BA - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. Good day, everyone, and welcome to the Boeing Company's Fourth Quarter 2024 Earnings Conference Call. Today's call is being recorded. The management discussion and the slide presentation, plus the analyst question-and-answer session are being broadcast live over the Internet. [Operator Instructions] At this time, for opening remarks and introductions, I'm turning the call over to Mr. of for President Boeing Vice Welch, Investor the Relations Company. Matt Mr. go ahead. please Welch,

Matt Welch

Thank Boeing's Financial are Welcome I morning. Vice Officer; you, good those and Boeing's SEC West, to as in and President Projections, estimates Chief boeing.com. Welch, Executive with and and Brian Boeing's and reminder, am and a quarterly . And today's me involve Ortberg, forward-looking at presentation today discussion slide Chief Kelly President statement and Executive you Officer. Matt call. our can the the follow at described risks the in beginning including goals filings presentation. today's included in broadcast disclaimer and earnings of

disclosures to to also in you We presentation. non-GAAP relating refer our the measures and earnings release

over to call the Ortberg. turn Kelly will I Now

Robert Ortberg

for and today's thanks everyone Matt, to call. joining Thanks,

get into families for condolences first flight XXXX. quarter and earnings of air fourth the thoughts our the both let offer Before me deepest and ones loved I

Safety continue to they the the South airline assist and We National support authorities the accident Board the investigation. as Korean in Transportation U.S.

Now the fourth to earnings. quarter turning

our During to X progress all areas. call, highlighted as begins, And making areas I in X new critical steady last we're the the year recovery.

business. stabilizing area, first The the

returning work about when the has so resolution framework current task when did with system. our on IAM can our floor. the so all been you're factory you back People work production were employees floor. We management training ensuring to to we to energy manufacturing and our up, strike, on factory the Following system. the plan the their we executing a started certifications production excited time on and the to safety factories that commercial took ahead, see the methodical rebalance healthy of line team are a the to prior of restart within This and included

our and including status, the X reported An a with an encouraged of in the early our system, agreed at upon on have shore For are key fuselages, we month. stable to also last management is and making X rate a enable all stabilize significant was increase. I'm management spending the lines improvements, in supply the important next the production as production they they're customers a to the XXX, at year indicators performance encouraging. balance up are on ensure a reporting of that stable but XXX system, accomplishment finished The best chain, news to business disciplined need are signs and ramp, our working is or monitor production Like our production. Progress sheet. including to that KPIs. It's early our XXX maintaining they the seeing are innings prior continues, production the are pleased stay safety the upon rate time the prior on we to per we rate strike. what factory the per production month, the pacing we that as the item to parts past management through we XX which increases have measured inventory a and MAX, floor. saw safety they path month. producing we and an to meeting And system adhering now XXX on reviewed XX cycling. In that beyond our all It's safety for were stable factory with completed system including They they sufficient agreed about our to production which quarter, FAA

while delivering recovering credit share the investment-grade to rating for business an committed maintaining our are holders. We and

rates. all with within programs our market's shortages control the confidence supplier speaks volumes for working established are readiness commercial in about Notably, supply of our the including last part to the our I think offering limits. ensure chain, across across stability We're their recovery. the year sub-tiers production demand our and

to promote system. to as sessions dedicated with operate stay as instituted extended as we aligned, We have X-way to together production as communication well suppliers insights X provide

programs. of development element is on performance recovery second improved our the The our

the While disappointing, troubled had reviews quarter are the programs. charges EAC in all I to BDS for on have the complete the deep-dive opportunity

very stability means stopped estimates are EACs clear focused within the risks cost growth. and on proactive drumbeat quarterly of more we so being on projects. the We the eye creating This complete to and our this

While better making actively to to I working outcomes performance, this know we're contracts for past our in it both doesn't quarter's achieve the customers show in manage progress parties. with

performance Force necessary all and Force all our MOA on of our the customer our the program Air performance focused really company customers. management, an focused this with for make VC discussions the the which in The a seen we've the We're on has and term on managing of and also as that on XXB that changes second improving You've to programs the an Air program. We're active I in U.S. on performance improve is program, program, T-XA on the delivery. program entered improve active into actively U.S. like. a we're the the with active to MOA turned to problematic discussions

on programs, there's manage ability While I performance XXXX. in the silver feel better price better no bullet these to I fixed our do said, about

lines on On time to the certification. getting focus we these commercial and previously side, are XXX-XX programs. as the through as on updates There communicated well continue the we XXX-X the to XXXX no

fixing through link focus handle leadership working year. The icing their with uncovered. the closely key will a on area in and this XXX-X the we in still a the of FAA, is for light XXXX us phase, back be issue good which test, finalizing solution, have thrust flight program. we're changes on to the design we and the focused Working the in especially include XXX-XX, we certification testing On plan

journey, culture but third This will be making moving we're multiyear area, a Now change. the to already progress.

discussions Leadership rebaselining Boeing change. In fundamental and will program values teammates. we're leaders what be make with perfectly getting of we'll Our help on elements we and be expectations to unity all for need clear incorporated to things to and our focus system. leadership become we will all and how grounded it behaviors successful annual what teams takes our frank our to not core score engaged implementing management more only but we to about a by accountability of performance done. We're These make development are enterprise their incentive teams having single promote our XXXX, of a our the and be culture the customers done, going our in promotions get Boeing get what into plans.

