Boeing (BA)

Maurita Sutedja VP, IR
David Calhoun President, CEO & Director
Gregory Smith CFO & EVP, Enterprise Performance & Strategy
Carter Copeland Melius Research
Myles Walton UBS Investment Bank
Ronald Epstein Bank of America Merrill Lynch
Sheila Kahyaoglu Jefferies
Douglas Harned Sanford C. Bernstein & Co.
David Strauss Barclays Bank
Jonathan Raviv Citigroup
Hunter Keay Wolfe Research
Noah Poponak Goldman Sachs Group
Call transcript
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Thank you for standing by. Good day, everyone, and welcome to The Boeing Company's Fourth Quarter 2019 Earnings Conference Call. Today's call is being recorded. The management discussion and slide presentation, plus the analyst question-and-answer session, are being broadcast live over the Internet. [Operator Instructions].

opening to introductions, Ms. for the am time, over call this remarks I and turning At Maurita for The Vice Boeing Sutedja, President Company. of Investor Relations Ms. go please ahead. Sutedja,

Maurita Sutedja

Thank and today Vice are Fourth Calhoun, will Boeing's and to to I'm start you it Executive of the with Chief Instructions] opening Sutedja, Boeing's David question-and-answer morning. Executive Strategy. Chief and Earnings Enterprise Officer Officer; President Maurita our hand Greg me XXXX Performance session. comments Smith, management Call. will and over Boeing's with environment Dave and President and good to Greg After Quarter Welcome comments, address and business and [Operator results. conduct some financial we Financial a

in And broadcast at earlier our press As we our presentation always, release as follow today's reminder, information today. you and can slide website through have provided boeing.com. financial a issued detailed

any have and are end Before you news web remind forward-looking we and this that in filings detailed our involve discussion release disclaimer at today statement estimates the of I presentation. our our and we various need begin, likely which are in SEC projections, in goals risks, to the to included

refer disclosures non-GAAP you earnings In addition, of presentation measures. for our we and and release to certain reconciliation

turn the Now I will Calhoun. Dave over call to

David Calhoun

my company. Thank you, the call I'll is to first President X.X this CEO morning state everyone. of earnings the Maurita. here as Good and obvious. I've weeks, been and the

the business, company and products CEO build the company. have that to new am serve the not people to I'm I the that the and While certainly new long admired role, the we

markets confident the we'll to the we We and technical serve maybe company's importantly, engineering moment optimistic right do. about and both of manage got and this It's But a lot for in the challenging terms of in Boeing. we a future, the that capabilities I'm more way, bring. situation work that I'm very

-- who ahead. those your and Flight make the safer, proceed, Ethiopian of loved will Air times loss. Flight XXX personally deeply to I Lion for and truly repeat this memories our Before our the and the say sorry can to ones perished many and Boeing will just I me let airplanes accidents, in to am all everything me Airlines we families do know the I we I XXX I associates industry Their in drive my and of accordingly. speak many, years for

the with and incorporating foot, transparency, have accountable been holding their over incredibly that safety spending of engaging do but learning with to another and highest I'm our and the connecting on and an created standards they I've what teammates stakeholders that we're proud century. lot how the and to let are front includes hurt on our ourselves across predecessors to with, back stakeholders outside-in and our one getting What a This legacy humility powerful we quality my and building perspective down. our Together, work meeting, country. employees to at weeks we've is committed disappointed hearing and my Boeing of also we Boeing, first listening last it. do with on seeing greater they're the

and our is I under I've customers importantly, which to business regulators. chain, stakeholders, finally, our our out external that most supply know X our reaching that, know To you maybe base, including been end, important supply of stress; also partners; businesses;

come. I many and opportunity to months whom forward look the to in with engaging yet with have others the I had meet with to weeks not

we the importance country. have I with important I conversations these and the am I ones certain of work the do what our All for had that do that we for support will laced have of the company, and are

forward. that be in transparent we do as move will we everything We

partner in remain We're grateful our personal my express challenging mindful for to and these are that want support. I this to your times we has journey. been for thanks who many, everyone

me new history XXXX, are my the airframe. delivering team. development when was on through since for a I engine share going engine When for you're of engaged of And on GE's the Boeing capable the you brief priorities first year wing, the the a aircraft centerline of business. thrust started of my Boeing. initial with XXX, in to the pounds we Before long-range XXXX let kind. I've XXX,XXX the interactions are known with of That its

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to As member priorities develop my week. a initial I able Boeing first of my in right institutional Board business, of away was the with knowledge

We please. can slide, the to turn second

service, and the FAA committed to and process. the lead and regulators completely this will we following airplane XXX ensure our First This they're and work. our continues authorities to the of our service and The includes primary the determine timeline for with with be working and foremost, return the safely. satisfied to returning focus supporting remain to certification regulatory global MAX to them fully

get every requirement We'll to the right answered. that Our it we'll is and way. get is fulfilled, job from every it question regulators done done, ensure the

oversight. governance Boeing know, included you in year, and challenges entire over to current These establishing has These and helping been last and well As actions design enhancing them. resolve our bright on the company. and engaged and engineering the lights the actively a management safety the elevating Safety Board and the safety realigning changes safety organization that across disciplines process shine underlie will organizations Board our engineering Committee

supply production health. also As the We maintaining temporarily and chain is decided production to we've this XXX system month. decision believe previously suspend disruptive beginning announced, to this least long-term

and production. to to We are to with will work supply safely return our chain closely ready smartly ensure we

and simulator computer-based with MAX customer to the in XXX training that pilots decided to for important stakeholder all us. combined return public, with confidence And training service. is critically prior to to focus, we've Similarly, recommend

singular take is priority as we every will guided forward be action, decision, we move every and every safety, it. Our by step

with risks currently certification ongoing that that informed flight last are the we of control XXX mid-XXXX. step Joint their experience the requirements. Operations further of week, ungrounding and address arise is for XXX accounts to certification also is It that As MAX attempts the scrutiny of our estimating known we're estimate the by the pilot process. Board the mentioned system applying to which Evaluation developments MAX's will subject determines at date in may begin rightly authorities every connection It with This to regulatory schedule process, the and our rigorous training review process.

