Q2 2024 The Boeing Co Earnings Call

Operator: Thank you for standing by. Good day, everyone, and welcome to the Boeing Company's second quarter 2024 earnings conference call. Today's call is being recorded.

Thank you for standing by.

Thank you for standing by good day, everyone and welcome to the Boeing Company's second quarter 2020 or earnings conference call.

Operator: The management discussion and the slide presentation plus the analyst question and answer session are being broadcast live over the Internet. To ask a question about today's conference, please press the digit one followed by the digit zero on your touchtone telephone. Again, it's one zero for question. After pressing 1-0, you will hear that you have been placed in queue. Pressing 1-0 again will take you out of queue and may prevent you from being able to ask a question.

Unknown Attendee: Good day, everyone, and welcome to the Boeing Companies. Second 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.

Today's call is being recorded.

The management discussion and the slides presentation plus the analyst question and answer session are being broadcast live over the internet.

Unknown Attendee: To ask a question on today's conference, please press the digit one, followed by the digit zero on your touch-tone telephone. Again, it's one zero for questions. After pressing one zero, you will hear that you have been placed in queue.

Speaker Change: To ask a question on today's conference. Please press the one followed by the zero on your Touchtone telephone.

Speaker Change: It's one zero for question.

Speaker Change: After pressing one zero you will hear that you had been placed in Q.

Unknown Attendee: Pressing one zero again will take you out of queue and may prevent you from being able to ask a question.

Matt Welch: <unk> one zero again, we'll take you out of queue and May prevent you from being able to ask a question at this time for opening remarks and introductions I'm turning the call over to Mr. Matt <unk>, Vice President of Investor Relations for the Boeing Company. Mr. Welch. Please go ahead.

Matt Welch: At this time, for opening remarks and introductions, I'm turning the call over to Mr. Matt Welch, Vice President of Investor Relations for the Boeing Company. Mr. Welch, please go ahead. Thank you, Lois. And good morning, everyone. Welcome to Boeing's quarterly earnings call. I am Matt Welch, and with me today are Dave Calhoun, Boeing's President and Chief Executive Officer, and Brian West, Boeing's Executive Vice President and Chief Financial Officer. As a reminder, you can follow today's broadcast and slide presentation at Boeing.com.

Unknown Attendee: At this time for opening remarks and introductions, I'm turning the call over to Mr. Matt Welch, President of Investor Relations for the Boeing Company. Mr. Welch, please go ahead.

Matt Welch: Thank you, Lois, and good morning, everyone. Welcome to Boeing's quarterly earnings call. I am Matt Welch, and with me today are Dave Calhoun, Boeing's president and chief executive officer, and Brian West, Boeing's executive vice president and chief financial officer. As a reminder, you can follow today's broadcast and slide presentation at Boeing.com.

Matt Welch: Thank you Louis and good morning, everyone welcome to Boeing's quarterly earnings call.

Matt Welch: I am Matt Welch and with me today are Dave Calhoun, Boeing's, President and Chief Executive Officer, and Brian West Boeing's Executive Vice President and Chief Financial Officer.

Speaker Change: As a reminder, you can follow today's broadcast and slide presentation at Boeing Dot com.

Matt Welch: Projections, estimates, and goals included in today's discussion involve risks, including those described in our SEC filings and in the forward-looking statement disclaimer at the beginning of the presentation.

Matt Welch: Projections, estimates, and goals included in today's discussion involve risks, including those described in our SEC filings and in the forward-looking statement disclaimer at the beginning of the presentation. We also refer you to the additional disclaimers related to the Spirit AeroSystems transaction at the beginning of the presentation, as well as the disclosures relating to non-GAAP measures in our earnings release and presentation. Now, I will turn the call over to Dave Calhoun. Thanks, Matt. Good morning to all, and thanks for joining us.

Speaker Change: Projections estimates and goals included in today's discussion involves risks, including those described in our SEC filings and in the forward looking statement disclaimer at the beginning of the presentation.

Matt Welch: We also refer you to the additional disclaimers related to the Spirit Arrow Systems transaction at the beginning of the presentation, as well as the disclosures relating to non-GAAP measures in our earnings release and presentation.

Speaker Change: We also refer you to the additional disclaimers related to the spirit Aero systems transaction at the beginning of the presentation.

Matt Welch: As well as the disclosures relating to non-GAAP measures in our earnings release and presentation now I will turn the call over to Dave Calhoun.

Matt Welch: Now I will turn the call over to Dave Calhoun. Thanks, Matt. Good morning to all, and thanks for joining us.

David L. Calhoun: Thanks, Matt Good morning to all and thanks for joining us.

David Calhoun: First, you saw the news that the company has announced the appointment of Kelly Orkberg as my successor, commencing August 8 of this calendar year. As you know, the board conducted an extensive search process. It was led by Steve Mollinkoff. I am incredibly grateful to the way in which he conducted it, the extent to which he conducted it, and I am extremely confident in their selection of Kelly as the next leader for Boeing. He's had more than 35 years of experience in aerospace and is tremendously respected in the industry. I look forward to working with him to ensure a smooth transition.

David L. Calhoun: First, you saw the news that the company has announced the appointment of Kelly Ortberg as my successor, commencing August 8th of this calendar year. As you know, the board conducted an extensive search process. It was led by Steve Mollenkopf, and I am incredibly grateful to the way in which he conducted it and the extent to which he conducted it.

David L. Calhoun: First you saw the news that the company has announced the appointment of Kelly Orenburg as my successor commencing.

David L. Calhoun: Commencing August eight of this calendar year.

Steve Mollenkopf: As you know the board conducted an extensive search process was led by Steve Mollenkopf.

Speaker Change: I am <unk>.

Speaker Change: Credibly grateful to the way in which he conducted as the extent to which you conducted at <unk>.

David L. Calhoun: And I'm extremely confident in their selection of Kelly as the next leader for Boeing. He's had more than 35 years of experience in aerospace and is tremendously respected in the industry. I look forward to working with him to ensure a smooth transition. I want to focus my opening comments on the progress that we are making on our recovery as we strengthen our quality management systems and position the company in the best possible way as we move forward. Brian will cover the financials following my remarks. As a company, we've been on a multi-year path to strengthen our safety and quality management systems. We've stressed our commitment to transparency every step of the way.

Speaker Change: And I am extremely confident and their selection is Kelly as the next leader for Boeing.

Speaker Change: He has had more than 35 years of experience in aerospace and is tremendously respected in the industry.

Speaker Change: I look forward to working with him to ensure a smooth transition.

David Calhoun: I want to focus my upfront comments on the progress that we are making on our recovery as we strengthen our quality management systems and position the company in the best possible way as we move forward. Brian will cover the financials following my remarks. As a company, we've been on a multi-year path to strengthen our safety and quality management systems. We've stressed our commitment to transparency every step of the way. The January accident obviously sharpened this focus, leading us to take multiple additional steps to improve the stability of our operations, including major elements of our supply chain.

Speaker Change: I want to focus my upfront comments on the progress we are making on our recovery as we strengthen our quality management systems and position the company in the best possible way as we move forward.

Speaker Change: Ryan will cover the financials following my remarks.

Ryan: As a company.

Ryan: We've been on a multiyear path to strengthen our safety and quality management systems.

Ryan: Stressed our commitment to transparency every step of the way.

David L. Calhoun: The January accident obviously sharpened this focus, leading us to take multiple additional steps to improve the stability of our operations, including major elements of our supply chain. First among our actions was to slow things down and control travel work, allowing our supply chain to catch up and provide the buffer we need to improve quality and stabilize deliveries going forward. Our second quarter financial results reflect the reality of that continuing recovery post the Alaska accident.

Ryan: The January accident, obviously sharpen this focus.

Ryan: Leaving us to take multiple additional steps to improve the stability of our operations, including major elements of our supply chain.

David Calhoun: First, among our actions was to slow things down and control travel work, allowing our supply chain to catch up and provide the buffer we need to improve quality and stabilize deliveries going forward. Our second quarter financial results reflect the reality of that continuing recovery post the Alaska accident. We're committed to doing all of the work necessary to ensure Boeing is the company the world needs it to be safe and predictable. Over the last seven months, we've made meaningful progress toward that goal. At the end of May, we provided our comprehensive safety and quality plan to the FAA, which continues to provide strong oversight of the delivery process.

Ryan: First among our actions was to slow things down and.

Ryan: And controlled travel work, allowing our supply chain to catch up and provide the buffer we need to improve quality and stabilize deliveries going forward.

