Boeing Reports Strong Fourth-Quarter Results and Provides 2012 Guidance
CHICAGO, Jan. 25, 2012 /PRNewswire-FirstCall/ --
Fourth-Quarter 2011
-- Earnings per share rose to $1.84, driven by strong core performance
-- EPS includes favorable tax settlement of $0.52 compared with $0.50 in
2010
-- Revenue rose to $19.6 billion on increased commercial airplane
deliveries
Full Year 2011
-- Earnings per share increased 20 percent to $5.34 on record revenue of
$68.7 billion
-- Operating cash flow increased 36 percent to $4.0 billion
-- Backlog grew to a record $356 billion including $103 billion of orders
during the year
Outlook for 2012
-- EPS guidance of between $4.05 and $4.25 reflects strong operating
performance offset by $0.83 of higher pension expense
-- Revenue guidance established at between $78 and $80 billion
-- Operating cash flow guidance set at greater than $5.0 billion includes
$1.5 billion of discretionary pension contributions
Table 1. Summary
Financial
Results
Fourth Quarter Full Year
-------------- ---------
(Dollars in
Millions, except
per share data) 2011 2010 Change 2011 2010 Change
----------------- ---- ---- ------ ---- ---- ------
Revenues $19,555 $16,550 18% $68,735 $64,306 7%
Earnings From
Operations $1,597 $1,103 45% $5,844 $4,971 18%
Operating Margin 8.2% 6.7% 1.5 Pts 8.5% 7.7% 0.8 Pts
Net Income $1,393 $1,164 20% $4,018 $3,307 21%
Earnings per
Share $1.84 $1.56 18% $5.34 $4.45 20%
Operating Cash
Flow $2,931 $1,116 NM $4,023 $2,952 36%
-------------- ------ ------ --- ------ ------ ---
The Boeing Company (NYSE: BA) reported fourth-quarter net income rose to $1.4 billion, or $1.84 per share, on revenue of $19.6 billion. The results reflect continued strong core performance across the company's businesses, a $0.52 per share impact related to a favorable tax settlement, and higher pension expense (Table 1). Fourth-quarter 2010 results included a $0.50 per share favorable tax settlement.
Net income for the full year increased to $4.0 billion, or $5.34 per share, on revenue of $68.7 billion, which included the impact of the favorable tax settlement ($0.53 per share for the year). Full-year 2010 results included the $0.50 per share favorable tax settlement and a $0.20 per share tax charge resulting from health care legislation.
Earnings guidance for 2012 has been established at between $4.05 and $4.25 per share reflecting solid core performance and higher pension expense. Revenue guidance for 2012 is between $78 and $80 billion.
"Strong fourth-quarter operating performance, record revenue and backlog, and expanded earnings and cash flow capped a year of substantial progress for Boeing in 2011," said Jim McNerney, Boeing chairman, president, and chief executive officer. "Major accomplishments of our team during the year included certifying and delivering the first 787s and 747-8s, winning the U.S. Air Force Tanker program, launching the 737 MAX, and securing both an important U.S. missile defense contract and a key agreement for F-15s to Saudi Arabia."
"We enter 2012 with renewed momentum, and proven business and product strategies. With a record backlog and intense focus on productivity, we are well positioned to deliver growth and increased competitiveness, even as we face constrained U.S. defense spending and pension headwinds. Our priorities for the year are to continue with disciplined increases in production rates for our commercial airplane customers, and to build on our strong position in defense, space and security with aggressive pursuit of growth in core, adjacent and international markets," he said.
Table 2. Cash Flow
Fourth
Quarter Full Year
------- ---------
(Millions) 2011 2010 2011 2010
---------- ---- ---- ---- ----
Operating Cash Flow $2,931 $1,116 $4,023 $2,952
Less Additions to Property, Plant &
Equipment ($571) ($400) ($1,713) ($1,125)
-------
Free Cash Flow* $2,360 $716 $2,310 $1,827
-------------------------------------- ------ ---- ------ ------
* Non-GAAP measure. A complete definition of Boeing's use of non-GAAP
measures, identified by an asterisk (*), is found on page 9, "Non-GAAP
Measure Disclosures."