to It requires influence reporting attempt the to to our that informed in service. most to or standard. regulators' supply other Very estimate not we return is important timing with and conditions financial schedule. determine up transparency, emphasize schedule to chain, its our the that and FAA absolute interpreted as simply, accurate and to the this Similarly, latest should interfere an be authority requires of of perform provide a name

these many and are trust, rebuilding commitment that through meeting to of do vital Moving it's We'll disappointed stakeholders touched we expectations. in recognize our a rightly earlier. exceeding in so which relationships. I on to We to everything and our on us, do briefly transparency by repair job or

listen, will seek We and respectfully. respond will urgently appropriately, we feedback and

all that around environment these centered integrity. oversight embraces is and inclusive and these quality else. Every culture accountability safety, will recommit Our value, foster strong X puts an principles to shared above and day, core we and

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the we complete and we it wherever our highest will do work We we station in standards. and whatever will do, to are

matters accountability. across our a & with everything We are to and approach what on This most businesses. simplification the focused ensure and Security we to just Defense, Services This MAX relegated XXX. the do committed deliver requires we is Space not or to in Commercial, do it

production health and be that, expertise across We to the with the smartly, particular, XXX in respect maintain to so will at and health, keep industry rate to standards restart production, taking disciplined within steps walls the ready quality. X of and large. We'll we'll MAX, the enterprise with manage workforce chain highest supply safely, both restore Boeing's the our increase

While doing all our of the lose sight of these, not we in importance will investing of future.

advancing never is Customer is increasing, technology growing. Boeing we've seen innovating must pace The succeed. are keep at and markets Our a competition evolving. to is demand before.

crewed Starliner and XX to includes XXXX business continuing aerospace. in full growth processes, become We'll workforce the and we preparing and technologies define safer, new more further of as our XXX of efficient new will MAX Embraer us work and progress to This services that global the of the invest implementation for global first partnership. future our continue help the our mission,

there strategy development fairly we said, that in some way. investment a the our do, product We'll reprioritizing always That and we will. streamlining can to and time are reassess methodical take

any course I think take. for new incoming that's a to natural leader

difficult and By this We'll strong, on topic priorities not foundation navigating keep keep the have unleashing is business these to intended our moment. I'm to return healthy simply to delay, it right very talent, to we future confident to while focusing refresh. this in discussions. the This

over role I rest continue and update business want to transitions. to to The ably had environment with me. challenging Before the partner, need leaders so together. leadership pause and on some we led set my changes for a during months, alongside him and be our of provided the way will leadership of the to working knows thank has I the Greg skill. it number But teams see, stability turn we and the to now be the will here company I'm Everybody CEO for Greg past time changes the our provided an few need the he have over of He for supporting have seamless we've leaders. and senior including performance, motion real the him and and in for excited strong he lead our it we this filling transition. throughout has has we paved the

And it now to Greg. turn I'll over

Gregory Smith

Great. everybody. morning, Thanks, Dave, and good

respect us have I and navigate completely to know, helping for tell Dave And Dave aligned of XXX% are long forward. of knowing I've lot we're in had path you, and the many and priorities forward our the And pleasure our you challenging I distinct As partnership. the company. to have the a through of times on the extremely these can path chair, forward look lucky him for we time. a continued for

X, overall our Let's to we'll and business discuss now Slide move environment.

years. fundamentals are in We and by the opportunity that sectors market backed continue over XX growing of to combined operating trillion sizable be a strong next $X.X with

healthy in see to global and Services. demand continue offerings for Defense, We our Space Commercial,

we see continue some starting However, in cargo pressure, to such we to monitor forward. the will as are that market, going

seen In this solid Commercial November. remain a in saw Aviation, intact. we traffic of passenger year, growth we've The some although fundamentals X.X% moderation through

the However, item of is the clearly a coronavirus near-term this impact traffic watch on year. growth

challenging contracted air and side, industrial be have trade On production rebound cargo volumes to due traffic the cargo in air market global to the and trade will XXXX. environment, key improvements in

steady of see orders carriers on. to support is eye definitely keeping are but freighters close continue utilization to will needs, placing replacement incremental something their while we're this global a fleet We

longer-term In the with affords the MAX the to time breadth implications. us presented the depth the challenges, grounding and and backlog of us assess our has mitigate narrowbody although segment, near-term

approximately growth of and XXX capacity replacement continue aircraft, backlog Our efficient older, has for see program to less required airplanes and a provide for creating new X,XXX these aircraft. we

Clearly, market and share our impacted has to by be continue delivery MAX. been the will narrowbody

on dynamics value impact we MAX XXX of the the Although we've direct this continue creates. not the in will marketplace, market a proposition monitor the seen to

down The facing Boeing time from order affords and of efficiency some term. in slot competitor these ample limited double availability operating on improving us aircraft in challenges to the program mitigate the production our both to is of near

and and back reprioritizing will future. product as investments. determine market are analysis will and the the be some forward. production we in our regards to on development system the part move asked of to of needed have team done design airplanes the the noted, we aircraft, build work what of family we Dave With as our NMA reassess team streamline as commercial of strategy to The We've the step middle

we saw XXXX for and in widebody order segment, families. the activity XXX In the XXX solid

term, the widebody has However, as we mentioned production our near before, the in environment in presented for trade the plans, particular, XXX global challenges program.

