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

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CHICAGO, April 25, 2018 /PRNewswire/ --

  • Revenueincreased to $23.4 billion reflecting 184 commercial deliveries and higher defense and services volume
  • GAAP EPS of $4.15 and core EPS (non-GAAP)* of $3.64 on strong performance across the company
  • Strong operating
cash flow of $3.1 billion; repurchased 8.9 million shares for $3.0 billion
  • Backlog grew to $486 billion, including over 5,800 commercial aircraft
  • Cash and marketable securities of $9.9 billion provide strong liquidity
  • Operating cash flow, EPS and Commercial Airplanes margin guidance increased on performance







  • Table 1. Summary Financial Results

    First Quarter



    (Dollars in Millions, except per share data)

    2018


    2017


    Change







    Revenues

    $23,382


    $21,961


    6%








    GAAP






    Earnings From Operations

    $2,875


    $2,206


    30%


    Operating Margin

    12.3%


    10.0%


    2.3 Pts


    Net Earnings

    $2,477


    $1,579


    57%


    Earnings Per Share

    $4.15


    $2.54


    63%


    Operating Cash Flow

    $3,136


    $2,098


    49%


    Non-GAAP*






    Core Operating Earnings

    $2,510


    $1,860


    35%


    Core Operating Margin

    10.7%


    8.5%


    2.2 Pts


    Core Earnings Per Share

    $3.64


    $2.17


    68%



    * Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."     

    The Boeing Company [NYSE: BA] reported first-quarter revenue of $23.4 billion reflecting higher commercial deliveries and mix, defense contract volume and services growth (Table 1). GAAP earnings per share increased to $4.15 and core earnings per share (non-GAAP)* increased to $3.64 reflecting strong performance across the company.

    The company's cash flow guidance is increased to between $15.0 and $15.5 billion, driven by improved performance. Full year EPS guidance is increased by $0.50 to between $16.40 and $16.60, and core earnings per share (non-GAAP)* guidance is increased to between $14.30 and $14.50 on performance.

    "Across Boeing, our teams performed at a high level in the quarter, driving revenue and earnings growth at all three business units, increasing profitability and operating cash flow, and delivering more value to our customers," said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. "Customers continue to recognize the value of our products and services, with strong orders booked in the quarter for defense, services and commercial offerings, including 221 net commercial aircraft orders."

    "During the quarter we captured important new business, including an initial contract for 28 F/A-18 Super Hornets for Kuwait, a Ground-based Midcourse Defense program contract extension from the Missile Defense Agency, and we delivered the first Space Launch System intertank hardware to NASA. We achieved the first flight of the 737 MAX 7, and delivered the first 787-10 Dreamliner and the first 737 MAX 9. Within our services business, we received a follow-on contract to support the Royal Canadian Air Force's Chinook fleet, captured a landing gear exchange contract for Aeromexico, and released Self-Service Analytics to complement our digital solutions portfolio. All of these milestones demonstrated the value we bring to our customers through the strength of our One Boeing offerings."

    "Our team's strong first-quarter performance, combined with the positive market outlook across our businesses and our confidence in executing on our production and development programs, gives us a solid foundation to raise our guidance for the year. Going forward, we remain focused on our disciplined growth strategy, improved profitability and cash flow to ensure we meet our commitments to our customers and our shareholders."






    Table 2. Cash Flow

    First Quarter

    (Millions)

    2018


    2017

    Operating Cash Flow

    $3,136


    $2,098


    Less Additions to Property, Plant & Equipment

    ($394)


    ($466)


    Free Cash Flow*

    $2,742


    $1,632



    * Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."

    Operating cash flow in the quarter of $3.1 billion reflects planned higher commercial airplane production rates, improved performance, and favorable timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 8.9 million shares for $3.0 billion, leaving $15.0 billion remaining under the current repurchase authorization which is expected to be completed over approximately the next two years. The company also paid $1.0 billion in dividends in the quarter, reflecting a 20 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)

    Q1 18


    Q4 17

    Cash

    $9.2


    $8.8


    Marketable Securities1

    $0.7


    $1.2


    Total

    $9.9


    $10.0


    Debt Balances:




    The Boeing Company, net of intercompany loans to BCC

    $10.0


    $8.6


    Boeing Capital, including intercompany loans

    $2.5


    $2.5


    Total Consolidated Debt

    $12.5


    $11.1



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

    Cash and investments in marketable securities totaled $9.9 billion, compared to $10.0 billion at the beginning of the quarter (Table 3). Debt was $12.5 billion, up from $11.1 billion at the beginning of the quarter, primarily due to the issuance of new debt.

