BA
$130.62
Boeing
($1.16)
(.88%)
Earnings Details
2nd Quarter June 2016
Wednesday, July 27, 2016 7:30:00 AM
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Summary

Boeing Misses

Boeing (BA) reported a 2nd Quarter June 2016 loss of $0.44 per share on revenue of $24.8 billion. The consensus estimate was a loss of $0.88 per share on revenue of $23.7 billion. The Earnings Whisper number was $2.37 per share. Revenue grew 0.9% on a year-over-year basis.

The company said it now expects 2016 earnings of $6.10 to $6.30 per share, including the previously announced charges, and continues to expect revenue of $93.00 billion to $95.00 billion. The current consensus earnings estimate is $5.32 per share on revenue of $93.88 billion for the year ending December 31, 2016.

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
($0.44)
Earnings Whisper
$2.37
Consensus Estimate
($0.88)
Reported Revenue
$24.76 Bil
Revenue Estimate
$23.70 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Boeing Reports Second-Quarter Results

Revenue increased to $24.8 billion on strong commercial deliveries and services growth

Loss of $0.37 per share (GAAP) and core (non-GAAP)* loss of $0.44 per share reflect $3.23 per share impact related to previously announced 787 R&D reclassification and 747 & Tanker charges

Strong operating cash flow of $3.2 billion; repurchased 15 million shares for $2.0 billion

-- Backlog remains robust at $472 billion with nearly 5,700 commercial airplane orders

-- Cash and marketable securities of $9.3 billion provide strong liquidity

Reaffirmed cash & revenue guidance; EPS reflects reclassification, charges, solid performance & tax

Table 1. Summary Financial Results
Second Quarter
First Half
(Dollars in Millions, except per share data)
2016
2015
Change
2016
2015
Change
Revenues
$24,755
$24,543
1%
$47,387
$46,692
1%
GAAP
Earnings/(Loss) From Operations
($419)
$1,683
(125)%
$1,369
$3,702
(63)%
Operating Margin
(1.7)%
6.9%
(8.6) Pts
2.9%
7.9%
(5.0) Pts
Net Earnings/(Loss)
($234)
$1,110
(121)%
$985
$2,446
(60)%
Earnings/(Loss) Per Share
($0.37)
$1.59
(123)%
$1.51
$3.46
(56)%
Operating Cash Flow
$3,234
$3,297
(2)%
$4,465
$3,385
32%
Non-GAAP*
Core Operating Earnings/(Loss)
($488)
$1,713
(128)%
$1,206
$3,845
(69)%
Core Operating Margin
(2.0)%
7.0%
(9.0) Pts
2.5%
8.2%
(5.7) Pts
Core Earnings/(Loss) Per Share
($0.44)
$1.62
(127)%
$1.35
$3.59
(62)%
* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."

The Boeing Company [NYSE: BA] reported second-quarter revenue of $24.8 billion on strong commercial deliveries and services growth (Table 1). GAAP loss per share of $0.37 and core loss per share (non-GAAP)* of $0.44 reflect the previously announced 787 cost reclassification ($1.33 per share) and charges on the 747 program ($1.28 per share) and the KC-46 Tanker program ($0.62 per share), partially offset by solid execution and higher volume.

"The underlying operating performance of the company remains solid with our commercial and defense teams again delivering strong revenues and operating cash flow. Actions taken during the quarter that impacted our earnings were the right, proactive steps to reduce risk and strengthen our position for the future," said Chairman, President and Chief Executive Officer Dennis Muilenburg. "Our strong cash generation also supported our ongoing commitment to invest in product innovation and in our people, and return substantial cash to shareholders through stock repurchases and dividends."

"As we look forward to the second half of the year, we anticipate continued strong operating performance across our production and services programs on generally healthy demand for our broad portfolio of market-leading offerings. Our commercial airplane development programs remain on track and we have successfully completed the flight testing required for customer approval of key KC-46 production milestones."

"Overall our teams remain intensely focused on improving productivity and quality, building out our large and diverse backlog, investing in future growth, and delivering increasing value to all of our stakeholders."

GAAP earnings per share guidance for 2016 has been adjusted to between $6.40 and $6.60 from $8.45 and $8.65 and core earnings per share (non-GAAP)* guidance has been adjusted to between $6.10 and $6.30 from $8.15 and $8.35 to reflect the impact of the 787 R&D reclassification and the 747 and Tanker charges, solid performance and tax benefits.