rate process, required. if our of the part we're As to assessing continually environment any determine adjustments are further

month per will XX late to the we from 'XX. rate that production announced previously We XXX transition per XX month in

to XXXX window further in in 'XX the month decision and reduce As to skyline, decided planning month before we're risk XX per rate reduce the 'XX in rate to returning the of we've a per early to and in XX XXXX.

customer with the we and a backlog it's the relationship. continue deal U.S. be to to will XXX we're Progress future prudent recent Phase that a and implementation closely times. of production of approach Boeing awaiting into more We're our between access given meantime, pleased the and proud very details X with the will continue part is lead on of our rates. and and trade announcement skyline deal valued think work encouraging, our we to how the take to measured production this this will airplanes our of In fit to obviously China,

risks going forward, into opportunities. account of will maintain process host this taking We to a management rate and disciplined continue

also appropriate in adjustments and future. will to demand continue the as assess make the We environment

cabin Turning which months safety The flight is and on to at will We're air last the and in ground successfully over and the testing expecting to tests the in the a We continue the -- and months XXX-X environmental program delivery last fleet, XXXX. be This to controls, year, coming reliability. test first aerodynamic evaluate others. Everett test ground to first XXXX completed series of many over of flight its the currently controls, conditions XXXX. demonstrate began among comprehensive performance rigorous week.

to XXXX the be XXXX. month delivery XXXX X the XXX, be rate for driver We XXX will per in primary the continue to program. on future rate Progress combined the of expect delivery approximately

corporation We will the service. of the the XXXX by minimize measured ramp, work rate prior number into take to a we entry in managing look produced aircraft of will approach to and change amount to

the as XXX, our cargo monitor and we discussed I carefully continually earlier, the skyline. closely manage On market will

transition in process starting month. are Finally, X of as we we XXX to previously per the rate X.X announced, production to the from

Security, global we At programs. Defense, major & for see and platforms Space demand solid continue to

In provide of including products, for addition, range support the the of budget FY enacted 'XX broad a F-XXEX. procurement

Our innovative, and portfolio needs future. and remains affordable build to new franchises platforms proven the with world-class capable current to positioned well address

existing MQ-XX, our focus Air Commercial the Hawk especially platforms, maintaining a working KC-XX Red are our Space such Grey future ensure on our on space We and programs T-XA sharp performance and Systems. franchise U.S. program Wolf, Force MH-XXXA while Crew the the to including as Launch strong and programs,

a marked Crew for month Commercial an flight significant or test Last -- with program CST-XXX milestone Starliner. orbital the uncrewed of the CTE

space XXXX NASA. test the uncrewed is However, venting anomalies mission, reviewing as in process reported, is astronauts was approval due with on docking to the mission data the Station. Space of contract this company's December test a with station, experienced and board. the from proceed flight became the during required to our mission, NASA's And with docking the to part including the International NASA abbreviated for of the with

are we this another in reflected you'll BDS impact crew financial provisioned obligation, see for and results. Given this uncrewed mission,

Services trillion the XX services our over $X.X next sector. company. a The for is years significant to the opportunity market Turning

by and the see who chain service our to impact continue digital our of BGS has timing pushing The the service impacted have on grounding. global with We supply our growth growth from been MAX some customers expanded of in offerings back grounding by airline XXXX demand solutions. had portfolio

We this to resolved over expect be time. much of

the healthy chain stability. supply production to the system backdrop Given demand, of critical is ecosystem sustain

we production extremely health navigate especially and Some assess grounding readiness critical and challenges suppliers be past. production forward. production current And rate the rate rate therefore, outlook. the we of changes are rates engaged will as Suppliers' as going had and we in the with have MAX

for Slide year Let's to now our turn full results. X

continue impacted Our were operating reduced. to by grounding. financial and MAX earnings results the be materially XXX Revenue, cash share per

negative cash XXX MAX share was for primarily by impacts. operating Our earnings revenue partially MAX and again, per a to billion, $X.X higher service XXX of $XX.X the negative volume. billion the the reflects year, Core offset full due was impacts, $X.XX

on our now to Let's Slide move X. results quarterly

and of negative During $XX.X $X.X operating operating the core recorded cash. quarter, per billion of $X.XX we earnings revenue -- negative share core billion, of

financials we Before segment performance, over MAX go detail. more XXX in let me discuss

In made is quarter of we financial reiterate, Turning regulators let now X. delivery, statements, timing and and certain Again, will production the timing to the preparation FAA rate of conditions it Slide determine assumptions, return service. profiles. ramp-up our resumption fourth to me including and global the for who of the

begin require will combination and will deliveries undergo approval assumed We've regulatory to MAX the simulator XXX also to pilots regulators service, that mid-XXXX. assumed that of computer to XXX enable a We've for as of condition MAX in training. return the

we will planned rates timing few low are at in of conditions previously XXXX that the assumed gradually expect And MAX understood. over to better then increase We've next service production rates aircraft and production to XXX we resume as return years.

