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Boeing Reports Third-Quarter Results; Raises Cash Flow and EPS Guidance

CHICAGO, Oct. 25, 2017 /PRNewswire/ --

  • Revenue of $24.3 billion, including a record 202 commercial aircraft deliveries
  • GAAP EPS of $3.06 and core EPS (non-GAAP)* of $2.72 on solid execution
  • Strong operating cash flow of $3.4 billion; repurchased 11 million shares for $2.5 billion
  • Backlog remains robust at $474 billion, including nearly 5,700 aircraft in commercial airplane orders
  • Cash flow and EPS guidance raised; segment guidance updated



















Table 1. Summary Financial Results


Third Quarter



Nine Months


(Dollars in Millions, except per share data)


2017

2016

Change

2017

2016

Change









Revenues



$24,309



$23,898


2%



$68,024



$71,285


(5)%










GAAP








Earnings From Operations



$2,689



$2,282


18%



$7,248



$3,651


99%


Operating Margin


11.1%


9.5%


1.6 Pts


10.7%


5.1%


5.6 Pts


Net Earnings



$1,853



$2,279


(19)%



$5,065



$3,264


55%


Earnings Per Share



$3.06



$3.60


(15)%



$8.27



$5.04


64%


Operating Cash Flow



$3,396



$3,202


6%



$10,440



$7,667


36%


Non-GAAP*








Core Operating Earnings



$2,373



$2,194


8%



$6,294



$3,400


85%


Core Operating Margin


9.8%


9.2%


0.6 Pts


9.3%


4.8%


4.5 Pts


Core Earnings Per Share



$2.72



$3.51


(23)%



$7.26



$4.79


52%



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

The Boeing Company [NYSE: BA] reported third-quarter revenue of $24.3 billion with GAAP earnings per share of $3.06 and core earnings per share (non-GAAP)* of $2.72 reflecting strong deliveries, services and delivery mix, and overall solid execution (Table 1).

The company's cash flow guidance is increased to $12.5 billion from $12.25 billion, driven by improved performance. Full year EPS guidance is increased to between $11.20 and $11.40 from $11.10 and $11.30 and core earnings per share (non-GAAP)* guidance is increased to between $9.90 and $10.10 from $9.80 and $10.00 driven by a lower-than-expected tax rate. Full year segment guidance is updated, reflecting the realignment of the company's services businesses into Boeing Global Services (BGS).

"Our teams across all three business segments are driving execution with a focus on both productivity and growth, which has enabled Boeing to deliver solid third quarter financial results, grow cash flow, and raise our 2017 outlook," said Chairman, President and Chief Executive Officer Dennis Muilenburg.

"In the third quarter we successfully launched our newest business segment, Boeing Global Services, leveraging our unique One Boeing advantages to offer complete lifecycle support across the commercial, defense and space sectors. We achieved a number of key milestones in the quarter with the delivery of a record 202 commercial airplanes, including 24 737 MAXs as we continue the smooth introduction of that airplane. On the defense side, we booked $6 billion in new orders, including an initial contract award for the Ground Based Strategic Deterrent program and an award from the U.S. Navy for 14 F/A-18 Super Hornet aircraft."

"We remain focused on accelerating productivity, quality and safety improvements across the company, executing on our future development programs, and capturing new business to ensure our continued growth."



Table 2. Cash Flow


Third Quarter


Nine Months

(Millions)


2017

2016

2017

2016

Operating Cash Flow



$3,396



$3,202



$10,440



$7,667


Less Additions to Property, Plant & Equipment



($399)



($595)



($1,304)



($2,014)


Free Cash Flow*



$2,997



$2,607



$9,136



$5,653



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

Operating cash flow in the quarter of $3.4 billion was driven by solid operating performance and favorable timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 11 million shares for $2.5 billion, leaving $6.5 billion remaining under the current repurchase authorization. The company also paid $0.9 billion in dividends in the quarter, reflecting a 30 percent increase in dividends per share compared to the same period of the prior year.