Table 2. Cash Flow
Second Quarter
First Half
(Millions)
2016
2015
2016
2015
Operating Cash Flow
$3,234
$3,297
$4,465
$3,385
Less Additions to Property, Plant & Equipment
($671)
($692)
($1,419)
($1,266)
Free Cash Flow*
$2,563
$2,605
$3,046
$2,119
* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."

Operating cash flow in the quarter was $3.2 billion, largely reflecting commercial airplane production rates and solid operating performance (Table 2). During the quarter, the company repurchased 15.3 million shares for $2.0 billion, leaving $8.5 billion remaining under the current repurchase authorization which is expected to be completed over approximately the next two years. The company also paid $691 million in dividends in the quarter, reflecting an approximately 20 percent increase in dividends per share compared to the same period of the prior year.

Table 3. Cash, Marketable Securities and Debt Balances
Quarter-End
(Billions)
Q2 16
Q1 16
Cash
$8.6
$7.9
Marketable Securities1
$0.7
$0.5
Total
$9.3
$8.4
Debt Balances:
The Boeing Company, net of intercompany loans to BCC
$8.7
$7.6
Boeing Capital, including intercompany loans
$2.3
$2.4
Total Consolidated Debt
$11.0
$10.0
1 Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."

Cash and investments in marketable securities totaled $9.3 billion, up from $8.4 billion at the beginning of the quarter. Debt was $11.0 billion, up from the beginning of the quarter, primarily due to the issuance of new debt (Table 3).

Total company backlog at quarter-end was $472 billion, down from $480 billion at the beginning of the quarter, and included net orders for the quarter of $17 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes
Second Quarter
First Half
(Dollars in Millions)
2016
2015
Change
2016
2015
Change
Commercial Airplanes Deliveries
199
197
1%
375
381
(2)%
Revenues
$17,456
$16,877
3%
$31,855
$32,258
(1)%
Earnings/(Loss) from Operations
($973)
$1,206
(181)%
$60
$2,823
(98)%
Operating Margin
(5.6)%
7.1%
(12.7) Pts
0.2%
8.8%
(8.6) Pts

Commercial Airplanes second-quarter revenue increased 3 percent to $17.5 billion on higher volume and mix (Table 4). Second-quarter operating margin was negative 5.6 percent, reflecting previously announced R&D reclassification of $1,235 million on the 787 program, a pre-tax charge of $1,188 million on the 747 program, and a pre-tax charge of $354 million on the KC-46 Tanker program. The results also reflect higher planned R&D and solid execution. Second-quarter operating margin excluding the reclassification and charges (non-GAAP)* was 10.3%.

During the quarter, the 787 program reached a 12 per month delivery rate and the company opened the new 777X Composite Wing Center in Everett. The 737 program rolled out the first two 737 MAX production airplanes and has captured over 3,200 orders for the 737 MAX since launch, including an order for 100 737 MAX 200 airplanes from Vietjet during the quarter. The 737 MAX development program is progressing smoothly and entry into service is being accelerated.

Commercial Airplanes booked 152 net orders during the quarter. Backlog remains strong with nearly 5,700 airplanes valued at $417 billion.

Defense, Space & Security

Table 5. Defense, Space & Security
Second Quarter
First Half
(Dollars in Millions)
2016
2015
Change
2016
2015
Change
Revenues1
Boeing Military Aircraft
$2,979
$3,474
(14)%
$6,638
$6,200
7%
Network & Space Systems
$1,810
$1,938
(7)%
$3,545
$3,670
(3)%
Global Services & Support
$2,385
$2,132
12%
$4,947
$4,383
13%
Total BDS Revenues
$7,174
$7,544
(5)%
$15,130
$14,253
6%
Earnings from Operations1
Boeing Military Aircraft
$175
$121
45%
$509
$380
34%
Network & Space Systems
$153
$151
1%
$301
$318
(5)%
Global Services & Support
$265
$274
(3)%
$605
$591
2%
Total BDS Earnings from Operations
$593
$546
9%
$1,415
$1,289
10%
Operating Margin
8.3%
7.2%
1.1 Pts
9.4%
9.0%
0.4 Pts
1 During the first quarter of 2016, certain programs were realigned between Boeing Military Aircraft and Global Services & Support.

Defense, Space & Security’s second-quarter revenue was $7.2 billion. Second-quarter operating margin was 8.3 percent, reflecting the previously announced $219 million pre-tax charge recorded at Boeing Military Aircraft on the KC-46 Tanker program (Table 5).

