BA
$380.07
Boeing
$2.55
.68%
Earnings Details
4th Quarter December 2018
Wednesday, January 30, 2019 7:30:00 AM
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Summary

Boeing Beats

Boeing (BA) reported 4th Quarter December 2018 earnings of $5.48 per share on revenue of $28.3 billion. The consensus earnings estimate was $4.52 per share on revenue of $26.9 billion. The Earnings Whisper number was $4.61 per share. Revenue grew 11.7% on a year-over-year basis.

The company said it expects 2019 earnings of $19.90 to $20.10 per share on revenue of $109.5 billion to $111.5 billion. The current consensus earnings estimate is $18.24 per share on revenue of $106.80 billion for the year ending December 31, 2019.

Boeing Co, together with its subsidiaries designs, develops, manufactures, sells and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services.

Results
Reported Earnings
$5.48
Earnings Whisper
$4.61
Consensus Estimate
$4.52
Reported Revenue
$28.34 Bil
Revenue Estimate
$26.92 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Boeing Reports Record 2018 Results and Provides 2019 Guidance

CHICAGO, Jan. 30, 2019 /PRNewswire/ --  

Fourth Quarter 2018

  • Record revenue of $28.3 billion and record operating profit of $4.2 billion driven by higher volume
  • Record GAAP EPS of $5.93 and record core EPS (non-GAAP)* of $5.48 on strong performance

Full-Year 2018

  • Record revenue of $101.1 billion reflecting strong growth across the portfolio
  • Record GAAP EPS of $17.85 and record core EPS (non-GAAP)* of $16.01 driven by solid execution
  • Record operating cash flow of $15.3 billion; repurchased 26.1 million shares for $9.0 billion
  • Total backlog remains robust at $490 billion, including nearly 5,900 commercial airplanes
  • Cash and marketable securities of $8.6 billion provide strong liquidity

Outlook for 2019

  • Revenue guidance of between $109.5 and $111.5 billion reflects higher volume across all businesses
  • GAAP EPS of between $21.90 and $22.10; core EPS (non-GAAP)* of between $19.90 and $20.10
  • Operating cash flow expected to increase to between $17.0 and $17.5 billion

 













Table 1. Summary Financial Results

Fourth Quarter




Full Year



(Dollars in Millions, except per share data)

2018


2017


Change


2018


2017


Change













Revenues

$28,341


$24,770


14%


$101,127


$94,005


8%













GAAP












Earnings From Operations

$4,175


$2,978


40%


$11,987


$10,344


16%

Operating Margin

14.7%


12.0%


2.7 Pts


11.9%


11.0%


0.9 Pts

Net Earnings

$3,424


$3,320


3%


$10,460


$8,458


24%

Earnings Per Share

$5.93


$5.49


8%


$17.85


$13.85


29%

Operating Cash Flow

$2,947


$2,903


2%


$15,322


$13,346


15%

Non-GAAP*












Core Operating Earnings

$3,867


$2,589


49%


$10,660


$8,906


20%

Core Operating Margin

13.6%


10.5%


3.1 Pts


10.5%


9.5%


1.0 Pts

Core Earnings Per Share

$5.48


$5.07


8%


$16.01


$12.33


30%


*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."    

The Boeing Company [NYSE: BA] reported fourth-quarter revenue of $28.3 billion, GAAP earnings per share of $5.93 and core earnings per share (non-GAAP)* of $5.48, all company records. These results reflect record commercial deliveries, higher defense and services volume and strong performance which outweighed favorable tax impacts recorded in the fourth quarter of 2017 (Table 1). Boeing generated operating cash flow of $2.9 billion, repurchased 1.6 million shares for $0.6 billion, paid $1.0 billion of dividends and completed the acquisition of KLX.

Revenue was a record $101.1 billion for the full year reflecting higher commercial deliveries and increased volume across the company. Records for GAAP earnings per share of $17.85 and core earnings per share (non-GAAP)* of $16.01 were driven by higher volume, improved mix and solid execution.

