BA - Earnings call transcript Q3 2018

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Operator

Good day, everyone, and welcome to The Boeing Company's Third Quarter 2018 Earnings Conference Call. Today's call is being recorded. The management discussion and slide presentation, plus the analyst and media question-and-answer sessions, are being broadcast live over the Internet. At this time, for opening remarks and introductions, I am turning the call over to Ms. Maurita Sutedja, Vice President of Investor Relations for The Boeing Co. Ms. ahead. go please Sutedja,

Maurita B. Sutedja

Officer; and on of Enterprise good Executive I'm yourself to me Maurita Boeing's ask you Chief the management call, Strategy. Performance In questions. to Dennis and Boeing's President take XXXX limit will today third earnings Muilenburg, we Executive and we President your call. Sutedja Vice one Chairman, fairness Greg morning. Officer you, Smith, Boeing's Chief Welcome quarter is and & After Thank Financial and comments, to question. others that with

release detailed you presentation We information boeing.com. have provided financial website our follow in and today's broadcast press and the at can through

Before various in the goals is the risk, begin, any which disclaimer need discussion SEC that forward-looking in statement to you projections in news our filings involve we detailed and and release, to today I presentation. remind our are likely

when reconciliation outlook. disclosures In measures that addition, presentation and we for use our refer release you of non-GAAP earnings our discussing results and to we and

Now, I call Muilenburg. Dennis to over will turn the

Dennis A. Muilenburg

Thank morning. good Maurita, and you,

me Greg the financial brief and expectations our forward. performance, outlook. that, quarter operating and you walk update overview by our business going a begin an today third followed our of After of details the Let of through will with environment results

and Thanks financial that flow, results cash Now company. our let's earnings X. include Boeing the execution XXXX operating quarter move solid higher to efforts to share of dedicated per company, the third slide driven teams across across delivered revenue, by the

of During Boeing and repurchased the cash $X.X operating of billion stock. $X.X generated billion quarter we

share dividends a reflecting XX% from paid in also We dividends, in last year. billion per $X increase

charges defense in cash growth. volume. on while Core per deliver shareholders people, in of third services billion, was share earnings our We $XX.X Revenue quarter innovation, and investing was higher to reflecting and continued $X.XX cost to on related Airplane contract T-X MQ-XX tax strong our commitment returning the future the in to settlements, to lower Tanker. by newly-awarded performance aircraft KC-XX tax income planned federal Trainer and audit growth primarily and partially the related by to offset investments a Commercial and driven rate, unmanned

for raising reducing year, For and also look discuss Airplanes. operating are the and margin BCA We're reaffirming let's raising detail earnings margin share that, segment cash these a operating revenue guidance. Greg Commercial flow. take in while full section. per more BDS in his at will With we guidance

margins For the Airplanes quarter, revenue of XXX of Commercial billion, operating deliveries, $XX.X generated reflecting with XX.X%.

stands to healthy XXX worth airplane backlog robust contributed that $XXX sales than more captured X,XXX billion. billion airplanes July to is The from and continues September, our to program delivered new XX an net orders. at make orders quarter, the XXX $XX we supply activities improvement than its In more adding Continued chain delivered on during have Year-to-date XXXs. the third with good August. overcome new quarter we XXX recovery in progress net to aircraft plans XXX challenges and worth

have delivered the of to we XX to expect them fourth rate. production recover XXX the by expected with line MAXs, the quarter deliveries The the ramp-up continues. in MAX production the end be quarter. We year above XXX To-date of

year. successful MAX expect to readiness XX% helped position total ramp-up. between strides The and further matured program XXXX. productivity to to for continue We XX-per-month deliveries its XXX account and in XX% for of XXX next us quality program's a for rate ongoing The

across-the-board. quality being and champion improvements continued set times to in We first-pass see

quarter the test set completed XXXX program, static it As airplane the for in moved up. we and test into the

first on track the XXXX. for production on and low-rate airplanes test delivery flight initial We XXXX testing in in in main building started the XXXX line to start also factory. the plan have We flight remain

BDS Operating including government margins Space of were billion across the and weapons. $X.X revenue BDS reflecting primarily investments and planned charges I its quarter Tanker, & programs in the higher Now, volume MQ-XX X.X% Security. T-X related over which negative third due business, bring to Space to F-XX, will Defense, important Security include to reported satellites, shortly. across $XX of our touch our MQ-XX franchise quarter, the future Trainer, we to MH-XXX and value orders on & The billion the customers portfolio. helicopter. during Those booked Defense, T-X the wins the unmanned demonstrating aircraft new on opportunities. orders

advanced much Tanker received We is trainer also of Next XX KC-XX to Air Generation the T-X the Force additional to Tankers the for the century. anticipate quarter. the replace T-XXC this the be franchise Talon. program fourth with production T-X for U.S. training lot capabilities providing We in a

market U.S. in of proving market aspect T-X aircraft are of applicable more platforms production representing and than current for systems programs. than aircraft both culmination the MQ-XX trainer improving first aircraft. technologies, and Air focus simulation aircraft. plus MQ-XX a billion, a $XX services advanced with X,XXX carrier-based The unwavering autonomy global unmanned and every critical Beyond platform and opportunity multi-decade with technologies, Force trainers opportunities greater technology The up opportunity. and of is Unmanned to attack for are the the years combat derivative de-risking and billion potential of of to our MQ-XX artificial operational $XX Navy's U.S. contract, the light intelligence wins XXX air and ground-based

tests that T-X MQ-XX handling and having we testing MQ-XX demonstrated engine all-new prepared and first flight with ground have production-ready flight. aircraft completed and XX is deck prototype tested been being on trials to-date. for in We've developed have flight currently We jets two an

are through of and mindset, services, XX% XX% recognize the than of give commitments. to return significant a the $XXX of run a than deliberate our support ourselves strength light opportunities. and services, Force, a to of for the for operational sense in-line capture programs agile, satellite strategy our the and initial first Key market and technologies quarter Boeing's These the strategy commercial the a investment leading-edge stakeholders. Apache globally, franchises will side, systems, on flight in to attack the as markets. investments Boeing Indian the Our cash production of our reflects deployment upgrades market two valuable investment, platforms position multi-decade Systems, Millennium well commercial complementing full the satellite decision we autonomous investments planned sizable proven address opportunity portfolio. lifecycle purposeful in in small-satellite represents and leverage and trainer for achieving quarter. acquisition the of create successfully milestones To our balanced provider BDS for in included performance customers to of for financial This and charge and in and sustained, Chinook in million U.S. current potential Air Space of after-tax as total the opportunity and future you and support, completed investments long-term all business further flights capability contract these the the will an growth portfolio existing on training T-X the less less mature meet of and foundation customer solutions with the

steady marked all certification We The continue in type final and FAA the progress KC-XX make Tanker September, systems supplemental mission the received the milestone KC-XX requirements. to FAA completion certification. certificate avionics of meet we of refueling that towards and verifying