Boeing's quarterly operating cash flow was $2.9 billion, with strong operating performance more than offsetting continued investment in the 787 and 747-8 programs. For the full year, operating cash flow was $4.0 billion. Free cash flow* was $2.4 billion in the quarter (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances
Quarter-End
-----------
(Billions) 4Q11 3Q11
---------- ---- ----
Cash $10.1 $5.9
Marketable Securities (1) $1.2 $3.3
---- ----
Total $11.3 $9.2
Debt Balances:
The Boeing Company $9.0 $9.0
Boeing Capital Corporation $3.4 $3.4
---- ----
Total Consolidated Debt $12.4 $12.4
----------------------- ----- -----
(1) Marketable securities consists primarily of time deposits due
within one year classified as "short-term investments."
Cash and investments in marketable securities totaled $11.3 billion at year-end (Table 3), up from $9.2 billion at the beginning of the quarter. Debt was unchanged in the quarter.
Total company backlog at year-end was a record $356 billion, up from $332 billion at the beginning of the quarter. Net orders for the quarter were $42 billion and included a significant mix of wide-body commercial airplanes. Backlog is up $34.6 billion from prior year-end, reflecting $103 billion of net orders in 2011.
Segment Results
Commercial Airplanes
Table 4. Commercial
Airplanes Operating
Results
Fourth
Quarter Full Year
------- ---------
(Dollars in
Millions) 2011 2010 Change 2011 2010 Change
----------- ---- ---- ------ ---- ---- ------
Commercial
Airplanes
Deliveries 128 116 10% 477 462 3%
Revenues $10,695 $8,184 31% $36,171 $31,834 14%
Earnings from
Operations $981 $627 56% $3,495 $3,006 16%
Operating
Margins 9.2% 7.7% 1.5 Pts 9.7% 9.4% 0.3 Pts
--------- --- --- ------- --- --- -------
Boeing Commercial Airplanes fourth-quarter revenue increased by 31 percent to $10.7 billion on higher delivery volume and mix. Operating margin was 9.2 percent, reflecting lower R&D partially offset by the dilutive impact of initial 787 and 747-8 deliveries and higher period costs (Table 4).
For the full year, revenue increased by 14 percent on higher delivery volume, increased services revenue and mix. Operating margin was 9.7 percent, reflecting improved mix and lower R&D partially offset by higher period costs and the dilutive impact of initial 787 and 747-8 deliveries.
During the quarter, the first 747-8 Freighter was delivered to Cargolux and the 747-8 Intercontinental achieved FAA certification. Also during the quarter, the company and the International Association of Machinists & Aerospace Workers reached agreement on a four-year contract extension primarily related to machinists in Puget Sound.
At year-end, the company had over 1,000 orders and commitments for the 737 MAX, including 150 firm orders from launch customer Southwest Airlines.
Commercial Airplanes booked 379 net orders during the quarter and 805 during the full year. Backlog remains strong with more than 3,700 airplanes valued at a record $296 billion.
Boeing Defense, Space & Security
Table 5. Defense, Space &
Security Operating Results
Fourth
Quarter Full Year
------- ---------
(Dollars in
Millions) 2011 2010 Change 2011 2010 Change
----------- ---- ---- ------ ---- ---- ------
Revenues
Boeing Military
Aircraft $3,949 $3,627 9% $14,947 $14,238 5%
Network & Space
Systems $1,967 $2,434 (19%) $8,673 $9,455 (8%)
Global Services
& Support $2,555 $2,104 21% $8,356 $8,250 1%
------ ------ --- ------ ------
Total BDS
Revenues $8,471 $8,165 4% $31,976 $31,943 0%
Earnings from
Operations
Boeing Military
Aircraft $374 $315 19% $1,526 $1,250 22%
Network & Space
Systems $170 $218 (22%) $690 $711 (3%)
Global Services
& Support $321 $283 13% $942 $914 3%
---- ---- --- ---- ----
Total BDS
Earnings from
Operations $865 $816 6% $3,158 $2,875 10%
Operating
Margins 10.2% 10.0% 0.2 Pts 9.9% 9.0% 0.9 Pts
--------- ---- ---- ------- --- --- -------
Boeing Defense, Space & Security's fourth-quarter revenue increased by 4 percent to $8.5 billion, while operating margin was 10.2 percent (Table 5).
For the full year, revenue was unchanged at $32.0 billion. Operating margin increased to 9.9 percent, driven by higher Boeing Military Aircraft (BMA) margins.