"Across the enterprise our team delivered strong core operating performance and customer focus, driving record revenues, earnings and cash flow and further extending our global aerospace industry leadership in 2018," said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. "Our financial performance provided a firm platform to further invest in new growth businesses, innovation and future franchise programs, as well as in our people and enabling technologies. In the last 5 years, we have invested nearly $35 billion in key strategic areas of our business, all while increasing cash returns to shareholders."

"Our One Boeing focus, clear strategies for growth, and leading positions in large and growing markets, give us confidence for continued strong performance, revenue expansion and solid execution across all three businesses, which is reflected in our 2019 guidance."

"We remain focused on executing on our production and development programs as well as our growth strategy while driving further productivity, quality and safety improvements, investing in our team and creating more value and opportunity for our customers, shareholders and employees."









Table 2. Cash Flow

Fourth Quarter


Full Year

(Millions)

2018


2017


2018


2017

Operating Cash Flow

$2,947


$2,903


$15,322


$13,346

Less Additions to Property, Plant & Equipment

($495)


($435)


($1,722)


($1,739)

Free Cash Flow*

$2,452


$2,468


$13,600


$11,607


*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."    

Operating cash flow was $2.9 billion in the quarter and $15.3 billion for the full year, reflecting planned higher commercial airplane production rates and strong operating performance as well as timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 1.6 million shares for $0.6 billion, paid $1.0 billion in dividends, and completed the acquisition of KLX. For the full year, the company repurchased 26.1 million shares for $9.0 billion and paid $3.9 billion in dividends. Based on strong cash generation and confidence in the company's outlook, the board of directors in December increased the quarterly dividend per share by 20 percent and replaced the existing share repurchase program with a new $20 billion authorization.





Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q4 18


Q3 18

Cash

$7.7


$8.0

Marketable Securities1

$0.9


$2.0

Total

$8.6


$10.0

Debt Balances:




The Boeing Company, net of intercompany loans to BCC

$11.3


$9.4

Boeing Capital, including intercompany loans

$2.5


$2.5

Total Consolidated Debt

$13.8


$11.9


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

Cash and investments in marketable securities totaled $8.6 billion, compared to $10.0 billion at the beginning of the quarter (Table 3). Debt was $13.8 billion, up from $11.9 billion at the beginning of the quarter primarily due to the issuance of new debt following the KLX acquisition.

Total company backlog at quarter-end was relatively unchanged at $490 billion and included net orders for the quarter of $27 billion.

Segment Results

Commercial Airplanes













Table 4. Commercial Airplanes

Fourth Quarter




Full Year



(Dollars in Millions)

2018


2017


Change


2018


2017


Change













Commercial Airplanes Deliveries

238


209


14%


806


763


6%













Revenues

$17,306


15,388


12%


$60,715


$58,014


5%

Earnings from Operations

$2,704


$1,787


51%


$7,879


$5,452


45%

Operating Margin

15.6%


11.6%


4.0 Pts


13.0%


9.4%


3.6 Pts

Commercial Airplanes fourth-quarter revenue increased to $17.3 billion reflecting higher deliveries and favorable mix (Table 4). Fourth-quarter operating margin increased to 15.6 percent, driven by higher 737 volume and strong operating performance on production programs, including higher 787 margins.

During the quarter, Commercial Airplanes delivered 238 airplanes, including the delivery of the 787th 787 Dreamliner and the first 737 MAX Boeing Business Jet. The 737 program delivered 111 MAX airplanes in the fourth quarter, including the first MAX delivery from the China Completion Center, and delivered 256 MAX airplanes in 2018. The first 777X flight test airplane completed final body join and power-on, and the program remains on track for flight testing this year and first delivery in 2020.

Commercial Airplanes booked 262 net orders during the quarter, valued at $16 billion. Backlog remains robust with nearly 5,900 airplanes valued at $412 billion.

Defense, Space & Security













Table 5. Defense, Space & Security

Fourth Quarter




Full Year



(Dollars in Millions)

2018


2017


Change


2018


2017


Change













Revenues

$6,111


$5,257


16%


$23,195


$20,561


13%

Earnings from Operations

$669


$544


23%


$1,594


$2,193


(27%)

Operating Margin

10.9%


10.3%


0.6 Pts


6.9%


10.7%


(3.8) Pts

Defense, Space & Security fourth-quarter revenue increased to $6.1 billion driven by increased volume across F/A-18, satellites, and weapons (Table 5). Fourth-quarter operating margin increased to 10.9 percent, primarily reflecting favorable mix.

