Boeing achieves record revenue in 2013, optimistic about 2014 deliveries

CHICAGO, 5 Feb. 2014. The Boeing Company [NYSE:BA] officials reported 2013 fourth-quarter revenue of $23.8 billion, an increase of seven percent over Q4 2012, drivenCHICAGO, 5 Feb. 2014. The Boeing Company [NYSE:BA] officials reported 2013 fourth-quarter revenue of $23.8 billion, an increase of seven percent over Q4 2012, driven by strong performance across the company's businesses and higher deliveries.

Feb 5th, 2014
Boeing
Boeing

CHICAGO, 5 Feb. 2014. The Boeing Company [NYSE:BA] officials reported 2013 fourth-quarter revenue of $23.8 billion, an increase of seven percent over Q4 2012, drivenCHICAGO, 5 Feb. 2014. The Boeing Company [NYSE:BA] officials reported 2013 fourth-quarter revenue of $23.8 billion, an increase of seven percent over Q4 2012, driven by strong performance across the company's businesses and higher deliveries.

"Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders," says Boeing Chairman and Chief Executive Officer Jim McNerney.

"Our Commercial Airplanes business accelerated delivery of its record backlog by successfully increasing production rates while also achieving important development milestones on the 737 MAX and 787-9 and launching the new 787-10 and 777X models with an unprecedented customer response.

“Our Defense, Space & Security unit overcame a tough operating environment to record expanded revenue, earnings and margins while executing to our commitments on the KC-46A tanker and developing and delivering important new capabilities to customers, such as the P-8 maritime aircraft and the Inmarsat-5 satellite," McNerney adds.

"For 2014, we remain focused on maintaining our commercial airplanes market leadership, strengthening and repositioning our defense, space, and security business, and continuing to meet the needs of our customers by improving productivity, executing to development plans and delivering our unmatched portfolio of innovative aerospace products and services," McNerney explains.



2013 figures

Fourth-quarter core operating earnings (non-GAAP) of $1.8 billion includes a $406 million non-cash charge to settle A-12 litigation dating back to 1991, retiring a longstanding risk to the company. Excluding the A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent to $2.2 billion and core operating margin increased to 9.4 percent.

Revenue rose 6 percent in the full year to a record $86.6 billion and core earnings per share increased 20 percent to a record $7.07. Full-year 2013 GAAP earnings per share was $5.96.

Core earnings per share guidance for 2014 is set at between $7.00 and $7.20, while GAAP earnings per share guidance is established at between $6.10 and $6.30. Revenue guidance is between $87.5 and $90.5 billion, including commercial deliveries of between 715 and 725. Operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow guidance is set at approximately $6.25 billion.

Full Year 2013

· Core EPS increased 20 percent to a record $7.07 on record revenue of $86.6 billion; GAAP EPS of $5.96

· Operating cash flow before pension contributions* grew to $9.7 billion; GAAP operating cash flow of $8.2 billion

· Backlog grew to a record $441 billion, including $135 billion of net orders during the year

Outlook for 2014

· 2014 Core EPS guidance of between $7.00 and $7.20; GAAP EPS guidance of between $6.10 and $6.30

· Revenue guidance of between $87.5 and $90.5 billion with commercial deliveries of between 715 and 725

Table 1. Summary Financial Results

Fourth Quarter

Full Year

(Dollars in Millions, except per share data)

2013

2012

Change

2013

2012

Change

Revenues

$23,785

$22,302

7%

$86,623

$81,698

6%

Non-GAAP*

Core Operating Earnings

$1,838

$1,836

0%

$7,876

$7,189

10%

Core Operating Margin

7.7%

8.2%

(0.5) Pts

9.1%

8.8%

0.3 Pts

Core Earnings Per Share

$1.88

$1.46

29%

$7.07

$5.88

20%

Operating Cash Flow Before Pension Contributions

$1,409

$4,204

(66)%

$9,721

$9,058

7%

GAAP

Earnings From Operations

$1,515

$1,624

(7)%

$6,562

$6,290

4%

Operating Margin

6.4%

7.3%

(0.9) Pts

7.6%

7.7%

(0.1) Pts

Net Earnings

$1,233

$978

26%

$4,585

$3,900

18%

Earnings Per Share

$1.61

$1.28

26%

$5.96

$5.11

17%

Operating Cash Flow

$1,380

$4,167

(67)%

$8,179

$7,508

9%

*

Non-GAAP measures (core operating earnings, core operating margin and core earnings per share) exclude certain components of pension and post retirement benefit expense that management believes are not reflective of underlying business performance. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."

