Boeing Reports Fourth-Quarter Results

CHICAGO, Jan. 29, 2020 /PRNewswire/ --

Fourth Quarter 2019

    --  Financial results continue to be significantly impacted by the 737 MAX
        grounding
    --  Revenue of $17.9 billion, GAAP loss per share of ($1.79) and core
        (non-GAAP)* loss per share of ($2.33)

Full-Year 2019

    --  Revenue of $76.6 billion, GAAP loss per share of ($1.12) and core
        (non-GAAP)* loss per share of ($3.47)
    --  Operating cash flow of ($2.4) billion; cash and marketable securities of
        $10.0 billion
    --  Total backlog of $463 billion, including over 5,400 commercial airplanes


        Table 1. Summary Financial
         Results                            Fourth Quarter                           Full Year



        (Dollars in Millions,
         except per share data)        2019              2018       Change      2019                2018           Change

    ---



        Revenues                    $17,911           $28,341        (37)%   $76,559            $101,127            (24)%




                     GAAP

    ---

        (Loss)/Earnings From
         Operations                ($2,204)           $4,175   
      
      NM    ($1,975)            $11,987     
       
       NM


        Operating Margin            (12.3)%            14.7%  
      
      NM      (2.6)%              11.9%    
       
       NM


        Net (Loss)/Earnings        ($1,010)           $3,424   
      
      NM      ($636)            $10,460     
       
       NM


        (Loss)/Earnings Per Share   ($1.79)            $5.93   
      
      NM     ($1.12)             $17.85     
       
       NM


        Operating Cash Flow        ($2,220)           $2,947   
      
      NM    ($2,446)            $15,322     
       
       NM


                     Non-GAAP*

    ---

        Core Operating
         (Loss)/Earnings           ($2,526)           $3,867   
      
      NM    ($3,390)            $10,660     
       
       NM


        Core Operating Margin       (14.1)%            13.6%  
      
      NM      (4.4)%              10.5%    
       
       NM


        Core (Loss)/Earnings Per
         Share                      ($2.33)            $5.48   
      
      NM     ($3.47)             $16.01     
       
       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 fourth-quarter revenue of $17.9 billion, GAAP loss per share of ($1.79) and core loss per share (non-GAAP)* of ($2.33), primarily reflecting the impacts of the 737 MAX grounding (Table 1). Boeing recorded operating cash flow of ($2.2) billion and paid $1.2 billion of dividends.

"We recognize we have a lot of work to do," said Boeing President and Chief Executive Officer David Calhoun. "We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public. We are committed to transparency and excellence in everything we do. Safety will underwrite every decision, every action and every step we take as we move forward. Fortunately, the strength of our overall Boeing portfolio of businesses provides the financial liquidity to follow a thorough and disciplined recovery process."



       
                Table 2. Cash Flow                        Fourth Quarter                     Full Year




       
                (Millions)                           2019    2018              2019        2018

    ---


       
                Operating Cash Flow              ($2,220) $2,947          ($2,446)    $15,322



       Less Additions to Property, Plant & Equipment   ($447) ($495)         ($1,834)   ($1,722)




       
                Free Cash Flow*                  ($2,667) $2,452          ($4,280)    $13,600

    ---



                            *Non-GAAP measure; complete
                             definitions of Boeing's non-GAAP
                             measures are on page 6, "Non-GAAP
                             Measures Disclosures."

Operating cash flow was ($2.2) billion in the quarter, primarily reflecting the impact of the 737 MAX grounding as well as timing of receipts and expenditures (Table 2). During the quarter, the company paid $1.2 billion of dividends.



       
                Table 3. Cash, Marketable Securities and Debt Balances Quarter-End




       
                (Billions)                                             Q4 19       Q3 19



       
                Cash                                                    $9.5              $9.8



       
                Marketable Securities
                
                  (1)    $0.5              $1.1



       
                Total                                                  $10.0             $10.9



       
                Debt Balances:



       The Boeing Company, net of intercompany loans to BCC                $25.3             $22.8



       Boeing Capital, including intercompany loans                         $2.0              $1.9



       
                Total Consolidated Debt                                $27.3             $24.7

    ---



                                           1 Marketable securities consists
                                            primarily of time deposits due
                                            within one year classified as
                                            "short-term investments."

