CHICAGO, 5 Feb. 2014. The Boeing Company [NYSE:BA] officials reported 2013 fourth-quarter revenue of $23.8 billion, an increase of seven percent over Q4 2012, drivenCHICAGO, 5 Feb. 2014. The Boeing Company [NYSE:BA] officials reported 2013 fourth-quarter revenue of $23.8 billion, an increase of seven percent over Q4 2012, driven by strong performance across the company's businesses and higher deliveries.
"Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders," says Boeing Chairman and Chief Executive Officer Jim McNerney.
"Our Commercial Airplanes business accelerated delivery of its record backlog by successfully increasing production rates while also achieving important development milestones on the 737 MAX and 787-9 and launching the new 787-10 and 777X models with an unprecedented customer response.
“Our Defense, Space & Security unit overcame a tough operating environment to record expanded revenue, earnings and margins while executing to our commitments on the KC-46A tanker and developing and delivering important new capabilities to customers, such as the P-8 maritime aircraft and the Inmarsat-5 satellite," McNerney adds.
"For 2014, we remain focused on maintaining our commercial airplanes market leadership, strengthening and repositioning our defense, space, and security business, and continuing to meet the needs of our customers by improving productivity, executing to development plans and delivering our unmatched portfolio of innovative aerospace products and services," McNerney explains.
2013 figures
Fourth-quarter core operating earnings (non-GAAP) of $1.8 billion includes a $406 million non-cash charge to settle A-12 litigation dating back to 1991, retiring a longstanding risk to the company. Excluding the A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent to $2.2 billion and core operating margin increased to 9.4 percent.
Revenue rose 6 percent in the full year to a record $86.6 billion and core earnings per share increased 20 percent to a record $7.07. Full-year 2013 GAAP earnings per share was $5.96.
Core earnings per share guidance for 2014 is set at between $7.00 and $7.20, while GAAP earnings per share guidance is established at between $6.10 and $6.30. Revenue guidance is between $87.5 and $90.5 billion, including commercial deliveries of between 715 and 725. Operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow guidance is set at approximately $6.25 billion.
Full Year 2013
· Core EPS increased 20 percent to a record $7.07 on record revenue of $86.6 billion; GAAP EPS of $5.96
· Operating cash flow before pension contributions* grew to $9.7 billion; GAAP operating cash flow of $8.2 billion
· Backlog grew to a record $441 billion, including $135 billion of net orders during the year
Outlook for 2014
· 2014 Core EPS guidance of between $7.00 and $7.20; GAAP EPS guidance of between $6.10 and $6.30
· Revenue guidance of between $87.5 and $90.5 billion with commercial deliveries of between 715 and 725
Table 1. Summary Financial Results | Fourth Quarter | Full Year | ||||||||||
(Dollars in Millions, except per share data) | 2013 | 2012 | Change | 2013 | 2012 | Change | ||||||
Revenues | $23,785 | $22,302 | 7% | $86,623 | $81,698 | 6% | ||||||
Non-GAAP* | ||||||||||||
Core Operating Earnings | $1,838 | $1,836 | 0% | $7,876 | $7,189 | 10% | ||||||
Core Operating Margin | 7.7% | 8.2% | (0.5) Pts | 9.1% | 8.8% | 0.3 Pts | ||||||
Core Earnings Per Share | $1.88 | $1.46 | 29% | $7.07 | $5.88 | 20% | ||||||
Operating Cash Flow Before Pension Contributions | $1,409 | $4,204 | (66)% | $9,721 | $9,058 | 7% | ||||||
GAAP | ||||||||||||
