Boeing Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020



☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-442



	THE BOEING COMPANY

(Exact name of registrant as specified in its charter)



Delaware			91-0425694
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

100 N. Riverside Plaza,	Chicago,	IL	60606-1596
(Address of principal executive offices)			(Zip Code)



	(312)	544-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405/ of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $5.00 Par Value	BA	New York Stock Exchange

As of July 22, 2020, there were 564,448,738 shares of common stock, $5.00 par value, issued and outstanding.

THE BOEING COMPANY

FORM 10-Q

For the Quarter Ended June 30, 2020

INDEX



Part I. Financial Information (Unaudited)		Page

Item 1.	Financial Statements	1
	Condensed Consolidated Statements of Operations	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Statements of Financial Position	3
	Condensed Consolidated Statements of Cash Flows	4
	Condensed Consolidated Statements of Equity	5
	Summary of Business Segment Data	7
	Note 1 - Basis of Presentation	8
	Note 2 - Goodwill and Acquired Intangibles	10
	Note 3 - Earnings Per Share	10
	Note 4 - Income Taxes	11
	Note 5 - Allowance for Losses on Financial Assets	12
	Note 6 - Inventories	12
	Note 7 - Contracts with Customers	13
	Note 8 - Customer Financing	13
	Note 9 - Investments	15
	Note 10 - Commitments & Contingencies	15
	Note 11 - Arrangements with Off-Balance Sheet Risk	21
	Note 12 - Debt	22
	Note 13 - Postretirement Plans	22
	Note 14 - Share-Based Compensation and Other Comprehensive Arrangements	23
	Note 15 - Shareholders' Equity	24
	Note 16 - Derivative Financial Instruments	24
	Note 17 - Fair Value Measurements	26
	Note 18 - Legal Proceedings	28
	Note 19 - Segment and Revenue Information	29
	Report of Independent Registered Public Accounting Firm	34

Forward-Looking Statements		35

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
	Consolidated Results of Operations and Financial Condition	37
	Commercial Airplanes	43
	Defense, Space & Security	47
	Global Services	49
	Boeing Capital	50
	Liquidity and Capital Resources	51
	Off-Balance Sheet Arrangements	52
	Contingent Obligations	52
	Non-GAAP Measures	53
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54

Item 4.	Controls and Procedures	55

Part II. Other Information

Item 1.	Legal Proceedings	56

Item 1A.	Risk Factors	56

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58

Item 3.	Defaults Upon Senior Securities	58

Item 4.	Mine Safety Disclosures	58

Item 5.	Other Information	58

Item 6.	Exhibits	59

Signature		60

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



(Dollars in millions, except per share data)	Six months ended June 30						Three months ended June 30
	2020			2019			2020			2019
Sales of products		$23,254			$33,319			$9,063			$13,094
Sales of services	5,461			5,349			2,744			2,657
Total revenues	28,715			38,668			11,807			15,751

Cost of products	(25,091		)	(31,910		)	(10,378		)	(15,672		)
Cost of services	(4,632		)	(4,511		)	(2,589		)	(2,122		)
Boeing Capital interest expense	(23		)	(34		)	(11		)	(16		)
Total costs and expenses	(29,746		)	(36,455		)	(12,978		)	(17,810		)
	(1,031		)	2,213			(1,171		)	(2,059		)
(Loss)/income from operating investments, net	(47		)	5			(45		)	(15		)
General and administrative expense	(2,034		)	(1,856		)	(1,161		)	(672		)
Research and development expense, net	(1,297		)	(1,692		)	(625		)	(826		)
Gain on dispositions, net	92			300			38			192
Loss from operations	(4,317		)	(1,030		)	(2,964		)	(3,380		)
Other income, net	206			213			94			107
Interest and debt expense	(815		)	(277		)	(553		)	(154		)
Loss before income taxes	(4,926		)	(1,094		)	(3,423		)	(3,427		)
Income tax benefit	1,890			301			1,028			485
Net loss	(3,036		)	(793		)	(2,395		)	(2,942		)
Less: net loss attributable to noncontrolling interest	(32		)				(19		)
Net loss attributable to Boeing Shareholders		($3,004	)		($793	)		($2,376	)		($2,942	)

