ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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THE BOEING COMPANY
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Delaware
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91-0425694
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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100 N. Riverside Plaza, Chicago, IL
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60606-1596
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(Address of principal executive offices)
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(Zip Code)
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(312) 544-2000
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Part I. Financial Information (Unaudited)
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II. Other Information
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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(Dollars in millions, except per share data)
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Three months ended March 31
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||||||
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2018
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2017
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Sales of products
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$20,820
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$19,367
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Sales of services
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2,562
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2,594
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Total revenues
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23,382
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21,961
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Cost of products
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(16,816
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)
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(16,062
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)
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Cost of services
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(1,992
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)
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(1,998
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)
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Boeing Capital interest expense
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(16
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)
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(13
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)
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Total costs and expenses
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(18,824
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)
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(18,073
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)
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4,558
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3,888
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Income from operating investments, net
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74
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81
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General and administrative expense
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(997
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)
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(929
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)
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Research and development expense, net
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(764
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)
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(836
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)
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Gain on dispositions, net
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4
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2
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Earnings from operations
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2,875
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2,206
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Other income, net
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66
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26
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Interest and debt expense
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(102
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)
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(87
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)
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Earnings before income taxes
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2,839
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2,145
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Income tax expense
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(362
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)
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(566
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)
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Net earnings
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$2,477
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$1,579
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Basic earnings per share
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$4.19
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$2.57
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Diluted earnings per share
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$4.15
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$2.54
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Cash dividends paid per share
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$1.71
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$1.42
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Weighted average diluted shares (millions)
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597.2
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621.2
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(Dollars in millions)
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Three months ended March 31
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2018
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2017
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Net earnings
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$2,477
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$1,579
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Other comprehensive income, net of tax:
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Currency translation adjustments
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27
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34
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Unrealized gain on certain investments, net of tax of $0 and ($1)
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2
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1
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Unrealized gain on derivative instruments:
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Unrealized (loss)/gain arising during period, net of tax of $0 and ($28)
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(2
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52
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Reclassification adjustment for losses included in net earnings, net of tax of $(1) and ($9)
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4
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16
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Total unrealized gain on derivative instruments, net of tax
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2
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68
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Defined benefit pension plans and other postretirement benefits:
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Amortization of prior service credits included in net periodic pension cost, net of tax of $10 and $16
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(36
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)
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(28
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)
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Net actuarial gain arising during the period, net of tax of $0 and $(1)
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3
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Amortization of actuarial losses included in net periodic pension cost, net of tax of ($60) and ($72)
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219
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132
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Pension and postretirement cost related to our equity method investments, net of tax of $1 and $1
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(3
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(2
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Total defined benefit pension plans and other postretirement benefits, net of tax
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180
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105
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Other comprehensive income, net of tax
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211
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208
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Comprehensive income related to noncontrolling interests
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(1
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)
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Comprehensive income, net of tax
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$2,687
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$1,787
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(Dollars in millions, except per share data)
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March 31
2018 |
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December 31
2017 |
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Assets
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Cash and cash equivalents
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$9,235
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$8,813
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Short-term and other investments
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656
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1,179
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Accounts receivable, net
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2,802
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2,894
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Unbilled receivables, net
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9,822
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8,194
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Current portion of customer financing, net
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244
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309
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Inventories
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61,303
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61,388
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Other current assets
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2,481
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2,417
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Total current assets
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86,543
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85,194
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Customer financing, net
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2,753
