||||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
(4 | ) | 37 | |||||
|
|
|
|
|||||
Net decrease in cash and cash equivalents |
(3,744 | ) | (309 | ) | ||||
Cash and cash equivalents at beginning of year |
10,049 | 5,359 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 6,305 | $ | 5,050 | ||||
|
|
|
|
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Six months ended June 30 |
Three months ended June 30 |
|||||||||||||||
(Dollars in millions) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues: |
||||||||||||||||
Commercial Airplanes |
$ | 22,780 | $ | 15,961 | $ | 11,843 | $ | 8,843 | ||||||||
Defense, Space & Security: |
||||||||||||||||
Boeing Military Aircraft |
8,438 | 7,034 | 4,130 | 3,642 | ||||||||||||
Network & Space Systems |
3,682 | 4,424 | 1,887 | 2,078 | ||||||||||||
Global Services & Support |
4,305 | 3,847 | 2,175 | 1,968 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Defense, Space & Security |
16,425 | 15,305 | 8,192 | 7,688 | ||||||||||||
Boeing Capital |
224 | 290 | 99 | 147 | ||||||||||||
Other segment |
66 | 74 | 42 | 38 | ||||||||||||
Unallocated items and eliminations |
(107 | ) | (177 | ) | (171 | ) | (173 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
$ | 39,388 | $ | 31,453 | $ | 20,005 | $ | 16,543 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings from operations: |
||||||||||||||||
Commercial Airplanes |
$ | 2,292 | $ | 1,429 | $ | 1,211 | $ | 920 | ||||||||
Defense, Space & Security: |
||||||||||||||||
Boeing Military Aircraft |
800 | 755 | 363 | 386 | ||||||||||||
Network & Space Systems |
199 | 333 | 126 | 192 | ||||||||||||
Global Services & Support |
491 | 381 | 259 | 220 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Defense, Space & Security |
1,490 | 1,469 | 748 | 798 | ||||||||||||
Boeing Capital |
69 | 114 | 31 | 62 | ||||||||||||
Other segment |
(129 | ) | (80 | ) | (50 | ) | (58 | ) | ||||||||
Unallocated items and eliminations |
(604 | ) | (398 | ) | (392 | ) | (188 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings from operations |
3,118 | 2,534 | 1,548 | 1,534 | ||||||||||||
Other income, net |
22 | 27 | 10 | 14 | ||||||||||||
Interest and debt expense |
(231 | ) | (253 | ) | (112 | ) | (123 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings before income taxes |
2,909 | 2,308 | 1,446 | 1,425 | ||||||||||||
Income tax expense |
(1,018 | ) | (778 | ) | (479 | ) | (483 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings from continuing operations |
1,891 | 1,530 | 967 | 942 | ||||||||||||
Net loss on disposal of discontinued operations, net of taxes of $1, $1, $0 and $0 |
(1 | ) | (3 | ) | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net earnings |
$ | 1,890 | $ | 1,527 | $ | 967 | $ | 941 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Research and development expense, net: |
||||||||||||||||
Commercial Airplanes |
$ | 1,104 | $ | 1,558 | $ | 560 | $ | 771 | ||||||||
Defense, Space & Security: |
||||||||||||||||
Boeing Military Aircraft |
289 | 250 | 144 | 125 | ||||||||||||
Network & Space Systems |
219 | 217 | 112 | 110 | ||||||||||||
Global Services & Support |
54 | 56 | 25 | 27 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Defense, Space & Security |
562 | 523 | 281 | 262 | ||||||||||||
Other |
26 | 23 | 16 | 14 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total research and development expense, net |
$ | 1,692 | $ | 2,104 | $ | 857 | $ | 1,047 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Unallocated items and eliminations: |
||||||||||||||||
Share-based plans |
$ | (41 | ) | $ | (44 | ) | $ | (19 | ) | $ | (22 | ) | ||||
Deferred compensation |
(34 | ) | (60 | ) | 2 | (10 | ) | |||||||||
Pension |
(404 | ) | (158 | ) | (215 | ) | (63 | ) | ||||||||
Post-retirement |
(49 | ) | (33 | ) | (30 | ) | (14 | ) | ||||||||
Capitalized interest |
(37 | ) | (31 | ) | (16 | ) | (16 | ) | ||||||||
Eliminations and other |
(39 | ) | (72 | ) | (114 | ) | (63 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | (604 | ) | $ | (398 | ) | $ | (392 | ) | $ | (188 | ) | ||||
|
|
|
|
|
|
|
|
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries |
Six months ended June 30 |
Three months ended June 30 |
||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Commercial Airplanes |
||||||||||||||||
737 |
208 | 181 | 109 | 94 | ||||||||||||
747 |
13 | 7 | ||||||||||||||
767 |
13 | 9 | 6 | 5 | ||||||||||||
777 |
42 | 32 | 22 | 19 | ||||||||||||
787 |
11 | 6 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
287 | 222 | 150 | 118 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Defense, Space & Security |
||||||||||||||||
Boeing Military Aircraft |
||||||||||||||||
F/A-18 Models |
24 | 25 | 12 | 12 | ||||||||||||
F-15 Models |
8 | 8 | 3 | 4 | ||||||||||||
C-17 Globemaster |
5 | 7 | 3 | 4 | ||||||||||||
KC-767 International Tanker |
1 | |||||||||||||||
CH-47 Chinook |
22 | 16 | 12 | 9 | ||||||||||||
AH-64 Apache |
3 | 3 | ||||||||||||||
AEW&C |
2 | 2 | ||||||||||||||
P-8A Poseidon |
1 | |||||||||||||||
Network & Space Systems |
||||||||||||||||
Commercial and Civil Satellites |
1 | |||||||||||||||
Military Satellites |
3 | 1 | 1 | 1 | ||||||||||||
Contractual backlog (Dollars in billions) |
June 30 2012 |
March 31 2012 |
December 31 2011 |
|||||||||||||
Commercial Airplanes |
$ | 300.4 | $ | 305.3 | $ | 293.3 | ||||||||||
Defense, Space & Security: |
||||||||||||||||
Boeing Military Aircraft |
29.7 | 29.0 | 24.1 | |||||||||||||
Network & Space Systems |
9.9 | 10.1 | 9.0 | |||||||||||||
Global Services & Support |
14.6 | 14.2 | 13.3 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total Defense, Space & Security |
54.2 | 53.3 | 46.4 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total contractual backlog |
$ | 354.6 | $ | 358.6 | $ | 339.7 | ||||||||||
|
|
|
|
|
|
|||||||||||
Unobligated backlog |
$ | 19.2 | $ | 21.2 | $ | 15.8 | ||||||||||
|
|
|
|
|
|
|||||||||||
Total backlog |
$ | 373.8 | $ | 379.8 | $ | 355.5 | ||||||||||
|
|
|
|
|
|
|||||||||||
Workforce |
174,200 | 172,200 | 171,700 | |||||||||||||
|
|
|
|
|
|