REG-Boeing Co: 3rd Quarter Results
23/10/2019 12:35
Boeing Reports Third-Quarter Results
CHICAGO, Oct. 23, 2019 /PRNewswire/ --
* Continue to engage global regulators and customers on safe return to service
of the 737 MAX
* Revenue of $20.0 billion reflecting lower 737 deliveries and higher defense
and services volume
* GAAP EPS of $2.05 and core EPS (non-GAAP)* of $1.45 per share
* Operating cash flow of ($2.4) billion; paid $1.2 billion of dividends
* Total backlog of $470 billion, including nearly 5,500 commercial airplanes
* Cash and marketable securities of $10.9 billion provide strong liquidity
Table 1. Summary Financial Results Third Quarter Nine Months
(Dollars in Millions, except per share data) 2019 2018 Change 2019 2018 Change
Revenues $19,980 $25,146 (21)% $58,648 $72,786 (19)%
GAAP
Earnings From Operations $1,259 $2,227 (43)% $229 $7,812 (97)%
Operating Margin 6.3% 8.9% (2.6) Pts 0.4% 10.7% (10.3) Pts
Net Earnings $1,167 $2,363 (51)% $374 $7,036 (95)%
Earnings Per Share $2.05 $4.07 (50)% $0.66 $11.95 (94)%
Operating Cash Flow ($2,424) $4,559 NM ($226) $12,375 NM
Non-GAAP*
Core Operating Earnings/(Loss) $895 $1,890 (53)% ($864) $6,793 NM
Core Operating Margin 4.5% 7.5% (3.0) Pts (1.5)% 9.3% (10.8) Pts
Core Earnings/(Loss) Per Share $1.45 $3.58 (59)% ($1.13) $10.55 NM
*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 third-quarter revenue of
$20.0 billion, GAAP earnings per share of $2.05 and core earnings per share
(non-GAAP)* of $1.45, reflecting lower 737 deliveries partially offset by
higher defense and services volume (Table 1). Boeing recorded operating cash
flow of ($2.4) billion and paid $1.2 billion of dividends.
Boeing has developed software and training updates for the 737 MAX and
continues to work with the FAA and global civil aviation authorities to
complete remaining steps toward certification and readiness for return to
service. These regulatory authorities will determine the timing and conditions
of return to service in each relevant jurisdiction. For purposes of the
third-quarter results, the company has assumed that regulatory approval of the
737 MAX return to service begins in the fourth quarter of 2019 and that it
will gradually increase the 737 production rate from 42 per month to 57 per
month by late 2020.
"Our top priority remains the safe return to service of the 737 MAX, and we're
making steady progress," said Boeing President and Chief Executive Officer
Dennis Muilenburg. "We've also taken action to further sharpen our company's
focus on product and services safety, and we continue to deliver on customer
commitments and capture new opportunities with our values of safety, quality
and integrity always at the forefront."
Table 2. Cash Flow Third Quarter Nine Months
(Millions) 2019 2018 2019 2018
Operating Cash Flow ($2,424) $4,559 ($226) $12,375
Less Additions to Property, Plant & Equipment ($465) ($457) ($1,387) ($1,227)
Free Cash Flow* ($2,889) $4,102 ($1,613) $11,148
*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."
Operating cash flow was ($2.4) billion in the quarter, primarily reflecting
lower 737 delivery and advance payments as well as timing of receipts and
expenditures (Table 2). During the quarter, the company paid $1.2 billion of
dividends, reflecting a 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) Q3 19 Q2 19
Cash $9.8 $9.2
Marketable Securities (1) $1.1 $0.4
Total $10.9 $9.6
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $22.8 $17.3
Boeing Capital, including intercompany loans $1.9 $1.9
Total Consolidated Debt $24.7 $19.2
(1) Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."
Cash and investments in marketable securities totaled $10.9 billion, compared
to $9.6 billion at the beginning of the quarter (Table 3). Debt was $24.7
billion, up from $19.2 billion at the beginning of the quarter primarily due
to the issuance of new debt.
Total company backlog at quarter-end was $470 billion and included net orders
of $16 billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes Third Quarter Nine Months
(Dollars in Millions) 2019 2018 Change 2019 2018 Change
Commercial Airplanes Deliveries 62 190 (67)% 301 568 (47)%
Revenues $8,249 $14,071 (41)% $24,793 $40,968 (39)%
(Loss)/Earnings from Operations ($40) $2,033 NM ($3,813) $5,230 NM
Operating Margin (0.5)% 14.4% (14.9) Pts (15.4)% 12.8% NM
Commercial Airplanes third-quarter revenue was $8.2 billion reflecting lower
737 deliveries (Table 4). Third-quarter operating margin decreased to (0.5)
percent reflecting lower 737 deliveries partially offset by a higher margin on
the 787 program. During the quarter estimated costs to produce 737 aircraft
included in the accounting quantity increased by $0.9 billion primarily to
reflect current assumptions regarding timing of return to service and the
timing of planned production rate increases. There was no significant change
to estimated potential concessions and other considerations to customers
related to the 737 MAX grounding.