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2,756
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Property, plant and equipment, net of accumulated depreciation of $17,894 and $17,641
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12,628
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12,672
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Goodwill
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5,558
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5,559
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Acquired intangible assets, net
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2,525
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2,573
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Deferred income taxes
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325
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321
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Investments
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1,248
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1,260
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Other assets, net of accumulated amortization of $514 and $482
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1,969
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2,027
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Total assets
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$113,549
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$112,362
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Liabilities and equity
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Accounts payable
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$12,613
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$12,202
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Accrued liabilities
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10,983
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13,069
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Advances and progress billings
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49,955
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48,042
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Short-term debt and current portion of long-term debt
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1,981
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1,335
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Total current liabilities
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75,532
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74,648
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Deferred income taxes
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2,001
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2,188
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Accrued retiree health care
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5,494
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5,545
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Accrued pension plan liability, net
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16,279
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16,471
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Other long-term liabilities
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2,474
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2,015
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Long-term debt
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10,471
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9,782
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Shareholders’ equity:
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Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued
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5,061
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5,061
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Additional paid-in capital
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6,624
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6,804
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Treasury stock, at cost - 428,038,987 and 421,222,326 shares
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(46,396
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)
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(43,454
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)
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Retained earnings
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52,095
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49,618
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Accumulated other comprehensive loss
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(16,162
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)
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(16,373
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)
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Total shareholders’ equity
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1,222
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1,656
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Noncontrolling interests
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76
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57
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Total equity
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1,298
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|
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1,713
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Total liabilities and equity
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$113,549
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$112,362
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(Dollars in millions)
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Three months ended March 31
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2018
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2017
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Cash flows – operating activities:
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Net earnings
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$2,477
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$1,579
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Adjustments to reconcile net earnings to net cash provided by operating activities:
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Non-cash items –
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Share-based plans expense
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45
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|
50
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Depreciation and amortization
|
501
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468
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Investment/asset impairment charges, net
|
20
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23
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Customer financing valuation (benefit)/expense
|
(1
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)
|
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7
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Gain on dispositions, net
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(4
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)
|
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(2
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)
|
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Other charges and credits, net
|
60
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|
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58
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|
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Changes in assets and liabilities –
|
|
|
|
||||
Accounts receivable
|
92
|
|
|
(264
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)
|
||
Unbilled receivables
|
(1,628
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)
|
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(568
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)
|
||
Advances and progress billings
|
1,917
|
|
|
1,375
|
|
||
Inventories
|
283
|
|
|
(1,491
|
)
|
||
Other current assets
|
(103
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)
|
|
(117
|
)
|
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Accounts payable
|
591
|
|
|
616
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|
||
Accrued liabilities
|
(1,337
|
)
|
|
(282
|
)
|
||
Income taxes receivable, payable and deferred
|
348
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|
|
552
|
|
||
Other long-term liabilities
|
(243
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)
|
|
(72
|
)
|
||
Pension and other postretirement plans
|
(50
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)
|
|
10
|
|
||
Customer financing, net
|
44
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|
|
231
|
|
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Other
|
124
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|
|
(75
|
)
|
||
Net cash provided by operating activities
|
3,136
|
|
|
2,098
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|
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Cash flows – investing activities:
|
|
|
|
||||
Property, plant and equipment additions
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(394
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)
|
|
(466
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)
|
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Property, plant and equipment reductions
|
27
|
|
|
9
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|
||
Contributions to investments
|
(249
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)
|
|
(605
|
)
|
||
Proceeds from investments
|
752
|
|
|
803
|
|
||
Purchase of distribution rights
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(20
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)
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Other
|
3
|
|
|
(1
|
)
|
||
Net cash provided/(used) by investing activities
|
119
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|
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(260
|
)
|
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Cash flows – financing activities:
|
|
|
|
||||
New borrowings
|
2,687
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|
|
872
|
|
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Debt repayments
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(1,371
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)
|
|
(34
|
)
|
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Contributions from noncontrolling interests
|
20
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|
|
|
|
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Stock options exercised
|
51
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|
|
174
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|
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Employee taxes on certain share-based payment arrangements
|
(226
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)
|
|
(107
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)
|
||
Common shares repurchased
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(3,000
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)
|
|
(2,500
|
)
|
||
Dividends paid
|
(1,006
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)
|
|
(868
|
)
|
||
Net cash used by financing activities
|
(2,845
|
)
|
|
(2,463
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)
|
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Effect of exchange rate changes on cash and cash equivalents, including restricted
|
8
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|
|
20
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|
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Net increase/(decrease) in cash & cash equivalents, including restricted
|
418
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|
|
(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
|
|
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Less restricted cash & cash equivalents, included in Investments
