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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 1994
Commission file number 1-442
THE BOEING COMPANY
7755 East Marginal Way South
Seattle, Washington 98108
Telephone: (206) 655-2121
State of incorporation: Delaware
IRS identification number: 91-0425694
The registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
and has been subject to such filing requirements for the past 90 days.
As of July 31, 1994, there were 340,697,330 shares of common stock, $5.00
par value, issued and outstanding.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE BOEING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET EARNINGS
(Dollars in millions except per share data)
(Unaudited)
Six months ended Three months ended
June 30 June 30
1994 1993 1994 1993
- - -------------------------------------------------------------------------------
Sales $11,741 $14,629 $5,396 $7,985
Costs and expenses 11,038 13,618 5,126 7,404
- - -------------------------------------------------------------------------------
Earnings from operations 703 1,011 270 581
Other income, principally interest 49 98 24 47
Interest and debt expense (57) (8) (29) (3)
- - -------------------------------------------------------------------------------
Earnings before federal taxes on income 695 1,101 265 625
Federal taxes on income 181 350 43 199
- - -------------------------------------------------------------------------------
Net earnings $ 514 $ 751 $ 222 $ 426
===============================================================================
Earnings per share $1.51 $2.21 $ .65 $1.25
===============================================================================
Cash dividends per share $ .50 $ .50 $ .25 $ .25
===============================================================================
See notes to consolidated financial statements.
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THE BOEING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Dollars in millions except per share data)
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
(Unaudited)
Assets
- - --------------------------------------------------------------------------
Cash and cash equivalents $ 2,438 $ 2,342
Short-term investments 971 766
Accounts receivable 1,510 1,615
Current portion of customer financing 390 218
Deferred income taxes 1,124 800
Inventories 10,048 10,485
Less advances and progress billings (6,169) (7,051)
- - --------------------------------------------------------------------------
Total current assets 10,312 9,175
Customer financing 2,829 2,959
Property, plant and equipment, at cost 13,459 13,232
Less accumulated depreciation (6,462) (6,144)
Deferred income taxes 63
Other assets 1,466 1,165
- - --------------------------------------------------------------------------
$21,604 $20,450
==========================================================================
Liabilities and Shareholders' Equity
- - --------------------------------------------------------------------------
Accounts payable and other liabilities $ 6,204 $ 5,854
Advances in excess of related costs 219 226
Income taxes payable 794 434
Current portion of long-term debt 21 17
- - --------------------------------------------------------------------------
Total current liabilities 7,238 6,531
Deferred income taxes 25
Accrued retiree health care 2,216 2,148
Long-term debt 2,608 2,613
Contingent stock repurchase commitment 175 175
Shareholders' equity:
Common shares, par value $5.00 -
600,000,000 shares authorized;
349,256,792 shares issued 1,746 1,746
Additional paid-in capital 409 413
Retained earnings 7,524 7,180
Less treasury shares, at cost -
1994 - 8,625,524; 1993 - 9,118,995 (337) (356)
- - --------------------------------------------------------------------------
Total shareholders' equity 9,342 8,983
- - --------------------------------------------------------------------------
$21,604 $20,450
==========================================================================
See notes to consolidated financial statements.
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THE BOEING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Six months ended June 30
- - -----------------------------------------------------------------------------
1994 1993
- - -----------------------------------------------------------------------------
Cash flows - operating activities:
Net earnings $ 514 $ 751
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 483 484
Changes in assets and liabilities -
Accounts receivable 105 (260)
Inventories, net of advances and progress billings (445) 289
Accounts payable and other liabilities 350 463
Advances in excess of related costs (7) (127)
Income taxes payable and deferred 124 201
Other assets (301) (268)
Accrued retiree health care 68 81
- - -----------------------------------------------------------------------------
Net cash provided by operating activities 891 1,614
- - -----------------------------------------------------------------------------
Cash flows - investing activities:
Short-term investments (205) 341
Customer financing additions (324) (1,279)
Customer financing reductions 252 137
Plant and equipment, net additions (361) (772)
Other (3)
- - -----------------------------------------------------------------------------
Net cash used by investing activities (638) (1,576)
- - -----------------------------------------------------------------------------
Cash flows - financing activities:
Debt financing (1) 471
Shareholders' equity -
Cash dividends paid (170) (170)
Stock options exercised, other 14 7
- - -----------------------------------------------------------------------------
Net cash provided (used) by financing activities (157) 308
- - -----------------------------------------------------------------------------
Net increase in cash and cash equivalents 96 346
Cash and cash equivalents at beginning of year 2,342 2,711
- - -----------------------------------------------------------------------------
Cash and cash equivalents at end of 2nd quarter $2,438 $ 3,057
=============================================================================
See notes to consolidated financial statements.
