Tag Archives: Boeing

IAG orders 50 Boeing 737-8-200s and 737-10s, plus 100 options

Boeing and International Airlines Group (IAG) have announced an order for a combined total of 50 737-8-200s and 737-10s, plus 100 options.

The 737-8-200 will enable IAG to configure the airplane with up to 200 seats, increasing revenue potential and reducing fuel consumption.

(Boeing photo)

The largest model in the family, the 737-10 seats up to 230 passengers in a single-class configuration and can fly up to 3,300 miles. The fuel-efficient jet can cover 99% of single-aisle routes, including routes served by 757s.

The 737 incorporates the latest-technology CFM International LEAP-1B engines, Advanced Technology winglets and other improvements to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market. The 737 family of airplanes is on average 14% more fuel-efficient than today’s most efficient Next-Generation 737s and 20% more efficient than the original Next-Generation 737s when they entered service.

This announcement finalizes a commitment made by IAG for the 737 at the 2019 Paris Air Show and is subject to approval by IAG shareholders.

Note: IAG did not specify which airlines will operate the aircraft.

Boeing to move its headquarters from Chicago to Northern Virginia

Boeing has announced that its Arlington, Virginia campus just outside Washington, D.C. will serve as the company’s global headquarters. The aerospace and defense firm’s employees in the region support various corporate functions and specialize in advanced airplane development and autonomous systems. In addition to designating Northern Virginia as its new headquarters, Boeing plans to develop a research & technology hub in the area to harness and attract engineering and technical capabilities.

“We are excited to build on our foundation here in Northern Virginia. The region makes strategic sense for our global headquarters given its proximity to our customers and stakeholders, and its access to world-class engineering and technical talent,” said Boeing President and Chief Executive Officer Dave Calhoun.

Boeing will maintain a significant presence at its Chicago location and surrounding region.

“We greatly appreciate our continuing relationships in Chicago and throughout Illinois. We look forward to maintaining a strong presence in the city and the state,” said Calhoun.

“We also want to especially thank Governor Youngkin for his partnership, and Senator Warner for his support as we worked through the process.”

Future of Work Enables More Investment in Manufacturing, Engineering, Training

Over the past two years, Boeing has implemented flexible and virtual solutions that have enabled the company to reduce its office space needs. At its Chicago office, less office space will be required for the employees who will continue to be based there. Boeing will adapt and modernize the workspace to better support future work requirements.

“In today’s business environment, we have adopted a flexible work strategy in parts of our company and are taking steps to be more efficient within a reduced footprint. This helps us channel investments toward our critical manufacturing and engineering facilities and training resources,” said Calhoun.

New Boeing Research & Technology Hub

As part of its effort to tap into engineering and technology talent across the U.S and around the world, Boeing plans to establish a research and technology hub in Northern Virginia. The hub will focus on developing innovations in the areas of cyber security, autonomous operations, quantum sciences and software and systems engineering.

“The future of Boeing is digital,” said Greg Hyslop, Boeing’s chief engineer and executive vice president of Engineering, Test and Technology. “Focusing our R&D and talent development in areas that support digital innovation will fuel the introduction of cutting-edge capabilities. This new hub in Northern Virginia will follow the successful implementation of this technology strategy in other regions.”

Boeing’s Footprint and Impact

As the nation’s largest exporter, Boeing employs more than 140,000 people and is hiring as the commercial market recovers and the company invests in production, innovation and product development. The company’s three business units will continue to be based at their current headquarters, which include:

  • Boeing Commercial Airplanes in Seattle, Wash.
  • Boeing Global Services in Plano, Texas
  • Boeing Defense, Space and Security in Arlington, Va.

In addition to the company’s operations, Boeing works with more than 12,000 businesses supporting more than one million supplier jobs across the United States, and located in every state. Globally, the company has operations in more than 65 countries.