Cash and investments in marketable securities totaled $10.0 billion, compared to $10.9 billion at the beginning of the quarter (Table 3). Debt was $27.3 billion, up from $24.7 billion at the beginning of the quarter primarily due to increased commercial paper borrowings.

Total company backlog at quarter-end was $463 billion and included net orders for the quarter of $13 billion.

Segment Results

Commercial Airplanes


        Table 4.
         Commercial
         Airplanes                Fourth Quarter                  Full Year



        (Dollars
         in
         Millions)           2019          2018  Change      2019          2018   Change





         Commercial
         Airplanes
         Deliveries            79           238   (67)%       380           806    (53)%




        Revenues           $7,462       $16,531   (55)%   $32,255       $57,499    (44)%


         (Loss)/Earnings
         from
         Operations      ($2,844)       $2,600    NM    ($6,657)       $7,830     NM


        Operating
         Margin           (38.1)%        15.7%   NM     (20.6)%        13.6%    NM

    ---

Commercial Airplanes fourth-quarter revenue was $7.5 billion and fourth-quarter operating margin decreased to (38.1) percent reflecting lower 737 deliveries and an additional pre-tax charge of $2.6 billion related to estimated potential concessions and other considerations to customers related to the 737 MAX grounding (Table 4). The estimated costs to produce 737 aircraft included in the accounting quantity increased by $2.6 billion during the quarter, primarily to reflect updated production and delivery assumptions. In addition, the suspension of 737 MAX production and a gradual resumption of production at low production rates will result in approximately $4 billion of abnormal production costs that will be expensed as incurred, primarily in 2020.

Commercial Airplanes delivered 79 airplanes during the quarter, including 45 787's, and captured orders for 30 737 MAX aircraft at the Dubai Air Show and 2 777 freighters for Lufthansa. The 787 program also booked 36 net orders in the quarter. As previously announced, the 787 production rate will be reduced from the current rate of 14 airplanes per month to 12 airplanes per month in late 2020. Based on the current environment and near-term market outlook, the production rate is expected to be further adjusted to 10 airplanes per month in early 2021, and return to 12 airplanes per month in 2023. The first flight of the 777X was completed on January 25, and first delivery is targeted for 2021.

Commercial Airplanes backlog included over 5,400 airplanes valued at $377 billion.

Defense, Space & Security


         Table
         5.
         Defense,
         Space
         &
         Security          Fourth Quarter                      Full Year



         (Dollars
         in
         Millions)    2019        2018        Change      2019         2018     Change




        Revenues    $5,962      $6,874           (13)% $26,227      $26,392        (1%)


         Earnings
         from
         Operations    $31        $771           (96)%  $2,608       $1,657         57%


         Operating
         Margin       0.5%      11.2%     (10.7) Pts    9.9%        6.3%    3.6 Pts

    ---

Defense, Space & Security fourth-quarter revenue decreased to $6.0 billion primarily driven by lower volume across the portfolio as well as the impact of a Commercial Crew charge (Table 5). Fourth-quarter operating margin decreased to 0.5 percent due to a $410 million pre-tax Commercial Crew charge primarily to provision for an additional uncrewed mission for the Commercial Crew program, performance and mix. NASA is evaluating the data received during the December 2019 mission to determine if another uncrewed mission is required.

During the quarter, Defense, Space & Security received an award for 10 Space Launch System core stages and up to 8 Exploration Upper Stages. Defense, Space & Security also received contracts for the remanufacture of 47 AH-64E Apache helicopters for three countries and to upgrade the NATO Airborne Warning & Control System fleet. Significant milestones achieved during the quarter included the delivery of the first modified MV-22 Osprey to the U.S. Marine Corps and delivery of the first P-8A Poseidon aircraft to the United Kingdom Royal Air Force. Defense, Space & Security also conducted a Commercial Crew spacecraft uncrewed Orbital Flight Test.

