BOE.L Regulatory News (BOE)

Boeing Reports Strong Third-Quarter Results and Raises 2013 EPS Guidance CHICAGO, Oct. 23, 2013 -- * Core EPS (non-GAAP)* rose 16 percent to $1.80 on strong operating performance; GAAP EPS of $1.51 * Revenue increased 11 percent to $22.1 billion reflecting higher commercial deliveries * Backlog grew to a record $415 billion, including $27 billion of net orders during the quarter * Operating cash flow before pension contributions* increased to $4.3 billion * 2013 Core EPS guidance increased to between $6.50 and $6.65; GAAP EPS to between $5.40 and $5.55 Table 1.Summary Financial Results Third Quarter Nine Months(Dollars inMillions,except pershare data) 2013 2012 Change 2013 2012 Change Revenues $22,130 $20,008 11% $62,838 $59,396 6% Non-GAAP*Core Operating Earnings $2,143 $1,793 20% $6,038 $5,353 13%Core Operating Margin 9.7% 9.0% 0.7Pts 9.6% 9.0% 0.6PtsCore Earnings Per Share $1.80 $1.55 16% $5.20 $4.43 17%Operating Cash Flow Before Pension Contributions $4,308 $2,346 84% $8,312 $4,854 71%GAAPEarnings From Operations $1,803 $1,559 16% $5,047 $4,666 8%Operating Margin 8.1% 7.8% 0.3Pts 8.0% 7.9% 0.1PtsNet Earnings $1,158 $1,032 12% $3,352 $2,922 15%Earnings Per Share $1.51 $1.35 12% $4.36 $3.84 14% Operating Cash Flow $2,808 $1,596 76% $6,799 $3,341 104% * Non-GAAP measures (core operating earnings, core operating margin and coreearnings per share) exclude certain components of pension and post retirementbenefit expense that the company believes are not reflective of underlyingbusiness performance. Complete definitions of Boeing's non-GAAP measures are onpage 6, "Non-GAAP Measures Disclosures." The Boeing Company (NYSE: BA) reported third-quarter core earnings per share(non-GAAP) increased 16 percent* to $1.80, driven by strong performance acrossthe company's businesses (Table 1). Third-quarter core operating earnings(non-GAAP) increased 20 percent* to $2.1 billion from the same period of theprior year. Third-quarter revenue was $22.1 billion, GAAP earnings fromoperations was $1.8 billion and earnings per share was $1.51. Core earnings pershare guidance increased to between $6.50 and $6.65 and GAAP earnings per share guidance increased to between $5.40 and $5.55,reflecting the strong performance. The company also increased its 2013operating cash flow outlook to greater than $7 billion, which includes $1.5billion of discretionary pension contributions, and reaffirmed its 2013 revenueguidance. "Consistently strong operating performance is driving higher earnings, revenueand cash flow as we deliver on our record backlog and return increased value toshareholders," said Boeing Chairman, President and CEO Jim McNerney. "Duringthe quarter, Commercial Airplanes completed the first flight of the 787-9 anddelivered 170 airplanes, while Defense, Space & Security maintained solidperformance and captured $7 billion in new orders. Despite the uncertainty ofthe U.S. defense market, overall our customer-focused business strategies anddisciplined execution on our programs are producing the results we expect, andour strong year-to-date performance and positive outlook allow us to increaseour 2013 guidance for earnings and operating cash flow." Table 2. Cash Flow Third Quarter Nine Months (Millions) 2013 2012 2013 2012 Operating Cash Flow Before Pension $4,308 $2,346 $8,312 $4,854Contributions* Pension Contributions ($1,500) ($750) ($1,513) ($1,513)Operating Cash Flow $2,808 $1,596 $6,799 $3,341 Less Additions to Property, Plant & Equipment ($484) ($428) ($1,460) ($1,208)Free Cash Flow* $2,324 $1,168 $5,339 $2,133 Operating cash flow before pension contributions* in the quarter was $4.3billion, reflecting higher commercial airplane production rates, strong coreoperating performance and timing of receipts and expenditures (Table 2). Duringthe quarter, the company repurchased 7.6 million shares for $0.8 billion andpaid $0.4 billion in dividends, reflecting an 11 percent increase in dividendspaid compared to the same period of the prior year. Table 3. Cash, Marketable Securities and Debt Balances Quarter-End(Billions) Q3 13 Q2 13Cash $10.0 $8.7Marketable Securities(1) $5.9 $5.6 Total $15.9 $14.3Debt Balances:The Boeing Company, net of intercompany loans to BCC $7.0 $7.0Boeing Capital Corporation, including intercompany loans $2.6 $2.6 Total Consolidated Debt $9.6 $9.6 (1) Marketable securities consists primarily of time deposits due within one yearclassified as "short-term investments." Cash and investments in marketable securities totaled $15.9 billion atquarter-end (Table 3), up from $14.3 billion at the beginning of the quarter.Debt was $9.6 billion, unchanged from the beginning of the quarter. Total company backlog at quarter-end was a record $415 billion, up from $410billion at the beginning of the quarter, and included net orders for thequarter of $27 billion. Segment Results Commercial Airplanes Table 4.Commercial Third Quarter Nine MonthsAirplanes (Dollars inMillions) 2013 2012 Change 2013 2012 Change CommercialAirplanes Deliveries 170 149 14% 476 436 9% Revenues $13,987 $12,186 15% $38,301 $34,966 10%Earnings from Operations $1,617 $1,153 40% $4,289 $3,445 24% Operating Margins 11.6% 9.5% 2.1Pts 11.2% 9.9% 1.3Pts Boeing Commercial Airplanes third-quarter revenue increased to $14.0 billionand operating margin improved to 11.6 percent on higher delivery volume andcontinued strong operating performance (Table 4). During the quarter, the 787-9 completed first flight. With the successfullaunch of the 787-10 and continued strong demand for the 787 family ofairplanes, the company intends to increase the 787 production rate from 10 to12 per month in 2016, with plans to increase to 14 per month before the end ofthe decade. Commercial Airplanes booked 200 net orders during the quarter. Backlog remainsstrong with nearly 4,800 airplanes valued at a record $345 billion. Boeing Defense, Space & Security Table 5. Defense, Third Quarter Nine MonthsSpace & Security(Dollars in Millions) 2013 2012 Change 2013 2012 Change Revenues Boeing Military Aircraft $3,543 $3,710 (5)% $11,541 $11,982 (4)% Network & Space Systems $2,231 $2,055 9% $6,240 $5,887 6% Global Services & Support $2,272 $2,074 10% $6,561 $6,395 3%Total BDS Revenues $8,046 $7,839 3% $24,342 $24,264 -Earnings from Operations Boeing Military Aircraft $221 $424 (48)% $1,024 $1,176 (13)% Network & Space Systems $193 $179 8% $486 $424 15% Global Services & Support $259 $224 16% $771 $717 8%Total BDS Earnings from Operations $673 $827 (19)% $2,281 $2,317 (2)%Operating Margins 8.4% 10.5% (2.1)Pts 9.4% 9.5% (0.1)Pts Boeing Defense, Space & Security's third-quarter revenue was $8.0 billion,while operating margin was 8.4 percent (Table 5). Boeing Military Aircraft (BMA) third-quarter revenue was $3.5 billion,primarily reflecting lower delivery volume. Operating margin decreased to 6.2percent, impacted by mix and one-time charges on the F-15 and C-17 programs.During the quarter, BMA was awarded a low-rate initial production award for 13P-8A Poseidon aircraft. Network & Space Systems (N&SS) third-quarter revenue was $2.2 billion,reflecting higher sales of Delta inventory and revenue in the Space LaunchSystem program, and operating margin was 8.7 percent. During the quarter, N&SSwas awarded a contract by Mexico's Satmex for an additional 702 smallsatellite. Global Services & Support (GS&S) third-quarter revenue was $2.3 billion, due tohigher volume in maintenance, modifications & upgrades. Operating margin was11.4 percent, reflecting strong performance. During the quarter, GS&S achievedfirst flight on the QF-16 unmanned aircraft and was also awarded a contract bythe U.S. Air Force for 56 additional replacement wings for the A-10 aircraft. Backlog at Defense, Space & Security was $70 billion, of which 38 percentrepresents orders with international customers. Additional Financial Information Table 6. Additional Financial Third Quarter Nine MonthsInformation(Dollars in Millions) 2013 2012 2013 2012 Revenues Boeing Capital Corporation $94 $101 $303 $339 Other segment $26 $27 $80 $79 Unallocated items and eliminations ($23) ($145) ($188) ($252)Earnings from Operations Boeing Capital Corporation $35 $28 $98 $100 Other segment income/(expense) $44 ($74) ($57) ($217) Unallocated items and eliminations included in core operating earnings ($226) ($141) ($573) ($292) Unallocated pension/ postretirement expense ($340) ($234) ($991) ($687)Other income, net $19 $17 $41 $39Interest and debt expense ($95) ($110) ($290) ($330)Effective tax rate 32.8% 29.5% 30.1% 33.1% At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was$4.1 billion and debt-to-equity ratio was 5.0-to-1. Other segment earningsimproved $118 million in the quarter primarily due to an insurance recovery.Unallocated items and eliminations included in core operating earningsincreased in the third quarter of 2013 partly due to higher deferredcompensation expense as a result of stock price appreciation. Total pensionexpense for the third quarter was $775 million, up from $583 million in thesame period last year. Unallocated pension expense included a charge related tothe previously announced decision to end C-17 production in 2015 offset by aone-time prior period pension adjustment. Outlook The company's 2013 financial guidance (Table 7) has been updated to reflectcontinued strong performance in both businesses, generating an expected 12percent year over year increase in core earnings per share (non-GAAP). Table 7. Financial Outlook(Dollars in Billions, except per share data) 2013 The Boeing Company Revenue $83 - 86 Core Earnings Per Share* $6.50 - 6.65 Earnings Per Share $5.40 - 5.55 Operating Cash Flow Before Pension Contributions* greater than $8.5 Operating Cash Flow(1) greater than $7 Boeing Commercial Airplanes Deliveries(2) 635 - 645 Revenue $51 - 53 Operating Margin greater than 10.0% Boeing Defense, Space & Security Revenue Boeing Military Aircraft ~$16.0 Network & Space Systems ~$7.8 Global Services & Support ~$8.2 Total BDS Revenue $31.5 - 32.5 Operating Margin Boeing Military Aircraft ~ 9.0% Network & Space Systems ~ 7.5% Global Services & Support ~ 11.5% Total BDS Operating Margin greater than 9.25% Boeing Capital Corporation Portfolio Size Lower Revenue ~ $0.4 Pre-Tax Earnings ~ $0.05 Research & Development ~ $3.2Capital Expenditures ~ $2.3Pension Expense(3) ~ $3.2Effective Tax Rate ~ 31% (1) After discretionary cash pension contributions of $1.5 billion and assumingnew aircraft financings under $0.5 billion. (2) Assumes greater than 60 787 deliveries. (3) Approximately $1.4 billion is expected to be recorded in unallocated itemsand eliminations. * Non-GAAP measures. Complete definitions of Boeing's use of non-GAAP measuresare on page 6, "Non-GAAP Measures Disclosures." Core earnings per share guidance for 2013 increased to between $6.50 and $6.65,up from between $6.20 and $6.40, and earnings per share guidance increased tobetween $5.40 and $5.55, up from between $5.10 and $5.30, both reflecting thestrong operating performance. Total company 2013 operating cash flow beforepension contributions (non-GAAP) is now expected to be greater than $8.5billion, up from greater than $8.0 billion. Operating cash flow is now expectedto be greater than $7 billion in 2013, up from greater than $6.5 billion,including $1.5 billion of discretionary pension contributions. Commercial Airplanes' operating margin increased to greater than 10.0 percent,up from greater than 9.5 percent. Defense, Space & Security's operating marginincreased to greater than 9.25 percent, up from greater than 9.0 percent,reflecting higher margins in Global Services & Support. Boeing Capital Corporation revenue increased to approximately $0.4 billion, upfrom approximately $0.3 billion. Research and development expense for 2013 isnow expected to be approximately $3.2 billion, down from approximately $3.3billion. Non-GAAP Measures Disclosures We supplement the reporting of our financial information determined under U.S.generally accepted accounting principles (GAAP) with certain non-GAAP financialinformation. The non-GAAP financial information presented excludes certainsignificant items that may not be indicative of, or are unrelated to, resultsfrom our ongoing business operations. We believe that these non-GAAP measuresprovide investors with additional insight into the company's ongoing businessperformance. These non-GAAP measures should not be considered in isolation oras a substitute for the related GAAP measures, and other companies may definesuch measures differently. We encourage investors to review our financialstatements and publicly-filed reports in their entirety and not to rely on anysingle financial measure. The following