As a leading global aerospace company, Boeing develops, manufactures and services commercial airplanes, defense products and space systems for customers in more than 150 countries. As a top U.S. exporter, the company leverages the talents of a global supplier base to advance economic opportunity, sustainability and community impact. Boeing’s diverse team is committed to innovating for the future, leading with sustainability, and cultivating a culture based on the company’s core values of safety, quality and integrity.

Boeing CEO updates employees on first quarter results, 777-9 paused

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

Team,

First, I want to again acknowledge the loss of those on board China Eastern Airlines Flight MU 5735. Our thoughts and prayers remain with the family members and loved ones of the passengers and crew, and everyone who has been affected by this accident. We will continue to support our airline customer and a Boeing technical team continues to support the National Transportation Safety Board and the Civil Aviation Administration of China, who is leading the investigation.

The first quarter presented new challenges for our world, our industry and our business. As we share an update on our company’s performance today, I want to begin by saying thank you. Despite the current environment, we continue to make important progress together toward our key commitments.

Through our first-quarter results, you’ll see we still have more work to do; but I remain encouraged with our trajectory, and we are on track to generate positive cash flow for 2022. We are a long-cycle business, and the success of our efforts will be measured over years and decades; not quarters. The deliberate actions we’re taking now will drive stability in our operations and position us for long-term, sustainable performance.

We’ve embodied this approach on the 737 MAX program by following a comprehensive and methodical process to safely return airplanes to service.

The 737 MAX is now approved to fly in nearly every country, and since late 2020, the fleet has safely flown more than one million flight hours with schedule reliability above 99 percent. We delivered 81 737 MAX airplanes in the first quarter, including 34 in March. We also steadily increased production and are on track to reach a rate of 31 per month in the second quarter. We’ll continue to prioritize quality, stability and supply chain capacity in determining future production increases.

The Commercial Airplanes team is applying that same focus to the 787 program as we complete a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications. Marking an important step, we have submitted the certification plan to the FAA. We also completed the required work on initial airplanes and are conducting Boeing check flights. We will continue to give our teams the time they need, engage transparently and follow the lead of our regulator on next steps and timing.

We also successfully launched our 777-8 Freighter program in the quarter, with our partner Qatar Airways, as cargo demand continues to grow. And on the 777-9 program, while the team is progressing well in development and testing, delivery of the first 777-9 airplane is now expected in 2025, based on an updated assessment of the time required to meet certification requirements.

To minimize inventory and the number of airplanes requiring change incorporation, we’re also adjusting the 777-9 production rate ramp, including a temporary pause through 2023. This adjustment will also enable us to add 777 freighter capacity starting in late 2023. We remain confident in the 777 program and our customers continue to see the value in its compelling economics and sustainability benefits. Airplane programs serve our market for several decades, and it is important we take the time now to position for long-term success.

Within our Defense, Space and Security business, we continue to see solid and stable demand. Our portfolio is well positioned and our future franchise programs have a long runway ahead. That said, supply chain constraints, COVID-19 disruption and inflationary challenges drove cost pressures and earnings charges on some of our fixed price development programs. We’re navigating through these challenges and are focused on improving our own performance as we mature these programs and transition to production.

At Global Services, our business has largely recovered from the most severe impacts of COVID-19 and the team has demonstrated exceptional resilience and adaptability. As the market recovers, our well-balanced portfolio of both commercial and government services is well positioned for growth.

Across our markets, we’re seeing increasing stability. Notably, the commercial market recovery is broadening and demand is solid as operators look to bring capacity back online and plan for growth, with an eye on sustainability. In fact, we booked 167 gross commercial airplane orders this quarter, including 134 for the 737 MAX.

While many markets stabilize, we also continue to navigate the shifting global landscape, including the impacts of the war in Ukraine. The safety of our employees in Ukraine has our focus, and we are supporting them every way we can. We have also contributed to humanitarian groups offering food, shelter and medical care to displaced Ukrainians. I am proud of our teammates who have made their own donations, which Boeing is matching, and of all those in the region who have opened their hearts and homes to displaced teammates to ensure they have the shelter and supplies they need.