Backlog at Defense, Space & Security was $64 billion, of which 29 percent represents orders from customers outside the U.S.

Global Services


         Table
         6.
         Global
         Services          Fourth Quarter                     Full Year



         (Dollars
         in
         Millions)    2019        2018        Change     2019         2018       Change




        Revenues    $4,648      $4,908           (5)% $18,468      $17,056            8%


         Earnings
         from
         Operations   $684        $737           (7)%  $2,697       $2,536            6%


         Operating
         Margin      14.7%      15.0%     (0.3) Pts   14.6%       14.9%    (0.3) Pts

    ---

Global Services fourth-quarter revenue was $4.6 billion, primarily driven by lower commercial services volume (Table 6). Fourth-quarter operating margin decreased to 14.7 percent primarily due to a charge related to the retirement of the Aviall brand and mix of products and services, partially offset by a gain on divestiture.

During the quarter, Global Services was awarded V-22 support contracts for Japan and the U.S. and AH-64 and CH-47 global support for the U.S. Army. Global Services signed a multi-year Landing Gear Exchange services agreement with LATAM Airlines Group and a 5-year digital navigation renewal agreement with Saudi Arabian Airlines. Global Services also expanded its digital offerings by launching ForeFlight Dispatch and signed a contract with Flexjet to be the inaugural customer.

Additional Financial Information



       
                Table 7. Additional Financial Information        Fourth Quarter            Full Year




       
                (Dollars in Millions)                       2019      2018            2019        2018



       
                Revenues



       Boeing Capital                                            $37       $60            $244        $274



       Unallocated items, eliminations and other              ($198)    ($32)         ($635)      ($94)



       
                Earnings from Operations



       Boeing Capital                                          ($58)       $8             $28         $79



       FAS/CAS service cost adjustment                          $322      $308          $1,415      $1,327



       Other unallocated items and eliminations               ($339)   ($249)       ($2,066)   ($1,442)



       
                Other income, net                           $104       $29            $438         $92



       
                Interest and debt expense                 ($242)   ($158)         ($722)     ($475)



       
                Effective tax rate                         56.9%    15.4%          71.8%       9.9%

    ---

At quarter-end, Boeing Capital's net portfolio balance was $2.3 billion. Revenue in other unallocated items and eliminations decreased primarily due to the timing of eliminations for intercompany aircraft deliveries. The change in earnings from other unallocated items and eliminations is primarily due to higher deferred compensation expense and increased enterprise research and development investment. Interest and debt expense increased due to higher debt balances. The fourth quarter 2019 effective tax rate reflects a $371 million tax benefit related to the settlement of state tax audits 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 (Loss)/Earnings, Core Operating Margin and Core (Loss)/Earnings Per Share

Core operating (loss)/earnings is defined as GAAP (loss)/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 (loss)/earnings expressed as a percentage of revenue. Core (loss)/earnings per share is defined as GAAP diluted (loss)/earnings per share excluding the net (loss)/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 (loss)/earnings, core operating margin and core (loss)/earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core (loss)/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 page 13-14.

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 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, delays in the resumption of production, lower than planned production rates and/or delivery rates, and increased considerations to customers and suppliers, (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)




                                                                          Twelve months ended                         Three months ended
                                                     December 31                     December 31


                     (Dollars in millions,
                      except per share data)           2019                   2018                   2019        2018

    ---                                                                                                        ---

        Sales of products                           $66,094                $90,229                $15,580     $25,381


        Sales of services                            10,465                 10,898                  2,331       2,960

    ---                                                                                                        ---

                     Total revenues                  76,559                101,127                 17,911      28,341




        Cost of products                           (62,877)              (72,922)              (16,293)   (19,788)


        Cost of services                            (9,154)               (8,499)               (2,402)    (2,284)


        Boeing Capital interest
         expense                                       (62)                  (69)                  (13)       (18)

    ---                                                                                                        ---

                     Total costs and expenses      (72,093)              (81,490)              (18,708)   (22,090)

    ---                                                                                                        ---

                                                      4,466                 19,637                  (797)      6,251


        (Loss)/income from
         operating investments,
         net                                            (4)                   111                    (1)        (1)