Commercial Airplanes delivered 62 airplanes during the quarter. Given the
current global trade environment, the 787 production rate will be reduced to
12 airplanes per month for approximately two years beginning in late 2020. The
777X program is progressing through pre-flight testing and remains on track
for first flight in early 2020. The company is now targeting early 2021 for
first delivery of the 777X.
Commercial Airplanes booked net orders worth $5 billion during the quarter,
including orders for twenty 787 airplanes for Korean Air, eight 787 airplanes
for Air New Zealand, and six 777 freighters for China Airlines. Commercial
Airplanes backlog included nearly 5,500 airplanes valued at $387 billion.
Defense, Space & Security
Table 5. Defense, Space & Security Third Quarter Nine Months
(Dollars in Millions) 2019 2018 Change 2019 2018 Change
Revenues $7,042 $6,937 2% $20,265 $19,518 4%
Earnings/(Loss) from Operations $755 ($247) NM $2,577 $886 191%
Operating Margin 10.7% (3.6)% 14.3 Pts 12.7% 4.5% 8.2 Pts
Defense, Space & Security third-quarter revenue increased to $7.0 billion
primarily driven by higher volume on satellites, weapons, and T-7A Red Hawk
(formerly T-X Trainer), partially offset by lower volume on F-15 (Table 5).
Third-quarter operating margin increased to 10.7 percent primarily due to the
absence of third quarter 2018 charges and improved performance.
During the quarter, Defense, Space & Security received contracts for the fifth
production lot for 15 KC-46A Tanker aircraft for the U.S. Air Force and nine
AH-64E Apache helicopters for the U.S. Army. Significant milestones achieved
during the quarter included completion of the first test flight of the MQ-25
unmanned aerial refueler, first flight of the inaugural P-8A Poseidon aircraft
for the United Kingdom Royal Air Force, and final assembly of the Space Launch
System core stage structure. Defense, Space & Security also performed the
100th test flight of the T-7A Red Hawk.
Backlog at Defense, Space & Security was $62 billion, of which 30 percent
represents orders from customers outside the U.S.
Global Services
Table 6. Global Services Third Quarter Nine Months
(Dollars in Millions) 2019 2018 Change 2019 2018 Change
Revenues $4,658 $4,101 14% $13,820 $12,148 14%
Earnings from Operations $673 $548 23% $2,013 $1,799 12%
Operating Margin 14.4% 13.4% 1.0 Pts 14.6% 14.8% (0.2) Pts
Global Services third-quarter revenue increased to $4.7 billion, primarily
driven by the acquisition of Boeing Distribution Services, Inc. (formerly KLX)
and higher government services volume (Table 6). Third-quarter operating
margin increased to 14.4 percent primarily due to improved performance.
During the quarter, Global Services was awarded contracts with the U.S. Air
Force for F-15 training to Qatar, A-10 Thunderbolt II re-winging, and KC-46A
Tanker Lot 5 services. Global Services also signed an agreement with IndiGo
for digital solutions and delivered the first SpiceXpress 737-800 Boeing
Converted Freighter following India certification.
Additional Financial Information
Table 7. Additional Financial Information Third Quarter Nine Months
(Dollars in Millions) 2019 2018 2019 2018
Revenues
Boeing Capital $66 $77 $207 $214
Unallocated items, eliminations and other ($35) ($40) ($437) ($62)
Earnings from Operations
Boeing Capital $29 $27 $86 $71
FAS/CAS service cost adjustment $364 $337 $1,093 $1,019
Other unallocated items and eliminations ($522) ($471) ($1,727) ($1,193)
Other income, net $121 $12 $334 $63
Interest and debt expense ($203) ($106) ($480) ($317)
Effective tax rate 0.8% (10.8)% (350.6)% 6.9%
At quarter-end, Boeing Capital's net portfolio balance was $2.2 billion. The
change in earnings from other unallocated items and eliminations is primarily
due to increased enterprise research and development investment. Interest and
debt expense increased due to higher debt balances. The effective tax rate for
the third quarter increased from the same period in the prior year primarily
due to a $412 million benefit related to a 2013-2014 tax settlement that was
recorded in the third quarter of 2018, partially offset by larger 2019 tax
rate benefits resulting from lower pre-tax earnings.
