REG-Boeing Co: 3rd Quarter Results
28/10/2020 11:30
Boeing Reports Third-Quarter Results
CHICAGO, Oct. 28, 2020 /PRNewswire/ --
* Financial results continue to be significantly impacted by COVID-19 and the
737 MAX grounding
* Proactively managing liquidity and transforming for the future
* Revenue of $14.1 billion, GAAP loss per share of ($0.79) and core
(non-GAAP)* loss per share of ($1.39)
* Operating cash flow of ($4.8) billion; cash and marketable securities of
$27.1 billion
* Total backlog of $393 billion, including more than 4,300 commercial
airplanes
Table 1. Summary Financial Results Third Quarter Nine Months
(Dollars in Millions, except per share data) 2020 2019 Change 2020 2019 Change
Revenues $14,139 $19,980 (29)% $42,854 $58,648 (27)%
GAAP
(Loss)/Earnings From Operations ($401) $1,259 NM ($4,718) $229 NM
Operating Margin (2.8)% 6.3% NM (11.0)% 0.4% NM
Net (Loss)/Earnings ($466) $1,167 NM ($3,502) $374 NM
(Loss)/Earnings Per Share ($0.79) $2.05 NM ($6.10) $0.66 NM
Operating Cash Flow ($4,819) ($2,424) NM ($14,401) ($226) NM
Non-GAAP*
Core Operating (Loss)/Earnings ($754) $895 NM ($5,773) ($864) NM
Core Operating Margin (5.3)% 4.5% NM (13.5)% (1.5)% NM
Core (Loss)/Earnings Per Share ($1.39) $1.45 NM ($7.88) ($1.13) NM
*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 5, "Non-GAAP Measures Disclosures."
The Boeing Company [NYSE: BA] reported third-quarter revenue of
$14.1 billion, GAAP loss per share of ($0.79) and core loss per share
(non-GAAP)* of ($1.39), reflecting lower commercial deliveries and services
volume primarily due to COVID-19 (Table 1). Boeing recorded operating cash
flow of ($4.8) billion.
"The global pandemic continued to add pressure to our business this quarter,
and we're aligning to this new reality by closely managing our liquidity and
transforming our enterprise to be sharper, more resilient and more sustainable
for the long term," said Boeing President and Chief Executive Officer Dave
Calhoun. "Our diverse portfolio, including our government services, defense
and space programs, continues to provide some stability for us as we adapt and
rebuild for the other side of the pandemic. We remain focused on the health
and safety of our employees and their communities. I'm proud of the dedication
and commitment our teams have demonstrated as they continued to deliver for
our customers in this challenging environment. Despite the near-term
headwinds, we remain confident in our long term future and are focused on
sustaining critical investments in our business and the meaningful actions we
are taking to strengthen our safety culture, improve transparency and rebuild
trust."
Following the lead of global regulators, Boeing made steady progress toward
the safe return to service of the 737 MAX, including rigorous certification
and validation flights conducted by the U.S. Federal Aviation Administration,
Transport Canada and the European Union Aviation Safety Agency. The Joint
Operational Evaluation Board, featuring civil aviation authorities from the
United States, Canada, Brazil, and the European Union, also conducted its
evaluations of updated crew training. The 737 MAX has now completed around
1,400 test and check flights and more than 3,000 flight hours as it progresses
through the robust and comprehensive certification process.
To adapt to the market impacts of COVID-19 and position the company for the
future, Boeing continued its business transformation across five key areas
including its infrastructure footprint, overhead and organizational structure,
portfolio and investment mix, supply chain health and operational excellence.
As the company resizes its operations to align with market realities, Boeing
expects to continue lowering overall staffing levels through natural attrition
as well as voluntary and involuntary workforce reductions, and recorded
additional severance costs in the third quarter.
Table 2. Cash Flow Third Quarter Nine Months
(Millions) 2020 2019 2020 2019
Operating Cash Flow ($4,819) ($2,424) ($14,401) ($226)
Less Additions to Property, Plant & Equipment ($262) ($465) ($1,038) ($1,387)
Free Cash Flow* ($5,081) ($2,889) ($15,439) ($1,613)
*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 5, "Non-GAAP Measures Disclosures."
