Tag Archives: Boeing

Boeing reports third quarter results

Copyright Photo: Joe G. Walker.

Boeing issued this financial statement:

  • Continued progress on global safe return to service of 737 MAX and focus on operational stability
  • Revenue of $15.3 billion, GAAP loss per share of ($0.19) and core (non-GAAP)* loss per share of ($0.60)
  • Operating cash flow of ($0.3) billion; cash and marketable securities of $20.0 billion
  • Commercial Airplanes backlog of $290 billion and added 93 net orders

 

Table 1. Summary Financial Results

Third Quarter

Nine Months

(Dollars in Millions, except per share data)

2021

2020

Change

2021

2020

Change

Revenues

$15,278

$14,139

8%

$47,493

$42,854

11%

GAAP

Earnings/(Loss) From Operations

$329

($401)

NM

$1,269

($4,718)

NM

Operating Margin

2.2%

(2.8)%

NM

2.7%

(11.0)%

NM

Net Loss

($132)

($466)

NM

($126)

($3,502)

NM

Loss Per Share

($0.19)

($0.79)

NM

($0.10)

($6.10)

NM

Operating Cash Flow

($262)

($4,819)

NM

($4,132)

($14,401)

NM

Non-GAAP*

Core Operating Earnings/(Loss)

$59

($754)

NM

$461

($5,773)

NM

Core Operating Margin

0.4%

(5.3)%

NM

1.0%

(13.5)%

NM

Core Loss Per Share

($0.60)

($1.39)

NM

($1.72)

($7.88)

NM

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

The Boeing Company [NYSE: BA] reported third-quarter revenue of $15.3 billion, driven by higher commercial airplanes and services volume. GAAP loss per share of ($0.19) and core loss per share (non-GAAP)* of ($0.60) primarily reflects higher commercial volume (Table 1). Boeing recorded operating cash flow of ($0.3) billion.

“We are driving stability across our operations, investing in our future and positioning our teams to deliver for our customers as the market recovers,” said Boeing President and Chief Executive Officer David Calhoun. “Commercial market demand continues to gain traction with broad-based vaccine distribution and border protocols beginning to open. Going forward, supply chain capacity and global trade will be key drivers of our industry and the broader economy’s recovery. Our portfolio across commercial, defense, space and services is well positioned, and we’re focused on improving performance, while advancing technologies and digital manufacturing capabilities to drive our next generation of products and a sustainable future.”

Table 2. Cash Flow

Third Quarter

Nine Months

(Millions)

2021

2020

2021

2020

Operating Cash Flow

($262)

($4,819)

($4,132)

($14,401)

Less Additions to Property, Plant & Equipment

($245)

($262)

($758)

($1,038)

Free Cash Flow*

($507)

($5,081)

($4,890)

($15,439)

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

Operating cash flow improved to ($0.3) billion in the quarter, reflecting higher commercial deliveries, higher order receipts, and lower expenditures (Table 2). Operating cash flow was also favorably impacted by a $1.3 billion income tax refund in the quarter.

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q3 21

Q2 21

Cash

$9.8

$8.2

Marketable Securities1

$10.2

$13.1

Total

$20.0

$21.3

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$60.9

$62.1

Boeing Capital, including intercompany loans

$1.5

$1.5

Total Consolidated Debt

$62.4

$63.6

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

Cash and investments in marketable securities decreased to $20.0 billion, compared to $21.3 billion at the beginning of the quarter, primarily driven by debt repayment and operating cash outflows (Table 3). Debt was $62.4 billion, down from $63.6 billion at the beginning of the quarter due to the repayment of maturing debt.

Total company backlog at quarter-end was $367 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

Third Quarter

Nine Months

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Commercial Airplanes Deliveries

85

28

204%

241

98

146%

Revenues

$4,459

$3,596

24%

$14,743

$11,434

29%

Loss from Operations

($693)

($1,369)

NM

($2,021)

($6,199)

NM

Operating Margin

(15.5)%

(38.1)%

NM

(13.7)%

(54.2)%

NM

Commercial Airplanes third-quarter revenue increased to $4.5 billion primarily driven by higher 737 deliveries, partially offset by lower 787 deliveries. Third-quarter operating margin improved to (15.5) percent primarily due to higher deliveries (Table 4).