    Total company backlog at quarter-end was $486 billion and included net orders for the quarter of $34 billion. Backlog was up from $475 billion at the beginning of the quarter, which has been adjusted to reflect the adoption of the new revenue recognition standard (ASC 606).

    Segment Results

    Commercial Airplanes








    Table 4. Commercial Airplanes

    First Quarter



    (Dollars in Millions)

    2018


    2017


    Change







    Commercial Airplanes Deliveries

    184


    169


    9%








    Revenues

    $13,652


    $12,953


    5%


    Earnings from Operations

    $1,508


    $870


    73%


    Operating Margin

    11.0%


    6.7%


    4.3 Pts


    Commercial Airplanes first-quarter revenue was $13.7 billion reflecting higher deliveries and mix (Table 4). First-quarter operating margin increased to 11.0 percent, reflecting strong operating performance on production programs.

    During the quarter, Commercial Airplanes delivered 184 airplanes, including delivery of the first 787-10 Dreamliner to Singapore Airlines and delivery of the first 737 MAX 9 to Lion Air Group. The 737 program reached additional milestones during the quarter, including first flight of the 737 MAX 7 and firm configuration of the 737 MAX 10. The 737 program has captured over 4,400 orders since launch for the 737 MAX, including a recent order from Jet Airways for 75 additional airplanes. Reflecting the strength of the cargo market, we now plan to increase the production rate on the 767 program from 2.5 to 3 per month beginning in 2020. Development on the 777X program remains on track as production began on the first 777X fuselage for structural testing.

    Commercial Airplanes booked 221 net orders during the quarter. Backlog remains robust with over 5,800 airplanes valued at $415 billion.

    Defense, Space & Security








    Table 5. Defense, Space & Security

    First Quarter



    (Dollars in Millions)

    2018


    2017


    Change







    Revenues

    $5,762


    $5,112


    13%


    Earnings from Operations

    $649


    $549


    18%


    Operating Margin

    11.3%


    10.7%


    0.6 Pts


    Defense, Space & Security first-quarter revenue increased to $5.8 billion driven by C-17, international fighters, and weapons volume (Table 5). First-quarter operating margin increased to 11.3 percent on solid execution and mix.

    During the quarter, Defense, Space & Security was awarded an initial contract for 28 F/A-18 Super Hornets for Kuwait, a contract for the final C-17 for India, and an extension for Ground-based Midcourse Defense development and sustainment from the Missile Defense Agency. We continue to progress on development programs as the KC-46 Tanker program completed fuel on-load certification testing, the first Space Launch System intertank hardware was delivered to NASA, and the second Commercial Crew spacecraft successfully achieved power-on.

    Backlog at Defense, Space & Security was $50 billion, of which 36 percent represents orders from international customers.

    Global Services








    Table 6. Global Services

    First Quarter



    (Dollars in Millions)

    2018


    2017


    Change







    Revenues

    $3,943


    $3,653


    8%


    Earnings from Operations

    $644


    $623


    3%


    Operating Margin

    16.3%


    17.1%


    (0.8) Pts


    Global Services first-quarter revenue increased to $3.9 billion, reflecting growth in commercial services (Table 6). First-quarter operating margin was 16.3 percent reflecting product and services mix.

    During the quarter, Global Services was awarded a follow-on contract from the Royal Canadian Air Force to provide full system logistics, engineering support, supply chain, data analytics and training services to their fleet of Chinooks. Global Services also captured a contract from the Royal Saudi Air Force for F-15 repair support services and a contract from Aeromexico for the 787 landing gear exchange program. As part of Boeing AnalytX, we released Self-Service Analytics to complement our digital solutions portfolio, allowing customers to access data to develop deeper insights into their operations.