that delivered during stored assumptions assuming them financial after these to will also the We're additional us Any of produced majority the impacts. of to year resumption and over during delivered quarters, first with XXX require MAX the several deliveries. the airplanes grounding will recognize changes be

quarter, return Adding costs and $X.X brings additional accounting units billion block additional current aircraft to program in in these the primarily reflect the XXX of reflect rates the regarding cumulative fourth be costs added service total to the production undelivered of the timing aircraft of the complete reduce therefore, This margin. accounting $X.X to to X,XXX the spread time billion. approximately is and produce we planned will XXX and, program quantity. program to the These across the program and In costs impact required program. of to timing assumptions undelivered the

XXX maintain during labor XXX the This GAAP. production includes as MAX be production costs costs of recorded suspension our decision infrastructure, including and related production some the production. abnormal must the suspension U.S. to In rate low to means costs addition, under the that

sustain chain made may and system the you recall, months. supply efforts health gains As the is decision this quality our of over several part production the to and in last

X these expect be these will through We primarily costs expensed to the abnormal rates Since see incurred, period These rate low, production will to costs the you'll starting these deemed XXXX, quarter. flow loaded. the be portion be first in the currently when is are earnings front-end we abnormal expense approximately be as estimate the expense largest in billion. of $X costs and as and

of to MAX included During as the in estimate XXX of and as disruptions based XXX our estimates on delays. reassessed information latest customers quarter, the insurance. billion delivery recent we recorded assessment, considerations grounding associated with This $X.X customers. billion related liability impacts our we for the brings also assumptions $X.X to other the concessions reflect potential to updating and net to reassessment engagement well added quarter. This on to cumulative Based total our the most

we've As individually customer by the addressing mentioned, we're customer. impact

to years, the cash will conversations cash be In concessions number loaded be the individual expect customers. years we in-kind We but, and but few in be see balance a first XXXX, over impact upon other of $X.X any the liability course, through revised we dependent reduced to considerations other to also billion payments with continue considerations. or front-end of more by

suspension rate accept and and and impact the customers to profile; the the considerations. our returns the potential and can deliver service the XXX Looking be related key conditions; return fast how ramp be concessions production we drivers ramp-up, to service the discussions aircraft; XXX line fast other with which will delivery dependent will and customers of time to forward, and the once on duration how the continue aircraft financial can of to regarding fleet

the to to our rates. service, return up to be financial continue customers production and to resume impacted results expect ramp deliveries safely we XXX adversely MAX We until

laser-focused scenario service understand fully customer range the perform financial more productivity. that liquidity, production to manage detailed also on chain, spending manage of rates, sheet our I'll deliveries talk supply later. on a little around outcomes. continue We're flexibility, about We return and fleet our and analyzing implications including to planning and to the taking balance to actions our our stay prudently increase

on to Airplanes X. move now Slide Let's Commercial

years declined revenue deliveries additional XXX customer at to and estimated decreased negative aircraft quarter business XX%, backlog billion $X.X reflecting X,XXX and potential includes and to of Our to BCA during considerations. production. both the than $XXX more Commercial operating -- billion, other of billion valued X equating $X.X Airplane concession margin concessions

the as program. on the decreased the additional Let's Security Fourth million now in reflected X.X% provision as & a previously reflecting Crew impact as Slide charge of for volume pretax affected several Crew BDS Defense, performance mentioned Space portfolio margin mix Commercial to $X well across to move Commercial on items program the charge, within as uncrewed recognition billion, to revenue lower the for portfolio quarter. of and which X. the quarter well mission $XXX operating the the revenue

worth contract billion, key During and U.S. stands quarter, outside the the now billion awards our $XX XX% at BDS won $X from with backlog

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the as a and of mix partially services brand a in to gain BGS operating related well distribution as onetime retirement of We the by on businesses Aviall under were of XX.X% consolidate products brand offset the as we a Boeing divestiture. margin noncash charge our quarter. reflect

the $XX During brings awards BGS worth now approximately which $X contract billion. won quarter, billion, key to its backlog

Slide on now XX. flow turn to Let's cash

the expenditures. advanced cash XXX mentioned, receipts and a operating driven inventories payments, lower quarter was I As higher billion lower timing negative and flow by in fourth $X.X deliveries, of

and business from during expect liquidity will flow balance cash from adequate production pressure continued help parts flow cash MAX operating provide of time. this the other levers impacting further sheet stabilizes. We until the Strong

have at sharpen the right ensure to including assessing on closely expenditures. We our to spending operational look also excellence, of the focus of and continue we timing all prioritization aspects noncritical

to this initiatives key period. accelerating navigate we're capital help working Additionally, difficult

sheet program and XXX billion the in remains to processes share are our better Dave and pause. continue we term, mentioned, top repurchase balance the the liquidity tools. on managing will production in people, and the necessary be increases continue fourth new make leverage in and see we But and we will to also execute quarter, business, $X.X stability Near as investments our dividend, the deliveries in and resume, technology until rate production system. MAX our priorities paid During

Our debt elevated been liquidity business cash level levers continue reduce has planning grounding, more we debt priority and to challenges. normalized for all will Again, the evaluate during deployment are Investing our generation level. the flow available once it next will current our and our we repaying to a returns immediately to as we remain cash navigate few in the years.