Boeing is continuing to make progress on the global safe return to service of the 737 MAX. Since the FAA’s approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 195 737 MAX aircraft and airlines have returned more than 200 previously grounded airplanes to service. 31 airlines are now operating the 737 MAX, safely flying over 206,000 revenue flights totaling more than 500,000 flight hours (as of October 24, 2021). The 737 program is currently producing at a rate of 19 per month and continues to progress towards a production rate of 31 per month in early 2022, and the company is evaluating the timing of further rate increases.

The company continues to focus 787 production resources on conducting inspections and rework and continues to engage in detailed discussions with the FAA regarding required actions for resuming delivery. The current 787 production rate is approximately two airplanes per month. The company expects to continue at this rate until deliveries resume and then return to five per month over time. The low production rates and rework are expected to result in approximately $1 billion of abnormal costs, of which $183 million was recorded in the quarter.

Commercial Airplanes secured orders for 70 737 MAX, 24 freighter, and 12 787 airplanes. Commercial Airplanes delivered 85 airplanes during the quarter and backlog included over 4,100 airplanes valued at $290 billion.

Defense, Space & Security

Table 5. Defense, Space & Security

Third Quarter

Nine Months

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Revenues

$6,617

$6,848

(3)%

$20,678

$19,478

6%

Earnings from Operations

$436

$628

(31)%

$1,799

$1,037

73%

Operating Margin

6.6%

9.2%

(28)%

8.7%

5.3%

64%

Defense, Space & Security third-quarter revenue decreased to $6.6 billion and third-quarter operating margin decreased to 6.6 percent, primarily due to a $185 million earnings charge on the Commercial Crew program driven by the second uncrewed Orbital Flight Test now anticipated in 2022 and the latest assessment of remaining work.

During the quarter, Defense, Space & Security secured awards for five P-8A Poseidon aircraft for the German Navy and four CH-47F Block II Chinook helicopters for the U.S Army, as well as a Joint Direct Attack Munition contract for the U.S. Air Force. Defense, Space & Security also conducted the MQ-25 unmanned aerial refueling of a U.S. Navy E-2D and F-35C, and delivered a total of 37 aircraft during the quarter, including the first CH-47F Chinook to the Royal Australian Army.

Backlog at Defense, Space & Security was $58 billion, of which 33 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global Services

Third Quarter

Nine Months

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Revenues

$4,221

$3,694

14%

$12,037

$11,810

2%

Earnings from Operations

$644

$271

138%

$1,616

$307

426%

Operating Margin

15.3%

7.3%

110%

13.4%

2.6%

415%

Global Services third-quarter revenue increased to $4.2 billion and third-quarter operating margin increased to 15.3 percent primarily driven by higher commercial services volume. Operating margin was also favorably impacted by lower severance costs and mix of products and services.

During the quarter, Global Services captured orders for 12 additional 737-800 converted freighters for BBAM, an award for performance-based logistics support of the global C-17 fleet, and a modification award for Chinook infra-red suppression systems for the U.K. Armed Forces. Global Services also announced a partnership to expand capacity for 767-300 Boeing Converted Freighters and was selected to provide training to the United Aviate Academy.

Additional Financial Information

Table 7. Additional Financial Information

Third Quarter

Nine Months

(Dollars in Millions)

2021

2020

2021

2020

Revenues

Boeing Capital

$71

$71

$209

$205

Unallocated items, eliminations and other

($90)

($70)

($174)

($73)

Earnings/(Loss) from Operations

Boeing Capital

$42

$30

$99

$47

FAS/CAS service cost adjustment

$270

$353

$808

$1,055

Other unallocated items and eliminations

($370)

($314)

($1,032)

($965)

Other income, net

$30

$119

$419

$325

Interest and debt expense

($669)

($643)

($2,021)

($1,458)

Effective tax rate

57.4%

49.6%

62.2%

40.1%

At quarter-end, Boeing Capital’s net portfolio balance was $1.8 billion. The earnings from FAS/CAS service cost adjustment primarily reflects an increase in the CAS discount rate driven by pension relief provisions in the American Rescue Plan Act of 2021. Interest and debt expense increased due to higher debt balances. The change in other income was driven by a pension settlement charge recorded during the quarter. The third quarter 2021 effective tax rate primarily reflects a lower pre-tax loss compared to the prior period, as well as benefits from R&D tax credits.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. 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. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. 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 they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 13-14.

