<PAGE> 1
...............................................................................
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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, 1995
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 May 1, 1995, there were 341,549,795 shares of common stock, $5.00 par
value, issued and outstanding.
...............................................................................
...............................................................................
1
<PAGE> 2
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
- -------------------------------------------------------------------------------
1995 1994
- -------------------------------------------------------------------------------
Sales and other operating revenues $5,037 $6,345
Costs and expenses 4,811 5,912
- -------------------------------------------------------------------------------
Earnings from operations 226 433
Other income, principally interest 31 25
Interest and debt expense (40) (28)
- -------------------------------------------------------------------------------
Earnings before federal taxes on income 217 430
Federal taxes on income 36 138
- -------------------------------------------------------------------------------
Net earnings $ 181 $ 292
===============================================================================
Earnings per share $ .53 $ .86
===============================================================================
Cash dividends per share $ .25 $ .25
===============================================================================
See notes to consolidated financial statements.
2
<PAGE> 3
THE BOEING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Dollars in millions except per share data)
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
(Unaudited)
Assets
- -------------------------------------------------------------------------------
Cash and cash equivalents $ 2,788 $ 2,084
Short-term investments 559
Accounts receivable 1,614 1,664
Current portion of customer financing 121 250
Deferred income taxes 905 878
Inventories 11,815 11,269
Less advances and progress billings (6,506) (6,290)
- -------------------------------------------------------------------------------
Total current assets 10,737 10,414
Customer financing 3,123 3,071
Property, plant and equipment, at cost 13,715 13,588
Less accumulated depreciation (6,940) (6,786)
Other assets 1,526 1,176
- -------------------------------------------------------------------------------
$22,161 $21,463
===============================================================================
Liabilities and Shareholders' Equity
- -------------------------------------------------------------------------------
Accounts payable and other liabilities $ 6,600 $ 6,267
Advances in excess of related costs 225 273
Income taxes payable 386 281
Current portion of long-term debt 258 6
- -------------------------------------------------------------------------------
Total current liabilities 7,469 6,827
Deferred income taxes 130 51
Accrued retiree health care 2,319 2,282
Long-term debt 2,348 2,603
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 585 586
Retained earnings 7,877 7,696
Less treasury shares, at cost -
1995 - 8,008,802; 1994 - 8,377,637 (313) (328)
- -------------------------------------------------------------------------------
Total shareholders' equity 9,895 9,700
- -------------------------------------------------------------------------------
$22,161 $21,463
===============================================================================
See notes to consolidated financial statements.
3
<PAGE> 4
THE BOEING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
Three months ended
March 31
- -------------------------------------------------------------------------------
1995 1994
- -------------------------------------------------------------------------------
Cash flows - operating activities:
Net earnings $ 181 $ 292
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 265 226
Changes in assets and liabilities -
Short-term investments 559 (169)
Accounts receivable 50 138
Inventories, net of advances and progress billings (330) 191
Accounts payable and other liabilities 418 242
Advances in excess of related costs (48) 40
Income taxes payable and deferred 157 116
Other assets (350) (331)
Accrued retiree health care 37 31
- -------------------------------------------------------------------------------
Net cash provided by operating activities 939 776
- -------------------------------------------------------------------------------
Cash flows - investing activities:
Customer financing additions (173) (128)
Customer financing reductions 236 171
Plant and equipment additions (224) (178)
- -------------------------------------------------------------------------------
Net cash used by investing activities (161) (135)
- -------------------------------------------------------------------------------
Cash flows - financing activities:
Debt financing (3) (3)
Shareholders' equity -
Cash dividends paid (85) (85)
Stock options exercised, other 14 10
- -------------------------------------------------------------------------------
Net cash used by financing activities (74) (78)
- -------------------------------------------------------------------------------
Net increase in cash and cash equivalents 704 563
Cash and cash equivalents at beginning of year 2,084 2,342
- -------------------------------------------------------------------------------
Cash and cash equivalents at end of 1st quarter $2,788 $2,905
===============================================================================
See notes to consolidated financial statements.