Earnings From Operations | $1,515 | $1,624 | (7)% | $6,562 | $6,290 | 4% | ||||||
Operating Margin | 6.4% | 7.3% | (0.9) Pts | 7.6% | 7.7% | (0.1) Pts | ||||||
Net Earnings | $1,233 | $978 | 26% | $4,585 | $3,900 | 18% | ||||||
Earnings Per Share | $1.61 | $1.28 | 26% | $5.96 | $5.11 | 17% | ||||||
Operating Cash Flow | $1,380 | $4,167 | (67)% | $8,179 | $7,508 | 9% | ||||||
* | Non-GAAP measures (core operating earnings, core operating margin and core earnings per share) exclude certain components of pension and post retirement benefit expense that management believes are not reflective of underlying business performance. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures." | |||||||||||
Table 2. Cash Flow | Fourth Quarter | Full Year | ||||||
(Millions) | 2013 | 2012 | 2013 | 2012 | ||||
Operating Cash Flow Before Pension Contributions* | $1,409 | $4,204 | $9,721 | $9,058 | ||||
Pension Contributions | ($29) | ($37) | ($1,542) | ($1,550) | ||||
Operating Cash Flow | $1,380 | $4,167 | $8,179 | $7,508 | ||||
Less Additions to Property, Plant & Equipment | ($638) | ($495) | ($2,098) | ($1,703) | ||||
Free Cash Flow* | $742 | $3,672 | $6,081 | $5,805 | ||||
Operating cash flow in the quarter was $1.4 billion, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 7.6 million shares for$1.0 billion and paid $0.4 billion in dividends, reflecting a 10 percent increase in dividends paid compared to the same period of the prior year. Based on the strong cash generation and outlook, in December, the board of directors authorized an additional $10 billionshare repurchase program and raised the quarterly dividend 50 percent.
Table 3. Cash, Marketable Securities and Debt Balances | Quarter-End | |||
(Billions) | Q4 13 | Q3 13 | ||
Cash | $9.1 | $10.0 | ||
Marketable Securities1 | $6.2 | $5.9 | ||
Total | $15.3 | $15.9 | ||
Debt Balances: | ||||
The Boeing Company, net of intercompany loans to BCC | $7.0 | $7.0 | ||
Boeing Capital Corporation, including intercompany loans | $2.6 | $2.6 | ||
Total Consolidated Debt | $9.6 | $9.6 | ||
1 | Marketable securities consists primarily of time deposits due within one year classified as "short-term investments." | |||
Cash and investments in marketable securities totaled $15.3 billion at year-end (Table 3), down from $15.9 billion at the beginning of the quarter. Debt was $9.6 billion, unchanged from the beginning of the quarter.
Total company backlog at year-end was a record $441 billion, up from $415 billion at the beginning of the quarter, and included net orders for the quarter of $48 billion. Backlog is up $51 billion from prior year-end, reflecting $135 billion of net orders in 2013.
Segment Results
Boeing Commercial Airplanes
Table 4. Boeing Commercial Airplanes | Fourth Quarter | Full Year | ||||||||||
(Dollars in Millions) | 2013 | 2012 | Change | 2013 | 2012 | Change | ||||||
Commercial Airplanes Deliveries | 172 | 165 | 4% | 648 | 601 | 8% | ||||||
Revenues | $14,680 | $14,161 | 4% | $52,981 | $49,127 | 8% | ||||||
Earnings from Operations | $1,506 | $1,266 | 19% | $5,795 | $4,711 | 23 % | ||||||
Operating Margin | 10.3% | 8.9% | 1.4 Pts | 10.9% | 9.6% | 1.3Pts | ||||||
Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7 billion and full-year revenue increased to a record $53 billionon higher delivery volume. Fourth-quarter operating margin improved to 10.3 percent and full-year operating margin grew to 10.9 percent on the higher volume, favorable delivery mix and continued strong operating performance (Table 4).
During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM).
Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.
