Boeing Earnings 2020-09-30

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

ba-20200930

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 September 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,

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

New York Stock Exchange

As of October 21, 2020, there were 564,529,686 shares of common stock, $5.00 par value, issued and outstanding.

THE BOEING COMPANY

FORM 10-Q

For the Quarter Ended September 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	11
	Note 4 - Income Taxes	12
	Note 5 - Allowance for Losses on Financial Assets	13
	Note 6 - Inventories	13
	Note 7 - Contracts with Customers	14
	Note 8 - Customer Financing	14
	Note 9 - Investments	16
	Note 10 - Commitments & Contingencies	16
	Note 11 - Arrangements with Off-Balance Sheet Risk	23
	Note 12 - Debt	23
	Note 13 - Postretirement Plans	24
	Note 14 - Share-Based Compensation and Other Comprehensive Arrangements	25
	Note 15 - Shareholders' Equity	26
	Note 16 - Derivative Financial Instruments	27
	Note 17 - Fair Value Measurements	29
	Note 18 - Legal Proceedings	31
	Note 19 - Segment and Revenue Information	31
	Report of Independent Registered Public Accounting Firm	36

Forward-Looking Statements		37

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
	Consolidated Results of Operations and Financial Condition	39
	Commercial Airplanes	46
	Defense, Space & Security	50
	Global Services	53
	Boeing Capital	54
	Liquidity and Capital Resources	55
	Off-Balance Sheet Arrangements	56
	Contingent Obligations	57
	Non-GAAP Measures	58
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59

Item 4.	Controls and Procedures	60

Part II. Other Information

Item 1.	Legal Proceedings	61

Item 1A.	Risk Factors	61

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63

Item 3.	Defaults Upon Senior Securities	63

Item 4.	Mine Safety Disclosures	63

Item 5.	Other Information	63

Item 6.	Exhibits	64

Signature		65

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)	Nine months ended September 30		Three months ended September 30
	2020	2019	2020	2019
Sales of products	$34,656	$50,514	$11,402	$17,195
Sales of services	8,198	8,134	2,737	2,785
Total revenues	42,854	58,648	14,139	19,980

Cost of products	(36,001)	(46,584)	(10,910)	(14,674)
Cost of services	(6,817)	(6,752)	(2,185)	(2,241)
Boeing Capital interest expense	(33)	(49)	(10)	(15)
Total costs and expenses	(42,851)	(53,385)	(13,105)	(16,930)
	3	5,263	1,034	3,050
Loss from operating investments, net	(61)	(3)	(14)	(8)
General and administrative expense	(2,989)	(2,857)	(955)	(1,001)
Research and development expense, net	(1,871)	(2,470)	(574)	(778)
Gain/(loss) on dispositions, net	200	296	108	(4)
(Loss)/earnings from operations	(4,718)	229	(401)	1,259
Other income, net	325	334	119	121
Interest and debt expense	(1,458)	(480)	(643)	(203)
(Loss)/earnings before income taxes	(5,851)	83	(925)	1,177
Income tax benefit/(expense)	2,349	291	459	(10)


Net (loss)/earnings	(3,502)	374	(466)	1,167
Less: net loss attributable to noncontrolling interest	(49)		(17)
Net (loss)/earnings attributable to Boeing Shareholders	($3,453)	$374	($449)	$1,167



Basic (loss)/earnings per share	($6.10)	$0.66	($0.79)	$2.07



Diluted (loss)/earnings per share	($6.10)	$0.66	($0.79)	$2.05

Weighted average diluted shares (millions)	566.3	570.4	566.6	569.2

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)	Nine months ended September 30		Three months ended September 30
	2020	2019	2020	2019
Net (loss)/earnings	($3,502)	$374	($466)	$1,167
Other comprehensive (loss)/income, net of tax:
Currency translation adjustments	15	(61)	48	(59)
Unrealized gain on certain investments, net of tax of $0, $0, $0 and $0		1
Unrealized (loss)/gain on derivative instruments:
Unrealized (loss)/gain arising during period, net of tax of $31, $30, ($23) and $25	(107)	(106)	79	(89)
Reclassification adjustment for losses/(gains) included in net (loss)/earnings, net of tax of ($6), ($6), ($2) and ($7)	20	22	8	25
Total unrealized (loss)/gain on derivative instruments, net of tax	(87)	(84)	87	(64)
Defined benefit pension plans and other postretirement benefits:
Prior service credit arising during the period, net of tax of ($4), $0, ($4) and $0	13		13
Amortization of prior service credits included in net periodic pension cost, net of tax of $22, $18, $10 and $5	(67)	(67)	(22)	(22)
Net actuarial loss arising during the period, net of tax of $19, $0, $16 and $0	(65)		(53)
Amortization of actuarial losses included in net periodic pension cost, net of tax of ($179), ($97), ($76) and ($32)	562	350	172	117
Settlements and curtailments included in net loss, net of tax of ($1), $0, $0 and $0	3		1
Pension and postretirement cost related to our equity method investments, net of tax of $0, ($5), $0, and ($3)		17		9
Total defined benefit pension plans and other postretirement benefits, net of tax	446	300	111	104
Other comprehensive income/(loss), net of tax	374	156	246	(19)
Comprehensive loss related to noncontrolling interests		(22)		(15)
Comprehensive (loss)/income, net of tax	(3,128)	508	(220)	1,133
Less: Comprehensive loss related to noncontrolling interest	(49)	(22)	(17)	(15)
Comprehensive (loss)/income attributable to Boeing Shareholders, net of tax	($3,079)	$530	($203)	$1,148

