Fourth-Quarter 2018 Performance Review and 2019 Guidance
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Fourth-Quarter 2018 Performance Review and 2019 Guidance Dennis Muilenburg Chairman, President and Chief Executive Officer Greg Smith Chief Financial Officer Executive Vice President of Enterprise Performance & Strategy January 30, 2019 Copyright © 2019 Boeing. All rights reserved.
2018 Summary
Boeing | Investor Relations
4Q18 BCA Backlog
Generated record revenue, earnings, EPS and cash flow
North
Repurchased $9.0B of shares; paid $3.9B in dividends Other
America
5,873
Airplanes in
Delivered record 806 commercial airplanes, including 256 737 MAXs backlog
Europe
Increased 737 rate to 52/mo; continued 777X development
Middle
Southeast
East
Asia
Won key defense franchises and space awards; completed key milestones
Achieved BGS growth; captured new opportunities
Closed KLX acquisition; launched seats and APU JVs
Reached agreement on Embraer strategic partnerships Strong demand and execution
Delivering performance; positioned for growth
2
Copyright © 2019 Boeing. All rights reserved.
Business Environment
Boeing | Investor Relations
Strong and Growing Markets
10-Year Served Market
Commercial aviation remains long-term growth industry
– 20 year Commercial Market Outlook of 42,730 airplanes
Defense Commercial
& Space Airplanes
Systems
Robust airline profitability, strong passenger traffic, healthy cargo market $8.1T
Aerospace
Diverse and balanced geographic, customer, and replacement demand Services
Aerospace Services
10-Year Served Market
Domestic support for our key defense and space programs
Defense Commercial
Services Services
Continuing international defense and space demand
$2.8T
3.5% CAGR
Growth opportunities over a 10-year period, $2.8 trillion services market
Healthy demand; business environment supportive of growth
3
Copyright © 2019 Boeing. All rights reserved.
Full Year Financial Results
Boeing | Investor Relations
Revenue (Billions) Core Earnings per Share * Operating Cash Flow (Billions)
$101.1 $15.3
$105 $17.50 $16
$94.0 $16.01
$13.3
$90 $15.00
$12.33 $12
$75 $12.50
$60 $10.00
$8
$45 $7.50
$30 $5.00
$4
$15 $2.50
$0 $0.00 $0
2017 2018 2017 2018 2017 2018
* Non-GAAP measures. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are provided in the company’s earnings press release dated January 30, 2019 and on slide 15 of this presentation.
Generated record revenue, earnings, and cash flow
4
Copyright © 2019 Boeing. All rights reserved.
Fourth-Quarter Revenue and Earnings
Boeing | Investor Relations
Revenue (Billions) Core Earnings per Share *
$32 $6.00
$28.3 $5.48
$5.07
$24.8 $5.00
$24
$4.00
$16 $3.00
$2.00
$8
$1.00
$0 $0.00
2017 Q4 2018 Q4 2017 Q4 2018 Q4
* Non-GAAP measures. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are provided in the company’s earnings press release dated January 30, 2019 and on slide 14 of this presentation.
Top and bottom line growth on strong performance
5
Copyright © 2019 Boeing. All rights reserved.
Commercial Airplanes
Boeing | Investor Relations
Delivered 238 airplanes in 4Q; 806 in 2018
Revenues & Operating Margins
– Included 111 737 MAX deliveries in 4Q; 256 in 2018 $20 20%
$17.3
$15.4
Revenue (billions)
– Delivered the first 737 MAX from the China Completion Center $15
15.6%
15%
Margin
$10 10%
11.6%
– Delivered the 787th 787 Dreamliner
$5 5%
Won 262 net orders in 4Q; 893 in 2018 $0 0%
2017 Q4 2018 Q4
– 777 program exceeded 2,000 orders since its launch
– 737 MAX family surpassed 5,000 net orders
– Orders valued at $16B in 4Q and $62B in 2018; robust backlog of $412B
Strong profitability driven by cost performance and 737 delivery volume
Continued progress on development programs
– Completed final body join and power-on for the first flight test 777X aircraft 787th 787 Delivery
Healthy market; driving productivity while ramping production
6
Copyright © 2019 Boeing. All rights reserved.
