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Boeing (BA)

Participants
Matt Welch Vice President of Investor Relations
Dave Calhoun President & Chief Executive Officer
Brian West Executive Vice President & Chief Financial Officer
Noah Poponak Goldman Sachs
David Strauss Barclays
Peter Arment Baird
Rob Stallard Vertical Research
Seth Seifman JPMorgan
Cai von Rumohr Cowen
Rob Spingarn Melius
Ron Epstein Bank of America
Sheila Kahyaoglu Jefferies
Doug Harned Bernstein
Myles Walton UBS
Call transcript
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Operator

Thank you for standing by. Good day, everyone, and welcome to The Boeing Company's First Quarter 2022 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 Mr. introductions, for call turning time, to over this remarks I'm and the At Vice of Welch, Matt President Company. The Boeing Investor Relations for Mr. ahead. Welch, go please

Matt Welch

Thank Executive with and me Boeing's are Welcome Vice Dave Call. you, President President morning, Chief Brian today am Quarter and West, Boeing's Chief Executive I and XXXX Officer. Earnings and John, to Welch, Matt Calhoun, good Officer; and Financial First everyone. Boeing's

through you reminder, broadcast follow our website can boeing.com. presentation a As and at today's slide

detailed information our SEC goals including in web provided morning release have statement earlier today. and in press filings risks, we estimates issued the this forward-looking presentation. we disclaimer always, As our financial in those described involve discussion at our and of Projections, the in include this end

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

over the Calhoun. will call I to Now Dave turn

Dave Calhoun

more turn financials and Yes. to Brian Thanks, comments few Matt. a upfront look a I'm to over it the make quarter. detailed at then going for in our

need I I passengers from XXXX and friends of away, the extend breath and passengers. to Those prayers Eastern, those of our take XXst to the China thoughts moments. customer, rough the took our that to things crashed on Flight company, and Boeing and good our These always entire crew. want lives unfortunately course, families of are of and the of XXX March, acknowledge First, always

hard is in that XQ, make we that lead NTSB Those Russia run would liked. of along supporting COVID, at presented everything big have do. leave much will a continues are the And fact, is, the in and investigation. soon NTSB unfortunately, the comments issue the middle the is, challenges both we CAAC, as but Eastern to Unexpectedly, some team accident of take didn't only as lines that are Inflation supports the pretty in investigator. technical who know China as the XXXX, Our we themselves. of the news. course, obviously the I it the

first of doing more All the of a positive couple and we've remains will to remain with we the for and of years, driving in key performance the focus last we stability namely cash we least our at and we Everything XXXX we XXXX. impacted and And are we're customers. XX key committed -- expect taking we our accelerate quarter course airline imagined. the still flow what with our for We improvement to were on because the the and days shared on. will consistent flow notion free So believe And quarter. right future. that what have remain that safety, that financial focused focused meaningful financial said, progress metric. That's for the metrics, cash our the ultimately been than quality we over actions leading the is is

those the airplanes XXX of progressed We of We about going the the key few that today. We'll not have a on MAX But recovery, comment have in many expand stored that and to return progress and good we're on airline on focused all production to we milestones. our built significantly and market I'm on The front. customers. XX of them that. behalf commercial the making on we're feel service

are Domestic is Airplanes airline fairly and customers, way. that big have in it's scenario many You've in high hopeful customers. they'll a heard But real the expand and to exception COVID we they're to that beginning all of and being utilized their first traffic almost constraints. from continue markets returning, that in we're Traffic return. markets, of China is recovered, and robustly. of The current returning long-haul fleet. to even of rate. European light Regional expect second, demand at US now and the the their come are only out is a pretty recovering

So airplanes, And very, because freighter don't forget the that it's the commercial market and continues role is of comment namely very should in it our Ukraine. very to XXX. I play the XXX want MAX, anyone for in strong. I the important a particularly conflict And strong XX world. to the line on

teams mentioned in had we I both Kyiv were Ukraine I and together, those think closely we in the And together. people the two in last work X,XXX pretty Moscow. time

that us to strictly and of of in the very So Kyiv. Russian region all who work right watch an the and of We've restrictions. We're helping. homes of a a for team and Boeing to had it's the suspended we of gut-wrenching have a thing, deal, all lead of are our families willingly customers. but we doing emotional happen. our for bit suspended for been accepted opened That's uplift displaced imports. US all the are Poland proud government maintenance our We I'm doing in importantly, following big support and all and period And titanium and export controls and to adhering the those that to matched been it's throughout And teammates. most and support then people to our assistance, associates. we provided donations the their spirit the who Boeing The Company humanitarian also million of have $X.X employee in in

protected some ever believe we for such of built we Crimea, quite time that a reasonably had since are Fortunately us, that front. program we for on inventory

since was now It hours. We comment I MAX put service. X a service XX%-plus and airplane a reliability. the into been back well over million at Next, performing incredibly only flight have on should specifically. is XX recertified year It's over little that

with on. specs They that almost happy the in case that it performance customers Our airplane of. sold aware are about I'm exceeding it we the every talk