Free Cash Flow

Free cash flow is GAAP operating cash flow reduced by capital expenditures for property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation of free cash flow to GAAP operating cash flow.

Boeing will require all employees to be vaccinated

Boeing will require all employees to be vaccinated.

From the Seattle Times:

https://www.seattletimes.com/business/boeing-aerospace/despite-wary-labor-unions-and-conservative-opposition-boeing-will-require-all-employees-to-be-vaccinated/

In other news, Boeing released its third quarter deliveries:

The Boeing Company announced major program deliveries across its commercial and defense operations for the third quarter of 2021.

“We made important progress driving stability throughout our operations in the third quarter, as we prioritized safety and quality and worked to deliver for our customers,” the company said.

“Our defense and services teams delivered across several key programs. In our commercial business, we increased 737 MAX deliveries in the quarter, and progressed in safely returning the 737 MAX to service in more international markets.

We are also continuing to complete comprehensive inspections across the 787 production system and within the supply chain, while holding detailed, transparent discussions with the FAA, suppliers and our customers. Production resources remain focused on inspections and rework and the 787 production rate remains lower than five airplanes per month. We will continue to take the time needed to ensure the highest levels of quality. While these efforts continue to impact deliveries, we’re confident this is the right approach to drive stability and first-time quality across our operations and to position the program for the long term as market demand recovers.”

Major program deliveries during the third quarter were as follows:

Major Programs

3rd Quarter
2021

Year-to-Date
2021

Commercial Airplanes Programs

737

66

179

747

2

4

767

11

24

777

6

20

787

14

Total

85

241

Defense, Space & Security Programs

   AH-64 Apache (New)

4

19

   AH-64 Apache (Remanufactured)

11

42

   CH-47 Chinook (New)

6

12

   CH-47 Chinook (Renewed)

1

5

   F-15 Models

3

11

   F/A-18 Models

4

15

   KC-46 Tanker

3

7

   P-8 Models

5

11

   Commercial and Civil Satellites

   Military Satellites

Note: Delivery information is not considered final until quarterly financial results are issued.

Boeing to add 767-300BCF conversion lines at GAMECO to meet strong market demand

Boeing and Guangzhou Aircraft Maintenance Engineering Company Limited (GAMECO) today announced plans to create additional capacity for the 767-300 Boeing Converted Freighter (BCF) to help meet continued strong market demand.

The agreement, revealed by the two companies during a signing ceremony at the China International Aviation & Aerospace Exhibition in Zhuhai, will expand freighter conversion capacity at GAMECO, opening two new 767-300BCF conversion lines next year.

GAMECO will be the first MRO in China to convert the 767-300BCF and the only MRO converting both the 767-300BCF and the 737-800BCF. Earlier this year, GAMECO announced plans to open a third 737-800BCF conversion line.

Boeing forecasts 1,720 freighter conversions will be needed over the next 20 years. Of those, 520 will be widebody conversions with Asia carriers accounting for more than 40 percent of that demand. The 767-300BCF has more than 95 orders and commitments.

GAMECO, established in October 1989 at Guangzhou Baiyun International Airport, is a joint venture between China Southern Airlines Co. Ltd. and Hutchison Whampoa (China) Ltd. from Hong Kong that specializes in aircraft and airborne component maintenance, repair and overhaul. GAMECO provides comprehensive, high-quality and highly efficient services to customers, covering line maintenance, base maintenance, component repair and overhaul, aircraft engineering, and training and technical service of ground-support equipment.

WSJ: US to charge ex-Boeing pilot over 737 MAX crashes

Federal prosecutors are reportedly preparing to charge a former Boeing test pilot for misleading aviation regulators over the safety issues concerning the certification of the 737 MAX which lead to two fatal 737 MAX crashes.