restoring employees, with be trust of growing talk a excitement back, getting part turnaround. I As they and want around and a Boeing their of this there's swell to

is for area future a So new the Boeing. last building

reduce preparing have for to overheads road in to operating and us. investments redundant reductions system. continuing management our bureaucratic, to been always well focused ahead While by and areas I'm This layers streamlining future. our difficult, are that of establish that environment workforce pleased agile in serve aren't we us our less will more a we able make in the portfolio We're business core core important for our while as

and saying we remain and core products So are that for wrap robust markets the Demand growing. let commercial our strong. me by services serve up defense and

to employees than commitments incredibly and on products our our Our $X.X high-quality portfolio, delivering at Boeing. clearly our and of the the do demonstrates talented value trillion to acknowledge safe, we're want meeting customers. I focused backlog of thank and more

in working together. and resiliency It's me us our to confidence of gives path forward. commitment all Your going take

happy operating And results. me take to cover after Brian be your turn the over it let to we'll Next, that, to questions.

over you. Brian, So to

Brian West

Thanks, Kelly, and good morning, everyone.

per with IAM the loss with a the Revenue in of working driven $XX.X stoppage. and XX%, shared billion line reductions down core financial commercial driven last and at share with primarily the work previously The the last commercial charges announced performance call. stoppage lower quarter, total IAM deliveries of were certain work was announced stoppage. agreement, in programs for with start as the cash by quarter. impacted well as defense on flow by $X.XX, costs the capital reflecting company deliveries Let's IAM primarily timing, billion, associated was unfavorable impacts work the our earnings $X.X lower primarily workforce by associated Results usage was year. Free expectations

billion the airplanes impacts quarter at the includes I'll and Airplanes. ended XXXX Revenue of Turning XX.X%, was next stoppage $X.X previously Boeing delivered margin and Commercial quarter. was billion, airplanes. XX from minus primarily reflecting X,XXX in to pretax the page, than announced work operating including $X.X and more the IAM programs. Backlog the and BCA in charges billion $XXX XXX agreement, on cover

in more step give color December rate. XX delivered programs. on restarted I'll the to up X And production, airplanes we the with to The as Now in days a December. to January XXX program we've increase gradually including plan XX factory and key in delivered in XQ, of yesterday, go. On XX airplanes

production year. needed in mid-XXs More supplier as is in and be based month inventory All We low per the levels. our the we cycling lines and in factory to on monthly continue to the X supplier for a master expect adjustments later on by make go position above to schedule, already January. broadly manage to XX in

Over across inventory stability to year, production the promote our has our buffer grown past system.

India deliberately to stabilizes China with from XX to production more for ended in X% with January. As buffer time, to The already and rates XQ return we plan prior levels. in delivered over another quarter down built and inventory normal majority customers increase XXXX, XXX-X about XX the

within midyear Given to the the the shut remaining expect customers all factory deliver impact down of now of and we shadow the strike, to airplanes year.

anti-icing stable XXX-XX, solution approximately at airplanes and ongoing design expected testing follow with were On the is to the the later XXX-X XX inventory certification on levels year. in and

the a Carolina need we we On delivery plans per recovery we at the X plans working year airplanes South through to rate exchangers The and with the for market. as the XXX of certifications. made recently program in for exited as heat future prepared commercial anticipated seat XX quarter, expand our and production production on of announced operations month delays associated delivered program, progress

to the prior with We prior are year. We the stability last this ensuring system ended quarter down chain quarter. from next the the airplanes in on to intent rework, built sometime XXXX inventory X on making rates demonstrate XX production supply require and that increase

expect and impacted the work XXXX. and in factory was to finish the ability early the complete shut this Our down by stoppage work also rework we to

the announced, XXXX, as in we testing continue we expect costs inventory through estimated million stoppage. billion, agreement recently with to the first of incurred work FAA move finished certification. XXXX resumed, Flight associated the $XXX years. IAM lead and over charge spend follow higher on the levels primarily and XXXX at will as several next finalizing and labor moderated XXXX, pretax spending Finally, as still we'll previously XQ be reflects delivery $X.X due in the to the

to noted inventory unwind associated build As similar with largest expect prior year the programs with use will which typically cash prior driven production delivery, the the to to we by deliveries first the look first profile cash previously, development accelerate. of as ramp,

Defense higher $XX the the & billion quarter, aircraft the and pretax including of in work charges for manufacturing margin over stoppage BDS $X.X including Boeing, XX with will announced. The the in Moving aircraft comprised the awards in and these years T-XA Force and the contracts Air TX reflecting of billion, recorded programs spread costs program estimated delivered primarily on XX% the on estimated the KC-XX billion. Revenue page costs, flows driven was development to the cash satellites pressures Space. decade. booked XXXX Tankers by XX XX% KC-XXA by at in to in the through was with the X quarter, aircraft in price the Air Force. IAM remainder X/X programs, fixed were Navy, the volume from next KC-XXA the operating production X a the cost orders year-over-year few price and driven for agreement work backlog during new BDS impacts minus ended XX.X%. charge portfolio of development $X and coming U.S. as billion the U.S. down $X.X higher of U.S. previously fixed T-XA charges, and EMD beyond. Roughly and and next The on including P-XA final

