01—Abstract
Summary
Summary of the 10-K filed February 12, 2015. Cited figures are marked; the original filing is the authoritative source.
Boeing's 2014 10-K filing highlights a strong year for the company, with significant revenue growth driven primarily by its Commercial Airplanes segment, which saw increased deliveries of new aircraft.
The Defense, Space & Security (BDS) segment experienced a revenue decline, largely due to lower revenues across its sub-segments. The company's overall strategy focuses on execution in these core businesses, supported by Boeing Capital, with an aim to deliver value to shareholders through innovation and efficiency improvements. Financially, Boeing demonstrated solid performance with increased earnings from operations and net earnings compared to the prior year.
The company also saw a substantial increase in its contractual backlog, particularly in Commercial Airplanes, indicating robust future demand. Significant investments in research and development for new aircraft programs, such as the 777X and 737 MAX, underscore Boeing's commitment to future growth. Key risks identified include market cyclicality, dependency on government defense spending, potential cost overruns on fixed-price contracts, and global economic uncertainties impacting airline demand.
02—Key points
Key Highlights
- The Commercial Airplanes segment revenue increased by 13% to $59.99 billion in 2014, driven by higher new airplane deliveries, while the Defense, Space & Security segment revenue decreased by 7% to $30.88 billion.
- Total revenues for Boeing increased by 5% to $90.76 billion in 2014, with net earnings rising to $5.45 billion, up from $4.59 billion in 2013.
- Boeing's total contractual backlog grew by 15% to $487.09 billion at the end of 2014, primarily driven by a strong order book for commercial aircraft.
- The company recorded a reach-forward loss of $425 million on the USAF KC-46A Tanker contract in the second quarter of 2014 due to initial engineering and design issues.
- Research and development expenses remained substantial at $3.05 billion, with continued investment in new aircraft derivatives like the 777X, 787-10, and 737 MAX.
- Boeing repurchased approximately 46.6 million shares of its common stock for $6.0 billion in 2014, and announced a new repurchase plan of up to $12 billion.
- The company's financial statements reveal significant pension and postretirement benefit obligations, with an underfunded status of $17.3 billion for pension plans under GAAP as of December 31, 2014.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Boeing Co kept $0.06.
- Revenue$90.76B100.0%
- Cost of revenue−$76.75B84.6%
- Gross profit$14.01B15.4%
- Operating costs−$6.54B7.2%
- Operating income$7.47B8.2%
- Interest, other & tax−$2.03B2.2%
- Net income$5.45B6.0%
Where FY2014 revenue went
$90.76B- Cost of revenue: $76.75B, 85% of revenue
- Net income: $5.45B, 6.0% of revenue
- R&D: $3.05B, 3.4% of revenue
- Other operating costs: $3.49B, 3.8% of revenue
- Interest, other & tax: $2.03B, 2.2% of revenue
Kept 6.0% as net incomeNet income $5.45B · 6.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 12, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $90.76B$86.62B | +4.8% |
| Cost of Revenue | $76.75B$73.27B | +4.8% |
| Gross Profit | $14.01B$13.36B | +4.9% |
| R&D Expenses | $3.05B$3.07B | −0.8% |
| Operating Income | $7.47B$6.56B | +13.9% |
| Net Income | $5.45B$4.58B | +18.8% |
| EPS (Basic) | $7.47$6.03 | +23.9% |
| EPS (Diluted) | $7.38$5.96 | +23.8% |
| Shares Outstanding (Basic) | 728.90M760.80M | −4.2% |
| Shares Outstanding (Diluted) | 736.70M767.60M | −4.0% |
05—Questions
Frequently Asked Questions
What was Boeing's financial performance in 2014?
In 2014, Boeing reported total revenues of $90.76 billion, a 5% increase from 2013, driven by strong performance in its Commercial Airplanes segment. Net earnings rose to $5.45 billion, up from $4.59 billion in the prior year, reflecting higher deliveries and improved profitability in commercial aircraft. The Defense, Space & Security segment saw a revenue decrease.
What are the key growth drivers and future investments for Boeing?
The primary growth driver is the Commercial Airplanes segment, supported by a robust backlog, particularly for new models like the 777X and 737 MAX. Boeing continued to invest significantly in research and development for these and other aircraft programs, aiming to maintain its market leadership and technological advantage.
What are the main risks highlighted in the filing?
Key risks include the cyclical nature of the airline industry, dependency on U.S. government defense spending, the potential for cost overruns on fixed-price defense contracts (as seen with the KC-46A Tanker program), the impact of global economic conditions on aircraft demand, and significant pension and postretirement benefit obligations. Competition from international players like Airbus is also a persistent risk.
How did Boeing manage its capital and shareholder returns in 2014?
Boeing actively managed its capital by repurchasing approximately 46.6 million shares of its common stock for $6.0 billion in 2014, demonstrating a commitment to returning value to shareholders. The company also announced a new, larger share repurchase authorization of $12 billion. Dividend payments also increased year-over-year.
06—Continue