Table 3. Cash, Marketable Securities and Debt Balances


Quarter-End

(Billions)


Q3 17

Q2 17

Cash



$8.6



$8.7


Marketable Securities1



$1.4



$1.6


Total



$10.0



$10.3


Debt Balances:




The Boeing Company, net of intercompany loans to BCC



$7.8



$7.8


Boeing Capital, including intercompany loans



$3.0



$3.0


Total Consolidated Debt



$10.8



$10.8



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, down slightly from $10.3 billion at the beginning of the quarter (Table 3). Debt was $10.8 billion, unchanged from the beginning of the quarter.

Total company backlog at quarter-end was $474 billion, down from $482 billion at the beginning of the quarter, and included net orders for the quarter of $16 billion.

Segment Results

Commercial Airplanes



















Table 4. Commercial Airplanes


Third Quarter



Nine Months



(Dollars in Millions)


2017

2016

Change

2017

2016

Change









Commercial Airplanes Deliveries


202


188


7%


554


563


(2)%










Revenues1



$14,982



$15,200


(1)%



$41,263



$43,630


(5)%


Earnings from Operations1



$1,483



$1,293


15%



$3,648



$804


354%


Operating Margin1


9.9%


8.5%


1.4 Pts


8.8%


1.8%


7.0 Pts



1 Prior year results have been adjusted to reflect the realignment of the services business

Commercial Airplanes third-quarter revenue was $15.0 billion on planned production rates and delivery mix (Table 4). Third-quarter operating margin increased to 9.9 percent, reflecting higher 787 margins and strong operating performance on production programs, partially offset by additional cost growth of $256 million on the KC-46 Tanker program due to incorporating changes into initial production aircraft as we progress through late-stage testing and the certification process.

During the quarter, Commercial Airplanes delivered a record 202 airplanes, including 24 737 MAX 8 airplanes. The production rate increased to 47 per month on the 737 program, and we confirmed plans to increase the 787 production rate to 14 per month in 2019. Development on 777X is on track as production began on the first complete wing for structural test.

Commercial Airplanes booked 117 net orders during the quarter. Backlog remains robust with nearly 5,700 airplanes valued at $412 billion.

Defense, Space & Security



















Table 5. Defense, Space & Security


Third Quarter



Nine Months



(Dollars in Millions)


2017

2016

Change

2017

2016

Change









Revenues1



$5,470



$5,751


(5)%



$15,520



$17,281


(10)%


Earnings from Operations1



$559



$564


(1)%



$1,670



$1,443


16%


Operating Margin1


10.2%


9.8%


0.4Pts


10.8%


8.4%


2.4 Pts



1 Prior year results have been adjusted to reflect the realignment of the services business

Defense, Space & Security (BDS) third-quarter revenue was $5.5 billion on lower planned deliveries and mix (Table 5). Third-quarter operating margin increased to 10.2 percent, reflecting solid performance and mix, partially offset by KC-46 Tanker cost growth of $73 million.

During the quarter, BDS was awarded contracts from the U.S. Air Force for design of the new Ground-Based Strategic Deterrent defense system and preliminary design of the next presidential aircraft. The U.S. Navy awarded BDS a contract for 14 F/A-18 Super Hornets during the third quarter. Additionally, BDS was selected to design and build seven medium earth orbit satellites for SES.

Backlog at Defense, Space & Security was $46 billion, of which 35 percent represents orders from international customers.

Global Services



















Table 6. Global Services


Third Quarter



Nine Months



(Dollars in Millions)


2017

2016

Change

2017

2016

Change









Revenues



$3,568



$3,506


2%



$10,638



$10,508


1%


Earnings from Operations



$506



$524


(3)%



$1,639



$1,609


2%


Operating Margin


14.2%


14.9%


(0.7) Pts


15.4%


15.3%


0.1 Pts


Global Services third-quarter revenue increased to $3.6 billion, primarily driven by higher commercial parts revenue, partially offset by timing of government services (Table 6). Third-quarter operating margin was 14.2 percent reflecting product and services mix.