3
<PAGE> 5
THE BOEING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions)
(Unaudited)
Note 1 - Consolidated Financial Statements
The consolidated interim financial statements included in this report have been
prepared by the Company without audit. In the opinion of management, all
adjustments necessary for a fair presentation are reflected in the interim
financial statements. Such adjustments are of a normal and recurring nature.
The results of operations for the period ended June 30, 1994, are not
necessarily indicative of the operating results for the full year. The interim
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's 1993 Annual Report.
Note 2 - Earnings per Share
Earnings per share are computed on the basis of the weighted average number of
shares outstanding during the period. The weighted average number of shares
was 340.4 million and 339.6 million for the six-month periods ended June 30,
1994 and 1993, respectively. There was no material dilutive effect on earnings
per share due to common stock equivalents.
Note 3 - Federal Taxes on Income
The provisions for federal taxes on income for the six-month periods ended
June 30, 1994 and 1993, were reduced by $43 and $30 applicable to Foreign Sales
Corporation tax benefits and by $27 and $0 applicable to research and
development credit, representing reductions from the statutory tax rate of
10.0% and 2.7%, respectively.
Income tax payments were $55 and $189 for the six months ended June 30, 1994
and 1993.
Note 4 - Accounts Receivable
Accounts receivable consisted of the following:
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
Amounts receivable under U.S. Government contracts $1,174 $1,182
Accounts receivable from commercial
and foreign military customers 336 433
- - --------------------------------------------------------------------------
$1,510 $1,615
==========================================================================
Accounts receivable at June 30, 1994 and December 31, 1993 included amounts not
currently billable of $546 and $596, respectively, principally relating to
sales values recorded upon attainment of scheduled performance milestones that
differ from contractual billing milestones, withholds on U.S. Government
contracts, and other amounts on U.S. Government contracts subject to future
settlement.
4
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Note 5 - Inventories
Inventories consisted of the following:
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
Inventoried costs relating to long-term commercial
programs and U.S. Government and foreign military
contracts, less estimated average cost of
deliveries $ 9,166 $ 9,557
Commercial spare parts, general stock materials
and other 882 928
- - --------------------------------------------------------------------------
$10,048 $10,485
==========================================================================
Note 6 - Customer Financing
Long-term customer financing, less current portion, consisted of the following:
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
Notes receivable $1,172 $1,396
Investment in sales-type/financing leases 918 768
Operating lease aircraft, at cost, less accumulated
depreciation of $248 and $220 839 895
- - --------------------------------------------------------------------------
2,929 3,059
Less valuation allowance (100) (100)
- - --------------------------------------------------------------------------
$2,829 $2,959
==========================================================================
Financing for aircraft is collateralized by security in the related asset,
and historically the Company has not experienced a problem in accessing such
collateral when necessary.
Sales for the first six months of 1994 and 1993 included interest income of
$88 and $68 associated with notes receivable and sales-type/financing leases.