BMA fourth-quarter revenue increased to $3.9 billion, due to Airborne Early Warning & Control (AEW&C) mix and higher KC-767 International Tanker deliveries partially offset by fewer C-17 deliveries. Operating margin increased to 9.5 percent, reflecting strong execution across various programs. Fourth-quarter 2010 included charges for higher costs on the AEW&C program. During the quarter, the U.S. Government and Saudi Arabia reached agreement on the purchase of 84 new F-15SA aircraft and upgrades to an additional 70 F-15Ss. Additionally, BMA was awarded the P-8A low rate initial production lot II production award from the U.S. Navy.
Network & Space Systems (N&SS) fourth-quarter revenue decreased to $2.0 billion, due to lower volume driven by termination of the Brigade Combat Team Modernization program. Operating margin decreased to 8.6 percent, reflecting higher R&D. During the quarter, N&SS was awarded the development and sustainment contract for Ground-based Midcourse Defense from the U.S. Missile Defense Agency. Also during the quarter, N&SS delivered the first 702 medium power satellite.
Global Services & Support (GS&S) fourth-quarter revenue increased to $2.6 billion, due to higher revenues in integrated logistics. Operating margin decreased to 12.6 percent, reflecting the current defense contracting environment. During the quarter, GS&S was awarded the C-17 Globemaster III Integrated Sustainment Program from the U.S. Air Force.
Backlog at Defense, Space & Security was $60 billion.
Additional Financial Information
Table 6. Additional
Financial Information
Fourth
Quarter Full Year
------- ---------
(Dollars in
Millions) 2011 2010 Change 2011 2010 Change
----------- ---- ---- ------ ---- ---- ------
Revenues
Boeing Capital
Corporation $116 $145 (20%) $532 $639 (17%)
Other segment $31 $31 $138 $138
Unallocated items
and eliminations $242 $25 ($82) ($248)
Earnings from
Operations
Boeing Capital
Corporation ($8) $6 NM $125 $152 (18%)
Other segment
income/
(expense) $43 ($73) $54 ($327)
Unallocated items
and eliminations ($284) ($273) ($988) ($735)
Other income/
(expense), net ($29) $32 $47 $52
Interest and debt
expense ($124) ($132) ($498) ($516)
Effective tax
rate 3.9% -16.3% 25.6% 26.5%
------------- --- ----- ---- ----
At year-end, Boeing Capital Corporation's (BCC) portfolio balance was $4.3 billion, unchanged from the beginning of the quarter and down from $4.7 billion at the start of the year. BCC's earnings decreased due to a smaller portfolio and higher asset impairments. BCC's debt-to-equity ratio was unchanged at 6.2-to-1.
The "Other" segment includes unallocated activities of Engineering, Operations and Technology, Shared Services Group as well as certain intercompany guarantees provided to BCC. Other segment earnings of $43 million in the fourth quarter 2011 were driven by assigning an upgraded credit rating category to certain financing receivables.
The loss in unallocated items and eliminations increased due to higher pension and deferred compensation expense partially offset by a charitable trust contribution that impacted fourth-quarter 2010. Total pension expense for the fourth quarter was $344 million, as compared to $254 million in the same period last year. A total of $291 million was allocated to the operating segments in the quarter, up from $244 million in the same period last year, and $53 million was recognized in unallocated items, compared to $10 million in the same period last year.
The company's income tax expense of $57 million in the quarter (compared to a benefit of $163 million in the same period last year) included a $397 million non-cash gain due to an IRS settlement for tax years 2004 through 2006. Fourth-quarter 2010 included a $371 million non-cash gain due to an IRS settlement and a benefit of $154 million due to the extension of the R&D credit.
Outlook
The company's 2012 financial guidance (Table 7) reflects continued strong core performance, generating a 7 percent increase in adjusted earnings per share*, which is offset by higher pension expense and other items.
Table 7. Financial Outlook 2012
(Dollars in Billions, except per-share data) ----
--------------------------------------------
The Boeing Company
Revenue $78 - 80
Earnings Per Share (GAAP) $4.05 - 4.25
Operating Cash Flow (1) > $5.0
Boeing Commercial Airplanes
585 -
Deliveries (2) 600
Revenue $47.5 - 49.5
8.5% -
Operating Margin 9%
Boeing Defense, Space & Security
Revenue
Boeing Military Aircraft ~ $15.0
Network & Space Systems ~ $7.25
Global Services & Support ~ $8.0
------
Total BDS Revenue $30.0 - 30.5
Operating Margin
Boeing Military Aircraft ~ 9.25%
Network & Space Systems ~ 7.5%
Global Services & Support ~ 10.5%
-------
Total BDS Operating Margin > 9.0%
Boeing Capital Corporation
Portfolio Size Lower
Revenue ~ $0.4
Return on Assets ~ 0.5%
Research & Development $3.3 - 3.5
Capital Expenditures ~ $2.0
Pension Expense $2.6
--------------- ----
(1) After discretionary cash pension contributions of $1.5
billion and assuming new aircraft financings under $0.5
billion.