Table 2. Cash Flow

Fourth Quarter

Full Year

(Millions)

2013

2012

2013

2012

Operating Cash Flow Before Pension Contributions*

$1,409

$4,204

$9,721

$9,058

Pension Contributions

($29)

($37)

($1,542)

($1,550)

Operating Cash Flow

$1,380

$4,167

$8,179

$7,508

Less Additions to Property, Plant & Equipment

($638)

($495)

($2,098)

($1,703)

Free Cash Flow*

$742

$3,672

$6,081

$5,805

Operating cash flow in the quarter was $1.4 billion, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 7.6 million shares for$1.0 billion and paid $0.4 billion in dividends, reflecting a 10 percent increase in dividends paid compared to the same period of the prior year. Based on the strong cash generation and outlook, in December, the board of directors authorized an additional $10 billionshare repurchase program and raised the quarterly dividend 50 percent.

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q4 13

Q3 13

Cash

$9.1

$10.0

Marketable Securities1

$6.2

$5.9

Total

$15.3

$15.9

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$7.0

$7.0

Boeing Capital Corporation, including intercompany loans

$2.6

$2.6

Total Consolidated Debt

$9.6

$9.6

1

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

Cash and investments in marketable securities totaled $15.3 billion at year-end (Table 3), down from $15.9 billion at the beginning of the quarter. Debt was $9.6 billion, unchanged from the beginning of the quarter.

Total company backlog at year-end was a record $441 billion, up from $415 billion at the beginning of the quarter, and included net orders for the quarter of $48 billion. Backlog is up $51 billion from prior year-end, reflecting $135 billion of net orders in 2013.

Segment Results

Boeing Commercial Airplanes

Table 4. Boeing Commercial Airplanes

Fourth Quarter

Full Year

(Dollars in Millions)

2013

2012

Change

2013

2012

Change

Commercial Airplanes Deliveries

172

165

4%

648

601

8%

Revenues

$14,680

$14,161

4%

$52,981

$49,127

8%

Earnings from Operations

$1,506

$1,266

19%

$5,795

$4,711

23 %

Operating Margin

10.3%

8.9%

1.4 Pts

10.9%

9.6%

1.3Pts

Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7 billion and full-year revenue increased to a record $53 billionon higher delivery volume. Fourth-quarter operating margin improved to 10.3 percent and full-year operating margin grew to 10.9 percent on the higher volume, favorable delivery mix and continued strong operating performance (Table 4).

During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM).

Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.

Boeing Defense, Space & Security

Table 5. Defense, Space & Security

Fourth Quarter

Full Year

(Dollars in Millions)

2013

2012

Change

2013

2012

Change

Revenues

Boeing Military Aircraft

$4,395

$4,037

9%

$15,936

$16,019

(1)%

Network & Space Systems

$2,272

$2,024

12%

$8,512

$7,911

8%

Global Services & Support

$2,188

$2,282

(4)%

$8,749

$8,677

1%

Total BDS Revenues

$8,855

$8,343

6%

$33,197

$32,607

2%

Earnings from Operations

Boeing Military Aircraft

$441

$313

41%

$1,465

$1,489

(2)%

Network & Space Systems

$233

$138

69%

$719

$562

28%

Global Services & Support

$280

$300

(7)%

$1,051

$1,017

3%

Total BDS Earnings from Operations

$954

$751

27%

$3,235

$3,068

5%

Operating Margin

10.8%

9.0%

1.8 Pts

9.7%

9.4%

0.3 Pts

Boeing Defense, Space & Security's fourth-quarter revenue increased 6 percent to $8.9 billion, while operating margin increased to 10.8 percent (Table 5). For the full year, revenue increased 2 percent to $33.2 billion, while operating margin increased to 9.7 percent.

Boeing Military Aircraft (BMA) fourth-quarter revenue increased to $4.4 billion, reflecting higher deliveries. Operating margin increased to 10.0 percent, reflecting the higher deliveries and strong performance. During the quarter, BMA achieved Initial Operating Capability (IOC) on the P-8A Poseidon aircraft.

