Second Quarter 2022

• Operating cash flow of $0.1 billion; continue to expect positive free cash flow for 2022
• Increased 737 production to 31 per month; working with FAA on final actions to resume 787 deliveries
• Successfully completed CST-100 Starliner uncrewed Orbital Flight Test-2 (OFT-2)
• Revenue of $16.7 billion; GAAP earnings per share of $0.32 and core (non-GAAP)* loss per share of ($0.37)
• Total backlog of $372 billion; including over 4,200 commercial airplanes

The Boeing Company reported second-quarter revenue of $16.7 billion, GAAP earnings per share of $0.32 and core loss per share (non-GAAP)* of ($0.37), driven by lower defense volume and unfavorable performance, partially offset by higher commercial volume (Table 1). Boeing recorded positive operating cash flow of $0.1 billion.

“We made important progress across key programs in the second quarter and are building momentum in our turnaround,” said Dave Calhoun, Boeing President and Chief Executive Officer. “As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022. While we are making meaningful progress, we have more work ahead. We will stay focused on safety, quality and transparency, as we drive stability, improve performance, and continue to invest in our future.”

Operating cash flow improved to $0.1 billion in the quarter, reflecting higher commercial deliveries and timing of receipts and expenditures (Table 2).

Cash and investments in marketable securities decreased to $11.4 billion, compared to $12.3 billion at the beginning of the quarter, primarily driven by debt repayment (Table 3). The company has access to credit facilities of $14.7 billion which remain undrawn.

Total company backlog at quarter-end was $372 billion.

Segment Results

Commercial Airplanes

Commercial Airplanes second-quarter revenue increased to $6.2 billion, driven by higher 737 deliveries, partially offset by lower 787 deliveries (Table 4). Operating margin of (3.9)% also reflects abnormal costs and period expenses, including higher R&D expense.

Boeing has nearly completed the global safe return to service of the 737 MAX and the fleet has flown more than 1.5 million total flight hours since late 2020. The 737 production rate increased to 31 airplanes per month during the quarter.

On the 787 program, the company continues to work with the FAA to finalize actions to resume deliveries and is readying airplanes for delivery. The program is producing at a very low rate and will continue to do so until deliveries resume, with an expected gradual return to five per month over time. The company still anticipates 787 abnormal costs of approximately $2 billion, with most being incurred by the end of 2023, including $283 million recorded in the quarter.

Commercial Airplanes secured orders for 169 737 MAX airplanes and 13 freighters, including seven 777-8 Freighters from Lufthansa Group. Commercial Airplanes delivered 121 airplanes during the quarter and backlog included over 4,200 airplanes valued at $297 billion.Boeing

At quarter-end, Boeing Capital’s net portfolio balance was $1.6 billion. The change in loss from other unallocated items and eliminations was primarily due to the recognition of deferred compensation income as compared to expense recorded in the second quarter 2021. The second quarter effective tax rate primarily reflects tax expense on pretax earnings and an increase to the valuation allowance.

Boeing President and CEO Dave Calhoun shared the following message with employees today addressing the company’s second-quarter results:

Team,

This month, Boeing marked its 106th anniversary. Throughout our history, we have seen moments of triumph and moments of challenge. Through it all, our people have made the difference, and that could not ring truer today. As we report our second-quarter results, you will see that we are building momentum in our turnaround. Even as we navigate a difficult environment, we are making progress across key programs and are beginning to hit significant milestones.

Thanks to these efforts, we generated positive operating cash flow in the second quarter, and we remain on track to achieve positive free cash flow for 2022. This is underpinned by strong demand and our efforts to improve performance.

In our Commercial Airplanes business, we increased 737 MAX production and improved deliveries, while working to drive stability in our factory and within the supply chain. We also continued to support the growing fleet, which has now safely flown more than 1.5 million flight hours with greater than 99% schedule reliability since the ungrounding.

Our 787 team is in the final stages of preparing to restart deliveries and continues to work through the comprehensive and transparent process with our regulator. There is no doubt that it has been a long road, but I am proud of our team for raising their hands, sharing information transparently and doing the hard work it takes to position us for success. I’ve spent a lot of time with our teams in North Charleston and Everett, and the work our mechanics, technicians and engineers are doing is exceptional. It’s detailed, disciplined and rigorous – and your efforts will have a positive impact for decades to come.

As we improve performance, the commercial market recovery is also gaining traction and customers are demonstrating their confidence and trust in Boeing, our products and our people. We are honored to have announced more than 200 airplane orders and commitments at the Farnborough International Airshow last week, including key orders for the 737 MAX, 787, freighters and services.