At the same time, we are following the lead of the U.S. government and strictly adhering to export controls and restrictions. We have suspended engineering support, flight training and customer operations, as well as parts delivery and maintenance support services for Russian customers. Separately, we’ve also halted the importation of titanium from Russia.

While these actions had an impact on our business; they are the right thing to do and our operations are well positioned. We have built up a substantial titanium inventory and a diverse supply base. We have sufficient material and parts in inventory for production in the near-term and are working to ensure long-term continuity.

As we navigate today’s environment, we’re also positioning for our future and increasing investments in key areas of safety, producibility, digital transformation, sustainable aerospace as well as in our people. At Boeing, our team has an opportunity to make a meaningful impact on the world — and we are investing in you, in your experience and in our culture. As we hire engineers, mechanics, quality professionals, safety experts and more, we’re also advancing our inclusive culture and ensuring Boeing is a great place for everyone to build rewarding and fulfilling careers.

Thank you for all you continue to do to support our customers, our company and each other. I am confident we are taking the best actions to rebuild trust, strengthen safety, enhance quality and drive stability for our future. I am proud to be on your team and look forward to continuing our progress forward, together.

Dave

Boeing reports a first quarter loss

Boeing issued this financial report for the first quarter:

First Quarter 2022

  • 737 production and deliveries continue to increase; submitted 787 certification plan to the FAA
  • Launched 777-8 Freighter; now anticipate first 7779 delivery in 2025
  • Recorded charges on fixedprice defense development programs as well as for impacts of the war in Ukraine
  • Operating cash flow of ($3.2) billion; continue to expect positive cash flow for 2022
  • Revenue of $14.0 billion; GAAP loss per share of ($2.06) and core (non-GAAP)* loss per share of ($2.75)
  • Total backlog of $371 billion; including nearly 4,200 commercial airplanes

Table 1. Summary Financial Results

First Quarter

(Dollars in Millions, except per share data)

2022

2021

Change

Revenues

$13,991

$15,217

(8)%

GAAP

Loss From Operations

($1,169)

($83)

NM

Operating Margin

(8.4)%

(0.5)%

NM

Net Loss

($1,242)

($561)

NM

Loss Per Share

($2.06)

($0.92)

NM

Operating Cash Flow

($3,216)

($3,387)

NM

Non-GAAP*

Core Operating Loss

($1,452)

($353)

NM

Core Operating Margin

(10.4)%

(2.3)%

NM

Core Loss Per Share

($2.75)

($1.53)

NM

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

The Boeing Company reported first-quarter revenue of $14.0 billion, driven by lower defense volume and charges on fixed-price defense development programs, partially offset by commercial services volume. GAAP loss per share of ($2.06) and core loss per share (non-GAAP)* of ($2.75) also reflect $212 million of pre-tax charges for impacts of the war in Ukraine (Table 1). Boeing recorded operating cash flow of ($3.2) billion.

“While the first quarter of 2022 brought new challenges for our world, industry and business, I am proud of our team and the steady progress we’re making toward our key commitments,” said Dave Calhoun, Boeing president and chief executive officer. “We increased 737 MAX production and deliveries and made important progress on the 787 by submitting our certification plan to the FAA. Despite the pressures on our defense and commercial development programs, we remain on track to generate positive cash flow for 2022, and we’re focused on our performance as we work through certification requirements and mature several key programs to production. Leading with safety and quality, we’re taking the right actions to drive stability throughout our operations, deliver on our commitments to customers and position Boeing for a sustainable future.”