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)	September 30 2020	December 31 2019
Assets
Cash and cash equivalents	$10,564	$9,485
Short-term and other investments	16,552	545
Accounts receivable, net	2,762	3,266
Unbilled receivables, net	8,860	9,043
Current portion of customer financing, net	100	162
Inventories	86,961	76,622
Other current assets, net	5,213	3,106
Total current assets	131,012	102,229
Customer financing, net	2,010	2,136
Property, plant and equipment, net of accumulated depreciation of $20,241 and $19,342	11,969	12,502
Goodwill	8,071	8,060
Acquired intangible assets, net	2,941	3,338
Deferred income taxes	704	683
Investments	1,052	1,092
Other assets, net of accumulated amortization of $671 and $580	3,502	3,585
Total assets	$161,261	$133,625
Liabilities and equity
Accounts payable	$14,479	$15,553
Accrued liabilities	22,220	22,868
Advances and progress billings	51,974	51,551
Short-term debt and current portion of long-term debt	3,634	7,340
Total current liabilities	92,307	97,312
Deferred income taxes	503	413
Accrued retiree health care	4,429	4,540
Accrued pension plan liability, net	15,343	16,276
Other long-term liabilities	2,907	3,422
Long-term debt	57,325	19,962
Total liabilities	172,814	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	6,687	6,745
Treasury stock, at cost - 447,744,896 and 449,352,405 shares	(54,819)	(54,914)
Retained earnings	47,029	50,644
Accumulated other comprehensive loss	(15,779)	(16,153)
Total shareholders’ equity	(11,821)	(8,617)
Noncontrolling interests	268	317
Total equity	(11,553)	(8,300)
Total liabilities and equity	$161,261	$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)	Nine months ended September 30
	2020	2019
Cash flows – operating activities:
Net (loss)/earnings	($3,502)	$374
Adjustments to reconcile net loss to net cash (used)/provided by operating activities:
Non-cash items –
Share-based plans expense	165	160
Depreciation and amortization	1,668	1,643
Investment/asset impairment charges, net	317	106
Customer financing valuation adjustments	12	249

Gain on dispositions, net	(200)	(296)
Other charges and credits, net	912	190

Changes in assets and liabilities –
Accounts receivable	125	315
Unbilled receivables	56	(1,053)
Advances and progress billings	428	2,355
Inventories	(9,653)	(9,565)
Other current assets	319	(224)
Accounts payable	(3,303)	1,626
Accrued liabilities	967	5,495
Income taxes receivable, payable and deferred	(2,404)	(989)
Other long-term liabilities	(149)	(577)
Pension and other postretirement plans	(556)	(570)
Customer financing, net	108	391
Other	289	144
Net cash used by operating activities	(14,401)	(226)
Cash flows – investing activities:
Property, plant and equipment additions	(1,038)	(1,387)
Property, plant and equipment reductions	275	334
Acquisitions, net of cash acquired		(492)
Contributions to investments	(25,846)	(1,439)
Proceeds from investments	9,772	967
Purchase of distribution rights		(20)
Other	14	(10)
Net cash used by investing activities	(16,823)	(2,047)
Cash flows – financing activities:
New borrowings	42,362	19,621
Debt repayments	(8,792)	(8,978)
Contributions from noncontrolling interests		7


Stock options exercised	31	51

Employee taxes on certain share-based payment arrangements	(169)	(241)
Common shares repurchased		(2,651)
Dividends paid	(1,158)	(3,473)

Net cash provided by financing activities	32,274	4,336
Effect of exchange rate changes on cash and cash equivalents, including restricted	26	(27)
Net increase in cash & cash equivalents, including restricted	1,076	2,036
Cash & cash equivalents, including restricted, at beginning of year	9,571	7,813
Cash & cash equivalents, including restricted, at end of period	10,647	9,849
Less restricted cash & cash equivalents, included in Investments	83	86
Cash and cash equivalents at end of period	$10,564	$9,763

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Equity

For the nine months ended September 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 earnings				374		(22)	352
Other comprehensive income, net of tax of ($60)					156		156
Share-based compensation and related dividend equivalents		176		(16)			160

Treasury shares issued for stock options exercised, net		(42)	82				40
Treasury shares issued for other share-based plans, net		(214)	(7)				(221)

Common shares repurchased			(2,651)				(2,651)
Cash dividends declared ($4.11 per share)				(2,313)			(2,313)
Changes in noncontrolling interests						258	258
Balance at September 30, 2019	$5,061	$6,688	($54,924)	$53,986	($14,927)	$307	($3,809)

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				(3,453)		(49)	(3,502)
Other comprehensive income, net of tax of ($118)					374		374
Share-based compensation and related dividend equivalents		165					165

Treasury shares issued for stock options exercised, net		(22)	53				31
Treasury shares issued for other share-based plans, net		(201)	42				(159)




Balance at September 30, 2020	$5,061	$6,687	($54,819)	$47,029	($15,779)	$268	($11,553)

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Equity

For the three months ended September 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 July 1, 2019	$5,061	$6,638	($54,932)	$52,819	($14,908)	$379	($4,943)
Net earnings				1,167		(

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	2020-09-30	Filed 2020-10-28
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	2020-11-10	Other Events
8-K	2020-10-29	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2020-10-28	Earnings, Exhibits
8-K	2020-10-26	Enter Agreement, Off-BS Arrangement, Exhibits
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-15	a202009sep3010qex15.htm
EX-31.1	a202009sep3010qex311.htm
EX-31.2	a202009sep3010qex312.htm
EX-32.1	a202009sep3010qex321.htm
EX-32.2	a202009sep3010qex322.htm

BA 10Q Quarterly Report

Boeing Earnings 2020-09-30