Network & Space Systems (N&SS) fourth-quarter revenue increased to $2.3 billion, reflecting higher delivery volume and mix, and operating margin increased to 10.3 percent on strong performance. During the quarter, N&SS was awarded a contract for a fourth Inmarsat-5 satellite.

Global Services & Support (GS&S) fourth-quarter revenue was $2.2 billion, reflecting lower volume in integrated logistics. Operating margin was 12.8 percent. During the quarter, GS&S was awarded contracts for the B-52 and B-1 bomber modifications and upgrades.

Backlog at Defense, Space & Security was $67 billion, of which 37 percent represents orders with international customers.

Additional Financial Information

Table 6. Additional Financial Information

Fourth Quarter

Full Year

(Dollars in Millions)

2013

2012

2013

2012

Revenues

Boeing Capital Corporation

$105

$129

$408

$468

Other segment

$22

$27

$102

$106

Unallocated items and eliminations

$123

($358)

($65)

($610)

Earnings from Operations

Boeing Capital Corporation

$9

($12)

$107

$88

Other segment income/(expense)

($99)

$31

($156)

($186)

Unallocated items and eliminations excluding unallocated pension/postretirement expense

($532)

($200)

($1,105)

($492)

Unallocated pension/postretirement expense

($323)

($212)

($1,314)

($899)

Other income, net

$15

$23

$56

$62

Interest and debt expense

($96)

($112)

($386)

($442)

Effective tax rate

14.0%

36.3%

26.4%

34.0%

At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was $3.9 billion down from $4.1 billion at the beginning of the quarter. BCC's debt-to-equity ratio was 5.0-to-1. Other segment earnings decreased $130 million in the quarter partly due to higher asset impairment expense.

Unallocated items and eliminations excluding unallocated pension/postretirement expense increased in the fourth quarter of 2013 primarily due to a $406 million charge associated with the A-12 settlement. Total pension expense for the fourth quarter was $717 million, up from $576 million in the same period last year. The company's income tax expense was $201 million in the quarter, compared to $557 million in the same period of the prior year, due to a $212 million benefit recorded in fourth-quarter 2013 for a tax regulation change.

Outlook

The company's 2014 financial guidance (Table 7) reflects continued strong performance in both businesses.

Table 7. Financial Outlook

(Dollars in Billions, except per share data)

2014

The Boeing Company

Revenue

$87.5 - 90.5

Core Earnings Per Share*

$7.00 - 7.20

Earnings Per Share

$6.10 - 6.30

Operating Cash Flow Before Pension Contributions*

~ $7

Operating Cash Flow 1

~ $6.25

Boeing Commercial Airplanes

Deliveries 2

715 - 725

Revenue

$57.5 - 59.5

Operating Margin

~ 10%

Boeing Defense, Space & Security

Revenue

Boeing Military Aircraft

~ $15

Network & Space Systems

~ $7.7

Global Services & Support

~ $7.8

Total BDS Revenue

$30 - 31

Operating Margin

Boeing Military Aircraft

~ 9.5%

Network & Space Systems

~ 8.5%

Global Services & Support

~ 10.5%

Total BDS Operating Margin

~ 9.5%

Boeing Capital Corporation

Portfolio Size

Lower

Revenue

~ $0.3

Pre-Tax Earnings

~ $0.05

Research & Development

~ $3.2

Capital Expenditures

~ $2.5

Pension Expense 3

~ $3.1

Effective Tax Rate 4

~ 31%

1

After discretionary cash pension contributions of $0.75 billion and assuming new aircraft financings under $0.5 billion

2

Assumes approximately 110 787 deliveries

3

Approximately $1.1 billion is expected to be recorded in unallocated items and eliminations

4

Assumes the extension of the research and development tax credit

*

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

Boeing's 2014 revenue guidance is established at between $87.5 and $90.5 billion. Core earnings per share guidance is set at between $7.00 and $7.20, and earnings per share guidance is expected to be between $6.10 and $6.30. Total company 2014 operating cash flow before pension contributions is expected to be approximately $7 billion, while operating cash flow is expected to be approximately $6.25 billion in 2014, including $0.75 billion of discretionary pension contributions. Total company pension expense in 2014 is expected to be approximately $3.1 billion (of which approximately $2.0 billion is expected to be recorded in core operating earnings and $1.1 billion recorded in unallocated items and eliminations).