Note 7 - Other Assets
Other assets consisted of the following:
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
Prepaid pension expense $1,282 $ 981
Investments, other 184 184
- - --------------------------------------------------------------------------
$1,466 $1,165
==========================================================================
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Note 8 - Accounts Payable and Other Liabilities
Accounts payable and other liabilities consisted of the following:
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
Accounts payable $3,006 $2,731
Employee compensation and benefits 1,056 1,005
Lease and other deposits 634 708
Other 1,508 1,410
- - --------------------------------------------------------------------------
$6,204 $5,854
==========================================================================
Note 9 - Long-Term Debt
Long-term debt consisted of the following:
June 30 December 31
1994 1993
- - --------------------------------------------------------------------------
Unsecured debentures and notes:
8 3/8% due Mar. 1, 1996 $ 250 $ 249
6.35% due Jun. 15, 2003 299 299
8 1/10% due Nov. 15, 2006 175 175
8 3/4% due Aug. 15, 2021 398 398
7.95% due Aug. 15, 2024 300 300
7 1/4% due Jun. 15, 2025 247 247
8 3/4% due Sep. 15, 2031 248 248
8 5/8% due Nov. 15, 2031 173 173
7.50% due Aug. 15, 2042 100 100
7 7/8% due Apr. 15, 2043 173 173
6 7/8% due Oct. 15, 2043 125 125
Other notes 141 143
Less current portion (21) (17)
- - --------------------------------------------------------------------------
$2,608 $2,613
==========================================================================
Interest rate swaps were entered into simultaneously with the issuance of
the $100 debentures due August 15, 2042, resulting in a synthetic interest
rate of 7.865%.
The Company has a $3,000 credit line currently available under a credit
agreement with a group of commercial banks. Under this agreement, there are
compensating balance arrangements, and retained earnings totaling $1,306 are
free from dividend restrictions. The Company has complied with restrictive
covenants contained in debt agreements.
Total debt interest, including amounts capitalized, was $108 and $81 for the
six-month periods ended June 30, 1994 and 1993, and interest payments were
$106 and $71, respectively.
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Note 10 - Shareholders' Equity
Changes in shareholders' equity for the six-month periods ended June 30, 1994
and 1993 consisted of the following:
(Shares in thousands)
<TABLE>
<CAPTION>
Common Stock
------------ Additional Treasury Stock
Par Paid-In Retained ---------------
Shares Value Capital Earnings Shares Amount
<S> <C> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------
Balance - December 31, 1992 349,257 $1,746 $418 $6,276 9,836 $(384)
- - -----------------------------------------------------------------------------------------
Net earnings 751
Cash dividends declared (170)
Treasury shares issued for
stock options, net (4) (262) 10
Tax benefit related to stock
options 1
Stock appreciation rights
expired or surrendered 1
- - -----------------------------------------------------------------------------------------
Balance - June 30, 1993 349,257 $1,746 $416 $6,857 9,574 $(374)
=========================================================================================
- - -----------------------------------------------------------------------------------------
Balance - December 31, 1993 349,257 $1,746 $413 $7,180 9,119 $(356)
- - -----------------------------------------------------------------------------------------
Net earnings 514
Cash dividends declared (170)
Treasury shares issued for
stock options, net (7) (493) 19
Tax benefit related to stock
options 2
Stock appreciation rights
expired or surrendered 1
- - -----------------------------------------------------------------------------------------
Balance - June 30, 1994 349,257 $1,746 $409 $7,524 8,626 $(337)
=========================================================================================
</TABLE>
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Note 11 - Contingencies
In January 1991, the Company received from the U.S. Government a notice of
partial termination for default which terminated most of the work required
under contracts to develop and install a new air defense system for Saudi
Arabia, known as the Peace Shield program. The Government has filed with the
Company a demand for repayment of $605 of Peace Shield unliquidated progress
payments plus interest commencing January 25, 1991. In February 1991, the
Company submitted a request for a deferred payment agreement which, if
granted, would formally defer the Company's potential obligation to repay the
$605 of unliquidated progress payments until the conclusion of the appeal
process. In June 1991, the Government selected another contractor to perform
the work which is the subject of the contracts that have been terminated for
default, and the Government will likely assert claims related to the
reprocurement. The Company does not expect the Government to assert such
claims prior to completion of the reprocurement contract, which was originally
scheduled for late 1995.
Management's position, supported by outside legal counsel which specializes in
government procurement law, is that the grounds for default asserted by the
Government in the Peace Shield termination are not legally supportable.