Table 2. Cash Flow

First Quarter

(Millions)

2022

2021

Operating Cash Flow

($3,216)

($3,387)

Less Additions to Property, Plant & Equipment

($349)

($291)

Free Cash Flow*

($3,565)

($3,678)

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

Operating cash flow was ($3.2) billion in the quarter due to unfavorable receipt timing (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q1 22

Q4 21

Cash

$7.4

$8.0

Marketable Securities1

$4.9

$8.2

Total

$12.3

$16.2

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$56.2

$56.6

Boeing Capital, including intercompany loans

$1.5

$1.5

Total Consolidated Debt

$57.7

$58.1

1 Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities decreased to $12.3 billion, compared to $16.2 billion at the beginning of the quarter, primarily driven by operating cash outflows and 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 $371 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

First Quarter

(Dollars in Millions)

2022

2021

Change

Commercial Airplanes Deliveries

95

77

23%

Revenues

$4,161

$4,269

(3)%

Loss from Operations

($859)

($856)

NM

Operating Margin

(20.6)%

(20.1)%

NM

Commercial Airplanes first-quarter revenue of $4.2 billion decreased slightly, primarily due to timing of wide-body deliveries, partially offset by higher 737 deliveries (Table 4). Operating margin of (20.6)% also reflects abnormal costs and period expenses, including charges for impacts of the war in Ukraine and higher research and development expense.

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

On the 787, the company has submitted the certification plan to the FAA. Rework has been completed on the initial airplanes and the company continues to work closely with the FAA on timing of resuming deliveries. 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 continues to anticipate 787 abnormal costs of approximately $2 billion, with most being incurred by the end of 2023, including $312 million recorded in the quarter.

During the quarter, the company launched the 777-8 Freighter with an order from Qatar Airways. Delivery of the first 777-9 airplane is now expected in 2025, which reflects an updated assessment of the time required to meet certification requirements. To minimize inventory and the number of airplanes requiring change incorporation, the 777-9 production rate ramp is being adjusted, including a temporary pause through 2023. This will result in approximately $1.5 billion of abnormal costs beginning in the second quarter of this year and continuing until 777-9 production resumes. The 777 program is also leveraging the adjustment to the 777-9 production rate ramp to add 777 Freighter capacity starting in late 2023.

Commercial Airplanes delivered 95 airplanes during the quarter and backlog included nearly 4,200 airplanes valued at $291 billion.

Defense, Space & Security

Table 5. Defense, Space & Security

First Quarter

(Dollars in Millions)

2022

2021

Change

Revenues

$5,483

$7,185

(24)%

(Loss)/earnings from Operations

($929)

$405

NM

Operating Margin

(16.9)%

5.6%

NM

Defense, Space & Security first-quarter revenue decreased to $5.5 billion and first-quarter operating margin decreased to (16.9) percent, primarily driven by lower volume and charges on fixed-price development programs, including VC-25B and T-7A Red Hawk. The VC-25B program recorded a $660 million charge, primarily driven by higher supplier costs, higher costs to finalize technical requirements and schedule delays. The T-7A Red Hawk program recorded $367 million in charges, primarily driven by ongoing supplier negotiations impacted by supply chain constraints, COVID-19 and inflationary pressures.

During the quarter, Defense, Space & Security captured an award for 6 MH-47G Block II Chinook rotorcraft for U.S. Army Special Operations. Defense, Space & Security completed mission profile flights on the SB>1 DEFIANT and completed the 400th test flight on the T-7A Red Hawk. Also in the quarter, Defense, Space & Security began build of the first P-8A for the Royal New Zealand Air Force and delivered 41 aircraft.

Backlog at Defense, Space & Security was $60 billion, of which 33% percent represents orders from customers outside the U.S.

Global Services

Table 6. Global Services

First Quarter

(Dollars in Millions)

2022

2021

Change

Revenues

$4,314

$3,749

15%

Earnings from Operations

$632

$441

43%

Operating Margin

14.6%

11.8%

24%

Global Services first-quarter revenue increased to $4.3 billion and first-quarter operating margin increased to 14.6 percent primarily driven by higher commercial volume and favorable mix.

During the quarter, Global Services secured a fuel-saving digital solutions contract for Etihad Airways’ 787 fleet and was awarded a contract for KC-135 horizontal stabilizers from the U.S. Air Force. Global Services captured a 767 converted freighter order from Air Transport Services Group and also announced plans to create additional capacity for 767 converted freighters.

