8-K
BOEING CO false 0000012927 0000012927 2020-07-29 2020-07-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 29, 2020

                        THE BOEING COMPANY                        

(Exact name of registrant as specified in its charter)

                                        1-442                                        

Commission file number

 

Delaware

  

91-0425694

(State or other jurisdiction of

incorporation or organization)

   (I.R.S. Employer Identification No.)

100 N. Riverside Plaza, Chicago, IL

  

60606-1596

(Address of principal executive offices)   (Zip Code)

                            (312) 544-2000                            

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading Symbol(s)

   

Name of each exchange on which registered

Common Stock, $5.00 Par Value   BA    New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On July 29, 2020, The Boeing Company issued a press release reporting its financial results for the second quarter of 2020. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

Exhibit No.

  

Description

99.1   Press Release issued by The Boeing Company dated July 29, 2020, reporting Boeing’s financial results for the second quarter of 2020, furnished herewith.
104   104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

    THE BOEING COMPANY    

 

   (Registrant)  

 

 

  

 

/s/ Robert E. Verbeck

  

 

 

   Robert E. Verbeck  

 

 

   Senior Vice President and Controller  

 

 

   July 29, 2020  

 

 

 

 

3

EX-99.1
Exhibit 99.1
 


pressreleaseheadera02.jpg
Boeing Reports Second-Quarter Results
▪
Financial results continue to be significantly impacted by COVID-19 and the 737 MAX grounding
▪
Revenue of $11.8 billion, GAAP loss per share of ($4.20) and core (non-GAAP)* loss per share of ($4.79)
▪
Operating cash flow of ($5.3) billion; cash and marketable securities of $32.4 billion
▪
Total backlog of $409 billion, including more than 4,500 commercial airplanes
Table 1. Summary Financial Results
 
Second Quarter
 
 
 
First Half
 
 
(Dollars in Millions, except per share data)
 
2020
 
2019
 
Change
 
2020
 
2019
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 

$11,807

 

$15,751

 
(25)%
 

$28,715

 

$38,668

 
(26)%
 
 
 
 
 
 

 
 
 
 
 

GAAP
 
 
 
 
 

 
 
 
 
 

Loss From Operations
 

($2,964
)
 

($3,380
)
 
NM
 

($4,317
)
 

($1,030
)
 
NM
Operating Margin
 
(25.1
)%
 
(21.5
)%
 
NM
 
(15.0
)%
 
(2.7
)%
 
NM
Net Loss
 

($2,395
)
 

($2,942
)
 
NM
 

($3,036
)
 

($793
)
 
NM
Loss Per Share
 

($4.20
)
 

($5.21
)
 
NM
 

($5.31
)
 

($1.40
)
 
NM
Operating Cash Flow
 

($5,280
)
 

($590
)
 
NM
 

($9,582
)
 

$2,198

 
NM
Non-GAAP*
 
 
 
 
 

 
 
 
 
 

Core Operating Loss
 

($3,319
)
 

($3,745
)
 
NM
 

($5,019
)
 

($1,759
)
 
NM
Core Operating Margin
 
(28.1
)%
 
(23.8
)%
 
NM
 
(17.5
)%
 
(4.5
)%
 
NM
Core Loss Per Share
 

($4.79
)
 

($5.82
)
 
NM
 

($6.49
)
 

($2.60
)
 
NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures."    
CHICAGO, July 29, 2020 – The Boeing Company [NYSE: BA] reported second-quarter revenue of $11.8 billion, GAAP loss per share of ($4.20) and core loss per share (non-GAAP)* of ($4.79), primarily reflecting the impacts of COVID-19 and the 737 MAX grounding (Table 1). Boeing recorded operating cash flow of ($5.3) billion.
“We remained focused on the health of our employees and communities while proactively taking action to navigate the unprecedented commercial market impacts from the COVID-19 pandemic,” said Boeing President and Chief Executive Officer Dave Calhoun. “We’re working closely with our customers, suppliers and global partners to manage the challenges to our industry, bridge to recovery and rebuild to be stronger on the other side.”
In the second quarter, Boeing restarted production operations across key sites following temporary pauses to protect its workforce and introduce rigorous new health and safety procedures. Despite the challenges, Boeing continued to deliver across key commercial, defense, space and services programs. The company also resumed early stages of production on the 737 program with a focus on safety, quality and operational excellence. Following the lead of global regulators, Boeing made steady progress toward the safe return to service of the 737, including completion of FAA certification flight tests.
To align to the sharp reduction in commercial market demand in light of COVID-19, the company is taking several actions including further adjusting commercial airplane production rates and reducing employment levels.

1

“The diversity of our balanced portfolio and our government services, defense and space programs provide some critical stability for us in the near-term as we take tough but necessary steps to adapt for new market realities,” Calhoun said. “We are taking the right action to ensure we're well positioned for the future by strengthening our culture, improving transparency, rebuilding trust and transforming our business to become a better, more sustainable Boeing. Air travel has always proven to be resilient - and so has Boeing.”
Table 2. Cash Flow
 
Second Quarter
 
First Half
(Millions)
 
2020
 
2019
 
2020
 
2019
Operating Cash Flow
 

($5,280
)
 

($590
)
 

($9,582
)
 

$2,198

Less Additions to Property, Plant & Equipment
 

($348
)
 

($421
)
 

($776
)
 

($922
)
Free Cash Flow*
 

($5,628
)
 

($1,011
)
 

($10,358
)
 

$1,276

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures."    
Operating cash flow was ($5.3) billion in the quarter, primarily reflecting lower commercial deliveries and services volume due to COVID-19 and the 737 MAX grounding, as well as timing of receipts and expenditures (Table 2).
Table 3. Cash, Marketable Securities and Debt Balances
 
Quarter-End
(Billions)
 
Q2 20
 
Q1 20
Cash
 

$20.0

 

$15.0

Marketable Securities1
 

$12.4



$0.5

Total
 

$32.4

 

$15.5

Debt Balances:
 
 
 
 
The Boeing Company, net of intercompany loans to BCC
 

$59.5

 

$36.9

Boeing Capital, including intercompany loans
 

$1.9

 

$2.0

Total Consolidated Debt
 

$61.4

 

$38.9

1 Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."
Cash and investments in marketable securities increased to $32.4 billion, compared to $15.5 billion at the beginning of the quarter, driven by the issuance of new debt (Table 3). Debt was $61.4 billion, up from $38.9 billion at the beginning of the quarter due to the issuance of new debt, partially offset by repayment of maturing debt.
Total company backlog at quarter-end was $409 billion.

2

Segment Results
Commercial Airplanes
Table 4. Commercial Airplanes
 
Second Quarter
 
 
 
First Half
 
 
(Dollars in Millions)
 
2020
 
2019
 
Change
 
2020
 
2019
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Airplanes Deliveries
 
20

 
90

 
(78)%
 
70

 
239

 
(71)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 

$1,633



$4,722

 
(65)%
 

$7,838

 

$16,544

 
(53)%
Loss from Operations
 

($2,762
)


($4,946
)
 
NM
 

($4,830
)
 

($3,773
)
 