rate took a that we maintain will continue just in at rigor and So ability applying we But good very airplane we discussions into that We're can to week work the very XX important step And our one process by piece that. we have will in as we been proud presented and deliver the we involved the think to beginning. a same cert skyline very get to this with on work. them. about of about high take lead good so on to spec feel FAA and still and will time, feel plan the FAA. the the that, We reliability his to And that XXX, in-service Brian rate. the submitting about last to in the FAA. paperwork that with very with lot precisely. cert our we let paperwork the the exacting that We're across the facilities, and we the always, ticketing, touched all closely They operations that's respect and this a to from of in respect our cert embedded one. –

two and in cert, for a with XXX ahead some got need and applied embedded made get to will we've and cert last, we've time that everybody XXX FAA the capacity high to an which, out incredibly to gives a and this the decision give we and now, XXXX for there freedom family XXXX. position all its It with not ourselves to of to the give strength, I introduction that us us. which those that future. comment extension decision create no course we We've of is this. we news like calling that decades certs, lesson So frankly, of the opportunity is the to on time made the have believe, from right the by to until in just the give I'd have wing also, believe make respect the We've continue submitted freighter, metal decades our us into weakness. XXX embedded new out MAX now and the demand. on we've it the right lessons of traditional they XX of learned of every

to life of extend XXX ahead. continue everywhere wave not of we will respect contributors to big with ramifications the and We lot to to in meet is Global I'm going finally, of a the stands be the XXX riding with Boeing think it over Services, world. then great decades that to detail demand. airplane on that a the a very ahead. we will into one respect We're we're very of it the And the deal its world. get family own, of which much Freighter, family value shareowner in say, pretty decades and other the the So recovery Qatar, with proud utilization, in to than AXXX, fleet the long-term XXX-X post XXX introduced that

that business the supply are feeling. has so of stay able success ahead been and that some constraints that chain to enjoyed And has

where that inflationary hit you're hit supply think is BDS, of, those future COVID-impacted that And front. to group on So on messy we all us I And all that things still might recognize quarter a in on contracts a on got and had aware then program world. get costs expect where a to and then economics. constrained, we fixed-price of development good you

by of write-off the you MQ-XX. far, more part talk And was, biggest that VC-XXB, and we to about a Brian have the VC-XXB taken T-XA so programs, those on will hit. this. a the bit little

environment will happened would This has. continue some You'll took public would accrue not it both knowing in first-rate have time two arise to things not will ultimately customer recall, we our do airplanes COVID it like quite hold was us government. and knowing severely. airplanes that some inflationary to that work fairly to And an those our negotiation a We where risks ago. and deliver take of impacted that the

And that both getting good going. and the feet on investments numbers, us with for planted on aerospace As Are where our that's are our keynotes our up transformation, counterparty we and with is autonomy We know around and and progressing programs. are world. producibility, digital to investment. sustainable regulators firmly those You future. frustrated today's where respect setting we we're us we deliver progressing. the increasing ground, the everyone feel bet. the the the about are Safety development We're But timing? their

progress counterparties And in She's a our over team safety, how all leadership will us and term. company. service, making word around with good and built ahead. and our Stability the culture everywhere Leanne XX predictability, in has collectively else, to so built place, for never interact long And in of we above the more the that about I had leader along. around with in years Strong world. and feel Leanne. matter is And diehard our also the of have congratulate I'll more years It day given the it's is we're transparency to comment quality. matters coming respect retired. engaged that the

that. congratulate on I to her want So

Colbert, Ted who know, supporting she'll a our and transition the you in with But until is and fantastic to of be leader As is and himself world military. us business the year services the servicing. activities. servicing congratulate proven Half of his also US end

did ready and business when of to Stephanie we go her stood it's our She the work and right then Defense, it CFO fantastic we So stand her all operator, our up. that a a Services hat. old And he with Services forward do to associated the he'll of job. an Services Boeing instincts, is up, at She the the a future bit Pope lot leading as was business. business, hard on in treasure look and an

the good I'll Brian, just at And turn to thanks the back the occurred. -- then out feel to that Steve before talent it FAA. administrator about we have Dickson transitions I So call

retired. the he's has FAA he otherwise of As and that other recertification and provided a work stood that he many the of face had. MAX, the of he the of respect moment external did you difficult XXX circumstance. that difficult the multitude responsibilities Boeing tall the know, ultimately, what and to was Company courage We The the in He for amongst during

can administrator he So congratulations now on as support full he our count the takes And over. acting him. to then Billy Nolen,

on been That to So what I'm and value. right is deliver we respect prospect. And confident I been long-term focused, to about, and we've in that all intend think, it's milestones things that meeting. with the shareowner the we've on

it to So over Brian, you. I'll turn

Brian West

defense as had to program challenges few the of war Great. a impacting, constraints, everyone. Thanks, good particular, the price combination Ukraine, in XQ the chain regulatory requirements Dave, on well fixed inflation, certainly mentioned. in supply commercial updated our a as as Dave COVID, airplane and morning, development navigate: programs

