Boeing Reports Strong First-Quarter Results

Defense, Space & Security's first-quarter revenue was $6.7 billion with an operating margin of 11.1 percent (Table 5).

Boeing Military Aircraft (BMA) first-quarter revenue was $2.7 billion, reflecting planned timing of deliveries and mix; operating margin was 9.5 percent. During the quarter, BMA was awarded contracts for 43 Apache helicopters.

Network & Space Systems (N&SS) first-quarter revenue was $1.7 billion, reflecting lower satellites and missile defense system program volume partially offset by higher volume on the Commercial Crew program. Operating margin increased to 9.6 percent on strong performance related to our United Launch Alliance joint venture. During the quarter, the first two all-electric Boeing 702SP satellites were launched on a single rocket.

Global Services & Support (GS&S) first-quarter revenue was $2.2 billion, reflecting slightly lower volume in integrated logistics. Operating margin increased to 14.1 percent on strong operating performance and program mix. During the quarter, GS&S was awarded a combat logistics support agreement with the U.S. Defense Logistics Agency.

Backlog at Defense, Space & Security was $60 billion, of which 37 percent represents orders from international customers.

Additional Financial Information










Table 6. Additional Financial Information


First Quarter

(Dollars in Millions)


2015


2014

Revenues





Boeing Capital


$86


$82

Unallocated items, eliminations and other


($27)


$13

Earnings from Operations





Boeing Capital


$20


$44

Unallocated pension/postretirement


($113)


($553)

Other unallocated items and eliminations


($248)


($229)

Other (loss)/income, net


($12)


$9

Interest and debt expense


($61)


($92)

Effective tax rate


31.3%


33.9%

At quarter-end, Boeing Capital's net portfolio balance was $3.4 billion, down from $3.5 billion at the beginning of the year (Table 6). Total pension expense for the first quarter was $785 million, down from $1,035 million in the same period of the prior year. Unallocated pension expense in 2014 included a $334 million non-cash charge related to retirement plan changes.

Outlook

The company's 2015 financial and delivery guidance (Table 7) is reaffirmed and reflects continued strong performance across the company.



Table 7. 2015 Financial Outlook


(Dollars in Billions, except per share data)

2015



The Boeing Company


Revenue

$94.5 - 96.5

Core Earnings Per Share*

$8.20 - 8.40

GAAP Earnings Per Share

$8.10 - 8.30

Operating Cash Flow

> $9



Commercial Airplanes


Deliveries

750 - 755

Revenue

$64.5 - 65.5

Operating Margin

9.5% - 10.0%





Defense, Space & Security (revised for business realignment)


Revenue


Boeing Military Aircraft

~$12.5

Network & Space Systems

~$8.0

Global Services & Support

~$9.5



Total BDS Revenue

$29.5 - 30.5



Operating Margin


Boeing Military Aircraft

~9.5%

Network & Space Systems

~9.0%

Global Services & Support

~11.0%



Total BDS Operating Margin

9.75% - 10.0%



Boeing Capital


Portfolio Size

Stable

Revenue

~$0.3

Pre-Tax Earnings

~$0.05



Research & Development

~ $3.5

Capital Expenditures

~ $2.8

Pension Expense 1

~ $2.1

Effective Tax Rate 2

~ 30.5%

1 Approximately $0.3 billion is expected to be recorded in unallocated items and eliminations

2 Assumes the extension of the research and development tax credit

* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 6, "Non-GAAP Measures Disclosures."


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