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Boeing Second-Quarter Earnings Investor Deck
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Boeing Second-Quarter Earnings Investor Deck

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This is Boeing's second-quarter financial information, as compiled and presented by the company and posted to its investor relations page.

This is Boeing's second-quarter financial information, as compiled and presented by the company and posted to its investor relations page.

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    Boeing Second-Quarter Earnings Investor Deck Boeing Second-Quarter Earnings Investor Deck Presentation Transcript

    • Copyright © 2013 Boeing. All rights reserved. Second-Quarter 2013 Performance Review Jim McNerney Chairman, President and Chief Executive Officer Greg Smith Executive Vice President and Chief Financial Officer July 24, 2013
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 2 Business Environment Commercial up-cycle progressing; dynamic defense environment  Global economic growth continues at a moderate pace  Passenger traffic healthy; cargo traffic remains under pressure  International defense growth opportunities; defense budget pressures in U.S. and other developed markets  Commercial aviation remains long-term growth industry  Defense markets will trend with threat environment
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 3  Results reflect strong core operating performance  Strong commercial airplane orders capture; key defense wins  Production ramp-ups and development programs progressing to plan  Strong fundamental product-and-services strategies  Net orders of $40 billion; large diversified backlog at record $410 billion Second-Quarter Summary Strong results . . . both businesses performing very well
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. $1.48 $1.67 $0.00 $0.50 $1.00 $1.50 $2.00 2012Q2 2013Q2 4 Second-Quarter Revenue and Earnings Revenue (Billions) Core Earnings per Share $20.0 $21.8 $0 $5 $10 $15 $20 $25 2012Q2 2013Q2 Strong core operating performance * Non-GAAP measures. Definitions, reconciliations, and further disclosures regarding non-GAAP measures are provided in the company’s earnings press release dated July 24, 2013. *
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. Revenues & Operating Margins Revenue(billions) Margin 5 Focusing on execution, quality and productivity Launched 787-10 Dreamliner Commercial Airplanes $11.8 $13.6 10.2% 10.7% 0% 5% 10% 15% $0 $2 $4 $6 $8 $10 $12 $14 2012Q2 2013Q2  Continued strong operating performance  Delivered 169 airplanes in Q2  Orders valued at $29B; record backlog of $339B – Won 481 net orders – Cumulative-to-date MAX orders reached 1,495  Began final assembly of the first 787-9 Dreamliner  Announced launch of 787-10 Dreamliner  Achieved 737 MAX firm configuration  Announced Southwest Airlines as 737 MAX-7 launch customer
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved.  Continued strong operating performance  Capturing new and follow-on business – U.S. Navy multi-year contract for 99 Osprey tiltrotor aircraft – U.S. Army multi-year contract for 177 Chinook helicopters – Commercial contracts for one 702HP and four 702MP satellites – Netherlands contract for Chinook and Apache helicopter support  Executing balanced defense and space portfolio – Delivered 31 aircraft – Assembly began on KC-46 tanker; critical design review successfully conducted – First C-17 and first P-8I delivered to India – Successful Phantom Eye, EMARSS, and X-51 flights  Orders valued at $11B; Backlog of $71B $8.2 $8.2 9.1% 9.5% 0% 5% 10% 15% $0 $2 $4 $6 $8 $10 2012Q2 2013Q2 6 Defense, Space & Security Revenues & Operating Margins Revenue(billions) Margin Focusing on execution and productivity . . . capturing opportunities V-22 Osprey
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 7  Boeing Capital Corporation – Supporting business units while prudently managing portfolio and risk – Net financing portfolio of $4.1 billion during the quarter, as normal portfolio run-off exceeded new volume  Other and Unallocated Expense – Unallocated expense from core operations increased to $177 million in the quarter driven by higher deferred compensation expense Supporting businesses and managing risks Other results
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 8 Cash Flow Strong cash flow generation . . . increasing shareholder returns  Increased production rates  Strong core operating performance  Timing of receipts and expenditures  Disciplined cash management providing strong liquidity  Repurchased 10.2 million shares for $1 billion and paid $0.4 billion in dividends $ Billions 2Q12 2Q13 Net Earnings 1.0 1.1 Depreciation/non-cash 0.7 0.4 Working Capital 1 (0.0) 2.0 Operating Cash Flow Before Pension Contributions* 1.7 3.5 Pension Contributions (0.8) (0.0) Operating Cash Flow 0.9 3.5 Free Cash Flow* 0.6 3.0 1 Excluding pension contributions * Non-GAAP measures. Definitions, reconciliations, and further disclosures regarding non-GAAP measures are provided in the company’s earnings press release dated July 24, 2013.
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 9 $6.7 $7.0 $2.5 $2.6 $0 $2 $4 $6 $8 $10 $12 2013Q1 2013Q2 Boeing debt1 BCC debt2 3.5 5.6 8.3 8.7 $0 $2 $4 $6 $8 $10 $12 $14 $16 2013Q1 2013Q2 Cash and Debt Balances Strong liquidity with manageable debt levels Billions Billions Cash Marketable Securities S&P: A Moody’s: A2 Fitch: A $14.3 $11.8 1 The Boeing Company debt, net of intercompany loans to BCC 2 Boeing Capital Corporation debt, including intercompany loans
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 2012A 2013 10 Financial Guidance 2012A 2013 Revenue (Billions) Core Earnings per Share* 2012A 2013 Operating Cash Flow before Pension Contributions* (Billions) $82 $82 - 85 $6.10 - 6.30 $5.88 $9.0 > $8.0 * Non-GAAP measures. Definitions, reconciliations, and further disclosures regarding non-GAAP measures are provided in the company’s earnings press release dated July 24, 2013. Increasing financial guidance $83 - 86 $6.20 - 6.40
    • Boeing | Investor Relations Copyright © 2013 Boeing. All rights reserved. 11 This document 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 are used to 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 our current expectations and assumptions, which 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 production rate increases across multiple commercial airline programs, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (4) changing 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) potential adverse developments in new or pending litigation and/or government investigations; (14) customer and aircraft concentration in Boeing Capital’s customer financing portfolio; (15) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates in order to fund our operations and contractual commitments; (16) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (17) the adequacy of our insurance coverage to cover significant risk exposures; (18) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks or natural disasters; (19) work stoppages or other labor disruptions; (20) significant changes in discount rates and actual investment return on pension assets; (21) potential environmental liabilities; and (22) threats to the security of our or our customers’ information. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Caution Concerning Forward-Looking Statements
    • Copyright © 2013 Boeing. All rights reserved.