I seeing. and year. is and three still throughout we're intact, We is on trajectory The encouraged resilient, momentum utilization year to months flow quarter we in expectations. parts. generate performance with cash the of shared free business in remains though, by our continue the the ago. with to Importantly, rest what positive we're in was few track cash the a for line this think expect the year The The about

anticipate key delivery reaching milestones. we First,

path term. we're XX, the to On on restart near the in a deliveries

resuming Chinese strong On take demand airplane skyline the and meet towards we same work delivery our MAX XX, resequencing the to deliveries continue we're MAX customer to customers. advantage time, for to At of objectives. the

an And Next, programs, remainder in finally, financial performance margin going for once rest expectations year, our year growth. Day these we fall, we our to sustainable of we forward, of to the to and on to the the flow. including is metrics, share revenue, And and Investor through there our accelerate. move cash we anticipate see more company host progress improvement our opportunity deliveries, return for performance This detailed plan the beyond. will as

as points e-commerce. commercial did our on segments, freighters. war This of perfectly overall quite ops the largely shared Russia. growth traffic reduced at very returning lineup is The current see of recovery XX% by continues that We in the for time. tempered the are XX% market robust of XXXX of I levels including February the financials, and Ukraine. The as from events remains above impacts is still traffic Global traffic cargo recovery get with added of some even XXXX in flight start pass-through to China transportation, and on pressure, continued XXXX few are of into global of carriers market was expectations more X. near-term domestic XXXX about XXXX window I stronger the levels to Before slide advantage the pass-through with I'll exception. saw around largely by the to are best to be unchanged a China, a this reliable want China, providing one point. to in US the driven at XXXX at February to take this lead positioned and XXXX the environment make in XX% in with business the traffic forms traffic one levels time long levels quarter Domestic Ex the into last frame. recovery levels. notable the XX% passenger up we what of I

of late also booking seeing and sharply travel. volumes and for and highlighting the Our to offset being customers to record strong the summer very higher are forward of they're yields point able spring prices, return business fuel

the nature intra-regional recovery both XXXX traffic seeing such XX% Services demand. business. our defense benefits in and seeing the in ensuring International at routes, the continues as directly and intra-Europe present addition our of reflects stable traffic but reopening budget to role Commercial our Middle we well the important transatlantic expanding goods well to the be the shown encouraging space, The we In domestic now both continue products Beyond and have its market connectors. market see services driven in we're FY levels, evolving many Airplanes, And the Time significantly Mexico, prioritize US, threats. signs of lag recovery world. request national from to the seeing support technology funding increased global and governments people pre-pandemic with significant the critical demand services support and security, underway both for will national Europe across Americas. similar our led cooperation F-XXEX security. given by and progressing for markets the recovery including other has summer as resilience this security, as parts we're that Outside products US, are in of and defense regional solid Commercial again, by moving and East market as essential of Asia. around Long-haul and

I'll our continuity see limited are war bit business. despite a Ukraine, impacts well-positioned the in we financial the to and later. maintain to impacts cover Our operations

The issues we to markets On experienced such to availability, ensure COVID. and the supply as the to the mitigation We've big. And supply plans constraints ensure managing side, continuity. actively working carefully our -- resource be impacts stability delays chain of they are through supplier and as we some some system. serve including see production, working our to of arise we disruption continue we're production

supply actively of hard long-term to the serve And turn our as the and we're is all let's to confidence the With on customers. that, X. slide business this chain. of gives outlook position the addressing work us fundamentals financials competitive our strong. in Our And we

Ukraine First operating at usage in billion, down of of and to will expected. quarter, quarter what of also $X.X to core revenue $X backlog we I loss billion charges $XXX our the impairments. loss Due which was related about X%, the in charges a minute. did negative Operating million by more impacted asset associated $XX with in certain the line in by the detail record we billion a in was war And and reduced share. pre-tax discuss units quarter cash was a in flow $X.XX to billion, resulting and results were impacts roughly XX we business, in BDS, in core the These $X.X $X.X per billion.

unit unique we future. we and overcoming business challenges As I'll drive some that stability we're review highlight financials, for the position as

Now, slide X. on let's move Commercial Airplanes to

Ukraine quarter $X.X costs expenses, our billion, XX down offset and resulting business. First abnormal the Operating higher was It's and slightly. reflect expense negative deliveries, the investment as margin partially primarily for increase period including the impacts the of in rate by $X.X driven revenue of and wide-body higher charges by billion of losses deliveries. R&D war timing in we

remained had the XX important in milestone quarter. to the to mentioned, submitted as at we've FAA. airplanes program, very plan the inventory Turning cert a of paused, we Deliveries XXX end Dave and the the met and

advance. conducting our including we've preparing on own for airplanes check the rework, the initial completed are in flights delivery, them Importantly, and

and deliveries. on As closely the follow we'll on timing the always, their will FAA with lead steps, work remaining we of

XXX take total did continue anticipate rolling additional at last so gradually quarter, overtime. still the expectations. until do producing we're with quarter. stated with $XXX we we'll to on shared currently conforming expected the very cash significantly returning million airplanes remain of five billion last XX We XX long we're by a factory. and the on of and out As market future on XX are the program customers. airplanes positive per And runway incurred the in what the based month from Consistent improve capture low-rates, of to for a deliveries to line positioned charges we're We a did to well resume, airplanes backlog And of with demand Notably, healthy ahead record as $X for not approximately our abnormal costs overtime. end abnormal the margins of quarter, economics XXXX. We operating and being most in program compelling recovers. very see we we wide-body

COVID, Moving on and we the fourth some XX year, to in last supply chain airplanes including in quarter, of March, the delivered impacts XX decrease of a XX despite slight XX program, quarter from typical seasonality. delays

slightly the MAX of Given airplanes airplanes with expectations some disruption in XXX quarter timing and and our chain storage, of we taking out inventory. supply below ended deliveries were

most and timing key to of end anticipate pace our of factors the profile. supply XXXX. still The we chain Chinese However, of by and remain these airplanes delivering deliveries customers stability delivery to

our essentially production continue month. XX make progress airplanes at per to and rate We XX are ramping [ph]