|
70
|
|
|
74
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|
||
Cash and cash equivalents at end of period
|
|
$9,235
|
|
|
|
$8,190
|
|
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Boeing shareholders
|
|
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||||||||||||||||||
(Dollars in millions, except per share data)
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Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Non-
controlling
Interests
|
|
Total
|
|
|||||||
Balance at January 1, 2017
|
|
$5,061
|
|
|
$4,762
|
|
|
($36,097
|
)
|
|
$41,754
|
|
|
($13,623
|
)
|
|
$60
|
|
|
$1,917
|
|
Net earnings
|
|
|
|
1,579
|
|
|
|
|
1,579
|
|
|||||||||||
Other comprehensive loss, net of tax of $(94)
|
|
|
|
|
208
|
|
|
208
|
|
||||||||||||
Share-based compensation and related dividend equivalents
|
|
48
|
|
|
|
|
|
|
48
|
|
|||||||||||
Treasury shares issued for stock options exercised, net
|
|
(42
|
)
|
215
|
|
|
|
|
173
|
|
|||||||||||
Treasury shares issued for other share-based plans, net
|
|
(164
|
)
|
62
|
|
|
|
|
(102
|
)
|
|||||||||||
Common shares repurchased
|
|
|
(2,500
|
)
|
|
|
|
(2,500
|
)
|
||||||||||||
Balance at March 31, 2017
|
|
$5,061
|
|
|
$4,604
|
|
|
($38,320
|
)
|
|
$43,333
|
|
|
($13,415
|
)
|
|
$60
|
|
|
$1,323
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at January 1, 2018
|
|
$5,061
|
|
|
$6,804
|
|
|
($43,454
|
)
|
|
$49,618
|
|
|
($16,373
|
)
|
|
$57
|
|
|
$1,713
|
|
Net earnings
|
|
|
|
2,477
|
|
|
(1
|
)
|
2,476
|
|
|||||||||||
Other comprehensive income, net of tax of ($50)
|
|
|
|
|
211
|
|
|
211
|
|
||||||||||||
Share-based compensation and related dividend equivalents
|
|
45
|
|
|
|
|
|
|
45
|
|
|||||||||||
Treasury shares issued for stock options exercised, net
|
|
(25
|
)
|
75
|
|
|
|
|
50
|
|
|||||||||||
Treasury shares issued for other share-based plans, net
|
|
(200
|
)
|
(17
|
)
|
|
|
|
(217
|
)
|
|||||||||||
Common shares repurchased
|
|
|
(3,000
|
)
|
|
|
|
(3,000
|
)
|
||||||||||||
Changes in noncontrolling interests
|
|
|
|
|
|
20
|
|
20
|
|
||||||||||||
Balance at March 31, 2018
|
|
$5,061
|
|
|
$6,624
|
|
|
($46,396
|
)
|
|
$52,095
|
|
|
($16,162
|
)
|
|
$76
|
|
|
$1,298
|
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
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
|
|
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Increase to Revenue
|
|
$117
|
|
|
|
$207
|
|
Increase to Earnings from Operations
|
|
$78
|
|
|
|
$108
|
|
Increase to Diluted EPS
|
|
$0.11
|
|
|
|
$0.13
|
|
|
Three months ended March 31, 2017
|
||||||||||
(Dollars in millions)
|
Reported
|
|
Impact of New Standards
|
|
Restated
|
||||||
Sales of products
|
|
$18,512
|
|
|
|
$855
|
|
|
|
$19,367
|
|
Sales of services
|
2,464
|
|
|
130
|
|
|
2,594
|
|
|||
Total revenues
|
20,976
|
|
|
985
|
|
|
21,961
|
|
|||
|
|
|
|
|
|
|
|||||
Cost of products
|
(15,363
|
)
|
|
(699
|
)
|
|
(16,062
|
)
|
|||
Cost of services
|
(1,888
|
)
|
|
(110
|
)
|
|
(1,998
|
)
|
|||
Boeing Capital interest expense
|
(13
|
)
|
|
|
|
|
(13
|
)
|
|||
Total costs and expenses
|
(17,264
|
)
|
|
(809
|
)
|
|
(18,073
|
)
|
|||
|
3,712
|
|
|
176
|
|
|
3,888
|
|
|||
Income from operating investments, net
|
81
|
|
|
|
|
|
81
|
|
|||
General and administrative expense
|
(933
|
)
|
|
4
|
|
|
(929
|
)
|
|||
Research and development expense, net
|
(838
|
)
|
|
2
|
|
|
(836
|
)
|
|||
Gain on dispositions, net
|
2
|
|
|
|
|
|
2
|
|
|||
Earnings from operations
|
2,024
|
|
|
182
|
|
|
2,206
|
|
|||
Other income, net
|
22
|
|
|
4
|
|
|
26
|
|
|||
Interest and debt expense
|
(87
|
)
|
|
|
|
|
(87
|
)
|
|||
Earnings before income taxes
|
1,959
|
|
|
186
|
|
|
2,145
|
|
|||
Income tax expense
|
(508
|
)
|
|
(58
|
)
|
|
(566
|
)
|
|||
Net earnings
|
|
$1,451
|
|
|
|
$128
|
|
|
|
$1,579
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$2.36
|
|
|
|
$0.21
|
|
|
|
$2.57
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
$2.34
|
|
|
|
$0.20
|
|
|
|
$2.54
|
|
(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
|
|
(Dollars in millions)
|
Three months ended March 31, 2017
|
||||||||||
|
Reported
|
|
|
Impact of New Standards
|
Restated
|
|
|||||
Cash flows - operating activities:
|
|
|
|
|
|
||||||
Net earnings
|
|
$1,451
|
|
|
|
$128
|
|
|
|
$1,579
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Non-cash items -
|
|
|
|
|
|
||||||
Share-based plans expense
|
50
|
|
|
|
|
50
|
|
||||
Depreciation and amortization
|
471
|
|
|
(3
|
)
|
|
468
|
|
|||
Investment/asset impairment charges, net
|
23
|
|
|
|
|
23
|
|
||||
Customer financing valuation expense
|
7
|
|
|
|
|
7
|
|
||||
Gain on dispositions, net
|
(2
|
)
|
|
|
|
(2
|
)
|
||||
Other charges and credits, net
|
52
|
|
|
6
|
|
|
58
|
|
|||
Changes in assets and liabilities -
|
|
|
|
|
|
||||||
Accounts receivable
|
(769
|
)
|
|
505
|
|
|
(264
|
)
|
|||
Unbilled receivables
|
|
|
(568
|
)
|
|
(568
|
)
|
||||
Advances and progress billings
|
|
|
1,375
|
|
|
1,375
|
|
||||
Inventories
|
(31
|
)
|
|
(1,460
|
)
|
|
(1,491
|
)
|
|||
Other current assets
|
|
|
(117
|
)
|
|
(117
|
)
|
||||
Accounts payable
|
616
|
|
|
|
|
616
|
|
||||
Accrued liabilities
|
(613
|
)
|
|
331
|
|
|
(282
|
)
|
|||
Advances and billings in excess of related costs
|
249
|
|
|
(249
|
)
|
|
|
||||
Income taxes receivable, payable and deferred
|
495
|
|
|
57
|
|
|
552
|
|
|||
Other long-term liabilities
|
(72
|
)
|
|
|
|
(72
|
)
|
||||
Pension and other postretirement plans
|
10
|
|
|
|
|
10
|
|
||||
Customer financing, net
|
232
|
|
|
(1
|
)
|
|
231
|
|
|||
Other
|
(75
|
)
|
|
|
|
(75
|
)
|
||||
Net cash provided by operating activities
|
2,094
|
|
|
4
|
|
|
2,098
|
|
|||
Cash flows - investing activities:
|
|
|
|
|
|
||||||
Property, plant and equipment additions
|
(466
|
)
|
|
|
|
(466
|
)
|
||||
Property, plant and equipment reductions
|
9
|
|
|
|
|
9
|
|
||||
Contributions to investments
|
(605
|
)
|
|
|
|
(605
|
)
|
||||
Proceeds from investments
|
803
|
|
|
|
|
803
|
|
||||
Other
|
(3
|
)
|
|
2
|
|
|
(1
|
)
|
|||
Net cash used by investing activities
|
(262
|
)
|
|
2
|
|
|
(260
|
)
|
|||
Cash flows - financing activities:
|
|
|
|
|
|
||||||
New borrowings
|
872
|
|
|
|
|
872
|
|
||||
Debt repayments
|
(34
|
)
|
|
|
|
(34
|
)
|
||||
Stock options exercised
|
174
|
|
|
|
|
174
|
|
||||
Employee taxes on certain share-based payment arrangements
|
(107
|
)
|
|
|
|
(107
|
)
|
||||
Common shares repurchased
|
(2,500
|
)
|
|
|
|
(2,500
|
)
|
||||
Dividends paid
|
(868
|
)
|
|
|
|
(868
|
)
|
||||
Net cash used by financing activities
|
(2,463
|
)
|
|
|
|
(2,463
|
)
|
||||
Effect of exchange rate changes on cash & cash equivalents, including restricted
|
20
|
|
|
|
|
20
|
|
||||
Net (decrease)/increase in cash & cash equivalents, including restricted
|
(611
|
)
|
|
6
|
|
|
(605
|
)
|
|||
Cash & cash equivalents, including restricted*, at beginning of year
|
8,801
|
|
|
68
|
|
|
8,869
|
|
|||
Cash & cash equivalents, including restricted*, at end of period
|
|
$8,190
|
|
|
|
$74
|
|
|
8,264
|
|
|
Less restricted cash & cash equivalents, included in Investments
|
|
|
|
|
74
|
|
|||||
Cash and cash equivalents at end of period
|
|
|
|
|
|
$8,190
|
|
|
Boeing shareholders
|
|
|
||||||||||||||||||
(Dollars in millions)
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Non-
controlling
Interests
|
|
Total
|
|
|||||||
Balance at January 1, 2017, as reported
|
|
$5,061
|
|
|
$4,762
|
|
|
($36,097
|
)
|
|
$40,714
|
|
|
($13,623
|
)
|
|
$60
|
|
|
$877
|
|
Cumulative Impact of Topic 606 at 1/1/2016
|
|
|
|
901
|
|
|
|
901
|
|
||||||||||||
Impact of Topic 606 on 2016 earnings
|
|
|
|
139
|
|
|
|
139
|
|
||||||||||||
Balance at January 1, 2017, as restated
|
|
$5,061
|
|
|
$4,762
|
|
|
($36,097
|
)
|
|
$41,754
|
|
|
($13,623
|
)
|
|
$60
|
|
|
$1,917
|
|
|
Boeing shareholders
|
|
|
||||||||||||||||||
(Dollars in millions)
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Non-
controlling
Interests
|
|
Total
|
|
|||||||
Balance at December 31, 2017, as reported
|
|
$5,061
|
|
|
$6,804
|
|
|
($43,454
|
)
|
|
$45,320
|
|
|
($13,376
|
)
|
|
$57
|
|
|
$412
|
|
Cumulative Impact of Topic 606 at 1/1/2016
|
|
|
|
901
|
|
|
|
901
|
|
||||||||||||
Impact of Topic 606 on 2016 earnings
|
|
|
|
139
|
|
|
|
139
|
|
||||||||||||
Impact of Topic 606 on 2017 earnings
|
|
|
|
261
|
|
|
|
261
|
|
||||||||||||
Total impact of ASC 606 through December 31, 2017
|
|
|
|
1,301
|
|
|
|
1,301
|
|
||||||||||||
Impact of ASU 2018-02
|
|
|
|
2,997
|
|
(2,997
|
)
|
|
|
||||||||||||
Balance at December 31, 2017, as restated
|
|
$5,061
|
|
|
$6,804
|
|
|
($43,454
|
)
|
|
$49,618
|
|
|
($16,373
|
)
|
|
$57
|
|
|
$1,713
|
|
(In millions - except per share amounts)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Net earnings
|
|
$2,477
|
|
|
|
$1,579
|
|
Less: earnings available to participating securities
|
3
|
|
|
2
|
|
||
Net earnings available to common shareholders
|
|
$2,474
|
|
|
|
$1,577
|
|
Basic
|
|
|
|
||||
Basic weighted average shares outstanding
|
590.8
|
|
|
614.4
|
|
||
Less: participating securities
|
0.7
|
|
|
0.8
|
|
||
Basic weighted average common shares outstanding
|
590.1
|
|
|
613.6
|
|
||
Diluted
|
|
|
|
||||
Basic weighted average shares outstanding
|
590.8
|
|
|
614.4
|
|
||
Dilutive potential common shares
(1)
|
6.4
|
|
|
6.8
|
|
||
Diluted weighted average shares outstanding
|
597.2
|
|
|
621.2
|
|
||
Less: participating securities
|
0.7
|
|
|
0.8
|
|
||
Diluted weighted average common shares outstanding
|
596.5
|
|
|
620.4
|
|
||
Net earnings per share:
|
|
|
|
||||
Basic
|
|
$4.19
|
|
|
|
$2.57
|
|
Diluted
|
4.15
|
|
|
2.54
|
|
(1)
|
Diluted earnings per share includes any dilutive impact of stock options, restricted stock units, performance-based restricted stock units and performance awards.
|
(Shares in millions)
|
Three months ended March 31
|
||||
|
2018
|
|
|
2017
|
|
Performance awards
|
2.9
|
|
|
5.6
|
|
Performance-based restricted stock units
|
0.5
|
|
|
1.3
|
|
|
March 31
2018 |
|
|
December 31
2017 |
|
||
Long-term contracts in progress
|
|
$1,926
|
|
|
|
$1,854
|
|
Commercial aircraft programs
|
53,008
|
|
|
52,861
|
|
||
Commercial spare parts, used aircraft, general stock materials and other
|
6,369
|
|
|
6,673
|
|
||
Total
|
|
$61,303
|
|
|
|
$61,388
|
|
|
March 31
2018 |
|
|
December 31
2017 |
|
||
Financing receivables:
|
|
|
|
||||
Investment in sales-type/finance leases
|
|
$1,265
|
|
|
|
$1,364
|
|
Notes
|
934
|
|
|
1,022
|
|
||
Total financing receivables
|
2,199
|
|
|
2,386
|
|
||
Operating lease equipment, at cost, less accumulated depreciation of $286 and $305
|
808
|
|
|
691
|
|
||
Gross customer financing
|
3,007
|
|
|
3,077
|
|
||
Less allowance for losses on receivables
|
(10
|
)
|
|
(12
|
)
|
||
Total
|
|
$2,997
|
|
|
|
$3,065
|
|
Rating categories
|
March 31
2018 |
|
|
December 31
2017 |
|
||
BBB
|
|
$1,130
|
|
|
|
$1,170
|
|
BB
|
490
|
|
|
627
|
|
||
B
|
173
|
|
|
177
|
|
||
CCC
|
406
|
|
|
412
|
|
||
Total carrying value of financing receivables
|
|
$2,199
|
|
|
|
$2,386
|
|
|
March 31
2018 |
|
|
December 31
2017 |
|
||
717 Aircraft ($256 and $269 accounted for as operating leases)
|
|
$1,039
|
|
|
|
$1,081
|
|
747-8 Aircraft ($136 and $138 accounted for as operating leases)
|
481
|
|
|
483
|
|
||
737 Aircraft ($257 and $127 accounted for as operating leases)
|
289
|
|
|
161
|
|
||
MD-80 Aircraft (accounted for as sales-type finance leases)
|
235
|
|
|
231
|
|
||
757 Aircraft ($26 and $27 accounted for as operating leases)
|
213
|
|
|
217
|
|
||
747-400 Aircraft ($83 and $88 accounted for as operating leases)
|
162
|
|
|
170
|
|
||
767 Aircraft ($0 and $25 accounted for as operating leases)
|
16
|
|
|
98
|
|
||
777 Aircraft ($17 and $0 accounted for as operating leases)
|
30
|
|
|
14
|
|
|
March 31
2018 |
|
|
December 31
2017 |
|
||
Equity method investments
(1)
|
|
$1,203
|
|
|
|
$1,214
|
|
Time deposits
|
108
|
|
|
613
|
|
||
Available for sale debt instruments
|
478
|
|
|
490
|
|
||
Restricted cash & cash equivalents
(2)
|
70
|
|
|
74
|
|
||
Equity and other investments
|
45
|
|
|
48
|
|
||
Total
|
|
$1,904
|
|
|
|
$2,439
|
|
(1)
|
Dividends received were
$88
and
$96
for the
three months ended March 31, 2018
and
2017
.
|
(2)
|
Reflects amounts restricted in support of our workers’ compensation programs, employee benefit programs, and insurance premiums.