definitions are provided: Core Operating Earnings, Core Operating Margin and Core Earnings Per Share Core operating earnings is defined as GAAP earnings from operations excludingunallocated pension and post-retirement expense. Core operating margin isdefined as core operating earnings expressed as a percentage of revenue. Coreearnings per share is defined as GAAP diluted earnings per share excluding thenet earnings per share impact of unallocated pension and post-retirementexpense. Unallocated pension and post-retirement expense represents the portionof pension and other post-retirement costs that are not recognized by businesssegments for segment reporting purposes. Management uses core operatingearnings, core operating margin and core earnings per share for purposes ofevaluating and forecasting underlying business performance. Management believesthese core earnings measures provide investors additional insights intooperational performance as they exclude unallocated pension and post-retirementcosts, which primarily represent costs driven by market factors and costs notallocable to government contracts. Operating Cash Flow Before Pension Contributions Operating cash flow before pension contributions is defined as GAAP operatingcash flow less pension contributions. Management believes operating cash flowbefore pension contributions provides additional insights into underlyingbusiness performance. Management uses operating cash flow before pensioncontributions as a measure to assess both business performance and overallliquidity. Table 2 provides a reconciliation between GAAP operating cash flowand operating cash flow before pension contributions. Free Cash Flow Free cash flow is defined as GAAP operating cash flow less capital expendituresfor property, plant and equipment additions. Management believes free cash flowprovides investors with an important perspective on the cash available forshareholders, debt repayment, and acquisitions after making the capitalinvestments required to support ongoing business operations and long term valuecreation. Free cash flow does not represent the residual cash flow availablefor discretionary expenditures as it excludes certain mandatory expendituressuch as repayment of maturing debt. Management uses free cash flow as a measureto assess both business performance and overall liquidity. Table 2 provides areconciliation between GAAP operating cash flow and free cash flow. Caution Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning ofthe 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 theseforward-looking statements. Examples of forward-looking statements includestatements relating to our future financial condition and operating results, aswell as any other statement that does not directly relate to any historical orcurrent fact. Forward-looking statements are based on our current expectationsand assumptions, which may not prove to be accurate. These statements are notguarantees and are subject to risks, uncertainties, and changes incircumstances that are difficult to predict. Many factors could cause actualresults to differ materially and adversely from these forward-lookingstatements. Among these factors are risks related to: (1) general conditions inthe economy and our industry, including those due to regulatory changes; (2)our reliance on our commercial airline customers; (3) the overall health of ouraircraft production system, planned production rate increases across multiplecommercial airline programs, our commercial development and derivative aircraftprograms, and our aircraft being subject to stringent performance andreliability standards; (4) changing acquisition priorities of the U.S.government; (5) our dependence on U.S. government contracts; (6) our relianceon 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 theavailability 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 adversedevelopments in new or pending litigation and/or government investigations;(14) customer and aircraft concentration in Boeing Capital's customer financingportfolio; (15) changes in our ability to obtain debt on commerciallyreasonable terms and at competitive rates in order to fund our operations andcontractual commitments; (16) realizing