We aircraft this steps with working Air quarter completing program Military third cost decades aircraft required and capable four U.S. quarter. to testing. the completed have booked a have us, in production to of is we of aircraft long-term follow-on the ticketing these Force while our support effort of Center. We confident Delivery FAA due the In customer customer. delivering Currently after-tax training. have ahead program work well remain higher-than-expected the first the Tanker highly-mission our run of Boeing support to there's all and are aircraft requirements value certification and of as to process the and towards this moving delivery in meet growth to deliver the initial are a to in closer the customer incremental million measured hundreds $XXX airplanes of very going as delays still And franchise, to that to moved

BGS reflected solutions services representing offerings. Operating growth Now, and by supply volume, revenue billion, and a $X.X parts of investments and chain our quarter reported of costs Global Services. mix, driven period grow portfolio turning higher product XX.X% to XX% third higher year-to-date. margins to

the order billion. contract an the XX Agency, of totaling offerings. Air an our spares contracts P-XA for for service During Force Royal X training contract $X Australian Navy Freighters, new for orders support the for F-XX the XXX-XXX the contract included approximately U.S. Logistics Converted Defense business and Air highlight quarter, the and lots BGS and MH-XXX U.S. won newly-awarded GECAS from Boeing for for X, strength for Force. This These Tanker One the a KC-XX service helicopter U.S.

aviation investments offerings Boeing completed KLX, parts Earlier our the growth This maintenance check on P-X business. a better to strategic our The growing strategy with and completed global the of and services, provider value talent a acquisitions. enables while major complementing of to us to serve resulting profitably together the and month organic supply capability heavy for the of KLX allow BGS one-stop will this part significant boost shop purposefully that customers. U.S. in targeted create of of acquisition we chain our us Additionally, product first and Navy. transaction brings provide customers our for

backlog, among to partnership shareholders, another and significant In Brazilian with business complemented additions definitive activities the the inorganic the work strategic returned on important that, industry. and and to growth Embraer diverse with to complete With strategic smoothly. coming quarter regulators, planned Separately, defense of Embraer. organic government for captured partnership the investments. including X. our progressing turn integration underway our to In our we the we and others, slide performance, its transaction are most operating to let's continue finalizing delivered key in proposed we'll future Our shareholders, large well create aerospace and and noteworthy franchises, environment the our agreements cash are months summary, the strong with

passenger over markets in see defense, space at healthy services trillion the outpace Meanwhile, traffic that momentum, X% in sizable the commercial airline growing growing X.X% through Passenger continues upward in to global market, continued are cargo In by We maintained and XXXX and XX $X.X traffic August. global GDP. airplane to markets, our traffic profitability years. XXXX remains its strong demand next grew through August. commercial, and

year-to-date. proposition fuel-efficient product family intake as we've brings customers the recognize new, order value more our new seen healthy the compelling to global the in reflected Our that to market continue

a drive is nature greater the and across patterns. traffic see expansion less from the purchasing customer and trend expanded city to dynamics older population diverse of patterns airline business emerging industry. markets as key as We fundamentally growth and underpinned we believe seeing pairs has are our models. The growth. demand stable travel the middle-class to spectrum sustained balanced evolution between of of perspective, fleet of consistent market stability demand continue and network rising geographical We and well more and the There the aircraft with in replacement in far of also for and aggregate balanced in cyclicality more continues changing

size long-term, the the market highly which in long-term XX,XXX be demand, our solid which by commercial market foundation of XX% outlook conditions with a next a deliveries, provides remain driven will combined fleet. forecasts we production rates. over replacement global backlog demand for healthy These double XX will years. demand, airplanes the confident This robust the for new and planned our of Over nearly

with to the our narrow-body. starting segments, Turning product

decade. current to XX sold on that and out aircraft based next and nearly per is increase into early backlog XX our Our skyline of XXXX of is production planned production rate a X,XXX month in

the to XXX early demand segment, XXX assess steady continue production confidence wide-body for the and in the in wide-body the orders rate. replacement high pressure and on a have decade. increase We next meaningful seen market In upward we've XXX the

in the highlighted air For the current generation provided bridge orders, support XXX backlog as strength to aircraft. has recent for sector renewed bringing the XX cargo the XXX, the by

per XXXX, as production of expect XXXX previously announced. X.X As we deliveries transition we XXX to through approximately the month

progress. While beyond, have filling do the particular to for XXX in work XXX slots, XXXX some remaining we still feel bridge we the in about and production confident

production up this forward strong foundation to commitments the orders delivery As XXXX, new a XXX our and have plan support for we that and of ramping of aircraft. we look

XXXX We are skyline. further bolstering focused the on

firm for our month to captured in family its Dreamliner X,XXX orders Dreamliner in production is than well a nearly We XX airplanes since the also to more more the order XXX. total year-to-date XXX the backlog, orders and XXXX XX in increase the quarter, XXX supported. plan launch to bringing than With

recent its the highlighting continue the additional repeat for for order market see the including We preference to United X strong Dreamliner, orders superior the value. for XXX XXX from XXX-Xs and

in the This to and positioned freighter strong, to X.X and Turning in our we remain cargo relationships to world. are with have strong our focused supports increase the the lines, from per well demand. per industry month we global increased important navigate programs, customers, X Boeing our fundamentals. trade It's with our as stakeholders We month this XXX XXX through to rate XXX unmatched capture maintains product long-term aerospace discussions. on XXXX. suppliers around other perspective production

in We aerospace leaders benefits productive differences, continue to a these prosperous industry. with dialogue mutual to trade economic urge strong and the a highlighting countries engage to resolve of

to & Turning Defense, Space Security.

