REG-Boeing Company: First Quarter Financial Results
24/04/2024 12:45
Boeing Reports First Quarter Results
ARLINGTON, Va., April 24, 2024 --
First Quarter 2024
* Undertaking comprehensive actions in our commercial business to strengthen
quality and safety
* Financial results reflect lower 737 deliveries and 737-9 grounding customer
considerations
* Revenue of $16.6 billion, GAAP loss per share of ($0.56) and core
(non-GAAP)* loss per share of ($1.13)
* Operating cash flow of ($3.4) billion and free cash flow of ($3.9) billion
(non-GAAP)*
* Total company backlog grew to $529 billion, including over 5,600 commercial
airplanes
Table 1. Summary Financial Results First Quarter
(Dollars in Millions, except per share data) 2024 2023 Change
Revenues $16,569 $17,921 (8) %
GAAP
Loss from operations ($86) ($149) NM
Operating margins (0.5) % (0.8) % NM
Net loss ($355) ($425) NM
Loss per share ($0.56) ($0.69) NM
Operating cash flow ($3,362) ($318) NM
Non-GAAP*
Core operating loss ($388) ($440) NM
Core operating margins (2.3) % (2.5) % NM
Core loss per share ($1.13) ($1.27) 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] recorded first quarter revenue of
$16.6 billion, GAAP loss per share of ($0.56) and core loss per share
(non-GAAP)* of ($1.13) (Table 1). Boeing reported operating cash flow of
($3.4) billion and free cash flow of ($3.9) billion (non-GAAP)*. Results
primarily reflect lower commercial delivery volume.
"Our first quarter results reflect the immediate actions we've taken to slow
down 737 production to drive improvements in quality," said Dave Calhoun,
Boeing president and CEO. "We will take the time necessary to strengthen our
quality and safety management systems and this work will position us for a
stronger and more stable future."
Table 2. Cash Flow First Quarter
(Millions) 2024 2023
Operating cash flow ($3,362) ($318)
Less additions to property, plant & equipment ($567) ($468)
Free cash flow* ($3,929) ($786)
*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 5, "Non-GAAP Measures Disclosures."
Operating cash flow was ($3.4) billion in the quarter reflecting lower
commercial deliveries, as well as unfavorable timing of receipts and
expenditures (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances Quarter End
(Billions) Q1 24 Q4 23
Cash $6.9 $12.7
Marketable securities 1 $0.6 $3.3
Total $7.5 $16.0
Consolidated debt $47.9 $52.3
1 Marketable securities consist primarily of time deposits due within one year classified as "short-term investments."
Cash and investments in marketable securities totaled $7.5 billion, compared
to $16.0 billion at the beginning of the quarter reflecting debt repayment
and free cash flow usage in the quarter (Table 3). Debt was $47.9 billion,
down from $52.3 billion at the beginning of the quarter due to the pay down
of maturing debt. The company has access to credit facilities of $10.0
billion, which remain undrawn.
Total company backlog at quarter end was $529 billion.
Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes First Quarter
(Dollars in Millions) 2024 2023 Change
Deliveries 83 130 (36) %
Revenues $4,653 $6,704 (31) %
Loss from operations ($1,143) ($615) NM
Operating margins (24.6) % (9.2) % NM
Commercial Airplanes first quarter revenue of $4.7 billion and operating
margin of (24.6) percent primarily reflect lower 737 deliveries and 737-9
grounding customer considerations (Table 4).
During the quarter, the 737 program slowed production below 38 per month to
incorporate improvements to its quality management system and reduce traveled
work within its factory and supply chain. In addition, Commercial Airplanes is
implementing a comprehensive action plan to address feedback from the FAA
audit of 737 production.
Commercial Airplanes booked 125 net orders, including 85 737-10 airplanes for
American Airlines and 28 777X airplanes for customers including Ethiopian
Airlines. Commercial Airplanes delivered 83 airplanes during the quarter and
backlog included over 5,600 airplanes valued at $448 billion.
Defense, Space & Security
Table 5. Defense, Space & Security First Quarter
(Dollars in Millions) 2024 2023 Change
Revenues $6,950 $6,539 6 %
Earnings/(loss) from operations $151 ($212) NM
Operating margins 2.2 % (3.2) % NM
Defense, Space & Security first quarter revenue was $7.0 billion. First
quarter operating margin increased to 2.2 percent, primarily driven by higher
volume and improved performance. Results also reflect $222 million of losses
on certain fixed-price development programs.