Boeing Defense, Space & Security
Table 5. Defense, Space & Security | Fourth Quarter | Full Year | |||||||||
(Dollars in Millions) | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||
Revenues | |||||||||||
Boeing Military Aircraft | $4,395 | $4,037 | 9% | $15,936 | $16,019 | (1)% | |||||
Network & Space Systems | $2,272 | $2,024 | 12% | $8,512 | $7,911 | 8% | |||||
Global Services & Support | $2,188 | $2,282 | (4)% | $8,749 | $8,677 | 1% | |||||
Total BDS Revenues | $8,855 | $8,343 | 6% | $33,197 | $32,607 | 2% | |||||
Earnings from Operations | |||||||||||
Boeing Military Aircraft | $441 | $313 | 41% | $1,465 | $1,489 | (2)% | |||||
Network & Space Systems | $233 | $138 | 69% | $719 | $562 | 28% | |||||
Global Services & Support | $280 | $300 | (7)% | $1,051 | $1,017 | 3% | |||||
Total BDS Earnings from Operations | $954 | $751 | 27% | $3,235 | $3,068 | 5% | |||||
Operating Margin | 10.8% | 9.0% | 1.8 Pts | 9.7% | 9.4% | 0.3 Pts | |||||
Boeing Defense, Space & Security's fourth-quarter revenue increased 6 percent to $8.9 billion, while operating margin increased to 10.8 percent (Table 5). For the full year, revenue increased 2 percent to $33.2 billion, while operating margin increased to 9.7 percent.
Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.4 billion, reflecting higher deliveries. Operating margin increased to 10.0 percent, reflecting the higher deliveries and strong performance. During the quarter, BMA achieved Initial Operating Capability (IOC) on the P-8A Poseidon aircraft.
Network & Space Systems (N&SS) fourth-quarter revenue increased to $2.3 billion, reflecting higher delivery volume and mix, and operating margin increased to 10.3 percent on strong performance. During the quarter, N&SS was awarded a contract for a fourth Inmarsat-5 satellite.
Global Services & Support (GS&S) fourth-quarter revenue was $2.2 billion, reflecting lower volume in integrated logistics. Operating margin was 12.8 percent. During the quarter, GS&S was awarded contracts for the B-52 and B-1 bomber modifications and upgrades.
Backlog at Defense, Space & Security was $67 billion, of which 37 percent represents orders with international customers.
Additional Financial Information
Table 6. Additional Financial Information | Fourth Quarter | Full Year | ||||||
(Dollars in Millions) | 2013 | 2012 | 2013 | 2012 | ||||
Revenues | ||||||||
Boeing Capital Corporation | $105 | $129 | $408 | $468 | ||||
Other segment | $22 | $27 | $102 | $106 | ||||
Unallocated items and eliminations | $123 | ($358) | ($65) | ($610) | ||||
Earnings from Operations | ||||||||
Boeing Capital Corporation | $9 | ($12) | $107 | $88 | ||||
Other segment income/(expense) | ($99) | $31 | ($156) | ($186) | ||||
Unallocated items and eliminations excluding unallocated pension/postretirement expense | ($532) | ($200) | ($1,105) | ($492) | ||||
Unallocated pension/postretirement expense | ($323) | ($212) | ($1,314) | ($899) | ||||
Other income, net | $15 | $23 | $56 | $62 | ||||
Interest and debt expense | ($96) | ($112) | ($386) | ($442) | ||||
Effective tax rate | 14.0% | 36.3% | 26.4% | 34.0% | ||||
At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was $3.9 billion down from $4.1 billion at the beginning of the quarter. BCC's debt-to-equity ratio was 5.0-to-1. Other segment earnings decreased $130 million in the quarter partly due to higher asset impairment expense.
Unallocated items and eliminations excluding unallocated pension/postretirement expense increased in the fourth quarter of 2013 primarily due to a $406 million charge associated with the A-12 settlement. Total pension expense for the fourth quarter was $717 million, up from $576 million in the same period last year. The company's income tax expense was $201 million in the quarter, compared to $557 million in the same period of the prior year, due to a $212 million benefit recorded in fourth-quarter 2013 for a tax regulation change.