F-XX supported production final XXXX the readiness funded Policy The fiscal XXXX We our our demands Defense the quantities aviation funded class rotorcraft, commercial strong key solid Bill missile, defense from see our franchise platforms platforms appropriations funding Defense derivative programs and and continue multi-year for requested is needs The for rotorcraft, in and The added new in fourth and and key satellite the our year products for positioned with budget space fighters bill to mature support a fixed-wing in and see portfolios, in future. for and commercial increases for additional current the programs fiscal continues for our of from to Pentagon's outside our Pentagon the build remains munitions authorized the of year BDS also and to for major derivatives, efforts. aircraft U.S. products. Congress. procurement Boeing portfolio high, to satellites. U.S. particular space Demand offerings world programs. address and across well

are sales priorities Our our customers. future that continues areas new and in growth for in investment

We to as Deterrent. across enterprise capabilities such important technologies from leverage will opportunities the Ground to our Based continue and Strategic win

grow Strong including market them helping portfolio services stretch and and quarter over in across analytics, of of four significant supply sector. the services trillion customers through our of BGS digital share. gain proposition rate our Turning a growth X.X% optimize performance BGS's These and to in the fleets to to services further capability We services the expand worldwide. the and reduce costs billion modifications $X.X growth we for customers' chain, of our the our average professional services the We maintenance, recognition $X areas, agile, the as see than offerings cost lifecycle. aviation their and market orders broad and company. reflect aim XX of next training opportunity to as provides years faster market operational activities value engineering competitive our continue services.

acquisitions BGS remains on the for focus portfolio long-term organic by and our for and growth sustained businesses strengthening our expanding vertical optimizing capabilities, through Our BGS profitable offerings strategic investments such as position complemented growth.

Our business have sector. our compete positioned partnerships strong to in important global reach this of customer win and well expertise, and the our us

safety the AnalytX enhancing will give provider Defense fleet access ahead, will On accelerating our growth, markets costs. maintenance for remains reliability Greg, innovation to while to investments with growing our In focused financial future. and you over that, a into by a in integrating the platform digital contracts, more Australia, Australian Boeing our analytics begin ever summary, analytics new Boeing as than all intensely increase we data the before, fleet improvement Boeing The tool Australia opportunities support developed With defense enabling and team the on readiness, services productivity data region. to leading new its fuel technologies to systems, front, Boeing results. and position in force featuring in reducing

Gregory D. Smith

and Thanks, morning, Dennis good everyone.

strong to we'll XXXX. tax federal as the Global after-tax XXXX million the audits related on quarter tax investment for Defense, turn MQ-XX benefit of by and were earnings, Tanker. solid performance, & Airplane deliveries, discuss higher $XX.X slide Services. volume third Services reflect and the $XXX KC-XX to and related partially the offset million T-X our Space per Revenue $XXX to million reflecting Global for and Core income and programs These $XXX Commercial settlement charge and of after-tax results. years $X.XX of planned a higher well charges Let's to billion increased as X share the Security earnings BCA quarter at on

X. Airplanes let's Commercial Now, discuss slide on

mix. Our margins production deliveries, timing operating by to This strong pre-tax margins, by during captured and business $XX reflected by program. billion BCA offset remains orders performance equating of to lower XXX during strong BCA $XXX operating more and and favorable at on a than cost. production. XX.X% $XXX partially Tanker was programs, charge net aircraft years the KC-XX backlog largely Airplane increased the of of the seven offset approximately million higher billion quarter Commercial revenue on billion of $XX.X period quarter X,XXX driven

program orders this through supplier our the overall improving On step-down we the improve day-to-day unit profile focus and and favorable to on and XXX XXX generation. overall the team's delivered quarter, booked program, pricing, of and cash continues net aircraft XX XX cash mix, in costs

now Defense, Let's turn to on Security results X. slide & Space

billion, increased $X.X BDS driven KC-XX Third pre-tax pre-tax. X.X% on MQ-XX margins the BDS investments of by on including the related across $XX programs Tanker, growth to business, quarter F/A-XX the million to and and higher revenue volume reflected program weapons. satellites, planned government charge million $XXX T-X of Tanker negative cost and

initial MQ-XX these, mentioned, potential our In to intentional key market are and such are on products order and opportunities the Dennis selective not current investments we As business considerable in taking cases create based deliberate long-term services the T-X and market account quantity our into and valuable as decisions with just franchises. the contracts.

costs have additional into purposes, without we the the and assess revenue opportunities. account market expected contract future of life the initial For taking potential anticipated over to accounting the

with long-term These provide investments valuable a financial in these Boeing's consistent not quarter. outside priorities and now and for organic performance investments growth. portfolio The awards its T-X in strategy the do growth leverage of are BDS franchises the business the guidance cash and bringing and our finally, total of flow of a year. along all foundation of and increased quarter the the key number long-term additional translate strength And planned Our capital of in charges billion $XX quarter into our against the our charges impact with to the to cash earnings for investments United programs from These backlog billion. of contract flow deployment BDS MQ-XX, with XX% $XX in stakeholders. investing won States. orders

and increased for Global driven the rate growth X. our Global our year-to-date service outpace solid Turning to were increased now revenue services expanding slide XX% at than volume average of billion solutions. the to of products going third efforts chain sales results parts market and annual Services quarter, Year-over-year XX.X% on focused in higher offerings reflecting growth by XX% Services mix for quarter In ongoing margins to more $X.X by Boeing reflecting higher of well as of X.X%. forward. the the objective quarter, offset predominantly of supply operating investments costs on and period as BGS productivity meet portfolio

awards backlog During the our our One won the BGS Boeing offerings customers. The $X billion. year strength underscore to to quarter, key worth our key of bringing $XX this contract billion approximately wins

XX third reflecting our in cash a increased more we've from and XX our and In in business. to $XX in authorization strong we dividends sustainable with of At we billion Boeing, invest the and billion our the to anticipate continued remain was key XXX%. Boeing higher than cash for Let's support last stock operating free customers, cash repurchased billion dividend slide flow XXX dividend XXX% production continuing remaining $X.X the while $X.X the at third XX% strong of long-term future end strategic cash growth in XXXX Since expenditures, shares year, and shareholders, planned than $X.X per approximately share time, timing and of increase We receipt more of commercial quarter track $X quarter and deployment to invested approximately billion to across our paid the we focused to of Operating driven growth our shareholders now on flow we've to same remain to and strategy. opportunities. balanced committed on rates, areas for and performance completing turn returning flow next X. repurchase repurchased months. the core months billion the over million by primarily

with levels, move cash We of ended and billion to cash the credit stable ratings. debt balances now Let's slide and marketable and X. quarter $XX debt securities, on

to and innovation returning to continues flexibility provide cash in value invest us again opportunities shareholders. Our position profitable with to growth while