4
<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 March 31, 1995, 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 1994 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
341.0 million and 340.3 million for the three-month periods ended March 31, 1995
and 1994. 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, 1995 and 1994, were reduced by $18 and $17 applicable to Foreign Sales
Corporation tax benefits and by $23 and $0 applicable to research and
experimentation credit, representing total reductions from the statutory tax
rate of 18.9% and 3.9%, respectively.
Income tax payments and transfers were a net refund of $124 and a payment of $21
for the three months ended March 31, 1995 and 1994.
Note 4 - Accounts Receivable
Accounts receivable consisted of the following:
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
Accounts receivable under U.S. Government contracts $1,185 $1,200
Accounts receivable from commercial
and foreign military customers 429 464
- -------------------------------------------------------------------------------
$1,614 $1,664
===============================================================================
Accounts receivable at March 31, 1995 and December 31, 1994 included amounts not
currently billable of $331 and $349, 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.
5
<PAGE> 6
Note 5 - Inventories
Inventories consisted of the following:
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
Commercial jet transport programs
and long-term contracts in progress $10,935 $10,352
Commercial spare parts, general stock
materials and other 880 917
- -------------------------------------------------------------------------------
$11,815 $11,269
===============================================================================
Note 6 - Customer Financing
Long-term customer financing, less current portion, consisted of the following:
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
Notes receivable $1,137 $1,189
Investment in sales-type leases 1,354 1,235
Operating lease aircraft, at cost,
less accumulated depreciation
of $283 and $269 732 747
- -------------------------------------------------------------------------------
3,223 3,171
Less valuation allowance (100) (100)
- -------------------------------------------------------------------------------
$3,123 $3,071
===============================================================================
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 and other operating revenues for the first three months of 1995 and 1994
included interest income associated with notes receivable and sales-type leases
of $50 and $42.
Note 7 - Other Assets
Other assets consisted of the following:
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
Prepaid pension expense $1,465 $1,115
Investments, other 61 61
- -------------------------------------------------------------------------------
$1,526 $1,176
===============================================================================
6
<PAGE> 7
Note 8 - Accounts Payable and Other Liabilities
Accounts payable and other liabilities consisted of the following:
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
Accounts payable $3,552 $3,207
Employee compensation and benefits 1,254 1,062
Lease and other deposits 525 640
Other 1,269 1,358
- -------------------------------------------------------------------------------
$6,600 $6,267
===============================================================================
Note 9 - Long-Term Debt
Long-term debt consisted of the following:
March 31 December 31
1995 1994
- -------------------------------------------------------------------------------
Unsecured debentures and notes:
8 3/8% due Mar. 1, 1996 $ 250 $ 250
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 118 121
Less current portion (258) (6)
- -------------------------------------------------------------------------------
$2,348 $2,603
===============================================================================
The $300 debentures due August 15, 2024, are redeemable at the holder's option
on August 15, 2012. All other debentures and notes are not redeemable prior to
maturity. The $100 notes due August 15, 2042, with a stated rate of 7.50% were
issued to a private investor in connection with an interest rate swap
arrangement that resulted in an effective synthetic rate of 7.865%.
The Company has $3,000 currently available under credit-line agreements with a
group of commercial banks. Under these agreements, there are compensating
balance arrangements, and retained earnings totaling $1,535 are free from
dividend restrictions. The Company has complied with the restrictive covenants
contained in debt agreements.
Total debt interest, including amounts capitalized, was $55 and $54 for the
three-month periods ended March 31, 1995 and 1994, and interest payments were
$57 and $58, respectively.