Accordingly, management and counsel are of the opinion that on appeal the
termination for default has a substantial probability of being converted to
termination for the convenience of the Government, which would eliminate any
Government claim for cost of reprocurement or other damages. Additionally,
the Company has a legal basis for a claim for equitable adjustment to the prices
and schedules of the contracts (the "Contract Claim"). Many of the same facts
underlie both the Contract Claim and the Company's appeal of the Government's
termination action. The Company has filed its complaint in the United States
Claims Court to overturn the default termination in order to obtain payment of
the Contract Claim. The parties are currently litigating jurisdictional issues
related to the complaint, and are engaged in discovery. Trial is currently
scheduled for March 1997. The Company expects that its position will
ultimately be upheld with respect to the termination action and that it will
prevail on the Contract Claim.
The Company's financial statements have been prepared on the basis of a
conservative estimate of the revised values of the Peace Shield contracts
including the Contract Claim and the Company's position that the termination
was for the convenience of the Government. At this time, the Company cannot
reasonably estimate the length of time that will be required to resolve the
termination appeal and the Contract Claim. In the event that the Company's
appeal of the termination for default is not successful, the Company could
realize a pre-tax loss on the program approximating the value of the
unliquidated progress payments plus related interest and potential damages
assessed by the Government.
REVIEW BY INDEPENDENT ACCOUNTANTS
The consolidated statement of financial position as of June 30, 1994, the con-
solidated statements of net earnings for the three-month and six-month periods
ended June 30, 1994 and 1993, and the related consolidated statements of cash
flows for the three-month and six-month periods ended June 30, 1994 and 1993,
have been reviewed by the registrant's independent accountants, Deloitte &
Touche, whose report covering their review of the financial statements follows:
8
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INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Shareholders
The Boeing Company
Seattle, Washington
We have reviewed the accompanying consolidated statement of financial position
of The Boeing Company and subsidiaries as of June 30, 1994, the related
consolidated statements of net earnings for the three-month and six-month
periods ended June 30, 1994 and 1993, and the related consolidated statements
of cash flows for the six-month periods ended June 30, 1994 and 1993. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing standards,
the consolidated statement of financial position of The Boeing Company and
subsidiaries as of December 31, 1993, and the related consolidated statements of
net earnings, shareholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated January 24, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated statement of
financial position as of December 31, 1993, is fairly stated, in all material
respects, in relation to the consolidated statement of financial position from
which it has been derived.
/s/ Deloitte & Touche
Deloitte & Touche
Seattle, Washington
July 26, 1994
9
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Sales of $11.7 billion for the first half of 1994 were 20% below sales for the
comparable period of 1993 due to fewer commercial jet transport deliveries.
Commercial jet transport deliveries totaled 149 in the first half of 1994 and
are projected to be in the 260 aircraft range for the full year, consistent
with previously announced commercial production rate reductions. Sales for
the year are expected to be in the $21 billion range.
Sales by business segment were as follows ($ in millions):
First Six Months Second Quarter
---------------- --------------
1994 1993 1994 1993
---- ---- ---- ----
Commercial transportation $ 9,335 $12,239 $4,117 $6,742
Defense and space 2,243 2,133 1,207 1,126
Other 163 257 72 117
------- ------- ------ ------
Total $11,741 $14,629 $5,396 $7,985
======= ======= ====== ======
Commercial jet transport deliveries were as follows:
First Six Months Second Quarter
---------------- --------------
Model 1994 1993 1994 1993
----- ---- ---- ---- ----
737 71 92 32 48
747 25 32 10 17
757 30 46 14 23
767 23 32 11 21
--- --- --- ---
Total 149 202 67 109
=== === === ===
The 747 production rate was reduced from 5 to 3 per month during the first
quarter. Based on current production schedules, the 737 rate will be reduced
from 10 to 8 1/2 per month in the fourth quarter of 1994, the 757 rate will be
reduced from 5 to 4 per month in early 1995, the 767 rate will be increased
from 3 to 4 per month in early 1995, and the 747 rate will be reduced from 3
to 2 per month in January 1995. Planned production rates will continue to
be adjusted as necessary to match customer orders.
Net earnings of $514 million for the first six months of 1994 were $237 million
lower than the comparable period of 1993, primarily due to the lower sales
volume, lower corporate investment income, and higher interest expense. These
factors were partially offset by a lower effective federal income tax rate.