Let's for XXXX. our now discuss turn slide to XX to outlook

year, revenue $X to For our higher the by billion the billion. billion raising full BGS primarily guidance between $XX we're now reflects $XXX BDS of acquisition. and and volume in revenue inclusive be increase KLX This

of billion segment full also XX.X%, we're $XX.X XX% between reduced to to in reflecting $XX for between again is investments billion quarter. reflect for than and the billion and T-X BDS guidance BDS margin result, XX.X%, year is in of timing increased updating MQ-XX now XX.X% this again revenue X.X% strong the guidance our our performance We're margin greater between expenses. a from between be guidance of increasing primarily now $XX margin guidance and and BGS prior billion $XX and guidance BCA investments guidance our and to programs. be T-X and As and BDS. be prior from and XX% BCA reflecting to than BCA's operating period MQ-XX some greater performance and strong

decrease full our accounting $X spending full lower from as performance. increasing reducing on timing again net by expected share charges. of our be earnings for for guidance rate, be to capital per $X.XX guidance improvements tax billion, of $XX.XX core expenditures year as $XX.XX than our prior year million We're are a performance $X.X to billion, and $XXX approximately We and guidance after now between reflecting well

the manage we continued the our and throughout the across order key execution areas include, recovery starting as chain, healthy well the factories the look of As continued as XXX Tanker supply our delivery to and of towards KC-XX within momentum year progress our strong focus remainder portfolio. continuing

results. strong So to in summary, continues our core deliver engine operating

and differentiator make we We unit prudent time, and strategic operations the as marketplace, across our the to same strategy challenging and will At talent innovation key the of in investments, company. use the a will profitability I'll to leverage grow to turn around and win functions and improve revenue, margins, objectives it goals set tied capital to business Dennis continue flow, elements closing year-over-year so us All these customers. to achieve three support will cash our goal working for and value generate and cash delivering back while that, help some to our comments. to with efficiency

Dennis A. Muilenburg

right. both Thank on With our our hard Greg. the All great our quarters growth focused driving results have you, partnership three dedication with us remains further strong productivity. and These and a and behind the our work team customers employees and were of achieved we suppliers. through

actions addition reduce which decisions, to we our less rate in pension in Commercial cyclical. I phasing expanding business, In our is strong production also the includes business. my earlier taken own de-risking market labor strategically our services dynamics contracts, our This in long-term remarks, have spending, stability research liabilities, and development our our remaining and cyclicality Airplane with mentioned to disciplined creating

and continuing We organic The strategy. investment Adient executed KLX acquisition are complemented enhance and returning of with our with and our consistent that by Safran, our acquisitions value growth on have joint and and strategic partnerships long-term the strategic growth plans. recent shareholders, planned venture Embraer, strategy and accelerate partnerships entirely robust to this

will our leveraging and continue the investments cash sharpen and our best our building and unique our levels to our driving the the and strategy, maintain Our on to unit One leverage of three and and power our on investments, of and and productivity world-class services production, priorities talent on the and our development these Boeing in on Commercial continuing Defense, innovation accelerate progress to going a growing profitable develop improve business Space productivity team & growth deliver on business programs, those stretch to and Security in advantages, balanced strengthen enterprise fund focus are consistent key of plans performance to objectives efforts. commitments integrated clear our throughout industry. business, delivering deployment Airplane beyond require Achieving to disciplined strength value-creating enterprise leading-edge growth, and strength the forward ramp-up and pace continuing and in

of employees value and growth, continued and questions. your happy shareholders, to All other for top increasing With Boeing market leadership, and be stakeholders. our which sustained line we'd bottom take that, customers, position for

Operator

go first Doug Bernstein. to Harned line of And ahead, Please with sir. the

Douglas Stuart Harned

you, Thank good morning.

Dennis A. Muilenburg

Hey, good morning, Doug.

Douglas Stuart Harned

– This the will part. discuss approach will this taking just I'd one the exceed on defense. you're to probably like

on it's fixed on T-X development price question programs there's the took history. history know big not and MQ-XX as of has and will And no continually but working fixed has good, approach those you be Boeing this contracts of for been development be You'll been than more the price been that part you and Tanker, difficult expectations.

competitions should and mean bring So I'm generate we then, and you profile over you aggressive these future see do And I these as the these you that describe what bids be the be how long expect it history before to a time? to these? you're cash all will can on new back of here? just programs kinds us. risk returns the measuring And how do curious, accurately get of comfortable are

Dennis A. Muilenburg

to Yeah, profile a your you flow add shot cash as at the and I'll Doug, Greg, in ask question, macro then let on well. take me

focused $XX a a believe have all, combined Doug, and two some and decades so very Now this opportunity them, franchises. first franchises on of is have deliberate that those targeted T-X targeted are key billion roughly space one, with defense programs MQ-XX, and we measured big lifecycles connected strategy between that in

be and at business going with taken have strong that our a way, front very result return in to diligent a strong. invested very have up the look a and is case is We shareholders very careful, to these as a

bring are men of a to decades. think These mindset in and to capabilities uniform. are customers measured applying commercial our So benefit women and that leading in going immediate edge franchises also to our

benefit. So shareholder there's and customer benefit

here. of contract space, initial that a give represents here investment volume in a So, XX% you XX% the services of the key of so contract first capability than we run less T-X, production the sense strategic have to than And it point is available focus. on less total that and total tremendous

point Secondly, to on your risk.

We have de-risked On flights these and than flying purposely, T-X, are they done example, today. have investments, fundamentally Tanker. two already. these different for production-ready with test XX jets significantly we programs, We've

in are These small programs We are rapid development to this highly leading program. confident production.

investments So the into as build flight contrast, two design had the board. we Tanker, on you on We made have we production the when recall MQ-XX. be year. drawing thing units years aircraft flying going in today last to that'll test In Tanker a still few for purposeful T-X. we prototype a Same started over coming

move capability So again, accelerate the to and customers our swiftly is for to idea here production.

the result, these than profile are risk of programs a dramatically different Tanker. As

shareholders, business a significantly de-risked a to case the making for that program, good This performance our financial with overall, have all cash through fuel So strong lens and is performance strong investment looked going at of cash company, good to we our organic in the business of customers do investment. the is our excellent frankly, this. a solid of our case, and an be use

provide just and of you in expectations. I'll So terms profiles to if so those add-on overarching want comments, cash Greg,

Gregory D. Smith

all of kind cash of level, I'd highest a forward flow going that at doesn't growing as view the wins. that We've Yeah, our these consideration. taken guess, I into result start of change

and timeframe perspective the start look XXXX of to kind XXXX. at MQ-XX T-X, phase ends in in you the programs, of a about on options that on through If from begin EMD each then the

the entering into – of I'll and kind along timeframe a breadth phase that then development say you production. it sense of So and gives the

EMD profile And level, isn't all for we through well that of expecting So as cash are programs then these phase ultimately going the I that generate to to at really I us think flow highest as and the change as of behind de-risk are these. a result production. that into again, at moving we think the Dennis said, investments moving made to try us both

Douglas Stuart Harned

Okay.

Operator

Next Bank America Epstein is from Merrill question go Ron with of Lynch. Please ahead.