Operating cash flow was ($4.8) billion in the quarter, reflecting lower
commercial deliveries and services volume primarily due to COVID-19, as well
as timing of receipts and expenditures (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances Quarter-End
(Billions) Q3 20 Q2 20
Cash $10.6 $20.0
Marketable Securities (1) $16.5 $12.4
Total $27.1 $32.4
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $59.1 $59.5
Boeing Capital, including intercompany loans $1.9 $1.9
Total Consolidated Debt $61.0 $61.4
(1) Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."
Cash and investments in marketable securities decreased to $27.1 billion,
compared to $32.4 billion at the beginning of the quarter, primarily driven by
operating cash outflows (Table 3). Debt was $61.0 billion, down from $61.4
billion at the beginning of the quarter due to the repayment of maturing debt.
Total company backlog at quarter-end was $393 billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes Third Quarter Nine Months
(Dollars in Millions) 2020 2019 Change 2020 2019 Change
Commercial Airplanes Deliveries 28 62 (55)% 98 301 (67)%
Revenues $3,596 $8,249 (56)% $11,434 $24,793 (54)%
Loss from Operations ($1,369) ($40) NM ($6,199) ($3,813) NM
Operating Margin (38.1)% (0.5)% NM (54.2)% (15.4)% NM
Commercial Airplanes third-quarter revenue decreased to $3.6 billion,
reflecting lower delivery volume primarily due to COVID-19 impacts as well as
787 quality issues and associated rework. Third-quarter operating margin
decreased to (38.1) percent, primarily driven by lower delivery volume, as
well as $590 million of abnormal production costs related to the 737 program.
Commercial Airplanes added the final 777X flight test airplane to the test
program and the GE9X engine received FAA certification. In October, the
company decided it will consolidate 787 production in South Carolina in
mid-2021, which did not have a significant financial impact on the program in
the third quarter. Commercial Airplanes delivered 28 airplanes during the
quarter, and backlog included over 4,300 airplanes valued at $313 billion.
Defense, Space & Security
Table 5. Defense, Space & Security Third Quarter Nine Months
(Dollars in Millions) 2020 2019 Change 2020 2019 Change
Revenues $6,848 $7,002 (2)% $19,478 $20,168 (3)%
Earnings from Operations $628 $754 (17)% $1,037 $2,581 (60)%
Operating Margin 9.2% 10.8% (1.6) Pts 5.3% 12.8% (7.5) Pts
Defense, Space & Security third-quarter revenue decreased to $6.8 billion,
primarily due to derivative aircraft award timing, partially offset by higher
fighter volume (Table 5). Third-quarter operating margin decreased to 9.2
percent reflecting less favorable performance, including a $67 million KC-46A
Tanker charge.
During the quarter, Defense, Space & Security received an award for eight
F-15EX advanced fighter aircraft for the U.S. Air Force and a contract
extension for the International Space Station for NASA, as well as contracts
for nine additional MH-47G Block II Chinook helicopters for the U.S. Army
Special Operations and four additional 702X satellites. Also in the quarter,
the U.S. Air Force and Boeing team was awarded the Collier Trophy for
aerospace excellence for the X-37B autonomous spaceplane. Significant
milestones included inducting the 20(th) U.S. Navy F/A-18 into the Service
Life Modification program as well as delivering the first Bell Boeing V-22
Osprey to Japan and the first MH-47G Block II Chinook to the U.S. Army Special
Operations.
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) 2020 2019 Change 2020 2019 Change
Revenues $3,694 $4,658 (21)% $11,810 $13,820 (15)%
Earnings from Operations $271 $673 (60)% $307 $2,013 (85%)
Operating Margin 7.3% 14.4% (7.1) Pts 2.6% 14.6% (12.0) Pts
Global Services third-quarter revenue decreased to $3.7 billion, driven by
lower commercial services volume due to COVID-19, partially offset by higher
government services volume (Table 6). Third-quarter operating margin decreased
to 7.3 percent primarily due to lower commercial services volume and
additional severance costs.