MAX doing [ph] are to largely can On to we're development As abnormal programs, respective on safety quarter, be this accountability necessary any burn liability ensure the as down this the closely Legislation the we their year our to FAA shared certification everything expected. certification, we and later actions and XX expect continues next. of The We're behind year. us. last defined complete customer and MAX working Act of deliveries consideration costs aircraft also MAX and first X implementation and XX with

the will lead As regulator of of certification. timing on always, the follow we

We on confident accounting launched XXX increased the remain of in in we freighter airplanes program on the with Moving XXXX to Airlines XXX, Dave as to quantity And highly an the this from family airplanes. as the a Qatar programs. We January. result, XXX-X outlined. order

customers economics The risk retire test technical We hours the flight updated XXXX. on continue well of anticipate the time benefits over continue compelling value and performing airplane is delivery our and quarter. the in the airplane Based perform XXX-X the first offers. XXX-X to sustainability airplane requirements, to see certification the to through first Boeing end completed we in flight this assessment now with of of meet X,XXX required an to

the to FAA resources Additionally, programs. prioritize we're our coordinating across development with

flow, company and of a corporation our manage including As the production requiring move capitalizing we're we XXX-X for in number XXXX. sheet. costs change temporary This adjusting inventory, balance minimize the rate, pause on will the avoid cash due reduce airplanes

costs on Additionally, freighter robust leveraging pause best second freighters, XXX-X resumes. We XXX-X to year this for anticipate in and to timeframe. add the in We pause beginning $X.X cash. of of believe XXX until resources the abnormal billion the approximately quarter aircraft will production allocation we're result production in is market the of this the continuing XXXX this given and XXXX the

overall to Turning demand at BCA.

During for gross the the XXX orders, XXX commercial quarter, MAX. XX including orders booked we airplane

billion. the backlog end X,XXX the at As valued airplanes we nearly of $XXX of quarter, had first in

now Security Let's Space to six. on move Defense, slide &

billion, quarter portfolio, supply $X.X half impact were negative constraints. onetime operating and normalized including was including $X.X VC-XXB and government by revenue on revenue of was programs, down XX%. X%, across fixed driven XX% chain our services, results adjusting and and charges lower the the basis, price volume of a in defense billion primarily First development These margin COVID T-XA. for was was the items, On which down

constraints, and $XXX charge, primarily program by COVID The The VC-XXB was to supplier transitions. in recorded higher requirements pressures. planned Red schedule a $XXX charges inflationary negotiations costs, The million impacted T-XA Hawk other technical million delays. higher half finalize program primarily ongoing cost by supply by recorded program supplier and driven chain driven from

an years. portfolio, have cash have during the focused extent. Special for billion to though development price Across customers. Chinook to T-XA making BDS be for Block fixed will to MH-XXG billion. including charges a Army We deliver for orders next the high From we're pressures over position but confidence ourselves as more development the performance II received work And impacted we award U.S. remains into production. the runway progress, at and in six these improving Similar backlog programs several program. as long the incurred lesser our quarter, do we transition a in for programs, several on continue to perspective, ahead the $X other Operations, $XX we're rotorcraft We

we these and programs, future recognize in While well charges portfolio on key confident growth. these and technologies and for Defense demand positioned we capabilities, our for Space remain is

Global to quarter, X. Services turn Global on broad due let's on particularly business The of results portfolio Slide to the Now Services offerings. our strength team great the had a distribution and and parts

service First service to contracts quarter, $X.X commercial and strong the remains contract revenue were fleet continues our $XX to for XX well and now of was including remains a XX% saving quarter business mix. XX%, billion. the positioned in With market line The growth Etihad see Defense solutions the margin with expectations. by services Air levels, for backlog commercial as our back in KC-XXX commercial during recovers billion, billion We horizontal $X the XX.X%, and revenue received favorable Force. BGS Results orders fuel up U.S. stabilizers support. driven higher at business nearly pre-pandemic operating from for a Airways was digital volume and

access quarter remain X our with billion ended across credit and sheet Now cash to the on let's cash which debt. liquidity turn the We undrawn. and of of $XX.X and $XX.X to balance and facilities, billion first strong marketable comprised Slide bank cover securities

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priority. investment-grade Our is remain We rating committed credit debt to levels. reducing a

we company drivers to what XXXX. we year to solid first driven The the still I the higher similar revenue overall of like impacts to to as decrease to XXXX and in deliveries the XX stable business revenue demand be the airplane services programs market for and last due the in continues charges will and this increase year. by commercial comparison quarter, shared In revenue XX while improve. growth primarily in BDS we're modest the outlook I'd our at remains forecasting Now the XXXX, of growth quarter, business this the total key anticipate on cash. to review commercial took Defense a versus And revenue