Boeing Military Aircraft (BMA) second-quarter revenue was $3.0 billion, reflecting lower planned C-17 and Chinook deliveries. Operating margin was 5.9 percent, reflecting the KC-46 Tanker charge. During the quarter, BMA was awarded contracts for 24 Apache and 12 Chinook helicopters.

Network & Space Systems (N&SS) second-quarter revenue was $1.8 billion. Operating margin increased to 8.5 percent, reflecting performance and timing on United Launch Alliance launches.

Global Services & Support (GS&S) second-quarter revenue increased to $2.4 billion, reflecting higher volume in Aircraft Modernization & Sustainment. Operating margin was 11.1 percent largely reflecting contract mix.

Backlog at Defense, Space & Security was $55 billion, of which 37 percent represents orders from international customers.

Additional Financial Information

Table 6. Additional Financial Information
Second Quarter
First Half
(Dollars in Millions)
2016
2015
2016
2015
Revenues
Boeing Capital
$84
$115
$148
$201
Unallocated items, eliminations and other
$41
$7
$254
($20)
Earnings from Operations
Boeing Capital
$18
$11
$23
$31
Unallocated pension/postretirement
$69
($30)
$163
($143)
Other unallocated items and eliminations
($126)
($50)
($292)
($298)
Other income, net
$13
$15
$39
$3
Interest and debt expense
($73)
($75)
($146)
($136)
Effective tax rate
51.1%
31.6%
21.9%
31.5%

At quarter-end, Boeing Capital’s net portfolio balance was $3 billion, down from the beginning of the quarter. Total pension expense for the second quarter was $463 million, down from $523 million in the same period of the prior year. Other unallocated items and eliminations decreased from the same period in the prior year primarily due to higher deferred compensation expense and elimination of intercompany profit. The effective tax rate for the second quarter was increased from the same period in the prior year primarily due to lower pre-tax income. During the quarter, the company adopted a new accounting standard for share-based compensation payments which resulted in a $54 million tax benefit ($0.08 per share).

Outlook

The company’s 2016 updated financial and delivery guidance (Table 7) reflects the impact of the 787 R&D reclassification and the 747 and Tanker charges, solid performance and tax benefits.

Table 7. 2016 Financial Outlook
Current
Prior
(Dollars in Billions, except per share data) Guidance
Guidance
The Boeing Company
Revenue
$93.0 - 95.0
$93.0 - 95.0
GAAP Earnings Per Share
$6.40 - 6.60
$8.45 - 8.65
Core Earnings Per Share*
$6.10 - 6.30
$8.15 - 8.35
Operating Cash Flow
$10.0
$10.0
Commercial Airplanes
Deliveries
740 - 745
740 - 745
Revenue
$64.0 - 65.0
$64.0 - 65.0
Operating Margin
4.5% - 5.0
9.0%
Defense, Space & Security
Revenue
Boeing Military Aircraft
$12.3
$12.3
Network & Space Systems
$7.3
$7.3
Global Services & Support
$9.4
$9.4
Total BDS Revenue
$28.5 - 29.5
$28.5 - 29.5
Operating Margin
Boeing Military Aircraft
9.5%
10.0%
Network & Space Systems
9.0%
9.0%
Global Services & Support
12.0%
11.5%
Total BDS Operating Margin
>10.0%
>10.0%
Boeing Capital
Portfolio Size
Stable
Stable
Revenue
$0.3
$0.3
Pre-Tax Earnings
$0.05
$0.05
Research & Development
$4.8
$3.6
Capital Expenditures
$2.8
$2.8
Pension Expense 1
$2.1
$2.1
Effective Tax Rate
23.0%
30.0%
1 Approximately ($0.1) billion is expected to be recorded in unallocated items and eliminations
* Non-GAAP measures. Complete definitions of Boeing’s non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (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/(Loss), Core Operating Margin and Core Earnings/(Loss) Per Share

Core operating earnings/(loss) is defined as GAAP earnings/(loss) from operations excluding unallocated pension and post-retirement expense. Core operating margin is defined as core operating earnings/(loss) expressed as a percentage of revenue. Core earnings/(loss) per share is defined as GAAP diluted earnings/(loss) per share excluding the net earnings per share impact of unallocated pension and post-retirement expense. Unallocated pension and post-retirement expense represents the portion of pension and other post-retirement costs that are not recognized by business segments for segment reporting purposes. Pension costs, comprising service and prior service costs computed in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) are allocated to Commercial Airplanes. Pension costs allocated to BDS segments 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 unallocated 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 page 14.

