Slide 1: Fourth-Quarter and Full-Year 2005 Performance Review
Fourth-Quarter and Full-Year 2005 Performance Review Jim McNerney Chairman, President and Chief Executive Officer James Bell Chief Financial Officer February 1, 2006 Exhibit 99.2
Slide 2: Solid results… strong growth ahead
Solid results… strong growth ahead Significantly improved financial results Generated a record $7.0 billion of operating cash flow Grew total backlog 33 percent to a record $202 billion Raised dividend 20% and repurchased 45 million shares Invested in key growth areas (787, 747-8, FCS, MMA) Operatin
Slide 3: Strong earnings growth… outstanding cash flow
Strong earnings growth… outstanding cash flow 2005 Financial Results $3.5B $2.30 3.8% 2.0B $52.5B 1.3 Pts 5.1% Operating Margin 100% $7.0B Operating Cash Flow 39% $3.20 Earnings per Share 40% $2.8B Operating Income 5% $54.8B Revenues Change
Slide 4: Fourth-quarter earnings more than doubled
Fourth-quarter earnings more than doubled 13.3 14.2 $0 $5 $10 $15 2004Q4 2005Q4 $0.23 $0.58 $0.00 $0.25 $0.50 $0.75 2004Q4 2005Q4 Fourth-Quarter Revenue and Earnings Revenue, Billions Earnings per Share $0.55 after special items $0.74 after special items
Slide 5: Commercial Airplanes: continued focus on growth and margin expansion
Continued focus on growth and margin expansion (2.8%) 5.6% Commercial Airplanes 747-8 Program Launched $5.9 $5.4 $0 $2 $4 $6 2004Q4 2005Q4 -5% 0% 5% 10% Revenues & Operating Margins Billions Strong performance… growth ramping up – Delivered 290 airplanes in 2005… 73 in fourth quarter – Airplane deli
Slide 6: Integrated Defense Systems: moderating market, focused on execution
Moderating market . . . focused on execution 8.9% 11.4% Record operating performance in 2005 - Record revenues, earnings and margins - Industry-leading margins and backlog Continued success on contract wins - F-15 Singapore contract award - F/A-18E/F FIRST contract extension - Army Chinook order Exc
Slide 7: BCC and Connexion on track
BCC and Connexion on track Other Businesses Boeing Capital Corporation – Environment continues to improve… aircraft financing market strengthening – Pre-tax income grew 27% in 2005 – Paid cash dividends totaling more than $1 billion to Boeing since 2004 – Maintaining conservative financial position
Slide 8: Generated a record $7.0 billion in operating cash flow after pensions
Generated a record $7.0 billion in operating cash flow after pensions Cash Flow Pension Plans Strengthened – In 2005 – Pension asset returns ~ 15% – Cash contributions totaled $1.9 billion – Funded status improved to 96% – In 2006 – Expected rate of return remains 8.5% – Discount rate reduced to 5.5
Slide 9: Outstanding balance sheet strength and liquidity
Outstanding balance sheet strength and liquidity Cash and Debt Balances 3.0 2.9 5.4 3.2 $0 $3 $6 $9 4.4 5.2 6.3 7.0 $0 $3 $6 $9 Billions Billions Boeing debt BCC debt S&P: A Moody’s: A3 * Fitch: A+ S&P: A Moody’s: A3 * Fitch: A+ Cash Marketable Securities * Moody’s announced on January 25, 2006 that
Slide 10: Forecasting solid growth
Forecasting solid growth Operating Cash Flow ² Earnings per Share Revenues ¹ >$5.5B >$5.5B $4.10 - $4.30 $3.25 - $3.45 $63.5B - $64.5B ~ $60B Financial Guidance 2006 revenue outlook is nearly $2B below prior estimate due solely to a previously disclosed accounting change at Boeing Commercial Airplan
Slide 11: Slide 11
Slide 12: Teams are up and running…
Teams are up and running… Initiative Sponsor Internal Services Productivity James Bell Global Sourcing Jim Albaugh Lean + Alan Mulally Development Process Excellence Jim Jamieson Growth and Productivity Initiatives
Slide 13: Better Leaders Make Better Companies
Growth / Productivity Better Leaders Make Better Companies Boeing Leadership Model Define It Model It Teach It • Leadership attributes • Performance • Values • Across the Enterprise • In all we do • Action/Words • Every day • Leaders Leading Leaders • Boeing Leadership Center • Candor/Openness • Lea
Slide 14: Delivering value to customers and shareholders
Delivering value to customers and shareholders Businesses are well positioned in healthy markets Forecasting strong growth in 2006 and 2007 Focused on growth and productivity initiatives… driving performance to new levels Embarking on major leadership development journey Looking Ahead
Slide 15: Forward-looking statements
Certain statements in this report may constitute “forward-looking” statements within the meaning of the Private Litigation Reform Act of 1995. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions are used to identify these forward-looking statemen