disappointing complicated transparent delivering to work acknowledge on Given development results. and to impacts each These focused are as we that the and and mature fixed retiring be contracts, these we remain stabilize continue mission-critical We are we'll to our of about these capabilities price programs. quarter these nature programs, risk customers. these ultimately

to make including continue As and order milestones we Kelly already noted. XQ, key in delivery progress shared,

as for T-XA are efforts to proof better how find Importantly, approach through a point other continue parties, portfolio. the we for we the of for the both and outcomes our overall with updated acquisition customers work working will those is parts

programs. On the the primarily comprised of fighter XX% portfolio, of satellite

F-XX the and Our production wind the disruptions fighter due programs losses ramp-up down. again in recognized XQ associated to with F-XXEX

performing few other to to a these needs. The impacts platforms capabilities revenues support in satellites in although the stoppage platforms quarter portfolio to the to as single-digit derivative We experienced the customer across high of our legacy realities work work program tied are also we margin recognize compression IAM remaining mid- PX of range, generally margin and the the and XX% fourth of to agreement. commercial development due refresh the

in levels longer threat business for work can performance stabilize transition development levels environment tighter more to to with still confronting remains execute in to our as continue us, We that be new by nation single-digit the BDS still front production, supported While contracts our products confident demand we the margins strong, allies. high term. The we return underwriting historical and programs to on expect standards. very improve our to medium to defense the of and

Japan high and well, commercial service last Global and Air government sustainment revenue focused terrific the year, the backlog C-XX in services billion. Operating offerings billion, operating X%, from conversion. margins. In F-XX was record with for double-digit BGS Revenue the volume. a next BGS flow Moving up ended XXX $XX quarter, primarily $X.X Super to and both XX.X% our page, margins and is U.S. was the received delivering a perform contract at mid-teen well The on as delivering on franchise awards and well capital-efficient secured to upgrade quarter. as points record Interceptor with $X business long-term to basis in executing quarter, Services. billion on profitable, BGS mid-single-digit margin in continued commercial the margins higher compared cash orders very the growth, up Boeing Force. businesses a for

cash capital originally the $X.X billion, October, securities, I'll by quarter quarter offset billion, at debt to a the the billion free and down in mature cash $X.X Turning On ended billion we raise flow $XX.X The marketable ended the $XX and repayment. in billion $XX.X next balance by bond page, debt cover reflecting and the usage of to debt. the primarily cash partially in XXXX. repayment driven at successful early set

undrawn. grade Importantly, We the objectives: committed remaining the profile, remain credit debt maturities $XX revolving managing the chain prudent rating; and main sheet to which second, allow billion $XXX continue remain balance all manner this and access in year. The maturity company prioritize million to with prepayment factory a investment First, supply derisks reset. the XXXX X in in to maintains resulting of of our facilities, of

We will through evaluate supplement further opportunities sheet we continue of to to the year. course the balance as decisions make certain the portfolio

page, commercial for XXXX, a I'll last we agreement. Free core will The lower Turning the XXXX. down significant driven year cash, program free our and provide expect the still total as usage expect including from on deliveries production of be will primarily year-over-year down of additional be similar me headwinds we capital a on next stoppage including a impacts the driven revenue loss improvement company continued context while it anticipate prior cash let recovery. capital Within to working in XQ commercial an important of on year. flow we ramp And use be over and deliveries, and free to IAM some financial lower back, defense flow. was $XX.X impact year, we exit accelerating XXXX positive investments to XQ by 'XX, be commercial prior was XX% year approximately and billion, down cash expect the businesses. work the XXXX the the the $XXX we in as and of $XX.XX, as to with flow full planned increase cover the XXXX. XXXX defense support in per cash results normal charges, across and use year half million including CapEx by stoppage. work share year well year. IAM deliveries still half could growth stoppage. Stepping by for $XX.X working the work stepped and the to second timing, was a first as of up versus billion turning usage cash impacts commercial seasonality. We both unfavorable Full

and with XXX disciplined momentum critical with $X.X through the production business. Broadly, program as demonstrate year, performance liquidating fundamentals be than long-term our continuing win. to moving the towards underwritten we continue the our customers. With questions. exit Importantly, year the programs strategically real to business focus and across business be to continue backlog shutting product in and we to as for portfolio renewed I'd to continue XXX both a open a development business legacy positioned production fixed factories, challenged outlook strong that its steadily like rates serve the by for our business XXX production and recently our management price up the we on shadow investing finally, services is return underpin of as planned on and we demonstrates down these expect few to will transition rates. This trillion our built that, defense Increasing more significant, the normal XXX the our to stabilizing inventory manage to rates, delivering factors: and mature the business and our CapEx including portfolio, in safety, Long with term, quality view to to long-term production the improving across ramp our it and work support programs confidence we markets XXXX growth

Operator

Barclays. [Operator of Instructions] line David our question And the Strauss first is from from

David Strauss

-- get the have gone viewed -- KPIs Can I FAA. Kelly, that's you month? us mentioned to you an on what and you you or ask go all-in necessary the some already that in you can maybe close you to deliveries XXX mentioned that of exactly how a what XXXX? you on for KPPs elaborate expect idea the with then Brian, of the MAX XX what's -- with give to And restart to wanted those how are, just MAX, you're hitting, how have above