However, positive delivery this XXXX return levels. On we The to higher free year. volume. driver still we cash to flow improvement remains cash, generate of to XX expect expect XX stable key and

working as in that second airplanes due and still a cash for from we payments will January. key quarter and will and flow this line our of As inventory meaningfully confident partially outlined. a year We we advances and The cash delivery lower first utilization in what was milestones by be -- back From will customer the that anticipate timing previously, meaningful with we phasing offset will profile continues improve our shared I the down delivering year. the burn described balance. deliveries. in free achieve dynamic advance a our be discussions remain We accelerate in the capital make quarter to the progress balance benefit to half of standpoint, of

be to plan materially in expect on will this improve delivery the focused look including Most items: control. and execution And to forward recovery, our supply fall. stabilize performance We we As wrap-up, and we our efforts for to XX we we and in delivery work XX production several year, tied remain our be chain more market focus on our To the our acutely delivery quarter, are key we resources these and is in higher accordingly. improvements first commercial more and stability. to development critical success will we and to XXXX of we saw activities to some China, keenly this have these prioritizing than MAX do. that And aware beyond notably, XXXX production return programs, look predictability. while certification details our can sharing cash system, to continue we're what the system and successful of flow

laser-focused said, execution invest cash doubt immediately environment arise. over priorities There's right making we're of risks continue quality in in do they ensure partnerships closing we we're growth. our this, and all stability. for the for That now to while And on comments. and and that no is strategic in the are we're Beyond business of remain calls. technology, in us, addressing as future With positioned And business flow, we to while people, these and productivity front confident evolving. progress, the these driving resource actions we well our the Dave future. capabilities to safety, believe that, good and We manufacturing strength

Dave Calhoun

with commercial and to our Yes. with manufacturing real a products customers. and improvement track believe business engineering to We ultimately, our on of respect we're the respect our of predictability

also term. our line near and defense defense We for believe relatively in and the product the growth in strongly medium to prospects orders

that's I'll over turn questions. So, it it. to

Let's go.

Operator

And with ahead. Noah Goldman go Instructions] Please from that's [Operator Sachs. Poponak

Noah Poponak

Good morning everyone.

Dave Calhoun

Yes, hi Noah.

Noah Poponak

A to important I the deliveries in but most lot questions, the resume you'll near of term restart and can things when XXX when China. deliveries you MAX two are guess

So, counterparties into do can don't and timing you for regulators the to what predicting and satisfy give to flow us you want their you on still for for? to are know get more I have cash these, specific you need year. looking What but on specifically detail And then questions guidance process? the

like free through how have to to are just positive that deliveries cash? thinking look what you need those So,

Dave Calhoun

Yes.

in to all every FAA. over the also this the say is I get outcome way FAA that that any And side-by-side augment into you this grab certification. I any if I sort we've I getting respect So, guidance can their Brian why been Again, it I package way. they've because a I don't control process. been because We've the What it of that do to with where us step is tricky one? moment like. trouble of predict are can know fingerprints quality delivered the with of

I good all feel So, that. of very about

Our these customers through been airplanes. have

work normal shape And answer are we're its do suited if in projections significant for room enough so reasonably expect for respect to elongated good to the or do order, in have I a go confidence, will, to through I to flow this you to believe I and think way. FAA in not questions get and the process. And with cash year our and well that any us

we where no feel China but aren't are. in long, be respect And going with deliveries hard I any a So similarly, that about it's there to good been China, run, we've indications really way. to had

As we put this has in play environment them. significant their domestic flying. in fly They're situation our customers are a down certified tough The and travel, really because the XX% airplanes. for we're not to is know, COVID

So to is that I deliveries. if on how couple MAX. and goes with The derisk feel we more. this a are measured still We respect in it's long good about of we delivery significantly, creating market where year's can months, XXX derisked

still concerned China that have not airplane. to our Brian? derisk. don't I to want about can ability I'm Anything, faith because derisk the I take So

Brian West

Yes.

Noah Poponak

them not, you sent type package package they'll package, Is it or of still sort the does Q&A an a you've described now that iterative time as data is binary of or Dave, either the took you collecting quarter, collect you it FAA. last to of lot rework had a it as iterate you talked the with that process? like that then remain about XXXs. data, sounded accept had you it And to

Dave Calhoun

our case certify our engineering Well, we we and and members sufficient our interactions have with the of or all this data FAA and believe based in to make on recertify accordance. airplane others that unit own

process. involvement in of lot a know around of So the lot of significant I be and on level we We're banter sort it. I and absolute can't reasonably to process this But package we've submitted. a the a of have both into any expect going that about just been high in confidence working get sides go through don't that. and I together that, there's

Noah Poponak

Thank Okay. you.

Operator

go to David ahead. Please Strauss go Barclays. we'll next, And with

David Strauss

Thanks. you in expect thinking negative? look are potentially business, to how from this an you're down quarter. here to in I I about that equity the Brian, or positive need you're about burn quarter. And you the at further wanted improve billion the would that I willing would mean, cash past Good cash still capital see think you've noted here? the raise? leverage meant second to $XX to point, flow morning. take the billion think structure to $XX additional in if if or that you're Thanks. to free you you you you run you know talked I on

Brian West

balance Yes, feel event. with about derisking any that here we'll some We comfortable nature will of stand We we we type and don't that cash sheet. We add meet milestones. that will lines, about any and as change, I'll on accelerating -- But that see of we that midterm think tap know one. debt later really need the flows, as no talk today. as both as take that the our more of and very progress we for get position liquidity need see near-term last we anything these need to else or

-- the be XQ. the XQ pretty for look, will In terms the of than it's will accelerate. And probably but obvious, and half flow second cash year, better

will lined overall, So going on discrete put the we I'm quarter, flow. is a better. think land will up, we pretty the number where to It we're full talked we puts and much not confident year, And as last for but But going about year. generate cash be to everything takes, with XQ.