|
|
2018
|
|
|
2017
|
|
||
Beginning balance – January 1
|
|
$524
|
|
|
|
$562
|
|
Reductions for payments made
|
(7
|
)
|
|
(11
|
)
|
||
Changes in estimates
|
22
|
|
|
(26
|
)
|
||
Ending balance – March 31
|
|
$539
|
|
|
|
$525
|
|
|
2018
|
|
|
2017
|
|
||
Beginning balance – January 1
|
|
$1,211
|
|
|
|
$1,414
|
|
Additions for current year deliveries
|
70
|
|
|
70
|
|
||
Reductions for payments made
|
(32
|
)
|
|
(74
|
)
|
||
Changes in estimates
|
(101
|
)
|
|
(65
|
)
|
||
Ending balance – March 31
|
|
$1,148
|
|
|
|
$1,345
|
|
|
Total
|
|
|
April through December 2018
|
|
$1,354
|
|
2019
|
2,960
|
|
|
2020
|
1,699
|
|
|
2021
|
1,632
|
|
|
2022
|
994
|
|
|
Thereafter
|
1,399
|
|
|
|
|
$10,038
|
|
|
Maximum
Potential Payments
|
|
Estimated Proceeds from
Collateral/Recourse
|
|
Carrying Amount of
Liabilities
|
|||||||||||||||
|
March 31
2018 |
|
December 31
2017 |
|
|
March 31
2018 |
|
December 31
2017 |
|
|
March 31
2018 |
|
December 31
2017 |
|
||||||
Contingent repurchase commitments
|
|
$1,527
|
|
|
$1,605
|
|
|
|
$1,527
|
|
|
$1,605
|
|
|
|
|
|
|
$9
|
|
Indemnifications to ULA:
|
|
|
|
|
|
|
|
|
||||||||||||
Contributed Delta program launch inventory
|
67
|
|
72
|
|
|
|
|
|
|
|
||||||||||
Contract pricing
|
261
|
|
261
|
|
|
|
|
|
7
|
|
7
|
|
||||||||
Other Delta contracts
|
191
|
|
191
|
|
|
|
|
|
|
|
|
|
||||||||
Credit guarantees
|
117
|
|
109
|
|
|
57
|
|
55
|
|
|
13
|
|
16
|
|
|
Pension
|
|
Other Postretirement Benefits
|
||||||||||||
Three months ended March 31
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Service cost
|
|
$108
|
|
|
|
$101
|
|
|
|
$24
|
|
|
|
$26
|
|
Interest cost
|
695
|
|
|
748
|
|
|
49
|
|
|
57
|
|
||||
Expected return on plan assets
|
(1,002
|
)
|
|
(961
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||
Amortization of prior service credits
|
(14
|
)
|
|
(10
|
)
|
|
(32
|
)
|
|
(34
|
)
|
||||
Recognized net actuarial loss/(gain)
|
282
|
|
|
201
|
|
|
(3
|
)
|
|
3
|
|
||||
Settlement/curtailment/other losses
|
|
|
|
1
|
|
|
|
|
|
|
|
||||
Net periodic benefit cost
|
|
$69
|
|
|
|
$80
|
|
|
|
$36
|
|
|
|
$50
|
|
|
|
|
|
|
|
|
|
||||||||
Net periodic benefit cost included in Earnings from operations
|
|
$82
|
|
|
|
$131
|
|
|
|
$22
|
|
|
|
$28
|
|
Net periodic benefit cost included in Other income, net
|
(42
|
)
|
|
(34
|
)
|
|
24
|
|
|
30
|
|
||||
Net periodic benefit cost included in Earnings before income taxes
|
|
$40
|
|
|
|
$97
|
|
|
|
$46
|
|
|
|
$58
|
|
|
Currency Translation Adjustments
|
|
|
Unrealized Gains and Losses on Certain Investments
|
|
|
Unrealized Gains and Losses on Derivative Instruments
|
|
|
Defined Benefit Pension Plans & Other Postretirement Benefits
|
|
|
Total
(1)
|
|
|||||
Balance at January 1, 2017
|
|
($143
|
)
|
|
|
($2
|
)
|
|
|
($127
|
)
|
|
|
($13,351
|
)
|
|
|
($13,623
|
)
|
Other comprehensive (loss)/income before reclassifications
|
34
|
|
|
1
|
|
|
52
|
|
|
1
|
|
|
88
|
|
|||||
Amounts reclassified from AOCI
|
|
|
|
|
16
|
|
|
104
|
|
(2)
|
120
|
|
|||||||
Net current period Other comprehensive (loss)/income
|
34
|
|
|
1
|
|
|
68
|
|
|
105
|
|
|
208
|
|
|||||
Balance at March 31, 2017
|
|
($109
|
)
|
|
|
($1
|
)
|
|
|
($59
|
)
|
|
|
($13,246
|
)
|
|
|
($13,415
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at January 1, 2018
|
|
($15
|
)
|
|
|
($2
|
)
|
|
|
$54
|
|
|
|
($16,410
|
)
|
|
|
($16,373
|
)
|
Other comprehensive (loss)/income before reclassifications
|
27
|
|
|
2
|
|
|
(2
|
)
|
|
(3
|
)
|
|
24
|
|
|||||
Amounts reclassified from AOCI
|
|
|
|
|
4
|
|
|
183
|
|
(2)
|
187
|
|
|||||||
Net current period Other comprehensive income
|
27
|
|
|
2
|
|
|
2
|
|
|
180
|
|
|
211
|
|
|||||
Balance at March 31, 2018
|
|
$12
|
|
|
|
$—
|
|
|
|
$56
|
|
|
|
($16,230
|
)
|
|
|
($16,162
|
)
|
(2)
|
Primarily relates to amortization of actuarial losses for the
three months ended March 31, 2018
and
2017
totaling
$219
and
$132
(net of tax of
($60)
and
($72)
). These are included in the net periodic pension cost.
|
|
Notional amounts
(1)
|
Other assets
|
Accrued liabilities
|
|||||||||||||||
|
March 31
2018 |
|
December 31
2017 |
|
March 31
2018 |
|
December 31
2017 |
|
March 31
2018 |
|
December 31
2017 |
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
|
$3,141
|
|
|
$2,930
|
|
|
$138
|
|
|
$131
|
|
|
($55
|
)
|
|
($63
|
)
|
Interest rate contracts
|
125
|
|
125
|
|
3
|
|
3
|
|
|
|
|
|||||||
Commodity contracts
|
35
|
|
56
|
|
4
|
|
4
|
|
(6
|
)
|
(6
|
)
|
||||||
Derivatives not receiving hedge accounting treatment:
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
270
|
|
406
|
|
14
|
|
16
|
|
(4
|
)
|
(5
|
)
|
||||||
Commodity contracts
|
676
|
|
563
|
|
|
|
|
|
|
|
||||||||
Total derivatives
|
|
$4,247
|
|
|
$4,080
|
|
|
$159
|
|
|
$154
|
|
|
($65
|
)
|
|
($74
|
)
|
Netting arrangements
|
|
|
(53
|
)
|
(61
|
)
|
53
|
|
61
|
|
||||||||
Net recorded balance
|
|
|
|
$106
|
|
|
$93
|
|
|
($12
|
)
|
|
($13
|
)
|
(1)
|
Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
|
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Effective portion recognized in Other comprehensive income, net of taxes:
|
|
|
|
||||
Foreign exchange contracts
|
|
($2
|
)
|
|
|
$56
|
|
Commodity contracts
|
|
|
|
(4
|
)
|
||
Effective portion reclassified out of Accumulated other comprehensive loss into earnings, net of taxes:
|
|
|
|
||||
Foreign exchange contracts
|
(4
|
)
|
|
(15
|
)
|
||
Commodity contracts
|
|
|
|
(1
|
)
|
||
Forward points recognized in Other income, net:
|
|
|
|
||||
Foreign exchange contracts
|
6
|
|
|
1
|
|
||
Undesignated derivatives recognized in Other income, net:
|
|
|
|
||||
Foreign exchange contracts
|
3
|
|
|
5
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
|
$1,983
|
|
|
|
$1,983
|
|
|
|
|
|
$1,582
|
|
|
|
$1,582
|
|
|
|
||||
Available-for-sale debt investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial paper
|
126
|
|
|
|
|
|
$126
|
|
|
70
|
|
|
|
|
|
$70
|
|
||||||
Corporate notes
|
340
|
|
|
|
|
340
|
|
|
382
|
|
|
|
|
382
|
|
||||||||
U.S. government agencies
|
33
|
|
|
|
|
33
|
|
|
47
|
|
|
|
|
47
|
|
||||||||
Other equity investments
|
17
|
|
|
17
|
|
|
|
|
18
|
|
|
18
|
|
|
|
||||||||
Derivatives
|
106
|
|
|
|
|
106
|
|
|
93
|
|
|
|
|
93
|
|
||||||||
Total assets
|
|
$2,605
|
|
|
|
$2,000
|
|
|
|
$605
|
|
|
|
$2,192
|
|
|
|
$1,600
|
|
|
|
$592
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
|
($12
|
)
|
|
|
|
|
($12
|
)
|
|
|
($13
|
)
|
|
|
|
|
($13
|
)
|
||||
Total liabilities
|
|
($12
|
)
|
|
|
|
|
($12
|
)
|
|
|
($13
|
)
|
|
|
|
|
($13
|
)
|
|
2018
|
|
2017
|
||||||||||||
|
Fair
Value
|
|
|
Total
Losses
|
|
|
Fair
Value
|
|
|
Total
Losses
|
|
||||
Operating lease equipment
|
|
$20
|
|
|
|
($8
|
)
|
|
|
$31
|
|
|
|
($11
|
)
|
Investments
|
|
|
(12
|
)
|
|
1
|
|
|
(11
|
)
|
|||||
Property, plant and equipment
|
|
|
|
|
|
|
9
|
|
|
(1
|
)
|
||||
Total
|
|
$20
|
|
|
|
($20
|
)
|
|
|
$41
|
|
|
|
($23
|
)
|
|
Fair
Value
|
|
Valuation
Technique(s)
|
|
Unobservable Input
|
|
Range
Median or Average
|
Operating lease equipment
|
$20
|
|
Market approach
|
|
Aircraft value publications
|
|
$20 - $32
(1)
Median $23
|
|
|
Aircraft condition adjustments
|
|
($3) - $0
(2)
Net ($3)
|
(1)
|
The range represents the sum of the highest and lowest values for all aircraft subject to fair value measurement, according to the third party aircraft valuation publications that we use in our valuation process.
|
(2)
|
The negative amount represents the sum for all aircraft subject to fair value measurement, of all downward adjustments based on consideration of individual aircraft attributes and condition. The positive amount represents the sum of all such upward adjustments.