Outlook
The company's 2014 financial guidance (Table 7) reflects continued strong performance in both businesses.
Table 7. Financial Outlook | |
(Dollars in Billions, except per share data) | 2014 |
The Boeing Company | |
Revenue | $87.5 - 90.5 |
Core Earnings Per Share* | $7.00 - 7.20 |
Earnings Per Share | $6.10 - 6.30 |
Operating Cash Flow Before Pension Contributions* | ~ $7 |
Operating Cash Flow 1 | ~ $6.25 |
Boeing Commercial Airplanes | |
Deliveries 2 | 715 - 725 |
Revenue | $57.5 - 59.5 |
Operating Margin | ~ 10% |
Boeing Defense, Space & Security | |
Revenue | |
Boeing Military Aircraft | ~ $15 |
Network & Space Systems | ~ $7.7 |
Global Services & Support | ~ $7.8 |
Total BDS Revenue | $30 - 31 |
Operating Margin | |
Boeing Military Aircraft | ~ 9.5% |
Network & Space Systems | ~ 8.5% |
Global Services & Support | ~ 10.5% |
Total BDS Operating Margin | ~ 9.5% |
Boeing Capital Corporation | |
Portfolio Size | Lower |
Revenue | ~ $0.3 |
Pre-Tax Earnings | ~ $0.05 |
Research & Development | ~ $3.2 |
Capital Expenditures | ~ $2.5 |
Pension Expense 3 | ~ $3.1 |
Effective Tax Rate 4 | ~ 31% |
1 | After discretionary cash pension contributions of $0.75 billion and assuming new aircraft financings under $0.5 billion |
2 | Assumes approximately 110 787 deliveries |
3 | Approximately $1.1 billion is expected to be recorded in unallocated items and eliminations |
4 | Assumes the extension of the research and development tax credit |
* | Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures." |
Boeing's 2014 revenue guidance is established at between $87.5 and $90.5 billion. Core earnings per share guidance is set at between $7.00 and $7.20, and earnings per share guidance is expected to be between $6.10 and $6.30. Total company 2014 operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow is expected to be approximately $6.25 billion in 2014, including $0.75 billion of discretionary pension contributions. Total company pension expense in 2014 is expected to be approximately $3.1 billion (of which approximately $2.0 billion is expected to be recorded in core operating earnings and $1.1 billion recorded in unallocated items and eliminations).
Commercial Airplanes' 2014 deliveries are expected to be between 715 and 725, which includes approximately 110 787 deliveries. Revenue at Commercial Airplanes is expected to be between $57.5 and $59.5 billion with operating margins of approximately 10 percent. Defense, Space & Security's revenue for 2014 is expected to be between $30 and $31 billion with operating margins of approximately 9.5 percent.
Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2014, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation. Boeing's 2014 R&D forecast is approximately $3.2 billion, and capital expenditures for 2014 are expected to be approximately $2.5 billion. Boeing's effective tax rate is expected to be approximately 31 percent in 2014, which assumes the extension of the research and development tax credit.