Additional Financial Information

Table 7. Additional Financial Information

First Quarter

(Dollars in Millions)

2022

2021

Revenues

Boeing Capital

$46

$60

Unallocated items, eliminations and other

($13)

($46)

(Loss)/Earnings from Operations

Boeing Capital

($36)

$21

FAS/CAS service cost adjustment

$283

$270

Other unallocated items and eliminations

($260)

($364)

Other income, net

$181

$190

Interest and debt expense

($630)

($679)

Effective tax rate

23.2%

1.9%

At quarter-end, Boeing Capital’s net portfolio balance was $1.6 billion. Earnings from operations at Boeing Capital decreased primarily due to a provision for losses related to the war in Ukraine. The change in loss from other unallocated items and eliminations was primarily due to decreased share-based plan expense and deferred compensation expense as compared to the first quarter 2021. The first quarter effective tax rate primarily reflects the tax benefit of pretax losses and realizable R&D tax credits.

Reuters: Boeing tells airlines 787 deliveries to restart in second half of 2022

From Reuters:

“Boeing Company has advised key airlines and parts suppliers that 787 Dreamliner deliveries would resume in the second half of 2022, a crucial landmark for an industry eager for a post-COVID recovery, three people familiar with the matter said.

Boeing’s swollen 787 inventory, amassed since it halted deliveries nearly a year ago over structural flaws, has locked up desperately needed cash and cut airline capacity.”

Read the full article:

https://www.reuters.com/business/aerospace-defense/exclusive-boeing-tells-airlines-787-deliveries-restart-second-half-2022-sources-2022-04-20/

Air Lease Corporation adds 32 Boeing 737 MAX jets to its orderbook

Boeing and Air Lease Corp. (ALC) today announced the aircraft lessor is expanding its airplane portfolio with an order for 32 additional 737-8 and 737-9 jets. As the travel market recovers, ALC is increasing its 737 MAX family offering to meet airline demand for modern, fuel-efficient and sustainable operations.

ALC continues to grow its investment in the 737 MAX family. In February the lessor added 18 737 MAXs to its portfolio. With the new order, ALC has 130 737 MAXs in its backlog.

Boeing statement on China Eastern Airlines flight MU 5735

Boeing issued this short statement on China Eastern Airlines flight MU 5735:

“We extend our deepest condolences for the loss of those on board China Eastern Airlines Flight MU 5735. Our thoughts and prayers are with the passengers and crew, their families and all those affected by this accident.

Boeing will continue to support our airline customer during this difficult time.

In addition, a Boeing technical team is supporting the NTSB and the Civil Aviation Administration of China who will lead the investigation.”

China Eastern Airlines flight MU 5735 was a scheduled domestic passenger flight from Kunming to Guangzhou in China. On March 21, 2022, the Boeing 737-89P aircraft (B-1791) descended steeply mid-flight and struck the ground at high speed in Teng County, Wuzhou, Guangxi Zhuang Autonomous Region, killing all 123 passengers and 9 crew members.

Flight MU735 from Kunming to  Guangzhou with 132 on board crashed into a forest on March 21, 2022

Above Copyright Photo: China Eastern Airlines Boeing 737-89P WL B-1791 (msn 41474) (Yunnan Peacock) PEK (Michael B. Ing). Image: 957101.

China Eastern Airlines aircraft slide show:

China Eastern Airlines aircraft photo gallery:

Boeing in talks for landmark Delta MAX order

Is Delta Air Lines ready to become a Boeing 737 customer?

From Reuters:

“Boeing is edging towards a landmark order from Delta Air Lines for up to 100 of its 737 MAX 10 jets, a model it is battling in separate talks to get approved before year-end rule changes, people familiar with the matter said.”

Boeing launches the 777-8F with Qatar Airways launch order + 25 737-10 aircraft

Boeing today launched the new 777-8 Freighter and expanded its market-leading 777X and freighter families of jetliners with an order for up to 50 aircraft from one of the world’s largest cargo carriers, Qatar Airways.