Robert Ortberg

Yes, David.

production So let about MAX. the on me talk startup

we speed, got I know, paying it that up rate. you amount process well, all airplanes production workforce, of dividends. We're didn't on them a building are as where the we very said, aircraft. is important came We And parts. is getting up time spent and right to the the feel stable the of out line, the already in strike supply the I and as come we've production line really the really, So also with training right but jump starting significant balancing actually now and manner. seeing pretty both inventory, good in about a in back Remember which

don't month any constraints the right I has team of and through has the improving So XXX performance ramping his XX in really from supply of the a has rate. the the factory. are overall work during to now see up fuselages, And notably, for -- job Spirit chain off. at paid which us to That great a help quality going strike flow the done the

days, it's I I I going for think pay dividends So to really as us said, early feel going our and is deliberate but forward. plan good,

Brian West

a not year. We're let's talk for deliveries on putting about out just for XXX framework early the about year. And for a how David, to too the But think bit little formal little that. a guidance

the and January month. high solid to So a off be is for delivery XXs start, the very in should

time the mind, of benefit center Now November some the had keep are ramp accumulated of in airplanes frame. December that clearing these in or the delivery

tailwind advantage the of nice an entering there's year. So a

timing and begin We get because likely of the predictability. better the and be restart to February factory than March there's also will more is manufacturing we February then days expect as fewer to be lighter

achieving on is restart XX and is which the half And the benefit gradual first FAA, reflect the from steady include as So our half mentioned. as possibly per we've going going based said, higher production target higher the factory. approval likely to Kelly month rates, from of second the to

our better, in today, look So things we've could maybe here as go if in work XXXX, of a a we way. lot sit got of like ways, us. bit XXXX, front some

Robert Ortberg

you me KPIs back David, that and about. come asked let talk the about also X

our control what these limits threshold are we the traveled quickly of the on at by are. operate. agreed collectively of what determined with stability the And employee rollout and line, NOE, escape you measure we what production part So where notice shortages, want that these to will are proficiency, work the tell rework performance. we've X is hours, system. I'll KPIs and the ticketing They're shortages,

little because yet that planes And were are inventory that will we're trending in and early have indications lot that of KPIs bit we going early so through, is I direction. a say the it's of process but in the looking right a all

So KPIs to we so see to the as far with these XX these ramp but we measure won't good, won't want at important XX FAA so to don't be I to. get continue need and will And rate see to way that KPIs performing continue up. stability KPIs. to and we one, we it go increase. we remember, a And to the show these We for request if feel

And so I think we've got a disciplined approach.

I grounded remarks, As in my that pretty I'm data. and it's facts well in said pleased

there's perform. So focused got performing subjectivity no going But clearly to far to what we've the team these and to KPIs. are on here Stephanie as take. And it's as

Operator

And from question Peter Baird. from next is the Arment

Peter Arment

parts. cash a maybe year. or been if working little spend us a could this bit dynamics of I Brian, some billion on capital called outflow free headwinds things, But about through out BDS the about moving few just we've flow you $X estimating losses, know the thinking XXXX walk XXXX? or for a you

maybe think thinking? could potentially you gave little are or reduce you above but that us us highlight outflow you help I anything more half Anything [indiscernible] the I color half second that dynamics, on? you consensus that it's could of could X. else first that provide be versus to how know

Brian West

Yes, sure, Peter.

impact updated charges. be going a largely October some BDS programs is based earnings anxious on million we've we're that X consistent what free hundred and said on to invest growth based bit which our a little is adjustments that the of higher XXXX the to with So call CapEx few the noted, at with flow in cash I

with adjustments. it's consistent So X those

profile, accelerate first be XXXX. will of half you exiting momentum will second the half we've very be sets us we a cash nicely the terms flows net importantly, as be year. But as the and negative, will positive. calendar in year discussed the that usage mentioned, up for in It positive Now

of in levers. Now terms

of investment XXXX usage going and to The year program. the be continued is by first the in half BDS going be capital negative, is BCA working driven negative due the to the seasonality to well through to receipts. as prior pertains period nice And in running half. steady normal is to charges as contributor and the it first as BGS be customer going

As we be go while to expected flip the going into half. to because our still get the that of benefit it's deliveries as a capital the ability deliveries program. is back invest second half, function positive the in higher working work of Again, BCA as will we all it to the then accelerate XXXX in

charges, half to tend our natural BGS, business. And positive is going in we BDS that then of first the a receipt continued of benefit from primarily from part to favorable move the and second despite and Now the drag timing that's half. seasonal

bit growing steady reasons for I nice So the second going be CapEx but mentioned, is all it's a for going a be about to to as but that's And good because the higher, growth. profile half.

course terms levers we of through the you that's we're aiming and ballpark the reasonable as we're at, a in numbers you what managing the described, year. of the that move and So all or keep updated