In our Defense, Space and Security business, our successful uncrewed CST-100 Starliner mission with NASA was a key moment for Boeing and I was proud to be with our team at Cape Canaveral for the launch. This orbital flight test was an important reminder of what we’re capable of achieving and a demonstration of our focus on engineering excellence. That said, we continue to work through hurdles on our fixed-price development programs amidst a challenging macro-economic environment, which had an impact on our results.

Meanwhile, our Global Services team had another strong quarter supporting commercial and government customers. As the commercial market recovers, and thanks to our team’s performance, BGS has largely returned to pre-pandemic levels faster than our expectations, demonstrated by strong revenue and operating margins this quarter.

As demand grows across our markets, we are partnering with our supply chain to ensure our industry can meet that demand now and into our future. Supply chain constraints and inflation continue to challenge our world – and our industry is no exception. Even with demand high, we won’t chase production rates or push our system too fast. With safety and quality at the forefront, we will prioritize stability and predictability because when we get those right, all other metrics will follow.

While we are making progress, we have more work to do. And as we focus on improving our performance today, we are making research and development investments to lay the foundation for our next generation of products and advance our sustainability efforts. Most importantly, we’re also investing in our people and hiring in key areas of engineering and manufacturing.

This is a pivotal moment in our 106-year legacy – and this team has the opportunity to define our future. Together, we are taking the right actions and heading in the right direction. Our programs are beginning to meet key milestones and our financials are starting to reflect our efforts. Our team is tested, prepared and ready to deliver – and I am confident in our future. Thank you for all that you do every day to support our customers, our company and each other.

Dave

Boeing’s 2022 Pilot and Technician Outlook (PTO) forecasts demand for 2.1 million new aviation personnel over the next 20 years to safely support the recovery in commercial air travel and meet rising long-term growth.

The long-term forecast shows that 602,000 pilots, 610,000 maintenance technicians and 899,000 cabin crew members will be needed to support the global commercial fleet over the next two decades. The worldwide fleet is expected to nearly double and grow to 47,080 airplanes by 2041, according to Boeing’s recently released Commercial Market Outlook.

This year’s PTO represents a 3.4 percent increase from 2021, excluding the Russia region, which is not forecast in this year’s PTO due to sanctions that prohibit exports of aircraft manufactured in western countries and market uncertainty. China, Europe and North America represent over half of the total new personnel demand. The fastest growing regions are Africa, Southeast Asia and South Asia, with all three regions expected to grow more than 4 percent over the forecast period.

“As the commercial aviation industry recovers from the pandemic and plans for long-term growth, we anticipate a steady and increasing demand for aviation personnel, as well as the ongoing need for highly effective training,” said Chris Broom, vice president, Commercial Training Solutions, Boeing Global Services. “Our customer-centric approach and digital expertise includes a commitment to delivering data driven, competency-based training and assessment solutions as well as technologies that meet the evolving needs of our customers.”

New digital solutions to enhance the efficacy and efficiency of training would include immersive learning experiences and virtual learning platforms.

Projected demand for new pilots, technicians and cabin crew by global region for the next 20 years is approximately:

Learn more about the Pilot and Technician Outlook

Boeing issued this forecast:

With demand rebounding for international air travel following ongoing recovery in many domestic markets, Boeing [NYSE: BA] today projected demand for more than 41,000 new airplanes through 2041, underscoring aviation industry resilience two years after the pandemic began. Boeing released its 2022 Commercial Market Outlook (CMO), the company’s annual long-term forecast, in advance of the Farnborough International Airshow.

The CMO forecasts a market value of $7.2 trillion for new airplane deliveries, with the global fleet increasing by 80% through 2041 compared to 2019 pre-pandemic levels. Approximately half of passenger jet deliveries will replace today’s models, improving the global fleet’s fuel efficiency and sustainability. In addition, Boeing Global Services forecasts $3.6 trillion in demand in its market segments over the same time period, including strong demand for maintenance and modifications such as converted freighters; digital solutions that increase efficiency and reduce cost; and effective training to enable the supply of pilots and technicians.

“Despite the unprecedented disruption over the past two years, the aviation industry has shown incredible resilience adapting to the challenge,” said Ihssane Mounir, Boeing’s senior vice president of Commercial Sales and Marketing. “The 2022 CMO draws upon our expertise forecasting market trends to demonstrate the strong demand for new airplanes and related services in the coming decades, providing a waypoint as the industry continues to navigate its recovery.”

The 2022 CMO includes these regional projections in the next 20 years:

• Continuing their strong growth story, Asian markets account for roughly 40% of long-term global demand for new airplanes. Europe and North America each account for just over 20% of demand, with 15% of deliveries going to other regions.
• South Asia’s fleet continues to lead global growth, at 6.2% annually. Led by India, the region’s fleet will nearly quadruple from 700 airplanes in 2019 to more than 2,600 airplanes through 2041. Southeast Asia is projected to see the second-fastest growth with a near-tripling of its commercial fleet to 4,500 airplanes.
• This year’s CMO does not include a forecast for airplane deliveries to Russia due to sanctions against aircraft exports. This change reduces global 20-year demand by about 1,500 airplanes compared to last year’s CMO.

