Fourth Quarter 2021
- Continued global return to service of 737 MAX, including progress in China
- Revenue of $14.8 billion; operating cash flow of $0.7 billion
- 787 program recorded $3.5 billion pre-tax non-cash charge; focused on actions required to resume deliveries
- GAAP loss per share of ($7.02) and core (non-GAAP)* loss per share of ($7.69)
Full-Year 2021
- Revenue of $62.3 billion; operating cash flow of ($3.4) billion; cash and marketable securities of $16.2 billion
- GAAP loss per share of ($7.15) and core (non-GAAP)* loss per share of ($9.44)
- Total backlog of $377 billion and added 535 net commercial orders
- Focused on safety, quality and operational stability
| Table 1. Summary Financial Results | Fourth Quarter | Full Year | ||||||||||
| (Dollars in Millions, except per share data) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||
| Revenues | $14,793 | $15,304 | (3)% | $62,286 | $58,158 | 7% | ||||||
| GAAP | ||||||||||||
| Loss From Operations | ($4,171) | ($8,049) | NM | ($2,902) | ($12,767) | NM | ||||||
| Operating Margin | (28.2)% | (52.6)% | NM | (4.7)% | (22.0)% | NM | ||||||
| Net Loss | ($4,164) | ($8,439) | NM | ($4,290) | ($11,941) | NM | ||||||
| Loss Per Share | ($7.02) | ($14.65) | NM | ($7.15) | ($20.88) | NM | ||||||
| Operating Cash Flow | $716 | ($4,009) | NM | ($3,416) | ($18,410) | NM | ||||||
| Non-GAAP* | ||||||||||||
| Core Operating Loss | ($4,536) | ($8,377) | NM | ($4,075) | ($14,150) | NM | ||||||
| Core Operating Margin | (30.7)% | (54.7)% | NM | (6.5)% | (24.3)% | NM | ||||||
| Core Loss Per Share | ($7.69) | ($15.25) | NM | ($9.44) | ($23.25) | NM |
| *Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.” |
The Boeing Company [NYSE: BA] reported fourth-quarter revenue of $14.8 billion, reflecting higher commercial volume and lower defense revenue. GAAP loss per share of ($7.02) and core loss per share (non-GAAP)* of ($7.69) reflect lower charges and higher commercial volume (Table 1). Boeing recorded operating cash flow of $0.7 billion.
“2021 was a rebuilding year for us as we overcame hurdles and reached key milestones across our commercial, defense and services portfolios. We increased 737 MAX production and deliveries, and safely returned the 737 MAX to service in nearly all global markets. As the commercial market recovery gained traction, we also generated robust commercial orders, including record freighter sales. Demonstrating progress in our overall recovery, we also returned to generating positive cash flow in the fourth quarter,” said David Calhoun, Boeing President and Chief Executive Officer. “On the 787 program, we’re progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications. While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term. Across the enterprise, we remain focused on safety and quality as we deliver for our customers and invest in our people and in our sustainable future.”
| Table 2. Cash Flow | Fourth Quarter | Full Year | ||||||
| (Millions) | 2021 | 2020 | 2021 | 2020 | ||||
| Operating Cash Flow | $716 | ($4,009) | ($3,416) | ($18,410) | ||||
| Less Additions to Property, Plant & Equipment | ($222) | ($265) | ($980) | ($1,303) | ||||
| Free Cash Flow* | $494 | ($4,274) | ($4,396) | ($19,713) |
| *Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.” |
Operating cash flow improved to $0.7 billion in the quarter, reflecting higher commercial volume, higher advance payments, and lower expenditures (Table 2).
| Table 3. Cash, Marketable Securities and Debt Balances | Quarter-End | |||
| (Billions) | Q4 21 | Q3 21 | ||
| Cash | $8.0 | $9.8 | ||
| Marketable Securities1 | $8.2 | $10.2 | ||
| Total | $16.2 | $20.0 | ||
| Debt Balances: | ||||
| The Boeing Company, net of intercompany loans to BCC | $56.6 | $60.9 | ||
| Boeing Capital, including intercompany loans | $1.5 | $1.5 | ||
| Total Consolidated Debt | $58.1 | $62.4 |
| 1 Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.” |
Cash and investments in marketable securities decreased to $16.2 billion, compared to $20.0 billion at the beginning of the quarter, primarily driven by debt repayment partially offset by operating cash flow. Debt was $58.1 billion, down from $62.4 billion at the beginning of the quarter due to the prepayment of a term loan and repayment of maturing debt.
Total company backlog at quarter-end was $377 billion.
Segment Results
Commercial Airplanes
| Table 4. Commercial Airplanes | Fourth Quarter | Full Year | ||||||||||
| (Dollars in Millions) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||
| Commercial Airplanes Deliveries | 99 | 59 | 68% | 340 | 157 | 117% | ||||||
| Revenues | $4,750 | $4,728 | 0% | $19,493 | $16,162 | 21% | ||||||
| Loss from Operations | ($4,454) | ($7,648) | NM | ($6,475) | ($13,847) | NM | ||||||
| Operating Margin | (93.8)% | (161.8)% | NM | (33.2)% | (85.7)% | NM |
Commercial Airplanes fourth-quarter revenue increased slightly to $4.8 billion primarily driven by higher 737 deliveries, partially offset by lower widebody deliveries and less favorable mix (Table 4). Fourth-quarter operating margin was primarily driven by a charge on the 787 program.
