Item 8.

Financial Statements and Supplementary Data

Index to the Consolidated Financial Statements

Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page
49
50

Consolidated Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52

Consolidated Statements of Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53

Summary of Business Segment Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54

Note 1 Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55

Note 2 Goodwill and Acquired Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66

Note 3 Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67

Note 4 Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68

Note 5 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

71

Note 6 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

72

Note 7 Customer Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73

Note 8 Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76

Note 9 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77

Note 10 Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77

Note 11 Liabilities, Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78

Note 12 Arrangements with Off-Balance Sheet Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82

Note 13 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84

Note 14 Postretirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85

Note 15 Share-Based Compensation and Other Compensation Arrangements . . . . . . . . . . .

94

Note 16 Shareholders Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97

Note 17 Derivative Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98

Note 18 Significant Group Concentrations of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

Note 19 Fair Value Measurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

Note 20 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103

Note 21 Segment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105

Note 22 Quarterly Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

Note 23 Subsequent Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . .

110

48

The Boeing Company and Subsidiaries

Consolidated Statements of Operations
(Dollars in millions, except per share data)
Years ended December 31,
Sales of products
Sales of services
Total revenues
Cost of products
Cost of services
Boeing Capital interest expense
Total costs and expenses
Income from operating investments, net
General and administrative expense
Research and development expense, net
Gain on dispositions, net
Earnings from operations
Other income, net
Interest and debt expense
Earnings before income taxes
Income tax expense
Net earnings from continuing operations
Net (loss)/gain on disposal of discontinued operations, net of taxes
of $0, $2, ($4)
Net earnings
Basic earnings per share from continuing operations
Net (loss)/gain on disposal of discontinued operations, net of taxes
Basic earnings per share
Diluted earnings per share from continuing operations
Net (loss)/gain on disposal of discontinued operations, net of taxes
Diluted earnings per share

2013
$76,792
9,831
86,623
(65,640)
(7,553)
(75)
(73,268)
13,355
214
(3,956)
(3,071)
20
6,562
56
(386)
6,232
(1,646)
4,586

2012
$71,234
10,464
81,698
(60,309)
(8,247)
(109)
(68,665)
13,033
268
(3,717)
(3,298)
4
6,290
62
(442)
5,910
(2,007)
3,903

2011
$57,401
11,334
68,735
(46,642)
(9,097)
(149)
(55,888)
12,847
278
(3,408)
(3,918)
24
5,823
47
(477)
5,393
(1,382)
4,011

(1)
$4,585
$6.03

(3)
$3,900
$5.15

$6.03
$5.96

$5.15
$5.11

$5.96

$5.11

7
$4,018
$5.38
0.01
$5.39
$5.33
0.01
$5.34

See Notes to the Consolidated Financial Statements on pages 54 109.

49

The Boeing Company and Subsidiaries

Consolidated Statements of Comprehensive Income
(Dollars in millions)
Years ended December 31,
Net earnings

2013

2012

2011

$4,585

$3,900

$4,018

Other comprehensive income/(loss), net of tax:

Currency translation adjustments

(64)

17

Unrealized loss on certain investments, net of tax of $0, $0 and $1

(35)
(2)

Unrealized (loss)/gain on derivative instruments:

Unrealized (loss)/gain arising during period, net of tax of $42,
($13) and $7
Reclassification adjustment for gains included in net earnings,
net of tax of $9, $3 and $9

(75)

25

(13)

(17)

(5)

(16)

Total unrealized (loss)/gain on derivative instruments, net of tax

(92)

20

(29)

(74)

(16)

338

10

18

94

Defined benefit pension plans & other postretirement benefits:

Prior service (cost)/benefit arising during the period, net of tax of
$41, $9 and ($195)
Amortization of prior service cost included in net periodic
pension cost, net of tax of ($6), ($10) and ($54)
Net actuarial gain/(loss) arising during the period, net of tax of
($3,437), $1,382 and $2,297
Amortization of actuarial losses included in net periodic pension
cost, net of tax of ($849), ($752) and ($523)
Settlements and curtailments included in net income, net of tax
of ($33), ($9) and ($25)
Pension and postretirement benefit/(cost) related to our equity
method investments, net of tax ($13), ($74) and $38
Total defined benefit pension plans & other postretirement benefits,
net of tax
Other comprehensive income/(loss), net of tax

1,516

1,304

909

59

15

42

24

127

(66)

(3,993)

7,678

(953)

(2,676)

7,522

(916)

(2,742)

3
$2,987

See Notes to the Consolidated Financial Statements on pages 54 109.

50

(2,401)

$12,116

Comprehensive income/(loss) related to non-controlling interest

Comprehensive income, net of tax

6,143

(1)
$1,275

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position
(Dollars in millions, except per share data)
December 31,
Assets
Cash and cash equivalents
Short-term and other investments
Accounts receivable, net
Current portion of customer financing, net
Deferred income taxes
Inventories, net of advances and progress billings
Total current assets
Customer financing, net
Property, plant and equipment, net
Goodwill
Acquired intangible assets, net
Deferred income taxes
Investments
Other assets, net of accumulated amortization of $448 and $504
Total assets
Liabilities and equity
Accounts payable
Accrued liabilities
Advances and billings in excess of related costs
Deferred income taxes and income taxes payable
Short-term debt and current portion of long-term debt
Total current liabilities
Accrued retiree health care
Accrued pension plan liability, net
Non-current income taxes payable
Other long-term liabilities
Long-term debt
Shareholders equity:
Common stock, par value $5.00 1,200,000,000 shares authorized;
1,012,261,159 shares issued
Additional paid-in capital
Treasury stock, at cost
Retained earnings
Accumulated other comprehensive loss
Total shareholders equity
Noncontrolling interest
Total equity
Total liabilities and equity
See Notes to the Consolidated Financial Statements on pages 54 109.
51