NM
Operating Margin
 
(169.1
)%

(104.7
)%
 
NM
 
(61.6
)%
 
(22.8
)%
 
NM
Commercial Airplanes second-quarter revenue and operating margin decreased reflecting lower delivery volume, partially offset by a lower 737 MAX customer consideration charge of $551 million in the quarter compared to a $5.6 billion charge in the same period last year. Second-quarter operating margin was also negatively impacted by $712 million of abnormal production costs related to the 737 program, $468 million of severance expense and $133 million of abnormal production costs from the temporary suspension of operations in response to COVID-19.
The 737 program resumed early stages of production in May and expects to continue to produce at low rates for the remainder of 2020. The COVID-19 pandemic has significantly impacted air travel and reduced near-term demand, resulting in lower production and delivery rate assumptions. Commercial Airplanes expects to gradually increase the 737 production rate to 31 per month by the beginning of 2022, with further gradual increases to correspond with market demand. Estimated potential concessions and other considerations to customers related to the 737 MAX grounding increased by $551 million in the quarter. There was no material change to estimated abnormal production costs.
Commercial Airplanes has further updated its production rate assumptions this quarter to reflect impacts of COVID-19 on its demand outlook, and will continue to assess them on an ongoing basis. The 787 production rate will be reduced to 6 per month in 2021. The 777/777X combined production rate will be gradually reduced to 2 per month in 2021, with 777X first delivery targeted for 2022. At this time, production rate assumptions have not changed on the 767 and 747 programs.
Commercial Airplanes delivered 20 airplanes during the quarter, and backlog included over 4,500 airplanes valued at $326 billion.

3


Defense, Space & Security
Table 5. Defense, Space & Security
 
Second Quarter
 
 
 
First Half
 
 
(Dollars in Millions)
 
2020
 
2019
 
Change
 
2020
 
2019
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 

$6,588

 

$6,579

 
—
 

$12,630

 

$13,166

 
(4)%
Earnings from Operations
 

$600

 

$975

 
(38)%
 

$409

 

$1,827

 
(78)%
Operating Margin
 
9.1
%
 
14.8
%
 
(5.7) Pts
 
3.2
%
 
13.9
%
 
(10.7) Pts
Defense, Space & Security second-quarter revenue was $6.6 billion, reflecting COVID-19 impact on derivative aircraft programs, partially offset by higher volume across the remainder of the portfolio (Table 5). Second-quarter operating margin decreased to 9.1 percent primarily due to a gain on sale of property in the second quarter of 2019 and a $151 million KC-46A Tanker charge primarily driven by additional fixed cost allocation resulting from lower commercial airplane production volume due to COVID-19.
During the quarter, Defense, Space & Security received an award for three additional MQ-25 unmanned aerial refueling aircraft for the U.S. Navy, as well as contracts for Cruise Missile Systems for the U.S. Navy and a contract for 24 AH-64E Apache helicopters for the Kingdom of Morocco. Defense, Space & Security completed Critical Design Review for the T-7A advanced trainer, achieved first flight and delivery of the F/A-18 U.S. Navy Block III Super Hornet, and achieved first flight of the F-15 Qatar Advanced aircraft. Defense, Space & Security also delivered the 100th U.S. Navy P-8A Poseidon, the 400th V-22 Osprey, and the 2,500th AH-64 Apache.
Backlog at Defense, Space & Security was $64 billion, of which 31 percent represents orders from customers outside the U.S.
Global Services
Table 6. Global Services
 
Second Quarter
 
 
 
First Half
 
 
(Dollars in Millions)
 
2020
 
2019
 
Change
 
2020
 
2019
 
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 

$3,488

 

$4,543

 
(23)%
 

$8,116

 

$9,162

 
(11)%
(Loss)/Earnings from Operations
 

($672
)
 

$687

 
NM
 

$36

 

$1,340

 
NM
Operating Margin
 
(19.3
)%
 
15.1
%
 
NM
 
0.4
%
 
14.6
%
 
NM
Global Services second-quarter revenue decreased to $3.5 billion, driven by lower commercial services volume due to COVID-19, partially offset by higher government services volume (Table 6). Second-quarter operating margin decreased to (19.3) percent primarily due to lower commercial services volume, less favorable mix of products and services, and $923 million of charges related to asset impairments and severance costs as a result of the COVID-19 market environment.
During the quarter, Global Services was awarded a contract modification for P-8A integrated logistics support for the U.S. Navy. Global Services captured an order for four 767-300 freighter conversions for DHL and was awarded a contract for F-15 pre-delivery training support for the Qatar Emiri Air Force. Global Services also delivered the first F/A-18 Super Hornet test aircraft modified for the U.S. Navy Blue Angels.