Ryan: Our second quarter financial results reflect the reality is that continuing recovery post the Alaska accident.

David L. Calhoun: We're committed to doing all of the work necessary to ensure Boeing is the company the world needs it to be, safe and predictable. Over the last seven months, we've made meaningful progress toward that goal. At the end of May, we provided our comprehensive safety and quality plan to the FAA, which continues to provide strong oversight of the delivery process. The plan notes our key performance indicators by which we and our regulator will monitor the health and quality of our production system. These measures include employee proficiency.

Ryan: We're committed to doing all of the work necessary to ensure Boeing as the company the world needs it to be safe and predictable.

Ryan: Over the last seven months, we've made meaningful progress toward that goal.

Ryan: At the end of May we provided our comprehensive safety and quality plan to the FAA, which.

Ryan: Which continues to provide strong oversight of the delivery process.

David Calhoun: The plan notes our key performance indicators by which we and our regulator will monitor the health and the quality of our production system. These measures include employee proficiency, notice of escapes, supplier shortages, rework hours, travelers at factory rollout, and ticketing performance. All of these key performance indicators, KPIs, are established and operationalized across our BCAA airplane programs, and they provide real-time insight to support stability, quality, and safety. We are seeing improved performance across the majority of the metrics and remain confident in our ability to meet these KPIs as we expand production. An important element of this plan is the control limits we've established by which the FAA, and more importantly, our own team hold ourselves accountable.

Speaker Change: The plan notes, our key performance indicators by which we and our regulator will monitor the health and quality of our production system.

Speaker Change: These measures include employee proficiency.

David L. Calhoun: Notice of escapes, supplier shortages, and Rework Hours. Travelers at Factory Rollout and Ticketing Performance. All of these key performance indicators, KPIs, are established and operationalized across our BCA airplane programs, and they provide real-time insight to support stability, quality, and safety. We are seeing improved performance across a majority of the metrics and remain confident in our ability to meet these KPIs as we expand production. An important element of this plan is the control limits we've established by which the FAA and, more importantly, our own team hold us accountable.

Speaker Change: Notice of escapes supplier shortages.

Speaker Change: Rework hours travelers at factory rollout and ticketing performance.

Speaker Change: All of these key performance indicators Kpis are established they are operationalized across RBC, a airplane programs and they provide real time insights to support stability quality and safety.

Speaker Change: We are seeing improved performance across the majority of the metrics and remain confident in our ability to meet these kpis as we expand production.

Speaker Change: An important element of this plan is the control limits, we've established by which the FAA and more importantly, our own team hold ourselves accountable.

David Calhoun: Furthermore, our plan doubles down on 4 key investments: workforce training, simplification of manufacturing plans and processes, eliminating defects, and elevating our safety and quality culture. We continue to seek feedback from our employees, from our customers, our regulators, policy makers, shareholders, and many others as we move forward.

David L. Calhoun: Furthermore, our plan doubles down on four key investments, workforce training, simplification of manufacturing plans and processes, eliminating defects, and elevating our safety and quality culture. We continue to seek feedback from our employees, from our customers, our regulators, policymakers, shareholders, and many others as we move forward. One of the most important actions we took was the transfer of our rental and fuselage inspection process to Wichita. On-site Boeing inspectors at Spirit increased by almost three times the number that we had before January, and defects we initially caught and reworked in Renton are now caught and reworked in Wichita.

Speaker Change: Furthermore.

Speaker Change: Our planned doubles down on four key investments workforce training simplification of manufacturing plans and processes.

Speaker Change: Eliminating defects and elevating our safety and quality culture.

Speaker Change: We continue to seek feedback from our employees from our customers our regulators.

Speaker Change: Policymakers shareholders.

Speaker Change: Any others as we move forward.

David Calhoun: One of the most important actions we took was the transfer of our rent and fuselage inspection process to Wichita. On-site Boeing inspectors at Spirit increased by almost three times the number that we had before January, and defects we initially caught and reworked in Renton are now caught and reworked in Wichita. While this dramatically reduced the number of clean fuselages coming from Spirit in the first few months, we have seen steady improvement ever since. The improvements in quality have significantly improved our rent and flow times over that same period.

Speaker Change: One of the most important actions we took was the transfer of our renton fuselage inspection process to Wichita.

Speaker Change: Onsite Boeing inspectors at spirit increased by almost three times the number that we had before January and defects. We initially caught and reworked and written are now caught and reworked in Wichita.

David L. Calhoun: While this dramatically reduced the number of clean fuselages coming from Spirit in the first few months, we have seen steady improvement ever since. The improvements in quality have significantly improved our rent and flow times over that same period.

Speaker Change: While this has dramatically reduced the number of clean fuselages coming from spirit. The first few months, we have seen steady improvement ever since.

Speaker Change: The improvements in quality of significantly improved our rent and flow times over that same period.

David Calhoun: While our focus remains on our factories to ensure we can meet our customer commitments, we are also making important progress on our development programs, including the 737-7-10 and our Triple-7X. Most notably, this month we received type inspection authorization (TIA) for the triple-7-9 and began cert flight testing with FAA personnel on board the aircraft. Our team has put the triple-7-9 test fleet through more than 1,200 flights, 3,500 flight hours across a wide range of regions and climate conditions, and the certification of flight testing will continue validating the airplane safety, reliability, and performance. In addition, we've identified an engineering solution for the engine inlet anti-if system for in-production aircraft that will be implemented and certified in 2025 to support the first delivery of our Dash 7 and Dash 10 NIMAC's family.

David L. Calhoun: While our focus remains on our factories to ensure we can meet our customer commitments, we are also making important progress on our development programs, including the 737-7, the 737-10, and our 777X. Most notably, this month we received type inspection authorization, TIA, for the 777-9 and began CERT flight testing with FAA personnel on board the aircraft. Our team has put the 777-9 test fleet through more than 1,200 flights and 3,500 flight hours across a wide range of regions and climate conditions, and the certification of flight testing will continue validating the airplane's safety, reliability, and performance.

Speaker Change: While our focus remains on our factories to ensure we can meet our customer commitments. We are also making important progress on our development programs, including the 737 dash seven the dash 10, and our Triple seven X.

Speaker Change: Most notably this month, we received type inspection authorization T. I E for the Triple seven Dash nine and began start flight testing with the FAA personnel onboard the aircraft.

Speaker Change: Our team has put the triple seven dash nine test fleet through more than 1200 flights.

Speaker Change: 3500 flight hours across a wide range of regions and climate condition and the certification of flight testing will continue validating the airplanes safety reliability and performance.

David L. Calhoun: In addition, we've identified an engineering solution for the engine inlet anti-ice system for in-production aircraft that will be implemented and certified in 2025 to support the first delivery of our Dash 7 and Dash 10 NEMAX family. A comment on Boeing's defense, space, and security performance. Clearly, the results this quarter are disappointing.

Speaker Change: In addition, we've identified an engineering solution for the engine inlet anti Ige system for in production aircraft that will be implemented and certified in 2025 to support the first delivery of our dash seven and Dash 10, the Max family.

David Calhoun: A comment on Boeing Defense, Space, and Security performance. It's clear the results of this quarter are disappointing. Brian and I have mentioned before that we expected the fixed price development programs to remain bumpy until we complete the development phase and transition to mature long-term franchise programs. Based on the lessons that we've learned in taking on these fixed price development programs, we have maintained contracting discipline for all future opportunities. We remain cautiously optimistic about the long-term prospects of our defense business, and we believe we can progress toward a more historical level of performance over time.

Speaker Change: A comment on Boeing defense space and security performance.

Speaker Change: The results this quarter are disappointing.

David L. Calhoun: Brian and I have mentioned before that we expected the fixed-price development programs to remain bumpy until we complete the development phase and transition to mature, long-term franchise programs. Based on the lessons that we've learned in taking on these fixed-price development programs, we have maintained contracting discipline for all future opportunities. We remain cautiously optimistic about the long-term prospects of our defense business, and we believe we can progress toward a more historical level of performance over time. Finally, global services remains a bright spot and continues to deliver solid results.

Speaker Change: Brian and I have mentioned before that we expected the fixed price development programs to remain bumpy until we complete the development phase and transitioned to mature long term franchise programs.

Speaker Change: Based on the lessons that we've learned in taking on these fixed price development programs. We have maintained contracting discipline for all future opportunities. We remain cautiously optimistic about the long term prospects of our defense business and.