During the quarter, Defense, Space & Security was awarded contracts for the second KC-46 Tanker to Japan, a joint ground system to provide tactical satellite communications for the U.S. Air Force and to modernize 17 Chinooks for Spain. Defense, Space & Security also completed a successful test for the U.S. Air Force's Minuteman III and unveiled the SB>1 DEFIANT helicopter for the U.S. Army. In January, the first two KC-46 Tankers were delivered to the U.S. Air Force.

Backlog at Defense, Space & Security was $57 billion, of which 30 percent represents orders from customers outside the U.S.

Global Services













Table 6. Global Services

Fourth Quarter




Full Year



(Dollars in Millions)

2018


2017


Change


2018


2017


Change













Revenues

$4,894


$3,797


29%


$17,018


$14,581


17%

Earnings from Operations

$732


$559


31%


$2,522


$2,246


12%

Operating Margin

15.0%


14.7%


0.3 Pts


14.8%


15.4%


(0.6) Pts

Global Services fourth-quarter revenue increased to $4.9 billion, primarily driven by higher parts volume including the acquisition of KLX (Table 6). Fourth-quarter operating margin increased to 15.0 percent reflecting improved performance, partially offset by higher period costs.

During the quarter, Global Services was awarded Performance Based Logistics contracts for C-17 and F-22 for the U.S. Air Force and F-15 for Qatar as well as contracts for F/A-18 services for the U.S Navy. Global Services was also selected by Shenzhen Airlines to provide crew management solutions, making them the first airline in China to utilize Boeing AnalytX-powered services. Significant milestones during the quarter included the first KC-46 training flight with the U.S. Air Force. In addition, Global Services successfully began integrating KLX and began operations of the Auxiliary Power Unit joint venture with Safran.

Additional Financial Information









Table 7. Additional Financial Information

Fourth Quarter


Full Year

(Dollars in Millions)

2018


2017


2018


2017

Revenues








Boeing Capital

$60


$73


$274


$307

Unallocated items, eliminations and other

($30)


$255


($75)


$542

Earnings from Operations








Boeing Capital

$8


$27


$79


$114

FAS/CAS service cost adjustment

$308


$389


$1,327


$1,438

Other unallocated items and eliminations

($246)


($328)


($1,414)


($1,099)

Other income, net

$29


$32


$92


$123

Interest and debt expense

($158)


($93)


($475)


($360)

Effective tax rate

15.4%


(13.8)%


9.9%


16.3%

At quarter-end, Boeing Capital's net portfolio balance was $2.8 billion. Revenue in other unallocated items and eliminations decreased primarily due to the timing of eliminations for intercompany aircraft deliveries and the 2017 sale of aircraft previously leased to customers. The change in earnings from other unallocated items and eliminations is primarily due to timing of expense allocations. The effective tax rate for the fourth quarter increased from the same period in the prior year primarily due to the favorable impacts from the enactment of the Tax Cuts and Jobs Act recorded in the fourth quarter of 2017.

Outlook

Effective in the first quarter of 2019, the Company is making a change to the accounting for military derivative aircraft. Revenues and costs associated with military derivative aircraft were previously reported in the Commercial Airplanes and Defense, Space & Security segments. Beginning in 2019, all revenues and costs associated with military derivative aircraft will be reported in the Defense, Space & Security segment. An additional exhibit is included on page 15 with restated 2018 results adjusted for the change in accounting for military derivative aircraft as well as the realignment of certain programs between Global Services and Defense, Space & Security. The Company has provided this comparable information in the exhibit and below to help investors understand the 2019 financial outlook (Table 8).