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/(Loss), Core Operating Margin and Core Earnings/(Loss)
Per Share
Core operating earnings/(loss) 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/(loss) expressed as a percentage of revenue. Core earnings/(loss) 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/(loss), core operating
margin and core earnings/(loss) per share for purposes of evaluating and
forecasting underlying business performance. Management believes these core
earnings/(loss) 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 page 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 of free cash flow to GAAP operating 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) the timing and conditions surrounding the return to service of the 737
MAX fleet; (2) general conditions in the economy and our industry, including
those due to regulatory changes; (3) our reliance on our commercial airline
customers; (4) 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; (5) changing budget and appropriation
levels and acquisition priorities of the U.S. government; (6) our dependence
on U.S. government contracts; (7) our reliance on fixed-price contracts; (8)
our reliance on cost-type contracts; (9) uncertainties concerning contracts
that include in-orbit incentive payments; (10) our dependence on our
subcontractors and suppliers, as well as the availability of raw materials;
(11) changes in accounting estimates; (12) changes in the competitive
landscape in our markets; (13) our non-U.S. operations, including sales to
non-U.S. customers; (14) threats to the security of our or our customers'
information; (15) potential adverse developments in new or pending litigation
and/or government investigations; (16) customer and aircraft concentration in
our customer financing portfolio; (17) changes in our ability to obtain debt
on commercially reasonable terms and at competitive rates; (18) realizing the
anticipated benefits of mergers, acquisitions, joint ventures/strategic
alliances or divestitures; (19) the adequacy of our insurance coverage to
cover significant risk exposures; (20) potential business disruptions,
including those related to physical security threats, information technology
or cyber-attacks, epidemics, sanctions or natural disasters; (21) work
stoppages or other labor disruptions; (22) substantial pension and other
postretirement benefit obligations; and (23) 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: Caroline Hutcheson (312) 544-2002
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Nine months ended Three months ended
September 30 September 30
(Dollars in millions, except per share data) 2019 2018 2019 2018
Sales of products $50,514 $64,848 $17,195 $22,463
Sales of services 8,134 7,938 2,785 2,683
Total revenues 58,648 72,786 19,980 25,146
Cost of products (46,584) (53,134) (14,674) (18,882)
Cost of services (6,752) (6,215) (2,241) (2,140)
Boeing Capital interest expense (49) (51) (15) (18)
Total costs and expenses (53,385) (59,400) (16,930) (21,040)
5,263 13,386 3,050 4,106
(Loss)/income from operating investments, net (3) 112 (8) 32
General and administrative expense (2,857) (3,345) (1,001) (1,154)
Research and development expense, net (2,470) (2,417) (778) (826)
Gain/(loss) on dispositions, net 296 76 (4) 69
Earnings from operations 229 7,812 1,259 2,227
Other income 334 63 121 12
Interest and debt expense (480) (317) (203) (106)
Earnings before income taxes 83 7,558 1,177 2,133
Income tax benefit/(expense) 291 (522) (10) 230
Net earnings $374 $7,036 $1,167 $2,363
Basic earnings per share $0.66 $12.08 $2.07 $4.11
Diluted earnings per share $0.66 $11.95 $2.05 $4.07
Weighted average diluted shares (millions) 570.4 588.9 569.2 580.8
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data) September 30 December 31 2018
2019
Assets
Cash and cash equivalents $9,763 $7,637
Short-term and other investments 1,150 927
Accounts receivable, net 3,564 3,879
Unbilled receivables, net 11,078 10,025
Current portion of customer financing, net 166 460
Inventories 73,279 62,567
Other current assets 2,656 2,335
Total current assets 101,656 87,830
Customer financing, net 2,077 2,418
Property, plant and equipment, net of accumulated depreciation of $19,125 and $18,568 12,527 12,645
Goodwill 8,063 7,840
Acquired intangible assets, net 3,587 3,429
Deferred income taxes 296 284
Investments 1,117 1,087
Other assets, net of accumulated amortization of $561 and $503 3,275 1,826
Total assets $132,598 $117,359
Liabilities and equity
Accounts payable $15,101 $12,916
Accrued liabilities 19,224 14,808
Advances and progress billings 53,167 50,676
Short-term debt and current portion of long-term debt 4,354 3,190
Total current liabilities 91,846 81,590
Deferred income taxes 1,615 1,736
Accrued retiree health care 4,437 4,584
Accrued pension plan liability, net 14,590 15,323
Other long-term liabilities 3,621 3,059
Long-term debt 20,298 10,657
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 6,688 6,768
Treasury stock, at cost - 449,472,403 and 444,619,970 shares (54,924) (52,348)
Retained earnings 53,986 55,941
Accumulated other comprehensive loss (14,927) (15,083)
Total shareholders' equity (4,116) 339
Noncontrolling interests 307 71
Total equity (3,809) 410
Total liabilities and equity $132,598 $117,359