 

Qatar Airways will be the 777-8 Freighter launch customer with a firm order for 34 jets and options for 16 more, a total purchase that would be worth more than $20 billion at current list prices and the largest freighter commitment in Boeing history by value. The order also supports hundreds of U.S. suppliers from across 38 states, will sustain more than 35,000 U.S. jobs, and provide the American economy with an annual estimated economic impact of $2.6 billion during the contract’s delivery period.

Featuring advanced technology from the new 777X family and the proven performance of the market-leading 777 Freighter, the 777-8 Freighter will be the largest, longest-range and most capable twin-engine freighter in the industry. With payload capacity nearly identical to the 747-400 Freighter and a 25% improvement in fuel efficiency, emissions and operating costs, the 777-8 Freighter will enable a more sustainable and profitable business for operators.

At the White House, Commerce Secretary Gina Raimondo, His Excellency Ambassador Sheikh Mishaal bin Hamad Al Thani, Director of the White House National Economic Council Brian Deese, and Boeing President and CEO Dave Calhoun joined the formal signing by Boeing Commercial Airplanes President and CEO Stan Deal and Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker, who reaffirmed the airline’s commitment to the 777X family with the record-breaking 777-8 Freighter deal. First delivery of the new freighter is anticipated in 2027.

Boeing is designing the 777-8 Freighter, the newest member of the 777X family, to maximize efficiency and environmental performance. The widebody family features engineering design improvements and innovative technologies, including a new carbon-fiber composite wing and new fuel-efficient engines. With a range of 4,410 nautical miles (8,167 km), the 777-8 Freighter has a maximum structural payload of 118 tonnes, allowing customers to make fewer stops and reduce landing fees on long-haul routes.

Boeing will build the 777-8 Freighter in its Everett, Wash., factory. The company has invested more than $1 billion into the Everett site to support 777X production and sustain thousands of local jobs for decades to come.

As part of today’s agreement, Qatar Airways will convert 20 of its 60 777X family orders to the 777-8 Freighter. Qatar Airways is also ordering two current 777 Freighters – Boeing’s best-selling freighter of all time – to capitalize on the buoyant air cargo market. Customers from around the world have ordered more than 300 777 Freighters since the program began in 2005.

Boeing and Qatar Airways also signed a Memorandum of Understanding for a firm order of 25 737-10 aircraft and purchase rights for 25 additional airplanes. The total value of this 737-10 commitment is nearly $7 billion at current list prices. The largest model in the MAX family, the 737-10 seats up to 230 passengers in a single-class configuration and can fly up to 3,300 miles. The fuel-efficient jet can cover 99% of single-aisle routes around the world.

An international carrier with a passenger fleet including Boeing 777 and 787 Dreamliner airplanes and an all-Boeing cargo fleet of 747 and 777 freighters, Qatar Airways serves more than 140 key business and leisure destinations worldwide.

Boeing reports fourth-quarter and full-year 2021 results, message to employees

Boeing issued this financial report:

Fourth Quarter 2021

  • Continued global return to service of 737 MAX, including progress in China
  • Revenue of $14.8 billion; operating cash flow of $0.7 billion
  • 787 program recorded $3.5 billion pre-tax non-cash charge; focused on actions required to resume deliveries
  • GAAP loss per share of ($7.02) and core (non-GAAP)* loss per share of ($7.69)

Full-Year 2021

  • Revenue of $62.3 billion; operating cash flow of ($3.4) billion; cash and marketable securities of $16.2 billion
  • GAAP loss per share of ($7.15) and core (non-GAAP)* loss per share of ($9.44)
  • Total backlog of $377 billion and added 535 net commercial orders
  • Focused on safety, quality and operational stability

Table 1. Summary Financial Results

Fourth Quarter

Full Year

(Dollars in Millions, except per share data)

2021

2020

Change

2021

2020

Change

Revenues

$14,793

$15,304

(3)%

$62,286

$58,158

7%

GAAP

Loss From Operations

($4,171)