7
<PAGE> 8
Note 10 - Shareholders' Equity
Changes in shareholders' equity for the three-month periods ended March 31, 1995
and 1994, consisted of the following:
(Shares in thousands)
- -------------------------------------------------------------------------------
Common Stock
------------ Additional
Par Paid-In Retained Treasury Stock
Shares Value Capital Earnings Shares Amount
- -------------------------------------------------------------------------------
Balance - December 31, 1993 349,257 $1,746 $413 $7,180 9,119 $(356)
- -------------------------------------------------------------------------------
Net earnings 292
Treasury shares issued for
incentive stock plans, net (4) (325) 12
Tax benefit related to
incentive stock plans 1
Stock appreciation rights
expired or surrendered 1
- -------------------------------------------------------------------------------
Balance - March 31, 1994 349,257 $1,746 $411 $7,472 8,794 $(344)
===============================================================================
- -------------------------------------------------------------------------------
Balance - December 31, 1994 349,257 $1,746 $586 $7,696 8,378 $(328)
- -------------------------------------------------------------------------------
Net earnings 181
Treasury shares issued for
incentive stock plans, net (4) (369) 15
Tax benefit related to
incentive stock plans 2
Stock appreciation rights
expired or surrendered 1
- -------------------------------------------------------------------------------
Balance - March 31, 1995 349,257 $1,746 $585 $7,877 8,009 $(313)
===============================================================================
Cash dividends paid in the first quarter of each year were declared and accrued
as of year end.
Note 11 - Contingencies
Various legal proceedings, claims and investigations are pending against the
Company related to products, contracts and other matters. Except for the items
discussed below, most of these legal proceedings are related to matters covered
by insurance.
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. 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
is scheduled to be completed in 1996.
8
<PAGE> 9
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 filed its complaint in the United States Court
of Federal Claims to overturn the default termination in order to obtain payment
of the Contract Claim. The parties are currently engaged in the discovery phase
of the litigation. Trial is 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.
In conjunction with the notice of partial termination in January 1991, the
Government demanded the repayment of unliquidated progress payments in the
amount of $605 plus interest. In April 1995, the parties executed an agreement
deferring the Company's potential obligation to repay the $605 from January 25,
1991, until a decision of the Court or earlier settlement. The deferment
agreement is subject to annual review by the Government.
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 pretax 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 March 31, 1995, and the
related consolidated statements of net earnings and cash flows for the three-
month periods ended March 31, 1995 and 1994, have been reviewed by the
registrant's independent accountants, Deloitte & Touche LLP, whose report
covering their review of the financial statements follows:
9
<PAGE> 10
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors and Shareholders
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, 1995, and the
related condensed consolidated statements of net earnings and cash flows for the
three-month periods ended March 31, 1995 and 1994. 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, 1994, 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 25, 1995, we expressed an
unqualified opinion on those consolidated financial statements, but we have not
performed any auditing procedures since that date. In our opinion, the
information set forth in the accompanying condensed consolidated statement
of financial position as of December 31, 1994, 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 LLP
Deloitte & Touche LLP
Seattle, Washington
April 24, 1995
10
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Sales of $5.0 billion for the first quarter of 1995 were 20% below sales for the
comparable period of 1994 due to fewer commercial jet transport deliveries. A
total of 59 commercial jet transports were delivered, compared with 82 in the
first quarter of 1994. The deliveries in the first quarter of 1994
substantially exceeded the nominal production rate quantity during that period
due to the timing of customer delivery requirements. Approximately 230
commercial aircraft deliveries are currently projected for the full year 1995,
compared with 270 in 1994. Total sales for 1995 are currently projected to be
in the $20-$21 billion range, compared with approximately $22 billion in 1994.
Sales by business segment were as follows ($ in millions):
First Quarter
--------------
1995 1994
---- ----
Commercial transportation $3,685 $5,218
Defense and space 1,283 1,036
Other 69 91
------ ------
$5,037 $6,345
====== ======
Commercial jet transport deliveries were as follows:
First Quarter
--------------
Model 1995 1994
----- ---- ----
737 29 39
747 8 15
757 14 16
767 8 12
---- ----
59 82
==== ====
Net earnings of $181 million for the first three months of 1995 were 38% below
earnings for the comparable period of 1994, principally due to fewer commercial
aircraft deliveries. The 1995 first quarter earnings also reflect a higher
level of research and development expense as a percent of sales. Research and
development expense totaled $404 million for the quarter, 4% lower than the
first quarter of 1994 while total sales were 20% lower. Research and
development expense for the full year 1995 is currently projected to be in the
$1.5 billion range, compared with the $1.7 billion level of the past two years.