to billion and increasing the we balances on cash helping quarter, up $XX quarter challenges. our debt to Slide securities. marketable additional billion We work position now paper ended the XX. current We Let's liquidity the in cash raised shore with and through the balance MAX move commercial and of $X.X debt as

facility $X.X and strong providing through with Our substantial markets strategy access of our borrowing capacity credit a capital sheet balance billion. us of maintaining of

we've commitment strong to the closes sufficient of could received term when exceed facility. February. $XX of this billion the on banks amount in demand, size the Additionally, transaction Based entry loan into the from facility a syndicate

flexibility impacts sufficient have ratings. of to but on at the We the navigate we operational the sheet additional balance challenging time. Currently our are levers A-, this has debt mindful AX, credit and confident

flow, particular, be significantly XXXX in XXXX. Cash financials to impacted will the year Our negatively more MAX. this will than be by in impacted continue

than use payments primarily of delivery be MAX lower to greater in flow will latest the be based 'XX, due XXXX to advanced assumptions. our XXXX XXX in cash on expect We XXX

to production I year. discussed, entry due I As as expect increasing and we're mentioned the a the our will impact this in additional widebody reduction, XXXX. to receipts XXX XXXX well current headwind as our assumptions, higher consideration previously, Also, be service cash customer be as rate liability into

decisions, but Keep to expenditures cash and payments these as And place rate. program see near our long-term including to inventory, system make production keeping supply we continue our in continuing are our the in derisk future XXX investment workforce on to production despite require mind, the focus invest we'll stability examples for in health term. suspension on chain of will in to the our production the

Given current rates, future these is as as and our XXXX. until delivery cash headwinds expected and flow MAX recovery to production return on well now to assumptions start service XXX

rate We the with to on information. to MAX as we production progress return providing plans are more committed you and have service updates additional

clarity, call further we to have will the follow-up and capture conference recent financial widebody a the investor of most will implications guidance, financial media the changes. schedule including we Once impact puts and discuss the provide which and takes,

to comments. So I'll that, turn Dave back over for it closing with some

David Calhoun

the we everyone Greg, thanks. as Thanks is airplane. as confident we're and sky, to our taking end get I a this wish on and is committed airplane line. moment. about we're just as can the the different, I'm We going other but get I'm well. in you challenge. to do excited I in this MAX to the know regulator moment will know of believe The this I that sound airplane. through and safest I to deliver this moment on was want be can we this through

So we're now appreciate thank that, And he partners. process, questions. this open and at line up this But big really I has time since I for Greg again, last with it. want to stood any transition to rate, tall and in the

Gregory Smith

Thanks, Dave.

David Calhoun


Gregory Smith

I appreciate it.


Instructions]. [Operator

Copeland of Carter question Melius from Research. from the line first comes Our

Carter Copeland

you Can hear gentlemen. Thanks me?

Gregory Smith

Yes, we can, Carter.

David Calhoun

can. We

Carter Copeland

value Or by level us? change broadly, of on I impacted MAX what's there. wondered little I pricing confidence monitoring the the for -- your a having if not are I that referring you to what proposition mean, sold be won't for market And you comment expand expand materially term, that guess, made about aircraft bit are guess, the dynamic comment longer you on might can unsold I short and you just or more the aircraft? Okay. we you've MAX seen?

Gregory Smith

the go think value backlog. the And first is market folks customers, to the in the look, obviously challenging for into very No, And airplane got X,XXX our this Yes. want aircraft Carter, and proposition but we've I brings backlog, time airplane. been the unchanged. a has

the So period, customers. look, and on that's put realized a the in we grounded we're strain

we're value that But intact. the franchise So of still the closely. proposition remains monitoring

I in going do we get the and focus delivering system safely said, like ensure production as on have has stable as And and to the our to right said, Dave and customers. we're it air, this our said, Dave thing airplane now, move that at this up back we commitments a time, one

David Calhoun

They Yes. airplane. of the value In it I've I've of do first but prop talked it me customers, firsthand. airplane, about believe a whatever weeks, want. in believe the They everything lot, get this our with large the heard most they they tell to and couple when of means still in


our next UBS. question Walton line comes of from And Myles the from

Myles Walton

repairing Dave, you're And and step went I view, you've of isn't view everything seeing outside able been how or to able of the a with out the to inside. table company changing maybe familiarity But this role. been that just what kind of how orthogonal so coming wrong that needed, wonder to step there's an you've take of familiarity, and/or more different maybe that relationships. reorient is, the tone from something just experience of it if decade a

David Calhoun

of that I question our hear, saw? an seat of no that effect, answer somehow make all Board simply read in the I an sitting insider. had mistake, media seat. they front the see operating to a result the impact, change a if a seat. I that bit? things everything I'm I get front get I took And What as me action the attention and And an differently and idea little let little And ultimately, it. you row Well, a have have lot they I'm all and one now because around if I a you row What a told maybe so

So anybody. I believing things on we've on to and want work regulators believe customers to I relationship tell when the industry lost be I with and don't know them. treasure me changes with others. always to and I them. they across something, it my I And got make. to fault

and know might it to confidence any think think differently I I there, it. The don't yes, work do our nuance and, got put you faith confidences and to the working to see Boeing what going restore culture, so I I'm those you internally And have the trust, do. than do. can Company. I'm job probably hand to in I all modify exactly on I a and here that's bet restore we at but I

Myles Walton

competitive And view, you market? there orthogonal the deficiency in from do in is a think that narrowbody offering

David Calhoun

Say that again?

Myles Walton

the Do today? you in a think competitive offering market there's your narrowbody in deficiency

David Calhoun

customers, But sometimes worried our that. that No, that actually going from airplane and development I type lead, MAX the feedback you I performance to business, the ultimately about Yes. the airplane I don't. we're in in and by you sometimes the business. family All type, don't. we're I'm know and not stay of this in got the said, development airplane get in to

needs So the be. what we're at to next looking to keep one going

suggest don't deficiencies or everyone me don't I immediately want to want do that to it's near sure understands to airplanes. even to have fleet do is -- the there. wanting one. the big make signing see to not not that we anywhere convey I NMA narrowbody today. not up I And me you is We'll new

with whole along I'm hand, I'm But about I started It's and X we'll can it's I -- news. honestly, getting On and simply to since my I'm the think And airplane up. over in the commercial the all now, right going of, new it product. believe going with yes, MAX, leader, markets. going then new it get out to discussion. to refresh every just years to we customers that way other listen been


question comes from from Ron Epstein of next of Our Bank the line America.