From WSJ:

https://www.wsj.com/articles/former-boeing-pilot-expected-to-face-prosecution-in-737-max-probe-11631845255

Ethiopian Airlines and Boeing have signed a strategic MOU to position Ethiopia as Africa’s Aviation Hub

Ethiopian Airlines Group and the Boeing company have signed a strategic Memorandum of Understanding (MOU) on positioning Ethiopia as an aviation hub for Africa. Building on the two parties’ seventy years of shared history in aviation, the MOU aims at positioning Ethiopia as Africa’s aviation hub – “Ethiopia for Africa”.

Boeing has recognized Ethiopian as a global aviation leader in the continent. The MOU is indicative of Boeing and Ethiopian Airlines interest to establish a mutually beneficial world class aviation partnership.

To realize their shared vision, Ethiopian and Boeing have agreed to work in partnership in four areas of strategic collaboration namely: Industrial Development, Advanced Aviation Training, Educational Partnership, and Leadership Development in a span of three years. To this effect, joint multidisciplinary teams have been established to implement the strategic partnership and important milestones have already been registered.

Ethiopian and Boeing desire Ethiopian Aviation Academy to be recognized as a global standard for aviation training. Boeing is committed to developing Ethiopia’s manufacturing capability and aftermarket aviation service. Through this MOU, Boeing and Ethiopian will partner to advance capabilities to compete globally. They seek to build a 21st century pipeline for aviation careers in Ethiopia. They will collaborate with highly qualified educational institutions and aviation industry partners to create specialized learning and development programs to meet workforce demands. Boeing and Ethiopian will also work together to develop current and future generations of leaders in Ethiopia for Africa.

Boeing adds ANA and Qatar titles to its 777-9 N779XW, now gone

August 22, 2021 was the ending date of the Boeing Classic golf tournament in Seattle to which a Boeing airplane normally flies over the course to mark the end of the tournament.

This year the aircraft flown was the prototype 777-9, registered as N779XW.
When flown, it had large “Stronger Together” underside titles (above), with ANA titles enlarged on the right side and Qatar on the left (below).
The airline titles have now been removed.
Copyright Photos and report by Joe G. Walker from Seattle.

Boeing reports its second quarter results

Boeing issued this second quarter financial report:

  • Continued progress on global safe return to service of 737 MAX
  • Revenue of $17.0 billion, GAAP earnings per share of $1.00 and core (non-GAAP)* earnings per share of $0.40
  • Operating cash flow of ($0.5) billion; cash and marketable securities of $21.3 billion
  • Commercial Airplanes backlog grew to $285 billion and added 180 net orders

 

Table 1. Summary Financial Results

Second Quarter

First Half

(Dollars in Millions, except per share data)

2021

2020

Change

2021

2020

Change

Revenues

$16,998

$11,807

44%

$32,215

$28,715

12%

GAAP

Earnings/(Loss) From Operations

$1,023

($2,964)

NM

$940

($4,317)

NM

Operating Margin

6.0%

(25.1)%

NM

2.9%

(15.0)%

NM

Net Earnings/(Loss)

$567

($2,395)

NM

$6

($3,036)

NM

Earnings/(Loss) Per Share

$1.00

($4.20)

NM

$0.09

($5.31)

NM

Operating Cash Flow

($483)

($5,280)

NM

($3,870)

($9,582)

NM

Non-GAAP*

Core Operating Earnings/(Loss)

$755

($3,319)

NM

$402

($5,019)

NM

Core Operating Margin

4.4%

(28.1)%

NM

1.2%

(17.5)%

NM

Core Earnings/(Loss) Per Share

$0.40

($4.79)

NM

($1.12)

($6.49)

NM

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

The Boeing Company reported second-quarter revenue of $17.0 billion, driven by higher commercial airplanes and services volume. GAAP earnings per share of $1.00 and core earnings per share (non-GAAP)* of $0.40 primarily reflects higher commercial volume and lower period costs (Table 1). Boeing recorded operating cash flow of ($0.5) billion.

“We continued to make important progress in the second quarter as we focus on driving stability across our operations and transforming our business for the future,” said Boeing President and Chief Executive Officer David Calhoun. “While our commercial market environment is improving, we’re closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for our industry’s stability. As we continue to position for a robust recovery, we remain committed to safety and quality, while investing in our people, products and technology. I am proud of our team’s resilience and commitment as we work to rebuild trust, improve our performance and deliver for our commercial, defense, space and services customers.”