Speaker Change: And we believe we can progress toward a more historical level of performance over time.

David Calhoun: Finally, global services remains a bright spot and continues to deliver solid results. We have a strong franchise, and the team remains dedicated to supporting our commercial and defense customers.

Speaker Change: Finally global services remains a bright spot continues to deliver solid results.

David L. Calhoun: We have a strong franchise, and the team remains dedicated to supporting our commercial and defense customers. Before turning it over to Brian, let me touch on the recently announced agreement to acquire Spirit Aerosystems. This is an important shift in strategic direction, and it would course correct a decision made decades ago. This planned acquisition is a very significant demonstration of our resolve to invest heavily in quality and safety and to take the additional actions needed to reshape our company.

Speaker Change: We have a strong franchise and the team remains dedicated to supporting our commercial and defense customers.

David Calhoun: Before turning it over to Brian, let me touch on the recently announced agreement to require Spirit Aerosystems. This is an important shift in strategic direction, and it would course-correct the decision made decades ago. This planned acquisition is a very significant demonstration of our resolve to invest heavily in quality and safety and to take the additional actions needed to reshape our company. As we have said, we believe this proposed deal is in the best interest of the flying public, in the best interest of our airline customers and the employees of Spirit and Boeing and the country more broadly.

Speaker Change: Before turning it over to Brian Let me touch on the recently announced agreement to acquire Spirit Aero systems.

Speaker Change: This is an important shift in strategic direction.

Speaker Change: And it would course correct the decision made decades ago.

Speaker Change: This planned acquisition is a very significant demonstration of our resolve to invest heavily in quality and safety and to take the additional actions needed to reshape our company.

David L. Calhoun: As we have said, we believe this proposed deal is in the best interest of the flying public, in the best interest of our airline customers and the employees of Spirit and Boeing, and the country more broadly. By bringing critical manufacturing work back within our four walls, we can unify our safety and quality management systems and ensure our engineers and mechanics are working together as one team, day in and day out, or close with a comment to our employees. Thank you for all that you do every single day.

Brian: As we have said we believe this proposed deal is in the best interest of the flying public in the best interest of our airline customers and the employees of spirit and Boeing and the country more broadly.

David Calhoun: By bringing in critical manufacturing work back within our four walls, we can unify our safety and quality management systems and ensure our engineers and mechanics are working together as one team day in and day out.

Speaker Change: By bringing in critical manufacturing work back within our four walls, we can unify our safety and quality management systems and ensure our engineers and mechanics are working together as one team day in and day out.

David Calhoun: A close with a comment to our employees. Thank you for all that you do every single day. You care deeply about our mission, about our company, and about each other. Your passion, your resilience, and commitment are inspiring. This is a challenging period of time for all of us. There is no doubt. But I am confident, maybe more confident than I've ever been in our future because of you.

Speaker Change: I'll close with a comment to our employees.

David L. Calhoun: You care deeply about our mission, about our company, and about each other. Your passion, your resilience, and commitment are inspiring. This is a challenging period of time for all of us, no doubt.

Speaker Change: Thank you for all that you do every single day, you care deeply about our mission about our company and about each other.

Speaker Change: Your passion your resilience and commitment are inspiring.

Speaker Change: This is a challenging period of time for all of US there is no doubt, but I am confident maybe more confident than I've ever been in our future because of you and thank you and Brian I'll turn it over to you.

Brian J. West: But I am confident, maybe more confident than I've ever been in our future because of you. And thank you. And Brian, I'll turn it over to you. Thanks, Dave, and good morning, everyone. Before jumping into the financial results, let me take a moment on our planned acquisition of Spirit Aerosystems. On July 1st, we announced a definitive agreement to acquire Spirit, an all-stock transaction worth approximately $4.7 billion, with a total enterprise value of approximately $8.3 billion.

David Calhoun: And thank you, and Brian, I'll turn it over to you.

Brian West: Thank you, Dave, and good morning, everyone. Before jumping into the financial results, let me take a moment on our planned acquisition of Spirit Aerosystems. On July the 1st, we announced a definitive agreement to acquire Spirit in an all stock transaction worth approximately $4.7 billion. With a total enterprise value of approximately $8.3 billion.

Brian: Thanks, Dave and good morning, everyone.

Brian: For jumping into the financial results, let me take a moment on our planned acquisition of Spirit Aero systems.

Brian: In July the first we announced a definitive agreement to acquire spirit in an all stock transaction worth approximately $4 $7 billion.

Brian: With a total enterprise value of approximately $8 $3 billion.

Brian West: As our materials indicated, we expect the transaction to close mid 2025, subject to the satisfaction of customer enclosing conditions, including regulatory and Spirit shareholder approvals, as well as the sale of Spirit operations. This agreement kind of plays us acquiring substantially all Boeing-related commercial operations, primarily consisting of the Wichita, Kansas, Tulsa, Oklahoma, and Dallas, Texas, facilities, as well as other commercial defense and aftermarket operations that would further augment our capabilities and offerings across the portfolio. Regarding the defense programs, we're committed to working with Spirit, its customers, and the DOD to ensure continuity in order to support these critical missions.

Brian J. West: As our materials indicate, we expect the transaction to close in mid-2025 subject to the satisfaction of customary closing conditions, including regulatory and Spirit shareholder approvals, as well as the sale of Spirit operations related to certain Airbus commercial work packages. This agreement contemplates us acquiring substantially all Boeing-related commercial operations, primarily consisting of the Wichita, Kansas, Tulsa, Oklahoma, and Dallas, Texas facilities, as well as other commercial, defense, and aftermarket operations that would further augment our capabilities and offerings across the portfolio.

Brian: As our materials indicated we expect the transaction to close mid 2025 subject to the satisfaction of customary closing conditions, including regulatory and spirit shareholder approvals as well as the sale of spirit operations related to certain Airbus commercial work packages.

Speaker Change: This agreement contemplates us acquiring substantially all Boeing related commercial operations, primarily consisting of the Wichita, Kansas, Tulsa, Oklahoma, and Dallas, Texas facilities as well as other commercial defense and aftermarket operations that would further augment our capabilities and offerings across the.

Speaker Change: Leo.

Brian J. West: Regarding defense programs, we're committed to working with SPIRIT, its customers, and the DOD to ensure continuity in order to support these critical missions. We continue to believe that this reintegration leverages and builds on our capabilities, supports supply chain stability, integrates critical manufacturing and engineering workforces, and allows for the ultimate unification of safety and quality management systems, fully aligning to the same priorities, incentives, and outcomes, centered on safety and quality, is in the best interest of our customers, the aviation industry, and all stakeholders, including the flying public.

Speaker Change: Regarding the defense programs, we're committed to working with spirit its customers and the D. O D to ensure continuity in order to support these critical missions.

Brian West: We continue to believe that this reintegration leverages and builds on our capabilities, supports supply chain stability, integrates critical manufacturing and engineering workforces, and allows for the ultimate notification of safety and quality management systems, fully aligning to the same priorities, incentives, and outcomes centered on safety and quality, as in the best interest of our customers, the aviation industry, and all stakeholders, including the flying public.

Speaker Change: We continue to believe that this reintegration leverages and builds on our capabilities supports supply chain stability.

Speaker Change: Integrates critical manufacturing and injury Workforces and allows for the ultimate unification of safety and quality management systems.

Speaker Change: Fully aligning to the same priorities incentives and outcomes centered on safety and quality is in the best interests of our customers the aviation industry and all stakeholders, including the flying public.

Brian West: All of this demonstrates our ongoing commitment to aviation safety, quality, and stability.

Brian J. West: All of this demonstrates our ongoing commitment to aviation safety, quality, and stability. Turn to the next page, and I'll cover the total company financial performance for the quarter. Revenue was $16.9 billion, primarily reflecting lower commercial delivery volumes.

Speaker Change: All of this demonstrates our ongoing commitment to aviation safety quality and stability.

Brian West: Turning to the next page, I'll cover the total company financial performance for the quarter. Revenue was $16.9 billion, primarily reflecting lower commercial delivery volume. The core loss per share was $2.90, reflecting lower commercial delivery volume and losses of a billion dollars on fixed price defense development programs, which I'll get into later. Free cash flow was a usage of $4.3 billion in the quarter, which was generally in line with the expectations shared in May.

Speaker Change: Turning to the next page I'll cover the total company financial performance for the quarter.

Speaker Change: Revenue was $16 $9 billion, primarily reflecting lower commercial delivery volume.