Single-aisle airplanes will account for 75% of all new deliveries, unchanged from last year’s CMO, and totaling nearly 31,000 airplanes. Through 2041, new widebody airplanes will account for about 18% of deliveries with more than 7,200 airplanes, enabling airlines to serve new and existing markets, passenger and cargo, more efficiently than in the past.

The CMO also predicts continued robust demand for dedicated freighters to support global supply chains and growing express networks. Carriers will need 2,800 additional freighters overall, including 940 new widebody models in addition to converted narrow-body and widebody freighters over the forecast period.

Boeing has provided the CMO annually for more than 60 years. As the longest-running jet forecast, the CMO is regarded as the most comprehensive analysis of the commercial aviation industry. Learn more about the Commercial Market Outlook. In addition, Boeing will release its Pilot and Technician Outlook on July 25.

Boeing made this announcement:

As the commercial aviation industry maps a path to net zero emissions, Boeing  today unveiled a new data modeling tool to show the most effective scenarios for reaching the destination by 2050. The model includes consultation with leading universities and will continue to be used with key stakeholders. The company also shared illustrative hydrogen and electric concepts that could power the future of flight.

“There are multiple ways to a future where aviation has zero climate impact. We created Cascade on a foundation of credible data and analytical models to allow users to explore various pathways to net-zero. We think this model will help our industry visualize, for the first time, the real climate impact of each solution, from beginning to end, and to inform the most probable and effective strategies,” said Boeing Chief Sustainability Officer Chris Raymond at the Farnborough International Airshow.

Raymond demonstrated Cascade, a data modeling tool Boeing created with consulting from leading universities. The tool appraises Boeing’s major paths to decarbonize aviation and their potential power to reduce emissions through:

• Airplane fleet renewal
• Renewable energy sources such as sustainable fuel, hydrogen, electric propulsion
• Operational efficiency improvements
• Advanced technologies

The Cascade model assesses the full lifecycle impacts of renewable energy by accounting for the emissions required to produce, distribute and use alternative energy carriers such as hydrogen, electricity, and Sustainable Aviation Fuels (SAF). Boeing plans to utilize the Cascade tool with airline operators, industry partners, and policymakers to inform when, where, and how different fuel sources intersect with new airplane designs.

“We have to take a holistic view to decarbonization,” said Raymond. “And when we do that, it is clear that sustainable aviation fuel (SAF) is a necessary lever. We know it will take a ‘SAF and’ approach and not a ‘SAF or’ approach to achieving net-zero by 2050.”

As part of the ‘SAF and’ approach, Boeing continues to advance the safety and viability of other renewable energy sources and their use on aircraft. Since the mid-2000’s, Boeing has conducted six hydrogen technology demonstrations with crewed and uncrewed aircraft using hydrogen fuel cells and combustion engines. Last year, Boeing successfully tested a cryotank designed for space with the capacity to hold 16,000 gallons of liquid hydrogen or the energy equivalent of the Jet A fuel in a typical regional jet.

Aside from its work on hydrogen applications, Boeing has invested in electric-powered aircraft through its joint venture Wisk, which is working to bring to market the first all-electric, autonomous air taxi in the U.S. Wisk’s current all-electric, eVTOL aircraft – on display at the Farnborough Airshow — has conducted more than 1,600 successful test flights.

Informed by the company’s extensive evaluation and testing of alternative propulsion sources and its research partnerships, Boeing today also shared illustrative ‘Future Flight Concepts,’ depicting potential hybrid, electric and hydrogen-powered aircraft.

The Boeing Company has announced major program deliveries across its commercial and defense operations for the second quarter of 2022.

The company will provide detailed second quarter financial results on July 27. Major program deliveries during the second quarter were as follows:

Boeing will fly the newest and largest members of its 737 MAX and 777X airplane families at the Farnborough International Airshow this month and present new tools in the push toward more sustainable and autonomous flight.

The 737-10, making its international debut, will join the 777-9 in the daily flying and static display. The airplanes, each one the most fuel-efficient in its class, will fly to the show on a blend of sustainable aviation fuel, which Boeing sees as a major lever for further reducing carbon emissions. The company also will unveil a modeling tool that will provide actionable insights on strategies the aviation industry can use to reach net zero emissions by 2050.