Ronald J. Epstein

Hey, guys. good Yeah. morning,

Dennis A. Muilenburg

morning. Good

Ronald J. Epstein

was It seemed kind terms towards up XX getting track. that? more when quarter, and potentially that about and then supply with in think of like about do actually how I this in the supply can handle back bit happened the little working talk supply about of pretty if XXX the think what you chain the then, quarter next went wondering how well could rate chain just you like a getting on and the you chain

Dennis A. Muilenburg

Ron, and XXX be execution program continue on and have focused been question Hey, great to Yeah. and production we very recovery.

healthy that continuing basis. seeing to are a to return on but chain condition monitor daily supply we're We a our

As fuselages while recovery work some and being through you've we've had have and the particular now recovery end with year. seeing work our towards engine we're in seen, we risk engine delivered engines the have to issues some to Spirit and on of order anticipating there, and do and we plans CFM purchase also fuselages we're still to

hit our for well. can we'll that noticed, see The that so changed reflected the confident remain confidence in guidance the building as You September not and have we recovery year-end strong as target you've year. delivery our deliveries, us total we deliveries give on deliveries, for

the be a focused the quarter you to in expect stay on deliveries we're very, should signs very seeing rate. deliveries across the we're as XX as executing board. those recovery month more on in As And see the to exceeding going back-loaded result, fourth good continue Again, will our but composite, to always a production quarter, that. a

as as a to planning year, to month. look Now, we XX to next know, you step-up we're

from That some and recent taking We includes learned those. lessons are ramping month up step staffing applying XX a the earlier.

XX that think see was as what are of is I are a year month airplanes we and with us help this additional step and the brought staying to has step. turned different. a month that MAXs. also in-depth up month we also in of of half health been some challenging XX and a you'll the So chain also especially the place staffing to Supply onboard the XX for year a model NGs is Roughly nature had the half major we and little mix changes. is next of stepped This monitoring

and As MAXs a year next be we point. the almost to rate we'll by break, that month entirely get XX towards

mix a So difficult challenge month be the as we next model will as not year. to step XX

continue the chain I'll on But focused production line in ramp-up to for our plans. we're customers, overall confident staying So say our is this. It's positive we're we're hit planning. we seeing deliveries also recovery here signs into remain XXX factoring that bottom profile very, and on very in supply and very important that and general, our

Ronald J. Epstein

thank Great, you.

Operator

go next ahead. is Seifman Our question JPMorgan. Seth with Please from

Seth M. Seifman

on I morning. good and wanted demand much with very time side. up Thanks follow to the question, this another XXX

higher can on of on with regard before investment? the kind Is XX while with that to it a does potential about month. get you have forward talked decision still possible of stuff thinking pressure move upward demand that that and about to China lot move the You've trade to settled make or a a to than there questions are outstanding

Dennis A. Muilenburg

in China countries with and the take something a healthy Yeah, China, the leadership Chinese Certainly, industry. a very conversations government commercial engaged relationship, one that. aviation standpoint are our China, particular to engaged a view around on interested U.S. fastest we're we U.S. we In in us, maintain on world. the dialogue governments a other U.S. Seth, and with along aerospace important world. airline at when In customers growing with both very trade the very and long-term macro the with from of that's look environment, we're and the the in government the markets

Asia growth. the the we China. patterns rising in years beyond those well strong say in said year I'll China XX are passengers there, new metrics, million and normal, world about driver next needs is that so a are fueling every X,XXX about a airplanes; middle-class very growth that of GDP are Over new population tremendous in Traffic XX,XXX XXX

and and American at component our Boeing U.S. U.S.; sector, that trade is look to leads very aerospace, is generator the the thing and interested and far all trade biggest the supply China greatest take when Same growing within healthy in aerospace So industry. a you trade that chain by in manufacturing in a jobs. are the surplus, surplus

and prosperous there's aerospace So to healthy, both China reasons a in have strong U.S. industry.

You skyline view. long-term timeframe, X,XXX aircraft, this combine a right? that we're particular, aircraft backlog, is with for XXXX we the backlog XXXs, and strong backlogs said today, in narrow-bodies, with in in and So filling earlier, than as more X,XXX

to we attention trade, it's while and something not changes pay analysis. us, So it's it, near-term very and to we're that modeling very important in our engaged

Our our really to our have the drivers the decisions stepping way and in month that's of and be in system, supply decision customers customers XX we a XX we smooth our by are supported commitments chain, ability with stepping will profitable to month around and for health around backlog a to that a position up execute the have for production that the our strongly company.

very to line. to when that step And our production smooth going internal diligent month to step, remain year going a that's to sure operational focused and work done a ready make that a we're do we and that take healthy in we'll XX to And so and productivity it's step we're much continue we're on confident next to manner.

Seth M. Seifman

Thank you. Great.

Operator

Arment Baird. ahead. Please Peter to go go we Next with

Peter J. Arment

Yes, good morning, Dennis, Greg.

Dennis A. Muilenburg

Peter. Morning,

Peter J. Arment

next A years? BDS, tremendous with in the profile KC-XX, we helicopter the growth the just amount think backdrop of budget T-X, you've couple the growth MQ-XX, the Thanks. think about Tanker forward had at wins and How on we going looking P-X. got question a you've when the over franchises, do with the obviously just

Dennis A. Muilenburg

not and is on said, a to strong. U.S. couple there battle well. defense budgets and the defense more of budgets seen strengthen signs Yeah, U.S. as stable budget Peter and risk, profiles a sustained, look as continue year-to-year macro are Control I it's we positive and the defense One, we've future budget defense as Act you strengthening long-term to healthy But seen environment, of the International We've Budget signs know. more good, budget, as without in think you there. factors

that, wins, As our is you international of so for defense third the very backlog of MH-XXX and with is earlier, good fuel programs a recent has funding win, Within now. been all T-X growth. our will our strong Greg in for defense, macro said our budget about noted those MQ-XX environment as right and

the that fuel even wins will going And modest Tanker and make at that program production, a into step to still business. recent look defense a more in growth as the see if healthy we healthy. well. we our composite, growth you as As are it business It's

Operator

with go from next Our Please Research. Copeland question ahead. is Melius Carter

Carter Copeland

good morning, gentlemen. Hey,

Dennis A. Muilenburg

Morning, Carter.