Commercial Airplanes Operating Margin Excluding the Reclassification and Charges

Commercial Airplanes GAAP operating margin for the three months ended June 30, 2016 includes research and development expense of $1,235 million related to the reclassification of costs associated with two 787 flight test aircraft from program inventory, a reach-forward loss on the 747 program of $1,188 million, and a reach-forward loss recorded at Commercial Airplanes on the KC-46 Tanker program of $354 million. Management uses Commercial Airplanes operating margin excluding the reclassification and charges for the purpose of evaluating underlying business performance for the three months ended June 30, 2016. Management believes that this measure also helps investors assess overall trends in our operational performance and provide additional context for year over year financial results. A reconciliation between the GAAP and non-GAAP measures is provided on page 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 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) the overall health of our aircraft production system, planned production rate increases across multiple commercial airline programs, 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) potential adverse developments in new or pending litigation and/or government investigations; (14) customer and aircraft concentration in Boeing Capital’s 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, epidemics, sanctions 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:
Troy Lahr or Ben Hackman (312) 544-2140
Communications:
Bernard Choi (312) 544-2002
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Six months ended
Three months ended
June 30
June 30
(Dollars in millions, except per share data) 2016
2015
2016
2015
Sales of products
$42,069
$41,408
$22,184
$21,923
Sales of services
5,318
5,284
2,571
2,620
Total revenues
47,387
46,692
24,755
24,543
Cost of products
(37,210)
(35,627)
(20,265)
(19,247)
Cost of services
(4,180)
(4,186)
(2,044)
(2,086)
Boeing Capital interest expense
(32)
(33)
(16)
(17)
Total costs and expenses
(41,422)
(39,846)
(22,325)
(21,350)
5,965
6,846
2,430
3,193
Income from operating investments, net
151
129
97
50
General and administrative expense
(1,694)
(1,705)
(806)
(760)
Research and development expense, net
(3,044)
(1,569)
(2,127)
(800)
(Loss)/gain on dispositions, net
(9)
1
(13)
Earnings/(loss) from operations
1,369
3,702
(419)
1,683
Other income, net
39
3
13
15
Interest and debt expense
(146)
(136)
(73)
(75)
Earnings/(loss) before income taxes
1,262
3,569
(479)
1,623
Income tax (expense)/benefit
(277)
(1,123)
245
(513)
Net earnings/(loss)
$985
$2,446
($234)
$1,110
Basic earnings/(loss) per share
$1.52
$3.50
($0.37)
$1.61
Diluted earnings/(loss) per share
$1.51
$3.46
($0.37)
$1.59
Cash dividends paid per share
$2.18
$1.82
$1.09
$0.91
Weighted average diluted shares (millions)
654.9
706.6
636.3
** 698.9
** As a result of incurring a net loss for the three months ended June 30, 2016, potential common shares of 6.7 million were excluded from diluted earnings per share.
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data)
June 30
December 31
2016
2015
Assets
Cash and cash equivalents
$8,605
$11,302
Short-term and other investments
660
750
Accounts receivable, net
9,809
8,713
Current portion of customer financing, net
251
212
Inventories, net of advances and progress billings
44,182
47,257
Total current assets
63,507
68,234
Customer financing, net
2,909
3,358
Property, plant and equipment, net of accumulated depreciation of $16,641 and $16,286
12,533
12,076
Goodwill
5,128
5,126
Acquired intangible assets, net
2,544
2,657
Deferred income taxes
267
265
Investments
1,312
1,284
Other assets, net of accumulated amortization of $451 and $451
1,409
1,408
Total assets
$89,609
$94,408
Liabilities and equity
Accounts payable
$11,748
$10,800
Accrued liabilities
13,534
14,014
Advances and billings in excess of related costs
23,409
24,364
Short-term debt and current portion of long-term debt
1,168
1,234
Total current liabilities
49,859
50,412
Deferred income taxes
2,422
2,392
Accrued retiree health care
6,586
6,616