Boeing is continuing to make progress on the global safe return to service of the 737 MAX. In December, the Civil Aviation Administration of China issued an airworthiness directive outlining changes required for Chinese airlines to prepare their fleets to resume service. Since the FAA’s approval to return the 737 MAX to operations in November 2020, over 300,000 revenue flights have been completed, and the reliability of the 737 MAX fleet remains above 99 percent (as of January 24, 2022). The 737 program is currently producing at a rate of 26 per month and continues to progress towards a production rate of 31 per month in early 2022. The company is evaluating the timing of further rate increases.
The company continues to perform rework on 787 airplanes in inventory and is engaged in detailed discussions with the FAA regarding required actions to resume deliveries. In the fourth quarter, the company determined that these activities will take longer than previously expected, resulting in further delays in customer delivery dates and associated customer considerations. Accordingly, Commercial Airplanes recorded a $3.5 billion pre-tax non-cash charge on the 787 program. The program is producing at a very low rate and will continue to do so until deliveries resume, with an expected gradual return to five per month over time. The company now anticipates 787 abnormal costs will increase to approximately $2 billion, with most being incurred by the end of 2023, including $285 million recorded in the quarter.
Commercial Airplanes secured orders for 164 737 MAX and 24 freighter aircraft. Commercial Airplanes delivered 99 airplanes during the quarter and backlog included over 4,200 airplanes valued at $297 billion.
Defense, Space & Security
| Table 5. Defense, Space & Security | Fourth Quarter | Full Year | ||||||||||
| (Dollars in Millions) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||
| Revenues | $5,862 | $6,779 | (14)% | $26,540 | $26,257 | 1% | ||||||
| (Loss)/earnings from Operations | ($255) | $502 | (151)% | $1,544 | $1,539 | —% | ||||||
| Operating Margin | (4.4)% | 7.4% | (159)% | 5.8% | 5.9% | (2)% |
Defense, Space & Security fourth-quarter revenue decreased to $5.9 billion and fourth-quarter operating margin decreased to (4.4) percent, primarily due to lower volume and less favorable performance across the portfolio, including a $402 million pre-tax charge on the KC-46A Tanker program.
During the quarter, Defense, Space & Security secured an award for six MH-47G Block II Chinook helicopters for the U.S. Army Special Operations, a contract extension for Future Logistics Information Services for the U.K. Ministry of Defence, an award for modernization of Airborne Warning and Control System to the Royal Saudi Air Force, and contracts for proprietary space programs. Defense, Space & Security also completed the first carrier tests for the MQ-25 unmanned aerial tanker and started flight testing on the second uncrewed Loyal Wingman aircraft.
Backlog at Defense, Space & Security was $60 billion, of which 33 percent represents orders from customers outside the U.S.
Global Services
| Table 6. Global Services | Fourth Quarter | Full Year | ||||||||||
| (Dollars in Millions) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||
| Revenues | $4,291 | $3,733 | 15% | $16,328 | $15,543 | 5% | ||||||
| Earnings from Operations | $401 | $143 | 180% | $2,017 | $450 | 348% | ||||||
| Operating Margin | 9.3% | 3.8% | 145% | 12.4% | 2.9% | 328% |
Global Services fourth-quarter revenue increased to $4.3 billion and fourth-quarter operating margin increased to 9.3 percent primarily driven by higher commercial volume and favorable mix. Operating margin was negatively impacted by a $220 million inventory impairment.
During the quarter, Global Services secured a V-22 Performance Based Logistics contract for the U.S. Marine Corps, was awarded a contract for F/A-18 Landing Gear Repair for the U.S. Navy, and was selected to provide Apache training and support services to the U.K. Ministry of Defence. Global Services also delivered the 50th 767-300 converted freighter.
Additional Financial Information
| Table 7. Additional Financial Information | Fourth Quarter | Full Year | ||||||
| (Dollars in Millions) | 2021 | 2020 | 2021 | 2020 | ||||
| Revenues | ||||||||
| Boeing Capital | $63 | $56 | $272 | $261 | ||||
| Unallocated items, eliminations and other | ($173) | $8 | ($347) | ($65) | ||||
| Earnings/(Loss) from Operations | ||||||||
| Boeing Capital | $7 | $16 | $106 | $63 | ||||
| FAS/CAS service cost adjustment | $365 | $328 | $1,173 | $1,383 | ||||
| Other unallocated items and eliminations | ($235) | ($1,390) | ($1,267) | ($2,355) | ||||
| Other income, net | $132 | $122 | $551 | $447 | ||||
| Interest and debt expense | ($661) | ($698) | ($2,682) | ($2,156) | ||||
| Effective tax rate | 11.4% | 2.2% | 14.8% | 17.5% |
At quarter-end, Boeing Capital’s net portfolio balance was $1.7 billion. The change in revenue and earnings from other unallocated items and eliminations was primarily due to the timing of allocations. The loss from other unallocated items and eliminations was also impacted by a $744 million charge related to an agreement between Boeing and the U.S. Department of Justice in 2020. The fourth quarter 2021 effective tax rate primarily reflects a higher income tax benefit due to a lower valuation allowance charge than in fourth quarter 2020.
Release Boeing