Carter Copeland

BDS them, the as just I and to just investments charges back want elements. to the two characterized go you've

I'd or KPPs $X about thinking you If Are do overall As target? then risk? current have are versus two million near-term capabilities How per you square you the – a it. think incentives help would charge, different do on think about you bidding you And billion a you product assessments appreciate competitor Do $XXX a ROIs? way, on something you earnings each competitor the of offerings about had with in took lost it. cost your I me with case? risk-adjusted what was there things that this say you in secondly, or there they could mean, share? your those differences

Dennis A. Muilenburg

then, to Carter, cut I'll take first the add feel in and free here. Greg,

the really see unique around this great investments for our team, make these to on investments, First we've customers an these of point That's years and that a smart make your shows future. all, made remain essence, pay those women. T-X for accelerate value, kind and the build and have as for mindset company, in for think defense our those and very our will to targets, of these and fact again, MQ-XX to category. confident here around as that long-term, that is long-term to long-term now, targets as invest creates ability value is and areas, that are that that the opportunity, to cases, very we in women over customers. on capabilities and I way our of great capability in investments incentive the mindset are our well shareholders create our We've mentioned our balance the very business for several a value capability are men we purposeful this reflection key philosophy. targeted for and few our brings in That to balanced servicemen provide to so investments of select in and uniform of de-risk and the sustained company here a is quarter focus our investments in right both long-term. you and investments programs were decades we customers create able of produce to to fuel performance franchises what because a exact through It's our them hardware, short-term To targets great the flying of the incentive smart set for single that annual to our value making investments value, and the

parameter So for that's important us. an

comment of Now, able we're about in solutions customers comment to terms really your the can because on I to bring we've the fact can't competitive that very I comment positions environment, competitors' but the in on investments making bid what productivity. our of is our been affordable

manufacturing investor our all you're we've we've in that investing to we're shown in we're aware of design being our well digital reflected are of as and as fact capabilities Generation had like our and these design advanced products things designs, these second-century as capabilities, the – defense think new customers. partners, bringing many I Next production that support

Anything you So affordable, want create are they capable, value great our they they and extremely to they on for are shareholders. Greg? that? customers, provide capability our for add

Gregory D. Smith

from the on at not quantity, broader looking case. said, the look what contract specifically invested would capital. capital, case, return question as your we I'd various say to obviously, at at take invested we just it on to but just looking NPV, looking perspective guess that, but what traditional market have I return Dennis business win, business Yeah, expect way a to and and a very value the at on through lenses net a stressing that would ensure that and and we present opportunities what –

doing have how said, in same So associated I'd as have a first it's say we're kind belt, Dennis that's T-X look lot of it such far been look, as platforms XXXX. and at looking and then run go, multi-dimensional that the as and its flights like risks spending two the that an how under flight and the as energy time then in the it to we obvious made its about we company expertise but XX XXXX at of at flying engine across and time, MQ-XX things from something with

bring our to Dennis the So war the the try to purpose-designed and leverage de-risk and about can and fighter the to the game-changing going our these and are best value to clearly add productivity platforms that hard to purpose-built war talked model-based are customer tried and we've shareholders. and enterprise, fighter we our work think to that really engineering I to to and

Dennis A. Muilenburg

and Further replicate defense and these commercial unique advanced unique manufacturing to across see technologies, these we're the our to XXXX, that our to share like there's and and Greg's that able businesses ability synergy learned point, you lessons apply design capabilities applied our those build are new there to tremendous on so so defense maturing programs, business to company. is programs back to think I commercial our

Carter Copeland

the for guys. color, Thanks

Dennis A. Muilenburg

You're welcome.

Operator

- Next we'll Suisse. Spingarn Please M. good question Robert ahead. go morning. Credit to go Hey, Securities Rob LLC Spingarn Suisse with (USA) Credit

Dennis A. Muilenburg

Suisse Hey, want Credit Rob. Robert clarification. just ask - Spingarn on I of At Securities to for M. the (USA) LLC the topic, risk staying

targeted XX% question of up part your of about take specifically market military I XX% truly kind the you last competitor, from but foreign with ask T-X Tanker? I'm investment as investments that so took differently production for there Greg's aircraft sustainment? wanted then you've since or you I this you like perspective these said cash than planned potential prototype the for saw to creep, are is you other if market is ring-fenced of commercial clearly of the taking the the comments and opportunity? these are of So can in have from more bit that they investments a and going Dennis, already and opportunities And two a to these or elaborate and example most the Who's made you quarter the

Dennis A. Muilenburg

a that, particular at second don't I'll part in the the investments play of and out. Rob, ring-fenced cut you how how Greg, and this part first why take but the answer we've

Gregory D. Smith

that in little investments but Yeah. that'll from with a an through all associated have talk out costs it front tried as but and that's really of of we've you'll the and flying And you obviously since piece perspective test coming of two from it's a there today. move to kind to into a to absolutely. the flow that handling right, the profile runs of certainly that it minimizes the and products de-risk two that risk airplanes some flying the in and when accounting these earlier, and Dennis get talking timeframe made going a and XXXX of over to them, so Yeah, got the a like and to trials, you state taxi been de-risking XX engine XXXX a tried out again, see in labs we've between recognized perspective not Rob, effort, have they're differentiator that And again obviously, had cash of get to period flights, MQ, go obviously big between done there's ground was kind forward. I this paper off I'll development we invested so let that XXXX modeled on little more of a profile And things and deck lot production have the tests that, we've it. into –

bring so of Dennis we to it we seen play So be going and what said, forward, these, but proposition they're because development other we too laid and not Boeing selective fit approach it's we to try the here profile long-term had and what the stakeholders. a different forward strategically today these of we're and lean risk very valuable far is we the it a two to this as campaigns, value than selectively our I you've want for we leveraging all way of these think out in going where saw and programs into franchises into as in on and to repeat took the much some best

Dennis A. Muilenburg

further that today's with here T-XX initially certainly Talon training a this broader by And will take that at then, capabilities the Rob, airplane. Force Air marketplace and so replaced to look value and U.S. be that point fleet the

thank same training U.S. the the as capability. our know, T-X needs to training be customers so in and support Further that that, T-X again to who we a trainers markets Air lead meet be about purpose-designed sense to the international training space ground-based you. in to support award. Suisse U.S. airplane fleet is at the and that good for allies we be and this around to Force needs LLC a size, as other to a placed will is also (USA) and investment. able this Robert addition tends globe customers in also other across be for to of airplane growth billion-sized as market all that why product aircraft, and that services. very a so also to so Spingarn significant T-X of had you of purpose-designed - marketplace applied $XX very typically see training We've around Yeah. terms T-X global the can opportunity globe customers modified composite you light substantial so the if well MQ-XX, side very other international on the well we've purpose-built, look you from already of align in X,XXX capabilities gives and market a a you globe, if is to is attack Trainer And Air Force's and cumulative it of So have and the fighter M. back number aircraft, this know, Securities helpful Credit at look and the inquiries are to also the you and market the as That's a U.S. realistically, the lines,

Dennis A. Muilenburg

You bet.

Operator

David from with ahead. Please is go question next Barclays. Strauss Our

David Strauss

good morning. Thanks,

Gregory D. Smith

Good morning.