Table 8. 2019 Financial Outlook



Restated


As Reported

(Dollars in Billions, except per share data)

2019


2018 Results


2018 Results







The Boeing Company






Revenue

$109.5 - 111.5











GAAP Earnings Per Share

$21.90 - 22.10





Core Earnings Per Share*

$19.90 - 20.10











Operating Cash Flow

$17.0 - $17.5B











Commercial Airplanes






Deliveries 1

895 - 905





Revenue

$64.5 - 65.5


$57.5


$60.7

Operating Margin

14.5% - 15.0%


13.6%


13.0%







Defense, Space & Security






Revenue

$26.5 - 27.5


$26.4


$23.2

Operating Margin

>11.0%


6.3%


6.9%







Global Services






      Revenue

$18.5 - 19.0


$17.1


$17.0

      Operating Margin

>15.0%


14.9%


14.8%







Boeing Capital Portfolio Size

Stable





Research & Development

~$4.1





Capital Expenditures

~$2.3





Pension Expense 2

~$0.0





Effective Tax Rate

~16%






*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."

1 Continues to include intercompany deliveries related to military derivative aircraft

2 Approximately $1.1 billion of pension expense is expected to be allocated to the business segments

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings/per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 13-14.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow without 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 as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

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 generally 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 expectations and assumptions that we believe to be reasonable when made, but that 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) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (4) changing budget and appropriation levels and 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) threats to the security of our or our customers' information; (14) potential adverse developments in new or pending litigation and/or government investigations; (15) customer and aircraft concentration in our customer financing portfolio; (16) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates; (17) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (18) the adequacy of our insurance coverage to cover significant risk exposures; (19) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (20) work stoppages or other labor disruptions; (21) substantial pension and other postretirement benefit obligations; (22) potential environmental liabilities.

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:


Maurita Sutedja or Keely Moos (312) 544-2140

Communications:


Allison Bone (312) 544-2002

 

The Boeing Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)


In the first quarter of 2018, we adopted the following Accounting Standards Updates (ASU), which are reflected in the unaudited Consolidated Financial Statements on pages 8-14: ASU 2014-09, Revenue from Contracts with Customers (Topic 606); ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost; ASU 2016-18 Statement of Cash Flows (Topic 230) Restricted Cash; and ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.











Twelve months ended
December 31


Three months ended
December 31

(Dollars in millions, except per share data)

2018


2017


2018


2017

Sales of products

$90,229


$83,740


$25,381


$22,073

Sales of services

10,898


10,265


2,960


2,697

Total revenues

101,127


94,005


28,341


24,770









Cost of products

(72,922)


(68,879)


(19,788)


(17,943)

Cost of services

(8,499)


(7,663)


(2,284)


(1,921)

Boeing Capital interest expense

(69)


(70)


(18)


(17)

Total costs and expenses

(81,490)


(76,612)


(22,090)


(19,881)


19,637


17,393


6,251


4,889

Income/(loss) from operating investments, net

111


204


(1)


35

General and administrative expense

(4,567)


(4,095)


(1,222)


(1,205)

Research and development expense, net

(3,269)


(3,179)


(852)


(762)

Gain/(loss) on dispositions, net

75


21


(1)


21

Earnings from operations

11,987


10,344


4,175


2,978

Other income, net

92


123


29


32

Interest and debt expense

(475)


(360)


(158)


(93)

Earnings before income taxes

11,604


10,107


4,046


2,917

Income tax (expense)/benefit

(1,144)


(1,649)


(622)


403

Net earnings

$10,460


$8,458


$3,424


$3,320









Basic earnings per share

$18.05


$14.03


$6.00


$5.57









Diluted earnings per share

$17.85


$13.85


$5.93


$5.49









Weighted average diluted shares (millions)

586.2


610.7


577.5


605.1

 

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited) 


(Dollars in millions, except per share data)

