Here some quotes from 2019 annual report:https://s2.q4cdn.com/661678649/files/do ... Report.pdf
"Financing Activities ...
Net borrowings were $13.2 billion in 2019, $1.4 billion in 2018 and $1.1 billion in 2017.
During 2019 and 2018 we repurchased 6.9 million and 26.1 million shares totaling $2.7 billion and $9.0
billion through our open market share repurchase program."
"We increased our quarterly dividend from $1.71 to $2.055 in
December 2018, which resulted in $684 million of higher dividend payments in 2019 compared with 2018."
Why not, one can always ask the taxpayer for a bailout?
"At December 31, 2019 and 2018, our pension plans were $15.9 billion and $15.3 billion underfunded as
measured under GAAP. On an Employee Retirement Income Security Act (ERISA) basis our plans are
more than 100% funded at December 31, 2019. We do not expect to make significant contributions to our
pension plans in 2020. We may be required to make higher contributions to our pension plans in future
That doesn't sound good.
p.46 about B737MAX grounding:
"We have also made significant assumptions
regarding estimated costs expected to be incurred in 2020 and 2021 that should be included in program
inventory and those costs that should be expensed when incurred as abnormal production costs.
The cumulative impacts of changes
to assumptions regarding timing of return to service and timing of planned production rates have increased
the estimated costs to produce aircraft included in the current accounting quantity by approximately $6.3
billion, which will be recorded in program inventory.
In addition, the suspension of 737 MAX production
and lower production rates is expected to result in approximately $4.0 billion of abnormal production costs
in 2020 and 2021 that will be expensed as incurred. The increases in the estimated costs accounted for
as program inventory will reduce 737 program and overall BCAsegment operating margins in future periods
after deliveries resume. Production costs incurred while production is suspended and a portion of production
costs incurred while we gradually increase production rates to a normal level will be expensed as incurred
as abnormal costs and will not be included in program inventory.
We recorded an earnings charge and corresponding liability of $6.1 billion, in the second quarter of 2019,
in connection with an estimate of potential concessions and other considerations to customers for
disruptions related to the 737 MAX grounding and associated delivery delays. The second quarter estimate
of $6.1 billion was updated in the third and fourth quarters of 2019. The remaining liability of $7.4 billion
at December 31, 2019 represents our current best estimate of future concessions and other considerations
we expect to provide to customers."
So there are abnormal production costs of 4 billion $ which will be expensed as occured. Then there are another 6.3 billion $ additional cost which will be recorded as program inventory, which is an asset, just like the B787 deferred production cost. I find it unclear what type of cost is abnormal and which is an asset.
Moreover I find it unclear what already entered the accounts and what will enter the accounts in 2020/ 2021. It sounds like the 4 billion $ + 6,3 billion $ are going to enter in the accounts later. Why not already form some provisions? I wonder why it is formulated so unclear?
Boeing already added a liability of 7,4 billion $ to compensate customers. At least this looks like conservative accounting.
p.51: Net loss 0,6 billion $
p.52: comprehensive loss (after pension plans) 1,7 billion $
p.53: equity sank from +0,4 billion $ to -8,3 billion $
1,7 billion comprehensive loss + 2,7 billion share repurchase + 4,6 billion dividends (p.54) = 9 billion $.
+0,3 billion $ came from noncontrolling interest, whatever that means.
Comprehensive loss was a surprising low 1,7 billion $. But the management extracted 7,3 billion $ through dividends and share buybacks in financial year 2019, during the MAX crisis.