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended
September 30
(Dollars in millions) 2019 2018
Cash flows – operating activities:
Net earnings $374 $7,036
Adjustments to reconcile net earnings to net cash provided by operating activities:
Non-cash items –
Share-based plans expense 160 150
Depreciation and amortization 1,643 1,531
Investment/asset impairment charges, net 106 63
Customer financing valuation adjustments 249 (3)
Gain on dispositions, net (296) (76)
Other charges and credits, net 190 158
Changes in assets and liabilities –
Accounts receivable 315 10
Unbilled receivables (1,053) (1,732)
Advances and progress billings 2,355 3,457
Inventories (9,565) (173)
Other current assets (224) (5)
Accounts payable 1,626 1,181
Accrued liabilities 5,495 890
Income taxes receivable, payable and deferred (989) (252)
Other long-term liabilities (577) 1
Pension and other postretirement plans (570) (89)
Customer financing, net 391 (175)
Other 144 403
Net cash (used)/provided by operating activities (226) 12,375
Cash flows – investing activities:
Property, plant and equipment additions (1,387) (1,227)
Property, plant and equipment reductions 334 117
Acquisitions, net of cash acquired (492) (250)
Contributions to investments (1,439) (2,145)
Proceeds from investments 967 1,369
Purchase of distribution rights (20) (56)
Other (10) (5)
Net cash used by investing activities (2,047) (2,197)
Cash flows – financing activities:
New borrowings 19,621 4,696
Debt repayments (8,978) (4,029)
Contributions from noncontrolling interests 7 35
Stock options exercised 51 70
Employee taxes on certain share-based payment arrangements (241) (247)
Common shares repurchased (2,651) (8,415)
Dividends paid (3,473) (2,976)
Net cash provided/(used) by financing activities 4,336 (10,866)
Effect of exchange rate changes on cash and cash equivalents, including restricted (27) (37)
Net increase/(decrease) in cash & cash equivalents, including restricted 2,036 (725)
Cash & cash equivalents, including restricted, at beginning of year 7,813 8,887
Cash & cash equivalents, including restricted, at end of period 9,849 8,162
Less restricted cash & cash equivalents, included in Investments 86 128
Cash and cash equivalents at end of period $9,763 $8,034
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2019, all revenues and costs associated with
military derivative aircraft production are reported in the Defense, Space &
Security segment. Revenues and costs associated with military derivative
aircraft production were previously reported in the Commercial Airplanes and
Defense, Space & Security segments. Business segment data for 2018 reflects
the realignment for military derivative aircraft as well as the realignment of
certain programs from Defense, Space & Security to Global Services.
Nine months ended Three months ended
September 30 September 30
(Dollars in millions) 2019 2018 2019 2018
Revenues:
Commercial Airplanes $24,793 $40,968 $8,249 $14,071
Defense, Space & Security 20,265 19,518 7,042 6,937
Global Services 13,820 12,148 4,658 4,101
Boeing Capital 207 214 66 77
Unallocated items, eliminations and other (437) (62) (35) (40)
Total revenues $58,648 $72,786 $19,980 $25,146
(Loss)/earnings from operations:
Commercial Airplanes ($3,813) $5,230 ($40) $2,033
Defense, Space & Security 2,577 886 755 (247)
Global Services 2,013 1,799 673 548
Boeing Capital 86 71 29 27
Segment operating profit 863 7,986 1,417 2,361
Unallocated items, eliminations and other (1,727) (1,193) (522) (471)
FAS/CAS service cost adjustment 1,093 1,019 364 337
Earnings from operations 229 7,812 1,259 2,227
Other income 334 63 121 12
Interest and debt expense (480) (317) (203) (106)
Earnings before income taxes 83 7,558 1,177 2,133
Income tax benefit/(expense) 291 (522) (10) 230
Net earnings $374 $7,036 $1,167 $2,363
Research and development expense, net:
Commercial Airplanes $1,529 $1,616 $467 $517
Defense, Space & Security 569 613 185 211
Global Services 102 119 29 48
Other 270 69 97 50
Total research and development expense, net $2,470 $2,417 $778 $826
Unallocated items, eliminations and other:
Share-based plans ($57) ($60) ($21) ($24)
Deferred compensation (154) (112) (25) (56)
Amortization of previously capitalized interest (68) (67) (23) (19)
Customer financing impairment (250)
Research and development expense, net (270) (69) (97) (50)
Eliminations and other unallocated items (928) (885) (356) (322)
Sub-total (included in core operating earnings) (1,727) (1,193) (522) (471)
Pension FAS/CAS service cost adjustment 823 780 274 260
Postretirement FAS/CAS service cost adjustment 270 239 90 77
FAS/CAS service cost adjustment 1,093 1,019 $364 $337
Total ($634) ($174) ($158) ($134)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries Nine months ended Three months ended
September 30 September 30
Commercial Airplanes 2019 2018 2019 2018
737 118 407 5 138
747 5 5 1 2
767 32 13 10 4
777* 33 (1) 37 11 12
787 113 106 35 34
Total 301 568 62 190
Note: Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses
* The deliveries press release originally published on October 8, 2019 indicated that there were 34 and 12 777 aircraft delivered for the nine and three months ended September 30, 2019. These numbers have since been revised and reflected in the totals.