Operator

is Sheila Jefferies. The next question Kahyaoglu from from

Sheila Kahyaoglu

in stabilize then, are how to on what to those actively And that to price you managing How mentioned looking business become you to the It outflow do related the and related fixed Brian, the then it the like correlate Is those maybe getting within does programs? pushed in when billion development breakeven keeps Kelly, those to I you are become programs you right. X/X change? timing now. is BDS. you And it for seems maybe 'XX? charges? . that BDS think cash Does billion $X And $X Can positive? 'XX? 'XX? size

Robert Ortberg

these Okay. my Brian quarter and follow so price all with we're up. find U.S. said got path these remarks, as is Sheila, to for better here first them. our in very forward working the obviously, customers. And now programs and us with we've Air working to I programs. the But both on development clearly disappointing go on Yes, Force the us I'll actively was fixed programs, a then ask for

we So is MOAs, it's agreements. this management different, memorandum are through of process -- have which still convert derisking and active these to

contract We changes. have to to convert them

customers us in So as realities a risks working sure real we're that but the at EACs and that stages, with I complete the in think And that I clear estimates have. reflecting then we just said, of early the making the regard. are to are taken look we're the and

more going And are here very next see we're stable until that we're again, with to so and hopeful done not I'm done fixed performance a much these this But year. we're these, price. with they

to continue So to at got we've work this.

do, Sheila, these. hand, lot of work focused team to but on making is Our task at very, very on program discipline, yet management sure we're the managing a

but I I can't yet. progress, claim -- victory making we're can't certainly think

Brian West

X cash be $X.X Sheila, you're characterized to is going And billion, that next the over we X/X about new correct, terms of years. of flow, of the in charge the

So little loaded. bit front-end -- and a it's

pressure we we that see back said what dollars So of dollars hundred October. few in million in versus XXXX few a million a --

broader are of going charges full tend in to Now through. terms the way the the question to on flow

I look lot get of be I wait be behind exiting get won't but as have this headwind positive, the discussion for we will this will to then move that like think bit from a to out because a XXXX, XXXX. flow BDS year, can't we it is beyond through from little XXXX different a much charge we exactly once a to cash spot performance And going that breakeven when And us. be year.

Sheila Kahyaoglu

it. Got

'XX? So breakeven maybe could 'XX or be possible in

Brian West

. Yes, sure. for

Operator

America. from is question Our next Ron from Epstein of Bank

Ronald Epstein

pretty not. Kelly, maybe much planet. Boeing's is mean, on about things I about a mean about that's the portfolio? talk fair bad other every amount every on core, hand, been the that's hand, puts could about in sale, cockpit way X are how thinking could the up So thinking good So like idea. a be airplane one there's for maybe about of thinking What's maybe been a isn't? you it? you things I've some selling what how press you're But been is the that on it, of that thing? talked I And name Jeppesen. about But maybe Boeing's of

Robert Ortberg

continue a the cases, sell you it with some to that I've is at that. elsewhere. And is a -- you review, have this, process like the Well, to one. would the something through continue was detailed organization something. In Ron. of want us There approach. The complete. of is those those what I we've at not Company. The and the each look we're can thing may say decision in, be are core early are the But may major do focusing buyers. that our streamline or to be and see an are only Ron, at you and in in be process viable that's not we cases, We areas. those year. paths, Boeing that potential some look so areas better next be questionable and in of where here's of go to look named Highlighted are there I that you may we'll months core part there as all, energy my going areas, that. not we and of just And how to X be that In off some restructuring first our you we're analysis we going about of This the areas to could through core. some portfolio would which it, or do areas actioning of those that phase coming yes, business think project over you with been

think I through pruning down going that. portfolio, it guidance, you not cutting the if tree. So think of I any But as the give more we're

Ronald Epstein

we'll Got in it. And about this you'd to something expect XX maybe like the more know next months, that? XX

Robert Ortberg

doing Look, I areas. as what along, decision But Yes. about we're you'll really individual come they can't speak there. portfolio see obviously,

Operator

is Research. The next from Myles question Wolfe from Walton

Myles Walton

touch is XX? within to above on XXXX? and maybe expect Spirit specifically on there supply quickly chain the constraints supply the to then XX to just those are and interiors the So observing you issue quickly how heat your get and then context and chain and on get the release And to you XXX if exchangers still if the you're key how integration, of that could ability the

Robert Ortberg

Yes, Myles.

on XX. us get look, for I constraint to fuselages a right now as rate view Spirit, don't to So Spirit

I quality As job remarks, in improving and fuselage fuselages. done nice of flow a the they've the of the really really, mentioned the of the

sets not still us. the It's seats, seats supply the And shape for good. Seats with really the So need said IFE us middle I with got or happen in on well I his sets monuments of we're folks their will think improvement that working as the got on up really at I mean XXX all challenged Brian integration And improvements through we Boeing sometime, with the around Spirit, fuselages of go processes. getting plan sets improved glove the but additional integration, seat, And for We're a customer-by-customer the that. good a chain, very a new look it's some the Spirit challenge we're that. for it on working hand them up heat think -- remain there. a upcoming that type we're certification the cert integration. We've exchangers. a really, on it's of in through production the successful team associated basis. We in really they've still and call still to as some inventory -- well -- us which remarks, XXX. year. Relating But of we're projecting and the in which

a I and think going needs certified. new of where work focused doors, have it's a We've to One in to really the monument. And more These we challenge so certification code call the looking but for Xs, out Xs to and get regulators configurations, a some to a that through things for move spread we a at is we're new to team the allow to particularly to configuration on ourselves They're deliveries code a things XXX seat we've got got continue doors we've real them a those seat spread complex. certification. these time the as we these got are we've complex be they're that, future of that. seat, challenge process to the not are through got be

we'll held as still and example, this for that we've and XXX through of program So integration we'll ramp got that. Hopefully, that have more up we're on year, are a completed get airplanes successful Lufthansa, up. lot seats, a through seat working we

Myles Walton

delivery And number the Brian, Is XX. Okay. for this XXX year, XX, for doable that a number?