During the quarter, Global Services signed an agreement with GECAS for 11
737-800 Boeing Converted Freighters, secured a six-year P-8A support contract
for the Royal Australian Air Force, and was awarded F-15EX training and
services support contracts by the U.S. Air Force. Global Services also
delivered the first P-8A Operational Flight Trainer for the United Kingdom
Royal Air Force.
Additional Financial Information
Table 7. Additional Financial Information Third Quarter Nine Months
(Dollars in Millions) 2020 2019 2020 2019
Revenues
Boeing Capital $71 $66 $205 $207
Unallocated items, eliminations and other ($70) $5 ($73) ($340)
Earnings from Operations
Boeing Capital $30 $29 $47 $86
FAS/CAS service cost adjustment $353 $364 $1,055 $1,093
Other unallocated items and eliminations ($314) ($521) ($965) ($1,731)
Other income, net $119 $121 $325 $334
Interest and debt expense ($643) ($203) ($1,458) ($480)
Effective tax rate 49.6% 0.8% 40.1% (350.6)%
At quarter-end, Boeing Capital's net portfolio balance was $2.0 billion. The
change in revenue and earnings from other unallocated items and eliminations
was primarily due to the timing of cost allocations. Earnings from other
unallocated items and eliminations was also impacted by lower enterprise
research and development expense. Interest and debt expense increased due to
higher debt balances. The third quarter effective tax rate reflects tax
benefits related to the five year net operating loss carryback provision in
the Coronavirus Aid, Relief, and Economic Security (CARES) Act as well as the
impact of pre-tax losses.
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 12-13.
Free Cash Flow
Free cash flow is GAAP operating cash flow reduced by capital expenditures
for property, plant and equipment. 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 COVID-19 pandemic and related government actions, including with
respect to our operations, our liquidity, the health of our customers and
suppliers, and future demand for our products and services; (2) the 737 MAX,
including the timing and conditions of 737 MAX regulatory approvals, lower
than planned production rates and/or delivery rates, and increased
considerations to customers and suppliers, (3) general conditions in the
economy and our industry, including those due to regulatory changes; (4) our
reliance on our commercial airline customers; (5) 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; (6)
changing budget and appropriation levels and acquisition priorities of the
U.S. government; (7) our dependence on U.S. government contracts; (8) our
reliance on fixed-price contracts; (9) our reliance on cost-type contracts;
(10) uncertainties concerning contracts that include in-orbit incentive
payments; (11) our dependence on our subcontractors and suppliers, as well as
the availability of raw materials; (12) changes in accounting estimates; (13)
changes in the competitive landscape in our markets; (14) our non-U.S.
operations, including sales to non-U.S. customers; (15) threats to the
security of our or our customers' information; (16) potential adverse
developments in new or pending litigation and/or government investigations;
(17) customer and aircraft concentration in our customer financing portfolio;
(18) changes in our ability to obtain debt financing on commercially
reasonable terms and at competitive rates; (19) realizing the anticipated
benefits of mergers, acquisitions, joint ventures/strategic alliances or
divestitures; (20) the adequacy of our insurance coverage to cover significant
risk exposures; (21) potential business disruptions, including those related
to physical security threats, information technology or cyber-attacks,
epidemics, sanctions or natural disasters; (22) work stoppages or other labor
disruptions; (23) substantial pension and other postretirement benefit
obligations; and (24) 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: Michael Friedman media@boeing.com
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Nine months ended September 30 Three months ended September 30
(Dollars in millions, except per share data) 2020 2019 2020 2019
Sales of products $34,656 $50,514 $11,402 $17,195
Sales of services 8,198 8,134 2,737 2,785
Total revenues 42,854 58,648 14,139 19,980