    Additional Financial Information






    Table 7. Additional Financial Information

    First Quarter

    (Dollars in Millions)

    2018


    2017

    Revenues




    Boeing Capital

    $65


    $92


    Unallocated items, eliminations and other

    ($40)


    $151


    Earnings from Operations




    Boeing Capital

    $20


    $39


    FAS/CAS service cost adjustment

    $365


    $346


    Other unallocated items and eliminations

    ($311)


    ($221)


    Other income, net

    $66


    $26


    Interest and debt expense

    ($102)


    ($87)


    Effective tax rate

    12.8%


    26.4%


    At quarter-end, Boeing Capital's net portfolio balance was $2.9 billion. Total pension expense for the first quarter was $40 million, down from $97 million in the same period of the prior year. Revenue in other unallocated items and eliminations decreased primarily due to the sale of aircraft previously leased to customers in the first quarter of 2017. The effective tax rate for the first quarter decreased from the same period in the prior year primarily due to the reduction of the federal tax rate to 21%.

    Outlook

    The Company's 2018 guidance is updated below (Table 8).





    Table 8. 2018 Financial Outlook

    Current


    Prior

    (Dollars in Billions, except per share data)

    Guidance


    Guidance





    The Boeing Company




    Revenue

    $96.0 - 98.0


    $96.0 - 98.0





    GAAP Earnings Per Share

    $16.40 - 16.60


    $15.90 - 16.10

    Core Earnings Per Share*

    $14.30 - 14.50


    $13.80 - 14.00





    Operating Cash Flow

    $15.0 - 15.5


    ~$15.0





    Commercial Airplanes




    Deliveries

    810 - 815


    810 - 815

    Revenue

    $59.5 - 60.5


    $59.5 - 60.5

    Operating Margin

    ~11.5%


    >11.0%





    Defense, Space & Security




    Revenue

    $21.5 - 22.5


    $21.5 - 22.5

    Operating Margin

    ~11.0%


    ~11.0%





    Global Services




          Revenue

    $15.0 - 15.5


    $15.0 - 15.5

          Operating Margin

    ~15.5%


    ~15.5%





    Boeing Capital




    Portfolio Size

    Stable


    Stable

    Revenue

    ~$0.2


    ~$0.2

    Pre-Tax Earnings

    ~$0.05


    ~$0.05





    Research & Development

    ~$3.7


    ~$3.7

    Capital Expenditures

    ~$2.2


    ~$2.2

    Pension Expense 1

    ~$0.1


    ~$0.1

    Effective Tax Rate

    ~16.0%


    ~16.0%


    1 Approximately $1.4 billion of pension expense is expected to be allocated to the business segments

    * Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 7, "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 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 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 commercial aircraft production rate changes, 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) threats to the security of our or our customers' information; (14) potential adverse developments in new or pending litigation and/or government investigations; (15) customer and aircraft concentration in our customer financing portfolio; (16) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates; (17) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (18) the adequacy of our insurance coverage to cover significant risk exposures; (19) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (20) work stoppages or other labor disruptions; (21) substantial pension and other postretirement benefit obligations; (22) 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 Ben Hackman (312) 544-2140

    Communications:


    Allison Bone (312) 544-2002

    The Boeing Company and Subsidiaries
    Consolidated Statements of Operations
    (Unaudited)

    In the first quarter of 2018, we adopted the following Accounting Standards Updates (ASU), which are reflected in the unaudited Consolidated Financial Statements on pages 9-14: ASU 2014-09, Revenue from Contracts with Customers (Topic 606); ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost; ASU 2016-18 Statement of Cash Flows (Topic 230) Restricted Cash; and ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.


    Three months ended
    March 31

    (Dollars in millions, except per share data)

    2018


    2017

    Sales of products

    $20,820


    $19,367

    Sales of services

    2,562


    2,594

    Total revenues

    23,382


    21,961





    Cost of products

    (16,816)


    (16,062)

    Cost of services

    (1,992)


    (1,998)

    Boeing Capital interest expense

    (16)


    (13)

    Total costs and expenses

    (18,824)


    (18,073)


    4,558


    3,888

    Income from operating investments, net

    74


    81

    General and administrative expense

    (997)


    (929)

    Research and development expense, net

    (764)


    (836)