As part of Boeing’s ongoing focus on global sustainability, the company published its first integrated Sustainability Report in July. “This was an important step in our continued efforts to reinforce our Environmental, Social, and Governance principles,” Calhoun said.

Table 2. Cash Flow

Second Quarter

First Half

(Millions)

2021

2020

2021

2020

Operating Cash Flow

($483)

($5,280)

($3,870)

($9,582)

Less Additions to Property, Plant & Equipment

($222)

($348)

($513)

($776)

Free Cash Flow*

($705)

($5,628)

($4,383)

($10,358)

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

Operating cash flow improved to ($0.5) billion in the quarter, driven by higher commercial deliveries, higher order receipts, and lower expenditures (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q2 21

Q1 21

Cash

$8.2

$7.0

Marketable Securities1

$13.1

$14.9

Total

$21.3

$21.9

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$62.1

$62.0

Boeing Capital, including intercompany loans

$1.5

$1.6

Total Consolidated Debt

$63.6

$63.6

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

Cash and investments in marketable securities decreased to $21.3 billion, compared to $21.9 billion at the beginning of the quarter, primarily driven by operating cash outflows (Table 3). The company has access to credit facilities of $14.8 billion which remain undrawn.

Total company backlog at quarter-end was $363 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

Second Quarter

First Half

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Commercial Airplanes Deliveries

79

20

295%

156

70

123%

Revenues

$6,015

$1,633

268%

$10,284

$7,838

31%

Loss from Operations

($472)

($2,762)

NM

($1,328)

($4,830)

NM

Operating Margin

(7.8)%

(169.1)%

NM

(12.9)%

(61.6)%

NM

Commercial Airplanes second-quarter revenue increased to $6.0 billion primarily driven by higher commercial airplane deliveries. Second-quarter operating margin improved to (7.8) percent, primarily due to lower period costs as well as higher delivery volume (Table 4).

Boeing is continuing to make progress on the global safe return to service of the 737 MAX. Since the FAA’s approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 130 737 MAX aircraft and airlines have returned more than 190 previously grounded airplanes to service. 30 airlines are now operating the 737 MAX, safely flying nearly 95,000 revenue flights totaling more than 218,000 flight hours (as of July 25, 2021). The 737 program is currently producing at a rate of approximately 16 per month and continues to expect to gradually increase production to 31 per month in early 2022 with further gradual increases to correspond with market demand. The company will continue to assess the production rate plan as it monitors the market environment and engages in customer discussions.

As Boeing has previously shared, the company is conducting inspections and rework and continues to engage in detailed discussions with the FAA on verification methodology for 787. In connection with these efforts, the company announced earlier this month that it has identified additional rework that will be required on undelivered 787s. Based on our assessment of the time required to complete this work, Boeing is reprioritizing production resources for a few weeks to support the inspection and rework. As that work is performed, the 787 production rate will temporarily be lower than five per month and will gradually return to that rate. Boeing expects to deliver fewer than half of the 787s currently in inventory this year.

Commercial Airplanes secured orders for 200 737 aircraft for United Airlines, 34 737 aircraft for Southwest Airlines, and a total of 31 freighter aircraft. Commercial Airplanes delivered 79 airplanes during the quarter and backlog included over 4,100 airplanes valued at $285 billion.

Defense, Space & Security

Table 5. Defense, Space & Security

Second Quarter

First Half

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Revenues

$6,876

$6,588

4%

$14,061

$12,630

11%

Earnings from Operations

$958

$600

60%

$1,363

$409

233%

Operating Margin

13.9%

9.1%

53%

9.7%

3.2%

203%

Defense, Space & Security second-quarter revenue increased to $6.9 billion driven by higher KC-46A Tanker and P-8A Poseidon volume. Second-quarter operating margin increased to 13.9 percent, primarily reflecting the absence of a charge on the KC-46A Tanker program as compared to second quarter 2020, as well as a favorable non-US contract adjustment.

During the quarter, Defense, Space & Security secured an award for 14 H-47 extended-range Chinook helicopters for the U.K. Royal Air Force and signed an agreement with the German Ministry of Defense for five P-8A Poseidon aircraft. Defense, Space & Security conducted the first MQ-25 unmanned aerial refueling of a F/A-18 Super Hornet and successfully joined T-7A Red Hawk front and aft sections in under 30 minutes enabled by digital design. Also, the first Core Stage for NASA’s Space Launch System began stacking with other Artemis I elements.