4


Additional Financial Information
Table 7. Additional Financial Information
 
Second Quarter
 
First Half
(Dollars in Millions)
 
2020
 
2019
 
2020
 
2019
Revenues
 
 
 
 
 
 
 
 
Boeing Capital
 

$69

 

$75

 

$134

 

$141

Unallocated items, eliminations and other
 

$29

 

($168
)
 

($3
)
 

($345
)
Earnings from Operations
 
 
 
 
 
 
 
 
Boeing Capital
 

($7
)
 

$37

 

$17

 

$57

FAS/CAS service cost adjustment
 

$355

 

$365

 

$702

 

$729

Other unallocated items and eliminations
 

($478
)
 

($498
)
 

($651
)
 

($1,210
)
Other income, net
 

$94

 

$107

 

$206

 

$213

Interest and debt expense
 

($553
)
 

($154
)
 

($815
)
 

($277
)
Effective tax rate
 
30.0
%
 
14.2
%
 
38.4
%
 
27.5
%
At quarter-end, Boeing Capital's net portfolio balance was $2.1 billion. Revenue from other unallocated items and eliminations increased primarily due to reserves related to cost accounting litigation recorded in the second quarter of 2019. Interest and debt expense increased due to higher debt balances. The second quarter effective tax rate reflects tax benefits related to the 5 year net operating loss carryback provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act as well as the impact of pre-tax losses.


5


Non-GAAP Measures Disclosures
We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:
Core Operating Earnings, Core Operating Margin and Core Earnings Per Share
Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on page 13.
Free Cash Flow
Free cash flow is GAAP operating cash flow reduced by capital expenditures for property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation of free cash flow to GAAP operating cash flow.



6



Caution Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) the COVID-19 pandemic and related government actions, including with respect to our operations, our liquidity, the health of our customers and suppliers, and future demand for our products and services; (2) the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, lower than planned production rates and/or delivery rates, and increased considerations to customers and suppliers, (3) general conditions in the economy and our industry, including those due to regulatory changes; (4) our reliance on our commercial airline customers; (5) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (6) changing budget and appropriation levels and acquisition priorities of the U.S. government; (7) our dependence on U.S. government contracts; (8) our reliance on fixed-price contracts; (9) our reliance on cost-type contracts; (10) uncertainties concerning contracts that include in-orbit incentive payments; (11) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (12) changes in accounting estimates; (13) changes in the competitive landscape in our markets; (14) our non-U.S. operations, including sales to non-U.S. customers; (15) threats to the security of our or our customers’ information; (16) potential adverse developments in new or pending litigation and/or government investigations; (17) customer and aircraft concentration in our customer financing portfolio; (18) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates; (19) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (20) the adequacy of our insurance coverage to cover significant risk exposures; (21) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (22) work stoppages or other labor disruptions; (23) substantial pension and other postretirement benefit obligations; and (24) potential environmental liabilities.
Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

# # #
Contact:
 
 
 
Investor Relations:
  
Maurita Sutedja or Keely Moos (312) 544-2140
Communications:
  
Michael Friedman media@boeing.com 


7


The Boeing Company and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Six months ended June 30
 
Three months ended June 30
(Dollars in millions, except per share data)
2020

 
2019

 
2020

 
2019

Sales of products

$23,254

 

$33,319

 

$9,063

 

$13,094

Sales of services
5,461

 
5,349

 
2,744

 
2,657

Total revenues
28,715

 
38,668

 
11,807

 
15,751


 
 
 
 
 
 
 
Cost of products
(25,091
)
 
(31,910
)
 
(10,378
)
 
(15,672
)
Cost of services
(4,632
)
 
(4,511
)
 
(2,589
)
 
(2,122
)
Boeing Capital interest expense
(23
)
 
(34
)
 
(11
)
 
(16
)
Total costs and expenses
(29,746
)
 
(36,455
)
 
(12,978
)
 
(17,810
)

(1,031
)
 
2,213

 
(1,171
)
 