    Gain on dispositions, net

    4


    2

    Earnings from operations

    2,875


    2,206

    Other income, net

    66


    26

    Interest and debt expense

    (102)


    (87)

    Earnings before income taxes

    2,839


    2,145

    Income tax expense

    (362)


    (566)

    Net earnings

    $2,477


    $1,579





    Basic earnings per share

    $4.19


    $2.57





    Diluted earnings per share

    $4.15


    $2.54





    Cash dividends paid per share

    $1.71


    $1.42





    Weighted average diluted shares (millions)

    597.2


    621.2

     

    The Boeing Company and Subsidiaries

    Consolidated Statements of Financial Position

    (Unaudited) 


    (Dollars in millions, except per share data)

    March 31
    2018


    December 31

    2017

    Assets




    Cash and cash equivalents

    $9,235


    $8,813

    Short-term and other investments

    656


    1,179

    Accounts receivable, net

    2,802


    2,894

    Unbilled receivables, net

    9,822


    8,194

    Current portion of customer financing, net

    244


    309

    Inventories

    61,303


    61,388

    Other current assets

    2,481


    2,417

    Total current assets

    86,543


    85,194

    Customer financing, net

    2,753


    2,756

    Property, plant and equipment, net of accumulated depreciation of $17,894 and $17,641

    12,628


    12,672

    Goodwill

    5,558


    5,559

    Acquired intangible assets, net

    2,525


    2,573

    Deferred income taxes

    325


    321

    Investments

    1,248


    1,260

    Other assets, net of accumulated amortization of $514 and $482

    1,969


    2,027

    Total assets

    $113,549


    $112,362

    Liabilities and equity




    Accounts payable

    $12,613


    $12,202

    Accrued liabilities

    10,983


    13,069

    Advances and progress billings

    49,955


    48,042

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

    1,981


    1,335

    Total current liabilities

    75,532


    74,648

    Deferred income taxes

    2,001


    2,188

    Accrued retiree health care

    5,494


    5,545

    Accrued pension plan liability, net

    16,279


    16,471

    Other long-term liabilities

    2,474


    2,015

    Long-term debt

    10,471


    9,782

    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

    6,624


    6,804

    Treasury stock, at cost - 428,038,987 and 421,222,326 shares

    (46,396)


    (43,454)

    Retained earnings

    52,095


    49,618

    Accumulated other comprehensive loss

    (16,162)


    (16,373)

    Total shareholders' equity

    1,222


    1,656

    Noncontrolling interests

    76


    57

    Total equity

    1,298


    1,713

    Total liabilities and equity

    $113,549


    $112,362

     

    The Boeing Company and Subsidiaries

    Consolidated Statements of Cash Flows

    (Unaudited)



    Three months ended
    March 31

    (Dollars in millions)

    2018


    2017

    Cash flows – operating activities:




    Net earnings

    $2,477


    $1,579

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




    Non-cash items – 




    Share-based plans expense

    45


    50

    Depreciation and amortization

    501


    468

    Investment/asset impairment charges, net

    20


    23

    Customer financing valuation (benefit)/expense

    (1)


    7

    Gain on dispositions, net

    (4)


    (2)

    Other charges and credits, net

    60


    58

    Changes in assets and liabilities – 




    Accounts receivable

    92


    (264)

    Unbilled receivables

    (1,628)


    (568)

    Advances and progress billings

    1,917


    1,375

    Inventories

    283


    (1,491)

    Other current assets

    (103)


    (117)

    Accounts payable

    591


    616

    Accrued liabilities

    (1,337)


    (282)

    Income taxes receivable, payable and deferred

    348


    552

    Other long-term liabilities

    (243)


    (72)

    Pension and other postretirement plans

    (50)


    10

    Customer financing, net

    44


    231

    Other

    124


    (75)

    Net cash provided by operating activities

    3,136


    2,098

    Cash flows – investing activities:




    Property, plant and equipment additions

    (394)


    (466)

    Property, plant and equipment reductions

    27


    9

    Contributions to investments

    (249)


    (605)

    Proceeds from investments

    752


    803

    Purchase of distribution rights

    (20)



    Other

    3


    (1)

    Net cash provided/(used) by investing activities

    119


    (260)

    Cash flows – financing activities:




    New borrowings

    2,687


    872

    Debt repayments

    (1,371)


    (34)

    Contributions from noncontrolling interests

    20



    Stock options exercised

    51


    174

    Employee taxes on certain share-based payment arrangements

    (226)


    (107)

    Common shares repurchased

    (3,000)


    (2,500)

    Dividends paid

    (1,006)


    (868)

    Net cash used by financing activities

    (2,845)


    (2,463)

    Effect of exchange rate changes on cash and cash equivalents, including restricted

    8


    20

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

    418


    (605)

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

    8,887


    8,869

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

    $9,305


    $8,264

    Less restricted cash & cash equivalents, included in Investments

    70


    74

    Cash and cash equivalents at end of period

    9,235


    8,190

     

    The Boeing Company and Subsidiaries

    Summary of Business Segment Data

    (Unaudited)



    Three months ended
    March 31

    (Dollars in millions)

    2018


    2017

    Revenues:




    Commercial Airplanes

    $13,652


    $12,953

    Defense, Space & Security

    5,762


    5,112

    Global Services

    3,943


    3,653

    Boeing Capital

    65


    92

    Unallocated items, eliminations and other

    (40)


    151

    Total revenues

    $23,382


    $21,961

    Earnings from operations:




    Commercial Airplanes

    $1,508


    $870

    Defense, Space & Security

    649


    549

    Global Services

    644


    623

    Boeing Capital

    20


    39

    Segment operating profit

    2,821


    2,081

    Unallocated items, eliminations and other

    (311)


    (221)

    FAS/CAS service cost adjustment

    365


    346

    Earnings from operations

    2,875


    2,206

    Other income, net

    66


    26

    Interest and debt expense

    (102)


    (87)

    Earnings before income taxes

    2,839


    2,145

    Income tax expense

    (362)


    (566)

    Net earnings

    $2,477


    $1,579





    Research and development expense, net:




    Commercial Airplanes

    $549


    $625

    Defense, Space & Security

    183


    196

    Global Services

    34


    28

    Other

    (2)


    (13)

    Total research and development expense, net

    $764


    $836





    Unallocated items, eliminations and other:




    Share-based plans

    ($18)


    ($21)

    Deferred compensation

    (29)


    (50)

    Amortization of previously capitalized interest

    (25)


    (24)

    Eliminations and other unallocated items

    (239)


    (126)

    Sub-total (included in core operating earnings)

    (311)


    (221)

    Pension FAS/CAS service cost adjustment

    283


    262

    Postretirement FAS/CAS service cost adjustment

    82


    84

    FAS/CAS service cost adjustment

    $365


    $346

    Total

    $54


    $125

     

    The Boeing Company and Subsidiaries

    Operating and Financial Data

    (Unaudited)


    Deliveries


    Three months ended
    March 31


    Commercial Airplanes


    2018


    2017


    737


    132


    113


    747


    2


    1

    (1)

    767


    4


    2


    777


    12


    21


    787


    34


    32


    Total


    184


    169


    Note: Aircraft accounted for as revenues by BCA and as a note receivable in consolidation identified by parentheses







    Defense, Space & Security






    AH-64 Apache (New)




    3


    AH-64 Apache (Remanufactured)


    6


    13


    C-17 Globemaster III






    CH-47 Chinook (New)


    4


    3


    CH-47 Chinook (Renewed)


    4


    9


    F-15 Models


    2


    3


    F/A-18 Models


    5


    6


    P-8 Models


    4


    4


    Commercial and Civil Satellites




    1


    Military Satellites
























    Total backlog (Dollars in millions)


    March 31
    2018


    Restated**
    December 31
    2017


    Reported
    December 31
    2017

    Commercial Airplanes


    $415,377


    $411,188


    $421,345

    Defense, Space & Security


    50,404


    44,049


    49,577

    Global Services


    20,464


    19,605


    17,223

    Total backlog


    $486,245


    $474,842


    $488,145








    Contractual backlog


    $461,742


    $457,186


    $470,241

    Unobligated backlog


    24,503


    17,656


    17,904

    Total backlog


    $486,245


    $474,842


    $488,145


    ** The restated backlog reflects the impact of ASC 606

    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 7 of this release for additional information on the use of these non-GAAP financial measures.



