Basic loss per share		($5.31	)		($1.40	)		($4.20	)		($5.21	)

Diluted loss per share		($5.31	)		($1.40	)		($4.20	)		($5.21	)

Weighted average diluted shares (millions)	566.1			566.6			566.4			565.3

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)



(Dollars in millions)	Six months ended June 30						Three months ended June 30
	2020			2019			2020			2019
Net loss		($3,036	)		($793	)		($2,395	)		($2,942	)
Other comprehensive (loss)/income, net of tax:
Currency translation adjustments	(33		)	(2		)	44			(3		)
Unrealized gain on certain investments, net of tax of $0 in all periods				1
Unrealized (loss)/gain on derivative instruments:
Unrealized (loss)/gain arising during period, net of tax of $54, $5, ($23) and $8	(186		)	(17		)	89			(28		)
Reclassification adjustment for losses/(gains) included in net loss, net of tax of ($4), $1, ($3) and $0	12			(3		)	10			(1		)
Total unrealized (loss)/gain on derivative instruments, net of tax	(174		)	(20		)	99			(29		)
Defined benefit pension plans and other postretirement benefits:
Amortization of prior service credits included in net periodic pension cost, net of tax of $12, $13, $6 and $7	(45		)	(45		)	(22		)	(22		)
Net actuarial loss arising during the period, net of tax of $3, $0, $3 and $0	(12		)				(12		)
Amortization of actuarial losses included in net periodic pension cost, net of tax of ($103), ($65), ($50) and ($33)	390			233			197			115
Settlements and curtailments included in net loss, net of tax of ($1), $0, ($1) and $0	2						2
Pension and postretirement cost related to our equity method investments, net of tax of $0, ($2), $0, and $0				8
Total defined benefit pension plans and other postretirement benefits, net of tax	335			196			165			93
Other comprehensive income, net of tax	128			175			308			61
Comprehensive loss related to noncontrolling interests				(7		)				(7		)
Comprehensive loss, net of tax	(2,908		)	(625		)	(2,087		)	(2,888		)
Less: Comprehensive loss related to noncontrolling interest	(32		)	(7		)	(19		)	(7		)
Comprehensive loss attributable to Boeing Shareholders, net of tax		($2,876	)		($618	)		($2,068	)		($2,881	)

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Financial Position

(Unaudited)



(Dollars in millions, except per share data)	June 30 2020			December 31 2019
Assets
Cash and cash equivalents		$19,992			$9,485
Short-term and other investments	12,438			545
Accounts receivable, net	2,793			3,266
Unbilled receivables, net	8,570			9,043
Current portion of customer financing, net	115			162
Inventories	83,745			76,622
Other current assets, net	2,624			3,106
Total current assets	130,277			102,229
Customer financing, net	2,054			2,136
Property, plant and equipment, net of accumulated depreciation of $19,863 and $19,342	12,182			12,502
Goodwill	8,064			8,060
Acquired intangible assets, net	3,019			3,338
Deferred income taxes	729			683
Investments	1,066			1,092
Other assets, net of accumulated amortization of $617 and $580	5,481			3,585
Total assets		$162,872			$133,625
Liabilities and equity
Accounts payable		$13,700			$15,553
Accrued liabilities	22,493			22,868
Advances and progress billings	53,367			51,551
Short-term debt and current portion of long-term debt	2,922			7,340
Total current liabilities	92,482			97,312
Deferred income taxes	404			413
Accrued retiree health care	4,427			4,540
Accrued pension plan liability, net	15,663			16,276
Other long-term liabilities	2,821			3,422
Long-term debt	58,457			19,962
Total liabilities	174,254			141,925
Shareholders’ equity:
Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued	5,061			5,061
Additional paid-in capital	6,648			6,745
Treasury stock, at cost - 447,840,938 and 449,352,405 shares	(54,829		)	(54,914		)
Retained earnings	47,478			50,644
Accumulated other comprehensive loss	(16,025		)	(16,153		)
Total shareholders’ equity	(11,667		)	(8,617		)
Noncontrolling interests	285			317
Total equity	(11,382		)	(8,300		)
Total liabilities and equity		$162,872			$133,625