Brian West

Yes. Yes.

X of and high-teens get We X to year, we've coming at as we've out this call it, said, got, inventory. want we're to month. sometime So per

together, add little you when maybe all sure, bit for a better. So that

Operator

next Deutsche Scott And from question from is Bank. our Deuschle

Scott Deuschle

the liquidate certified are Kelly, can expecting you itself any there delay from is of once time could then as be XXXX seating launch first-class certified of type cabin And business think characterize by XXXX the on the for hits? inventory the you well? or aircraft pace is EIS XXXX customers to the risk seats which you there

Robert Ortberg

Yes.

take the Brian to seating and liquidation. Let then ask the me first, do I'll

where So have Lufthansa, XXXX actually, to -- which seat just is first to challenges. and I is had seat have delivery we the delivery continue also mentioned,

I the So bad Lufthansa challenges, what is know challenges news, those guess but for news are seat do we've we had deliveries. good

interior, XXXX overall is program in into aircraft. that's the certification interior, baked complex our general, more but for Now a

and from got we've go we seat time the XXX certification work So issues issues those our what to learned are.

be deliveries. initial we'll I So that to manage think the for able

Brian West

XXXX. be heavy And year Scott, for typical which flows, as to is the of is in EIS, terms going cash usage cash new a on before program,

airplanes in to get But deliveries goes are In free really you're are airplanes, cash through mind, of going service, terms which that's going out get in going be to and as going the changing and corp then to XXXX of flow accelerate. accelerate initial you to start you XXXX, cash to XXXX, and generate when not Keep it into airplanes. be those flows, once high

So we're to through once up we EIS. . very going be nicely set get

Operator

is The JPMorgan. from Seth Seifman next from question

Seth Seifman

we guess, follow X to think maybe cash items, on the wanted I as about year. this other up flow I

the factoring down half? improvement in and flow was think this that flow I do the something a that any enabler as the winding How we're guess, then cash also shadow implications them, factories, about seeing the of in that cash of both profitability. enhanced second about talked key You about Spirit the past, we year? implications of financial And -- into talked integration that we've

Brian West

sure. Yes,

Let me at a one. take stab that

we've in got a to verification X lot shadow is factories. in has reworking Lake, those you been airplanes. go So labor Moses as largely work been And XXX the Everett. The know, into the of joint XXX has there

work done. very of part year, the pertains be the we it to that this early As XXX, will expect

we customer airplanes all some things deliver this planning, in Now with. because won't sit year the we we've got fleet to need

labor started the itself is bleed that So that of over this over run labor early part going production. the will into already move first the to And towards other and associated But next be year. has factory to year.

to XXX move the Renton. it Lake, On Moses Lake from equally, Moses labor and take into we've begun

to down shut And We end will expect the towards shadow tail this then by the that off factory year. deliveries corresponding midyear. of

these So described cash move discussed at expensive We into margin terms don't would be done. it's factories in all I going going running the our look They'll time, contemplated improvement because you numbers how It's anymore. that. and and this been X the a flows that long to of say the to to start year. I to see very forward journey. up have benefit over BCA shadow are -- you're is

So and will something be that XXXX that beyond. will be

doing integration, financial impact anxious we're describing what anxious. get is on closed. to it they're Spirit really great good a we As is, as important at is said, point as the and close. a the pace, to not job. that the pertains We're We're Kelly it really pivotal holding nicely up team we But production. ramp One, it we're on that until remains news strategically is

Operator

Goldman Poponak Noah from is question next from Sachs. the And

Noah Poponak

about it that defense confusion as you I And been having creep? I portfolio, these. guess, of cost and programs. much But the of investor everything the so think dollar amount that the is complexity to into some it relative work T-XA Kelly, complex perceived this is specifically keeps these around in there's the appreciate at look What goes size

it? bit detail a that what approach causing the on cost the program you how So little you creep and mentioned acquisition further? fix And that do you can is specifically, updated

Robert Ortberg

Yes.

and TX So the chains on supply we did price is have the fixed development with fundamental not our in production. fixed price large a to back fixed-price a back production,

of on you been production. you don't tanker fixed-price that's So a see that what normally it's We've but rarely program. fixed see -- because of clearly, where And have larger where would us have very the first much a do burned multiyears price been than on you you for challenge all, TXA. development certainly on have

medicine. that anymore. we've going taken our do to So We're not

building a test in Now wants that testing process, and eliminate ripple that, of process still design, you to because Force through what us and allow with a the you've every disaster doing certifying the specific to we've is got comes concurrency, come while to up we're we're back or out either that concurrency. production production are the go that's change change a additional will complete. The time airplanes is Air aircraft, by got some -- MOA, we're making -- what I that airplanes And we're mean a changes.