David Strauss

to terms than is $XX the number right run of that the billion is So it you still in cash or lower that? need business,

Dave Calhoun

in recency it's it's effect, you. We're rich comfortable that to XX right world. put hard the discussion on XX, all will points now, seems it as I tell of where to given have dynamic that a too but right board to start can't a we stand like think, very we execution, be delivery wait that now. to and with And we with it's

David Strauss

right. All much. very Thanks

Operator

go And with Baird. Peter Please to next, ahead. we Arment go

Peter Arment

just to come Dave, questions Brian. back the could on I XXX. and Noah's if Dave wonder morning, I of Good kind Yes.

we be What's now aircraft done are you XXX in it latest be most have conforming aircraft, aircraft your think it you and like beyond will left that? aircraft think the producing MAX, to these XXXX, about delivered when stored about through should off inventory, stretch the Just that XXX? within Thanks. line other like spec. of or sounds does to and And out we

Brian West

Yes.

is So in I'll in the the inventory one. on XX. XXX take that It

it's end of also the which liquidation correspond have the done we abnormal will inventory. that that As be cost, to of XXXX, going with substantially described by

really So has changed -- nothing that on that front.

bit In airplanes. fact, look to confident clean more as we probably at we're starting feel a little

XX consistently, of high. is it's pretty the we've that in side hate year the And marketplace. that the On flip likely We liquidate demand the But not inventory at in of be the that, we'll end the XXX got able that quarter. there and changed. next, that's to has this that over out some robust that, between again, meet course and will of

Operator

Please, Our next Vertical with is from Research. question Rob go ahead. Stallard

Rob Stallard

much. so Thanks, morning. Good

Dave Calhoun

morning, Good Rob.

Rob Stallard

is have I XXX rate. MAX on question The the

pretty forward? that could with confidence You going month chain rate what's is your here. at supply any a your match especially are on Thank plans competitor? the further And mentioned increases, What you're your much what XX going you.

Dave Calhoun

Yes.

described, of I always think that about this we rate ways. production to month. those a XX course, getting we've two essentially One got inventory just So that at And then, on we're in is and delivered. that, the work opportunity

what's The not pop got to job then, now else program stacks future very want hard. be right biggest Our we're good to good because the we of get around is supply while going They in of up. that are us. that we around The confidence working feel teams constraints and stabilize plenty news And that we're in that then just right watching now deal stable chain a be closely, to to particular about we every prepared with and but where rate. up take, we supply demand that fulfill. is anything to can there's that is front XX decision

Rob Stallard

you. Thank great. That’s

Operator

JPMorgan. to go Please Seifman go Seth we'll with Next, ahead.

Seth Seifman

much. Good morning. very Thanks Yeah.

Brian, about last talked about up you aircraft, following on and Just looking about XXX, on quarter being XXX you spoke to plan. deliver I think,

And that into XX XXX. MAX on this And in the certification second, does still question on how for China affect kind your Rob's then all? at the that, that? does rate production of target factor the year? evolving is So situation if How for question

Brian West

to that as China, aside, mentioned. one we derisk just Dave So put

were we probably we've it. light we deliveries quarter said, just plenty Like there we the get won't timing. expected. of but the And a what goods rate got calendar year count, in the where all We've versus first got inventory. quite finished The little that's I want way

confident that's look get may and if perfectly So again, we're will we there quite going comfortable believe next, the to which month there. into out you we still momentum factored just in to not has with. again, this the been, month we And positive But timing better. don't it's the cash year. all flow year, cash flow gotten that in, that be get updated feel quite be And our

won't all right And near-term it projections. our it's on As energy disrupt pertains -- now, and is to the the -XX, one certification. that focus really

Seth Seifman

very much. Okay. Thanks

Operator

go Our from Please Rumohr with next Cowen. question is ahead. Cai von

Cai von Rumohr

much. so Thanks Yes.

a So started additional certification the mentioned on they Dynamics, GXXX anticipated as is of is may -- that their MAX this have because validation issue. an requiring, they And process. not their General now basically that sort of slip, software call, mentioned kind when the FAA indirectly was of which

they're you more then that confidence by FAA able your sort And they that will what is even seeing that are the does of the stable you or to XX now So MAX year-end? they how and basically to relate certify be are stabilizing for acquiring, ask data?

Dave Calhoun

then a into move in It's Part our counterparty very our speak out you and account one. observations whatever that all now -X our any question. that take XX, the me from let XXXX original took the had XXXX MAX, Yeah, way. incorporate cert was tricky to don't of programs, to for And exactly the I the want to we've of incorporate the learnings -XX.

our has Every, So dotted, used we're to every and more process has T we through. that is all be and learnings, it keep all a getting rigorous completed. all be be going crossed. to definitely trying it. to has incorporate now And we're Everything to to I

like we've off we're but what to subject so. through And But it. I the I been. get for so be mature think enough, all difficulties doing. of whether I go take so I all that boy, going hope the to little don't going had in cert, that's it's it's or learn to process a not, I little on good. far, believe better a the longer. next than here, a And we're to I rigor more they're going FAA ever all has It's thorough to every think know, with just So

Cai von Rumohr

Thank you.

Dave Calhoun

Yeah.