10
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Debt interest expense for the first six months of 1994 was $57 million compared
with $8 million for the same period of 1993. The high level of new investments
in facilities, equipment and tooling during 1993 had resulted in most of the
Company's debt interest being capitalized on in-process construction in 1993, as
required by Statement of Financial Accounting Standards No. 34. Because of the
reduced levels of new investments in facilities and equipment in 1994, a
substantial portion of the total debt interest in 1994 will not be capitalized.
Debt interest in the first half of 1994 and 1993, including amounts capitalized,
totaled $108 million and $81 million.
The effective income tax rate is currently estimated at 26.0% for 1994, as
reflected in the 1994 year-to-date earnings. This compares to 31.8% reported
for the first half of 1993 and 31.7% for the full year 1993. The effective tax
rate as of June 30, 1994, is lower than the statutory rate of 35.0% due to
tax-exempt income benefits associated with export sales (representing a
reduction of 6.2%) and research and development tax credit (representing a
reduction of 3.8%), partially offset by other permanent differences
(representing an increase of 1.0%).
For the first half of 1994, research and development expense was $892 million,
approximately the same level as in the first half of 1993. For the full year of
1994, research and development expense is projected to be higher than the $1.7
billion for 1993. In addition to extensive systems integration and test
activities on the initial 777 model, the principal commercial developmental
programs with significant expenditures in 1994 are the extended-range version
of the 777 which begins deliveries in late 1996, the 737-700 which begins
deliveries in late 1997, and the freighter version of the 767 to be delivered
in the fourth quarter of 1995.
Although commercial aircraft unit production rates were down approximately 35%
in the aggregate from the levels a year ago, the combined operating profit
margin on commercial aircraft programs, before research and development expense,
has been maintained through efficiencies gained by process improvements in all
aspects of operations. The lower aggregate sales currently projected for 1995
for the mature commercial jet transport programs will be substantially offset
by the initial deliveries of the new 777 jet transport; however, the overall
commercial operating profit margin, exclusive of research and development
expense, is expected to decline somewhat as the mix of commercial sales changes.
The Company continues to explore major process improvement opportunities for
which initial investments can provide substantial long-term economic benefits.
The new 777, scheduled to begin passenger service in May 1995, began the most
comprehensive flight test program in commercial aviation history with its first
flight on June 12. A total of nine 777s with three engine types (Pratt &
Whitney PW4084, General Electric GE90 and Rolls-Royce Trent 800) will be
included in the flight test program, involving over 4,800 flight cycles. Early
flight test results have been very encouraging. The 777 program continues to
meet its major milestones and achieve anticipated benefits from digital pre-
assembly computer design, new producibility processes and advanced systems-
integration testing capabilities.
11
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The diversified programs in the Defense and Space segment continue to contribute
solid performance. The Space Station Alpha program is now being managed by
Boeing Defense & Space Group as prime contractor, and funding uncertainties have
been reduced with a favorable funding vote in the U.S. House of Representatives
in late June, and in the U.S. Senate in early August. Major assembly of the
first 767 military derivative began in June for the first of two Airborne
Warning and Control Systems (AWACS) ordered by the government of Japan in
1993. The government of Japan order is anticipated to be increased by two
additional 767 AWACS later this year.
While total commercial aircraft deliveries are expected to remain at relatively
low levels through 1995 compared to recent years, the Company remains optimistic
about the longer-term global market opportunities as worldwide economic
conditions and airline operating results improve. The Company's continued high
investment level in new products and processes will help ensure a favorable
competitive position as the longer-term market opportunities develop.
Liquidity and Capital Resources
The Company's financial liquidity position has remained strong, with cash and
short-term investments totaling $3.4 billion at June 30, 1994, and total
long-term debt at 22% of total shareholder equity plus debt. The Company
continues to maintain its $3.0 billion revolving credit line.
Cash and short-term investments are projected to decrease over the next several
quarters. 777 program inventory will continue to increase until deliveries
begin in mid-1995. There will also be additional investment in customer
financing, some of which may be partially offset through sales of existing
customer financing receivables. Federal income tax payments are projected to
substantially exceed income tax expense through 1995, principally due to
completion of contracts executed under prior tax regulations.
As discussed in Note 11 to the Consolidated Financial Statements, the U.S.