|
|
March 31, 2018
|
||||||||||||
|
Carrying
Amount
|
|
Total Fair
Value
|
|
Level 1
|
Level 2
|
|
Level 3
|
|
||||
Assets
|
|
|
|
|
|
||||||||
Notes receivable, net
|
|
$934
|
|
|
$956
|
|
|
|
$956
|
|
|
||
Liabilities
|
|
|
|
|
|
||||||||
Debt, excluding capital lease obligations and commercial paper
|
(11,719
|
)
|
(12,943
|
)
|
|
(12,848
|
)
|
|
($95
|
)
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Amount
|
|
Total Fair
Value
|
|
Level 1
|
Level 2
|
Level 3
|
||||||
Assets
|
|
|
|
|
|
||||||||
Notes receivable, net
|
|
$1,022
|
|
|
$1,046
|
|
|
|
$1,046
|
|
|
||
Liabilities
|
|
|
|
|
|
||||||||
Debt, excluding capital lease obligations and commercial paper
|
(10,380
|
)
|
(11,923
|
)
|
|
(11,823
|
)
|
|
($100
|
)
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
Revenue from contracts with customers:
|
2018
|
|
2017
|
||||
Europe
|
|
$3,199
|
|
|
|
$2,132
|
|
China
|
2,047
|
|
|
1,179
|
|
||
Asia, other than China
|
1,731
|
|
|
1,235
|
|
||
Middle East
|
461
|
|
|
2,398
|
|
||
Other
|
1,494
|
|
|
1,058
|
|
||
Total non-U.S. revenues
|
8,932
|
|
|
8,002
|
|
||
United States
|
4,339
|
|
|
4,421
|
|
||
Total revenues from contracts with customers
|
13,271
|
|
|
12,423
|
|
||
Intersegment revenues, eliminated on consolidation
|
381
|
|
|
530
|
|
||
Total segment revenues
|
|
$13,652
|
|
|
|
$12,953
|
|
|
|
|
|
||||
Revenue recognized on fixed price contracts
|
100
|
%
|
|
100
|
%
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
Revenue from contracts with customers:
|
|
|
|
||||
U.S. customers
|
|
$4,226
|
|
|
|
$3,974
|
|
Non U.S. customers
(1)
|
1,536
|
|
|
1,138
|
|
||
Total segment revenue from contracts with customers
|
|
$5,762
|
|
|
|
$5,112
|
|
|
|
|
|
||||
Revenue recognized over time
|
98
|
%
|
|
96
|
%
|
||
|
|
|
|
||||
Revenue recognized on fixed price contracts
|
67
|
%
|
|
64
|
%
|
||
|
|
|
|
||||
Revenue from the U.S. government
(1)
|
87
|
%
|
|
87
|
%
|
(1)
|
Includes revenues earned from foreign military sales through the U.S. government.
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
Revenue from contracts with customers:
|
|
|
|
||||
Commercial
|
|
$2,102
|
|
|
|
$1,848
|
|
Government
|
1,782
|
|
|
1,792
|
|
||
Total revenues from contracts with customers
|
3,884
|
|
|
3,640
|
|
||
Intersegment revenues eliminated on consolidation
|
59
|
|
|
13
|
|
||
Total segment revenues
|
|
$3,943
|
|
|
|
$3,653
|
|
|
|
|
|
||||
Revenue recognized at a point in time
|
54
|
%
|
|
48
|
%
|
||
|
|
|
|
||||
Revenue recognized on fixed price contracts
|
88
|
%
|
|
88
|
%
|
||
|
|
|
|
||||
Revenue from the U.S. government
(1)
|
37
|
%
|
|
42
|
%
|
(1)
|
Includes revenues earned from foreign military sales through the U.S. government.
|
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Share-based plans
|
|
($18
|
)
|
|
|
($21
|
)
|
Deferred compensation
|
(29
|
)
|
|
(50
|
)
|
||
Amortization of previously capitalized interest
|
(25
|
)
|
|
(24
|
)
|
||
Eliminations and other unallocated items
|
(239
|
)
|
|
(126
|
)
|
||
Unallocated items, eliminations and other
|
|
($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
|
|
|
March 31
2018 |
|
|
December 31
2017 |
|
||
Commercial Airplanes
|
|
$64,846
|
|
|
|
$64,647
|
|
Defense, Space & Security
|
19,460
|
|
|
18,476
|
|
||
Global Services
|
12,636
|
|
|
12,491
|
|
||
Boeing Capital
|
3,007
|
|
|
3,156
|
|
||
Unallocated items, eliminations and other
|
13,600
|
|
|
13,592
|
|
||
Total
|
|
$113,549
|
|
|
|
$112,362
|
|
FORWARD-LOOKING STATEMENTS
|
|
This report 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; and
|
|
|
(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 information 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.
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These measures exclude certain components of pension and other postretirement benefit expense. See page
49
for important information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
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
|
|
$23,382
|
|
|
|
$21,961
|
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
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
|
|
||
Pension FAS/CAS service cost adjustment
|
283
|
|
|
262
|
|
||
Postretirement FAS/CAS service cost adjustment
|
82
|
|
|
84
|
|
||
Unallocated Items, Eliminations and Other
|
(311
|
)
|
|
(221
|
)
|
||
Earnings from operations (GAAP)
|
|
$2,875
|
|
|
|
$2,206
|
|
FAS/CAS service cost adjustment *
|
(365
|
)
|
|
(346
|
)
|
||
Core operating earnings (Non-GAAP) **
|
|
$2,510
|
|
|
|
$1,860
|
|
*
|
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 earnings is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See page
49
.
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Share-based plans
|
|
($18
|
)
|
|
|
($21
|
)
|
Deferred compensation
|
(29
|
)
|
|
(50
|
)
|
||
Eliminations and other unallocated items
|
(264
|
)
|
|
(150
|
)
|
||
Unallocated items, eliminations and other
|
|
($311
|
)
|
|
|
($221
|
)
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
Pension Plans
|
2018
|
|
|
2017
|
|
||
Service cost
|
|
$108
|
|
|
|
$101
|
|
Interest cost
|
695
|
|
|
748
|
|
||
Expected return on plan assets
|
(1,002
|
)
|
|
(961
|
)
|
||
Amortization of prior service (credits)/costs
|
(14
|
)
|
|
(10
|
)
|
||
Recognized net actuarial loss/(gain)
|
282
|
|
|
201
|
|
||
Settlement/curtailment/other losses
|
|
|
|
1
|
|
||
Net periodic benefit cost
|
|
$69
|
|
|
|
$80
|
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
Pension Plans
|
2018
|
|
|
2017
|
|
||
Allocated to business segments
|
|
($365
|
)
|
|
|
($393
|
)
|
Pension FAS/CAS service cost adjustment
|
283
|
|
|
262
|
|
||
Net periodic benefit cost included in Earnings from operations
|
|
($82
|
)
|
|
|
($131
|
)
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Earnings from operations
|
|
$2,875
|
|
|
|
$2,206
|
|
Other income, net
|
66
|
|
|
26
|
|
||
Interest and debt expense
|
(102
|
)
|
|
(87
|
)
|
||
Earnings from operations
|
2,839
|
|
|
2,145
|
|
||
Income tax expense
|
(362
|
)
|
|
(566
|
)
|
||
Net earnings from continuing operations
|
|
$2,477
|
|
|
|
$1,579
|
|
(Dollars in millions)
|
Three months ended March 31
|
|||||||||
|
2018
|
|
|
2017
|
|
Change
|
|
|||
Cost of sales
|
|
$18,824
|
|
|
|
$18,073
|
|
|
$751
|
|
Cost of sales as a % of Revenues
|
80.5
|
%
|
|
82.3
|
%
|
(1.8
|
%)
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Commercial Airplanes
|
|
$549
|
|
|
|
$625
|
|
Defense, Space & Security
|
183
|
|
|
196
|
|
||
Global Services
|
34
|
|
|
28
|
|
||
Other
|
(2
|
)
|
|
(13
|
)
|
||
Total
|
|
$764
|
|
|
|
$836
|
|
Total Backlog
(Dollars in millions)
|
March 31
2018 |
|
|
December 31
2017 |
|
||
Commercial Airplanes
|
|
$415,377
|
|
|
|
$411,188
|
|
Defense, Space & Security
|
50,404
|
|
|
44,049
|
|
||
Global Services
|
20,464
|
|
|
19,605
|
|
||
Total Backlog
|
|
$486,245
|
|
|
|
$474,842
|
|
|
|
|
|
||||
Contractual backlog
|
|
$461,742
|
|
|
|
$457,186
|
|
Unobligated backlog
|
24,503
|
|
|
17,656
|
|
||
Total Backlog
|
|
$486,245
|
|
|
|
$474,842
|
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
Revenues
|
|
$13,652
|
|
|
|
$12,953
|
|
Earnings from operations:
|
|
$1,508
|
|
|
|
$870
|
|
Operating margins
|
11.0
|
%
|
|
6.7
|
%
|
|
737
|
|
*
|
747
|
|
†
|
767
|
|
|
777
|
|
|
787
|
|
|
Total
|
|
Deliveries during the first three months of 2018
|
132
|
|
(5)
|
2
|
|
|
4
|
|
|
12
|
|
|
34
|
|
|
184
|
|
Deliveries during the first three months of 2017
|
113
|
|
(5)
|
1
|
|
(1)
|
2
|
|
|
21
|
|
|
32
|
|
|
169
|
|
Cumulative deliveries as of 3/31/2018
|
6,864
|
|
|
1,544
|
|
|
1,110
|
|
|
1,546
|
|
|
670
|
|
|
|
|
Cumulative deliveries as of 12/31/2017
|
6,732
|
|
|
1,542
|
|
|
1,106
|
|
|
1,534
|
|
|
636
|
|
|
|
†
|
Aircraft accounted for as revenues by
BCA
and as a note receivable in consolidation identified by parentheses
|
|
Program
|
||||||||||||||||
As of 3/31/2018
|
737
|
|
|
747*
|
|
|
767
|
|
|
777
|
|
|
777X
|
|
|
787
|
|
Program accounting quantities
|
10,000
|
|
|
1,570
|
|
|
1,195
|
|
|
1,625
|
|
|
**
|
|
|
1,400
|
|
Undelivered units under firm orders
|
4,656
|
|
|
24
|
|
|
101
|
|
|
90
|
|
|
326
|
|
|
638
|
|
Cumulative firm orders
|
11,520
|
|
|
1,568
|
|
|
1,211
|
|
|
1,636
|
|
|
326
|
|
|
1,308
|
|
|
Program
|
||||||||||||||||
As of 12/31/2017
|
737
|
|
|
747
|
|
|
767
|
|
|
777
|
|
|
777X
|
|
|
787
|
|
Program accounting quantities
|
9,800
|
|
|
1,570
|
|
|
1,171
|
|
|
1,625
|
|
|
**
|
|
|
1,400
|
|
Undelivered units under firm orders***
|
4,617
|
|
|
12
|
|
|
98
|
|
|
97
|
|
|
326
|
|
|
648
|
|
Cumulative firm orders ***
|
11,349
|
|
|
1,554
|
|
|
1,204
|
|
|
1,631
|
|
|
326
|
|
|
1,284
|
|
*
|
At
March 31, 2018
, the 747 accounting quantity has
25
undelivered aircraft, including
one
already completed aircraft that has not been sold and is being remarketed.