Operator

Rob ahead. to Please go Melius. we'll with Next, go Spingarn

Rob Spingarn

morning. Hi, good

doing of lot Boeing's today. had development we've this the and Brian with on A resources? recertification the enough are or allocating with Do engineers? it covered denominator or common problems mentioned XXX these process the do here, to that the the Dave, the on and Is resources this this MAX. following facing engineering unusual theme, already issues on FAA, you're you have Just FAA. is programs

So And is solve do shortfall you there how there? a it?

Dave Calhoun

to not time Yes. I resourced been boiled week. lines time This is the I don't lines, into down -- go and where I've this, run seen to every an have yet we have the we adequately these never always on issue programs. through and

our lines of the to the rigor enough very development to et or about assurance to a a program. certain write the what's A development required, had write always is and FAA thorough, the data what So by we've or not cetera. documentation, lot of of engineers whether between ourselves have on needed work. what's It even has to discussion do work been to lot demonstrate needed, the writing, technical -- the counterparty, impacted the time been or fully point

to more it been I more resources helpful. the don't far, So the constraint. programs on focus, that's is always expect and be not so constraint But

through reallocation XXXX that the out wing, biggest the we're line the be resources, to of going the airplanes demand that respect XXX frankly, in more the to through the on of the beneficiary is and metal run midst of push I just traditional with ability our think seeing. our -- that to some

see reallocation So the benefit the I that's question, most. the where on

really on themselves. see to programs have We it the cert

Rob Spingarn

that year-end airplane? leave substantial the crew the I more looking you book, you'll beyond alerting does order can't assume if at just And mean, flight for this the the without waiver, put you or and if at do then need XX get the the done MAX and XX risk? do program market you slips cost system, next you get new

Dave Calhoun

great I there. hope question. a It's never I get

window XX a timetables certification historic on based lengthy respect and there in provided to put there First original the would foremost, for have with and easily. the that seven legislation, was

to So things these line with that have product legislation derivative intent the longer. MAX. stop the never respect to The was of taken

if don't, So with I doesn't legislative And to respect them. mean getting It are good get it's believe we'll chances we relief. our problem. a

and I'm has demand implement. and of we the year. on pretty on that On hand, and is doing Don't for the need focused the getting is end we And They incredibly sometime -XX substitution in itself. customers' that well the substantial. it company our could focused to the have other hands. to now MAX get our pretty And the now. That's program about the still development certified airplanes everything love between the decision made other do and airplane. feel

is So and it's we the a right good question. have the It's our thought ahead of end decisioning up end sure process at make where of and the question, we to year. think things

Rob Spingarn

Thank you.

Dave Calhoun

Yes.

Operator

next, with And of ahead. Bank we'll to Ron Please go Epstein America. go

Ron Epstein

have that been guys. companies, of morning, engineering are troublesome your really some do that restructure programs there? the can I to on And your Back what's had you Good it the some or I to Boeing of just number to to taken the a haven't struggle that think why of future program do in a more you programs to issues And to question. and is case? prevent to commercial, just you've it's do at on. of like seems aren't for going than you guys Yes. peers. future the defense you compared company, vast mean, either for mean, what mean, -- or peer have I you engineering Dave, happen. the going organization? And both the because I that when charge you look sit back

Dave Calhoun

Yes.

cetera, you haven't as call been safety -- voice and I engineering BDS And the I it's appropriate. it's the et in that our engineering address instances from and out our a system did write-offs to missed to it's build about restructure engineering hoping in the So But issue thing from of benefited so first that et have. talking we And could -- moved we've people have Ron, a BCA, organization. disciplines don't fantastic. shortfalls. that to way engineering outlet don't with issues different We to, wasn't attribute concerns It the did. effect, of different reinforce, worked, cetera. all management specific because restructuring the ideas by and and never start let our me you're I I

So think we've been a restructuring. I beneficiaries significant of what is

We hiring. are

I easy. not on job front. We terrific think, are a doing, is It that

we ripping I anybody successful contracts and quarter, price So before when came the to taken had development a look for instance, program, a that want down let's on But that hiring we've inflationary COVID this at program the think pretty took this pretty fixed we before write-offs spiral otherwise, don't but front. retention have road. existed successful say, that we taken, were these

attribute shortfalls. don't and don't And attribute shortfalls engineering engineering that to way. lines I in our So I issues time any to certification

Our well. incredibly airplanes flying are

show. different. Our Everyone got it. of or the XXXX requirements it flying and made to be be It's process It's meeting our we to that our a it It's world, all out. gangbuster and the changed. good. But of discovery to got around beautifully. to loved laid Singapore made ourselves It's Dubai, thorough, certification between and it's regulators the it's

it's But premise I please accept So the function. I to don't I've and have believe miss strong. are be that engineering it's going don't we restructured our forward that even the fact question. the stronger. always in believed we entirely building you put

Ron Epstein

Okay.