(2) 2012 is sold out and includes an expected 70 to 85 787 and
747-8 deliveries, of which approximately half are 787
aircraft.
* Non-GAAP measure. A complete definition of Boeing's use of
non-GAAP measures, identified by an asterisk (*), is found
on page 9, "Non-GAAP Measure Disclosures." A complete
reconciliation is attached to this release.
Boeing's 2012 revenue guidance is between $78 and $80 billion. Earnings guidance for 2012 is established at between $4.05 and $4.25 per share. Total pension expense in 2012 is expected to be $2.6 billion (of which approximately $1.0 billion is expected to be recorded in unallocated items and eliminations) or $2.21 per share, an increase of $0.83 per share from 2011. Operating cash flow is expected to be greater than $5.0 billion in 2012, including $1.5 billion of discretionary pension contributions.
Commercial Airplanes' 2012 deliveries are expected to be between 585 and 600 airplanes and is sold out. This includes an expected 70 to 85 787 and 747-8 deliveries, of which approximately half are 787 aircraft. Commercial Airplanes' 2012 revenue is expected to be between $47.5 and $49.5 billion with operating margins between 8.5 and 9 percent.
Defense, Space & Security's revenue for 2012 is expected to be between $30.0 and $30.5 billion with operating margins greater than 9.0 percent.
Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2012, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation. BCC's debt-to-equity ratio is expected to return to 5.0-to-1 in the first quarter of 2012 due to the repayment of maturing debt.
Boeing's 2012 R&D forecast is between $3.3 and $3.5 billion. Capital expenditures for 2012 are expected to be approximately $2.0 billion.
Non-GAAP Measure Disclosures
Management believes that the non-GAAP (Generally Accepted Accounting Principles) measures (indicated by an asterisk *) used in this report provide investors with important perspectives into the company's ongoing business performance. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently. The following definitions are provided:
Free Cash Flow
Free cash flow is defined as GAAP operating cash flow less 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 internally to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.
Increase in Adjusted Earnings Per Share
Adjusted earnings per share is defined as GAAP diluted earnings per share adjusted for certain significant charges or credits. Management believes the increase in adjusted earnings per share is important to understanding the company's on-going operations and provide additional insights into underlying business performance. Significant charges or credits are described in the attachments to this release which provide reconciliations between GAAP earnings per share and adjusted earnings per share.
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) our commercial development programs, planned production rate increases across multiple commercial airline programs and the overall health of our production system; (4) changing 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 Corporation'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 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: Scott Fitterer or Jennifer Mack (312) 544-2140
Communications: Chaz Bickers (312) 544-2002
The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Twelve months Three months
ended ended
December 31 December 31
(Dollars in millions,
except per share data) 2011 2010 2011 2010
----------------------- ---- ---- ---- ----
Sales of products $57,401 $52,586 $16,960 $13,569
Sales of services 11,334 11,720 2,595 2,981
-----------------
Total revenues 68,735 64,306 19,555 16,550
Cost of products (46,642) (42,194) (14,307) (11,025)
Cost of services (9,097) (9,489) (1,920) (2,352)
Boeing Capital Corporation
interest expense (128) (160) (34) (36)
--------------------------
Total costs and expenses (55,867) (51,843) (16,261) (13,413)
------------------------ ------- ------- ------- -------
12,868 12,463 3,294 3,137
Income from operating
investments, net 278 267 76 80
General and administrative
expense (3,408) (3,644) (864) (977)
Research and development
expense, net (3,918) (4,121) (913) (1,134)
Gain/(loss) on
dispositions, net 24 6 4 (3)