The Boeing Company and Subsidiaries Consolidated Statements of Operations (Unaudited) | |||||||
Twelve months | Three months | ||||||
(Dollars in millions, except per share data) | 2013 | 2012 | 2013 | 2012 | |||
Sales of products | $76,792 | $71,234 | $21,482 | $19,793 | |||
Sales of services | 9,831 | 10,464 | 2,303 | 2,509 | |||
Total revenues | 86,623 | 81,698 | 23,785 | 22,302 | |||
Cost of products | (65,640) | (60,309) | (18,610) | (17,206) | |||
Cost of services | (7,553) | (8,247) | (1,758) | (1,816) | |||
Boeing Capital interest expense | (75) | (109) | (20) | (24) | |||
Total costs and expenses | (73,268) | (68,665) | (20,388) | (19,046) | |||
13,355 | 13,033 | 3,397 | 3,256 | ||||
Income from operating investments, net | 214 | 268 | 67 | 57 | |||
General and administrative expense | (3,956) | (3,717) | (1,100) | (943) | |||
Research and development expense, net | (3,071) | (3,298) | (848) | (753) | |||
Gain/(loss) on dispositions, net | 20 | 4 | (1) | 7 | |||
Earnings from operations | 6,562 | 6,290 | 1,515 | 1,624 | |||
Other income, net | 56 | 62 | 15 | 23 | |||
Interest and debt expense | (386) | (442) | (96) | (112) | |||
Earnings before income taxes | 6,232 | 5,910 | 1,434 | 1,535 | |||
Income tax expense | (1,646) | (2,007) | (201) | (557) | |||
Net earnings from continuing operations | 4,586 | 3,903 | 1,233 | 978 | |||
Net loss on disposal of discontinued operations, net of taxes of $0 and $2 | (1) | (3) | |||||
Net earnings | $4,585 | $3,900 | $1,233 | $978 | |||
Basic earnings per share from continuing operations | $6.03 | $5.15 | $1.63 | $1.29 | |||
Net loss on disposal of discontinued operations, net of taxes | |||||||
Basic earnings per share | $6.03 | $5.15 | $1.63 | $1.29 | |||
Diluted earnings per share from continuing operations | $5.96 | $5.11 | $1.61 | $1.28 | |||
Net loss on disposal of discontinued operations, net of taxes | |||||||
Diluted earnings per share | $5.96 | $5.11 | $1.61 | $1.28 | |||
Cash dividends paid per share | $1.94 | $1.76 | $0.485 | $0.44 | |||
Weighted average diluted shares (millions) | 769.5 | 763.8 | 768.4 | 768.3 | |||
The Boeing Company and Subsidiaries Consolidated Statements of Financial Position (Unaudited) | |||
(Dollars in millions, except per share data) | December 31 | December 31 | |
Assets | |||
Cash and cash equivalents | $9,088 | $10,341 | |
Short-term and other investments | 6,170 | 3,217 | |
Accounts receivable, net | 6,546 | 5,608 | |
Current portion of customer financing, net | 344 | 364 | |
Deferred income taxes | 14 | 28 | |
Inventories, net of advances and progress billings | 42,912 | 37,751 | |
Total current assets | 65,074 | 57,309 | |
Customer financing, net | 3,627 | 4,056 | |
Property, plant and equipment, net of accumulated depreciation of $15,070 and $14,645 | 10,224 | 9,660 | |
Goodwill | 5,043 | 5,035 | |
Acquired intangible assets, net | 3,052 | 3,111 | |
Deferred income taxes | 2,939 | 6,753 | |
Investments | 1,204 | 1,180 | |
Other assets, net of accumulated amortization of $448 and $504 | 1,500 | 1,792 | |
Total assets | $92,663 | $88,896 | |
Liabilities and equity | |||
Accounts payable | $9,498 | $9,394 | |
Accrued liabilities | 14,131 | 12,995 | |
Advances and billings in excess of related costs | 20,027 | 16,672 | |
Deferred income taxes and income taxes payable | 6,267 | 4,485 | |
Short-term debt and current portion of long-term debt | 1,563 | 1,436 | |