        General and
         administrative expense                     (3,909)               (4,567)               (1,052)    (1,222)


        Research and development
         expense, net                               (3,219)               (3,269)                 (749)      (852)


        Gain/(loss) on
         dispositions, net                              691                     75                    395         (1)

    ---                                                                                                        ---

                     (Loss)/earnings from
                      operations                    (1,975)                11,987                (2,204)      4,175


        Other income, net                               438                     92                    104          29


        Interest and debt expense                     (722)                 (475)                 (242)      (158)

    ---                                                                                                        ---

                     (Loss)/earnings before
                      income taxes                  (2,259)                11,604                (2,342)      4,046


        Income tax benefit/
         (expense)                                    1,623                (1,144)                 1,332       (622)

    ---                                                                                                        ---

                     Net (loss)/earnings             ($636)               $10,460               ($1,010)     $3,424

    ===                                                                                                        ===



                     Basic (loss)/earnings per
                      share                         ($1.12)                $18.05                ($1.79)      $6.00

    ===                                                                                                        ===



                     Diluted (loss)/earnings
                      per share                     ($1.12)                $17.85                ($1.79)      $5.93

    ===                                                                                                        ===



                     Weighted average diluted
                      shares (millions)               566.0                  586.2                  565.4       577.5

    ===                                                                                                        ===


                                                                              
              
                The Boeing Company and Subsidiaries


                                                                         
              
                Consolidated Statements of Financial Position


                                                                                                 
              (Unaudited)





       
                (Dollars in millions, except per share data)                                                                         
        
     December 31 
     December 31
                                                                                                                                                        2019           2018

                                                                                                                                                                       ---


       
                Assets



       Cash and cash equivalents                                                                                                                     $9,485         $7,637



       Short-term and other investments                                                                                                                 545            927



       Accounts receivable, net                                                                                                                       3,266          3,879



       Unbilled receivables, net                                                                                                                      9,043         10,025



       Current portion of customer financing, net                                                                                                       162            460



       Inventories                                                                                                                                   76,622         62,567



       Other current assets                                                                                                                           3,106          2,335

    ---


       
                Total current assets                                                                                                            102,229         87,830



       Customer financing, net                                                                                                                        2,136          2,418



       Property, plant and equipment, net of accumulated depreciation of $19,342 and $18,568                                                         12,502         12,645



       Goodwill                                                                                                                                       8,060          7,840



       Acquired intangible assets, net                                                                                                                3,338          3,429



       Deferred income taxes                                                                                                                            683            284



       Investments                                                                                                                                    1,092          1,087



       Other assets, net of accumulated amortization of $580 and $503                                                                                 3,585          1,826

    ---


       
                Total assets                                                                                                                   $133,625       $117,359

    ===


       
                Liabilities and equity



       Accounts payable                                                                                                                             $15,553        $12,916



       Accrued liabilities                                                                                                                           22,868         14,808



       Advances and progress billings                                                                                                                51,551         50,676



       Short-term debt and current portion of long-term debt                                                                                          7,340          3,190

    ---


       
                Total current liabilities                                                                                                        97,312         81,590



       Deferred income taxes                                                                                                                            413          1,736



       Accrued retiree health care                                                                                                                    4,540          4,584



       Accrued pension plan liability, net                                                                                                           16,276         15,323



       Other long-term liabilities                                                                                                                    3,422          3,059



       Long-term debt                                                                                                                                19,962         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                                                                                                                     6,745          6,768



       Treasury stock, at cost                                                                                                                     (54,914)      (52,348)



       Retained earnings                                                                                                                             50,644         55,941



       Accumulated other comprehensive loss                                                                                                        (16,153)      (15,083)

    ---


       Total shareholders' equity                                                                                                                   (8,617)           339



       Noncontrolling interests                                                                                                                         317             71

    ---


       
                Total equity                                                                                                                    (8,300)           410



       
                Total liabilities and equity                                                                                                   $133,625       $117,359

    ===


                  
              
                The Boeing Company and Subsidiaries


                 
              
                Consolidated Statements of Cash Flows


                                    
              (Unaudited)




