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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
March 31, 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 April 30, 1994, there were 340,483,696 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)
Three months ended
March 31
- - -------------------------------------------------------------------------------
1994 1993
- - -------------------------------------------------------------------------------
Sales and other operating revenues $6,345 $6,644
Costs and expenses 5,912 6,214
- - -------------------------------------------------------------------------------
Earnings from operations 433 430
Other income, principally interest 25 51
Interest and debt expense (28) (5)
- - -------------------------------------------------------------------------------
Earnings before federal taxes on income 430 476
Federal taxes on income 138 151
- - -------------------------------------------------------------------------------
Net earnings $ 292 $ 325
===============================================================================
Earnings per share $ .86 $ .96
===============================================================================
Cash dividends per share $ .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)
March 31 December 31
1994 1993
- - -------------------------------------------------------------------------------
(Unaudited)
Assets
- - -------------------------------------------------------------------------------
Cash and cash equivalents $ 2,905 $ 2,342
Short-term investments 935 766
Accounts receivable 1,477 1,615
Current portion of customer financing 249 218
Deferred income taxes 948 800
Inventories 9,688 10,485
Less advances and progress billings (6,445) (7,051)
- - -------------------------------------------------------------------------------
Total current assets 9,757 9,175
Customer financing 2,869 2,959
Property, plant and equipment, at cost 13,331 13,232
Less accumulated depreciation (6,275) (6,144)
Deferred income taxes 23 63
Other assets 1,496 1,165
- - -------------------------------------------------------------------------------
$21,201 $20,450
===============================================================================
Liabilities and Shareholders' Equity
- - -------------------------------------------------------------------------------
Accounts payable and other liabilities $ 6,011 $ 5,854
Advances in excess of related costs 266 226
Income taxes payable 658 434
Current portion of long-term debt 21 17
- - -------------------------------------------------------------------------------
Total current liabilities 6,956 6,531
Accrued retiree health care 2,179 2,148
Long-term debt 2,606 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 411 413
Retained earnings 7,472 7,180
Less treasury shares, at cost -
1994 - 8,793,791; 1993 - 9,118,995 (344) (356)
- - -------------------------------------------------------------------------------
Total shareholders' equity 9,285 8,983
- - -------------------------------------------------------------------------------
$21,201 $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)
Three months ended
March 31
- - -------------------------------------------------------------------------------
1994 1993
- - -------------------------------------------------------------------------------
Cash flows - operating activities:
Net earnings $ 292 $ 325
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 226 253
Changes in assets and liabilities -
Accounts receivable 138 (46)
Inventories, net of advances and progress billings 191 (325)
Accounts payable and other liabilities 242 429
Advances in excess of related costs 40 (44)
Income taxes payable and deferred 116 141
Other assets (331) 71
Accrued retiree health care 31 35
- - -------------------------------------------------------------------------------
Net cash provided by operating activities 945 839
- - -------------------------------------------------------------------------------
Cash flows - investing activities:
Short-term investments (169) 410
Customer financing additions (128) (416)
Customer financing reductions 171 52
Plant and equipment, net additions (178) (409)
Other 1
- - -------------------------------------------------------------------------------
Net cash used by investing activities (304) (362)
- - -------------------------------------------------------------------------------
Cash flows - financing activities:
Debt financing (3) (1)
Shareholders' equity -
Cash dividends paid (85) (85)
Stock options exercised, other 10 4
- - -------------------------------------------------------------------------------
Net cash used by financing activities (78) (82)
- - -------------------------------------------------------------------------------
Net increase in cash and cash equivalents 563 395
Cash and cash equivalents at beginning of year 2,342 2,711
- - -------------------------------------------------------------------------------
Cash and cash equivalents at end of 1st quarter $2,905 $3,106
===============================================================================
See notes to consolidated financial statements.
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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 March 31, 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
340.3 million and 339.5 million for the three-month periods ended March 31, 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 three-month periods ended
March 31, 1994 and 1993, were reduced by $17 and $13 applicable to Foreign Sales
Corporation tax benefits, representing reductions from the statutory tax rate of
3.9% and 2.7%, respectively.
Income tax payments were $21 and $9 for the three months ended March 31, 1994
and 1993.