Total current liabilities | 51,486 | 44,982 | |
Accrued retiree health care | 6,528 | 7,528 | |
Accrued pension plan liability, net | 10,474 | 19,651 | |
Non-current income taxes payable | 156 | 366 | |
Other long-term liabilities | 950 | 1,429 | |
Long-term debt | 8,072 | 8,973 | |
Shareholders' equity: | |||
Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued | 5,061 | 5,061 | |
Additional paid-in capital | 4,415 | 4,122 | |
Treasury stock, at cost – 264,882,461 and 256,630,628 shares | (17,671) | (15,937) | |
Retained earnings | 32,964 | 30,037 | |
Accumulated other comprehensive loss | (9,894) | (17,416) | |
Total shareholders' equity | 14,875 | 5,867 | |
Noncontrolling interest | 122 | 100 | |
Total equity | 14,997 | 5,967 | |
Total liabilities and equity | $92,663 | $88,896 | |
The Boeing Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) | |||
Twelve months ended | |||
(Dollars in millions) | 2013 | 2012 | |
Cash flows – operating activities: | |||
Net earnings | $4,585 | $3,900 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Non-cash items – | |||
Share-based plans expense | 206 | 193 | |
Depreciation and amortization | 1,844 | 1,811 | |
Investment/asset impairment charges, net | 96 | 84 | |
Customer financing valuation benefit | (11) | (10) | |
Loss on disposal of discontinued operations | 1 | 5 | |
Gain on dispositions, net | (20) | (4) | |
Other charges and credits, net | 528 | 694 | |
Excess tax benefits from share-based payment arrangements | (128) | (45) | |
Changes in assets and liabilities – | |||
Accounts receivable | (879) | (27) | |
Inventories, net of advances and progress billings | (5,562) | (5,681) | |
Accounts payable | (298) | 1,199 | |
Accrued liabilities | 883 | 801 | |
Advances and billings in excess of related costs | 3,353 | 1,177 | |
Income taxes receivable, payable and deferred | 1,445 | 1,605 | |
Other long-term liabilities | 2 | 157 | |
Pension and other postretirement plans | 1,720 | 1,288 | |
Customer financing, net | 391 | 407 | |
Other | 23 | (46) | |
Net cash provided by operating activities | 8,179 | 7,508 | |
Cash flows – investing activities: | |||
Property, plant and equipment additions | (2,098) | (1,703) | |
Property, plant and equipment reductions | 51 | 97 | |
Acquisitions, net of cash acquired | (26) | (124) | |
Contributions to investments | (15,394) | (12,921) | |
Proceeds from investments | 12,453 | 10,901 | |
Purchase of distribution rights | (140) | (7) | |
Net cash used by investing activities | (5,154) | (3,757) | |
Cash flows – financing activities: | |||
New borrowings | 571 | 60 | |
Debt repayments | (1,434) | (2,076) | |
Repayments of distribution rights and other asset financing | (280) | (228) | |
Stock options exercised, other | 1,097 | 120 | |
Excess tax benefits from share-based payment arrangements | 128 | 45 | |
Employee taxes on certain share-based payment arrangements | (63) | (76) | |
Common shares repurchased | (2,801) | ||
Dividends paid | (1,467) | (1,322) | |
Net cash used by financing activities | (4,249) | (3,477) | |
Effect of exchange rate changes on cash and cash equivalents | (29) | 18 | |
Net (decrease)/increase in cash and cash equivalents | (1,253) | 292 | |
Cash and cash equivalents at beginning of year | 10,341 | 10,049 | |
Cash and cash equivalents at end of period | $9,088 | $10,341 | |