                                                                                              Twelve months ended
                                                                                  December 31



       
                (Dollars in millions)                                          2019          2018

    ---                                                                                           ---


       
                Cash flows - operating activities:



       Net (loss)/earnings                                                       ($636)      $10,460


        Adjustments to reconcile net earnings to net cash provided by operating
         activities:



       Non-cash items -



       Share-based plans expense                                                    212           202



       Depreciation and amortization                                              2,271         2,114


        Investment/asset impairment charges, net                                     443            93


        Customer financing valuation adjustments                                     250           (3)



       Gain on dispositions, net                                                  (691)         (75)



       Other charges and credits, net                                               334           247



       Changes in assets and liabilities -



       Accounts receivable                                                          603         (795)



       Unbilled receivables                                                         982       (1,826)



       Advances and progress billings                                               737         2,636



       Inventories                                                             (12,391)          568



       Other current assets                                                       (682)           98



       Accounts payable                                                           1,600             2



       Accrued liabilities                                                        7,781         1,117


        Income taxes receivable, payable and deferred                            (2,476)        (180)



       Other long-term liabilities                                                (621)           87


        Pension and other postretirement plans                                     (777)        (153)



       Customer financing, net                                                      419           120



       Other                                                                        196           610

    ---

                     Net cash (used)/provided by operating
                      activities                                                 (2,446)       15,322

    ---                                                                                           ---


       
                Cash flows - investing activities:


        Property, plant and equipment additions                                  (1,834)      (1,722)


        Property, plant and equipment reductions                                     334           120



       Acquisitions, net of cash acquired                                         (455)      (3,230)



       Proceeds from dispositions                                                   464



       Contributions to investments                                             (1,658)      (2,607)



       Proceeds from investments                                                  1,759         2,898



       Purchase of distribution rights                                            (127)         (69)



       Other                                                                       (13)         (11)

    ---                                                                                           ---

                     Net cash used by investing activities                       (1,530)      (4,621)

    ---                                                                                           ---


       
                Cash flows - financing activities:



       New borrowings                                                            25,389         8,548



       Debt repayments                                                         (12,171)      (7,183)


        Contributions from noncontrolling interests                                    7            35



       Stock options exercised                                                       58            81


        Employee taxes on certain share-based payment
         arrangements                                                              (248)        (257)



       Common shares repurchased                                                (2,651)      (9,000)



       Dividends paid                                                           (4,630)      (3,946)



       Other                                                                       (15)


                     Net cash provided/(used) by financing
                      activities                                                   5,739      (11,722)

    ---                                                                                           ---

        Effect of exchange rate changes on cash and
         cash equivalents, including restricted                                      (5)         (53)

    ---                                                                                           ---

                     Net increase/(decrease) in cash & cash
                      equivalents, including restricted                            1,758       (1,074)


        Cash & cash equivalents, including restricted,
         at beginning of year                                                      7,813         8,887

                                                                                                  ---

                     Cash & cash equivalents, including restricted,
                      at end of period                                             9,571         7,813

    ---                                                                                           ---

        Less restricted cash & cash equivalents,
         included in Investments                                                      86           176


                     Cash and cash equivalents at end of period                   $9,485        $7,637

    ===                                                                                           ===

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.


                                                                                     Twelve months ended                       Three months ended
                                                                         December 31                  December 31



       
                (Dollars in millions)                               2019             2018                   2019     2018

    ---


       Revenues:



       Commercial Airplanes                                          $32,255          $57,499                 $7,462  $16,531



       Defense, Space & Security                                      26,227           26,392                  5,962    6,874



       Global Services                                                18,468           17,056                  4,648    4,908



       Boeing Capital                                                    244              274                     37       60



       Unallocated items, eliminations and other                       (635)            (94)                 (198)    (32)




       
                Total revenues                                   $76,559         $101,127                $17,911  $28,341

    ===


       (Loss)/earnings from operations:



       Commercial Airplanes                                         ($6,657)          $7,830               ($2,844)  $2,600



       Defense, Space & Security                                       2,608            1,657                     31      771



       Global Services                                                 2,697            2,536                    684      737