Another decarbonization strategy is electric propulsion and Boeing’s joint venture Wisk Aero will make the European debut of its all-electric vertical-takeoff-landing (eVTOL) air taxi. The “Cora” development vehicle is pilotless, helping to advance autonomous capabilities in aviation. Boeing will highlight other autonomous capabilities at the show, including its MQ-25 uncrewed aerial refueler and Airpower Teaming System (ATS).

“In the four years since the last Farnborough Airshow, the world has seen the critical social and economic role that aerospace and defence plays. We are excited to reconnect with our colleagues at Farnborough as we address together the need for a more sustainable future and take concrete steps to enable innovation and clean technology,” said Sir Michael Arthur, president of Boeing International. “We look forward to sharing the progress we are making.”

Below are some of Boeing’s highlights scheduled for the airshow starting on July 18, 2022.

Commercial Airplanes
The 737-10 (above) will be on the show grounds July 18-21. The largest member of the 737 MAX family will provide operators with more capacity, greater fuel efficiency and the best per-seat economics of any single-aisle airplane. The 737 MAX family, which has received more than 3,300 net orders, leverages advanced aerodynamic design and highly-efficient engines to reduce fuel use and emissions 20% and the noise footprint 50% compared to airplanes they replace.

The 777-9, which is the world’s largest and most efficient twin-engine jet, will be at the airshow July 18-20. Based on the most successful twin-aisle airplane – the 777 – and advanced technologies from the 787 Dreamliner family, the 777-9 will deliver 10% better fuel use, emissions and operating costs than the competition. The 777X family has more than 340 orders from leading operators around the world.

Defense, Space & Security
Boeing’s exhibit will highlight its highly capable military helicopters, including the CH-47 Chinook and AH-64 Apache, and mobility and surveillance aircraft such as the P-8A Poseidon, E-7 Wedgetail and KC-46A Pegasus.

Boeing also will display some of its newest, most digitally-advanced programs, including the T-7A Red Hawk trainer and ATS. In addition, the U.S. Department of Defense corral is expected to display the FA-18E/F, F-15E, P-8A, AH-64E and CH-47F.

Global Services
Boeing will highlight its customer-centric services business that is focused on keeping the world’s fleet flying safely, efficiently and sustainably by pairing OEM expertise with data-driven innovation. This includes showcasing parts, modifications, digital, sustainment, and training solutions offerings, as well as an expansive global supply chain, maintenance and logistics network.

Sustainability
Boeing will present its vision for a sustainable aerospace future that is grounded in collaboration, technical research, data and extensive testing of technologies including sustainable aviation fuel, hydrogen and electric power.

Autonomy
Boeing will highlight autonomous platforms such as MQ-25, ATS, and Wisk Aero’s Cora.

The company is building on decades of engineering experience to accelerate autonomous capabilities, which can enable sustainable and accessible modes of transportation as the world confronts a growing population and aging infrastructure. Boeing has made significant investments in California-based Wisk Aero, a leading Advanced Air Mobility company and developer of the first all-electric, self-flying air taxi in the U.S. Wisk’s configuration is an important differentiator within the eVTOL market as the independence of its lift and thrust rotors is expected to support simplicity and certification of the go-to-market vehicle.

Photo: Boeing.

Boeing has unveiled its 2022 ecoDemonstrator with a livery that honors a decade of testing to reduce fuel use, emissions and noise. The latest ecoDemonstrator, a Boeing-owned 777-200ER, will test about 30 new technologies aimed at improving sustainability and safety for the aerospace industry, including a water conservation system and technologies to improve operational efficiency.

During six months of flight and ground tests starting this summer, the 2022 ecoDemonstrator will evaluate:

• In collaboration with NASA, SMART vortex generators – small vertical vanes on the wing – that improve aerodynamic efficiency during takeoff and landing
• A system to conserve onboard water and reduce weight as well as fuel use
• Additively manufactured airplane and engine parts to help reduce fuel use and manufacturing waste
• An environmentally preferred refrigerant and a new fire suppression agent to reduce greenhouse gas emissions
• A heads-up enhanced vision system for pilots to improve operational efficiency
• Continued comprehensive study of the impact of sustainable aviation fuel toward the reduction of emissions
• For all flight tests, the 777-200ER will fly on a highest approved blend of sustainable aviation fuel (SAF) available

Shown here, the 2022 ecoDemonstrator – a Boeing-owned 777-200 ER (Extended Range) — after its livery was painted in San Bernardino, Calif., in June. (Photo: Boeing)

Since its initial flights in 2012, the Boeing ecoDemonstrator program has accelerated innovation by taking new technologies out of the lab and testing them in an operational environment. Including this year’s platform, the program has tested about 230 technologies to help decarbonize aviation, improve operational efficiency and enhance safety and the passenger experience. Approximately a third of tested technologies have progressed onto Boeing’s products and services.