During the quarter, Global Services was awarded a contract from the Defense Logistics Agency to supply F/A-18 E/F spare parts, and a contract from the Italian Air Force to provide performance-based logistics services to support the KC-767A tanker aircraft. More than 40 commercial airline customers signed up for our digital navigation applications in the quarter. Additionally, Global Services continues to capture new commercial and government customers through expanded offerings, including those powered by Boeing AnalytX.

Additional Financial Information















Table 7. Additional Financial Information


Third Quarter


Nine Months

(Dollars in Millions)


2017

2016

2017

2016

Revenues






Boeing Capital



$70



$63



$234



$211


Unallocated items, eliminations and other



$219



($622)



$369



($345)


Earnings from Operations






Boeing Capital



$23



$13



$87



$36


Unallocated pension/postretirement



$316



$88



$954



$251


Other unallocated items and eliminations



($198)



($200)



($750)



($492)


Other income, net



$45



$2



$94



$41


Interest and debt expense



($87)



($81)



($267)



($227)


Effective tax rate


30.0%


(3.4)%


28.4%


5.8%


At quarter-end, Boeing Capital's net portfolio balance was $3.4 billion. Total pension expense for the third quarter was $100 million, down from $453 million in the same period of the prior year. Revenue increased in other unallocated items and eliminations primarily due to timing of eliminations of intercompany aircraft deliveries, including those accounted for under operating lease. Other unallocated items and eliminations earnings decreased primarily due to timing of eliminations of intercompany aircraft deliveries, offset by higher deferred compensation. The effective tax rate for the third quarter increased to 30.0 percent primarily due to discrete tax benefits recorded in the prior year.

Outlook

The company's 2017 guidance is updated below (Table 8).





Table 8. 2017 Financial Outlook

Current


Prior

(Dollars in Billions, except per share data)

Guidance


Guidance





The Boeing Company




Revenue

$90.5 - 92.5


$90.5 - 92.5





GAAP Earnings Per Share

$11.20 - 11.40


$11.10 - 11.30

Core Earnings Per Share*

$9.90 - 10.10


$9.80 - 10.00





Operating Cash Flow

~$12.5


~$12.25





Commercial Airplanes




Deliveries

760 - 765


760 - 765

Revenue

$55.5 - 56.5


N/A

Operating Margin

9.0% - 9.5


N/A





Defense, Space & Security




Revenue

$20.5 - 21.5


N/A

Operating Margin

>10.5%


N/A





Global Services




Revenue

$14.0 - 14.5


N/A

Operating Margin

15.0% - 15.5


N/A





Boeing Capital




Portfolio Size

Stable


Stable

Revenue

~$0.3


~$0.3

Pre-Tax Earnings

~$0.08


~$0.08





Research & Development

~ $3.4


~ $3.6

Capital Expenditures

~ $2.0


~ $2.0

Pension Expense 1

~ $0.6


~ $0.6

Effective Tax Rate

~ 28.5%


~ 29.0%


1 Approximately ($1.0) billion is expected to be recorded in unallocated items and eliminations

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

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding unallocated pension and other postretirement benefit expense. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of unallocated pension and other postretirement benefit expense. Unallocated pension and other postretirement benefit expense represents the portion of pension and other post-retirement costs that are not recognized by business segments for segment reporting purposes. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings/per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude unallocated 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 14.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow without capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

Caution Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) general conditions in the economy and our industry, including those due to regulatory changes; (2) our reliance on our commercial airline customers; (3) the overall health of our aircraft production system, planned production rate increases across multiple commercial airline programs, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (4) changing budget and appropriation levels and 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'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, epidemics, sanctions 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:


Maurita Sutedja or Ben Hackman (312) 544-2140

Communications:


Allison Bone (312) 544-2002

The Boeing Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)
















Nine months ended
September 30


Three months ended
September 30

(Dollars in millions, except per share data)

2017


2016


2017


2016


Sales of products


$60,484



$63,563



$21,825



$21,494


Sales of services

7,540


7,722


2,484


2,404


Total revenues

68,024


71,285


24,309


23,898







Cost of products

(49,856)