Speaker Change: The core loss per share was $2 90.

Speaker Change: Reflecting lower commercial delivery volume and losses of $1 billion on fixed price defense development programs, which I'll get into later.

Speaker Change: Free cash flow was a usage of $4 $3 billion in the quarter, which was generally in line with the expectations shared in May.

Brian West: Results were impacted by lower commercial deliveries and unfavorable working capital timing.

Speaker Change: Results were impacted by lower commercial deliveries and unfavorable working capital timing.

Brian West: Turning to the next page, I'll cover Boeing Commercial Airplanes. VCA delivered 92 airplanes in the quarter. Revenue was $6 billion, and operating margin was minus 11.9%. Primarily reflecting lower deliveries and expected higher period costs, including R&D. The backlog in the quarter ended at $437 billion, and includes more than 5,400 airplanes.

Brian J. West: The core loss per share was $2.90, reflecting lower commercial delivery volume and losses of $1 billion on fixed-price defense development programs, which I'll get into later. Free cash flow with a usage of $4.3 billion in the quarter, which was generally in line with the expectations shared in May. Results were impacted by lower commercial deliveries and unfavorable working capital timing. Turn to the next page, and I'll cover Boeing commercial airplanes. BCA delivered 92 airplanes in the quarter. Revenue was $6 billion, and the operating margin was minus 11.9%, primarily reflecting lower deliveries and expected higher period costs, including R&D.

Speaker Change: Turning to the next page I'll cover Boeing commercial airplanes.

Speaker Change: BCA delivered 92 airplanes in the quarter revenue was $6 billion and operating margin was minus 11, 9%.

Speaker Change: Primarily reflecting lower deliveries and expected higher period costs, including R&D.

Brian J. West: The backlog in the quarter ended at $437 billion and included more than 5,400 airplanes. Last week's Farnborough Air Show continued to highlight the robust demand for our product lineup as we announced orders and commitments for over 150 airplanes, including nearly 100 widebodies. Now I'll give more color on the key programs.

Speaker Change: The backlog in the quarter ended at $437 billion and includes more than 5400 airplanes.

Brian West: Last week's Farnborough Air Show continued to highlight the robust demand for our product lineup as we announce orders and commitments for over 150 airplanes, including nearly 100 wide bodies. Now I'll give more color on the key programs. The 737 program delivered 70 airplanes in the second quarter, including a meaningful step up to 35 in June. July will be more or less in line with June levels, despite normal seasonality. On production, we gradually increased during the quarter and still expect to be higher in the second half as we move to 38 per month by year end.

Speaker Change: Last week's Farnborough Air show continued to highlight the robust demand for our product lineup as we announced orders and commitments for over 150 airplanes, including nearly 100 wide bodies.

Speaker Change: Now I will give more color on the key programs.

Brian J. West: The 737 program delivered 70 airplanes in the second quarter, including a meaningful step up to 35 in June. July will be more or less in line with June levels despite normal seasonality. On production, we gradually increased during the quarter and still expect to be higher in the second half as we move to 38 per month by year end. We've reactivated the third line in our rented factory and have monthly production improvements from high single digits at the end of the first quarter to roughly 25 in June and July.

Speaker Change: The 737 program delivered 70 airplanes in the second quarter, including a meaningful step up to 35 in June.

Speaker Change: July will be more or less in line with June levels, Despite normal seasonality.

Speaker Change: On production, we gradually increased during the quarter and still expect to be higher in the second half as we move to <unk> 38 per month by year end.

Brian West: We've reactivated the third line in our rent and factory, and monthly production improvement from high single digits at the end of the first quarter to roughly 25 in June and July. As they've noted, the factory is currently operating within or near the KPI control limits laid out with the FAA as part of the safety and quality plan. The factory is operating with all fully inspected fuselages today, and near-term production will continue to be paced by fuselages from Wichita. More broadly on the master schedule, we continue to make adjustments as needed and manage supplier by supplier based on inventory levels.

Speaker Change: We've reactivated the third line in our Renton factory and monthly production improvement from high single digits at the end of the first quarter to roughly 25 in June and July.

Brian J. West: As Dave noted, the factory is currently operating within or near the KPI control limits laid out with the FAA as part of the safety and quality plan. The factory is operating with all fully inspected fuselages today, and near-term production will continue to be paced by fuselages from Wichita.

Speaker Change: As Dave noted the factory is currently operating within or near the K P. I control limits laid out with the FAA as part of the safety and quality plan.

David L. Calhoun: The factories operating with all fully inspected fuselages today and near term production will continue to be paced by fuselages from Wichita.

Brian J. West: More broadly on the master schedule, we continue to make adjustments as needed and manage supplier by supplier based on inventory level. Our objective remains to keep the supply chain paced ahead of final assembly to support stability and minimize traveled work. The quarter ended with approximately 90 737-8s built prior to 2023, the vast majority for customers in China and India.

Speaker Change: More broadly on the master schedule, we continue to make adjustments as needed and manage supplier by supplier based on inventory levels.

Brian West: Our objective remains to keep the supply chain paced ahead of final assembly to support stability and minimize travel and work.

Speaker Change: Our objective remains to keep the supply chain paced ahead of final assembly to support stability and minimize traveled work.

Brian West: Mark. The quarter ended with approximately 90,737-8's built prior to 2023, the vast majority for customers in China and India. This is down 20 from last quarter's value, and we expect approximately 10 more delivered in the month of July. We still expect to deliver most of these airplanes by year end as we work towards shutting down the shadow factory. Regarding the Dash Seven or the Dash 10 models, inventory levels remain stable at approximately 35 airplanes, and the certification timelines remain unchanged. On the 787, we delivered nine airplanes of the quarter. All of the quarter was impacted by lower production, seat delays, and other delivery timing items noted previously.

Speaker Change: Our quarter ended with approximately 90 737 dash eight built prior to 2023.

Speaker Change: The vast majority for customers in China and India.

Brian J. West: This is down 20 from last quarter's value, and we expect approximately 10 more to be delivered in the month of July. We still expect to deliver most of these airplanes by year-end as we work towards shutting down the shadow factory. Regarding the Dash 7 and the Dash 10, models, inventory levels remain stable at approximately 35 airplanes, and the certification timelines remain unchanged.

Speaker Change: This is down <unk> 20 from last quarter's value add.

Speaker Change: And we expect approximately 10 more delivered in the month of July.

Speaker Change: We still expect to deliver most of these airplanes by yearend as we work towards shutting down the Shadow factory.

Speaker Change: Regarding the dash seven of the Dash 10 models inventory levels remained stable at approximately 35 airplanes and the certification timelines remain unchanged.

Brian J. West: On the 787, we delivered nine airplanes in the quarter. Although the quarter was impacted by lower production, seat delays, and other delivery timing issues noted previously, we're starting to work through these issues and delivered six airplanes in July. The program produced below $5 per month in the quarter, as expected, and still plans to return to $5 per month by year end.

Speaker Change: On the 77, we delivered nine airplanes in the quarter, although the quarter was impacted by lower production see delays and other delivery timing items noted previously.

Brian West: We're starting to work through these issues and delivered six airplanes in July. The program produced below five per month in the quarter as expected and still plans to return to five per month by year end. We ended the quarter with around 35 airplanes of inventory built prior to 2023 that required rework, which continues to progress steadily. We still expect to finish the rework and shut down the shadow factory by year, with most of these airplanes delivering this year.

Speaker Change: We're starting to work through these issues and delivered six airplanes in July.

Speaker Change: The program produced below five per month in the quarter as expected and still plans to return to five per month by year end.

Brian J. West: We ended the quarter with around 35 airplanes in inventory built prior to 2023 that required rework, which continues to progress steadily. We still expect to finish the rework and shut down the Shadow Factory by year end with most of these airplanes delivered this year. Finally, on the 777X program, as Dave noted, we took a very important step on the certification timeline earlier this month as the program obtained type inspection authorization and began FAA certification flight testing.

Speaker Change: We ended the quarter with around 35 airplanes that inventory built prior to 2023 that required rework, which continues to progress steadily.

Speaker Change: We still expect to finish the rework and shut down the shadow factory by year end with most of these airplanes delivering this year.

Brian West: Finally, on the 777 program, as they've noted, we took a very important step on the certification timeline earlier this month, as the program obtained type inspection authorization and began FAA certification flight testing. We'll continue to follow the lead of the FAA as we progress through the certification process and still expect first delivery in 2025. Inventory in the quarter grew approximately $800 million in line with recent quarterly trends and will continue to grow as we move towards entry into service, as we previously contemplated.

