01—Abstract
Summary
Summary of the 10-K filed February 11, 2013. Cited figures are marked; the original filing is the authoritative source.
Boeing reported strong revenue growth in 2012, driven by a significant increase in commercial airplane deliveries.
The Commercial Airplanes segment saw revenues jump by 36%a compared to the previous year, bolstered by higher deliveries across all programs, including the introduction of the 787-8 and 747-8 Freighter. Defense, Space & Security (BDS) revenues also saw a modest increase, with growth in the Boeing Military Aircraft (BMA) and Global Services & Support (GS&S) segments partially offsetting a decline in Network & Space Systems (N&SS). Despite the revenue surge, the company faced increased costs and pressures impacting operating margins, particularly from the ramp-up of new aircraft programs like the 787 and 747-8.
Research and development expenses decreased year-over-year due to lower spending on these programs. The company's strong backlog, totaling over $372 billionb, provides a solid foundation for future growth, although significant risks remain related to production schedules, supplier performance, and potential impacts from U.S. government defense spending.
02—Key points
Key Highlights
- Total revenues increased by 19% to $81.7 billion in 2012, primarily driven by a 36% surge in Commercial Airplanes revenue to $49.1 billion.
- Defense, Space & Security (BDS) revenues saw a modest 2% increase to $32.6 billion, with growth in BMA and GS&S offsetting a decline in N&SS.
- Operating earnings increased by 8% to $6.3 billion, with Commercial Airplanes reporting a significant 35% rise in earnings due to higher deliveries and lower R&D.
- The company's total contractual backlog remained robust, growing to $372.3 billion by year-end 2012, indicating strong future demand.
- Research and development expenses decreased by 16% to $3.3 billion, largely due to reduced spending on the 747-8 and 787-8 programs.
- Boeing highlighted significant risks associated with production rate ramp-ups, supplier performance, and potential impacts of U.S. defense budget sequestration.
- The company experienced battery issues with its 787 aircraft early in 2013, leading to a suspension of deliveries and an ongoing investigation by regulatory agencies.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Boeing Co kept $0.05.
- Revenue$81.70B100.0%
- Cost of revenue−$68.67B84.0%
- Gross profit$13.03B16.0%
- Operating costs−$6.74B8.3%
- Operating income$6.29B7.7%
- Interest, other & tax−$2.39B2.9%
- Net income$3.90B4.8%
Where FY2012 revenue went
$81.70B- Cost of revenue: $68.67B, 84% of revenue
- Net income: $3.90B, 4.8% of revenue
- R&D: $3.30B, 4.0% of revenue
- Other operating costs: $3.44B, 4.2% of revenue
- Interest, other & tax: $2.39B, 2.9% of revenue
Kept 4.8% as net incomeNet income $3.90B · 4.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 11, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $81.70B$68.73B | +18.9% |
| Cost of Revenue | $68.67B$55.89B | +22.9% |
| Gross Profit | $13.03B$12.85B | +1.4% |
| R&D Expenses | $3.30B$3.92B | −15.8% |
| Operating Income | $6.29B$5.82B | +8.0% |
| Net Income | $3.90B$4.02B | −2.9% |
| EPS (Basic) | $5.15$5.39 | −4.5% |
| EPS (Diluted) | $5.11$5.34 | −4.3% |
| Shares Outstanding (Basic) | 758.00M744.10M | +1.9% |
| Shares Outstanding (Diluted) | 761.50M750.60M | +1.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Boeing's revenue growth in 2012?
Boeing's revenue growth in 2012 was primarily driven by a significant increase in commercial airplane deliveries, particularly across all programs including the 787 and 747, as well as higher revenues from commercial aviation services. The Defense, Space & Security segment also contributed positively, albeit at a slower pace.
What are the main risks and challenges highlighted by Boeing in this filing?
Key risks include market conditions impacting demand for commercial aircraft, potential cost overruns on firm fixed-price contracts, reliance on suppliers, production system challenges affecting delivery schedules, changes in U.S. government defense spending and acquisition priorities, and the financial health of customers. The company also noted potential impacts from pension obligations and labor relations.
How did Boeing's R&D spending change, and why?
Boeing's research and development expense decreased in 2012 compared to 2011, primarily due to lower spending on the 747-8 and 787-8 programs as these development phases matured.
What is the significance of Boeing's contractual backlog?
The contractual backlog represents future orders for products and services. Boeing's total contractual backlog stood at $372.3 billion at the end of 2012, indicating a substantial pipeline of future revenue and a strong demand for its aircraft and defense systems. The increase in backlog was driven by new commercial aircraft orders exceeding deliveries.
06—Continue