(55,117)


(18,050)


(17,907)


Cost of services

(5,730)


(6,163)


(1,910)


(1,983)


Boeing Capital interest expense

(53)


(46)


(27)


(14)


Total costs and expenses

(55,639)


(61,326)


(19,987)


(19,904)



12,385


9,959


4,322


3,994


Income from operating investments, net

169


220


49


69


General and administrative expense

(2,888)


(2,617)


(915)


(923)


Research and development expense, net

(2,418)


(3,901)


(767)


(857)


Loss on dispositions, net



(10)




(1)


Earnings from operations

7,248


3,651


2,689


2,282


Other income, net

94


41


45


2


Interest and debt expense

(267)


(227)


(87)


(81)


Earnings before income taxes

7,075


3,465


2,647


2,203


Income tax (expense)/benefit

(2,010)


(201)


(794)


76


Net earnings


$5,065



$3,264



$1,853



$2,279







Basic earnings per share


$8.37



$5.09



$3.10



$3.64







Diluted earnings per share


$8.27



$5.04



$3.06



$3.60







Cash dividends paid per share


$4.26



$3.27



$1.42



$1.09







Weighted average diluted shares (millions)

612.8


647.9


606.3


632.7


The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited)









(Dollars in millions, except per share data)

September 30
2017


December 31
2016


Assets



Cash and cash equivalents


$8,569



$8,801


Short-term and other investments

1,463


1,228


Accounts receivable, net

10,644


8,832


Current portion of customer financing, net

435


428


Inventories, net of advances and progress billings

43,031


43,199


Total current assets

64,142


62,488


Customer financing, net

3,039


3,773


Property, plant and equipment, net of accumulated depreciation of $17,401 and $16,883

12,712


12,807


Goodwill

5,344


5,324


Acquired intangible assets, net

2,523


2,540


Deferred income taxes

298


332


Investments

1,270


1,317


Other assets, net of accumulated amortization of $509 and $497

1,679


1,416


Total assets


$91,007



$89,997


Liabilities and equity



Accounts payable


$12,718



$11,190


Accrued liabilities

14,008


14,691


Advances and billings in excess of related costs

26,695


23,869


Short-term debt and current portion of long-term debt

988


384


Total current liabilities

54,409


50,134


Deferred income taxes

2,884


1,338


Accrued retiree health care

5,826


5,916


Accrued pension plan liability, net

15,514


19,943


Other long-term liabilities

1,449


2,221


Long-term debt

9,780


9,568


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

6,754


4,762


Treasury stock, at cost - 414,910,219 and 395,109,568 shares

(41,745)


(36,097)


Retained earnings

44,052


40,714


Accumulated other comprehensive loss

(13,036)


(13,623)


Total shareholders' equity

1,086


817


Noncontrolling interests

59


60


Total equity

1,145


877


Total liabilities and equity


$91,007



$89,997


The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)










Nine months ended
September 30

(Dollars in millions)

2017


2016


Cash flows – operating activities:



Net earnings


$5,065



$3,264


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



Non-cash items –



Share-based plans expense

151


144


Depreciation and amortization

1,487


1,364


Investment/asset impairment charges, net

75


61


Customer financing valuation expense/(benefit)

4


(5)


Loss on dispositions, net



10


Other charges and credits, net

190


219


Changes in assets and liabilities –



Accounts receivable

(1,983)


(517)


Inventories, net of advances and progress billings

254


4,334


Accounts payable

778


1,366


Accrued liabilities

112


82


Advances and billings in excess of related costs

2,828


(1,717)


Income taxes receivable, payable and deferred

1,465


(725)


Other long-term liabilities

25


(67)


Pension and other postretirement plans

(550)


144


Customer financing, net

635


(195)


Other

(96)


(95)


Net cash provided by operating activities

10,440


7,667


Cash flows – investing activities:



Property, plant and equipment additions

(1,304)


(2,014)


Property, plant and equipment reductions

30


14


Contributions to investments

(2,847)


(928)