Government has terminated for alleged default most of the work required under
contracts for a new Saudi Arabia air defense system known as the Peace Shield
program. The Government has demanded that the Company repay $605 million of
Peace Shield unliquidated progress payments and has selected another contractor
to perform the terminated work. Management believes that the Government's
grounds for default are not legally supportable and on appeal the Government's
position will be overturned. In February 1991, the Company submitted a request
for a deferred payment agreement which, if granted, would formally defer the
Company's potential obligation to repay the $605 million of unliquidated
progress payments until the conclusion of the appeal process. The Company has
filed its complaint in the United States Claims Court to overturn the default
termination, submitted a Contract Claim for equitable adjustment to the
contract prices and schedules, and requested that repayment of the unliquidated
progress payments be deferred. The Company's financial statements assume that
the termination for default will be overturned and that the Contract Claim will
be settled in the Company's favor. If the Company's appeal of the termination
for default is not successful, the Company could realize a pre-tax loss on the
program approximating the value of the unliquidated progress payments plus
related interest and potential damages.
12
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Backlog
Contractual backlog, which excludes purchase options and announced orders for
which definitive contracts have not been executed, unobligated Government
contract values, and orders from customers that have filed for bankruptcy
protection, was as follows ($ in billions):
June 30 March 31 Dec. 31
1994 1994 1993
------- -------- -------
Commercial aircraft $65.5 $67.4 $69.0
Defense and space, other 5.7 5.3 4.5
----- ----- -----
Total $71.2 $72.7 $73.5
===== ===== =====
Unobligated U.S. Government contract values not included in backlog totaled
$6.8 billion at June 30, 1994, and $6.9 billion at December 31, 1993.
13
<PAGE> 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 11 to the Consolidated Financial Statements for a
discussion of the Peace Shield termination.
On April 29, 1994, the Company reached a settlement with
the U.S. Government concerning its investigations of cost
classification practices. The settlement had previously
been anticipated and will have no material impact on the
Company's results of operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: (12) Computation of Ratios of Earnings
to Fixed Charges. Page 15.
(15) Letter from independent accountants regarding
unaudited interim financial information. Page 16.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the
quarter covered by this report.
- - - - - - -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE BOEING COMPANY
------------------
(Registrant)
August 8, 1994 /s/ T. M. Budinich
- - -------------- -----------------------------
(Date) T. M. Budinich
Vice President and Controller
14
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EXHIBIT (12)
Computation of Ratio of Earnings to Fixed Charges
The Boeing Company and Subsidiaries
(Dollars in millions)
Six months ended June 30,
-------------------------
1994 1993
---- ----
Earnings before federal taxes on income $695 $1,101
Fixed charges excluding capitalized interest 75 32
Amortization of previously capitalized interest 18 15
---- ------
Earnings available for fixed charges $788 $1,148
==== ======
Interest expense $ 57 $ 8
Interest capitalized during the period 51 73
Rentals deemed representative of an interest factor 18 24
---- ----
Total fixed charges $126 $105
==== ====
Ratio of earnings to fixed charges 6.3 10.9
=== ====
15
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EXHIBIT (15)
Letter from Independent Accountants Regarding
Unaudited Interim Financial Information
The Boeing Company and Subsidiaries
The consolidated statement of financial position as of June 30, 1994, the
related consolidated statements of net earnings for the three-month and six-
month periods ended June 30, 1994 and 1993, and the related statements of cash
flows for the six-month periods ended June 30, 1994 and 1993, have been
reviewed by the registrant's independent accountants, Deloitte & Touche, whose
letter regarding such unaudited interim financial information follows:
July 26, 1994
The Boeing Company
Seattle, Washington
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of The Boeing Company and subsidiaries for the periods ended June
30, 1994 and 1993, as indicated in our report dated July 26, 1994; because we
did not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which was included in your
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994, is
incorporated by reference in Registration Statement No. 33-46540 on Form S-3
and Prospectuses and in Registration Statement Nos. 2-48576, 2-93923, 33-25332,
33-31434, 33-43854 and 33-58798 on Form S-8.
We also are aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered part of the Registration
Statements prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche
Deloitte & Touche
Seattle, Washington
16