The Boeing Company and Subsidiaries Summary of Business Segment Data (Unaudited) | |||||||
Twelve months ended | Three months ended | ||||||
(Dollars in millions) | 2013 | 2012 | 2013 | 2012 | |||
Revenues: | |||||||
Commercial Airplanes | $52,981 | $49,127 | $14,680 | $14,161 | |||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 15,936 | 16,019 | 4,395 | 4,037 | |||
Network & Space Systems | 8,512 | 7,911 | 2,272 | 2,024 | |||
Global Services & Support | 8,749 | 8,677 | 2,188 | 2,282 | |||
Total Defense, Space & Security | 33,197 | 32,607 | 8,855 | 8,343 | |||
Boeing Capital | 408 | 468 | 105 | 129 | |||
Other segment | 102 | 106 | 22 | 27 | |||
Unallocated items and eliminations | (65) | (610) | 123 | (358) | |||
Total revenues | $86,623 | $81,698 | $23,785 | $22,302 | |||
Earnings from operations: | |||||||
Commercial Airplanes | $5,795 | $4,711 | $1,506 | $1,266 | |||
Defense, Space & Security: | |||||||
Boeing Military Aircraft | 1,465 | 1,489 | 441 | 313 | |||
Network & Space Systems | 719 | 562 | 233 | 138 | |||
Global Services & Support | 1,051 | 1,017 | 280 | 300 | |||
Total Defense, Space & Security | 3,235 | 3,068 | 954 | 751 | |||
Boeing Capital | 107 | 88 | 9 | (12) | |||
Other segment | (156) | (186) | (99) | 31 | |||
Unallocated items and eliminations | (2,419) | (1,391) | (855) | (412) | |||
Earnings from operations | 6,562 | 6,290 | 1,515 | 1,624 | |||
Other income, net | 56 | 62 | 15 | 23 | |||
Interest and debt expense | (386) | (442) | (96) | (112) | |||
Earnings before income taxes | 6,232 | 5,910 | 1,434 | 1,535 | |||
Income tax expense | (1,646) | (2,007) | (201) | (557) | |||
Net earnings from continuing operations | 4,586 | 3,903 | 1,233 | 978 | |||
Net loss on disposal of discontinued operations, net of taxes of $0 and $2 | (1) | (3) | |||||
Net earnings | $4,585 | $3,900 | $1,233 | $978 | |||
Research and development expense, net: | |||||||
Commercial Airplanes | $1,807 | $2,049 | $510 | $411 | |||
Defense, Space & Security | 1,215 | 1,189 | 323 | 321 | |||
Other | 49 | 60 | 15 | 21 | |||
Total research and development expense, net | $3,071 | $3,298 | $848 | $753 | |||
Unallocated items and eliminations: | |||||||
Share-based plans | ($95) | ($81) | ($21) | ($17) | |||
Deferred compensation | (238) | (75) | (73) | (26) | |||
Capitalized interest | (69) | (70) | (17) | (17) | |||
Eliminations and other | (703) | (266) | (421) | (140) | |||
Sub-total (included in core operating earnings) | (1,105) | (492) | (532) | (200) | |||
Pension | (1,374) | (787) | (329) | (179) | |||
Postretirement | 60 | (112) | 6 | (33) | |||
Total unallocated items and eliminations | ($2,419) | ($1,391) | ($855) | ($412) | |||
The Boeing Company and Subsidiaries Operating and Financial Data (Unaudited) | ||||||||||||||||
Deliveries | Twelve months ended | Three months ended | ||||||||||||||
Commercial Airplanes | 2013 | 2012 | 2013 | 2012 | ||||||||||||
737 | 440 | 415 | 110 | 105 | ||||||||||||
747 | 24 | 31 | 8 | 10 | ||||||||||||
767 | 21 | 26 | 4 | 6 | ||||||||||||
777 | 98 | 83 | 25 | 21 | ||||||||||||
787 | 65 | (1) | 46 | (3) | 25 | 23 | (3) | |||||||||
Total | 648 | 601 | 172 | 165 | ||||||||||||
Note: Deliveries under operating lease are identified by parentheses. | ||||||||||||||||
Defense, Space & Security | ||||||||||||||||
Boeing Military Aircraft | ||||||||||||||||
F/A-18 Models | 48 | 48 | 12 | 12 | ||||||||||||