During the quarter, Defense, Space & Security captured awards for 17 P-8A
Poseidon aircraft for the Royal Canadian Air Force and German Navy, secured
the final new-build production contract from the U.S. Navy for 17 F/A-18 Super
Hornets, and was awarded an MQ-25 cost-type contract modification from the
U.S. Navy including two additional test aircraft. Backlog at Defense, Space &
Security was $61 billion, of which 31 percent represents orders from customers
outside the U.S.
Global Services
Table 6. Global Services First Quarter
(Dollars in Millions) 2024 2023 Change
Revenues $5,045 $4,720 7 %
Earnings from operations $916 $847 8 %
Operating margins 18.2 % 17.9 % 0.3 pts
Global Services first quarter revenue of $5.0 billion and operating margin of
18.2 percent reflect higher commercial volume and favorable mix.
During the quarter, Global Services opened a maintenance facility in
Jacksonville, Florida, supporting military customers and the U.S. Navy
exercised options on a P-8 sustainment modification contract.
Additional Financial Information
Table 7. Additional Financial Information First Quarter
(Dollars in Millions) 2024 2023
Revenues
Unallocated items, eliminations and other ($79) ($42)
Earnings/(loss) from operations
FAS/CAS service cost adjustment $302 $291
Other unallocated items and eliminations ($312) ($460)
Other income, net $277 $302
Interest and debt expense ($569) ($649)
Effective tax rate 6.1 % 14.3 %
Other unallocated items and eliminations primarily reflects timing of
allocations.
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/(loss) from
operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service
cost adjustment represents the difference between the Financial Accounting
Standards (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/(loss) per share
excluding the net earnings/(loss) 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 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 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 of these non-GAAP measures
to the most directly comparable GAAP measure is provided on page 12.
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.
See Table 2 on page 2 for 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) 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,
production quality issues, commercial airplane production rates, our ability
to successfully develop and certify new aircraft or new derivative aircraft,
and the ability of our aircraft to meet stringent performance and reliability
standards; (4) changing budget and appropriation levels and acquisition
priorities of the U.S. government, as well as significant delays in U.S.
government appropriations; (5) our dependence on our subcontractors and
suppliers, as well as the availability of highly skilled labor and raw
materials; (6) work stoppages or other labor disruptions; (7) competition
within our markets; (8) our non-U.S. operations and sales to non-U.S.
customers; (9) changes in accounting estimates; (10) realizing the anticipated
benefits of mergers, acquisitions, joint ventures/strategic alliances or
divestitures; (11) our dependence on U.S. government contracts; (12) our
reliance on fixed-price contracts; (13) our reliance on cost-type contracts;
(14) contracts that include in-orbit incentive payments; (15) unauthorized
access to our, our customers' and/or our suppliers' information and systems;
(16) potential business disruptions, including threats to physical security or
our information technology systems, extreme weather (including effects of
climate change) or other acts of nature, and pandemics or other public health
crises; (17) potential adverse developments in new or pending litigation
and/or government inquiries or investigations; (18) potential environmental
liabilities; (19) effects of climate change and legal, regulatory or market
responses to such change; (20) changes in our ability to obtain debt financing
on commercially reasonable terms, at competitive rates and in sufficient
amounts; (21) substantial pension and other postretirement benefit
obligations; (22) the adequacy of our insurance coverage; and (23) customer
and aircraft concentration in our customer financing portfolio.
