Boeing reports fourth-quarter and full-year 2021 results, message to employees

Boeing issued this financial report:

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 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

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. 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.

Boeing President and CEO Dave Calhoun shared the following message with employees today addressing the company’s fourth-quarter results:

As we share our fourth-quarter results, I want to thank you for your hard work and resilience. 2021 was a key rebuilding year for us, and together, we overcame significant hurdles. While we have more work to do, I am confident that we are well positioned to accelerate our progress in 2022 and beyond.

The industry’s mounting recovery has spurred solid commercial airplane demand. Order activity picked up significantly, particularly for the 737 MAX. In total, we booked over 900 gross commercial airplane orders including approximately 750 orders for the 737 family.

The 737 MAX is now safely flying in nearly every jurisdiction around the globe and the fleet is performing very well. With about 1,600 flights daily and more than 300,000 revenue flights completed since late 2020, the fleet is delivering reliability equal to or better than any fleet flying. And with over 800,000 total flight hours since late 2020, the fleet has now flown more flight hours than it had prior to the initial grounding. We also delivered 245 737 MAX airplanes in 2021, and we’ve steadily increased production with a focus on safety and quality. We began 2021 at very low production rates, and today, are producing at 26 airplanes per month on our way to 31 per month early this year. Looking back at where we started, 2021 was a pivotal year for the 737 team.

We’re now applying that same disciplined and detailed focus to the 787 program. As you know, we are progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications. This effort continues to impact our deliveries and our financial results – but we are fully confident it is the right thing to do. I view the financial impacts of this work as a long-term investment in a program that has significant runway ahead. We are taking the time now to ensure we’re positioned well as widebody demand recovers. We’ll continue to keep you updated as we progress toward returning to 787 deliveries.

As cargo demand expands, we also booked record orders for new and converted Boeing freighters, including 84 orders for our 767, 777 and 747 freighters. Our Global Services team also announced 10 new converted freighter lines to meet the growing demand. Overall, our Global Services business showed great resilience, in part due to our well-balanced portfolio of both government and commercial offerings. This quarter, the team delivered our 50th 767-300 converted freighter and captured new commercial and government business valued at $6 billion. As the commercial market recovers, BGS is well positioned for growth in 2022.

In our defense and space business, we secured key orders and delivered on critical customer milestones. We completed the first carrier tests with the U.S. Navy for the MQ-25, started flight testing on the second uncrewed Loyal Wingman aircraft, and delivered 47 total aircraft including the first KC-46 for Japan and Norway’s first P-8A Poseidon. We also generated $7 billion in orders in the quarter, extending our BDS backlog to $60 billion.

We took another key step in our overall recovery, notably in our financial performance, by generating positive cash flow in the fourth quarter, which represents our first positive cash quarter since early 2019. At the same time, the ongoing 787 activities resulted in financial charges that significantly impacted our earnings. While we never want to disappoint our customers or miss expectations, the work we’re putting in now will build stability and predictability going forward.

And looking to our future, we’re sustaining and expanding key investments, including in our people, in sustainability, advanced manufacturing, digital engineering, supply chain capability, technology development and partnerships.

We’ll stay squarely focused on safety, quality and transparency as we strengthen our culture and rebuild trust each day. While challenges remain, I am confident in our future. Our market is resilient, our team is world-class and we are taking the right, tough actions today to position ourselves for success. Thank you for all you continue to do to support our customers, our communities and each other.

Dave