|
**
|
The accounting quantity for the 777X will be determined in the year of first airplane delivery, targeted for 2020.
|
***
|
Cumulative firm orders adjusted to reflect the adoption of Topic 606 in the first quarter of 2018.
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Revenues
|
|
$5,762
|
|
|
|
$5,112
|
|
Earnings from operations
|
|
$649
|
|
|
|
$549
|
|
Operating margins
|
11.3
|
%
|
|
10.7
|
%
|
|
Three months ended March 31
|
||
|
2018
|
|
2017
|
F/A-18 Models
|
5
|
|
6
|
F-15 Models
|
2
|
|
3
|
CH-47 Chinook (New)
|
4
|
|
3
|
CH-47 Chinook (Renewed)
|
4
|
|
9
|
AH-64 Apache (New)
|
|
|
3
|
AH-64 Apache (Remanufactured)
|
6
|
|
13
|
P-8 Models
|
4
|
|
4
|
Total
|
25
|
|
41
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Revenues
|
|
$3,943
|
|
|
|
$3,653
|
|
Earnings from operations
|
|
$644
|
|
|
|
$623
|
|
Operating margins
|
16.3
|
%
|
|
17.1
|
%
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Revenues
|
|
$65
|
|
|
|
$92
|
|
Earnings from operations
|
|
$20
|
|
|
|
$39
|
|
Operating margins
|
31
|
%
|
|
42
|
%
|
(Dollars in millions)
|
March 31
2018 |
|
|
December 31
2017 |
|
||
Customer financing and investment portfolio, net
|
|
$2,922
|
|
|
|
$3,003
|
|
Other assets, primarily cash and short-term investments
|
653
|
|
|
677
|
|
||
Total assets
|
|
$3,575
|
|
|
|
$3,680
|
|
|
|
|
|
||||
Other liabilities, primarily deferred income taxes
|
|
$533
|
|
|
|
$653
|
|
Debt, including intercompany loans
|
2,522
|
|
|
2,523
|
|
||
Equity
|
520
|
|
|
504
|
|
||
Total liabilities and equity
|
|
$3,575
|
|
|
|
$3,680
|
|
|
|
|
|
||||
Debt-to-equity ratio
|
4.9-to-1
|
|
|
5.0-to-1
|
|
(Dollars in millions)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Net earnings
|
|
$2,477
|
|
|
|
$1,579
|
|
Non-cash items
|
621
|
|
|
604
|
|
||
Changes in working capital
|
38
|
|
|
(85
|
)
|
||
Net cash provided by operating activities
|
3,136
|
|
|
2,098
|
|
||
Net cash provided/(used) by investing activities
|
119
|
|
|
(260
|
)
|
||
Net cash used by financing activities
|
(2,845
|
)
|
|
(2,463
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
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
|
|
(Dollars in millions, except per share data)
|
Three months ended March 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Revenues
|
|
$23,382
|
|
|
|
$21,961
|
|
Earnings from operations, as reported
|
|
$2,875
|
|
|
|
$2,206
|
|
Operating margins
|
12.3
|
%
|
|
10.0
|
%
|
||
|
|
|
|
||||
Pension FAS/CAS service cost adjustment
(1)
|
|
($283
|
)
|
|
|
($262
|
)
|
Postretirement FAS/CAS service cost adjustment
(1)
|
|
($82
|
)
|
|
|
($84
|
)
|
FAS/CAS service cost adjustment
(1)
|
|
($365
|
)
|
|
|
($346
|
)
|
Core operating earnings (non-GAAP)
|
|
$2,510
|
|
|
|
$1,860
|
|
Core operating margins (non-GAAP)
|
10.7
|
%
|
|
8.5
|
%
|
||
|
|
|
|
||||
Diluted earnings per share, as reported
|
|
$4.15
|
|
|
|
$2.54
|
|
Pension FAS/CAS service cost adjustment
(1)
|
(0.47
|
)
|
|
(0.42
|
)
|
||
Postretirement FAS/CAS service cost adjustment
(1)
|
(0.14
|
)
|
|
(0.14
|
)
|
||
Non-operating pension expense
(2)
|
(0.07
|
)
|
|
(0.06
|
)
|
||
Non-operating postretirement expense
(2)
|
0.04
|
|
|
0.05
|
|
||
Provision for deferred income taxes on adjustments
(3)
|
0.13
|
|
|
0.20
|
|
||
Core earnings per share (non-GAAP)
|
|
$3.64
|
|
|
|
$2.17
|
|
|
|
|
|
||||
Weighted average diluted shares (in millions)
|
597.2
|
|
|
621.2
|
|
(1)
|
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. This adjustment is excluded from Core operating earnings (non-GAAP)
|
(2)
|
Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income/(loss), net and are excluded from Core earnings per share (non-GAAP)
|
(1)
|
We purchased an aggregate of
8,875,094
shares of our common stock in the open market pursuant to our repurchase program and
657,827
shares transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period. We did not purchase shares in swap transactions.
|
(2)
|
On December 11, 2017, we announced a new repurchase plan for up to $18 billion of common stock, replacing the plan previously authorized in 2016.
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
12
|
|
|
|
15
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
THE BOEING COMPANY
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
April 25, 2018
|
|
/s/ Robert E. Verbeck
|
(Date)
|
|
Robert E. Verbeck – Senior Vice President, Finance and Corporate Controller
|
1.
|
RSU Award.
You have been awarded «RSU_Units» Restricted Stock Units. Each Restricted Stock Unit (“RSU”) corresponds to one share of Boeing stock. Your RSUs are subject to the terms of the Plan. If there is any inconsistency between the terms of this Notice and the terms of the Plan, the Plan’s terms will control. A summary of the Plan accompanies this Notice.
|
2.
|
RSU Account.
The Company will maintain a record of the number of awarded RSUs in an account established in your name.
|
3.
|
Vesting of RSUs.
Subject to Sections 6 and 7, your RSUs will vest on _______________ (the “Vesting Date”). At the time your RSUs vest, the Company will issue to you shares of Boeing stock equal in number to the vested number of whole RSUs in your account, after deduction of shares to cover appropriate taxes and other charges as described in Section 10.2.
|
4.
|
Dividend Equivalents.
|
5.
|
Adjustment in Number of RSUs.
The number of RSUs in your account will be adjusted proportionately for any increase or decrease in the number of issued shares of Boeing stock resulting from any stock split, combination or exchange of shares, consolidation, spin-off or recapitalization of shares, or any similar capital adjustment or the payment of any stock dividend.
|
6.
|
Termination Due to Retirement, Layoff, Disability, or Death.
In the event your employment is terminated by reason of retirement, layoff, disability, or death, your RSU payout, including any dividend equivalent RSUs, will be prorated based on the number of full and partial calendar months you spent on the active payroll during the vesting period (beginning with the first full calendar month after the Grant Date). Payment for this award will be made as soon as administratively possible, but not later than 60 days after your termination of employment. For purposes of this award, “retirement” means a voluntary termination of employment under the conditions that satisfy the definition of “retirement” under the terms of a defined benefit pension plan maintained by the Company or one of its subsidiaries in which you participate. If you are not eligible to participate in such a defined benefit pension plan, “retirement” means termination of employment voluntarily by you after you have attained either (i) age 55 with 10 years of service,
|
7.
|
Forfeiture Upon
Other Terminations.
In the event your employment is terminated prior to the Vesting Date for any reason (including for cause and resignation) other than those reasons described in Section 6, all RSUs (and all associated dividend equivalent RSUs) granted hereunder shall immediately be forfeited by you and canceled.
|
8.
|
Specified Employees.
If you are a Specified Employee (as defined in the Deferred Compensation Plan for Employees of The Boeing Company) on the Vesting Date, and were eligible for retirement on the Grant Date or became so eligible between the Grant Date and the Vesting Date, distributions upon vesting due to retirement, layoff or disability will be delayed until six months after the date of vesting based on Internal Revenue Code Section 409A.
|
9.
|
Leave of Absence.