Cost of products (36,001) (46,584) (10,910) (14,674)
Cost of services (6,817) (6,752) (2,185) (2,241)
Boeing Capital interest expense (33) (49) (10) (15)
Total costs and expenses (42,851) (53,385) (13,105) (16,930)
3 5,263 1,034 3,050
Loss from operating investments, net (61) (3) (14) (8)
General and administrative expense (2,989) (2,857) (955) (1,001)
Research and development expense, net (1,871) (2,470) (574) (778)
Gain/(loss) on dispositions, net 200 296 108 (4)
(Loss)/earnings from operations (4,718) 229 (401) 1,259
Other income, net 325 334 119 121
Interest and debt expense (1,458) (480) (643) (203)
(Loss)/earnings before income taxes (5,851) 83 (925) 1,177
Income tax benefit/(expense) 2,349 291 459 (10)
Net (loss)/earnings (3,502) 374 (466) 1,167
Less: net loss attributable to noncontrolling interest (49) (17)
Net (loss)/earnings attributable to Boeing Shareholders ($3,453) $374 ($449) $1,167
Basic (loss)/earnings per share ($6.10) $0.66 ($0.79) $2.07
Diluted (loss)/earnings per share ($6.10) $0.66 ($0.79) $2.05
Weighted average diluted shares (millions) 566.3 570.4 566.6 569.2
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data) September 30 2020 December 31 2019
Assets
Cash and cash equivalents $10,564 $9,485
Short-term and other investments 16,552 545
Accounts receivable, net 2,762 3,266
Unbilled receivables, net 8,860 9,043
Current portion of customer financing, net 100 162
Inventories 86,961 76,622
Other current assets, net 5,213 3,106
Total current assets 131,012 102,229
Customer financing, net 2,010 2,136
Property, plant and equipment, net of accumulated depreciation of $20,241 and $19,342 11,969 12,502
Goodwill 8,071 8,060
Acquired intangible assets, net 2,941 3,338
Deferred income taxes 704 683
Investments 1,052 1,092
Other assets, net of accumulated amortization of $671 and $580 3,502 3,585
Total assets $161,261 $133,625
Liabilities and equity
Accounts payable $14,479 $15,553
Accrued liabilities 22,220 22,868
Advances and progress billings 51,974 51,551
Short-term debt and current portion of long-term debt 3,634 7,340
Total current liabilities 92,307 97,312
Deferred income taxes 503 413
Accrued retiree health care 4,429 4,540
Accrued pension plan liability, net 15,343 16,276
Other long-term liabilities 2,907 3,422
Long-term debt 57,325 19,962
Total liabilities 172,814 141,925
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 6,687 6,745
Treasury stock, at cost - 447,744,896 and 449,352,405 shares (54,819) (54,914)
Retained earnings 47,029 50,644
Accumulated other comprehensive loss (15,779) (16,153)
Total shareholders' equity (11,821) (8,617)
Noncontrolling interests 268 317
Total equity (11,553) (8,300)
Total liabilities and equity $161,261 $133,625
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine months ended September 30
(Dollars in millions) 2020 2019
Cash flows – operating activities:
Net (loss)/earnings ($3,502) $374
Adjustments to reconcile net loss to net cash (used)/provided by operating activities:
Non-cash items –
Share-based plans expense 165 160
Depreciation and amortization 1,668 1,643
Investment/asset impairment charges, net 317 106
Customer financing valuation adjustments 12 249
Gain on dispositions, net (200) (296)
Other charges and credits, net 912 190
Changes in assets and liabilities –
Accounts receivable 125 315
Unbilled receivables 56 (1,053)
Advances and progress billings 428 2,355
Inventories (9,653) (9,565)
Other current assets 319 (224)
Accounts payable (3,303) 1,626
Accrued liabilities 967 5,495
Income taxes receivable, payable and deferred (2,404) (989)
Other long-term liabilities (149) (577)
Pension and other postretirement plans (556) (570)
Customer financing, net 108 391
Other 289 144
Net cash used by operating activities (14,401) (226)
Cash flows – investing activities:
Property, plant and equipment additions (1,038) (1,387)
Property, plant and equipment reductions 275 334
Acquisitions, net of cash acquired (492)
Contributions to investments (25,846) (1,439)
Proceeds from investments 9,772 967
Purchase of distribution rights (20)
Other 14 (10)
Net cash used by investing activities (16,823) (2,047)
Cash flows – financing activities:
New borrowings 42,362 19,621
Debt repayments (8,792) (8,978)
Contributions from noncontrolling interests 7