Speaker Change: Finally on the Triple Seven X program as Dave noted, we took a very important step on the certification timeline earlier. This month as the program obtained type inspection authorization and began FAA certification flight testing.

Brian J. West: We will continue to follow the lead of the FAA as we progress through the certification process and still expect first delivery in 2025. Inventory in the quarter grew approximately $800 million in line with recent quarterly trends and will continue to grow as we move towards entry into service as we previously contemplated. Moving on to the next page, Boeing Defense and Space. BDS booked $4 billion in orders during the quarter, including capturing an award from the U.S. Air Force for seven MH-139 helicopters, and the backlog ended at $59 billion. Revenue was $6 billion, down 2%, driven by fixed price development losses.

Speaker Change: We will continue to follow the lead of the FAA as we progressed through the certification process and still expect first delivery in 2025.

Speaker Change: Inventory in the quarter grew approximately $800 million in line with recent quarterly trends and will continue to grow as we move towards entry into service as we previously contemplated.

Brian West: Moving on to the next page, Boeing Defense Space. BDS booked $4 billion in orders during the quarter, including capturing an award from the U.S. Air Force for seven MH-139 helicopters and the backlog ended at $59 billion. Revenant was $6 billion, down 2%, driven by fixed price development losses, and BDS delivered 28 aircraft in the quarter, including the first CH-47F Block Two Chinook to the U.S. Army. We took a billion dollar loss on certain fixed price development contracts in the quarter, and operating margin was minus 15.2%. In late May, we indicated that margins would take a step back and be negative due to a couple of things.

Speaker Change: Moving on to the next page Boeing defense and space.

Speaker Change: Bds booked $4 billion in orders during the quarter, including capturing an award from the U S. Air Force for seven MH 139 helicopters and the backlog ended at $59 billion.

Speaker Change: Revenue was $6 billion down, 2% driven by fixed price development losses, and Bds delivered 28 aircraft in the quarter, including the first CH 47 F blocked two chinook to the U S Army.

Brian J. West: And BDS delivered 28 aircraft in the quarter, including the first CH-47F Block II Chinook to the U.S. Army. We took a billion-dollar loss on certain fixed-price development contracts in the quarter, and our operating margin was minus 15.2 percent. In late May, we indicated that margins would take a step back and be negative due to a couple of things. First... The deliberate slowdown of the Puget Sound factories has impacted the derivative programs, specifically a $391 million loss on the KC-46A tanker, as well as margin compression on the profitable P-8 program.

Speaker Change: We took $1 billion loss on certain fixed price development contracts in the quarter and operating margin was minus 15, 2%.

Speaker Change: In late May we indicated that margins would take a step back and be negative due to a couple of things.

Brian West: First, the delivered slowdown of the Puget Sound factories has impacted the derivative programs, specifically a $391 million loss on the KC-46A tanker, as well as margin compression on the profitable P-8 program. Second, we've seen additional fixed-price development cost pressures resulting in additional losses on T-7A, VC-25B, and commercial crew. Primary related to higher estimated engineering and manufacturing costs and inefficiencies associated with meeting certain technical requirements.

Speaker Change: First.

Speaker Change: The deliberate slowdown of the Puget sound factories has impacted the ribbon of programs, specifically, a $391 million loss on the KC 46, a tanker as well as margin compression on the profitable program.

Brian J. West: Second, we've seen additional fixed price development cost pressures resulting in additional losses on T7A, VC25B, and Commercial Crew, primarily related to higher estimated engineering and manufacturing costs and inefficiencies associated with meeting certain technical requirements. Given the fixed price nature of these contracts, we continue to be transparent about impacts as we work to stabilize and mature these programs. While acknowledging these are disappointing results, these are complicated development programs, and we continue to put milestones behind us and remain focused on retiring risk each quarter and ultimately delivering these mission-critical commitments to our customers. Stepping back, the game plan to get BDS back to high single-digit margins in the medium to long term remains unchanged.

Speaker Change: Second we've seen additional fixed price development cost pressures, resulting in additional losses on T. Seven a.

Speaker Change: VC 25, B and commercial crew.

Speaker Change: <unk> related to higher estimated engineering and manufacturing costs and inefficiencies associated with meeting certain technical requirements.

Brian West: News. Given the fixed price nature of these contracts, we continue to be transparent about impacts as we work to stabilize the maturity's programs. While acknowledging these are disappointing results, there's a complicated development program, and we continue to put milestones behind us and remain focused on retiring risk each quarter and ultimately delivering these mission critical commitments to our customers. Stepping back, the game plan to get BDS back to high single-digit margins in the medium to long-term remains unchanged. The core business remains solid, representing approximately 60% of our revenue and performing in the mid to high single-digit margin range.

Speaker Change: Given the fixed price nature of these contracts, we continue to be transparent about impacts as we work to stabilize the mature these programs.

Speaker Change: While acknowledging these are disappointing results is a complicated development programs and we continue to put milestones behind us and remain focused on retiring risk each quarter and ultimately delivering these mission critical commitments to our customers.

Speaker Change: Stepping back the game plan to get Bbs back to high single digit margins in the medium to long term remains unchanged.

Brian J. West: The core business remains solid, representing approximately 60% of our revenue and performing in the mid to high single-digit margin range. Demand for these products continues to be very strong, supported by the geopolitical threat environment confronting our nation and our allies. On the 25% of the portfolio primarily comprised of fighter and satellite programs, the quarter again saw improved margin trends as we continue to make important progress, including delivering our eighth F-15EX aircraft to the U.S. Air Force, which enabled the program to achieve its initial operating capability milestone in July. We still expect to return to strong historical performance levels as we roll to new contracts with tighter underwriting standards. Overall, the defense portfolio is well positioned for the long term.

Speaker Change: The core business remains solid representing approximately 60% of our revenue and performing in the mid to high single digit margin range.

Brian West: The demand for these products continues to be very strong, supported by the geopolitical front environment confronting our nation and our allies. On the 25% of the portfolio primarily comprised of fighter and satellite programs, the quarter again sought to improve margin trends as we continue to make important progress, including delivering our 8th F-15EX aircraft to the U.S. Air Force, which enabled the program to achieve its initial operating capability milestone in July. We still expect to return to strong historical performance levels as we roll to new contracts with tighter underwriting standards.

Speaker Change: The demand for these products continues to be very strong supported by the geopolitical threat environment confronting our nation and our allies.

Speaker Change: On the 25% of the portfolio, primarily comprised of fighter and satellite programs. The quarter again saw improved margin trends as we continue to make important progress, including delivering our eight F 15 E. <unk> aircraft to the U S Air Force, which enabled the program to achieve initial operating capability milestone in <unk>.

Speaker Change: July.

Speaker Change: We still expect to return to strong historical performance levels as he rolls and new contracts with tighter underwriting standards.

Brian West: Overall, the defense portfolio is well positioned for the long-term. They're strong demand across the customer base, the products are performing well in the field, and we're confident that our efforts to drive execution and stability or return this business to performance levels that our investors will recognize.

Brian J. West: There's strong demand across the customer base, the products are performing well in the field, and we're confident that our efforts to drive execution and stability will return this business to performance levels that our investors will recognize. Moving on to the next page, Boeing Global Services. BGS continued to perform well in the second quarter, delivering very strong results across a globally deployed team that is focused on supporting its customers on both the defense and commercial sides. They received $4 billion in orders, and the backlog ended at $19 billion.

Speaker Change: Overall, the defense portfolio is well positioned for the long term theres strong demand across the customer base. The products are performing well in the field and we're confident that our average drive execution instability or return this business to performance levels that our investors will recognize.

Brian West: Moving on to the next page, Boeing Global Services. BGS continue to perform well in the second quarter, delivering very strong results across a globally deployed team that is focused on supporting its customers on both the defense and commercial sides. They received $4 billion in orders, and the backlog ended at $19 billion. Revenue was $4.9 billion, up 3%, primarily on higher commercial volume. Operating margin was 17.8%, down slightly compared to last year, but still strong performance. In the quarter, BGS secured a patchy performance-based logistics contract from the U.S. Army, and captured flight deck pro-service contracts with Haynon, Airlines, and Ryanair.