December 31

2018


December 31

2017

Assets




Cash and cash equivalents

$7,637


$8,813

Short-term and other investments

927


1,179

Accounts receivable, net

3,879


2,894

Unbilled receivables, net

10,025


8,194

Current portion of customer financing, net

460


309

Inventories

62,567


61,388

Other current assets

2,335


2,417

Total current assets

87,830


85,194

Customer financing, net

2,418


2,756

Property, plant and equipment, net

12,645


12,672

Goodwill

7,840


5,559

Acquired intangible assets, net

3,429


2,573

Deferred income taxes

284


321

Investments

1,087


1,260

Other assets, net of accumulated amortization of $503 and $482

1,826


2,027

Total assets

$117,359


$112,362

Liabilities and equity




Accounts payable

$12,916


$12,202

Accrued liabilities

14,808


13,069

Advances and progress billings

50,676


48,042

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

3,190


1,335

Total current liabilities

81,590


74,648

Deferred income taxes

1,736


2,188

Accrued retiree health care

4,584


5,545

Accrued pension plan liability, net

15,323


16,471

Other long-term liabilities

3,059


2,015

Long-term debt

10,657


9,782

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

6,768


6,804

Treasury stock, at cost

(52,348)


(43,454)

Retained earnings

55,941


49,618

Accumulated other comprehensive loss

(15,083)


(16,373)

Total shareholders' equity

339


1,656

Noncontrolling interests

71


57

Total equity

410


1,713

Total liabilities and equity

$117,359


$112,362

 

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



Twelve months ended
December 31

(Dollars in millions)

2018


2017

Cash flows – operating activities:




Net earnings

$10,460


$8,458

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




Non-cash items – 




Share-based plans expense

202


202

Depreciation and amortization

2,114


2,047

Investment/asset impairment charges, net

93


113

Customer financing valuation (benefit)/expense

(3)


2

(Gain)/loss on dispositions, net

(75)


(21)

Other charges and credits, net

247


293

Changes in assets and liabilities – 




Accounts receivable

(795)


(840)

Unbilled receivables

(1,826)


(1,600)

Advances and progress billings

2,636


4,700

Inventories

568


(1,403)

Other current assets

98


(19)

Accounts payable

2


130

Accrued liabilities

1,117


335

Income taxes receivable, payable and deferred

(180)


656

Other long-term liabilities

87


94

Pension and other postretirement plans

(153)


(582)

Customer financing, net

120


1,041

Other

610


(260)

Net cash provided by operating activities

15,322


13,346

Cash flows – investing activities:




Property, plant and equipment additions

(1,722)


(1,739)

Property, plant and equipment reductions

120


92

Acquisitions, net of cash acquired

(3,230)


(324)

Contributions to investments

(2,607)


(3,569)

Proceeds from investments

2,898


3,607

Purchase of distribution rights

(69)


(131)

Other

(11)


6

Net cash used by investing activities

(4,621)


(2,058)

Cash flows – financing activities:




New borrowings

8,548


2,077

Debt repayments

(7,183)


(953)

Contributions from noncontrolling interests

35



Stock options exercised

81


311

Employee taxes on certain share-based payment arrangements

(257)


(132)

Common shares repurchased

(9,000)


(9,236)

Dividends paid

(3,946)


(3,417)

Net cash used by financing activities

(11,722)


(11,350)

Effect of exchange rate changes on cash and cash equivalents, including restricted

(53)


80

Net (decrease) / increase in cash & cash equivalents, including restricted

(1,074)


18

Cash & cash equivalents, including restricted, at beginning of year

8,887


8,869

Cash & cash equivalents, including restricted, at end of period

7,813


8,887

Less restricted cash & cash equivalents, included in Investments

176


74

Cash and cash equivalents at end of period

$7,637


$8,813

 

The Boeing Company and Subsidiaries

Summary of Business Segment Data

(Unaudited)



Twelve months ended
December 31


Three months ended
December 31

(Dollars in millions)

2018


2017


2018


2017

Revenues:








Commercial Airplanes

$60,715


$58,014


$17,306


$15,388

Defense, Space & Security

23,195


20,561


6,111


5,257

Global Services

17,018


14,581


4,894


3,797

Boeing Capital

274


307


60


73

Unallocated items, eliminations and other

(75)


542


(30)


255

Total revenues

$101,127


$94,005


$28,341


$24,770

Earnings from operations:








Commercial Airplanes

$7,879


$5,452


$2,704


$1,787

Defense, Space & Security

1,594


2,193


669


544

Global Services

2,522


2,246


732


559

Boeing Capital

79


114


8


27

Segment operating profit

12,074


10,005


4,113


2,917

Unallocated items, eliminations and other

(1,414)


(1,099)


(246)


(328)

FAS/CAS service cost adjustment

1,327


1,438


308


389

Earnings from operations

11,987


10,344


4,175


2,978

Other income/(loss), net

92


123


29


32

Interest and debt expense

(475)


(360)


(158)


(93)

Earnings before income taxes

11,604


10,107


4,046


2,917

Income tax expense

(1,144)


(1,649)


(622)


403

Net earnings

$10,460


$8,458


$3,424


$3,320









Research and development expense, net:








Commercial Airplanes

$2,188


$2,247


$572


$492

Defense, Space & Security

788


834


175


235

Global Services

161


140


42


39

Other

132


(42)


63


(4)

Total research and development expense, net

$3,269


$3,179


$852


$762









Unallocated items, eliminations and other:








Share-based plans

($76)


($77)


($16)


($10)

Deferred compensation

(19)


(240)


93


(66)

Amortization of previously capitalized interest

(92)


(96)


(25)


(28)

Eliminations and other unallocated items

(1,227)


(686)


(298)


(224)

Sub-total (included in core operating earnings)

(1,414)


(1,099)


(246)


(328)

Pension FAS/CAS service cost adjustment

1,005


1,127


225


316

Postretirement FAS/CAS service cost adjustment

322


311


83


73

FAS/CAS service cost adjustment

$1,327


$1,438


$308


$389

Total

($87)


$339


$62


$61

 

The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)


Deliveries

Twelve months ended
December 31


Three months ended
December 31

Commercial Airplanes

2018


2017


2018


2017

737

580


529


173


148

747

6


14

(1)

1


6

767

27


10


14


3

777

48


74


11


16

787

145


136


39


36

Total

806


763


238


209

Note: Aircraft accounted for as revenues by BCA and as a note receivable in consolidation identified by parentheses









Defense, Space & Security








AH-64 Apache (New)


11



3

AH-64 Apache (Remanufactured)

23


57


11


14

CH-47 Chinook (New)

13


9


2


3

CH-47 Chinook (Renewed)

17


35


3


7

F-15 Models

10


16


2


5

F/A-18 Models

17


23


7


5

P-8 Models

16


19


6


5

Commercial and Civil Satellites

1


3



Military Satellites

1


1


1


1



Total backlog (Dollars in millions)

December 31

2018


December 31

2017

Commercial Airplanes

$412,307


$410,986

Defense, Space & Security

57,166


44,049

Global Services

21,008


19,605

Total backlog

$490,481


$474,640





Contractual backlog

$462,070


$456,984

Unobligated backlog

28,411


17,656

Total backlog

$490,481


$474,640

 

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

(Unaudited)


The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin, and core earnings per share with the most directly comparable GAAP financial measures, earnings from operations, operating margin, and diluted earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial measures.


(Dollars in millions, except per share data)

Fourth Quarter 2018


Fourth Quarter 2017


$ millions


Per Share


$ millions


Per Share

Revenues

28,341




24,770



Earnings from operations (GAAP)

4,175




2,978



Operating margins

14.7%




12.0%











FAS/CAS service cost adjustment:








Pension FAS/CAS service cost adjustment

(225)




(316)



Postretirement FAS/CAS service cost adjustment

(83)




(73)



FAS/CAS service cost adjustment

(308)




(389)



Core operating earnings (non-GAAP)

$3,867




$2,589



Core operating margins (non-GAAP)

13.6%




10.5%











Diluted earnings per share (GAAP)



$5.93




$5.49

Pension FAS/CAS service cost adjustment

($225)


(0.39)


($316)


(0.52)

Postretirement FAS/CAS service cost adjustment

(83)


(0.14)


(73)


(0.12)

Non-operating pension expense

(45)


(0.08)


(29)


(0.05)

Non-operating postretirement expense

24


0.04


32


0.05

Provision for deferred income taxes on adjustments 1

69


0.12


135


0.22

Subtotal of adjustments

($260)


($0.45)


($251)


($0.42)

Core earnings per share (non-GAAP)



$5.48




$5.07









Weighted average diluted shares (in millions)



577.5




605.1


1 The income tax impact is calculated using the U.S. corporate statutory tax rate.

 

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

(Unaudited)


The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin, and core earnings per share with the most directly comparable GAAP financial measures, earnings from operations, operating margin, and diluted earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial measures.