Note 4 - Accounts Receivable
Accounts receivable consisted of the following:
March 31 December 31
1994 1993
- - -------------------------------------------------------------------------------
Amounts receivable under U.S. Government contracts $1,179 $1,182
Accounts receivable from commercial
and foreign military customers 298 433
- - -------------------------------------------------------------------------------
$1,477 $1,615
===============================================================================
Accounts receivable at March 31, 1994 and December 31, 1993 included amounts not
currently billable of $464 and $596, respectively, principally relating to sales
values recorded upon attainment of scheduled performance milestones which differ
from contractual billing milestones, withholds on U.S. Government contracts, and
other amounts on U.S. Government contracts subject to negotiation.
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Note 5 - Inventories
Inventories consisted of the following:
March 31 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 $8,776 $ 9,557
Commercial spare parts, general stock
materials and other 912 928
- - -------------------------------------------------------------------------------
$9,688 $10,485
===============================================================================
Note 6 - Customer Financing
Long-term customer financing, less current portion, consisted
of the following:
March 31 December 31
1994 1993
- - -------------------------------------------------------------------------------
Notes receivable $1,321 $1,396
Investment in sales-type/financing leases 794 768
Operating lease aircraft, at cost,
less accumulated depreciation
of $233 and $220 854 895
- - -------------------------------------------------------------------------------
2,969 3,059
Less valuation allowance (100) (100)
- - -------------------------------------------------------------------------------
$2,869 $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.
Sales for the first three months of 1994 and 1993 included $42 and $26 of
operating revenues associated with notes receivable and sales-type leases.
Note 7 - Other Assets
Other assets consisted of the following:
March 31 December 31
1994 1993
- - -------------------------------------------------------------------------------
Prepaid pension expense $1,317 $ 981
Investments, other 179 184
- - -------------------------------------------------------------------------------
$1,496 $1,165
===============================================================================
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Note 8 - Accounts Payable and Other Liabilities
Accounts payable and other liabilities consisted of the following:
March 31 December 31
1994 1993
- - -------------------------------------------------------------------------------
Accounts payable $3,033 $2,731
Employee compensation and benefits 1,036 1,005
Lease and other deposits 575 708
Other 1,367 1,410
- - -------------------------------------------------------------------------------
$6,011 $5,854
===============================================================================
Note 9 - Long-Term Debt
Long-term debt consisted of the following:
March 31 December 31
1994 1993
- - -------------------------------------------------------------------------------
Unsecured debentures and notes:
8 3/8% due Mar. 1, 1996 $ 249 $ 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 140 143
Less current portion (21) (17)
- - -------------------------------------------------------------------------------
$2,606 $2,613
===============================================================================
Interest rate swaps were simultaneously entered into 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 $1,266 are
free from dividend restrictions. The Company has complied with restrictive
covenants contained in debt agreements.
Total debt interest, including amounts capitalized, were $54 and $40 for the
three-month periods ended March 31, 1994 and 1993, and interest payments were
$58 and $54, respectively.
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Note 10 - Shareholders' Equity
Changes in shareholders' equity for the three-month periods ended March 31, 1994
and 1993 consisted of the following:
(Shares in thousands)
- - -------------------------------------------------------------------------------
Common Stock
------------ Additional Treasury Stock
Par Paid-In Retained --------------
Shares Value Capital Earnings Shares Amount
- - -------------------------------------------------------------------------------
Balance - December 31, 1992 349,257 $1,746 $418 $6,276 9,836 $(384)
- - -------------------------------------------------------------------------------
Net earnings 325
Treasury shares issued for
stock options, net (3) (153) 6
Tax benefit related to stock
options 1
- - -------------------------------------------------------------------------------
Balance - March 31, 1993 349,257 $1,746 $416 $6,601 9,683 $(378)
===============================================================================
- - -------------------------------------------------------------------------------
Balance - December 31, 1993 349,257 $1,746 $413 $7,180 9,119 $(356)
- - -------------------------------------------------------------------------------
Net earnings 292
Treasury shares issued for
stock options, net (4) (325) 12
Tax benefit related to stock
options 1
Stock appreciation rights
expired or surrendered 1
- - -------------------------------------------------------------------------------
Balance - March 31, 1994 349,257 $1,746 $411 $7,472 8,794 $(344)
===============================================================================
Cash dividends paid in the first quarter of each year were declared and accrued
as of year end.