       Boeing Capital                                                     28               79                   (58)       8

    ---


       
                Segment operating (loss)/profit                  (1,324)          12,102                (2,187)   4,116



       Unallocated items, eliminations and other                     (2,066)         (1,442)                 (339)   (249)



       FAS/CAS service cost adjustment                                 1,415            1,327                    322      308

    ---


       
                (Loss)/earnings from operations                  (1,975)          11,987                (2,204)   4,175



       Other income, net                                                 438               92                    104       29



       Interest and debt expense                                       (722)           (475)                 (242)   (158)

    ---


       
                (Loss)/earnings before income taxes              (2,259)          11,604                (2,342)   4,046



       Income tax benefit/(expense)                                    1,623          (1,144)                 1,332    (622)

    ---


       
                Net (loss)/earnings                               ($636)         $10,460               ($1,010)  $3,424

    ===




       
                Research and development expense, net:



       Commercial Airplanes                                           $1,956           $2,188                   $427     $572



       Defense, Space & Security                                         758              788                    189      175



       Global Services                                                   121              161                     19       42



       Other                                                             384              132                    114       63



       
                Total research and development expense, net       $3,219           $3,269                   $749     $852

    ===




       
                Unallocated items, eliminations and other:



       Share-based plans                                               ($65)           ($76)                  ($8)   ($16)



       Deferred compensation                                           (174)            (19)                  (20)      93



       Amortization of previously capitalized interest                  (89)            (92)                  (21)    (25)



       Customer financing impairment                                   (250)



       Research and development expense, net                           (384)           (132)                  (97)    (63)



       Eliminations and other unallocated items                      (1,104)         (1,123)                 (193)   (238)



       
                Sub-total (included in core operating earnings)  (2,066)         (1,442)                 (339)   (249)

    ===


       Pension FAS/CAS service cost adjustment                         1,071            1,005                    248      225



       Postretirement FAS/CAS service cost adjustment                    344              322                     74       83



       
                FAS/CAS service cost adjustment                    1,415            1,327                   $322     $308

    ---


       
                Total                                             ($651)          ($115)                 ($17)     $59

    ===


                                                                                  
              
                The Boeing Company and Subsidiaries


                                                                                      
              
                Operating and Financial Data


                                                                                                     
              (Unaudited)





       
                Deliveries                                                                                                                                            Twelve months ended                             Three months ended
                                                                                                                                                              December 31                        December 31

                                                                                                                                                                                                     ---


       Commercial Airplanes                                                                                   2019                                       2018                        2019                       2018

    ---

                                                                                                                737         127                                        580                        9                    173


                                                                                                                747           7                                          6                        2                      1


                                                                                                                767          43                                         27                       11                     14


                                                                                                                777          45                       (2)               48                       12          (1)        11


                                                                                                                787         158                                        145                       45                     39



                                                                         
              
                Total                     380                                        806                       79                    238




       
                Note: Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses





       Defense, Space & Security

    ---

                                                                         
              AH-64 Apache (New)                      37                                                                 10


                                                                         
              AH-64 Apache (Remanufactured)           74                                         23                       18                     11


                                                                         
              C-17 Globemaster III                     1


                                                                         
              C-40A                                    2


                                                                         
              CH-47 Chinook (New)                     13                                         13                                              2


                                                                         
              CH-47 Chinook (Renewed)                 22                                         17                        6                      3


                                                                         
              F-15 Models                             11                                         10                        4                      2


                                                                         
              F/A-18 Models                           23                                         17                        7                      7


                                                                         
              KC-46 Tanker                            28                                                                  7


                                                                         
              P-8 Models                              18                                         16                        4                      6


                                                                         
              Commercial and Civil Satellites          2                                          1                        1


                                                                         
              Military Satellites                                                                1                                              1







       
                Total backlog 
                (Dollars in millions)                                   December 31                         December 31
                                                                                                               2019
                                                                                                                          2018

    ---


       Commercial Airplanes                                                                               $376,593                             $408,140



       Defense, Space & Security                                                                            63,908                               61,277



       Global Services                                                                                      22,902                               21,064



       
                Total backlog                                                                         $463,403                             $490,481

    ===




       Contractual backlog                                                                                $436,473                             $462,070



       Unobligated backlog                                                                                  26,930                               28,411




       
                Total backlog                                                                         $463,403                             $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 (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 6 of this release for additional information on the use of these non-GAAP financial measures.