($8,049)

NM

($2,902)

($12,767)

NM

Operating Margin

(28.2)%

(52.6)%

NM

(4.7)%

(22.0)%

NM

Net Loss

($4,164)

($8,439)

NM

($4,290)

($11,941)

NM

Loss Per Share

($7.02)

($14.65)

NM

($7.15)

($20.88)

NM

Operating Cash Flow

$716

($4,009)

NM

($3,416)

($18,410)

NM

Non-GAAP*

Core Operating Loss

($4,536)

($8,377)

NM

($4,075)

($14,150)

NM

Core Operating Margin

(30.7)%

(54.7)%

NM

(6.5)%

(24.3)%

NM

Core Loss Per Share

($7.69)

($15.25)

NM

($9.44)

($23.25)

NM

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

The Boeing Company reported fourth-quarter revenue of $14.8 billion, reflecting higher commercial volume and lower defense revenue. GAAP loss per share of ($7.02) and core loss per share (non-GAAP)* of ($7.69) reflect lower charges and higher commercial volume (Table 1). Boeing recorded operating cash flow of $0.7 billion.

“2021 was a rebuilding year for us as we overcame hurdles and reached key milestones across our commercial, defense and services portfolios. We increased 737 MAX production and deliveries, and safely returned the 737 MAX to service in nearly all global markets. As the commercial market recovery gained traction, we also generated robust commercial orders, including record freighter sales. Demonstrating progress in our overall recovery, we also returned to generating positive cash flow in the fourth quarter,” said David Calhoun, Boeing President and Chief Executive Officer. “On the 787 program, we’re progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications. While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term. Across the enterprise, we remain focused on safety and quality as we deliver for our customers and invest in our people and in our sustainable future.”

Table 2. Cash Flow

Fourth Quarter

Full Year

(Millions)

2021

2020

2021

2020

Operating Cash Flow

$716

($4,009)

($3,416)

($18,410)

Less Additions to Property, Plant & Equipment

($222)

($265)

($980)

($1,303)

Free Cash Flow*

$494

($4,274)

($4,396)

($19,713)

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

Operating cash flow improved to $0.7 billion in the quarter, reflecting higher commercial volume, higher advance payments, and lower expenditures (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q4 21

Q3 21

Cash

$8.0

$9.8

Marketable Securities1

$8.2

$10.2

Total

$16.2

$20.0

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$56.6

$60.9

Boeing Capital, including intercompany loans

$1.5

$1.5

Total Consolidated Debt

$58.1

$62.4

Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities decreased to $16.2 billion, compared to $20.0 billion at the beginning of the quarter, primarily driven by debt repayment partially offset by operating cash flow. Debt was $58.1 billion, down from $62.4 billion at the beginning of the quarter due to the prepayment of a term loan and repayment of maturing debt.

Total company backlog at quarter-end was $377 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

Fourth Quarter

Full Year

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Commercial Airplanes Deliveries

99

59

68%

340

157

117%

Revenues

$4,750

$4,728

0%

$19,493

$16,162

21%

Loss from Operations

($4,454)

($7,648)

NM

($6,475)

($13,847)

NM

Operating Margin

(93.8)%

(161.8)%

NM

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Commercial Airplanes fourth-quarter revenue increased slightly to $4.8 billion primarily driven by higher 737 deliveries, partially offset by lower widebody deliveries and less favorable mix. Fourth-quarter operating margin was primarily driven by a charge on the 787 program.

Boeing is continuing to make progress on the global safe return to service of the 737 MAX. In December, the Civil Aviation Administration of China issued an airworthiness directive outlining changes required for Chinese airlines to prepare their fleets to resume service. Since the FAA’s approval to return the 737 MAX to operations in November 2020, over 300,000 revenue flights have been completed, and the reliability of the 737 MAX fleet remains above 99 percent (as of January 24, 2022). The 737 program is currently producing at a rate of 26 per month and continues to progress towards a production rate of 31 per month in early 2022. The company is evaluating the timing of further rate increases.