F-15E Eagle | 14 | 8 | 11 | |||||||||||||
C-17 Globemaster III | 10 | 10 | 2 | 2 | ||||||||||||
CH-47 Chinook | 44 | 51 | 12 | 11 | ||||||||||||
AH-64 Apache | 37 | 19 | 6 | 6 | ||||||||||||
P-8 Models | 11 | 5 | 4 | 2 | ||||||||||||
AEW&C | 3 | 1 | ||||||||||||||
Network & Space Systems | ||||||||||||||||
Commercial and Civil Satellites | 3 | 3 | 2 | |||||||||||||
Military Satellites | 4 | 7 | 3 | 1 | ||||||||||||
Contractual backlog(Dollars in billions) | December 31 | September 30 | December 31 | |||||||||||||
Commercial Airplanes | $373.0 | $344.3 | $317.3 | |||||||||||||
Defense, Space & Security: | ||||||||||||||||
Boeing Military Aircraft | 24.8 | 26.4 | 29.2 | |||||||||||||
Network & Space Systems | 9.8 | 9.9 | 10.1 | |||||||||||||
Global Services & Support | 15.0 | 14.6 | 15.8 | |||||||||||||
Total Defense, Space & Security | 49.6 | 50.9 | 55.1 | |||||||||||||
Total contractual backlog | $422.6 | $395.2 | $372.4 | |||||||||||||
Unobligated backlog | $18.3 | $19.9 | $17.9 | |||||||||||||
Total backlog | $440.9 | $415.1 | $390.3 | |||||||||||||
Workforce | 168,400 | 170,800 | 174,400 | |||||||||||||
The Boeing Company and Subsidiaries | |||||||||
Reconciliation of Non-GAAP Measures | |||||||||
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share | |||||||||
Core Operating Margin and Increase in Core Operating Earnings Excluding A-12 Settlement Charge | |||||||||
(Unaudited) | |||||||||
The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin and core earnings per share as well as core operating margin and the increase in core operating earnings excluding the A-12 settlement charge with the most directly comparable GAAP financial measures, earnings from operations, operating margin and diluted earnings per share. See page 7 of this release for additional information on the use of these non-GAAP financial measures. | |||||||||
Fourth Quarter | Full Year | Guidance | |||||||
2013 | 2012 | 2013 | 2012 | 2014 | |||||
Revenues | $23,785 | $22,302 | $86,623 | $81,698 | |||||
GAAP Earnings From Operations | $1,515 | $1,624 | $6,562 | $6,290 | |||||
GAAP Operating Margin | 6.4% | 7.3% | 7.6% | 7.7% | |||||
Unallocated Pension/Postretirement Expense | $323 | $212 | $1,314 | $899 | ~ $1,050 | ||||
Core Operating Earnings (non-GAAP) | $1,838 | $1,836 | $7,876 | $7,189 | |||||
Core Operating Margin (non-GAAP) | 7.7% | 8.2% | 9.1% | 8.8% | |||||
A-12 Settlement Charge | $406 | — | $406 | — | |||||
Core Operating Earnings Excluding A-12 Settlement Charge | $2,244 | $1,836 | $8,282 | $7,189 | |||||
Core Operating Margin Excluding A-12 Settlement Charge (non-GAAP) | 9.4% | 8.2% | 9.6% | 8.8% | |||||
Increase/(Decrease) in GAAP Earnings From Operations | (7%) | 4% | |||||||
Increase in Core Operating Earnings Excluding A-12 Settlement Charge (non-GAAP) | 22% | 15% | |||||||
GAAP Diluted Earnings Per Share | $1.61 | $1.28 | $5.96 | $5.11 | $6.10 - 6.30 | ||||
Unallocated Pension/Postretirement Expense1 | $0.27 | $0.18 | $1.11 | $0.77 | $0.90 | ||||
Core Earnings Per Share (non-GAAP) | $1.88 | $1.46 | $7.07 | $5.88 | $7.00 - 7.20 | ||||
Weighted Average Diluted Shares (millions) | 768.4 | 768.3 | 769.5 | 763.8 | 750 - 755 | ||||
Increase in GAAP Earnings Per Share | 26% | 17% | |||||||
Increase in Core Earnings Per Share | 29% | 20% | |||||||
1 | Earnings per share impact is presented net of the federal statutory tax rate of 35.0 percent. | ||||||||