Unless otherwise required by law, in the event you have an authorized leave of absence at any time during the vesting period which absence extends beyond three full calendar months (including any absence that began before the Grant Date), your RSU payout, including any dividend equivalent RSUs, will be prorated based on the number of full and partial calendar months you spent on the active payroll during the vesting period (beginning with the first full calendar month after the Grant Date).
|
10.
|
RSU Award Payable in Stock.
|
11.
|
Transfer.
RSUs are not transferable except by will or by laws of descent and distribution. You may designate a beneficiary to receive your award in the event of your death.
|
12.
|
Clawback and Forfeiture Policy.
|
1.
|
PBRSU Award.
You have been awarded «PBRSU_Units» Performance-Based Restricted Stock Units. Each Performance-Based Restricted Stock Unit (“PBRSU”) corresponds to one share of Boeing stock. Your PBRSUs are subject to the terms of the Plan, including the maximum award provisions. If there is any inconsistency between the terms of this Notice and the terms of the Plan, the Plan’s terms will control. A summary of the Plan accompanies this Notice.
|
2.
|
PBRSU Account.
The Company will maintain a record of the number of awarded PBRSUs in an account established in your name.
|
3.
|
Vesting Provisions:
|
4.
|
Dividend Equivalents.
|
5.
|
Adjustment in Number of PBRSUs.
The number of PBRSUs in your account will be adjusted proportionately for any increase or decrease in the number of issued shares of Boeing stock resulting from any stock split, combination or exchange of shares, consolidation, spin
-
off or recapitalization of shares, or any similar capital adjustment or the payment of any stock dividend.
|
6.
|
Termination Due to Retirement, Layoff, Disability, or Death.
In the event your employment is terminated by reason of retirement, layoff, disability, or death, your PBRSU payout, including any dividend equivalent PBRSUs, will be prorated based on the number of full and partial calendar months you spent on the active payroll during the Measurement Period (beginning with the first full calendar month after the Grant Date). Payout for the award will be made at the same time as payment would have been made had you not had a termination of employment and will in all respects be subject to the Company’s actual Relative Total Shareholder Return achievement for the full Measurement Period. For purposes of this award, “retirement” means a voluntary termination of employment under the conditions that satisfy the definition of “retirement” under the terms of a defined benefit pension plan maintained by the Company or one of its subsidiaries in which you participate. If you are not eligible to participate in such a defined benefit pension plan, “retirement” means termination of employment voluntarily by you after you have attained either (i) age 55 with 10 years of service, or (ii) age 62 with one year of service. For purposes of this award, “disability” means a disability entitling you to benefits under any long
-
term disability policy sponsored by the Company or one of its subsidiaries.
|
7.
|
Forfeiture Upon
Other Terminations.
In the event your employment is terminated prior to the Vesting Date for any reason (including for cause and resignation) other than those reasons described in Section 6, all PBRSUs (and all associated dividend equivalent PBRSUs) granted hereunder shall immediately be forfeited by you and canceled.
|
8.
|
Leave of Absence.
Unless otherwise required by law, in the event you have an authorized leave of absence at any time during the Measurement Period which absence extends beyond three full calendar months (including any absence that began before the Grant Date), your PBRSU payout, including any dividend equivalent PBRSUs, will be prorated based on the number of full and partial calendar months you spent on the active payroll during the Measurement Period (beginning with the first full calendar month after the Grant Date). Payout for the award will be made at the same time as payment would have been made without regard to any leave of absence, and will in all respects be subject to the Company’s actual Relative Total Shareholder Return achievement for the full Measurement Period.
|
9.
|
PBRSU Award Payable in Stock.
|
10.
|
Transfer.
PBRSUs are not transferable except by will or by laws of descent and distribution. You may designate a beneficiary to receive your award in the event of your death.
|
11.
|
Clawback and Forfeiture Policy.
|
•
|
“
Relative Total Shareholder Return
” means Boeing’s TSR relative to the TSR of the Peer Companies. Relative Total Shareholder Return will be determined by ranking Boeing and the Peer Companies from highest to lowest according to their respective TSRs. After this ranking, the percentile performance of Boeing relative to the Peer Companies will be determined as follows:
|
P = 1
|
—
|
R - 1
|
N - 1
|
where:
|
“P” represents the percentile performance which will be rounded, if necessary, to the nearest whole percentile by application of regular rounding.
|
•
|
“
TSR
” means, for Boeing and each of the Peer Companies, the company’s total shareholder return, expressed as a percentage, which will be calculated by dividing (i) the Closing Average Share Value by (ii) the Opening Average Share Value and subtracting one from the quotient.
|
•
|
“
Opening Average Share Value
” means the average Share Value over the trading days in the Opening Average Period.
|
•
|
“
Opening Average Period
” means the 20 trading days immediately following the Grant Date.
|
•
|
“
Accumulated Shares
” means, for a given trading day, the sum of (i) one (1) share and (ii) the cumulative number of shares of the company’s common stock purchasable with dividends declared on the company’s common stock to that point during the Measurement Period, assuming same day reinvestment of such dividends at the closing price on the ex-dividend date.
|
•
|
“
Closing Average Share Value
” means the average Share Value over the trading days in the Closing Average Period.
|
•
|
“
Closing Average Period
” means the 20 trading days immediately preceding the Vesting Date.
|
•
|
“
Share Value
” means, with respect to a given trading day, the closing price of the company’s common stock multiplied by the Accumulated Shares for such trading day.
|
•
|
“
Peer Companies
” means the following companies:
|
•
|
Each Peer Company’s “common stock” shall mean that series of common stock that is publicly traded on a registered U.S. exchange or, in the case of a non-U.S. company, an equivalent non-U.S. exchange. For purposes of calculating TSR, the value on any given trading day of any Peer Company shares traded on a foreign exchange will be converted to U.S. dollars.
|
•
|
The following example illustrates the calculation of TSR for Boeing with Grant Date of January 1, 2015 and Vesting Date of January 1, 2018.
|
Opening Average
|
|
Closing Average
|
||||||||
Date
|
Close
|
Ex- Div.
|
Accum.
Shares |
Share
Value |
|
Date
|
Close
|
Ex- Div.
|
Accum.
Shares |
Share
Value |
1/30/2015
|
$145.37
|
$—
|
1
|
$145.37
|
|
12/29/2017
|
$294.91
|
$—
|
1.089871
|
$321.41
|
1/29/2015
|
$147.78
|
$—
|
1
|
$147.78
|
|
12/28/2017
|
$296.35
|
$—
|
1.089871
|
$322.98
|
1/28/2015
|
$139.64
|
$—
|
1
|
$139.64
|
|
12/27/2017
|
$295.62
|
$—
|
1.089871
|
$322.19
|
1/27/2015
|
$132.48
|
$—
|
1
|
$132.48
|
|
12/26/2017
|
$295.36
|
$—
|
1.089871
|
$321.90
|
1/26/2015
|
$134.07
|
$—
|
1
|
$134.07
|
|
12/22/2017
|
$295.10
|
$—
|
1.089871
|
$321.62
|
1/23/2015
|
$134.62
|
$—
|
1
|
$134.62
|
|
12/21/2017
|
$295.03
|
$—
|
1.089871
|
$321.54
|
1/22/2015
|
$135.64
|
$—
|
1
|
$135.64
|
|
12/20/2017
|
$297.90
|
$—
|
1.089871
|
$324.67
|
1/21/2015
|
$132.41
|
$—
|
1
|
$132.41
|
|
12/19/2017
|
$297.25
|
$—
|
1.089871
|
$323.96
|
1/20/2015
|
$131.22
|
$—
|
1
|
$131.22
|
|
12/18/2017
|
$296.14
|
$—
|
1.089871
|
$322.75
|
1/16/2015
|
$130.78
|
$—
|
1
|
$130.78
|
|
12/15/2017
|
$293.94
|
$—
|
1.089871
|
$320.36
|
1/15/2015
|
$130.14
|
$—
|
1
|
$130.14
|
|
12/14/2017
|
$293.88
|
$—
|
1.089871
|
$320.29
|
1/14/2015
|
$130.38
|
$—
|
1
|
$130.38
|
|
12/13/2017
|
$291.84
|
$—
|
1.089871
|
$318.07
|
1/13/2015
|
$131.17
|
$—
|
1
|
$131.17
|
|
12/12/2017
|
$289.94
|
$—
|
1.089871
|
$316.00
|
1/12/2015
|
$130.87
|
$—
|
1
|
$130.87
|
|
12/11/2017
|
$283.16
|
$—
|
1.089871
|
$308.61
|
1/9/2015
|
$131.54
|
$—
|
1
|
$131.54
|
|
12/8/2017
|
$285.90
|
$—
|
1.089871
|
$311.59
|
1/8/2015
|
$131.80
|
$—
|
1
|
$131.80
|
|
12/7/2017
|
$281.97
|
$—
|
1.089871
|
$307.31
|
1/7/2015
|
$129.51
|
$—
|
1
|
$129.51
|
|
12/6/2017
|
$278.27
|
$—
|
1.089871
|
$303.28
|
1/6/2015
|
$127.53
|
$—
|
1
|
$127.53
|
|
12/5/2017
|
$275.54
|
$—
|
1.089871
|
$300.30
|
1/5/2015
|
$129.05
|
$—
|
1
|
$129.05
|
|
12/4/2017
|
$277.97
|
$—
|
1.089871
|
$302.95
|
1/2/2015
|
$129.95
|
$—
|
1
|
$129.95
|
|
12/1/2017
|
$271.38
|
$—
|
1.089871
|
$295.77
|
1.
|
Target Value of Performance Awards.