(2,059
)
(Loss)/income from operating investments, net
(47
)
 
5

 
(45
)
 
(15
)
General and administrative expense
(2,034
)
 
(1,856
)
 
(1,161
)
 
(672
)
Research and development expense, net
(1,297
)
 
(1,692
)
 
(625
)
 
(826
)
Gain on dispositions, net
92

 
300

 
38

 
192

Loss from operations
(4,317
)
 
(1,030
)
 
(2,964
)
 
(3,380
)
Other income, net
206

 
213

 
94

 
107

Interest and debt expense
(815
)
 
(277
)
 
(553
)
 
(154
)
Loss before income taxes
(4,926
)
 
(1,094
)
 
(3,423
)
 
(3,427
)
Income tax benefit
1,890

 
301

 
1,028

 
485

Net loss
(3,036
)
 
(793
)
 
(2,395
)
 
(2,942
)
Less: net loss attributable to noncontrolling interest
(32
)
 
 
 
(19
)
 
 
Net loss attributable to Boeing Shareholders

($3,004
)
 

($793
)
 

($2,376
)
 

($2,942
)
 
 
 
 
 
 
 
 
Basic loss per share

($5.31
)
 

($1.40
)
 

($4.20
)
 

($5.21
)
 
 
 
 
 
 
 
 
Diluted loss per share

($5.31
)
 

($1.40
)
 

($4.20
)
 

($5.21
)
 
 
 
 
 
 
 
 
Weighted average diluted shares (millions)
566.1

 
566.6

 
566.4

 
565.3






8


The Boeing Company and Subsidiaries
Consolidated Statements of Financial Position
(Unaudited) 
(Dollars in millions, except per share data)
June 30
2020

 
December 31
2019

Assets
 
 
 
Cash and cash equivalents

$19,992

 

$9,485

Short-term and other investments
12,438

 
545

Accounts receivable, net
2,793

 
3,266

Unbilled receivables, net
8,570

 
9,043

Current portion of customer financing, net
115

 
162

Inventories
83,745

 
76,622

Other current assets, net
2,624

 
3,106

Total current assets
130,277

 
102,229

Customer financing, net
2,054

 
2,136

Property, plant and equipment, net of accumulated depreciation of $19,863 and $19,342
12,182

 
12,502

Goodwill
8,064

 
8,060

Acquired intangible assets, net
3,019

 
3,338

Deferred income taxes
729

 
683

Investments
1,066

 
1,092

Other assets, net of accumulated amortization of $617 and $580
5,481

 
3,585

Total assets

$162,872

 

$133,625

Liabilities and equity

 

Accounts payable

$13,700

 

$15,553

Accrued liabilities
22,493

 
22,868

Advances and progress billings
53,367

 
51,551

Short-term debt and current portion of long-term debt
2,922

 
7,340

Total current liabilities
92,482

 
97,312

Deferred income taxes
404

 
413

Accrued retiree health care
4,427

 
4,540

Accrued pension plan liability, net
15,663

 
16,276

Other long-term liabilities
2,821

 
3,422

Long-term debt
58,457

 
19,962

Total liabilities
174,254

 
141,925

Shareholders’ equity:
 
 
 
Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued
5,061

 
5,061

Additional paid-in capital
6,648

 
6,745

Treasury stock, at cost - 447,840,938 and 449,352,405 shares
(54,829
)
 
(54,914
)
Retained earnings
47,478

 
50,644

Accumulated other comprehensive loss
(16,025
)
 
(16,153
)
Total shareholders’ equity
(11,667
)
 
(8,617
)
Noncontrolling interests
285

 
317

Total equity
(11,382
)
 
(8,300
)
Total liabilities and equity

$162,872

 

$133,625




9


The Boeing Company and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 
Six months ended June 30
(Dollars in millions)
2020

 
2019

Cash flows – operating activities:
 
 
 
Net loss

($3,036
)
 

($793
)
Adjustments to reconcile net loss to net cash (used)/provided by operating activities:
 