Brian J. West: Revenue was $4.9 billion, up 3%, primarily on higher commercial volumes; operating margin was 17.8%, down slightly compared to last year, but still a strong performance. In the quarter, BGS secured an Apache performance-based logistics contract from the U.S. Army and captured Flight Deck Pro service contracts with Hainan Airlines and Ryanair. Importantly, BGS continued to deliver very strong operating margins for the first half of the year, matching the record levels from 2023. It's a terrific franchise that's set up for years to come.

Speaker Change: Moving on to the next page Boeing Global services.

Speaker Change: Bgs continuing to perform well in the second quarter delivering very strong results across a globally deployed team that is focused on supporting its customers on both the defense and commercial sides.

Speaker Change: They received $4 billion in orders and the backlog ended at $19 billion.

Speaker Change: Revenue was $4 $9 billion up 3% primarily on higher commercial volume.

Speaker Change: Operating margin was 17, 8% down slightly compared to last year, but still strong performance.

Speaker Change: In the quarter Bgs secured at Apache performance based logistics contract from the U S Army and captured flight deck Pro service contracts with Hainan Airlines in Ryanair.

Brian West: Importantly, BGS continued to deliver very strong operating margins for the first half of the year, matching the record levels from 2023. A terrific franchise that set up for years to come, the team is focused on profitable, capital-efficient, high-IP offerings, and we still expected to grow at solid mid-single-digit revenue levels and throw off mid-team margins with very high free cash flow conversion.

Speaker Change: Importantly, bgs continuing to deliver very strong operating margins for the first half of the year matching the record levels from 2023.

Speaker Change: It's a terrific franchise that setup for years to come the team is focused on profitable capital efficient high IP offerings, and we still expected to grow at solid mid single digit revenue levels and throw off mid teen margins with very high free cash flow conversion.

Brian J. West: The team is focused on profitable, capital efficient, high IP offerings, and we still expect it to grow at solid mid-single-digit revenue levels and throw off mid-team margins with very high free cash flow conversion. Turn to the next page.

Brian West: Turn to the next page; I'll cover cash and debt. On cash and marketable securities, we ended the quarter at $12.6 billion, reflecting the $10 billion issuance of new debt in May, partially offset by the use of free cash flow in the quarter. The debt balance increased to $57.9 billion, driven by the new debt issuance. We continue to maintain access to $10 billion and revolving credit facilities, all of which remain undrawn. The deliberate actions we're taking demonstrate our commitment to improve safety and quality, and we continue to manage the business with a long-term view.

Speaker Change: Turning to the next page I'll cover cash and debt.

Brian J. West: I'll cover cash and debt. On cash and marketable securities, we ended the quarter at $12.6 billion, reflecting the $10 billion issuance of new debt in May, partially offset by the use of free cash flow in the quarter. The debt balance increased to $57.9 billion, driven by the new debt issuance.

Speaker Change: On cash and marketable securities we ended the quarter at $12 $6 billion, reflecting the $10 billion issuance of new debt in may partially offset by the use of free cash flow in the quarter.

Speaker Change: The debt balance increased to $57 $9 billion, driven by the new debt issuance.

Brian J. West: We continue to maintain access to $10 billion of revolving credit facilities, all of which remain undrawn. The deliberate actions we're taking demonstrate our commitment to improve safety and quality, and we continue to manage the business with a long-term view. We acknowledge the impact these actions are having on calendar year cash flows. So, let me provide some additional context on near-term expectations. While commercial production and deliveries are improving, additional losses in BDS and working capital timing continue to weigh on near-term cash flow.

Speaker Change: We continue to maintain access to $10 billion of revolving credit facilities, all of which remain undrawn.

Speaker Change: The deliberate actions, we're taking demonstrate our commitment to improve safety and quality.

Speaker Change: And we continue to manage the business with a long term view.

Brian West: We acknowledge the impact these actions are having on calendar year cash flows, so let me provide some additional context on near-term expectations. While commercial production and deliveries are improving, additional losses in VDS and working capital timing continue to weigh on near-term cash flow. Inventory will remain a near-term headwind as we prioritize supply chain stability to support future rate increases. And advance payments will take time to improve as we stabilize production and improve predictability of deliveries to our customers.

Speaker Change: We acknowledge the impact of these actions are having on calendar year cash flows. So let me provide some additional context on near term expectations.

Speaker Change: While commercial production and deliveries are improving.

Speaker Change: Additional losses, and Bds and working capital timing continue to weigh on near term cash flow.

Brian J. West: Inventory will remain a near-term headwind as we prioritize supply chain stability to support future rate increases, and advance payments will take time to improve as we stabilize production and improve predictability of deliveries to our customers. Given these short-term working capital pressures, the third quarter is expected to be another use of cash. We expect these working capital timing impacts will begin to unwind as deliveries and production stabilize later this year. On the free cash flow outlook for the year, we are now expecting a larger use of cash than previously forecast.

Speaker Change: Inventory will remain a near term headwind as we prioritize supply chain stability to support future rate increases.

Speaker Change: And advance payments will take time to improve as we stabilized production and improved predictability of deliveries to our customers.

Brian West: Given these near-term working capital pressures, third quarter is expected to be another use of cash. We expect these working capital timing impacts will begin unwind as deliveries and production stabilize later this year. On the free cash flow outlook for the year, we are now expecting a larger use of cash than previously forecasted. As you know, operating leverage in our business is meaningful, and as we ramp up deliveries, free cash flow will grow. We are deliberately investing today and taking the time necessary to get it right to ensure we're positioned to ramp production in a more predictable and stable fashion.

Speaker Change: Given these near term working capital pressures third quarter is expected to be another use of cash.

Speaker Change: We expect these working capital timing impacts will begin to unwind as deliveries and production stabilize later this year.

Speaker Change: On the free cash flow outlook for the year, we are now expecting a larger use of cash than previously forecasted.

Brian J. West: As you know, operating leverage in our business is meaningful, and as we ramp up deliveries, free cash flow will grow. We are deliberately investing today and taking the time necessary to get it right to ensure we're positioned to ramp production in a more predictable and stable fashion. We remain committed to managing the balance sheet in a prudent manner, with two main objectives.

Speaker Change: As you know operating leverage in our business is meaningful and as we ramp up deliveries free cash flow will grow.

Speaker Change: We are deliberately investing today and taking the time necessary to get it right to ensure we're positioned to ramp production and a more predictable and stable fashion.

Brian West: We remain committed to managing the balance sheet in a prudent manner with two main objectives. First, prioritize the investment grade rating, and second, allow the factory and supply chain to reset. Both of which were supported by our decision to acquire Spirit with all stock financing. We'll continue to actively monitor our liquidity levels, and as needed, we'll supplement our liquidity position with these two objectives in mind.

Speaker Change: We remain committed to managing the balance sheet in a prudent manner with two main objectives first prioritize the investment grade rating and second allow the factory and supply chain to reset.

Brian J. West: First, prioritize the investment grade rating. And second, allow the factory and supply chain to reset, both of which were supported by our decision to acquire Spirit with all stock financing. We will continue to actively monitor our liquidity levels, and, as needed, will supplement our liquidity position with these two objectives in mind. We're confident that over time, the business performance and capital structure will return to levels fully aligned with an investment grade profile.

Speaker Change: Both of which were supported by our decision to acquire spirit with all stock financing.

Speaker Change: We will continue to actively monitor our liquidity levels and as needed will supplement our liquidity position with these two objectives in mind.

Brian West: We're confident at overtime that business performance and capital structure will return to levels fully aligned with an investment grade profile. Looking forward, we're taking the time now to ensure that our BCA factories are positioned to ramp production in a stable fashion for years to come. We'll also continue to make progress on other important objectives, including shutting down the shadow factories, maturing and de-resting the defense fixed price development programs, and building on the continued strong results and services.

Speaker Change: We're confident that over time, the business performance and capital structure, well returned to levels fully aligned with an investment grade profile.

Brian J. West: Looking forward, we're taking the time now to ensure that our BCA factories are positioned to ramp up production in a stable fashion for years to come, and will also continue to make progress on other important objectives, including shutting down the shadow factories, maturing and de-risking the defense fixed price development programs, and building on the continued strong results in service. By 2025, we will be in a much stronger position because of the work we're doing now.

Speaker Change: Looking forward, we're taking the time now to ensure that our BCA factories are positioned to ramp production and a stable fashion for years to come.

Speaker Change: We will also continue to make progress on other important objectives, including shutting down the shadow factories maturing and Derisking the defense fixed price development programs and building on the continued strong results in services.

Brian West: Entering 2025 will be in a much stronger position because of the work we're doing now.