11
<PAGE> 12
Partially offsetting the effect of the lower sales and the relatively high
research and development expenditures in the first quarter of 1995 was a lower
effective income tax rate. The effective income tax rate for the first quarter
of 1995 was 16.6%, compared with 32.1% for the first quarter of 1994. The
effective rate for the full year 1994 was 25.1%. The lower 1995 rate was due to
the recognition of higher tax benefits associated with research and
experimentation tax credits, primarily associated with the initial 777
development program that substantially completes in 1995.
Although current delivery levels for commercial jet transports are down
substantially from prior levels, the combined operating profit margin on
commercial aircraft programs before research and development expense has been
essentially maintained through efficiencies gained by process improvements in
all aspects of operations. The overall commercial aircraft operating profit
margin, exclusive of research and development expense, is expected to be
somewhat lower over the next several quarters as sales levels for existing
programs remain low and deliveries of the new 777 jet transport begin.
Additionally, the Company continues to pursue major process improvement
opportunities that can provide substantial long-term economic benefits.
Current market trends in the commercial airline industry continue to be
favorable, largely driven by worldwide economic conditions. These favorable
trends, including airline passenger traffic growth rates, higher load factors,
and the improving financial health of the airline industry worldwide, should
lead to expanding market opportunities for commercial jet transports. In
preparation for these future market opportunities and in response to competitive
market forces, the Company is making the investments necessary both in new
products and in business and manufacturing processes to help ensure the Company
is well positioned to maintain or improve market share at acceptable profit
margins.
A key part of the Company's strategy to achieve major productivity advances
involves internal organizational and process restructurings. In line with these
objectives, the Company is making further work force reductions and has
implemented a special retirement program to encourage early retirements. The
special retirement program will be funded over a number of years through the
Company's retirement plan and will not have a significant impact on cash flow
projections. However, the increase in the retirement plan's actuarial liability
will result in a one-time charge to earnings in the second quarter, based on the
number of retirements involved. While the number of employees accepting the
retirement incentive offer will not be known until June, an acceptance rate of
approximately one-half of the eligible employees would result in a one-time
pretax earnings charge of $350-$400 million.
During the first quarter, orders for 74 commercial jet transports were announced
by 11 customers, including the kick-off order from Scandinavian Airlines System
for 35 737-600s, the smallest version of the Next-Generation 737 family.
Cumulative announced orders for the Next-Generation 737 series total 142 from
seven customers. The middle-sized 737-700 delivers first in late 1997.
12
<PAGE> 13
Flight testing of the new 777 continues to progress well under the most
comprehensive flight test program in commercial aviation history. The joint
U.S. and European type/design certification was received on April 19 for the
Pratt & Whitney-powered 777 jet transport. The Company is working toward
receiving ETOPS (extended-range twin-engine operations) certification for the
777 soon after the first aircraft delivery to United Airlines in May.
Certification of the initial GE-powered 777 is expected in the third quarter for
delivery to British Airways, to be followed by certification of the initial
Rolls-Royce-powered 777 in first quarter 1996 for delivery to Thai Airways
International Ltd.
There were several positive developments during the first quarter in the
Company's defense and space segment, including definitization of the
International Space Station Alpha contract with NASA at a target price of $5.6
billion and successful accomplishment of the Air Vehicle Critical Design Review
for the F-22 fighter program. Additionally, an order for 14 Chinook helicopters
was announced by Britain's Ministry of Defense.