Stock options exercised 31 51
Employee taxes on certain share-based payment arrangements (169) (241)
Common shares repurchased (2,651)
Dividends paid (1,158) (3,473)
Net cash provided by financing activities 32,274 4,336
Effect of exchange rate changes on cash and cash equivalents, including restricted 26 (27)
Net increase in cash & cash equivalents, including restricted 1,076 2,036
Cash & cash equivalents, including restricted, at beginning of year 9,571 7,813
Cash & cash equivalents, including restricted, at end of period 10,647 9,849
Less restricted cash & cash equivalents, included in Investments 83 86
Cash and cash equivalents at end of period $10,564 $9,763
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2020, certain programs were realigned between
our Defense, Space & Security segment and Unallocated items, eliminations and
other. Business segment data for 2019 has been adjusted to reflect the
realignment.
Nine months ended September 30 Three months ended September 30
(Dollars in millions) 2020 2019 2020 2019
Revenues:
Commercial Airplanes $11,434 $24,793 $3,596 $8,249
Defense, Space & Security 19,478 20,168 6,848 7,002
Global Services 11,810 13,820 3,694 4,658
Boeing Capital 205 207 71 66
Unallocated items, eliminations and other (73) (340) (70) 5
Total revenues $42,854 $58,648 $14,139 $19,980
Earnings/(loss) from operations:
Commercial Airplanes ($6,199) ($3,813) ($1,369) ($40)
Defense, Space & Security 1,037 2,581 628 754
Global Services 307 2,013 271 673
Boeing Capital 47 86 30 29
Segment operating (loss)/earnings (4,808) 867 (440) 1,416
Unallocated items, eliminations and other (965) (1,731) (314) (521)
FAS/CAS service cost adjustment 1,055 1,093 353 364
(Loss)/earnings from operations (4,718) 229 (401) 1,259
Other income, net 325 334 119 121
Interest and debt expense (1,458) (480) (643) (203)
(Loss)/earnings before income taxes (5,851) 83 (925) 1,177
Income tax benefit/(expense) 2,349 291 459 (10)
Net (loss)/earnings (3,502) 374 (466) 1,167
Less: Net loss attributable to noncontrolling interest (49) (17)
Net (loss)/earnings attributable to Boeing Shareholders ($3,453) $374 ($449) $1,167
Research and development expense, net:
Commercial Airplanes $1,107 $1,529 $321 $467
Defense, Space & Security 494 556 164 182
Global Services 110 102 45 29
Other 160 283 44 100
Total research and development expense, net $1,871 $2,470 $574 $778
Unallocated items, eliminations and other:
Share-based plans ($80) ($57) ($37) ($21)
Deferred compensation 34 (154) (39) (25)
Amortization of previously capitalized interest (69) (68) (19) (23)
Customer financing impairment (250)
Research and development expense, net (160) (283) (44) (100)
Eliminations and other unallocated items (690) (919) (175) (352)
Sub-total (included in core operating loss) (965) (1,731) (314) (521)
Pension FAS/CAS service cost adjustment 773 823 260 274
Postretirement FAS/CAS service cost adjustment 282 270 93 90
FAS/CAS service cost adjustment 1,055 1,093 $353 $364
Total $90 ($638) $39 ($157)
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Deliveries Nine months ended September 30 Three months ended September 30
Commercial Airplanes 2020 2019 2020 2019
737 12 118 3 5
747 2 5 1 1
767 20 32 6 10
777 15 33 (1) 5 11
787 49 113 13 35
Total 98 301 28 62
Note: Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses
Defense, Space & Security
AH-64 Apache (New) 18 27 7 17
AH-64 Apache (Remanufactured) 44 56 12 21
C-17 Globemaster III — 1 — 1
C-40A — 2 — 2
CH-47 Chinook (New) 19 13 4 6
CH-47 Chinook (Renewed) 3 16 2 7
F-15 Models 3 7 — 2
F/A-18 Models 14 16 5 6
KC-46A Tanker 10 21 4 9
P-8 Models 9 14 3 6
Commercial and Civil Satellites — 1 — —
Total backlog (Dollars in millions) September 30 2020 December 31 2019
Commercial Airplanes $312,684 $376,593
Defense, Space & Security 62,375 63,691
Global Services 17,464 22,902
Unallocated items, eliminations and other 544 217
Total backlog $393,067 $463,403
Contractual backlog $368,916 $436,473
Unobligated backlog 24,151 26,930
Total backlog $393,067 $463,403
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,
(loss)/earnings from operations, operating margin, and diluted (loss)/earnings
per share. See page 5 of this release for additional information on the use of
these non-GAAP financial measures.