 
 
Non-cash items – 
 
 
 
Share-based plans expense
115

 
104

Depreciation and amortization
1,103

 
1,067

Investment/asset impairment charges, net
280

 
70

Customer financing valuation adjustments
9

 
249

Gain on dispositions, net
(92
)
 
(300
)
Other charges and credits, net
815

 
145

Changes in assets and liabilities – 
 
 
 
Accounts receivable
143

 
588

Unbilled receivables
285

 
(222
)
Advances and progress billings
1,822

 
1,842

Inventories
(6,741
)
 
(5,233
)
Other current assets
433

 
(887
)
Accounts payable
(3,181
)
 
2,002

Accrued liabilities
514

 
4,959

Income taxes receivable, payable and deferred
(1,894
)
 
(921
)
Other long-term liabilities
(109
)
 
(509
)
Pension and other postretirement plans
(357
)
 
(390
)
Customer financing, net
62

 
347

Other
247

 
80

Net cash (used)/provided by operating activities
(9,582
)
 
2,198

Cash flows – investing activities:
 
 
 
Property, plant and equipment additions
(776
)
 
(922
)
Property, plant and equipment reductions
96

 
331

Acquisitions, net of cash acquired


 
(492
)
Contributions to investments
(12,557
)
 
(496
)
Proceeds from investments
543

 
758

Purchase of distribution rights


 
(20
)
Other
8

 
(12
)
Net cash used by investing activities
(12,686
)
 
(853
)
Cash flows – financing activities:
 
 
 
New borrowings
42,302

 
11,670

Debt repayments
(8,265
)
 
(6,422
)
Contributions from noncontrolling interests


 
7

Stock options exercised
27

 
47

Employee taxes on certain share-based payment arrangements
(164
)
 
(238
)
Common shares repurchased


 
(2,651
)
Dividends paid
(1,158
)
 
(2,317
)
Net cash provided by financing activities
32,742

 
96

Effect of exchange rate changes on cash and cash equivalents, including restricted
(11
)
 
(2
)
Net increase in cash & cash equivalents, including restricted
10,463

 
1,439

Cash & cash equivalents, including restricted, at beginning of year
9,571

 
7,813

Cash & cash equivalents, including restricted, at end of period
20,034

 
9,252

Less restricted cash & cash equivalents, included in Investments
42

 
85

Cash and cash equivalents at end of period

$19,992

 

$9,167



10


The Boeing Company and Subsidiaries
Summary of Business Segment Data
(Unaudited)
Effective at the beginning of 2020, certain programs were realigned between our Defense, Space & Security segment and Unallocated items, eliminations and other. Business segment data for 2019 has been adjusted to reflect the realignment.
 
Six months ended June 30
 
Three months ended June 30
(Dollars in millions)
2020

 
2019

 
2020

 
2019

Revenues:
 
 
 
 
 
 
 
Commercial Airplanes

$7,838

 

$16,544

 

$1,633

 

$4,722

Defense, Space & Security
12,630

 
13,166

 
6,588

 
6,579

Global Services
8,116

 
9,162

 
3,488

 
4,543

Boeing Capital
134

 
141

 
69

 
75

Unallocated items, eliminations and other
(3
)
 
(345
)
 
29

 
(168
)
Total revenues

$28,715

 

$38,668

 

$11,807

 

$15,751

Earnings/(loss) from operations:
 
 
 
 
 
 
 
Commercial Airplanes

($4,830
)
 

($3,773
)
 

($2,762
)
 

($4,946
)
Defense, Space & Security
409

 
1,827

 
600

 
975

Global Services
36

 
1,340

 
(672
)
 
687

Boeing Capital
17

 
57

 
(7
)
 
37

Segment operating loss
(4,368
)
 
(549
)
 
(2,841
)
 
(3,247
)
Unallocated items, eliminations and other
(651
)
 
(1,210
)
 
(478
)
 
(498
)
FAS/CAS service cost adjustment
702

 
729

 
355

 
365

Loss from operations
(4,317
)
 