Liquidity and Capital Resources
The Company's financial liquidity position remains strong, with cash and short-
term investments totaling $2.8 billion at March 31, 1995, and total long-term
debt at 21% of total shareholders' equity plus debt. The Company continues to
maintain its $3.0 billion revolving credit line.
As discussed in Note 11 to the Consolidated Financial Statements, in 1991 the
U.S. Government terminated for alleged default most of the work required under
contracts for a Saudi Arabia air defense system known as the Peace Shield
program and selected another contractor to perform the terminated work. In
conjunction with the notice of partial termination, the Government demanded that
the Company repay $605 million of Peace Shield unliquidated progress payments.
In April 1995, an agreement was executed deferring the Company's potential
obligation to repay the $605 million from January 25, 1991, until a decision of
the Court or earlier settlement. The deferment agreement is subject to annual
review by the Government. Management believes that the Government's grounds for
default are not legally supportable and on appeal the Government's position will
be overturned. The Company filed its complaint in the United States Court of
Federal Claims to overturn the default termination and submitted a Contract
Claim for equitable adjustment to the contract prices and schedules. The
Company's financial statements assume that the termination for default will be
overturned and that the Contract Claim will be settled in the Company's favor.
If the Company's appeal of the termination for default is not successful, the
Company could realize a pretax loss on the program approximating the value of
the unliquidated progress payments plus related interest and potential damages.
13
<PAGE> 14
Backlog
Contractual backlog, which excludes purchase options and announced orders for
which definitive contracts have not been executed, unobligated Government
contract values, and orders from customers which have filed for bankruptcy
protection, was as follows ($ in billions):
March 31 Dec. 31
1995 1994
-------- -------
Commercial aircraft $58.4 $60.6
Defense and space, other 5.7 5.7
-------- -------
$64.1 $66.3
======== =======
Unobligated U.S. Government contract values not included in backlog totaled $8.5
billion at March 31, 1995, and $5.9 billion at December 31, 1994.
14
<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.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Shareholders was held on April 24,
1995.
(c) At the Annual Meeting, in an uncontested election, five nominees
of the Board of Directors were elected Directors for three-year
terms ending on the date of the annual meeting in 1998 and one
nominee, Frank Shrontz, was elected for a two-year term ending on
the date of the annual meeting in 1997. The votes were as follows
(in thousands):
For Withheld
------- --------
John E. Bryson 289,685 1,973
Stanley Hiller, Jr. 289,745 1,913
Charles M. Pigott 289,883 1,776
Franklin D. Raines 289,622 2,037
Rozanne L. Ridgway 289,532 2,127
Frank Shrontz 289,852 1,806
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, 1995 /s/ T. M. Budinich
------------ ------------------------
(Date) T. M. Budinich
Vice President and Controller
15
<PAGE> 16
EXHIBIT (12)
Computation of Ratio of Earnings to Fixed Charges
The Boeing Company and Subsidiaries
(Dollars in millions)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
Earnings before federal taxes on income $217 $430
Fixed charges excluding capitalized interest 46 37
Amortization of previously capitalized interest 11 8
---- ----
Earnings available for fixed charges $274 $475
==== ====
Interest expense $ 40 $ 28
Interest capitalized during the period 15 26
Rentals deemed representative of an interest factor 6 9
---- ----
Total fixed charges $ 61 $ 63
==== ====
Ratio of earnings to fixed charges 4.5 7.5
==== ====
16
<PAGE> 17
EXHIBIT (15)
Letter from Independent Accountants Regarding
Unaudited Interim Financial Information
The Boeing Company and Subsidiaries
The consolidated statement of financial position as of March 31, 1995, and the
related consolidated statements of net earnings and cash flows for the three-
month periods ended March 31, 1995 and 1994, have been reviewed by the
registrant's independent accountants, Deloitte & Touche LLP, whose letter
regarding such unaudited interim financial information follows:
April 24, 1995
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, 1995 and 1994, as indicated in our report dated April 24, 1995; 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, 1995, 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 LLP
Deloitte & Touche LLP
Seattle, Washington
17
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