Proceeds from investments

2,612


956


Purchase of distribution rights

(131)



Other

4


8


Net cash used by investing activities

(1,636)


(1,964)


Cash flows – financing activities:



New borrowings

876


1,323


Debt repayments

(83)


(836)


Repayments of distribution rights and other asset financing



(24)


Stock options exercised

291


192


Employee taxes on certain share-based payment arrangements

(118)


(83)


Common shares repurchased

(7,500)


(6,501)


Dividends paid

(2,575)


(2,084)


Net cash used by financing activities

(9,109)


(8,013)


Effect of exchange rate changes on cash and cash equivalents

73


(6)


Net decrease in cash and cash equivalents

(232)


(2,316)


Cash and cash equivalents at beginning of year

8,801


11,302


Cash and cash equivalents at end of period


$8,569



$8,986


The Boeing Company and Subsidiaries

Summary of Business Segment Data

(Unaudited)
















Nine months ended
September 30


Three months ended
September 30

(Dollars in millions)

2017


2016


2017


2016


Revenues:





Commercial Airplanes


$41,263



$43,630



$14,982



$15,200


Defense, Space & Security

15,520


17,281


5,470


5,751


Global Services

10,638


10,508


3,568


3,506


Boeing Capital

234


211


70


63


Unallocated items, eliminations and other

369


(345)


219


(622)


Total revenues


$68,024



$71,285



$24,309



$23,898


Earnings from operations:





Commercial Airplanes


$3,648



$804



$1,483



$1,293


Defense, Space & Security

1,670


1,443


559


564


Global Services

1,639


1,609


506


524


Boeing Capital

87


36


23


13


Segment operating profit

7,044


3,892


2,571


2,394


Unallocated items, eliminations and other

204


(241)


118


(112)


Earnings from operations

7,248


3,651


2,689


2,282


Other income, net

94


41


45


2


Interest and debt expense

(267)


(227)


(87)


(81)


Earnings before income taxes

7,075


3,465


2,647


2,203


Income tax (expense)/benefit

(2,010)


(201)


(794)


76


Net earnings


$5,065



$3,264



$1,853



$2,279







Research and development expense, net:





Commercial Airplanes


$1,755



$3,152



$538



$633


Defense, Space & Security

599


666


207


201


Global Services

101


126


38


41


Other

(37)


(43)


(16)


(18)


Total research and development expense, net


$2,418



$3,901



$767



$857







Unallocated items, eliminations and other





Share-based plans


($67)



($50)



($21)



($9)


Deferred compensation

(174)


(38)


(78)


(33)


Amortization of previously capitalized interest

(72)


(71)


(21)


(23)


Eliminations and other unallocated items

(437)


(333)


(78)


(135)


Sub-total (included in core operating earnings)

(750)


(492)


(198)


(200)


Pension

808


129


275


50


Postretirement

146


122


41


38


Total unallocated items, eliminations and other


$204



($241)



$118



($112)


The Boeing Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Summary of Business Segment Data
(Unaudited)

Effective July 1, 2017, we now operate in four principal segments: Commercial Airplanes; Defense, Space & Security, Global Services and Boeing Capital. The prior period amounts have been reclassified to conform to the current period's presentation as set forth below.





















Three months ended

(Dollars in millions)

06/30/17


03/31/17


12/31/16


09/30/16


06/30/16


03/31/16


Revenues:







Commercial Airplanes


$13,817



$12,464



$14,382



$15,200



$15,643



$12,787


Defense, Space & Security

5,198


4,852


5,282


5,751


5,394


6,136


Global Services

3,564


3,506


3,417


3,506


3,581


3,421


Boeing Capital

72


92


87


63


84


64


Unallocated items, eliminations and other

88


62


118


(622)


53


224


Total revenues


$22,739



$20,976



$23,286



$23,898



$24,755



$22,632


Earnings from operations:







Commercial Airplanes


$1,274



$891



$1,191



$1,293



($1,281)



$792


Defense, Space & Security

619


492


523


564


362


517


Global Services

564


569


568


524


539


546


Boeing Capital

25


39


23


13


18


5


Segment operating profit/(loss)