The company continues to perform rework on 787 airplanes in inventory and is engaged in detailed discussions with the FAA regarding required actions to resume deliveries. In the fourth quarter, the company determined that these activities will take longer than previously expected, resulting in further delays in customer delivery dates and associated customer considerations. Accordingly, Commercial Airplanes recorded a $3.5 billion pre-tax non-cash charge on the 787 program. 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 now anticipates 787 abnormal costs will increase to approximately $2 billion, with most being incurred by the end of 2023, including $285 million recorded in the quarter.

Commercial Airplanes secured orders for 164 737 MAX and 24 freighter aircraft. Commercial Airplanes delivered 99 airplanes during the quarter and backlog included over 4,200 airplanes valued at $297 billion.

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

As we share our fourth-quarter results, I want to thank you for your hard work and resilience. 2021 was a key rebuilding year for us, and together, we overcame significant hurdles. While we have more work to do, I am confident that we are well positioned to accelerate our progress in 2022 and beyond.

The industry’s mounting recovery has spurred solid commercial airplane demand. Order activity picked up significantly, particularly for the 737 MAX. In total, we booked over 900 gross commercial airplane orders including approximately 750 orders for the 737 family.

The 737 MAX is now safely flying in nearly every jurisdiction around the globe and the fleet is performing very well. With about 1,600 flights daily and more than 300,000 revenue flights completed since late 2020, the fleet is delivering reliability equal to or better than any fleet flying. And with over 800,000 total flight hours since late 2020, the fleet has now flown more flight hours than it had prior to the initial grounding. We also delivered 245 737 MAX airplanes in 2021, and we’ve steadily increased production with a focus on safety and quality. We began 2021 at very low production rates, and today, are producing at 26 airplanes per month on our way to 31 per month early this year. Looking back at where we started, 2021 was a pivotal year for the 737 team.

We’re now applying that same disciplined and detailed focus to the 787 program. As you know, we are progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications. This effort continues to impact our deliveries and our financial results – but we are fully confident it is the right thing to do. I view the financial impacts of this work as a long-term investment in a program that has significant runway ahead. We are taking the time now to ensure we’re positioned well as widebody demand recovers. We’ll continue to keep you updated as we progress toward returning to 787 deliveries.

As cargo demand expands, we also booked record orders for new and converted Boeing freighters, including 84 orders for our 767, 777 and 747 freighters. Our Global Services team also announced 10 new converted freighter lines to meet the growing demand. Overall, our Global Services business showed great resilience, in part due to our well-balanced portfolio of both government and commercial offerings. This quarter, the team delivered our 50th 767-300 converted freighter and captured new commercial and government business valued at $6 billion. As the commercial market recovers, BGS is well positioned for growth in 2022.

In our defense and space business, we secured key orders and delivered on critical customer milestones. We completed the first carrier tests with the U.S. Navy for the MQ-25, started flight testing on the second uncrewed Loyal Wingman aircraft, and delivered 47 total aircraft including the first KC-46 for Japan and Norway’s first P-8A Poseidon. We also generated $7 billion in orders in the quarter, extending our BDS backlog to $60 billion.

We took another key step in our overall recovery, notably in our financial performance, by generating positive cash flow in the fourth quarter, which represents our first positive cash quarter since early 2019. At the same time, the ongoing 787 activities resulted in financial charges that significantly impacted our earnings. While we never want to disappoint our customers or miss expectations, the work we’re putting in now will build stability and predictability going forward.

And looking to our future, we’re sustaining and expanding key investments, including in our people, in sustainability, advanced manufacturing, digital engineering, supply chain capability, technology development and partnerships.

We’ll stay squarely focused on safety, quality and transparency as we strengthen our culture and rebuild trust each day. While challenges remain, I am confident in our future. Our market is resilient, our team is world-class and we are taking the right, tough actions today to position ourselves for success. Thank you for all you continue to do to support our customers, our communities and each other.

Dave