Commercial Airplanes' 2014 deliveries are expected to be between 715 and 725, which includes approximately 110 787 deliveries. Revenue at Commercial Airplanes is expected to be between $57.5 and $59.5 billion with operating margins of approximately 10 percent. Defense, Space & Security's revenue for 2014 is expected to be between $30 and $31 billion with operating margins of approximately 9.5 percent.

Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2014, as new aircraft financing of less than $0.5 billion is expected to be lower than normal portfolio runoff through customer payments and depreciation. Boeing's 2014 R&D forecast is approximately $3.2 billion, and capital expenditures for 2014 are expected to be approximately $2.5 billion. Boeing's effective tax rate is expected to be approximately 31 percent in 2014, which assumes the extension of the research and development tax credit.

The Boeing Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

Twelve months
ended December 31

Three months
ended December 31

(Dollars in millions, except per share data)

2013

2012

2013

2012

Sales of products

$76,792

$71,234

$21,482

$19,793

Sales of services

9,831

10,464

2,303

2,509

Total revenues

86,623

81,698

23,785

22,302

Cost of products

(65,640)

(60,309)

(18,610)

(17,206)

Cost of services

(7,553)

(8,247)

(1,758)

(1,816)

Boeing Capital interest expense

(75)

(109)

(20)

(24)

Total costs and expenses

(73,268)

(68,665)

(20,388)

(19,046)

13,355

13,033

3,397

3,256

Income from operating investments, net

214

268

67

57

General and administrative expense

(3,956)

(3,717)

(1,100)

(943)

Research and development expense, net

(3,071)

(3,298)

(848)

(753)

Gain/(loss) on dispositions, net

20

4

(1)

7

Earnings from operations

6,562

6,290

1,515

1,624

Other income, net

56

62

15

23

Interest and debt expense

(386)

(442)

(96)

(112)

Earnings before income taxes

6,232

5,910

1,434

1,535

Income tax expense

(1,646)

(2,007)

(201)

(557)

Net earnings from continuing operations

4,586

3,903

1,233

978

Net loss on disposal of discontinued operations, net of taxes of $0 and $2

(1)

(3)

Net earnings

$4,585

$3,900

$1,233

$978

Basic earnings per share from continuing operations

$6.03

$5.15

$1.63

$1.29

Net loss on disposal of discontinued operations, net of taxes

Basic earnings per share

$6.03

$5.15

$1.63

$1.29

Diluted earnings per share from continuing operations

$5.96

$5.11

$1.61

$1.28

Net loss on disposal of discontinued operations, net of taxes

Diluted earnings per share

$5.96

$5.11

$1.61

$1.28

Cash dividends paid per share

$1.94

$1.76

$0.485

$0.44

Weighted average diluted shares (millions)

769.5

763.8

768.4

768.3

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited)

(Dollars in millions, except per share data)

December 31
2013

December 31
2012

Assets

Cash and cash equivalents

$9,088

$10,341

Short-term and other investments

6,170

3,217

Accounts receivable, net

6,546

5,608

Current portion of customer financing, net

344

364

Deferred income taxes

14

28

Inventories, net of advances and progress billings

42,912

37,751

Total current assets

65,074

57,309

Customer financing, net

3,627

4,056

Property, plant and equipment, net of accumulated depreciation of $15,070 and $14,645

10,224

9,660

Goodwill

5,043

5,035

Acquired intangible assets, net

3,052

3,111

Deferred income taxes

2,939

6,753

Investments

1,204

1,180

Other assets, net of accumulated amortization of $448 and $504

1,500

1,792

Total assets

$92,663

$88,896

Liabilities and equity

Accounts payable

$9,498

$9,394

Accrued liabilities

14,131

12,995

Advances and billings in excess of related costs

20,027

16,672

Deferred income taxes and income taxes payable

6,267

4,485

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

1,563

1,436

Total current liabilities

51,486

44,982

Accrued retiree health care

6,528

7,528

Accrued pension plan liability, net

10,474

19,651

Non-current income taxes payable

156

366

Other long-term liabilities

950

1,429

Long-term debt

8,072

8,973

Shareholders' equity:

Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued

5,061

5,061

Additional paid-in capital

4,415

4,122

Treasury stock, at cost – 264,882,461 and 256,630,628 shares

(17,671)