(Dollars in millions, except per share data)

2019 Guidance


Full Year 2018


Full Year 2017


$ millions

Per Share


$ millions


Per Share


$ millions


Per Share

Revenues




101,127




94,005



Earnings from operations (GAAP)




11,987




10,344



Operating margins




11.9%




11.0%




FAS/CAS service cost adjustment:









Pension FAS/CAS service cost adjustment




(1,005)




(1,127)



Postretirement FAS/CAS service cost adjustment




(322)




(311)



FAS/CAS service cost adjustment

~($1,335)



(1,327)




(1,438)



Core operating earnings (non-GAAP)




$10,660




$8,906



Core operating margins (non-GAAP)




10.5%




9.5%




Diluted earnings per share (GAAP)


$21.90 - 22.10



$17.85



$13.85

Pension FAS/CAS service cost adjustment

~($1,335)



($1,005)


(1.71)


($1,127)


(1.84)

Postretirement FAS/CAS service cost adjustment



(322)


(0.55)


(311)


(0.51)

Non-operating pension expense

~($90)



(143)


(0.24)


(117)


(0.19)

Non-operating postretirement expense



101


0.17


123


0.20

Provision for deferred income taxes on adjustments 1




287


0.49


501


0.82

Subtotal of adjustments


($2.00)


($1,082)


($1.84)


($931)


($1.52)

Core earnings per share (non-GAAP)


$19.90 - 20.10



$16.01



$12.33


Weighted average diluted shares (in millions)

560 - 565




586.2



610.7


1 The income tax impact is calculated using the U.S. corporate statutory tax rate.

 

The Boeing Company and Subsidiaries

Summary of Business Segment Data - Restated

(Unaudited)


The restated amounts below reflect the change in accounting for military derivative aircraft as well as the realignment of certain programs between Global Services and Defense, Space & Security.


(Dollars in millions)

2018


Q4 2018


Q3 2018


Q2 2018


Q1 2018


2017

Revenues:












Commercial Airplanes

$57,499


$16,531


$14,071


$13,952


$12,945


$54,612

Defense, Space & Security

26,392


6,874


6,937


6,100


6,481


23,938

Global Services

17,056


4,908


4,101


4,097


3,950


14,611

Boeing Capital

274


60


77


72


65


307

Unallocated items, eliminations and other

(94)


(32)


(40)


37


(59)


537

Total revenues

101,127


28,341


25,146


24,258


23,382


94,005

Earnings from operations:












Commercial Airplanes

7,830


2,600


2,033


1,785


1,412


5,285

Defense, Space & Security

1,657


771


(247)


376


757


2,383

Global Services

2,536


737


548


604


647


2,251

Boeing Capital

79


8


27


24


20


114

Segment operating profit

12,102


4,116


2,361


2,789


2,836


10,033

Unallocated items, eliminations and other

(1,442)


(249)


(471)


(396)


(326)


(1,127)

FAS/CAS service cost adjustment

1,327


308


337


317


365


1,438

Earnings from operations

11,987


4,175


2,227


2,710


2,875


10,344

Other income/(loss), net

92


29


12


(15)


66


123

Interest and debt expense

(475)


(158)


(106)


(109)


(102)


(360)

Earnings before income taxes

11,604


4,046


2,133


2,586


2,839


10,107

Income tax (expense)/benefit

(1,144)


(622)


230


(390)


(362)


(1,649)

Net earnings

$10,460


$3,424


$2,363


$2,196


$2,477


$8,458

 

Cision View original content:http://www.prnewswire.com/news-releases/boeing-reports-record-2018-results-and-provides-2019-guidance-300786413.html

SOURCE Boeing