Speaker Change: Entering 2025 will be in a much stronger position because of the work we're doing now.

Brian West: As noted in the commercial market outlook published this month, we continue to see robust demand, and the fundamentals are there for the next 20 years, where we expect the global fleet to almost double as nearly 44,000 new airplanes are delivered, with about half of those full replacement demand. The commercial and defense markets we serve, along with our product portfolio, underpin our confidence as we manage the business today with a long-term view built on safety, quality, and delivering for our customers.

Brian J. West: As noted in the Commercial Market Outlook published this month, we continue to see robust demand, and the fundamentals are there for the next 20 years, where we expect the global fleet to almost double as nearly 44,000 new airplanes are delivered, with about half of those for replacement demand. The commercial and defense markets we serve, along with our product portfolio, underpin our confidence as we manage the business today with a long-term view built on safety, quality, and delivery for our customers.

Speaker Change: As noted in the commercial market outlook published this month, we continue to see robust demand and the fundamentals are there for the next 20 years or we expect the global fleet to almost double as nearly 44000, new airplanes are delivered with about half of those for replacement demand.

Speaker Change: The commercial and defense markets, we serve along with our product portfolio underpinned our confidence as we manage the news today with a long term view built on safety quality and delivering for our customers.

Brian J. West: With that, let's open it up for questions. Thank you. In order that your question can be clearly heard, we ask that you not use a speakerphone, cell phone, or phone headset. Please use your handset to ask a question. If you are on a speakerphone, please be sure your mute function is switched off so your signal can be heard. As a reminder, in the interest of time, we are asking that you limit yourself to one single-part question. And our first question will come from the line of Doug Harned. Bernstein. Please go ahead. Good morning.

Unknown Attendee: With that, let's open up for questions. Thank you. In order that your question be clearly heard, we ask that you not use a speaker phone, cell phone, or phone. Headset. Please use your handset to ask a question. If you are on a speaker phone, please be sure your mute function is switched off so your signal can be reached on our equipment.

Speaker Change: With that let's open up for questions.

Speaker Change: Thank you and order that Youre question be clearly heard we ask that you not even the speaker phone cell phone phone headset.

Speaker Change: Please use your handset to ask a question.

Speaker Change: If you are on a speaker phone please be sure your mute function is switched off.

Speaker Change: Signal can be right now.

Speaker Change: Equipment as a reminder, in the interest of time, we ask we are asking that you limit yourself to one single part question.

Unknown Attendee: As a reminder, in the interest of time, we are asking that you limit yourself to one single part question.

Douglas Stuart Harned: Thank you. Now I wanted to understand a little bit about, [inaudible] I expect you're having inventory build, and then on the other end, you know, difficulty with seats, so you would have things coming off the line, and some of the inventory to China as well, difficult to get out of there. Can you talk about how you think of managing this inventory on both ends given the production process or ramp that you're on right now? Yeah, thanks, Doug.

Doug Harned: And our first question will come from the line of Doug Harned from Bernstein. Please go ahead.

Douglas Stuart Harned: And our first question will come from the line of Doug Harned Ed.

Speaker Change: From Bernstein. Please go ahead.

Doug Harned: Good morning. Thank you.

Speaker Change: Good morning, Thank you.

Speaker Change:

Doug Harned: Now, I wanted to understand a little bit about the sort of the process, the production process on the 787 and the 737. Because, you know, you're seeing this inventory bill, and it appears both from suppliers supplying at 38 a month now for the max and five to six a month for the 787. So, on that end, I expect you having inventory bill. And then on the other end, you know, difficulty with seats. So you would have things coming off the line and some of the inventory to China as well. It's difficult to get out of there.

Speaker Change: No I wanted.

Speaker Change: Want to understand a little bit about.

Speaker Change: So the process the production process on the 787 and the 737, because youre seeing this inventory build and it appears both from suppliers supplying at 38, a month now for the Max.

Speaker Change: And five to six a month for the 787, so on that end.

Speaker Change: I expect you're having inventory build and then in the other end.

Speaker Change: No difficulty with seats. So you would have things coming off the line and some of the inventory to China.

Speaker Change: Well it's.

Speaker Change: Difficult to get out of there can you talk about how you think of managing this inventory on both ends given the production process or ramp that you're on right now.

Doug Harned: Can you talk about how you think of managing this inventory on both ends given the production process or ramp that you're on right now?

David Calhoun: Yes, thanks, Doug. There's no question. The inventory bill is ranked in front of us as we make this investment for stability. The way I would think about going forward, you know, we were on the 737 to start with. You know, our delivery rates in April, May were in the mid teens; June, we did 35; July will do somewhere in that zip code. So we are seeing demonstrated progress as we continue to move forward and rent and to stabilize and get better. So the progress evidence is there, and we expect that to continue as we move to the second half.

Brian J. West: There's a question. The inventory bill is right in front of us as we make this investment for stability. The way I would think about going forward, You know, we were on the 737 to start with. Our delivery rates in April and May were in the mid-teens. June, we did 35. July, we'll do somewhere in that zip code.

Doug: Yes, Thanks, Doug.

Speaker Change: There's no question the inventory build is right in front of us as we make this investment for stability the way I would think about going forward.

Speaker Change: Yeah, we were on the 737 to start with.

Speaker Change: Our delivery rates in April may were in the mid teens.

Speaker Change: June we did 35 July will do somewhere in that ZIP code. So we are seeing demonstrated progress as we continue to move forward and rent them to stabilize and get better. So the progress is there and we expect that to continue as we move through the second half and of course then the.

Brian J. West: So we are seeing demonstrated progress as we continue to move forward and rent in to stabilize and get better. So the evidence of progress is there, and we expect that to continue as we move through the second half. And, of course, then the inventory will begin to unwind.

David Calhoun: And of course, then the inventory will begin to unwind. But it's real, predicated on the continued progress.

Speaker Change: Tory will begin to unwind, but its real predicated on the continued progress and as I mentioned that third line in Renton is a very big deal for us to get moving as well as our resuming deliveries to China. So all of those indications suggest that production moving to the right direction, we're making progress.

Brian J. West: But it's really predicated on continued progress. And as I mentioned, that third line in renting is a very big deal for us to get moving, as well as resuming deliveries to China. So all of those indications suggest that production's moving in the right direction. We're making progress, and the inventory will unwind. On the 87, similarly, as I mentioned, in the second quarter, we had nine deliveries. In July, we've already got about six.

David Calhoun: And, as I mentioned, that third line in Renton is a very big deal for us to get moving, as well as resuming deliveries to China. So all of those indications suggest that productions and moving in the right direction, we're making progress and the inventory will unwind on the 877. Similarly, as I mentioned, second quarter, we had nine deliveries in July. We've already got about six. So again, good progress despite having some real supply chain constraints. As you mentioned, those constraints aren't going to go away immediately, but they're going to get better. We got a game plan in place, and we do believe it will get to that five per month as we get to the end of the year.

Speaker Change: And the inventory will unwind on the 87 are similarly, as I mentioned second quarter, we had nine deliveries in July.

Speaker Change: <unk> already got about six so again good progress despite having some real supply chain constraints as you mentioned those constraints aren't going to go away immediately, but theyre going to get better we got a game plan in place and.

Brian J. West: So again, good progress, despite having some real supply chain constraints, as you mentioned. Those constraints aren't going to go away immediately, but they're going to get better. We have a game plan in place, and we do believe that we'll get to that. 5 per month as we get to the end of the year.

Speaker Change: And we do believe that we'll get to that five per month as we get to the end of the year and again the inventory will liquidate as as production performance improves.

David Calhoun: And again, that inventory will liquidate as production performance improves.

David Calhoun: If I can just follow up on that, you all have talked about the bottleneck, the chief bottleneck, I believe, being the fuselage deliveries from Spirit. So, as you bring that third line on, how does this work?

Brian J. West: And again, that inventory will liquidate as production performance improves. If I can just follow up on that, you all have talked about the bottlenecks, the chief bottleneck, I believe being the fuselage deliveries from Spirit, so as you bring that third line on, how does this work? It didn't seem like it was final assembly that was the bottleneck before. So, you know, how does that help you as Spirit at a point now where... It's your capacity that is the limiting factor.

Speaker Change: And if I can just follow up on that.

Speaker Change: You all have talked about the bottleneck chief bottleneck I believe being the fuselage deliveries from spirit.

Speaker Change: So.

Speaker Change: As you bring that third line on.

Speaker Change: How does this work it didn't seem like it was final assembly that was the bottleneck before.

