Boeing Co. (BA) | Analysis of Investments

Investment Accounting Policy

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid instruments, such as commercial paper, time deposits, and other money market instruments, which have original maturities of three months or less. Boeing aggregates cash balances by bank where conditions for right of set-off are met, and reclassify any negative balances, consisting mainly of uncleared checks, to Accounts payable. Negative balances reclassified to Accounts payable were $132 and $209 at December 31, 2011 and 2010.

Investments

Time deposits are held-to-maturity investments that are carried at cost.

The equity method of accounting is used to account for investments for which Boeing has the ability to exercise significant influence, but not control, over an investee. Significant influence is generally deemed to exist if Boeing has an ownership interest in the voting stock of an investee of between 20% and 50%.

Boeing classifies investment income and loss on Consolidated Statements of Operations based on whether the investment is operating or non-operating in nature. Operating investments align strategically and are integrated with Boeing's operations. Earnings from operating investments, including Boeing's share of income or loss from equity method investments, dividend income from certain cost method investments, and any impairments or gain/loss on the disposition of these investments, are recorded in Income from operating investments, net. Non-operating investments are those Boeing held for non-strategic purposes. Earnings from non-operating investments, including interest and dividends on marketable securities, and any impairments or gain/loss on the disposition of these investments are recorded in Other income/(expense), net.

Source: Boeing Co., Annual Report

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Boeing Co., adjustment to Net Earnings Attributable To Parent

	12 months ended	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	Net earnings attributable to parent (as reported)
	Add: Unrealized gain (loss) on certain investments, net of tax
	Less: Reclassification adjustment for (gains) losses realized in net earnings, net of tax
	Net earnings attributable to parent (adjusted)

Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)

Boeing Co., adjusted ratios

		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	Net Profit Margin
	Reported net profit margin	%	%	%	%	%
	Adjusted net profit margin	%	%	%	%	%
	Return on Equity (ROE)
	Reported ROE	%	%	%	%	%
	Adjusted ROE	%	%	%	%	%
	Return on Assets (ROA)
	Reported ROA	%	%	%	%	%
	Adjusted ROA	%	%	%	%	%

Adjusted Net Profit Margin

		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	As Reported
	Net earnings attributable to parent (USD $ in millions)
	Revenues (USD $ in millions)
	Net profit margin1	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted net earnings attributable to parent (USD $ in millions)
	Revenues (USD $ in millions)
	Adjusted net profit margin2	%	%	%	%	%

2011 Calculations

Adjusted Return On Equity (ROE)

		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	As Reported
	Net earnings attributable to parent (USD $ in millions)
	Shareholders’ equity (USD $ in millions)
	ROE1	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted net earnings attributable to parent (USD $ in millions)
	Shareholders’ equity (USD $ in millions)
	Adjusted ROE2	%	%	%	%	%

2011 Calculations

Adjusted Return On Assets (ROA)

		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	As Reported
	Net earnings attributable to parent (USD $ in millions)
	Assets (USD $ in millions)
	ROA1	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted net earnings attributable to parent (USD $ in millions)
	Assets (USD $ in millions)
	Adjusted ROA2	%	%	%	%	%

2011 Calculations