Ronald Epstein

picture a for question you. Maybe big

what couple how the that I happened, you to my this question we company, the you're do culture, since really a focusing it's times can on demoralized a the how you've and it some big press particularly some had things bit seat organization? be that mean culture of And is might went right? of workforce predecessor we you in front talked And before so did in given answered, is places, on row -- question here? a the never You've asked change the mentioned he a the that's of And when that get and texts when of got something a I Board you your around. infer. this

David Calhoun

question. Yes. a That's big

go what all, happened. of first to let's So back

same environment relatively that should that MCAS engineering the in failed something can There a question miss. So think fixed culture that you think to made the are can should we about. have disciplines an deal boundary mistake. condition apply design get with known and don't regulators to The I to I quickly. contributed that

simply did. I disciplines think

make to to watch all I that wasn't of appropriately. didn't didn't apparently to detected. relatively really everything that, Boeing The training it react of my that things does. in was for group The small think and horrible going relegated And would do and system power question folks, like writes, IMs to or with have listen it sure forward a but it the recommendations to respect like people

think more we our has Listening than I that culture. about with to it. of. believe then they in finish through not our processes. be XXXX, get flight, and do think Boeing, that will that technology, fly that, you'd everything good all And starts all in impressed People -- tested And move patience, it first if they ever I of engineers. me. a flew want you and rigorous And this and way that and more are it They to are mistake, tested slowly, you And it we all process can in this it. or They leadership, in let's change or tested product we'll history need with with more you disciplines looked you. disciplined to line, at successfully sat And be follow near we'll and on promise will. seen. certification starts every did we And will steadily, it, plane,

in broken. role have And for entirely isn't culture. Leaders fix thing culture, a how this step a the every stakeholder investors. I perfectly in to way. anybody is. have everyone. convince of of that It's obvious interest don't safety to the the and including a It one to at setting is to massive So every inch stage to best that setting play I time, demonstrate have

no do priorities have step to convincing I we So forward. no front. I on that competing will have as

so hate but reduce that's what to simple, I that's And to all things it about. it's I think


question of Jefferies. Sheila the from Kahyaoglu line a have from We

Sheila Kahyaoglu

whether dynamics, that looks of about like some XXXX, what of that's manufacturing talked with about guess charges I you rate challenges maybe at XXXX grounding, potential the the the of touching segment market processes like. the Commercial longer-term and about by offset XXX what think If of MAX We in a delays. Boeing? cut we and clearly on lot how Carter's talk looks implications could Airplane question, impact XXX do

Gregory Smith

Yes. to considering where and And widebody Yes. of on think I side, I think talked we Well, to it's with of through. the the skyline, rate prudent, delivery as we I'll outlook dynamics point deal way the associated in the about work a a we got actually of timing we see today. kind say, we and think, profiles taking some the trade global, said, a our some still a trade steps

time we're So marketplace I at being rates. prudent and looking the think and here those in that moderating

in in you that Now the having demand the still that said see market franchises, see backlog that, widebody great and for you outlook. the there's all and

there going forward So continues strong. I think potential to be the

been rate, is this versus up and saw and you as investments customers for of overall XXXX On term. you're result stability back all on in these you making to and franchise, That our under year been line talked think healthier we chain a if predictability of the about, these assumptions even certainly grounding, a on delivering during going long to we've have time there's put Sheila, the today what ago, I it. supply in processes but a time narrowbody, to saw the in activity tremendous getting place help our ultimately the in tools

it's that's of in it, So a during But that's get a this been a really one place let's huge critical face level today. time. to but effort long-term play,

that on delivery our ultimately stability and again, predictability, So financials. and on then have profile our we

during we're investments. the then productivity as investments this, still we And we're well And mentioned, on the in making making R&D as side.

that, So pencils. we focusing we're the to have on we're and we're it, sharpening the long-term again, franchise come. and prudent potential really being franchises that the But -- about is being

David Calhoun

And that a deal matters that the on. I I'd if Chinese had think lot. about and a it portfolio I widebody like come with our and we've relationship them, and rebuild we and back everything like we to trade products always believe The I stimulus. is customers narrowbody. the is major is I follow enjoyed it think what field, of

Boeing's constrained. And have that limited process. of Secondly, the chain believe side this and industry that of I has been supply on actions taken some been

believe, pause, fixed. some I being During we that readiness -- the this are of questions

be I not as as to begin think will itself, for and forward And think don't been alleviate just we'll going have I'm industry, us. for speak that supply now I to supply-constrained we chain the date. to trying

those am I optimistic of but angles, ones. lots So I are from the think big


line Our next Harned Bernstein. come question the will Doug then from from of

Douglas Harned

then you're BCA. how as how at decade The the efficiency regulators on to certification. one at you've MAX thing time over I'm XXXX, then And support to comes term, customers progress next. operationally you're challenges And the decide predicted also certain, you rate of to want does against got spending short said, a wouldn't we the to look I to on talked on the on the it would we'd Boeing deliver have wait of thing as be too what in The at think you And I'd the restart down, you in half long the with compete want and the going the improve Dave, year, you MAX, decade. XXX looking see to Airbus and to course of as that conversation. look about, not is could back the is is like ago, this having

there? on short-, so of your medium- how your plate, to So of the with across all issues leaders outcome what BCA, new on the time? get are you prioritizing year, successful of we long-term a And sort when you this consider and end would