Air program, forward. MOA got going more So get X aircraft us risk we've us test the eliminates concurrency the that with Force major into milestone the for the with helps really

purchased some Air purchased our it's changes with making which sets. program. versus help will necessarily not X, to risk we it's associated it's them, directly, commodity write-up, those from going EAC is us certainly MOA also derisk -- an then So active good staring logistics but escalation on but also that which in Force equipment with on risk to plans, are by support we're their with at And by the discussion news eliminate the them on also

development we've your good is having working chain stuff a that's the going we're customer, but do And price to So those that price not with fundamental supply option to anymore. back type things fixed a the and to recipe. get the learned this got fixed back better not we've a of and is at to not is with production

Noah Poponak

confidence in -- learning have programs, those in that not were flow expressed programs of you how cash you that doing the segment with made that improvement the and the live decisions you've appreciate So that but near lesson in existing the for do here? the if until term end the again, on

Robert Ortberg

do to we estimate look mean, I an the at complete so estimate and Well, at complete.

to of for are taking the we're increased There actual for charges supply are date. overruns our charges much from anticipated that chain. So charges not cost

and chain getting right So to now. back supply price back fixed we are the

having Our XXX% goal that is we're to done. But chain. to doing that, as supply increases we're the from cost the get recognize

all I confidence So to that's why getting back that closer to having have back. we're

significant charges we've So in forward. But read large we it's as resulting obviously, risk eliminate pretty that eliminated going that. through

Brian West

market better us on, development of they even particularly those those term, stay little a including to going are we that's because And you in absolutely we a in do I XX% the not can programs at XX% Noah, portfolio consume legacy are that's portfolio programs neutral, the these counting right, their they development has the fixed-price programs these do XX% demand, be we're including why of to that a for in we would be get internationally, could with MQ, portfolio reason the what to need. the the outside front us. And fine have objective should should, our but the anything XX% all to be doing in drag that's a high TX actually isn't bit to term, not that with cash. there of to margins longer-term included to been rest up portfolio capabilities right always The term, just the get in products they the single-digit deliver of not TX, customers the satellites wrapped to opportunities as that fighter when profit direction, say long in given get that and longer of us, be and long if path moving including gets quite plan X and the that well, performing like to tanker, BDS, of period

Operator

is question from from Harned next The Bernstein. Doug

Douglas Harned

when XXs to -- you're have in upward get at historically, like look the XX the good make sounds breaks challenging. make happen given And to that But XX and breaks to are done you're that the a position have rates, on It right those the over now lot given a in have XX the already month MAX. rate you been rate level you very subsequent in left pretty get X the to people that past XX how month you about years-or-so? rate thinking the to need right sure of a to place you team what beyond a

Robert Ortberg

look the I concerned that, our -- at to Yes, I'm about less as people that. resources do

most X met things important I thing these we're higher then and those the supply once and to that mature. get doing right now we good supply in the forecasted of we've chain think chain we're rates has rate to the have shape that And breaks, is we the we haven't ready built because rates.

So these supply that want the need I in us. continuing out-year production and invest that to for rates decisions readiness to independent on make to sure they capacity chain making isn't supply

we're point and get to increase is to as is to -- levels, not, we're their started we've talking investing supply in us chain. where to a we're we level, in making they about do that and at that including sure said we and to means through sure rate don't to there. ready get communication So they're the be why, And make CEO next stability that working if are remarks, various the what going they're I supply what not opening the open chain

each talked about remember, Now earlier those these for I are to us increase. KPIs rate stay going with that

system -- metrics we won't won't indicating that request showing we these our won't we it, production it, are stability. increase well, make rate isn't approved a be if but for if So we

to But or focusing production the about overall the of not growth. got concerned probably too more too we continue that. for resources, So sure it's work chain I'm the supply on staffing that to level

Brian West

line X lot at in breaks. rate we other us to mentioned, that as for And facilitization. And lines a the Doug, of news those is that and the Everett. is as good think create We're got cycling about fourth going we've flexibility Kelly Renton, in

well. parts, as facilitization cetera, is only et there supply the chain, is not but So it labor,

So And course, we demand there, the feel beneficial. pretty confident is that tools is are of all there which in place.

Douglas Harned

would to on don't you point next to that And there you chain sure want into focus anything when an make your supply the issue to you breakup? particularly you take run is in

Robert Ortberg

not No, in particular.

I the the overall want engines well our is where understand of to that aftermarket -- with airplanes, think build we we tier we're all commodity sure, probably one overall there's the multiple our manage don't increases, as Tier X easy invest very generally That's market there. And that making I'm work that out of well Larry closely make rate supporting for because the sure a and big and more and that in aftermarket. commodities in make third forgings, working hedged I where worried sure their demand the they'll is, the make those castings, lead very believe pretty challenge we're we with that a And their a bets work supply as team like demand portfolio areas our to stuff. his stay competitor to there's then second have increases capacity going components it's things that that have to chain and have the on closely with as in find all we GE aligned. investments that -- got and making they our the scale. But they've long rate less of haven't with to but we'll the kind we in and they to that OEMs you electronics. sure area want it's they're about

Operator

next The of Jason the is from question Gursky from line Citi.