(1,030
)
 
(2,964
)
 
(3,380
)
Other income, net
206

 
213

 
94

 
107

Interest and debt expense
(815
)
 
(277
)
 
(553
)
 
(154
)
Loss before income taxes
(4,926
)
 
(1,094
)
 
(3,423
)
 
(3,427
)
Income tax benefit
1,890

 
301

 
1,028

 
485

Net loss
(3,036
)
 
(793
)
 
(2,395
)
 
(2,942
)
Less: Net loss attributable to noncontrolling interest
(32
)
 
 
 
(19
)
 
 
Net loss attributable to Boeing Shareholders

($3,004
)
 

($793
)
 

($2,376
)
 

($2,942
)
Research and development expense, net:
 
 
 
 
 
 
 
Commercial Airplanes

$786

 

$1,062

 

$361

 

$498

Defense, Space & Security
330

 
374

 
167

 
190

Global Services
65

 
73

 
35

 
33

Other
116

 
183

 
62

 
105

Total research and development expense, net

$1,297

 

$1,692

 

$625

 

$826

Unallocated items, eliminations and other:
 
 
 
 
 
 
 
Share-based plans

($43
)
 

($36
)
 

($25
)
 

($22
)
Deferred compensation
73

 
(129
)
 
(120
)
 
(27
)
Amortization of previously capitalized interest
(50
)
 
(45
)
 
(27
)
 
(21
)
Customer financing impairment


 
(250
)
 


 

Research and development expense, net
(116
)
 
(183
)
 
(62
)
 
(105
)
Eliminations and other unallocated items
(515
)

(567
)

(244
)

(323
)
Sub-total (included in core operating loss)
(651
)
 
(1,210
)
 
(478
)
 
(498
)
Pension FAS/CAS service cost adjustment
513

 
549

 
258

 
275

Postretirement FAS/CAS service cost adjustment
189

 
180

 
97

 
90

FAS/CAS service cost adjustment
702


729



$355



$365

Total

$51

 

($481
)


($123
)


($133
)

11


The Boeing Company and Subsidiaries
Operating and Financial Data
(Unaudited)
  
Deliveries
 
Six months ended June 30
 
Three months ended June 30
 
Commercial Airplanes
 
2020

 
2019

 
2020

 
2019

 
737
 
9


113


4


24


747
 
1


4


1


2


767
 
14


22


4


10


777
 
10


22

(1)
4


12


787
 
36


78


7


42


Total
 
70

 
239

 
20

 
90

 
Note: Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses
 
 
 
 
 
 
 
 
 
 
Defense, Space & Security
 
 
 
 
 
 
 
 
 
AH-64 Apache (New)
 
11

 
10

 
9

 
4

 
AH-64 Apache (Remanufactured)
 
32

 
35

 
18

 
13

 
C-17 Globemaster III
 
—

 
—

 
—

 
—

 
C-40A
 
—

 
—

 
—

 
—

 
CH-47 Chinook (New)
 
15

 
7

 
6

 
—

 
CH-47 Chinook (Renewed)
 
1

 
9

 
—

 
5

 
F-15 Models
 
3

 
5

 
3

 
1

 
F/A-18 Models
 
9

 
10

 
4

 
3

 
KC-46 Tanker
 
6

 
12

 
1

 
5

 
P-8 Models
 
6

 
8

 
3

 
5

 
Commercial and Civil Satellites
 
—

 
1

 
—

 
1

 
Military Satellites
 
—

 
—

 
—

 
—

 
Total backlog (Dollars in millions)
 
June 30
2020

 
December 31
2019

Commercial Airplanes
 

$325,674

 

$376,593

Defense, Space & Security
 
64,286

 
63,691

Global Services
 
18,168

 
22,902

Unallocated items, eliminations and other
 
522

 
217

Total backlog
 

$408,650

 

$463,403

 
 
 
 
 
Contractual backlog
 

$385,389

 

