Boeing Co. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report; the supplied filing text does not provide a clear standalone fourth-quarter financial summary.
Business context
Boeing operates three reportable segments: Commercial Airplanes (BCA), Defense, Space & Security (BDS), and Global Services (BGS). Results reflect stronger aircraft deliveries and services demand, alongside production, supplier, labor, quality and fixed-price program challenges.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $77.8 billion | $66.6 billion |
| GAAP operating loss / margin | $773 million / (1.0%) | $3.5 billion / (5.3%) |
| Net loss attributable to Boeing shareholders | $2.2 billion | $4.9 billion |
| Diluted loss per share | $3.67 | $8.30 |
| Operating cash flow | $6.0 billion | $3.5 billion |
| Cash and cash equivalents at year-end | $12.7 billion | $14.6 billion |
| Debt at year-end | $52.3 billion | $57.0 billion |
| Shareholders’ deficit | $17.2 billion | $15.9 billion |
Revenue rose about 17%, while GAAP operating and net losses narrowed. Operating cash flow improved; management attributed this partly to higher revenue and customer advances, partly offset by higher inventory. Capital expenditures were $1.5 billion, and cash used in financing activities was $5.5 billion, including $5.1 billion of net debt repayments. Boeing had $3.3 billion in short-term investments and $10.0 billion of available revolving credit capacity. No dividends were paid.
Current assets were $109.3 billion and current liabilities were $95.8 billion. The filing reports $17.7 billion of principal payments due over the next three years. Boeing said it expected to meet cash requirements through cash and short-term investments, operating cash flow and capital-market access.
Segments and changes versus prior year
| Segment | FY2023 revenue | FY2023 operating result | Change versus FY2022 |
|---|---|---|---|
| BCA | $33.9 billion | $1.6 billion loss; (4.8%) margin | Revenue increased $7.9 billion, primarily on higher 787 deliveries; operating loss narrowed by $706 million. |
| BDS | $24.9 billion | $1.8 billion loss; (7.1%) margin | Revenue increased $1.8 billion; operating loss narrowed by $1.8 billion, mainly from lower development-program charges. |
| BGS | $19.1 billion | $3.3 billion earnings; 17.4% margin | Revenue increased $1.5 billion and operating earnings increased $602 million, driven mainly by commercial services. |
Total backlog increased to $520.2 billion from $404.4 billion, including $497.1 billion of contractual backlog. Boeing expects approximately 16% of year-end backlog to convert to revenue through 2024 and 62% through 2027, while noting substantial timing uncertainty.
Outlook, risks and unusual items
- 737 MAX quality and oversight: After the January 5, 2024 Alaska Airlines 737-9 door-plug accident, the FAA required inspections and opened an investigation into Boeing’s quality-control system. The FAA said it would not approve 737 MAX production-rate increases or additional lines until satisfied with compliance. Boeing said it could not reasonably estimate the financial impact.
- Production and certification: The 737-7 and 737-10 require engineering work on de-icing systems, delaying certification and first deliveries. Boeing expected the first 777-9 delivery in 2025 and the 777-8 freighter in 2027; first delivery of the passenger 777-8 was not expected before 2030. The 787 rate reached five per month in October 2023, with about 50 aircraft requiring rework at year-end; the company expected to complete that rework by the end of 2024.
- Development-program losses: BDS recorded $1.585 billion of losses in 2023 on five major fixed-price development programs: Commercial Crew, KC-46A, MQ-25, T-7A and VC-25B. Boeing warned that further cost increases, schedule delays or technical challenges could produce additional losses and cash-flow effects. Across long-term contracts, net cumulative catch-up adjustments increased operating loss by $2.943 billion in 2023, versus $5.253 billion in 2022.
- Other exposures: Risks include supplier disruption and labor instability, inflation, customer delivery claims or cancellations, U.S. government funding uncertainty, international trade and geopolitical tensions, litigation, environmental remediation and potential financing commitments. Environmental remediation liabilities were $844 million; the high end of reasonably possible costs exceeded recorded liabilities by $1.030 billion.
- Demand and management commentary: Management cited strong global airline demand and a recovering commercial-services market, while describing supply-chain, production-quality and labor challenges as adverse to results and cash flows. No consolidated numerical earnings or cash-flow guidance is provided in the filing text.
- Accounting and tax: Estimates for program costs, production quantities and certification schedules are significant sources of earnings risk. Boeing recorded a $4.550 billion deferred-tax valuation allowance, up $1.388 billion, and said further allowances may be needed until sustained profitability is achieved.
Key facts for investors to verify
- Progress and costs of FAA-mandated quality actions, the investigation, and the timing of any permitted 737 MAX production-rate changes.
- Actual certification and delivery schedules for the 737-7, 737-10 and 777X, and the resolution of 737 and 787 inventory and rework.
- Whether fixed-price development programs incur additional reach-forward losses and whether supplier, labor and factory performance improves.
- Conversion of backlog into deliveries, revenue and operating cash flow, including the assumptions underlying aircraft orders and customer deliveries.
- Debt repayment and liquidity needs, aircraft financing commitments of $17.0 billion, and progress toward sustained profitability and realization of deferred tax assets.