2013

2012

$9,088
6,170
6,546
344
14
42,912
65,074
3,627
10,224
5,043
3,052
2,939
1,204
1,500
$92,663

$10,341
3,217
5,608
364
28
37,751
57,309
4,056
9,660
5,035
3,111
6,753
1,180
1,792
$88,896

$9,498
14,131
20,027
6,267
1,563
51,486
6,528
10,474
156
950
8,072

$9,394
12,995
16,672
4,485
1,436
44,982
7,528
19,651
366
1,429
8,973

5,061
4,415
(17,671)
32,964
(9,894)
14,875
122
14,997
$92,663

5,061
4,122
(15,937)
30,037
(17,416)
5,867
100
5,967
$88,896

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows
(Dollars in millions)
Years ended December 31,
Cash flows operating activities:
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Non-cash items
Share-based plans expense
Depreciation and amortization
Investment/asset impairment charges, net
Customer financing valuation benefit
Loss/(gain) on disposal of discontinued operations
Gain on dispositions, net
Other charges and credits, net
Excess tax benefits from share-based payment arrangements
Changes in assets and liabilities
Accounts receivable
Inventories, net of advances and progress billings
Accounts payable
Accrued liabilities
Advances and billings in excess of related costs
Income taxes receivable, payable and deferred
Other long-term liabilities
Pension and other postretirement plans
Customer financing, net
Other
Net cash provided by operating activities
Cash flows investing activities:
Property, plant and equipment additions
Property, plant and equipment reductions
Acquisitions, net of cash acquired
Contributions to investments
Proceeds from investments
Receipt of economic development program funds
Purchase of distribution rights
Net cash (used)/provided by investing activities
Cash flows financing activities:
New borrowings
Debt repayments
Repayments of distribution rights and other asset financing
Stock options exercised, other
Excess tax benefits from share-based payment arrangements
Employee taxes on certain share-based payment arrangements
Common shares repurchased
Dividends paid
Net cash used by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

See Notes to the Consolidated Financial Statements on pages 54 109.

52

2013

2012

2011

$4,585

$3,900

$4,018

206
1,844
96
(11)
1
(20)
528
(128)

193
1,811
84
(10)
5
(4)
694
(45)

186
1,675
119
(269)
(11)
(24)
500
(36)

(879)
(5,562)
(298)
883
3,353
1,445
2
1,720
391
23
8,179

(27)
(5,681)
1,199
801
1,177
1,605
157
1,288
407
(46)
7,508

(292)
(10,012)
1,164
237
3,173
1,262
127
2,126
(6)
86
4,023

(2,098)
51
(26)
(15,394)
12,453

(1,703)
97
(124)
(12,921)
10,901

(1,713)
94
(42)
(6,796)
10,757
69

(140)
(5,154)

(7)
(3,757)

571
(1,434)
(280)
1,097
128
(63)
(2,801)
(1,467)
(4,249)
(29)
(1,253)
10,341
$9,088

60
(2,076)
(228)
120
45
(76)

799
(930)
(451)
114
36
(24)

(1,322)
(3,477)
18
292
10,049
$10,341

(1,244)
(1,700)
(2)
4,690
5,359
$10,049

2,369

The Boeing Company and Subsidiaries

Consolidated Statements of Equity
Boeing shareholders

(Dollars in millions, except per share data)

Balance at January 1, 2011

Additional
Common
Paid-In
Stock
Capital
$3,866

$5,061

Accumulated
Other
NonTreasury Retained Comprehensive controlling
Stock Earnings
Loss
Interest

($17,187) $24,784

Net earnings

($13,758)

4,018

Other comprehensive loss, net of tax of $1,555

$96
(1)

(2,742)

Share-based compensation and related dividend

equivalents

197

Excess tax pools

Total
$2,862
4,017
(2,742)

(15)

182

20

20

Treasury shares issued for stock options exercised, net

(37)

151

114

Treasury shares issued for other share-based plans, net

(59)

45

(14)

46

388

Treasury shares issued for 401(k) contribution

Cash dividends declared ($1.70 per share)

434
(1,263)

(1,263)

Changes in noncontrolling interest

Balance at December 31, 2011

(2)
$5,061

$4,033

($16,603)

Net earnings

$27,524

($16,500)

3,900

$93

$3,608

3,903

(916)

Other comprehensive loss, net of tax of $536

(2)

(916)

Share-based compensation and related dividend

equivalents
Excess tax pools

215

Treasury shares issued for stock options exercised, net

(54)

174

Treasury shares issued for other share-based plans, net

(183)

116

(67)

66

376

442

(27)

188

45

Treasury shares issued for 401(k) contribution

45

Cash dividends declared ($1.805 per share)

120

(1,360)

(1,360)

Changes in noncontrolling interest

Balance at December 31, 2012

$5,061

$4,122 ($15,937)

Net earnings

$30,037

($17,416)

4,585

Other comprehensive income net of tax of ($4,246)

4
$5,967

4,594
7,522

7,522

Share-based compensation and related dividend

equivalents
Excess tax pools

216

200

(16)

101

101

Treasury shares issued for stock options exercised,

net
Treasury shares issued for other share-based plans,
net
Common shares repurchased

109

988

(133)

79

1,097
(54)
(2,801)

(2,801)

Cash dividends declared ($2.185 per share)

(1,642)

(1,642)

Changes in noncontrolling interest

Balance at December 31, 2013

4
$100

$5,061

$4,415

See Notes to the Consolidated Financial Statements on pages 54 109.

53

($17,671) $32,964

($9,894)

13

13

$122

$14,997