Interpreting Non-GAAP Disclosures The Boeing Company reported the following information in its MD&A section of a...

 

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Interpreting Non-GAAP Disclosures The Boeing Company reported the following information in its MD&A section of a recent annual report on Form 10-K. Earnings From Operations-The following table summarizes Earnings from operations. Year Ended December 31 ($ millions) Commercial Airplanes Defense, Space & Security Boeing Capital Unallocated pension and other postretirement benefit expense Other unallocated items and eliminations. Earnings from operations (GAAP) Unallocated pension and other postretirement benefit expense Core operating earnings (Non-GAAP) 2015 2014 2013 $5,157 $6,411 $5,795 3,274 3,133 3,235 50 92 107 (298) (1,387) (1,314) (740) (776) (1,261) $7,443 $7,473 $6,562 298 1,387 1,314 $7,741 $8,860 $7,876 Earnings from operations in 2015 decreased by $30 million compared with 2014 primarily reflecting a fourth quarter charge of $885 million related to the 747 program at Commercial Airplanes. and higher charges of $410 million related to the USAF KC-46A Tanker recorded by Commercial Airplanes and our Boeing Military Aircraft (BMA) segment, partially offset by lower unallocated pension and other postretirement benefit expense of $1,089 million. Non-GAAP Measures: Core Operating Earnings, Core Operating Margin, and Core Earnings Per Share Our Consolidated Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently... Core operating earnings, core operating margin and core earnings per share exclude the impact of certain pension and other postretirement benefit expenses that are not allocated to business segments... Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as unallocated pension and other postretirement benefit cost primarily represent costs driven by market factors and costs not allocable to U.S. government contracts. Required a. What are the non-GAAP measures reported? b. What GAAP measure is used in the reconciliation to compare to the non-GAAP measure? c. Why is this disclosure included in the MD&A section of the Form 10-K and not in the notes accompanying the financial statements? d. Why is this non-GAAP measure reported? = + ÷ Non-GAAP Measures: Core Operating Earnings, Core Operating Margin, and Core Earnings Per Share Our Consolidated Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently... Core operating earnings, core operating margin and core earnings per share exclude the impact of certain pension and other postretirement benefit expenses that are not allocated to business segments... Management uses core operating ea evaluating and forecasting underlying business performance. Management believes these core earnin as unallocated pension and other postretirement benefit cost primarily represent costs driven by mar Required a. What are the non-GAAP measures reported? b. What GAAP measure is used in the reconciliation to compare to the non-GAAP measure? c. Why is this disclosure included in the MD&A section of the Form 10-K and not in the notes accompanying the financial stat d. Why is this non-GAAP measure reported? Net assets Net income Non-GAAP measures are a required component of the MD&A section Non-GAAP measures may be explained in the notes to financial statements Non-GAAP measures must be explained in the notes to financial statements The reporting affirms the computation of a measure widely and consistently used across companies The reporting of non-GAAP measures is a required industry practice Total assets Core operating earnings, core operating margin, core earnings per share Disclosure is not based on a GAAP standard Earnings from operations Voluntary decision made by management Interpreting Non-GAAP Disclosures The Boeing Company reported the following information in its MD&A section of a recent annual report on Form 10-K. Earnings From Operations-The following table summarizes Earnings from operations. Year Ended December 31 ($ millions) Commercial Airplanes Defense, Space & Security Boeing Capital Unallocated pension and other postretirement benefit expense Other unallocated items and eliminations. Earnings from operations (GAAP) Unallocated pension and other postretirement benefit expense Core operating earnings (Non-GAAP) 2015 2014 2013 $5,157 $6,411 $5,795 3,274 3,133 3,235 50 92 107 (298) (1,387) (1,314) (740) (776) (1,261) $7,443 $7,473 $6,562 298 1,387 1,314 $7,741 $8,860 $7,876 Earnings from operations in 2015 decreased by $30 million compared with 2014 primarily reflecting a fourth quarter charge of $885 million related to the 747 program at Commercial Airplanes. and higher charges of $410 million related to the USAF KC-46A Tanker recorded by Commercial Airplanes and our Boeing Military Aircraft (BMA) segment, partially offset by lower unallocated pension and other postretirement benefit expense of $1,089 million. Non-GAAP Measures: Core Operating Earnings, Core Operating Margin, and Core Earnings Per Share Our Consolidated Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently... Core operating earnings, core operating margin and core earnings per share exclude the impact of certain pension and other postretirement benefit expenses that are not allocated to business segments... Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as unallocated pension and other postretirement benefit cost primarily represent costs driven by market factors and costs not allocable to U.S. government contracts. Required a. What are the non-GAAP measures reported? b. What GAAP measure is used in the reconciliation to compare to the non-GAAP measure? c. Why is this disclosure included in the MD&A section of the Form 10-K and not in the notes accompanying the financial statements? d. Why is this non-GAAP measure reported? = + ÷ Non-GAAP Measures: Core Operating Earnings, Core Operating Margin, and Core Earnings Per Share Our Consolidated Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently... Core operating earnings, core operating margin and core earnings per share exclude the impact of certain pension and other postretirement benefit expenses that are not allocated to business segments... Management uses core operating ea evaluating and forecasting underlying business performance. Management believes these core earnin as unallocated pension and other postretirement benefit cost primarily represent costs driven by mar Required a. What are the non-GAAP measures reported? b. What GAAP measure is used in the reconciliation to compare to the non-GAAP measure? c. Why is this disclosure included in the MD&A section of the Form 10-K and not in the notes accompanying the financial stat d. Why is this non-GAAP measure reported? Net assets Net income Non-GAAP measures are a required component of the MD&A section Non-GAAP measures may be explained in the notes to financial statements Non-GAAP measures must be explained in the notes to financial statements The reporting affirms the computation of a measure widely and consistently used across companies The reporting of non-GAAP measures is a required industry practice Total assets Core operating earnings, core operating margin, core earnings per share Disclosure is not based on a GAAP standard Earnings from operations Voluntary decision made by management

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a The nonGAAP measures reported are core operating earnings core operating margin and core earnings ... View the full answer