The Performance Award target value (or “initial value”) will be based on (i) your base salary as of December 31, _____ (or, if you were hired after that date but prior to the Grant Date, your new hire salary), (ii) your target Performance Awards multiple based on your E
-
series grade as of March 1 of the year of the award or, if you were hired or promoted into E-series after that date but prior to the Grant Date, your new E-series grade, and (iii) your _____ Integrated Performance Score (IPS) or if you don’t have such an IPS, 100%. The target value will be expressed as a number of units (rounded to the nearest unit), each of which has an initial value equal to $100.
|
2.
|
Performance Measure
. For the ____________Performance Period, the performance measure will be based on the 2018 Long-Range Business Plan. The Committee retains discretion in calculating actual performance to exclude the impact of extraordinary and/or non-recurring items deemed not reflective of the Company’s core operating performance. Such non-recurring items may include, but are not limited to, exogenous events, acquisitions, divestitures, changes in accounting principles, or “extraordinary items” determined under generally accepted accounting principles (GAAP).
|
3.
|
Final Award Determination.
Final amounts payable will be determined following the end of the Performance Period. The amount payable may be anywhere from $0 to $200 per unit, depending on the Company’s performance against plan for the period ending on December 31, ________. The final award will range from 0% to a maximum of 200% of the Performance Award target value, as outlined below. There will be straight-line interpolation to determine payouts between minimum and target, and target and maximum.
|
|
|
Achievement (% of Plan)
|
|
||
Level of Performance
|
Final Performance Award Unit Value
|
Free Cash Flow
(50% Weighting) |
Core Earnings Per Share
(25% Weighting) |
Revenue
(25% Weighting) |
Payout Factor
(% of Target Award) |
Maximum
|
$200
|
____%
|
____%
|
____%
|
200%
|
Target
|
$100
|
Plan
|
Plan
|
Plan
|
100%
|
Minimum
|
$—
|
____%
|
____%
|
____%
|
—%
|
4.
|
Continued Employment.
Subject to the terms and conditions outlined under Section 5, this Performance Award is granted on the condition that you remain employed by the Company from the Grant Date through the entire Performance Period. You will not have any right to payment of any award unless and until all terms, conditions, and provisions of the Performance Award program that affect you have been complied with as specified herein, including
|
5.
|
Termination Due to Retirement, Layoff, Disability, or Death.
In the event your employment is terminated by reason of retirement, layoff, disability, or death, you shall continue to be eligible to participate in the Performance Period, provided you were on the active payroll on the Grant Date. Your Performance Award payout will be prorated based on the number of full and partial calendar months you spent on the active payroll during the Performance Period. Payment for the award will be made at the same time as payment would have been made had you not had a termination of employment. For purposes of this award, “retirement” means a voluntary termination of employment under the conditions that satisfy the definition of “retirement” under the terms of a defined benefit pension plan maintained by the Company or one of its subsidiaries in which you participate. If you are not eligible to participate in such a defined benefit pension plan, “retirement” means termination of employment voluntarily by you after you have attained either (i) age 55 with 10 years of service, or (ii) age 62 with one year of service. For purposes of this award, “disability” means a disability entitling you to benefits under any long-term disability policy sponsored by the Company or one of its subsidiaries.
|
6.
|
Forfeiture Upon Other Terminations.
In the event your employment is terminated prior to payment of the Performance Award for any reason (including for cause and resignation) other than those reasons described in Section 5, the Performance Award granted hereunder shall immediately be forfeited by you and canceled.
|
7.
|
Leave of Absence.
Unless otherwise required by law, in the event you have an authorized leave of absence at any time during the Performance Period which absence extends beyond three full calendar months (including any absence that began before the Grant Date), your Performance Award payout will be prorated based on the number of full and partial calendar months you spent on the active payroll during the Performance Period.
|
8.
|
Form and Timing of Payment of Performance Awards.
Any payment of the Performance Awards shall be made in either cash or shares of Boeing stock, at the Committee’s discretion. The Performance Award payment shall be made within a reasonable time following the end of the Performance Period. For certain eligible participants, amounts to be paid in connection with Performance Awards may be deferred in accordance with the Company’s deferred compensation plan then in place.
|
9.
|
Transferability.
This Performance Award is not transferable except by will or by laws of descent and distribution. You may designate a beneficiary to receive your award in the event of your death.
|
10.
|
Successors.
All obligations of the Company under the Performance Award program shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, or consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.
|
11.
|
Clawback and Forfeiture Policy
.
|
1.
|
RSU Award
.
You have been awarded ______________ Restricted Stock Units. Each Restricted Stock Unit (“RSU”) corresponds to one share of Boeing stock. Your RSUs are subject to the terms of the Plan. If there is any inconsistency between the terms of this Notice and the terms of the Plan, the Plan’s terms will control. A summary of the Plan accompanies this Notice.
|
2.
|
RSU Account
.
The Company will maintain a record of the number of awarded RSUs in an account established in your name.
|
3.
|
Vesting of RSUs
.
Subject to Sections 6 and 7, ______________. At the time your RSUs vest, the Company will issue to you shares of Boeing stock equal in number to the vested number of whole RSUs in your account, after deduction of shares to cover appropriate taxes and other charges as described in Section 8.2.
|
4.
|
Dividend Equivalents.
|
5.
|
Adjustment in Number of RSUs
.
The number of RSUs in your account will be adjusted proportionately for any increase or decrease in the number of issued shares of Boeing stock resulting from any stock split, combination or exchange of shares, consolidation, spin-off or recapitalization of shares, or any similar capital adjustment or the payment of any stock dividend.
|
6.
|
Termination Due to Layoff, Disability, or Death
.
In the event your employment is terminated by reason of layoff, disability, or death, before your RSUs are fully vested, your RSU payout, including any dividend equivalent RSUs, will be made as soon as administratively possible, but not later than 60 days after your termination of employment. For purposes of this award, “disability” means a disability entitling you to benefits under any long-term disability policy sponsored by the Company or one of its subsidiaries.
|
7.
|
Forfeiture Upon
Other Terminations
.
In the event your employment is terminated prior to the Vesting Date for any reason (including for cause and resignation) other than those reasons described in Section 6, all RSUs (and all associated dividend equivalent RSUs) granted hereunder shall immediately be forfeited by you and canceled.
|
8.
|
RSU Award Payable in Stock.
|
9.
|
Transfer.
RSUs are not transferable except by will or by laws of descent and distribution. You may designate a beneficiary to receive your award in the event of your death.
|
10.
|
Clawback and Forfeiture Policy.
|
|
Three months ended
|
|
Years ended December 31,
|
||||||||||||
|
March 31, 2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
|||||
Earnings before income taxes
(1)
|
|
$2,839
|
|
|
$10,107
|
|
|
$5,783
|
|
|
$7,155
|
|
|
$7,137
|
|
Fixed charges excluding capitalized interest
|
131
|
|
486
|
|
422
|
|
391
|
|
455
|
|
|||||
Amortization of previously capitalized interest
|
25
|
|
96
|
|
106
|
|
90
|
|
72
|
|
|||||
Net adjustment for earnings from affiliates
|
(8
|
)
|
14
|
|
11
|
|
(34
|
)
|
7
|
|
|||||
Earnings available for fixed charges
|
|
$2,987
|
|
|
$10,703
|
|
|
$6,322
|
|
|
$7,602
|
|
|
$7,671
|
|
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest and debt expense
(2)
|
|
$118
|
|
|
$430
|
|
|
$365
|
|
|
$339
|
|
|
$402
|
|
Interest capitalized during the period
|
21
|
|
110
|
|
170
|
|
158
|
|
102
|
|
|||||
Rentals deemed representative of an interest factor
|
13
|
|
56
|
|
57
|
|
52
|
|
53
|
|
|||||
Total fixed charges
|
|
$152
|
|
|
$596
|
|
|
$592
|
|
|
$549
|
|
|
$557
|
|
Ratio of earnings to fixed charges
|
19.7
|
|
18.0
|
|
10.7
|
|
13.8
|
|
13.8
|
|
(1)
|
We adopted
ASU 2014-09
,
Revenue from Contracts with Customers (Topic 606)
on January 1, 2018, using the full retrospective method. 2017 and 2016 amounts have been adjusted to conform with the current year presentation. Amounts prior to 2016 have not been adjusted. See Note
1
– Basis of Presentation and and Note
2
- Impact of Adoption of New Standards of the Notes to the Condensed Consolidated Financial Statements for more information.
|
(2)
|
Amount does not include tax-related interest expense which is reported as a component of Income tax expense in our
Condensed Consolidated Financial Statements
.
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of The Boeing Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Dennis A. Muilenburg
|
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of The Boeing Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Gregory D. Smith
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Dennis A. Muilenburg
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Gregory D. Smith
|
|