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: Matt Welch or David Dufault BoeingInvestorRelations@boeing.com
Communications: Michael Friedman media@boeing.com
The Boeing Company and Subsidiaries Consolidated Statements of Operations (Unaudited)
Three months ended
March 31
(Dollars in millions, except per share data) 2024 2023
Sales of products $13,268 $14,914
Sales of services 3,301 3,007
Total revenues 16,569 17,921
Cost of products (12,064) (13,553)
Cost of services (2,629) (2,445)
Total costs and expenses (14,693) (15,998)
1,876 1,923
Income/(loss) from operating investments, net 67 (27)
General and administrative expense (1,161) (1,304)
Research and development expense, net (868) (741)
Loss from operations (86) (149)
Other income, net 277 302
Interest and debt expense (569) (649)
Loss before income taxes (378) (496)
Income tax benefit 23 71
Net loss (355) (425)
Less: net loss attributable to noncontrolling interest (12) (11)
Net loss attributable to Boeing Shareholders ($343) ($414)
Basic loss per share ($0.56) ($0.69)
Diluted loss per share ($0.56) ($0.69)
Weighted average diluted shares (millions) 613.2 602.5
The Boeing Company and Subsidiaries Consolidated Statements of Financial Position (Unaudited)
(Dollars in millions, except per share data) March 31 December 31
2024 2023
Assets
Cash and cash equivalents $6,914 $12,691
Short-term and other investments 615 3,274
Accounts receivable, net 2,959 2,649
Unbilled receivables, net 9,673 8,317
Current portion of financing receivables, net 57 99
Inventories 83,471 79,741
Other current assets, net 2,843 2,504
Total current assets 106,532 109,275
Financing receivables and operating lease equipment, net 833 860
Property, plant and equipment, net of accumulated depreciation of $22,414 and 10,696 10,661
$22,245
Goodwill 8,089 8,093
Acquired intangible assets, net 2,034 2,094
Deferred income taxes 68 59
Investments 1,042 1,035
Other assets, net of accumulated amortization of of $1,098 and $1,046 5,190 4,935
Total assets $134,484 $137,012
Liabilities and equity
Accounts payable $11,616 $11,964
Accrued liabilities 21,607 22,331
Advances and progress billings 58,972 56,328
Short-term debt and current portion of long-term debt 1,063 5,204
Total current liabilities 93,258 95,827
Deferred income taxes 223 229
Accrued retiree health care 2,196 2,233
Accrued pension plan liability, net 6,400 6,516
Other long-term liabilities 2,546 2,332
Long-term debt 46,877 47,103
Total liabilities 151,500 154,240
Shareholders' equity:
Common stock, par value $5.00 – 1,200,000,000 shares authorized; 5,061 5,061
1,012,261,159 shares issued
Additional paid-in capital 10,539 10,309
Treasury stock, at cost - 398,878,880 and 402,746,136 shares (49,105) (49,549)
Retained earnings 26,908 27,251
Accumulated other comprehensive loss (10,412) (10,305)
Total shareholders' deficit (17,009) (17,233)
Noncontrolling interests (7) 5
Total equity (17,016) (17,228)
Total liabilities and equity $134,484 $137,012
The Boeing Company and Subsidiaries Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
March 31
(Dollars in millions) 2024 2023
Cash flows – operating activities:
Net loss ($355) ($425)
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash items –
Share-based plans expense 119 222
Treasury shares issued for 401(k) contribution 606 553
Depreciation and amortization 442 457
Investment/asset impairment charges, net 21 11
Other charges and credits, net 10 33
Changes in assets and liabilities –
Accounts receivable (328) (341)
Unbilled receivables (1,357) (1,055)
Advances and progress billings 2,718 1,417
Inventories (3,778) (390)
Other current assets (249) 82
Accounts payable (264) 231
Accrued liabilities (666) (769)
Income taxes receivable, payable and deferred (59) (122)
Other long-term liabilities (83) (117)
Pension and other postretirement plans (261) (244)
Financing receivables and operating lease equipment, net 79 101
Other 43 38
Net cash used by operating activities (3,362) (318)
Cash flows – investing activities:
Payments to acquire property, plant and equipment (567) (468)
Proceeds from disposals of property, plant and equipment 11 5
Contributions to investments (243) (3,561)
Proceeds from investments 2,907 2,203
Other (34) (2)
Net cash provided/(used) by investing activities 2,074 (1,823)
Cash flows – financing activities:
New borrowings 27 17
Debt repayments (4,442) (1,699)