Jason Gursky

you forward well. targeted you charges as for were that have some I that you, margins at calendar. increases kind we'll got get on for labor and for BCA quick over this time the on Kelly, corporate Kelly quarter suspect Brian, model one once in of positions. one some those took though stake just XXX just chance a It's of here then kind company's out we that programs margins curious of Brian, coming really quickly as rates? And margins, production do loss you're what X When I'm the long-term next the X quarters over the given for going the on does the just of thing production? the what implications for BCA profitable strike programs just on and look cadence you're financial positive impacts to then in those well range as ramping the all I the of flip the are to to up margins? And cover. costs. your these for margin on then more to some to kind you. the cost like the BCA of received

of Just your aircraft wondering general and on could kind if for comment means views you to a bit NASA? what development on little that the that program it company and of kind

Robert Ortberg

Yes.

me the that latter part first. of Let take

So out development technologies that comes dedicated I taking then it's very things into look It's for next technology factors important an learning think new some we'll And resources us. and how that what are at new It's of that program. airplane. and challenging. exploring our

to there some us. that funding, we're an funding some it's investing, we're got support So on. We've we've project got working but important also

continue and that -- explore I've the and portends we're see learning to opportunity continue what so that sat exciting we'll we from the So future that. there's airplane. want the program with and tell that through to you, think exciting that through stuff I I for team will some

Brian West

And Jason, in of terms BCA margins.

It's And will then talking agreement going margins than pressure. be the think terms better So cost through as move it that, in the quarters in to mind, them as we're too a we about XXXX, yet. early. going But the get longer-term profile, did not as we the next expect quite beyond negative less we're put We're to few IAM But negative. try of X% to be year. They'll exit of about XXXX. characterize to in we the keep airplane. less that's

benefit and but bit going that's ramp the characterize X us accelerate rate productivity naturally. pressure, shadow we're by of factories that going having that to it's I'd versus Now enjoy a massive productivity little to behind a

work it long us, disrupt to favor, this disrupt doesn't towards over order long we but lot of our necessarily behind margin A term. term. our plenty So in get doesn't expectations that think levers the of that pressure the work

Operator

The.

Next question UBS. from from Parsons Gavin is

Gavin Parsons

is Just How much price/cost follow price a starting or tied much the how clarification on margin And up to BCA much price kind quick aircraft the escalators over mix. MAX bit drive realized both on of question wanted in years? then that, completed coming of up up, with side XX the margin cash to inventory, of how WIP? helps and increases the a just contribute of that little

Brian West

supply has That's So it. backlog good. vastly BCA, embedded got in contracts, in is for in until of signed profile of terms the we've hasn't place And end escalation That changed. this of that our up course, a they're that decade. terms of in

really that disrupt So forward, I that we by doesn't kind will to near expectation term be drive the we se. of per even expect we medium you the productivity. any pressure offset tell to as or move continue inflation though, will an term

the BCA to And and historically. manage talked of always some production on to we've of move the we to we mentioned, into that get suggest be tailwinds, margin still about towards we that to more going So would and normal benefits very of outlook consolidation including XX now long-term right disrupt XX we of the mix year it's position. think rates. enjoyed we'll come move mix. More out the natural of going this stable that both be as the as XX XX course, that normal able But and feel nothing are has that the that you about, good and Charleston

do, we today. to see So we disruptions no big as more sit here work but

the of got is inventory right $XX.X inventory, of terms company now. much. In That worth billion in too we've the

get we working will factories as we rates an But the benefit point stability, put a that will and that begin interested seeing be we're are get lower be and right liquidate can to and will capital that the we committed not to we only more we that been see to benefit, there will it's place something those in make so the productivity deliberately investment to buffer in predictability. very Now the inventories begin in spot. in where investment

we've cash that big forward we're Seattle. to big years-ish we're that out couple we this that the So the with and investment because benefit over is having on it's unwind see deliveries the team of look focused that's been sitting next flow in what and on going to all

Operator

of line the from coming is question that And

Unknown Analyst

within be a could XX point and wanted deliveries in a just when a I realistically on of you the you on month know when you could finer finer terms but year? year, to point mentioned to expect put this the at put XX. to if I XX you get

Robert Ortberg

point I better far. indicating. That's we externally we'll so towards just I rate go an do, approval putting like work We're rate. We've do that get finer see hopefully, You sometime dates yet the to mean know and what, things year And sometime look know going trends on a to go how it, providing that year. KPIs that to both or how rate we're that not when that we're XX that the not put said, move and to want plays about of of got and exact those the encouraging the feel a I'm out. to rate the so KPIs this on I internally. increases, say we'll to But XX end going and make it lot approval to through through once of rate we'll guidance to are and next part that -- of yet. why get XX our get the

get guidance. bit before meet feel be stable we provide that think see to can system have we'll the that a a to able expectation reasonable little like we we've that work you I guidance more to do got to I

things good we lot of a yet do. but as we've come start, to off got mature, work to more a to So are

Operator

for joining, Conference Thank That completes Quarter XXXX Company's now disconnect. you Earnings Fourth Boeing you Call. and the may

The Boeing Company (BA) 28 Jan 252024 Q4 Earnings call transcript