David Calhoun

-- question. the Doug thanks so one, for Well,

you you Didn't turn As way looking different MAX exception think. in back with as at I the remember XXXX. of pickup, said, out might all actually the chessboard as this the

are We very getting on a Getting more cycle world. than is important decisions fast. right way long them

mistake So about that. I make no

with points is of regulator also getting a the to lot course of Rebuilding and year. the the has One, of It's in rely over important. significant from a of customers critically our important this in on the view. our The priority it. way back of our itself institution relationships my process up MAX MAX economics the be

always We on be dependent will those relationships.

what of as X.X of edges The view then to And want that tested working -- to tumultuous. on will. airplanes. want get it exactly to think will the to of of anybody some I refresh been that's types just the some has than respect don't development, I in with all out demand finally, for our airplane I I last more have market It view, there. the is. on enjoy right airplane And years new my the

airplane, not had learn to it. And that. think I've previous we with And in move in than creating my so from life. But hesitate I that tools think have on ever had next to will I to work forward I competitive I more advantage

in So at any rate, of all have that. I confidence

in confidence year indication back I a got going original necessity the our The don't I focused question, that I'm forward. going don't It I the almost -- about to of have across front not the it out fact and back this coming that we exclusively an the that our on there, for Boeing is over feet. that anything course We confuse will fact get anybody get will simply get is start us. to going the your of to But be want to talk want I and process. MAX, to to on

don't And confused me, what please. from that's but mostly so, again, by you'll it, hear get

Douglas Harned

But I XXXX? this or How financial should financially, you do when certainly, to and too early have goals goals translate in XXXX this Or a that put do And way? you're if this treat can, look year, year. of it this think thinking will you be into how rough you that? together, when you is all at

David Calhoun

it's to that Yes, too early think way.

going I'm people this engineering Boeing in our restore in the also Company stand get here head, to their function, will investments to I'm forward, an regain listen puts going to are again, airplane I to required simply lot everybody The conclusion and, that and moment, simply going -- follow. awful safety notion every I'm confidence a then not do. to to our I'm to that my confidence believe to that all up projections have jump that going up conjure want now. certain might through I the of And While before I be don't of


come next David of then Barclays. line the will Our question Strauss from from

David Strauss

during I chain support wanted and I you call. provide this sound approaching Greg, to to halt? you you for you're not are to chain the doesn't during to the going Who are chain you're the to billion, mentioned telling discuss halt. this? everyone support the supply how you approaching telling chain it needed How is think the the is How supply like this to chain or supply of you do much financial supply guess, some supply overall during $X -- halt. are

Gregory Smith

them not David, I and their engagement, would tell just you, a it's No, one-on-one suppliers. but Yes.

come that And to of so what that and kind them healthier, game, I'll help this we them get have levers And is this again, a understanding objective we do with impact on to and frankly. then all and through say the out the having we're long want in order playing suppliers them tiered-down quite of this.

level of is is production been type a of working at a bit bit engaging one different needed. of each this. we're how has and assistance we're them Everybody, So and of as a little what about through how little you different know,

there's levels So inventory. of different

inventory. you, get is tell around them, and has the been where or making to are a smart engagement ahead by trying by where supplier, supply in our get their went So of keeping going this, to folks with we decisions and assist. you're But I of if variation supplier them very informed say, good would and and assisting I can would build they what you rate again, chain

for and with got we'll to long-term we've healthy. some them, need again, healthy, to yes, this objective. We them term. help We the be long So, provisioning them and playing to want the be do continue here to we're that, in

make XX, rates is that supply to them going more key into these the will about chain the of we stable, ultimately forward. some healthier, taken again, be the our which we've those supply even more on productivity going things predictable, has talked that, So production chain to team

David Calhoun

travel the they discipline might in our simply factories design as that's accelerated add, we faster line. rate we an never said, return these of the just to they, in reinstall want that the in protection will -- MAX that I rate. a That's I their actually that by will months will ours, be so work. important with we and ahead our as be because early And beneficiary at

David Strauss

and that one is then Dave? -- for ask planning year. middle resuming? resuming accounting purposes, I you assume clarifying then deliveries of deliveries and I I the think some purposes, lag cert certification Or in Can between cert you or it and of mentioned see the sort certification question,

Gregory Smith

kind monitoring inventoried that aircraft, stability bringing way we'll line be frame then reach make when will each objectives But way. time got tarmac, time grounding going But the midyear the We've it's as lifted, once then Dave. move. step start we the of with like very our stability, we frame, ramp-up. of kind prudent that be priority in a of up the that. very and to those off time is Yes. slowly moderated, and say, the to methodical will be said, priority next I'll we a the And and of the slow, getting X, associated in a the about, And airplanes talked

Now slowly lifted, that keeping line risk during grounding. to the period currently, right think mitigator. the be at onto program, as the time They're are then that and confidence bring again, grounding getting at empty. -- level we empty. look resources these But the that that back of empty going will lines than we're we'll earlier of lifting of and our of a They're now. start mind starting to We'll in looking the actual

we'll it very as make that game into slowly bring decision crews to and bringing back position over, that's in we stability but so again, but plan And X, return play. the to them get that closer start methodical, today. service, see then we we'll start But the get