Dennis A. Muilenburg

morning. good Hey,

David Strauss

Wanted unfinished at the you're are jobs additional so ago, sort rolling they color the today of there unfinished have the there. line the or XXX, you off they Dennis, quantification do on making point? the versus progress airplanes a rolling for or of to today, off or on and follow-up give some looking are clean the line this jobs any number can month any

Dennis A. Muilenburg

the direction shortages on in in factory. to health, every meeting wrapped of direction, off a of on complete a very above take been in months expect best said, total in it's on with part more, we to I line trends the while trending metrics and to month give committed at, saw we for XX entire get we're in just flow-through continuing right to headed get XX More our stay the very, year-end If at of up, completed production the all work not back jobs that the frankly that it ramp aircraft between airplanes over and done, you and in aircraft made have chain the if in supply delivered guidance. health of going. how and delivery travel I while we're behind at inventory of and plan. to factories, they're couple as Yeah, are ramp-up we're indicator jobs will continuing sense full production the overall deliveries, not the recovery that you And we're look our we're progress said, schedule, stations, the I going we're fourth watching quarter recovery to Across like that substantial we're we're being the and September and the that last airplanes be completed in as element a the that look of focused deliveries, factors, seeing the things have and rate on place of airplane I we're ramp, jobs that outside recovery right so is the factory. the factory set the the are of all yet, position,

Operator

ahead. & with Please question Co. from Next von go Rumohr is Cowen Cai

Cai von Rumohr

Yes, thank you very much.

guide your think your most million So ramp-up than you R&D of lower close to to lot $XXX R&D has R&D to I by the in us sequentially $XXX lower quarter number, by to a third and expected took get yet down was even million. and

some that that the imply R&D more estimate year what NMA? for that corporate-wide so has rate run First, given considering a conservative is opportunity next you're and that does the

Gregory D. Smith

Cai, some changed, some of of year, going spending certainly transition of from just wouldn't more much so some and the run but between that than the MAX rate other the in I Yeah, haven't projects place, too the next XXXX expectations then have and into timing. there's into just other some quarter-to-quarter we read timing

is As as far of kind forward, all see of of kind we we taking a X.X% consideration. going spend say, about at R&D still of high-level what into to still kind I'll broader, that what talked revenue, X.X%,

think between programs. just So timing here of more quarter-over-quarter

Cai von Rumohr

Thank you.

Gregory D. Smith

You're welcome.

Dennis A. Muilenburg

Thanks, Cai.

Operator

UBS. with Next Please go Myles question Walton from ahead. is

Myles Alexander Walton

Thanks, good morning.

Dennis A. Muilenburg

Myles. Morning,

Myles Alexander Walton

XXXX. if the it last you've BCA can what couple was talk about I the looking seen the of fourth we margins wondering kind quarters, margins and you're Dennis, underlying the over we for quarter and year pushback in is there going me CFO to as not to mid-teens happen? target in a Greg, any you're arrive conservative early is to margin give that to looks tell that's going a going me

Dennis A. Muilenburg

Hey, all, for Myles, you there. feedback the first of thank

investments do Commercial You performance margin the drive in and strong reflects it behind mid-teens across and performance margin of long-term making very progress there but in laid productivity results, we're the the and plan and the business. our by on are we're overall that, team this lines product said, we showing focused our a on in and items a to make and Airplane are that, see we a intent performance our number There quarter. as

to and we very great committed making on that. We progress that journey remain are

As comments, of cash Myles' we some then and point Greg the growth margins but end said growth to the as that, before, by our long-term not in we year-over-year grow to see there? and Greg, a this there you only mentioned margin beyond getting his continuing as decade add want do color to business.

Gregory D. Smith

Yeah,

Myles Alexander Walton

off me here? Talk the ledge

Gregory D. Smith

sorry? I'm

Myles Alexander Walton

want You to down? talk me

Gregory D. Smith

program-to-program. effort practices then the our the I'm on best mix, the a we that's of enablers. one The and big step-down sharing those on improving facts. one margin there's in company of talked to Look, and and a of been productivity across score everybody's lot about supplier lot it. In the and XXX you company, and just own give profile going going the on been Well, the particular

everybody's first So, leverage to practices do the foremost bring on these best you and mind program. how and it's them of

seeing you're So that. some of

You're seeing the is but very are focused, lot seeing program you a of margins on discipline cash spending like that just across-the-board, flows and some ebbs the obviously are, quarter-to-quarter.

quarter. more So little in expense to see fourth you're period the a going

so into we XXX something we're eye things keeping quarter of on quarter particular, fourth some taking and so talked obviously recovery that that a some as in favorable and mindful back far the that did I you'll of see that and between some watching in In plan third the we're So what and had we're timing come end about as and as well. of the that profile, our recovery now in year. is daily, around we're and particular, delivery the engine consideration focused on Dennis

but the So changed. lots of moving objective net-net, pieces, hasn't

You're and see towards continue. going that objective seeing progress you're to that

Myles Alexander Walton

Thanks.

Operator

Jefferies. to Please go Kahyaoglu with we'll Sheila ahead. Next go

Sheila Kahyaoglu

morning and the you good Hey, thank time. for

Dennis A. Muilenburg

Sheila. Hi,

Sheila Kahyaoglu

Hi.

associated that were implied on as that into think plays bit. we services, what the little profile recovery it? about profitability of costs KLX some about period with Just in maybe the compressed of business a and how Can the QX margins the we and talk the

Dennis A. Muilenburg

Yeah, so very on of line. all, both first overall profitably, focused top we're and business, Sheila, bottom growing growing services

year-to-date, that line, said, strategy growth see our our top working. growth as You'll about we XX% so is in services

You investments margin. do you year-end for in in you see local some quarter-to-quarter. see our did BGS changed we that in but see margin the We there, the can guidance haven't some variability on bottom margins quarter targeted third make performance line

So a be to both we and bottom expect robust-growing line. And still top Greg...? this business

Gregory D. Smith

some of well. to that quarter-over-quarter obviously and businesses mentioned those and there together for all. elements services by obviously, continue us and not margins objective prior looking as A our our see like the to in and really of from why on thousands this objective on ebb just seeing Obviously it's and that effort Yeah, being there's the again, you're customer, brought to has the a here efficient these of the is reinvest across think look you're in grow so But and so efficient the overall just and that's I that's two bringing – the calls, in platform. starting going as customers and way and most together mix but to something changed to board. the in contracts, lot business, going we shareholder do on objective order value to best the initiatives bringing flow I we services delivering some to think our deliver efficiencies differentiating of really book most quarters long-term, of and I backlog, year-over-year, to Boeing at thousands place back of alone but lot that and of back our outside here go-to-market, of our kind get the delivers in to the and

Sheila Kahyaoglu

Thanks.