Accrued pension plan liability, net
18,200
17,783
Other long-term liabilities
2,048
2,078
Long-term debt
9,847
8,730
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
4,778
4,834
Treasury stock, at cost - 386,402,793 and 345,637,354 shares
(34,821)
(29,568)
Retained earnings
38,362
38,756
Accumulated other comprehensive loss
(12,795)
(12,748)
Total shareholders’ equity
585
6,335
Noncontrolling interests
62
62
Total equity
647
6,397
Total liabilities and equity
$89,609
$94,408
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six months ended
June 30
(Dollars in millions)
2016
2015
Cash flows - operating activities:
Net earnings/(loss)
$985
$2,446
Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash items -
Share-based plans expense
97
94
Depreciation and amortization
890
912
Investment/asset impairment charges, net
50
74
Customer financing valuation benefit
(4)
(5)
Gain/(loss) on dispositions, net
9
(1)
Other charges and credits, net
141
140
Excess tax benefits from share-based payment arrangements
(124)
Changes in assets and liabilities -
Accounts receivable
(503)
(313)
Inventories, net of advances and progress billings
3,004
(2,395)
Accounts payable
1,221
888
Accrued liabilities
(269)
(177)
Advances and billings in excess of related costs
(954)
195
Income taxes receivable, payable and deferred
(494)
482
Other long-term liabilities
(103)
(17)
Pension and other postretirement plans
181
1,244
Customer financing, net
275
19
Other
(61)
(77)
Net cash provided by operating activities
4,465
3,385
Cash flows - investing activities:
Property, plant and equipment additions
(1,419)
(1,266)
Property, plant and equipment reductions
13
20
Acquisitions, net of cash acquired
(23)
Contributions to investments
(657)
(1,205)
Proceeds from investments
705
2,040
Other
8
22
Net cash used by investing activities
(1,350)
(412)
Cash flows - financing activities:
New borrowings
1,323
761
Debt repayments
(267)
(846)
Stock options exercised
147
276
Excess tax benefits from share-based payment arrangements
124
Employee taxes on certain share-based payment arrangements
(79)
(90)
Common shares repurchased
(5,501)
(4,501)
Dividends paid
(1,408)
(1,264)
Other
(24)
Net cash used by financing activities
(5,809)
(5,540)
Effect of exchange rate changes on cash and cash equivalents
(3)
(9)
Net decrease in cash and cash equivalents
(2,697)
(2,576)
Cash and cash equivalents at beginning of year
11,302
11,733
Cash and cash equivalents at end of period
$8,605
$9,157
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Six months ended
Three months ended
June 30
June 30
(Dollars in millions)
2016
2015
2016
2015
Revenues:
Commercial Airplanes
$31,855
$32,258
$17,456
$16,877
Defense, Space & Security:
Boeing Military Aircraft
6,638
6,200
2,979
3,474
Network & Space Systems
3,545
3,670
1,810
1,938
Global Services & Support
4,947
4,383
2,385
2,132
Total Defense, Space & Security
15,130
14,253
7,174
7,544
Boeing Capital
148
201
84
115
Unallocated items, eliminations and other
254
(20)
41
7
Total revenues
$47,387
$46,692
$24,755
$24,543
Earnings/(loss) from operations:
Commercial Airplanes
$60
$2,823
($973)
$1,206
Defense, Space & Security:
Boeing Military Aircraft
509
380
175
121
Network & Space Systems
301
318
153
151
Global Services & Support
605
591
265
274
Total Defense, Space & Security
1,415
1,289
593
546
Boeing Capital
23
31
18
11
Segment operating profit/(loss)
1,498
4,143
(362)
1,763
Unallocated items, eliminations and other
(129)
(441)
(57)
(80)
Earnings/(loss) from operations
1,369
3,702
(419)
1,683
Other income, net
39
3
13
15
Interest and debt expense
(146)
(136)
(73)
(75)
Earnings/(loss) before income taxes
1,262
3,569
(479)
1,623
Income tax (expense)/benefit
(277)
(1,123)
245
(513)
Net earnings/(loss)
$985
$2,446
($234)
$1,110
Research and development expense, net:
Commercial Airplanes
$2,548
$1,097
$1,877
$554
Defense, Space & Security
521
474
263
250
Other
(25)
(2)
(13)
(4)
Total research and development expense, net
$3,044
$1,569
$2,127
$800
Unallocated items, eliminations and other:
Share-based plans
($41)
($37)
($18)
($16)
Deferred compensation
(5)
(48)
(21)
10
Amortization of previously capitalized interest (48)
(49)