the anticipated benefits of mergers,acquisitions, joint ventures/strategic alliances or divestitures; (17) theadequacy of our insurance coverage to cover significant risk exposures; (18)potential business disruptions, including those related to physical securitythreats, information technology or cyber-attacks or natural disasters; (19)work stoppages or other labor disruptions; (20) significant changes in discountrates and actual investment return on pension assets; (21) potentialenvironmental liabilities; and (22) threats to the security of our or ourcustomers' information. Additional information concerning these and other factors can be found in ourfilings with the Securities and Exchange Commission, including our most recentAnnual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reportson Form 8-K. Any forward-looking statement speaks only as of the date on whichit is made, and we assume no obligation to update or revise any forward-lookingstatement, whether as a result of new information, future events, or otherwise,except as required by law. Contact: Investor Relations: Troy Lahr or Matt Welch (312) 544-2140Communications: Chaz Bickers (312) 544-2002 The Boeing Company and Subsidiaries Consolidated Statements of Operations (Unaudited) Nine months ended Three months ended September 30 September 30(Dollars in millions, except per 2013 2012 2013 2012share data) Sales of products $55,310 $51,441 $19,754 $17,415Sales of services 7,528 7,955 2,376 2,593Total revenues 62,838 59,396 22,130 20,008 Cost of products (47,030) (43,103) (16,865) (14,683)Cost of services (5,795) (6,431) (1,791) (2,089)Boeing Capital interest expense (55) (85) (18) (27)Total costs and expenses (52,880) (49,619) (18,674) (16,799) 9,958 9,777 3,456 3,209 Income from operating investments, net 147 211 59 120General and administrative expense (2,856) (2,774) (956) (916)Research and development expense, net (2,223) (2,545) (755) (853)Gain/(loss) on dispositions, net 21 (3) (1) (1)Earnings from operations 5,047 4,666 1,803 1,559Other income, net 41 39 19 17Interest and debt expense (290) (330) (95) (110)Earnings before income taxes 4,798 4,375 1,727 1,466Income tax expense (1,445) (1,450) (567) (432)Net earnings from continuing operations 3,353 2,925 1,160 1,034 Net loss on disposal of discontinued operations, net of taxes of $0, $2, $0 and $1 (1) (3) (2) (2) Net earnings $3,352 $2,922 $1,158 $1,032Basic earnings per share from continuing operations $4.40 $3.86 $1.53 $1.36 Net loss on disposal of discontinued operations, net of taxes Basic earnings per share $4.40 $3.86 $1.53 $1.36 Diluted earnings per share from continuing operations $4.36 $3.84 $1.51 $1.35 Net loss on disposal of discontinued operations, net of taxes Diluted earnings per share $4.36 $3.84 $1.51 $1.35Cash dividends paid per share $1.455 $1.32 $0.485 $0.44 Weighted average diluted shares (millions) 769.8 762.3 769.1 765.2 The Boeing Company and Subsidiaries Consolidated Statements of Financial Position (Unaudited) (Dollars in millions, except per share data) September 30 December 31 2013 2012AssetsCash and cash equivalents $10,041 $10,341Short-term and other investments 5,870 3,217Accounts receivable, net 6,652 5,608Current portion of customer financing, net 316 364Deferred income taxes 43 28Inventories, net of advances and progress billings 41,240 37,751 Total current assets 64,162 57,309Customer financing, net 3,903 4,056Property, plant and equipment, net of accumulated depreciation of $14,938 and $14,645 9,987 9,660 Goodwill 5,047 5,035Acquired intangible assets, net 2,962 3,111Deferred income taxes 5,957 6,753Investments 1,168 1,180Other assets, net of accumulated amortization of $493 and $504 1,447 1,792 Total assets $94,633 $88,896Liabilities and equityAccounts payable $10,657 $9,394Accrued liabilities 12,384 12,995Advances and billings in excess of related costs 20,216 16,672Deferred income taxes and income taxes payable 5,504 4,485Short-term debt and current portion of long-term debt 919 1,436 Total current liabilities 49,680 44,982Accrued retiree health care 7,415 7,528Accrued pension plan liability, net 18,559 19,651Non-current income taxes payable 299 366Other long-term liabilities 936 1,429Long-term debt 8,677 