------------------ --- --- --- ---
Earnings from operations 5,844 4,971 1,597 1,103
Other income/(expense),
net 47 52 (29) 32
Interest and debt expense (498) (516) (124) (132)
-------------------------
Earnings before income
taxes 5,393 4,507 1,444 1,003
Income tax
(expense)/benefit (1,382) (1,196) (57) 163
------------------ ------ ------ --- ---
Net earnings from
continuing operations 4,011 3,311 1,387 1,166
Net gain/(loss) on
disposal of discontinued
operations, net of taxes
of ($4), $2, ($3) and $1 7 (4) 6 (2)
Net earnings $4,018 $3,307 $1,393 $1,164
============ ====== ====== ====== ======
Basic earnings per share
from continuing
operations $5.38 $4.50 $1.85 $1.57
Net gain/(loss) on
disposal of discontinued
operations, net of taxes 0.01 (0.01) 0.01
------------------------- ---- ----- ----
Basic earnings per share $5.39 $4.49 $1.86 $1.57
======================== ===== ===== ===== =====
Diluted earnings per share
from continuing
operations $5.33 $4.46 $1.83 $1.56
Net gain/(loss) on
disposal of discontinued
operations, net of taxes 0.01 (0.01) 0.01
------------------------- ---- ----- ----
Diluted earnings per share $5.34 $4.45 $1.84 $1.56
========================== ===== ===== ===== =====
Cash dividends paid per
share $1.68 $1.68 $0.42 $0.42
======================= ===== ===== ===== =====
Weighted average diluted
shares (millions) 753.1 744.3 757.1 747.0
======================== ===== ===== ===== =====
The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited)
December December
31 31
(Dollars in millions, except per share
data) 2011 2010
Assets
Cash and cash equivalents $10,049 $5,359
Short-term and other investments 1,223 5,158
Accounts receivable, net 5,793 5,422
Current portion of customer financing, net 476 285
Deferred income taxes 29 31
Inventories, net of advances and progress
billings 32,240 24,317
Total current assets 49,810 40,572
Customer financing, net 4,296 4,395
Property, plant and equipment, net of
accumulated depreciation of $13,993 and
$13,322 9,313 8,931
Goodwill 4,945 4,937
Acquired intangible assets, net 3,044 2,979
Deferred income taxes 5,892 4,031
Investments 1,043 1,111
Other assets, net of accumulated
amortization of $717 and $630 1,643 1,609
-------------------------------- ----- -----
Total assets $79,986 $68,565
======= =======
Liabilities and equity
Accounts payable $8,406 $7,715
Accrued liabilities 12,239 13,802
Advances and billings in excess of related
costs 15,496 12,323
Deferred income taxes and income taxes
payable 2,780 607
Short-term debt and current portion of
long-term debt 2,353 948
-------------------------------------- ----- ---
Total current liabilities 41,274 35,395
Accrued retiree health care 7,520 8,025
Accrued pension plan liability, net 16,537 9,800
Non-current income taxes payable 122 418
Other long-term liabilities 907 592
Long-term debt 10,018 11,473
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 4,033 3,866
Treasury stock, at cost - 267,556,388 and
277,002,059 shares (16,603) (17,187)
Retained earnings 27,524 24,784
Accumulated other comprehensive loss (16,500) (13,758)
Total shareholders' equity 3,515 2,766
Noncontrolling interest 93 96
----------------------- --- ---
Total equity 3,608 2,862
------------ ----- -----
Total liabilities and equity $79,986 $68,565
============================ ======= =======
The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Twelve months ended
December 31
(Dollars in millions) 2011 2010
--------------------- ---- ----
Cash flows - operating activities:
Net earnings $4,018 $3,307
Adjustments to reconcile net earnings to
net cash provided by operating
activities:
Non-cash items -
Share-based plans expense 186 215
Depreciation 1,457 1,510
Amortization of acquired intangible
assets 203 217
Amortization of debt discount/premium
and issuance costs 15 19
Investment/asset impairment charges, net 119 174
Customer financing valuation provision (269) 51
(Gain)/loss on disposal of discontinued
operations (11) 6
Gain on dispositions, net (24) (6)
Other charges and credits, net 500 512
Excess tax benefits from share-based
payment arrangements (36) (19)
Changes in assets and liabilities -
Accounts receivable (292) 8
Inventories, net of advances and progress
billings (10,012) (7,387)
Accounts payable 1,164 313