       
                (Dollars in millions, except per share data)      Fourth Quarter 2019            Fourth Quarter 2018


                                                                   
     
              $ millions Per Share                      
     $ millions   
     Per Share




       
                Revenues                                                       17,911                                       28,341



       
                (Loss)/earnings from operations (GAAP)                        (2,204)                                       4,175



       
                Operating margin (GAAP)                                       (12.3)%                                       14.7%





       
                FAS/CAS service cost adjustment:



       Pension FAS/CAS service cost adjustment                                      (248)                                       (225)



       Postretirement FAS/CAS service cost adjustment                                (74)                                        (83)




       
                FAS/CAS service cost adjustment                                 (322)                                       (308)



       
                Core operating (loss)/earnings (non-GAAP)                    ($2,526)                                      $3,867

    ===


       
                Core operating margin (non-GAAP)                              (14.1)%                                       13.6%





       
                Diluted (loss)/earnings per share (GAAP)                                ($1.79)                                              $5.93



       Pension FAS/CAS service cost adjustment                                     ($248)    (0.44)                            ($225)           (0.39)



       Postretirement FAS/CAS service cost adjustment                                (74)    (0.13)                              (83)           (0.14)



       Non-operating pension expense                                                 (94)    (0.17)                              (45)           (0.08)



       Non-operating postretirement expense                                            27       0.05                                 24              0.04



       Provision for deferred income taxes on adjustments 1                            82       0.15                                 69              0.12




       
                Subtotal of adjustments                                        ($307)   ($0.54)                            ($260)          ($0.45)



       
                Core (loss)/earnings per share (non-GAAP)                               ($2.33)                                              $5.48

    ===




       
                Weighted average diluted shares (in millions)                             565.4                                               577.5



                                           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, (loss)/earnings from operations, operating margin, and diluted (loss)/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)      Full Year 2019            Full Year 2018


                                                                   
     
         $ millions Per Share                 
     $ millions   
     Per Share




       
                Revenues                                                  76,559                                 101,127



       
                (Loss)/earnings from operations (GAAP)                   (1,975)                                 11,987



       
                Operating margin (GAAP)                                   (2.6)%                                  11.9%





       
                FAS/CAS service cost adjustment:



       Pension FAS/CAS service cost adjustment                               (1,071)                                (1,005)



       Postretirement FAS/CAS service cost adjustment                          (344)                                  (322)




       
                FAS/CAS service cost adjustment                          (1,415)                                (1,327)



       
                Core operating (loss)/earnings (non-GAAP)               ($3,390)                                $10,660

    ===


       
                Core operating margin (non-GAAP)                          (4.4)%                                  10.5%





       
                Diluted (loss)/earnings per share (GAAP)                           ($1.12)                                        $17.85



       Pension FAS/CAS service cost adjustment                              ($1,071)    (1.89)                     ($1,005)           (1.71)



       Postretirement FAS/CAS service cost adjustment                          (344)    (0.61)                        (322)           (0.55)



       Non-operating pension expense                                           (374)    (0.66)                        (143)           (0.24)



       Non-operating postretirement expense                                      107       0.19                           101              0.17



       Provision for deferred income taxes on adjustments 1                      353       0.62                           287              0.49




       
                Subtotal of adjustments                                 ($1,329)   ($2.35)                     ($1,082)          ($1.84)



       
                Core (loss)/earnings per share (non-GAAP)                          ($3.47)                                        $16.01

    ===




       
                Weighted average diluted shares (in millions)                        566.0                                          586.2



                                           1
                                            The income tax impact is
                                            calculated using the U.S.
                                            corporate statutory tax
                                            rate
                .

View original content:http://www.prnewswire.com/news-releases/boeing-reports-fourth-quarter-results-300995213.html

SOURCE Boeing