(18)
(20)
Eliminations and other unallocated items
(198)
(164)
(69)
(24)
Sub-total (included in core operating earnings) (292)
(298)
(126)
(50)
Pension
79
(209)
34
(57)
Postretirement
84
66
35
27
Total unallocated items, eliminations and other
($129)
($441)
($57)
($80)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries
Six months ended Three months ended
June 30
June 30
Commercial Airplanes
2016
2015
2016
2015
737
248
249
127
128
747
3
9
2
5
767
5
9
4
4
777
51
50
28
26
787
68
64
38
34
Total
375
381
199
197
Note: Deliveries under operating lease are identified by parentheses.
Defense, Space & Security
Boeing Military Aircraft
AH-64 Apache (New)
15
12
8
6
AH-64 Apache (Remanufactured)
18
23
7
13
C-17 Globemaster III
4
3
1
2
CH-47 Chinook (New)
10
21
7
15
CH-47 Chinook (Renewed)
16
5
7
1
F-15 Models
7
5
3
4
F/A-18 Models
14
20
6
9
P-8 Models
9
6
5
4
Global Services & Support
AEW&C
C-40A
1
Network & Space Systems
Commercial and Civil Satellites
1
1
1
Military Satellites
1
1
1
1
Contractual backlog (Dollars in billions)
June 30
December 31
2016
2015
Commercial Airplanes
$416.6
$431.4
Defense, Space & Security:
Boeing Military Aircraft
22.6
19.9
Network & Space Systems
6.9
7.4
Global Services & Support
16.9
17.9
Total Defense, Space & Security
46.4
45.2
Total contractual backlog
$463.0
$476.6
Unobligated backlog
$9.2
$12.7
Total backlog
$472.2
$489.3
Workforce
158,100
161,400
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, core earnings per share, and Commercial Airplanes operating margin excluding the reclassification and charges with the most directly comparable GAAP financial measures, earnings from operations, operating margin, diluted earnings per share and Commercial Airplanes operating margin. See page 7 of this release for additional information on the use of these non-GAAP financial measures.
(Dollars in millions, except per share data)
Second Quarter
First Half
Guidance
2016
2015
2016
2015
2016
Revenues
$24,755
$24,543
$47,387
$46,692
GAAP Earnings/(Loss) From Operations
($419)
$1,683
$1,369
$3,702
Increase/(Decrease) in GAAP Earnings From Operations
(125%)
(63%)
GAAP Operating Margin
(1.7%)
6.9%
2.9%
7.9%
Unallocated Pension (Income)/Expense
($34)
$57
($79)
$209
Unallocated Other Postretirement Benefit Income
($35)
($27)
($84)
($66)
Unallocated Pension and Other Postretirement Benefit (Income)/Expense
($69)
$30
($163)
$143
($300)
Core Operating Earnings/(Loss) (non-GAAP)
($488)
$1,713
$1,206
$3,845
Increase/(Decrease) in Core Operating Earnings (non-GAAP)
(128%)
(69%)
Core Operating Margin (non-GAAP)
(2.0%)
7.0%
2.5%
8.2%
GAAP Diluted Earnings/(Loss) Per Share
($0.37)
$1.59
$1.51
$3.46
$6.40 - $6.60
Unallocated Pension (Income)/Expense
($0.05)
$0.09
($0.12)
$0.29
Unallocated Postretirement Benefit (Income)/Expense
($0.06)
($0.04)
($0.13)
($0.09)
($0.30)
Provision for deferred income taxes on adjustments (1)
$0.04
($0.02)
$0.09
($0.07)
Core Earnings/(Loss) Per Share (non-GAAP)
($0.44)
$1.62
$1.35
$3.59
$6.10 - $6.30
Weighted Average Diluted Shares (millions)
636.3
** 698.9
654.9
706.6
645 - 650
Increase/(Decrease) in GAAP Earnings Per Share
(123%)
(56%)
Increase/(Decrease) in Core Earnings Per Share (non-GAAP)
(127%)
(62%)
Commercial Airplanes Revenues
$17,456
GAAP Commercial Airplanes Earnings/(Loss) from Operations
($973)
GAAP Commercial Airplanes Operating margin
(5.6%)
Cost reclassification of two 787 flight test aircraft
$1,235
Reach-forward loss on 747 program
$1,188
Reach-forward loss at Commercial Airplanes on KC-46 Tanker program
$354
Commercial Airlines Earnings from Operations excluding the reclassification and charges (non-GAAP)
$1,804
Commercial Airplanes operating margin excluding the reclassification and charges (non-GAAP)
10.3%
(1) The income tax impact is calculated using the tax rate in effect for the non-GAAP adjustments.
**
As a result of incurring a net loss for the three months ended June 30, 2016, potential common shares of 6.7 million were excluded from diluted earnings per share.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/boeing-reports-second-quarter-results-300304517.html

SOURCE Boeing

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