Accrued liabilities 237 668
Advances and billings in excess of
related costs 3,173 238
Income taxes receivable, payable and
deferred 1,262 822
Other long-term liabilities 127 328
Pension and other postretirement plans 2,126 1,335
Customer financing, net (6) 717
Other 86 (76)
-----
Net cash provided by operating activities 4,023 2,952
----------------------------------------- ----- -----
Cash flows - investing activities:
Property, plant and equipment additions (1,713) (1,125)
Property, plant and equipment reductions 94 63
Acquisitions, net of cash acquired (42) (932)
Contributions to investments (6,796) (15,548)
Proceeds from investments 10,757 12,425
Reimbursement of Sea Launch guarantee
payments 82
Receipt of economic development program
funds 69 206
Purchase of distribution rights (2)
Net cash provided/(used) by investing
activities 2,369 (4,831)
------------------------------------- ----- ------
Cash flows - financing activities:
New borrowings 799 41
Debt repayments (930) (689)
Repayments of distribution rights
financing (451) (137)
Stock options exercised, other 114 87
Excess tax benefits from share-based
payment arrangements 36 19
Employee taxes on certain share-based
payment arrangements (24) (30)
Dividends paid (1,244) (1,253)
Net cash used by financing activities (1,700) (1,962)
------------------------------------- ------ ------
Effect of exchange rate changes on cash
and cash equivalents (2) (15)
--------------------------------------- --- ---
Net increase/(decrease) in cash and cash
equivalents 4,690 (3,856)
Cash and cash equivalents at beginning of
year 5,359 9,215
----------------------------------------- ----- -----
Cash and cash equivalents at end of
period $10,049 $5,359
=================================== ======= ======
The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Twelve months Three months
ended ended
December 31 December 31
(Dollars in millions) 2011 2010 2011 2010
--------------------- ---- ---- ---- ----
Revenues:
Commercial Airplanes $36,171 $31,834 $10,695 $8,184
Boeing Defense, Space &
Security:
Boeing Military Aircraft 14,947 14,238 3,949 3,627
Network & Space Systems 8,673 9,455 1,967 2,434
Global Services & Support 8,356 8,250 2,555 2,104
------------------------- ----- ----- ----- -----
Total Boeing Defense, Space &
Security 31,976 31,943 8,471 8,165
Boeing Capital Corporation 532 639 116 145
Other segment 138 138 31 31
Unallocated items and
eliminations (82) (248) 242 25
---------------------
Total revenues $68,735 $64,306 $19,555 $16,550
============== ======= ======= ======= =======
Earnings from operations:
Commercial Airplanes $3,495 $3,006 $981 $627
Boeing Defense, Space &
Security:
Boeing Military Aircraft 1,526 1,250 374 315
Network & Space Systems 690 711 170 218
Global Services & Support 942 914 321 283
-------------------------
Total Boeing Defense, Space &
Security 3,158 2,875 865 816
Boeing Capital Corporation 125 152 (8) 6
Other segment 54 (327) 43 (73)
Unallocated items and
eliminations (988) (735) (284) (273)
--------------------- ---- ---- ---- ----
Earnings from operations 5,844 4,971 1,597 1,103
Other income/(expense), net 47 52 (29) 32
Interest and debt expense (498) (516) (124) (132)
-------------------------
Earnings before income taxes 5,393 4,507 1,444 1,003
Income tax (expense)/benefit (1,382) (1,196) (57) 163
---------------------------- ------ ------ --- ---
Net earnings from continuing
operations 4,011 3,311 1,387 1,166
Net gain/(loss) on disposal
of discontinued operations,
net of taxes of ($4), $2,
($3) and $1 7 (4) 6 (2)
Net earnings $4,018 $3,307 $1,393 $1,164
============ ====== ====== ====== ======
Research and development
expense, net:
Commercial Airplanes $2,715 $2,975 $524 $873
Boeing Defense, Space &
Security:
Boeing Military Aircraft 541 589 172 130
Network & Space Systems 476 417 156 90
Global Services & Support 121 130 37 31
------------------------- --- --- --- ---
Total Boeing Defense, Space &
Security 1,138 1,136 365 251
Other segment 65 10 24 10
Total research and
development expense, net $3,918 $4,121 $913 $1,134
========================= ====== ====== ==== ======
Unallocated items and
eliminations:
Share-based plans $(83) $(136) $(20) $(24)
Deferred compensation (61) (112) (65) (28)
Pension (269) 54 (53) (10)