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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 million of Peace Shield unliquidated progress pay-
ments 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 million 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 Gov-
ernment in the Peace Shield termination are not legally supportable. Accor-
dingly, management and counsel are of the opinion that on appeal the termin-
ation for default has a substantial probability of being converted to termin-
ation for the convenience of the Government, which would eliminate any Govern-
ment 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 conser-
vative 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 pay-
ments plus related interest and potential damages assessed by the Government.
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.
REVIEW BY INDEPENDENT ACCOUNTANTS
The consolidated statement of financial position as of March 31, 1994, the
consolidated financial statements of net earnings for the three-month periods
ended March 31, 1994 and 1993, and the related statements of cash flows for the
three-month periods ended March 31, 1994 and 1993, have been reviewed by the
registrant's independent accountants, Deloitte & Touche, whose report covering
their review of the financial statements follows:
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INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Stockholders
The Boeing Company
Seattle, Washington
We have reviewed the accompanying condensed consolidated statement of financial
position of The Boeing Company and subsidiaries as of March 31, 1994, the
related condensed consolidated statements of net earnings and cash flows for the
three-month periods ended March 31, 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 condensed 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, stockholders' 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 condensed 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
Seatle, Washington
April 25, 1994
10
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Sales of $6.3 billion for the first quarter of 1994 were 12% above sales of the
previous quarter, but 5% below first-quarter 1993 sales. Consistent with the
lower production rates scheduled during 1994 for the commercial aircraft
programs, 1994 sales for the full year are projected to be in the $21 billion
range, compared with $25.4 billion for 1993. Commercial aircraft deliveries in
the first quarter, totaling 82 units, were high relative to current production
rates due to the timing of customer delivery requirements. Total commercial
deliveries for the full year are projected to be in the 260 aircraft range.
Sales by business segment were as follows:
First Quarter
--------------
1994 1993
---- ----
Commercial transportation $5.2 $5.5
Defense and space 1.0 1.0
Other .1 .1
---- ----
$6.3 $6.6
==== ====
Commercial jet transport deliveries were as follows:
First Quarter
--------------
Model 1994 1993
----- ---- ----
737 39 44
747 15 15
757 16 23
767 12 11
---- ----
82 93
==== ====
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. Production of the new 777 model is on
schedule to support the flight test program starting in June, and production
activity will continue to build until initial deliveries begin in mid-1995.
NASA's selection of Boeing Defense & Space Group as the prime contractor for the
restructured Space Station program is projected to result in an increase in
defense and space segment sales in 1994 compared with 1993, based on current
programs and schedules. However, U.S. Government defense and space programs
continue to be subject to funding constraints, and further program stretch-outs
or curtailments are possible.
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Net earnings for the first three months of 1994 were 10% lower than the
comparable period of the prior year. The decrease in first quarter earnings was
primarily attributable to fewer commercial aircraft deliveries, lower corporate
investment income and higher interest expense. These factors were partially
offset by lower research and development expense and increased income from
customer financing.
Although the $419 million of research and development expense for the first
quarter of 1994 was 7% lower than in the first quarter of 1993, research and
development expense for the full year 1994 is projected to be higher than the
total 1993 expense of $1.66 billion. The principal commercial developmental
programs with significant expenditures in 1994, in addition to extensive systems
integration and test activities on the 777 base model, are the extended-range
version of the 777 for which deliveries begin in late 1996, the 737-700 for
which deliveries begin in late 1997, and the freighter version of the 767 to be
delivered in the fourth quarter of 1995.
Sales include all revenues associated with customer financing activities.
Revenues associated with customer financing notes receivable and sales-type
leases for the first three months of 1994 were $16 million higher than for the
comparable period of 1993, reflecting the increased level of customer financing
notes receivable and sales-type leases.
Although commercial aircraft unit production rates were down approximately 35%
in the aggregate from the levels a year ago, operating profit margins on com-
mercial aircraft programs, before research and development expense and customer
financing income, have been maintained through efficiencies gained by process
improvements in all aspects of operations. Consequently, the Company should be
well positioned for the next growth cycle in the commercial jet transport
market. With regard to 1995, 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 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, aggregate operating profit margins on mature programs are higher than
the margin on a new program.