(Dollars in millions, except per share data) Third Quarter 2020 Third Quarter 2019
$ millions Per Share $ millions Per Share
Revenues 14,139 19,980
(Loss)/earnings from operations (GAAP) (401) 1,259
Operating margin (GAAP) (2.8)% 6.3%
FAS/CAS service cost adjustment:
Pension FAS/CAS service cost adjustment (260) (274)
Postretirement FAS/CAS service cost adjustment (93) (90)
FAS/CAS service cost adjustment (353) (364)
Core operating (loss)/earnings (non-GAAP) ($754) $895
Core operating margin (non-GAAP) (5.3)% 4.5%
Diluted (loss)/earnings per share (GAAP) ($0.79) $2.05
Pension FAS/CAS service cost adjustment ($260) (0.46) ($274) (0.48)
Postretirement FAS/CAS service cost adjustment (93) (0.16) (90) (0.16)
Non-operating pension expense (84) (0.16) (93) (0.17)
Non-operating postretirement expense 10 0.02 27 0.05
Provision for deferred income taxes on adjustments ( 1) 90 0.16 90 0.16
Subtotal of adjustments ($337) ($0.60) ($340) ($0.60)
Core (loss)/earnings per share (non-GAAP) ($1.39) $1.45
Weighted average diluted shares (in millions) 566.6 569.2
(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, core operating margin, and core loss per share with the most
directly comparable GAAP financial measures, (loss)/earnings from operations,
operating margin, and diluted (loss)/earnings per share. See page 5 of this
release for additional information on the use of these non-GAAP financial
measures.
(Dollars in millions, except per share data) Nine Months 2020 Nine Months 2019
$ millions Per Share $ millions Per Share
Revenues 42,854 58,648
(Loss)/earnings from operations (GAAP) (4,718) 229
Operating margin (GAAP) (11.0)% 0.4 %
FAS/CAS service cost adjustment:
Pension FAS/CAS service cost adjustment (773) (823)
Postretirement FAS/CAS service cost adjustment (282) (270)
FAS/CAS service cost adjustment (1,055) (1,093)
Core operating loss (non-GAAP) ($5,773) ($864)
Core operating margin (non-GAAP) (13.5)% (1.5 %)
Diluted (loss)/earnings per share (GAAP) ($6.10) $0.66
Pension FAS/CAS service cost adjustment ($773) (1.36) ($823) (1.45)
Postretirement FAS/CAS service cost adjustment (282) (0.50) (270) (0.47)
Non-operating pension expense (255) (0.46) (280) (0.49)
Non-operating postretirement expense 37 0.07 80 0.14
Provision for deferred income taxes on adjustments ( 1) 267 0.47 272 0.48
Subtotal of adjustments ($1,006) ($1.78) ($1,021) ($1.79)
Core loss per share (non-GAAP) ($7.88) ($1.13)
Weighted average diluted shares (in millions) 566.3 570.4
(1 ) The income tax impact is calculated using the U.S. corporate statutory tax rate.
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