(15,937)

Retained earnings

32,964

30,037

Accumulated other comprehensive loss

(9,894)

(17,416)

Total shareholders' equity

14,875

5,867

Noncontrolling interest

122

100

Total equity

14,997

5,967

Total liabilities and equity

$92,663

$88,896

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Twelve months ended
December 31

(Dollars in millions)

2013

2012

Cash flows – operating activities:

Net earnings

$4,585

$3,900

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

Non-cash items –

Share-based plans expense

206

193

Depreciation and amortization

1,844

1,811

Investment/asset impairment charges, net

96

84

Customer financing valuation benefit

(11)

(10)

Loss on disposal of discontinued operations

1

5

Gain on dispositions, net

(20)

(4)

Other charges and credits, net

528

694

Excess tax benefits from share-based payment arrangements

(128)

(45)

Changes in assets and liabilities –

Accounts receivable

(879)

(27)

Inventories, net of advances and progress billings

(5,562)

(5,681)

Accounts payable

(298)

1,199

Accrued liabilities

883

801

Advances and billings in excess of related costs

3,353

1,177

Income taxes receivable, payable and deferred

1,445

1,605

Other long-term liabilities

2

157

Pension and other postretirement plans

1,720

1,288

Customer financing, net

391

407

Other

23

(46)

Net cash provided by operating activities

8,179

7,508

Cash flows – investing activities:

Property, plant and equipment additions

(2,098)

(1,703)

Property, plant and equipment reductions

51

97

Acquisitions, net of cash acquired

(26)

(124)

Contributions to investments

(15,394)

(12,921)

Proceeds from investments

12,453

10,901

Purchase of distribution rights

(140)

(7)

Net cash used by investing activities

(5,154)

(3,757)

Cash flows – financing activities:

New borrowings

571

60

Debt repayments

(1,434)

(2,076)

Repayments of distribution rights and other asset financing

(280)

(228)

Stock options exercised, other

1,097

120

Excess tax benefits from share-based payment arrangements

128

45

Employee taxes on certain share-based payment arrangements

(63)

(76)

Common shares repurchased

(2,801)

Dividends paid

(1,467)

(1,322)

Net cash used by financing activities

(4,249)

(3,477)

Effect of exchange rate changes on cash and cash equivalents

(29)

18

Net (decrease)/increase in cash and cash equivalents

(1,253)

292

Cash and cash equivalents at beginning of year

10,341

10,049

Cash and cash equivalents at end of period

$9,088

$10,341

The Boeing Company and Subsidiaries

Summary of Business Segment Data

(Unaudited)

Twelve months ended
December 31

Three months ended
December 31

(Dollars in millions)

2013

2012

2013

2012

Revenues:

Commercial Airplanes

$52,981

$49,127

$14,680

$14,161

Defense, Space & Security:

Boeing Military Aircraft

15,936

16,019

4,395

4,037

Network & Space Systems

8,512

7,911

2,272

2,024

Global Services & Support

8,749

8,677

2,188

2,282

Total Defense, Space & Security

33,197

32,607

8,855

8,343

Boeing Capital

408

468

105

129

Other segment

102

106

22

27

Unallocated items and eliminations

(65)

(610)

123

(358)

Total revenues

$86,623

$81,698

$23,785

$22,302

Earnings from operations:

Commercial Airplanes

$5,795

$4,711

$1,506

$1,266

Defense, Space & Security:

Boeing Military Aircraft

1,465

1,489

441

313

Network & Space Systems

719

562

233

138

Global Services & Support

1,051

1,017

280

300

Total Defense, Space & Security

3,235

3,068

954

751

Boeing Capital

107

88

9

(12)

Other segment

(156)

(186)

(99)

31

Unallocated items and eliminations

(2,419)

(1,391)

(855)

(412)

Earnings from operations

6,562

6,290

1,515

1,624

Other income, net

56

62

15

23

Interest and debt expense

(386)

(442)

(96)

(112)

Earnings before income taxes

6,232

5,910

1,434

1,535

Income tax expense

(1,646)

(2,007)

(201)

(557)

Net earnings from continuing operations

4,586

3,903

1,233

978

Net loss on disposal of discontinued operations, net of taxes of $0 and $2

(1)

(3)

Net earnings

$4,585

$3,900

$1,233

$978

Research and development expense, net:

Commercial Airplanes

$1,807

$2,049

$510

$411

Defense, Space & Security

1,215

1,189

323

321

Other

49

60

15

21

Total research and development expense, net

$3,071

$3,298

$848

$753

Unallocated items and eliminations:

Share-based plans

($95)

($81)

($21)

($17)

Deferred compensation

(238)

(75)

(73)

(26)

Capitalized interest

(69)

(70)

(17)

(17)

Eliminations and other

(703)

(266)

(421)

(140)

Sub-total (included in core operating earnings)

(1,105)

(492)

(532)

(200)

Pension

(1,374)

(787)

(329)

(179)

Postretirement

60

(112)

6

(33)

Total unallocated items and eliminations

($2,419)

($1,391)

($855)

($412)

The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)

Deliveries

Twelve months ended
December 31

Three months ended
December 31

Commercial Airplanes

2013

2012

2013

2012

737

440

415

110

105

747

24

31

8

10

767

21

26

4

6

777

98

83

25

21

787

65

(1)

46

(3)

25

23

(3)

Total

648

601

172

165

Note: Deliveries under operating lease are identified by parentheses.

Defense, Space & Security

Boeing Military Aircraft

F/A-18 Models

48

48

12

12

F-15E Eagle

14

8

11

C-17 Globemaster III

10

10

2

2

CH-47 Chinook

44

51

12

11

AH-64 Apache

37

19

6

6

P-8 Models

11

5

4

2

AEW&C

3

1

Network & Space Systems

Commercial and Civil Satellites

3

3

2

Military Satellites

4

7

3

1

Contractual backlog(Dollars in billions)

December 31
2013

September 30
2013

December 31
2012

Commercial Airplanes

$373.0

$344.3

$317.3

Defense, Space & Security:

Boeing Military Aircraft

24.8

26.4

29.2

Network & Space Systems

9.8

9.9

10.1

Global Services & Support

15.0

14.6

15.8

Total Defense, Space & Security

49.6

50.9

55.1

Total contractual backlog

$422.6

$395.2

$372.4

Unobligated backlog

$18.3

$19.9

$17.9

Total backlog

$440.9

$415.1

$390.3

Workforce

168,400

170,800

174,400

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures

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

Core Operating Margin and Increase in Core Operating Earnings Excluding A-12 Settlement Charge

(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin and core earnings per share as well as core operating margin and the increase in core operating earnings excluding the A-12 settlement charge with the most directly comparable GAAP financial measures, earnings from operations, operating margin and diluted earnings per share. See page 7 of this release for additional information on the use of these non-GAAP financial measures.

Fourth Quarter

Full Year

Guidance

2013

2012

2013

2012

2014

Revenues

$23,785

$22,302

$86,623

$81,698

GAAP Earnings From Operations

$1,515

$1,624

$6,562

$6,290

GAAP Operating Margin

6.4%

7.3%

7.6%

7.7%

Unallocated Pension/Postretirement Expense

$323

$212

$1,314

$899

~ $1,050

Core Operating Earnings (non-GAAP)

$1,838

$1,836

$7,876

$7,189

Core Operating Margin (non-GAAP)

7.7%

8.2%

9.1%

8.8%

A-12 Settlement Charge

$406

$406

Core Operating Earnings Excluding A-12 Settlement Charge

$2,244

$1,836

$8,282

$7,189

Core Operating Margin Excluding A-12 Settlement Charge (non-GAAP)

9.4%

8.2%

9.6%

8.8%

Increase/(Decrease) in GAAP Earnings From Operations

(7%)

4%

Increase in Core Operating Earnings Excluding A-12 Settlement Charge (non-GAAP)

22%

15%

GAAP Diluted Earnings Per Share

$1.61

$1.28

$5.96

$5.11

$6.10 - 6.30

Unallocated Pension/Postretirement Expense1

$0.27

$0.18

$1.11

$0.77

$0.90

Core Earnings Per Share (non-GAAP)

$1.88

$1.46

$7.07

$5.88

$7.00 - 7.20

Weighted Average Diluted Shares (millions)

768.4

768.3

769.5

763.8

750 - 755

Increase in GAAP Earnings Per Share

26%

17%

Increase in Core Earnings Per Share

29%

20%

1

Earnings per share impact is presented net of the federal statutory tax rate of 35.0 percent.


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