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



(Dollars in millions)	Six months ended June 30
	2020			2019
Cash flows – operating activities:
Net loss		($3,036	)		($793	)
Adjustments to reconcile net loss to net cash (used)/provided by operating activities:
Non-cash items –
Share-based plans expense	115			104
Depreciation and amortization	1,103			1,067
Investment/asset impairment charges, net	280			70
Customer financing valuation adjustments	9			249
Gain on dispositions, net	(92		)	(300		)
Other charges and credits, net	815			145
Changes in assets and liabilities –
Accounts receivable	143			588
Unbilled receivables	285			(222		)
Advances and progress billings	1,822			1,842
Inventories	(6,741		)	(5,233		)
Other current assets	433			(887		)
Accounts payable	(3,181		)	2,002
Accrued liabilities	514			4,959
Income taxes receivable, payable and deferred	(1,894		)	(921		)
Other long-term liabilities	(109		)	(509		)
Pension and other postretirement plans	(357		)	(390		)
Customer financing, net	62			347
Other	247			80
Net cash (used)/provided by operating activities	(9,582		)	2,198
Cash flows – investing activities:
Property, plant and equipment additions	(776		)	(922		)
Property, plant and equipment reductions	96			331
Acquisitions, net of cash acquired				(492		)
Contributions to investments	(12,557		)	(496		)
Proceeds from investments	543			758
Purchase of distribution rights				(20		)
Other	8			(12		)
Net cash used by investing activities	(12,686		)	(853		)
Cash flows – financing activities:
New borrowings	42,302			11,670
Debt repayments	(8,265		)	(6,422		)
Contributions from noncontrolling interests				7
Stock options exercised	27			47
Employee taxes on certain share-based payment arrangements	(164		)	(238		)
Common shares repurchased				(2,651		)
Dividends paid	(1,158		)	(2,317		)
Net cash provided by financing activities	32,742			96
Effect of exchange rate changes on cash and cash equivalents, including restricted	(11		)	(2		)
Net increase in cash & cash equivalents, including restricted	10,463			1,439
Cash & cash equivalents, including restricted, at beginning of year	9,571			7,813
Cash & cash equivalents, including restricted, at end of period	20,034			9,252
Less restricted cash & cash equivalents, included in Investments	42			85
Cash and cash equivalents at end of period		$19,992			$9,167

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Equity

For the six months ended June 30, 2020 and 2019

(Unaudited)



	Boeing shareholders
(Dollars in millions, except per share data)	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Non- controlling Interests			Total
Balance at January 1, 2019		$5,061		$6,768			($52,348	)		$55,941			($15,083	)		$71			$410
Net loss									(793		)				(7		)	(800		)
Other comprehensive income, net of tax of ($48)												175						175
Share-based compensation and related dividend equivalents			120						(16		)							104
Treasury shares issued for stock options exercised, net			(39		)	82												43
Treasury shares issued for other share-based plans, net			(211		)	(15		)										(226		)
Common shares repurchased						(2,651		)										(2,651		)
Cash dividends declared ($4.11 per share)									(2,313		)							(2,313		)
Changes in noncontrolling interests															315			315
Balance at June 30, 2019		$5,061		$6,638			($54,932	)		$52,819			($14,908	)		$379			($4,943	)

Balance at December 31, 2019		$5,061		$6,745			($54,914	)		$50,644			($16,153	)		$317			($8,300	)
Impact of ASU 2016-13									(162		)							(162		)
Balance at January 1, 2020		$5,061		$6,745			($54,914	)		$50,482			($16,153	)		$317			($8,462	)
Net loss									(3,004		)				(