Stock options exercised 44
Employee taxes on certain share-based payment arrangements (65) (42)
Other 18
Net cash used by financing activities (4,462) (1,680)
Effect of exchange rate changes on cash and cash equivalents (28) 10
Net decrease in cash & cash equivalents, including restricted (5,778) (3,811)
Cash & cash equivalents, including restricted, at beginning of year 12,713 14,647
Cash & cash equivalents, including restricted, at end of period 6,935 10,836
Less restricted cash & cash equivalents, included in Investments 21 24
Cash & cash equivalents at end of period $6,914 $10,812
The Boeing Company and Subsidiaries Summary of Business Segment Data (Unaudited)
Three months ended
March 31
(Dollars in millions) 2024 2023
Revenues:
Commercial Airplanes $4,653 $6,704
Defense, Space & Security 6,950 6,539
Global Services 5,045 4,720
Unallocated items, eliminations and other (79) (42)
Total revenues $16,569 $17,921
Loss from operations:
Commercial Airplanes ($1,143) ($615)
Defense, Space & Security 151 (212)
Global Services 916 847
Segment operating (loss)/earnings (76) 20
Unallocated items, eliminations and other (312) (460)
FAS/CAS service cost adjustment 302 291
Loss from operations (86) (149)
Other income, net 277 302
Interest and debt expense (569) (649)
Loss before income taxes (378) (496)
Income tax expense 23 71
Net loss (355) (425)
Less: net loss attributable to noncontrolling interest (12) (11)
Net loss attributable to Boeing Shareholders ($343) ($414)
Research and development expense, net:
Commercial Airplanes $518 $444
Defense, Space & Security 235 195
Global Services 26 26
Other 89 76
Total research and development expense, net $868 $741
Unallocated items, eliminations and other:
Share-based plans $10 ($52)
Deferred compensation (30) (54)
Amortization of previously capitalized interest (23) (23)
Research and development expense, net (89) (76)
Eliminations and other unallocated items (180) (255)
Sub-total (included in Core operating loss) (312) (460)
Pension FAS/CAS service cost adjustment 230 223
Postretirement FAS/CAS service cost adjustment 72 68
FAS/CAS service cost adjustment 302 291
Total ($10) ($169)
The Boeing Company and Subsidiaries Operating and Financial Data (Unaudited)
Deliveries Three months ended
March 31
Commercial Airplanes 2024 2023
737 67 113
747 — 1
767 3 1
777 — 4
787 13 11
Total 83 130
Defense, Space & Security
AH-64 Apache (New) — 7
AH-64 Apache (Remanufactured) 6 13
CH-47 Chinook (New) 1 5
CH-47 Chinook (Renewed) 1 1
F-15 Models 1 2
F/A-18 Models 1 7
KC-46 Tanker 3 1
P-8 Models 1 3
Commercial Satellites — 3
Total 1 14 42
1 Deliveries of new-build production units, including remanufactures and modifications
Total backlog (Dollars in millions) March 31 December 31
2024 2023
Commercial Airplanes $447,533 $440,507
Defense, Space & Security 60,744 59,012
Global Services 19,693 19,869
Unallocated items, eliminations and other 779 807
Total backlog $528,749 $520,195
Contractual backlog $505,918 $497,094
Unobligated backlog 22,831 23,101
Total backlog $528,749 $520,195
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 of Loss from operations, operating
margin, and Diluted loss 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) First Quarter 2024 First Quarter 2023
$ millions Per Share $ millions Per Share
Revenues 16,569 17,921
Loss from operations (GAAP) (86) (149)
Operating margins (GAAP) (0.5) % (0.8) %
FAS/CAS service cost adjustment:
Pension FAS/CAS service cost adjustment (230) (223)
Postretirement FAS/CAS service cost adjustment (72) (68)
FAS/CAS service cost adjustment (302) (291)
Core operating loss (non-GAAP) ($388) ($440)
Core operating margins (non-GAAP) (2.3) % (2.5) %
Diluted loss per share (GAAP) ($0.56) ($0.69)
Pension FAS/CAS service cost adjustment ($230) (0.37) ($223) (0.37)
Postretirement FAS/CAS service cost adjustment (72) (0.12) (68) (0.11)
Non-operating pension expense (123) (0.20) (134) (0.23)
Non-operating postretirement expense (18) (0.03) (15) (0.02)
Provision for deferred income taxes on adjustments 1 93 0.15 92 0.15
Subtotal of adjustments ($350) ($0.57) ($348) ($0.58)
Core loss per share (non-GAAP) ($1.13) ($1.27)
Weighted average diluted shares (in millions) 613.2 602.5
1 The income tax impact is calculated using the U.S. corporate statutory tax rate.
SOURCE Boeing
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