8,973Shareholders' 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 4,295 4,122 Treasury stock, at cost - 260,351,104 and 256,630,628 shares (16,865) (15,937) Retained earnings 32,647 30,037 Accumulated other comprehensive loss (16,187) (17,416) Total shareholders' equity 8,951 5,867 Noncontrolling interest 116 100 Total equity 9,067 5,967 Total liabilities and equity $94,633 $88,896 The Boeing Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Nine months ended September 30(Dollars in millions) 2013 2012 Cash flows - operating activities: Net earnings $3,352 $2,922 Adjustments to reconcile net earnings to net cash provided by operating activities: Non-cash items - Share-based plans expense 156 148 Depreciation and amortization 1,323 1,313 Investment/asset impairment charges, net 38 59 Customer financing valuation benefit (7) (4) Loss on disposal of discontinued operations 1 5 (Gain)/loss on dispositions, net (21) 3 Other charges and credits, net 48 559 Excess tax benefits from share-based payment arrangements (86) (43) Changes in assets and liabilities - Accounts receivable (1,006) 150 Inventories, net of advances and progress billings (3,631) (4,588) Accounts payable 943 857 Accrued liabilities (338) (123) Advances and billings in excess of related costs 3,543 123 Income taxes receivable, payable and deferred 1,336 1,085 Other long-term liabilities (52) 22 Pension and other postretirement plans 954 571 Customer financing, net 223 254 Other 23 28 Net cash provided by operating activities 6,799 3,341Cash flows - investing activities: Property, plant and equipment additions (1,460) (1,208) Property, plant and equipment reductions 47 29 Acquisitions, net of cash acquired (26) (18) Contributions to investments (9,640) (10,331) Proceeds from investments 6,997 6,941 Purchase of distribution rights (6) Net cash used by investing activities (4,082) (4,593)Cash flows - financing activities: New borrowings 547 34 Debt repayments (1,397) (1,273) Repayments of distribution rights financing (139) (72) Stock options exercised, other 871 96 Excess tax benefits from share-based payment arrangements 86 43 Employee taxes on certain share-based payment arrangements (60) (72) Common shares repurchased (1,799) Dividends paid (1,102) (990) Net cash used by financing activities (2,993) (2,234)Effect of exchange rate changes on cash and cash equivalents (24) 19Net decrease in cash and cash equivalents (300) (3,467)Cash and cash equivalents at beginning of year $10,341 $10,049Cash and cash equivalents at end of period $10,041 $6,582 The Boeing Company and Subsidiaries Summary of Business Segment Data (Unaudited) Nine months ended Three months ended September 30 September 30(Dollars in millions) 2013 2012 2013 2012Revenues: Commercial Airplanes $38,301 $34,966 $13,987 $12,186 Defense, Space & Security: Boeing Military Aircraft 11,541 11,982 3,543 3,710 Network & Space Systems 6,240 5,887 2,231 2,055 Global Services & Support 6,561 6,395 2,272 2,074 Total Defense, Space & Security 24,342 24,264 8,046 7,839 Boeing Capital 303 339 94 101 Other segment 80 79 26 27 Unallocated items and eliminations (188) (252) (23) (145)Total revenues $62,838 $59,396 $22,130 $20,008Earnings from operations: Commercial Airplanes $4,289 $3,445 $1,617 $1,153 Defense, Space & Security: Boeing Military Aircraft 1,024 1,176 221 424 Network & Space Systems 486 424 193 179 Global Services & Support 771 717 259 224 Total Defense, Space & Security 2,281 2,317 673 827 Boeing Capital 98 100 35 28 Other segment (57) (217) 44 (74) Unallocated items and eliminations (1,564) (979) (566) (375)Earnings from operations 5,047 4,666 1,803 1,559Other income, net 41 39 19 17Interest and debt expense (290) (330) (95) (110)Earnings before income taxes 4,798 4,375 1,727 1,466Income tax expense (1,445) (1,450) (567) (432)Net earnings from continuing operations 3,353 2,925 1,160 1,034Net loss on disposal of discontinued operations, net of taxes of $0, $2, $0 and $1 (1) (3) (2) (2)Net earnings $3,352 $2,922 $1,158 $1,032 Research and development expense,net: Commercial Airplanes $1,297 $1,638 $432 $534 Defense, Space & Security 892 868 313 306 Other 34 39 10 13Total research and development expense, net $2,223 $2,545 $755 $853 Unallocated