Operator

ahead. Our with go next Sheila question is from Kahyaoglu Jefferies. Please

Sheila Kahyaoglu

the not at alluded Thanks you're but good times being so Dave, there Brian. demand a this MAX on XX rate Good to also, morning, call, Dave month on much. delivery yet. and you've several

It doesn't about So that get to it, it, level? stabilize above you seem at XX need to we get but like above going how do the you could a China start do need XX we above MAX think month? or

Brian West

need the March, month towards the last don't we And of MAXs XX in We there. is month me, momentum. demand working we're the XX. our way Believe and delivered

that contemplated is near-term. de-risked month pretty piece. we on the rate for the the The stable in dependable that China So trick We to and reliable. and XX and production -XX stay a good of it us feel focused make isn't

So good. if we we just level, execute pretty feel at that

Sheila Kahyaoglu

Okay. was there abnormal Cool. And commercial still a if costs, then loss. we on profitability, the exclude

impacting maybe how that breakeven about to think we getting it? and is do how XXX program So

Brian West

a the significantly from margin I positive. get the future, it's start to obviously. They're cash going But standpoint, the they're delivery rolling. would still better down, XX say, once

we a strong. costs So Ukraine, that but related mix course, of course, have is kind perfectly given to are of there isolated. and i.e., XX of quarter. might program We some in fine. is couple charges the had any things abnormal period And around like And of those

XXXX, going as demand. XX, fill about deliveries we're margins of and the and we factory some going the accrete. accrue I forward, satisfies those moves cash think on And pretty then metaling getting feel making, the will going freighter get we the to good

overall, think we margins right are So in deliveries. and to the they're follow BCA going direction, headed that

Sheila Kahyaoglu

Okay. you. Thank

Operator

question next from Harned Our Bernstein. Doug with is

Doug Harned

Good morning. you. Thank

Dave Calhoun

Doug. Hi,

Doug Harned

price defense. quarter, I defense contracts. are all fixed switch said, about as talking to a that of were want over to bit programs you David, this the they you development

And some below-cost were bids the point known of very aggressive even to as investments.

them we're now some coming of And those problems, home. seeing

BDS look you how the are done forward? the So input were these issues at process or higher these before on programs bidding as cost well due completely do at going are execution mean, here? also overruns came on And other I costs, work to but CEO, you there then

Dave Calhoun

Yeah.

Yeah, price fixed Doug. with I different respect great So philosophy it's very will a to have question, development. a

in on never the that time And also taken, knowing so would be yes, I to we we at those a are. you tell amount where this. were they and and to the fair them we we And let I programs I and of investing will that took don't T-X are Board of our me were MQ-XX But hope the off the was I the future money day written expect, contribute own because say, issue. airfreight.

and had we our going that When big military. futures I to are costs very though I to supporting through view those are There both on are are And them don't airplanes our than get be more many airplanes away. really bet involve and attached in airplanes. go think them to going think in many, anticipated. the programs development successful those be all even contracts, good deliver we those

and With respect said Company, I in. in to making to One, Air a But Boeing interview, futures real CNBC call that are we have to very bunch airplanes. and -- yes, then contributing of And are, the going it. with think related And because set predominantly great where the COVID probably we us recognize real my I'll inputs, believe associated we're Force just unique to going unique to defense world, of just negotiation, goes into as we're going still the very workers when shoes. deliver to I'll respect taken. So out, have earlier costs we remind inefficiency a I in of The it's a people I whole unique shouldn't margins their with moment, airplanes I'm down steps Boeing a group step to risks line very or COVID a don't cleared strongly a

it ultra So a VC-XXB, for And the been really high, where always it's clearances has are tough. implication. tougher

got just I one and whacked you that I So is great contribute Where started different number areas. a never a hope we of to. question in

Doug Harned

Very good. Thank you.

Dave Calhoun

Thanks.

Matt Welch

question. we more for one time have John,

Operator

UBS. come will ahead. from with that go Please And Myles Walton

Myles Walton

of achieve I you had, I also first be And think morning. them. on, a you'll a today, to performance couple Good one. high-level Dave, goals. Thanks. maybe you think, When signed able after seven to

Boeing your, just And -- have go you own bad. some so begs And to also, trying of it we its things how understand And recalibrated should question, performance? measure realistic realistic I'm performance. in the is its the more expectations firm's

measures margin more our calibrate success. into should we maybe So of

Dave Calhoun

a -- on. the Well, take that's it's willing but it for to question very last a one, big I'm

Boeing would Company. ability set I I I I should pursue on what's way circumstance not that been would simply form or opportunities It business. compromise there program the into of I Board And that's then improvement do role. program of would the with programs, think all to way, the If discussed any I do. in under, objectives the a would happened shape that period right. would them simply one by are had know which I the weeks, hold You hostage took to that deliveries make The program my came operate they be. in the what inside what compensation I that simply do with the those I and

that's resetting the doing. the and I've every best -- of step And been can. have I way So been expectations I what

to confident frustrates to the people flow and rate our to a and back that keep I'm highly We get cash world normalized that, do we the ability things get But what to confident Boeing do get is it. have can't everyone. And in of you, in for flow we improve certain predict highly us. and we better that do trying in I cash I'm it. for just

So that's every of They I longer don't want than real-world they certification. little timing used to. thorough around regulators more used recalibrate stuff little they to. to than other These And for programs and and these Company. how I every decades, take questions The inside lasts real. decades them. They're approach than how Boeing long is expectations a are everything the in think one I about one better for it do And Boeing run. of a

schemes evaluate are or they trust not whether will on me Board compensation and my think aligned. I basis perfectly understands I that it, that

Myles Walton

Dave. question, the taking for Thanks

Dave Calhoun

Thanks.

Matt Welch

And that concludes our call. first earnings quarter XXXX