Defense, Space & Security
Boeing | Investor Relations
Achieved strong 13% annual year-over-year revenue growth Revenues & Operating Margins
$6.1 20%
Captured new and follow-on business; well positioned for the future $5.3
Revenue (billions)
$6
15%
Margin
$4
– Awarded contract to modernize 17 H-47 Chinooks for Spain 10.9%
10%
10.3%
$2 5%
– Awarded contract for second KC-46 Tanker to Japan $0 0%
2017 Q4 2018 Q4
– Unveiled the Joint Multi-Role SB>1 DEFIANTTM helicopter for the U.S. Army
– Won contract to provide tactical satellite communications for the U.S. Air Force
Executed balanced portfolio
– Completed first delivery of KC-46 Tanker to U.S. Air Force in January 2019
– Supported successful test for U.S. Air Force’s Minuteman III
Orders valued at $5B in 4Q18 and $36B in 2018; Backlog of $57B First Delivery of KC-46 Tanker
Solid execution and healthy demand; increasing productivity and competitiveness
7
Copyright © 2019 Boeing. All rights reserved.Global Services
Boeing | Investor Relations
Generated robust 17% annual year-over-year revenue growth Revenues & Operating Margins
$6 30%
Captured new and follow-on business $4.9
Revenue (billions)
$4
$3.8 20%
– Secured sustainment contract for C-17 Globemaster III
Margin
$2 14.7% 15.0% 10%
– Awarded F-15 Qatar Performance Based Logistics contract
$0 0%
– Captured F/A-18 services support to the U.S. Navy 2017 Q4 2018 Q4
– Selected by Shenzhen Airlines to provide crew management solution
Completed first KC-46 training flight with U.S. Air Force
Successfully integrating KLX
Began Auxiliary Power Unit joint venture operations with Safran
Secured PBL Contract for C-17 GISP Sustainment
Orders valued at $6B in 4Q and $18B in 2018; Backlog of $21B
Sizable market opportunity; growth outpacing market
8
Copyright © 2019 Boeing. All rights reserved.Cash Flow
Boeing | Investor Relations
Operating Cash Flow (Billions)
$15.3
$15
$13.3
Planned higher commercial production rates
$10
Strong operating performance
Timing of receipts and expenditures
$5
$2.9 $2.9
$0
2017 Q4 2018 Q4 2017 2018
Strong cash flow reflects healthy business
9
Copyright © 2019 Boeing. All rights reserved.Cash and Debt Balances
Boeing | Investor Relations
Billions Cash Billions S&P: A Boeing debt
Moody’s: A2
Marketable Securities
Fitch: A BCC debt
$12 $12 $11.3
$10.0
$9.4
$8.6
$9 $9
$6 $8.0 $6
$7.7
$3 $3 $2.5 $2.5
$2.0
$0.9
$0 $0
2018 Q3 2018 Q4 2018 Q3 2018 Q4
Strong liquidity with manageable debt levels
10
Copyright © 2019 Boeing. All rights reserved.Financial Guidance
Boeing | Investor Relations
2019
Revenue $109.5 – 111.5B
Core EPS * $19.90 – 20.10
Operating Cash Flow $17.0 – 17.5B
Capital Expenditures ~$2.3B
* Non-GAAP measures. Definitions, reconciliations, and further disclosures regarding this non-GAAP measure are provided in the company’s earnings press release dated January 30, 2019 and on slide 14-15 of this presentation.
Strong performance driving upward revisions
11
Copyright © 2019 Boeing. All rights reserved.Copyright © 2019 Boeing. All rights reserved.
Caution Concerning Forward-Looking Statements
Boeing | Investor Relations
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 generally 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 expectations and assumptions that we believe to be reasonable when made, but that 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 changes, our
commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (4) changing budget and appropriation
levels and 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) threats to the security of our or our customers’ information; (14) potential adverse developments in new or pending litigation and/or government investigations; (15) customer
and aircraft concentration in our customer financing portfolio; (16) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates in order to fund
our operations and contractual commitments; (17) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (18) the adequacy of
our insurance coverage to cover significant risk exposures; (19) potential business disruptions, including those related to physical security threats, information technology or cyber-
attacks or natural disasters; (20) work stoppages or other labor disruptions; (21) substantial pension and other postretirement benefit obligations; (22) potential environmental
liabilities.
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.
13
Copyright © 2019 Boeing. All rights reserved.Non-GAAP Measure Disclosure
Boeing | Investor Relations
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The table provided below reconciles the non-GAAP financial measure core earnings per share with the most directly comparable GAAP financial measure diluted earnings per
share. See page 6 of the company's press release dated January 30, 2019 for additional information on the use of core earnings per share as a non-GAAP financial measure.
14
Copyright © 2019 Boeing. All rights reserved.Non-GAAP Measure Disclosure
Boeing | Investor Relations
The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)
The table provided below reconciles the non-GAAP financial measure core earnings per share with the most directly comparable GAAP financial measure diluted earnings per
share. See page 6 of the company's press release dated January 30, 2019 for additional information on the use of core earnings per share as a non-GAAP financial measure.
15
Copyright © 2019 Boeing. All rights reserved.You can also read