Backlog at Defense, Space & Security was $59 billion, of which 32 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global Services

Second Quarter

First Half

(Dollars in Millions)

2021

2020

Change

2021

2020

Change

Revenues

$4,067

$3,488

17%

$7,816

$8,116

(4)%

Earnings/(Loss) from Operations

$531

($672)

NM

$972

$36

NM

Operating Margin

13.1%

(19.3)%

NM

12.4%

0.4%

NM

Global Services second-quarter revenue increased to $4.1 billion and second-quarter operating margin increased to 13.1 percent primarily driven by higher commercial services volume. Operating margin was also favorably impacted by lower asset impairments, lower severance costs, and mix of products and services.

During the quarter, Global Services signed an expanded parts agreement with Turkish Technic and announced a partnership to expand capacity for 737-800 Boeing Converted Freighters. Global Services was also selected to provide P-8A training and sustainment as well as C-17 training to the U.K. Royal Air Force, and was awarded a modification for KC-46A interim contract support for the U.S. Air Force.

Additional Financial Information

Table 7. Additional Financial Information

Second Quarter

First Half

(Dollars in Millions)

2021

2020

2021

2020

Revenues

Boeing Capital

$78

$69

$138

$134

Unallocated items, eliminations and other

($38)

$29

($84)

($3)

Earnings/(Loss) from Operations

Boeing Capital

$36

($7)

$57

$17

FAS/CAS service cost adjustment

$268

$355

$538

$702

Other unallocated items and eliminations

($298)

($478)

($662)

($651)

Other income, net

$199

$94

$389

$206

Interest and debt expense

($673)

($553)

($1,352)

($815)

Effective tax rate

(3.3)%

30.0%

126.1%

38.4%

At quarter-end, Boeing Capital’s net portfolio balance was $1.9 billion. The change in revenue from other unallocated items and eliminations was primarily due to the timing of allocations. The loss from other unallocated items and eliminations was impacted by lower deferred compensation expense as compared to the second quarter of 2020. Interest and debt expense increased due to higher debt balances. The second quarter 2021 effective tax rate primarily reflects benefits from a lower valuation allowance.

Top Copyright Photo: Joe G. Walker. The Boeing test fleet at Boeing Field in Seattle.

United Aviate Academy will train new pilots using Boeing’s comprehensive suite of training solutions

Photo: Boeing. Representatives of Boeing and United Airlines sign a training solutions agreement supporting United Aviate Academy at EAA AirVenture in Oshkosh, Wisconsin on July 26, 2021. Pictured left to right: Curt Brunjes, managing director, Aviate and Pilot Strategy, United Airlines; Bryan Quigley, senior vice president, Flight Operations, United Airlines; Brendan Curran, vice president, Commercial Services, Boeing; Chris Broom, vice president, Training Solutions, Boeing. (Boeing photo)

United Aviate Academy has selected Boeing to provide a comprehensive suite of training tools, materials and digital solutions to develop and provide early career training to United Airlines’ next generation of pilots. The companies commemorated the five-year training agreement with a ceremonial signing event at EAA AirVenture.

The comprehensive training package of courseware and multimedia materials spans Boeing’s portfolio of service offerings, including its Jeppesen and ForeFlight solutions, and provides United Aviate Academy with the tools to help cadets master key concepts and information needed to confidently and safely pilot aircraft.

The agreement includes:

  • Initial cadet assessment materials with accompanying online courses and e-books, supporting higher program completion rates through analytics of data-driven assessments
  • Jeppesen Academy courseware, textbooks and digital learning materials for private, instrument, commercial, multiengine and instructor training
  • The ForeFlight Mobile integrated flight app for pilots equipped with Jeppesen NavData®, electronic charts and Airway Manuals, a one-stop shop for flight tasks like routing flights, planning and filing flight plans, managing electronic charts and maps, and gathering destination and weather information
  • Pilot supplies including Bose headsets, computers, student flight bags, logbooks and more
  • GPS NavData for the United Aviate Academy fleet