Defense, Space & Security
AH-64 Apache (New) 27 — 17 —
AH-64 Apache (Remanufactured) 56 12 21 6
C-17 Globemaster III 1 — 1 —
C-40A 2 — 2 —
CH-47 Chinook (New) 13 11 6 2
CH-47 Chinook (Renewed) 16 14 7 6
F-15 Models 7 8 2 3
F/A-18 Models 16 10 6 5
KC-46 Tanker 21 — 9 —
P-8 Models 14 10 6 2
Commercial and Civil Satellites 1 1 — 1
Military Satellites — — — —
Total backlog (Dollars in millions) September 30 December 31 2018
2019
Commercial Airplanes $387,397 $408,140
Defense, Space & Security 61,740 61,277
Global Services 21,088 21,064
Total backlog $470,225 $490,481
Contractual backlog $444,711 $462,070
Unobligated backlog 25,514 28,411
Total backlog $470,225 $490,481
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) Third Quarter 2019 Third Quarter 2018
$ millions Per Share $ millions Per Share
Revenues 19,980 25,146
Earnings from operations (GAAP) 1,259 2,227
Operating margin (GAAP) 6.3% 8.9%
FAS/CAS service cost adjustment:
Pension FAS/CAS service cost adjustment (274) (260)
Postretirement FAS/CAS service cost adjustment (90) (77)
FAS/CAS service cost adjustment (364) (337)
Core operating earnings (non-GAAP) $895 $1,890
Core operating margin (non-GAAP) 4.5% 7.5%
Diluted earnings per share (GAAP) $2.05 $4.07
Pension FAS/CAS service cost adjustment ($274) (0.48) ($260) (0.45)
Postretirement FAS/CAS service cost adjustment (90) (0.16) (77) (0.13)
Non-operating pension expense (93) (0.17) (50) (0.09)
Non-operating postretirement expense 27 0.05 29 0.05
Provision for deferred income taxes on adjustments ( 1) 90 0.16 75 0.13
Subtotal of adjustments ($340) ($0.60) ($283) ($0.49)
Core earnings per share (non-GAAP) $1.45 $3.58
Weighted average diluted shares (in millions) 569.2 580.8
(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 (loss)/earnings, core operating margin, and core (loss)/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) Nine Months 2019 Nine Months 2018
$ millions Per Share $ millions Per Share
Revenues 58,648 72,786
Earnings from operations (GAAP) 229 7,812
Operating margin (GAAP) 0.4% 10.7%
FAS/CAS service cost adjustment:
Pension FAS/CAS service cost adjustment (823) (780)
Postretirement FAS/CAS service cost adjustment (270) (239)
FAS/CAS service cost adjustment (1,093) (1,019)
Core operating (loss)/earnings (non-GAAP) ($864) $6,793
Core operating margin (non-GAAP) (1.5)% 9.3%
Diluted earnings per share (GAAP) $0.66 $11.95
Pension FAS/CAS service cost adjustment ($823) (1.45) ($780) (1.32)
Postretirement FAS/CAS service cost adjustment (270) (0.47) (239) (0.41)
Non-operating pension expense (280) (0.49) (98) (0.17)
Non-operating postretirement expense 80 0.14 77 0.13
Provision for deferred income taxes on adjustments ( 1) 272 0.48 218 0.37
Subtotal of adjustments ($1,021) ($1.79) ($822) ($1.40)
Core (loss)/earnings per share (non-GAAP) ($1.13) $10.55
Weighted average diluted shares (in millions) 570.4 588.9
(1) The income tax impact is calculated using the U.S. corporate statutory tax rate.
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