2,482


1,991


2,305


2,394


(362)


1,860


Unallocated items, eliminations and other

53


33


(122)


(112)


(57)


(72)


Earnings/(loss) from operations

2,535


2,024


2,183


2,282


(419)


1,788


Other income/(loss), net

27


22


(1)


2


13


26


Interest and debt expense

(93)


(87)


(79)


(81)


(73)


(73)


Earnings/(loss) before income taxes

2,469


1,959


2,103


2,203


(479)


1,741


Income tax (expense)/benefit

(708)


(508)


(472)


76


245


(522)


Net earnings/(loss)


$1,761



$1,451



$1,631



$2,279



($234)



$1,219









Research and development expense, net:







Commercial Airplanes


$592



$625



$554



$633



$1,860



$659


Defense, Space & Security

196


196


149


201


233


232


Global Services

35


28


27


41


47


38


Other

(10)


(11)


(4)


(18)


(13)


(12)


Total research and development expense, net


$813



$838



$726



$857



$2,127



$917


The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)


Deliveries


Nine months ended
September 30


Three months ended
September 30


Commercial Airplanes


2017


2016



2017


2016


737


381


368



145


120


747


8

(1)

8


(3)

4


5

(3)

767


7


10



2


5


777


58


73



16


22


787


100


104



35


36


Total


554


563



202


188


Note: Deliveries under operating lease are identified by parentheses.









Defense, Space & Security








AH-64 Apache (New)


8


25



3


10


AH-64 Apache (Remanufactured)


43


27



15


9


C-17 Globemaster III



4







CH-47 Chinook (New)


6


17



2


7


CH-47 Chinook (Renewed)


28


23



9


7


F-15 Models


11


11



4


4


F/A-18 Models


18


20



6


6


P-8 Models


14


13



5


4


Commercial and Civil Satellites


3


3





2


Military Satellites




2





1
























Total backlog (Dollars in millions)






September 30
2017


December 31
2016

Commercial Airplanes







$412,185


$413,036

Defense, Space & Security






45,852


44,825

Global Services






16,251


15,631

Total backlog







$474,288


$473,492









Contractual backlog







$459,871


$458,277

Unobligated backlog







$14,417


$15,215

Total backlog







$474,288


$473,492

Workforce






142,300


150,500


The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin, and core earnings per share with the most directly comparable GAAP financial measures, earnings from operations, operating margin, and diluted earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial measures.
















(Dollars in millions, except per share data)

Third Quarter


Nine Months


Guidance


2017

2016

2017

2016

2017

Revenues


$24,309



$23,898



$68,024



$71,285









GAAP Earnings From Operations


$2,689



$2,282



$7,248



$3,651









Unallocated Pension Income


($275)



($50)



($808)



($129)



Unallocated Other Postretirement Benefit Income


($41)



($38)



($146)



($122)



Unallocated Pension and Other Postretirement Benefit Income


($316)



($88)



($954)



($251)


~($1,220)

Core Operating Earnings (non-GAAP)


$2,373



$2,194



$6,294



$3,400













GAAP Diluted Earnings Per Share


$3.06



$3.60



$8.27



$5.04


$11.20 - 11.40

Unallocated Pension Income


($0.45)



($0.08)



($1.31)



($0.20)



Unallocated Postretirement Benefit Income


($0.07)



($0.06)



($0.24)



($0.19)


($1.30)

Provision for deferred income taxes on adjustments (1)


$0.18



$0.05



$0.54



$0.14



Core Earnings Per Share (non-GAAP)


$2.72



$3.51



$7.26



$4.79


$9.90 - 10.10







Weighted Average Diluted Shares (millions)

606.3


632.7


612.8


647.9


~ 610



















(1) The income tax impact is calculated using the tax rate in effect for the non-GAAP adjustments.

View original content:http://www.prnewswire.com/news-releases/boeing-reports-third-quarter-results-raises-cash-flow-and-eps-guidance-300542971.html

SOURCE Boeing