    (Dollars in millions, except per share data)

    2018 Guidance


    First Quarter 2018


    First Quarter 2017


    $ millions


    Per Share


    $ millions


    Per Share


    $ millions


    Per Share

    Revenues





    23,382




    21,961



    Earnings from operations (GAAP)





    2,875




    2,206



    Operating margins





    12.3%




    10.0%















    FAS/CAS service cost adjustment:












    Pension FAS/CAS service cost adjustment





    (283)




    (262)



    Postretirement FAS/CAS service cost adjustment





    (82)




    (84)



    FAS/CAS service cost adjustment

    ~($1,395)




    (365)




    (346)



    Core operating earnings (non-GAAP)





    $2,510




    $1,860



    Core operating margins (non-GAAP)





    10.7%




    8.5%















    Diluted earnings per share (GAAP)



    $16.40 - 16.60




    $4.15




    $2.54

    Pension FAS/CAS service cost adjustment

    ~($1,395)




    ($283)


    (0.47)


    ($262)


    (0.42)

    Postretirement FAS/CAS service cost adjustment





    (82)


     

    (0.14)


    (84)


     

    (0.14)

    Non-operating pension expense

    ~($170)




    (42)


    (0.07)


    (34)


    (0.06)

    Non-operating postretirement expense





    24


    0.04


    30


    0.05

    Provision for deferred income taxes on adjustments 1





    80


    0.13


    122


    0.20

    Subtotal of adjustments



    ($2.10)


    ($303)


    ($0.51)


    ($228)


    ($0.37)

    Core earnings per share (non-GAAP)



    $14.30 - 14.50




    $3.64




    $2.17













    Weighted average diluted shares (in millions)

    585 - 590






    597.2




    621.2


    1 The income tax impact is calculated using the U.S. corporate statutory tax rate in effect for non-GAAP adjustments. 

    Condensed Consolidated Statement of Financial Position

    The impact to our Condensed Consolidated Statement of Financial Position as a result of adopting new accounting standards was as follows:







    (Dollars in millions)

    December 31, 2017

    Assets

    Reported


    Impact of
    New
    Standards


    Restated

    Cash and cash equivalents

    $8,813




    $8,813

    Short-term and other investments

    1,179




    1,179

    Accounts receivable, net

    10,516


    ($7,622)


    2,894

    Unbilled receivables, net



    8,194


    8,194

    Current portion of customer financing, net

    309




    309

    Inventories

    44,344


    17,044


    61,388

    Other current assets



    2,417


    2,417

    Total current assets

    65,161


    20,033


    85,194

    Customer financing, net

    2,740


    16


    2,756

    Property, plant and equipment, net

    12,672




    12,672

    Goodwill

    5,559




    5,559

    Acquired intangible assets, net

    2,573




    2,573

    Deferred income taxes

    341


    (20)


    321

    Investments

    1,260




    1,260

    Other assets, net of accumulated amortization

    2,027




    2,027

    Total assets

    $92,333


    $20,029


    $112,362

    Liabilities and equity






    Accounts payable

    $12,202




    $12,202

    Accrued liabilities

    15,292


    (2,223)


    13,069

    Advances and billings in excess of related costs

    27,440


    (27,440)



    Advances and progress billings



    48,042


    48,042

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

    1,335




    1,335

    Total current liabilities

    56,269


    18,379


    74,648

    Deferred income taxes

    1,839


    349


    2,188

    Accrued retiree health care

    5,545




    5,545

    Accrued pension plan liability, net

    16,471




    16,471

    Other long-term liabilities

    2,015




    2,015

    Long-term debt

    9,782




    9,782

    Shareholders' equity:






    Common stock

    5,061




    5,061

    Additional paid-in capital

    6,804




    6,804

    Treasury stock, at cost

    (43,454)




    (43,454)

    Retained earnings

    45,320


    4,298


    49,618

    Accumulated other comprehensive loss

    (13,376)


    (2,997)


    (16,373)

    Total shareholders' equity

    355


    1,301


    1,656

    Noncontrolling interests

    57




    57

    Total equity

    412


    1,301


    1,713

    Total liabilities and equity

    $92,333


    $20,029


    $112,362

     

    SOURCE Boeing

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