Operator

Ms. gentlemen, the will that Boeing ahead. by Ms. Communications. Company please analyst return session. now President introductory Interim conclude for to I of go Anne question-and-answer Vice and the Toulouse, Ladies remarks will you Toulouse,

Anne C. Toulouse

you good and morning. Thank

Greg. with We questions and call will continue for Dennis the media

our In at are any part team that question. please now If Relations you the of session, question Media to interest just following we (XXX) limit one please. of ready that XXX-XXXX. everyone this the for have we time ask questions call first Operator, you

Operator

Thank you ahead. Johnsson Bloomberg. and go go we'll to Please Julie with

Julie Johnsson

morning, Hi, everyone. good

Dennis A. Muilenburg

Julie. Morning,

Julie Johnsson

products business and carry T-X mentioned mindset about and Boeing of you'd NMA? Greg, just that of And looks also how selectively a that curious now like it case go taking fencing when is that sort risk MQ-XX. sort and costs. over strategic opportunity into to outlook for account market longer-term does, of at it ring Does you sort the if

Gregory D. Smith

doing more case. really at efficient commercial-type how and and T-X that that the there's MQ that that these it's the actually a de-risk the more reverse of that, typically make at and Dennis I'd that. Having NMA so on business like you how it we about said the Yeah, on looking do things really of a are looking lot does productive we're us say indicated and we're opportunity, programs would more does on NMA, it

not really together our learned our is the Boeing the lessons So is bringing investments it this portfolio. across where lessons, and of best leveraging reliving in really

on T-X. teams a had on Jenks, who XXX, we've and had teams, Mark T-X. XXX element So obviously as on over the we've T-X was key reviewing NMA people had XXX, teams like over NMA we've We've and had on

back kind across I'd de-risk differentiate to over commercial, look stakeholders and business total that of again, the do – take of market and case in learned leverage some company. again, the how say any more that say competitively through what's really to from the it and opportunities lessons it's all pretty market value So really you bring opportunity that looking to yourself win standard for and I'd and

Operator

The ahead. is go Wall Our Andrew with question Tangel from Please next Street Journal.

Andrew Tangel

Hi there, good morning.

Dennis A. Muilenburg

Morning, Andrew.

Gregory D. Smith

Morning.

Andrew Tangel

much of You cost. winter there industry some and and not in have may all exposure given make profits growth. planes commercial world see it aircrafts How talk Boeing, they about business some labor the that in the are and that the have much you operations and much at do order for concerning low-cost as the strong been all passenger how for predictions low-cost you other and do least is face cargo airlines book to and Recently, the to commercial short-term? carriers bills higher overall, how exposure demand the new ceased airline around some from how you've to state seeing through demand fuel strong carriers

Dennis A. Muilenburg

Andrew, to profitability in see airline low-cost I composite, is a of that we customers carriers. across broad say business have, models point, good range do of while see to industry types we're continuing some including all healthy airline variability of as a would your overall, amongst direction. different airline The the we the trending very

have airline that being the a to and selective provide there are capability airline And able drive composite of It's we're well-managed. and it it's growth. part fact as them advanced challenges helping strong profitability industry, technologies within the further while with customers a been some healthy industry. so And is our

of difference keep the growth health X.X% in traffic very So almost and around from global the growing the the industrial is broadly, other fundamental that, more on but is passenger an traffic. the of sector, middle-class we factor passenger Again, GDP. It market. the the continues airline world eye industry, health we a overall feel behind confident population that. really but macro in year-to-date, big driving to any That significantly outpace

for has said, single XX% million new than time. population that the taken yet As world's first year Asia; XXX the a I Less of every in people fly flight. passengers

for the airplane that's airplanes confident growth us airlines, macro that that. XX years, So strength the in very and the trends be producers, over when overall of if as good going next around you our good at current new market the that's outlook, world, population for to think it's going look to XX,XXX about you fueling be remain and the we

continue see market on we assessment. pressure fact upward to In our

Operator

Reuters Next Please with question Eric from Johnson go is News. ahead.

Eric M. Johnson

and front about in to to to it guys. some off that way other Appreciate an it and happening situation ask the charge opportunity. on is the go with if pain Thank you, is inevitable sort may a In similar the wanted Dennis, KC-XX. it what effort course? is T-X I of load anticipate words

Dennis A. Muilenburg

the No, Eric, those de-risked front These, said, on them. in have dramatically one, are reduces we purposeful production-ready beyond the development see that up us, contract, behind around program Greg that with case different But significantly aircraft. which production the the the forward the those, built flying are it's risk a And we with than where program different commercial business taking those is program as a makes because in contract. That charges than at wrapped planned, production apply that. you initial investments investments around two it to the case business if particular, Tanker. these having T-X, we're and this current future opportunity the look investments, well in quarter,

as will these that early for run production think in begins XXXXs the So of a literally and enable investments that decades. extend

defense make Investments and where for support confidence have line investment have decades a run will So in de-risked different program that dramatically terms and in of we different it's us commercial-like also fundamentally a Tanker. it approach. a and services. are both program production It's making ones the it behind the that than

Anne C. Toulouse

Operator, last for have we question. one time

Operator

from will One. be Defense Please ahead. with Marcus go That Weisgerber

Marcus Weisgerber

my assessment a in that package planning U.S. the plan dependence. of taking light Chinese-made thanks of Earlier of base American weapons. to and warns Pentagon they which areas in invest they in the Hi, and question. for are is to released the good the And that chain of excessive morning this supply month content defense-industrial Chinese an reduce House legislative White saying

you any be pentagon reassess investments? differently those make chain do will Boeing the report indication suppliers is any getting and my question if your of or does So supply of any look you have

Dennis A. Muilenburg

something that get very and with every day. Yeah, the as into the working export/import a the our we U.S. Supply great our are customers. and have in we much business, built built Chain rules business and to that applied and into that's and Pentagon matter all into connected are do base defense-industrial regulations are how of hand-in-hand We, normal plans, policies visibility of

So new supply this supply as sources, we not look capabilities is to deep and at chain us.

completely Defense In the that we I'll we'll things sources we and I business satisfy the model our we as to add anything and will or understand have, govern to to that U.S. don't the say discipline for in that diversity define ensuring with to today, jointly and of that here need ensure these Supply going continuing we be this fact our sources supplier just customer going defense future of work Department needs. Supply security business the Chain. see as additional our It substantially that's forward. change Chain our the are

Anne C. Toulouse

call. media, at further please (XXX) the Relations that you Okay, our questions, if Media you. Again, for XXX-XXXX. have members concludes earnings of our call Thank team

The Boeing Company (BA) 24 Oct 182018 Q3 Earnings call transcript