Price	382.86	EPS	7
Shares	570	P/E	57
MCap	218,154	P/FCF	-965
Net Debt	10,449	EBIT	3,507
TEV	228,603	TEV/EBIT	65
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-29
10-Q	2020-03-31	Filed 2020-04-29
10-K	2019-12-31	Filed 2020-01-31
10-Q	2019-09-30	Filed 2019-10-23
10-Q	2019-06-30	Filed 2019-07-24
10-Q	2019-03-31	Filed 2019-04-24
10-K	2018-12-31	Filed 2019-02-08
10-Q	2018-09-30	Filed 2018-10-24
10-Q	2018-06-30	Filed 2018-07-25
10-Q	2018-03-31	Filed 2018-04-25
10-K	2017-12-31	Filed 2018-02-12
10-Q	2017-09-30	Filed 2017-10-25
10-Q	2017-06-30	Filed 2017-07-26
10-Q	2017-03-31	Filed 2017-04-26
10-K	2016-12-31	Filed 2017-02-08
10-Q	2016-09-30	Filed 2016-10-26
10-Q	2016-06-30	Filed 2016-07-27
10-Q	2016-03-31	Filed 2016-04-27
10-K	2015-12-31	Filed 2016-02-10
10-Q	2015-09-30	Filed 2015-10-21
10-Q	2015-06-30	Filed 2015-07-22
10-Q	2015-03-31	Filed 2015-04-22
10-K	2014-12-31	Filed 2015-02-12
10-Q	2014-09-30	Filed 2014-10-22
10-Q	2014-06-30	Filed 2014-07-23
10-Q	2014-03-31	Filed 2014-04-23
10-K	2013-12-31	Filed 2014-02-14
10-Q	2013-09-30	Filed 2013-10-23
10-Q	2013-06-30	Filed 2013-07-24
10-Q	2013-03-31	Filed 2013-04-24
10-K	2012-12-31	Filed 2013-02-11
10-Q	2012-09-30	Filed 2012-10-24
10-Q	2012-06-30	Filed 2012-07-25
10-Q	2012-03-31	Filed 2012-04-25
10-K	2011-12-31	Filed 2012-02-09
10-Q	2011-09-30	Filed 2011-10-26
10-Q	2011-06-30	Filed 2011-07-27
10-Q	2011-03-31	Filed 2011-04-27
10-K	2010-12-31	Filed 2011-02-09
10-Q	2010-09-30	Filed 2010-10-20
10-Q	2010-06-30	Filed 2010-07-28
10-Q	2010-03-31	Filed 2010-04-21
10-K	2009-12-31	Filed 2010-02-08

8-K	2020-07-29	Earnings, Exhibits
8-K	2020-04-30
8-K	2020-04-29
8-K	2020-04-27
8-K	2020-04-05
8-K	2020-03-23
8-K	2020-03-20
8-K	2020-03-16
8-K	2020-03-13
8-K	2020-02-23
8-K	2020-02-06
8-K	2020-01-29
8-K	2020-01-21
8-K	2020-01-10
8-K	2019-12-26
8-K	2019-12-22
8-K	2019-12-16
8-K	2019-10-30
8-K	2019-10-25
8-K	2019-10-23
8-K	2019-10-11
8-K	2019-07-29
8-K	2019-07-24
8-K	2019-07-18
8-K	2019-06-26
8-K	2019-05-01
8-K	2019-04-30
8-K	2019-04-29
8-K	2019-04-29
8-K	2019-04-24
8-K	2019-04-05
8-K	2019-02-26
8-K	2019-02-13
8-K	2019-01-30
8-K	2019-01-24
8-K	2018-12-17
8-K	2018-10-29
8-K	2018-10-24
8-K	2018-10-22
8-K	2018-07-25
8-K	2018-07-13
8-K	2018-07-05
8-K	2018-06-07
8-K	2018-04-30
8-K	2018-04-30
8-K	2018-04-25
8-K	2018-02-21
8-K	2018-01-31

EX-10.1	a202006jun3010qexhibit101.htm
EX-10.2	a202006jun3010qexhibit102.htm
EX-15	a202006jun3010qexhibit15.htm
EX-31.1	a202006jun3010qexhibit311.htm
EX-31.2	a202006jun3010qexhibit312.htm
EX-32.1	a202006jun3010qexhibit321.htm
EX-32.2	a202006jun3010qexhibit322.htm

BA 10Q Quarterly Report

Boeing Earnings 2020-06-30