David Calhoun

us that for on of which, process question it. pressure certificates course, tightly that And we've run FAA. new is relates to with and be a much for think and process, of going to involves to not room unfold methodically I And of I course, by very, airplane, this and provided the plenty too think, if the

the our out that's So time in laid way important line. we've


the We have Citi. Raviv a line question of from Jon from

Jonathan Raviv

of the of versus the some being use talk In cash about and context can state the the in relevant BCA, understand generation Commercial, 'XX a you cash pieces moving here? in perhaps certainly think the 'XX, of outside which topic still is of a bigger businesses I Boeing

Gregory Smith

bit than slightly around of from lower earnings the timing. outside or this of that on It's lot nothing performance-wise bulk receipt less -- pretty conversion see of BDS, will operating par. little BCA. that, bit It's And lot an at it year. performance, cash little timing. with headwind to remains headwind than a that. we'll Yes, last a yes. much and just core variance XXXX. to but But timing a is operating BGS, just on But of of the timing. I'd that and The the cash, BDS, of core in be again, than say award And pretty is a consistent But On again, more year.


Goldman We Noah have a from question from Poponak Sachs.

Noah Poponak

I order of changes wanted margins Do also visibility into XXX stepping pace to kind into there. the the about up demand ask the given and then and you supply mid-XXXs have the rate month or while still a building XXX. XX per even year but there? the for Because and below a over the the a has XX you're been XXX, at order month

but then, to don't sustainably. that that the input many know versus increase talked the is -- I fill China pace would to it on at a that Is margin, able XX? just order And at about cash is know China continue being I gap not planning true you've an slower widebodies or So at XX Greg, margin, not on XX. to still that if

Gregory Smith

discussed under yes. productivity. over not to has supply improved the our mix before I'll continue these slope reasons the But was, obviously that for between over and margin again, amount the it as That at unchanged. period moderated profile Yes, is still see story Obviously, lower same, chain, we've growth all own but the cash rates. say, of we

head-to-head a that continues. marketplace. think, in the been at the it. supply-demand, is the deal, I'd big of as XXX, economics and China that's outlook a deal. there's been rates. to going mistake of these market. widebodies bring there. is On you well It's continues production big at play Outside is one market and in the we've you've say XXX-XX. The the seen, lot we've a the that, field. to Don't a winning the with big great long-term airplane the family, And extremely when that When look I is probably XXX replacement address the forecast, XX-year And more underserved suited still this And point into

to market. think in the I more and we're within more think going proposition is going the coming we what considering -XX. continue for that skyline, incredible machine I value as I'll replacing say It's just our replacement an be see for demand market, customers, our especially to to see

adjustments today, are continue to we see think lead a XX time. and thing this we we'll do and is that go have confidence in that, And to the do going again, XX China, to month. have we it make times on out our a watch one to as whatever into Outside big good item. So skyline? needed. to do, work of And Absolutely. at monitor, prudent But we campaign play a the we're

Noah Poponak

XXX Do you need of X we out specifically? Phase do to get Or order X? Phase come the China to past expect

Gregory Smith

the then deal I into -- clarity. provide and model when -- the with airplanes when are -- actually we're at China. get that, of it. we details those our I have of a more the a And know certainly, on government between don't we'll we're with them. this we No. engaged but know we'll clarity But trade that part we And don't point, part customers, know point. -- at this get big

David Calhoun

has reason X. wait to no There's for believe Phase to it


a Research. the Keay from Wolfe We question from have Hunter of line

Hunter Keay

decider here. So the obviously, FAA I realize, is

assumptions clear. that and of very after spirit or And few recertification? ramp the we've you potentially care share get resuming is part XX comfortable rate to But care you over X fakes head months then the question before how would last transparency, all certification second You've so? made to given you that months for the the can production the of would -- MAX accounting your the had in

Gregory Smith

it. to going to that Well, we're we a going but Yes. maybe is exact back, just confidence in time that of want on what again, game a just, turning We're point level to line obviously, back the return on slowly more to as on think the crews to build see have store airplanes that one, service and put confidence have level Don't we plan -- frame because, a higher them. don't finer as on. I'll bring

game So as But that's sits it today. remember, again, the plan empty. line the is

the will in I'll our, of is of obviously, more us big which to introduction that first take position, going slowly be and line. in that's to kind going slow a and up. us, confidence milestone, production some bring it's behind So give to that But say, cert time we'll have flight the

plan game the on that's So that.

if has has stability at next going to maybe and would to As stability. said far We equally, got increase. look, keep as of ramp We're thing a airplane the the we to delivering not going chain time, rate as many important, off more on increases rate Hunter, and the think back. the start say, supply in make I time. this We'll a one got we one position, ensure and have just to step of us, to or forward, the -- increases rate going get Dave we're work at

really we've got again, that a are some we And going one the stability do made is, game but here certainly in assumptions ensure there, we've this time. So to at to playing long with suppliers, and not a say, and all much delivering will production, more that ultimately us our but then to I'll institutionalized, customers. it have just predictability and predictable to say, I'll cadence

once give we the I that that keep will guidance our you we'll posted plans and guidance. I'll the -- said, on kind you more clarity say rate and moving time, going support at we'll plan, we game of pieces forward. this that's provide like once So But

David Calhoun

financials I this one think of just That and have I built philosophy, we will reiterate a reflected does is our matter. because set expectations. it time, into at what in

we going about it airplane. next exceeds hope that expectations, think get go one that I We're but way. can So at to simply not a at a time we're those every to going rate to


Please go ahead.

Maurita Sutedja

That concludes our the question-and-answer session. Thank you call. for joining


That you. Conference completes you Fourth Earnings Company XXXX The for Call. Thank Boeing Quarter joining. Thank