Post-retirement (248) (59) (40) (23)
Capitalized interest (51) (54) (12) (13)
Eliminations and other (276) (428) (94) (175)
---------------------- ---- ---- --- ----
Total $(988) $(735) $(284) $(273)
===== ===== ===== ===== =====
The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
Twelve months ended Three months ended
Deliveries December 31 December 31
----------- -----------
Commercial
Airplanes 2011 2010 2011 2010
---------- ---- ---- ---- ----
737 372 376 91 95
747 9 9
767 20 12 6 3
777 73 74 20 18
787 3 2
Total 477 462 128 116
===== === === === ===
Boeing
Defense,
Space
&
Security
---------
Boeing
Military
Aircraft
F/A-
18
Models 49 50 11 11
F-15E
Eagle 15 13 4 3
C-17
Globemaster 13 14 2 4
KC-767
International
Tanker 3 1 2 1
CH-47
Chinook 32 20 10 7
AH-64
Apache 13 2
AEW&C 3 4 1 1
Network
& Space
Systems
Delta
II 1 1
Delta
IV 1
Commercial
and
Civil
Satellites 1 3 1 1
Military
Satellites 3 1 1
December 31 September 30 December 31
Contractual
backlog
(Dollars
in
billions) 2011 2011 2010
----------- ---- ---- ----
Commercial
Airplanes $293.3 $270.3 $255.6
Boeing
Defense,
Space
&
Security:
Boeing
Military
Aircraft 24.1 24.2 25.1
Network
& Space
Systems 9.1 9.5 9.6
Global
Services
&
Support 13.2 12.9 13.7
--------- ---- ---- ----
Total
Boeing
Defense,
Space
&
Security 46.4 46.6 48.4
Total
contractual
backlog $339.7 $316.9 $304.0
============ ====== ====== ======
Unobligated
backlog $15.8 $14.7 $16.9
=========== ===== ===== =====
Total
backlog $355.5 $331.6 $320.9
======== ====== ====== ======
Workforce 171,700 170,600 160,500
========= ======= ======= =======
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
2012 Increase in Adjusted Earnings Per Share
(Unaudited)
In addition to disclosing results that are determined in accordance
with U.S. generally accepted accounting principles (GAAP), the
company also discloses non-GAAP results that exclude certain
significant charges or credits or highlight certain significant
items that are important to an understanding of the company's
ongoing operations. The company provides reconciliations of its
non-GAAP financial reporting to the most comparable GAAP reporting.
The company believes that discussion of results excluding certain
significant charges or credits provides additional insights into
underlying business performance. The company also believes that it
is useful to highlight the significant impact pensions and the
higher tax rate and shares have on the company's projected 2012
results. The determination of significant charges or credits or
exclusion of certain items may not be comparable to similarly titled
measures used by other companies and may vary from quarter to
quarter.
Year Ended Year Ended
December 31, December 31, 2012 -
2011 Guidance
------------- -------------------
Earnings Per
Share Earnings Per Share
------------- ------------------
GAAP Diluted Earnings Per Share $5.34 $4.05 - 4.25
Favorable Tax Settlement ($0.53) a
Increased Pension Expense $0.83 b
Higher Tax Rate $0.12 c
Higher Shares $0.06 d
Adjusted Earnings Per Share $4.81 $5.06 - 5.26
Weighted Average Diluted Shares
(in millions) 753.1 762.0
2012 Decrease in GAAP Earnings Per
Share (~ 22%)
2012 Increase in Adjusted Earnings
Per Share ~ 7%
Represents favorable tax settlement of $397 million recorded in 2011 related to Internal
Revenue Service (IRS) settlement for 2004 through 2006 tax years, expressed as earnings-
a per-share.
Represents pension expense increase of $934 million (2012 projection of $2,582 million vs.
$1,648 million in 2011), expressed as earnings-per-share. The earnings per share amount is
b presented net of income taxes of approximately 35 percent.
Represents impact of higher tax rate (approximately 35 percent projection in 2012 vs. 33.0
percent in 2011) of $92 million, expressed as earnings-per-share. The 33.0 percent tax rate
in 2011 represents the 2011 GAAP effective income tax rate of 25.6 percent adjusted by 7.4
percent for the $397 million favorable IRS settlement for 2004 through 2006 tax years. Our
c 2012 guidance assumes Congress extends the R&D tax credit for 2012.
Represents impact of higher weighted average diluted shares (762.0 million projection in 2012
d vs. 753.1 million in 2011), expressed as earnings-per-share.
SOURCE Boeing