$436,473

Unobligated backlog
 
23,261

 
26,930

Total backlog
 

$408,650

 

$463,403


12


The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core operating loss, core operating margin, and core loss per share with the most directly comparable GAAP financial measures, loss from operations, operating margin, and diluted loss 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)

Second Quarter 2020

Second Quarter 2019

$ millions

Per Share


$ millions

Per Share

Revenues

11,807




15,751



Loss from operations (GAAP)

(2,964
)



(3,380
)


Operating margin (GAAP)

(25.1
)%



(21.5
%)













FAS/CAS service cost adjustment:










Pension FAS/CAS service cost adjustment

(258
)



(275
)


Postretirement FAS/CAS service cost adjustment

(97
)



(90
)


FAS/CAS service cost adjustment

(355
)



(365
)


Core operating loss (non-GAAP)


($3,319
)




($3,745
)


Core operating margin (non-GAAP)

(28.1
)%



(23.8
%)













Diluted loss per share (GAAP)




($4.20
)




($5.21
)
Pension FAS/CAS service cost adjustment


($258
)
(0.46
)


($275
)
(0.49
)
Postretirement FAS/CAS service cost adjustment

(97
)
(0.17
)

(90
)
(0.16
)
Non-operating pension expense

(84
)
(0.14
)

(94
)
(0.17
)
Non-operating postretirement expense

14

0.02


26

0.05

Provision for deferred income taxes on adjustments 1

89

0.16


91

0.16

Subtotal of adjustments


($336
)

($0.59
)


($342
)

($0.61
)
Core loss per share (non-GAAP)




($4.79
)




($5.82
)










Weighted average diluted shares (in millions)



566.4




565.3

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


























13


The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The tables provided below reconcile the non-GAAP financial measures core operating loss, core operating margin, and core loss per share with the most directly comparable GAAP financial measures, loss from operations, operating margin, and diluted loss 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)

First Half 2020

First Half 2019

$ millions

Per Share


$ millions

Per Share

Revenues

28,715




38,668



Loss from operations (GAAP)

(4,317
)



(1,030
)


Operating margin (GAAP)

(15.0
)%



(2.7
%)













FAS/CAS service cost adjustment:










Pension FAS/CAS service cost adjustment

(513
)



(549
)


Postretirement FAS/CAS service cost adjustment

(189
)



(180
)


FAS/CAS service cost adjustment

(702
)



(729
)


Core operating loss (non-GAAP)


($5,019
)




($1,759
)


Core operating margin (non-GAAP)

(17.5
)%



(4.5
%)













Diluted loss per share (GAAP)




($5.31
)




($1.40
)
Pension FAS/CAS service cost adjustment


($513
)
(0.91
)


($549
)
(0.97
)
Postretirement FAS/CAS service cost adjustment

(189
)
(0.33
)

(180
)
(0.32
)
Non-operating pension expense

(171
)
(0.30
)

(187
)
(0.32
)
Non-operating postretirement expense

27

0.05


53

0.09

Provision for deferred income taxes on adjustments 1

178

0.31


181

0.32

Subtotal of adjustments


($668
)

($1.18
)


($682
)

($1.20
)
Core loss per share (non-GAAP)




($6.49
)




($2.60
)










Weighted average diluted shares (in millions)



566.1




566.6

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


14
v3.20.2
Document and Entity Information
Jul. 29, 2020
Cover [Abstract]  
Entity Registrant Name BOEING CO
Amendment Flag false
Entity Central Index Key 0000012927
Document Type 8-K
Document Period End Date Jul. 29, 2020
Entity File Number 1-442
Entity Incorporation State Country Code DE
Entity Tax Identification Number 91-0425694
Entity Address, Address Line One 100 N. Riverside Plaza
Entity Address, City or Town Chicago
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60606-1596
City Area Code (312)
Local Phone Number 544-2000
Security 12b Title Common Stock, $5.00 Par Value
Trading Symbol BA
Security Exchange Name NYSE
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Entity Emerging Growth Company false