Debt interest expense for the first quarter of 1994 was $28 million compared
with $5 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 quarter, including amounts capitalized, totaled $54
million.
Liquidity and Capital Resources
The Company's financial liquidity position has remained strong, with cash and
short-term investments totaling $3.8 billion at March 31, 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.
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Cash and short-term investments are projected to decrease significantly during
the second half of the year due principally to the inventory buildup on the new
777 jet transport, customer financing requirements, and projected federal
income tax payments in excess of income tax expense.
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 $605 million of unliquidated
progress payments until the conclusion of the appeal process. The Company has
filed its complaint in the United States Claims Court to overturn the default
termination, submitted a Contract Claim for equitable adjustment to the contract
prices and schedules, and requested that repayment of the unliquidated progress
payments be deferred. The Company's financial statements assume that the
termination for default will be overturned and that the Contract Claim will be
settled in the Company's favor. If the Company's appeal of the termination
for default is not successful, the Company could realize a pre-tax loss on the
program approximating the value of the unliquidated progress payments plus
related interest and potential damages.
Backlog
Contractual backlog, which excludes purchase options and announced orders for
which definitive contracts have not been executed, unobligated Government
contract values, and orders from customers which have filed for bankruptcy
protection, was as follows ($ in billions):
March 31, Dec. 31,
1994 1993
-------- -------
Commercial aircraft $67.4 $69.0
Defense and space, other 5.3 4.5
----- -----
Total $72.7 $73.5
===== =====
Unobligated U.S. Government contract values not included in backlog totaled $7.0
billion at March 31, 1994, and $6.9 billion at December 31, 1993.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 11 to the Consolidated Financial Statements for a discussion of
the Peace Shield termination.
Item 2. Changes in Securities
On March 30, 1994, the Company issued to a private investor $100,000,000
aggregate principal amount of 7.50% Debentures Due 2042 and not
redeemable prior to maturity in exchange for $100,000,000 aggregate
principal amount of its Fixed-Floating Rate Debentures Due 2042 issued
August 1992, which were cancelled. The interest rate swaps entered into
with the private investor at the time the Fixed-Floating Rate Debentures
were issued have been renegotiated so that the effective synthetic rate
remains 7.865%.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Shareholders was held on
April 25, 1994.
(c) At the Annual Meeting, in an uncontested election, four
nominees of the Board of Directors were re-elected Directors
for 3-year terms ending in 1997. The votes were as follows:
For Withheld
-----------------------
Paul E. Gray 274,303,681 1,825,898
Harold J. Haynes 274,333,989 1,795,590
George M. Keller 274,196,067 1,933,512
George H. Weyerhaeuser 274,328,791 1,800,788
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: (12) Computation of Ratios of Earnings to Fixed
Charges. Page 16.
(15) Letter from independent accountants regarding
unaudited interim financial information. Page 17.
(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)
May 9, 1994 /s/ T. M. Budinich
----------------- ---------------------------------
(Date) T. M. Budinich
Vice President and Controller
15
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EXHIBIT (12) - Computation of Ratio
of Earnings to Fixed Charges
The Boeing Company and Subsidiaries
(Dollars in millions)
Three months Ended March 31,
---------------------------
1994 1993
---- ----
Earnings before federal taxes on income $430 $476
Fixed charges excluding
capitalized interest 37 17
Amortization of previously
capitalized interest 8 8
---- ----
Earnings available for
fixed charges $475 $501
==== ====
Interest expense $ 28 $ 5
Interest capitalized during
the period 26 35
Rentals deemed representative
of an interest factor 9 12
---- ----
Total fixed charges $ 63 $ 52
==== ====
Ratio of earnings to fixed charges 7.5 9.6
==== ====
16
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EXHIBIT (15) - Letter from Independent
Accountants Regarding Unaudited Interim
Financial Information
The consolidated statement of financial position as of March 31, 1994, the
consolidated financial statements of net earnings for the three-month periods
ended March 31, 1994 and 1993, and the related statements of cash flows for the
three-month periods ended March 31, 1994 and 1993, have been reviewed by the
registrant's independent accountants, Deloitte & Touche, whose letter regarding
such unaudited interim financial information follows:
17
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April 25, 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 March
31, 1994 and 1993, as indicated in our report dated April 25, 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 March 31, 1994, is
incorporated by reference 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
18