items and eliminations: Share-based plans ($74) ($64) (21) (23) Deferred compensation (165) (49) (63) (15) Capitalized interest (52) (53) (18) (16) Eliminations and other (282) (126) (124) (87) Sub-total (included in core operating earnings) (573) (292) (226) (141) Pension (1,045) (608) (356) (204) Postretirement 54 (79) 16 (30)Total unallocated items and eliminations ($1,564) ($979) ($566) ($375) The Boeing Company and Subsidiaries Operating and Financial Data (Unaudited) Deliveries Nine months ended Three months ended September 30 September 30Commercial Airplanes 2013 2012 2013 2012 737 330 310 112 102 747 16 21 4 8 767 17 20 5 7 777 73 62 26 20 787 40 (1) 23 23 12 Total 476 436 170 149Note: Deliveries under operating lease are identified byparentheses. Defense, Space & SecurityBoeing Military Aircraft F/A-18 Models 36 36 12 12 F-15E Eagle 3 8 C-17 Globemaster III 8 8 2 3 CH-47 Chinook 32 40 15 18 AH-64 Apache 31 13 11 10 P-8 Models 7 3 2 2 AEW&C 2 Network & Space Systems Commercial and Civil Satellites 1 3 2 Military Satellites 1 6 1 3 Contractual backlog September 30 June 30 March 31 December 31(Dollars in billions) 2013 2013 2013 2012 Commercial Airplanes $344.3 $337.7 $322.0 $317.3 Defense, Space & Security: Boeing Military Aircraft 26.4 26.5 26.6 29.2 Network & Space Systems 9.9 10.2 9.6 10.1 Global Services & Support 14.6 14.8 15.4 15.8 Total Defense, Space & Security 50.9 51.5 51.6 55.1Total contractual backlog $395.2 $389.2 $373.6 $372.4Unobligated backlog $19.9 $21.1 $18.1 $17.9Total backlog $415.1 $410.3 $391.7 $390.3Workforce 170,800 172,200 173,100 174,400 The Boeing Company and Subsidiaries Reconciliation of Non-GAAP Measures Core Operating Earnings, Core Operating Margin and Core Earnings Per Share (Unaudited) The tables provided below reconcile the non-GAAP financial measures coreoperating earnings, core operating margin and core earnings per share with themost directly comparable GAAP financial measures, earnings from operations,operating margin and diluted earnings per share. See page 6 of this release foradditional information on the use of these non-GAAP financial measures. Nine months ended Three months ended September 30 September 30 2013 2012 2013 2012 Revenues $62,838 $59,396 $22,130 $20,008 GAAP Earnings From Operations $5,047 $4,666 $1,803 $1,559GAAP Operating Margin 8.0% 7.9% 8.1% 7.8% Unallocated Pension/ Postretirement Expense $991 $687 $340 $234Core Operating Earnings (non-GAAP) $6,038 $5,353 $2,143 $1,793Core Operating Margin (non-GAAP) 9.6% 9.0% 9.7% 9.0% GAAP Diluted Earnings Per Share $4.36 $3.84 $1.51 $1.35 Unallocated Pension/ Postretirement Expense(1) $0.84 $0.59 $0.29 $0.20 Core Earnings Per Share (non-GAAP) $5.20 $4.43 $1.80 $1.55 Weighted Average Diluted Shares (millions) 769.8 762.3 769.1 765.2Increase in GAAP Earnings Per Share 14% 12%Increase in Core Earnings Per Share 17% 16% (1) Earnings per share impact is presented net of the federal statutory tax rateof 35.0 percent. The Boeing Company and Subsidiaries Reconciliation of Non-GAAP Measures 2013 Increase in Core Earnings Per Share (Unaudited) The tables provided below reconcile the non-GAAP financial measures coreoperating earnings, core operating margin and core earnings per share with themost directly comparable GAAP financial measures, earnings from operations,operating margin and diluted earnings per share. See page 6 of this release foradditional information on the use of these non-GAAP financial measures. Year Ended December 31, 2012 Year Ended December 31, 2013 Guidance Earnings Per Share Earnings Per Share GAAP Diluted Earnings Per Share $5.11 $5.40 - 5.55 Unallocated Pension/Postretirement Expense 0.77 a 1.10 b Core Earnings Per Share (non-GAAP) $5.88 $6.50 - 6.65 Weighted averagediluted shares (millions) 763.8 768.0 2013 Change in GAAP Earnings per Share ~ 7% 2013 Increase in Core Earnings per Share ~ 12% a Represents the net earnings per share impact of unallocated pension and postretirement expense of $899 million, net of the federal statutory tax rate of 35.0 percent. b Represents the net earnings per share impact of unallocated pension and postretirement expense of approximately $1.3 billion, net of the federal statutory tax rate of 35.0 percent. SOURCE Boeing