David Calhoun: It didn't seem like it was final assembly. That was the bottleneck before. So how does that help you with spirit at a point now? Well, we're...

Speaker Change: So how.

Speaker Change: How does that help you with spirit at a point now where.

David Calhoun: Is your capacity that is the limiting factor? So, Spiritson, a very nice job. We watch it very closely, but they've had a nice steady improvement. The ramp from their way up, we've got confidence Pat in the team, and we believe that we will be able to fill that third line, and we believe that we'll be able to get to that 38 per month as we get to the back half of the year. Because it gives us flexibility across three lines as opposed to having to have a close to if we end up with a non-conformance somewhere.

Speaker Change: It's your capacity that is the limiting factor.

Brian J. West: So Spirits did a very nice job. We watch it very closely, but they've had a nice, steady improvement. They're ramping their way up. We've got confidence, Pat, and the team.

Speaker Change: So.

Pat: Spirits in a very nice job, we watch it very closely but they've had a nice steady improvement the ramp on their way up we've got confidence Pat and the team and we believe that we will be able to fill that third line and we believe that we'll be able to get to that 38 per month as we get to the back half of the year.

Brian J. West: And we believe that we will be able to fill that third line. And we believe that we'll be able to get to that 38 per month as we get to the back half of the year. The only thing I would add, Doug, is the third line.

Pat: The only thing I would add Doug is the third line.

Brian J. West: It also helps us with unforeseen issues because it gives us flexibility across three lines as opposed to having to close two if we end up with a non-conformance somewhere. So we are simply trying to over-capacitize to accommodate things that appear and steady our production. Okay, very good. Thank you. Thank you. Our next question is from Peter Arment from Bayard. Please go ahead.

Pat: It also helps us with unforeseen issues.

Speaker Change: Because it gives us flexibility across three lines as opposed to having to having a close to if we end up with a nonconforming somewhere so we are simply trying to overcapacity is to accommodate things that appear and.

David Calhoun: So, we are simply trying to over-capacitize to accommodate things that appear and study our production.

Pat: And steady our production.

Unknown Attendee: Okay, very good.

Speaker Change: Okay very good thank you.

Unknown Attendee: Thank you.

Peter Arment: Our next question is from Peter Amit from Beard. Please go ahead.

Peter J. Arment: Thank you. Our next question is from Peter <unk> from Baird. Please go ahead.

Peter Arment: Yes, good morning, Dave and Brian. Hey Dave, thanks for calling out some of the KPIs that you were talking about. Obviously, they're all super important. You know, you said you're getting some real-time insights on some of these metrics. Maybe, you know, is there any color you can give us on what you're seeing so far on the progress?

Peter J. Arment: Hey Dave, thanks for calling out some of the KPIs that you were talking about. Obviously, they're all super important. You know, you said you're getting some real-time insights on some of these metrics. Maybe, you know, is there any color you can give us on what you're seeing so far in terms of progress? You know, the notice of escapes or shortages. [inaudible] Just trying to get at, you know, ultimately, what the metrics that are, is there anything that's a long pole in the tent that is holding back for ratings?

Peter: Yes, good morning, Dave and Brian.

Peter: Hey, Dave Thanks for calling out some of the Kpis that you were talking about obviously, they're all super important.

Peter: You said, you're getting some real time insights on some of these metrics maybe is there any any color you can give us on what you're seeing so far in the progress whether it's.

Peter Arment: Whether it's, you know, the notice of escapes or shortages or, you know, you talk about employee proficiency, just trying to get at, you know, ultimately what the metrics that is or anything that's a long poll in the tent that is holding back for rate increases and just the confidence around, you know, getting to that rate 38. Thanks.

Speaker Change: The notice of escapes or shortages or you talked about employee proficiency.

Speaker Change: Just trying to get at ultimately what the metrics that is there anything that's a long pole in the tent that is holding back for rate increases and just the confidence around getting to that rate 38. Thanks Peter.

David L. Calhoun: Confidence around, you know, getting, Peter, thanks. Every metric gets better when you slow things down. So yeah, I don't want to kid anybody.

David Calhoun: Peter, thanks. Every metric gets better when you slow things down. So, yeah, I don't want to get anybody.

Peter: Peter Thanks.

Speaker Change: Every metric gets better when you slow things down so yeah, I don't want to Kid anybody the step we took to slow things down it was very deliberate very straightforward and.

David L. Calhoun: The step we took to slow things down was very deliberate, very straightforward, and every metric benefits from that moment. So we've had a step change, improvement, and traveled work, of course, being the big one. And the way to measure traveled work, in my view, and I think the view of our production team, is when we get a clean fuselage and we move it through, you know, less than half the flow time it would have taken in its prior state, that reduces everything. And the reason is you don't have traveled work, you don't have defects moving down the line, you don't have any of that stuff.

David Calhoun: The step we took to slow things down, it was very deliberate, very straightforward, and every metric benefits from that moment. So we've had a step change improvement, traveled work, of course, being the big one. And the way to measure traveled work, in my view, I think the view of our production team is when we get a clean fuselage, and we move it through with, you know, less than half the flow time it would have taken in its prior state, that reduces everything. And the reason is you don't have traveled work; you don't have defects moving down the line; you don't have any of that stuff.

Peter: Every metric benefits from that moment, so we've had a step change improvement.

Speaker Change: Traveled work of course being the big one in a way to measure traveled work in my view.

Speaker Change: The view of our production team is when we get a clean fuselage and we move it through as you know Washington have to flow time, it would've taken in its prior state.

Speaker Change: That reduces everything and the reason is you don't have traveled work you don't have defects were moving down. The line you don't have any of that stuff. So we've been a beneficiary of a step change on that front and we're now at the stage, where we're only getting clean fuselages, whereas you know in the first two quarters we were.

David L. Calhoun: So we've been a beneficiary of a step change on that front, and we're now at the stage where we're only getting clean fuselages. Whereas, you know, in the first two quarters, we were managing a mix of the prior regime and what we're getting now. So anyway, that's a big proxy for the way things are going to move forward and are moving forward. You'll know when we get out of kilt on any one of those metrics.

David Calhoun: So we've been a beneficiary of a step change on that front, and we're now at the stage where we're only getting clean fuselages. Whereas you know, in the first two quarters, we were managing a mix of the prior regime and what we're getting now.

Speaker Change: Managing a mix of the prior regime and what we're getting now.

David Calhoun: So anyway, that's the big proxy for the way things are going to move forward and are moving forward. You'll know when we get out of, out of kilp on any one of those metrics. I don't think any of them are going to stop us from the plans that we've announced in our expectations as we approach your end. Probably the one we'll all just keep our eye on is the travel work scenario. We cannot allow ourselves to get back into a scenario where we're traveling things too far down the line, and we've got a lot of controls in place.

Speaker Change: So.

Speaker Change: Anyway.

Speaker Change: That's the big proxy for the way things are going to move forward and are moving forward.

Speaker Change: And you'll know when we get out of out of kilter on any one of those metrics I don't think any of them are going to.

David L. Calhoun: I don't think any of them are going to stop us from the plans that we've announced and our expectations as we approach year end. Probably the one we'll all just keep our eye on is the travel work scenario where we cannot allow ourselves to get back into a scenario where we're traveling things too far down the line. And we've got a lot of controls in place. So that won't happen.

Speaker Change: Stop us from plans that we've announced in our expectations as we approach year end <unk>.

Speaker Change: Probably the one will all just keep our eye on is the traveled work scenario, where we cannot allow ourselves to to get back into a scenario, where we're traveling things too far down the line and we got a lot of controls in place so that that won't happen.

David Calhoun: So that won't happen.

Unknown Attendee: Appreciate it, thanks, Dave. Thank you.

Speaker Change: I appreciate it thanks, Dave.

David L. Calhoun: Thanks, Dave. Thank you. Our next question is from Sheila Kahyaoglu from Jeffreys. Please go ahead. Thank you, guys. And good morning, Dave and Brian.

Speaker Change: Thank you. Our next question is from Sheila <unk>.

Sheila Kahyaoglu: Our next question is from Sheila Kaya, from Jeffries. Please go ahead. Thank you guys, and good morning, Dave and Brian.

Sheila: From Jefferies. Please go ahead.

Sheila Karin Kahyaoglu: Brian, this one's for you. Maybe if we could just think about what the buffer is on free cash flow and the cash balance? How do we think about tapping that RC if cash flow falls below $10 billion, which is what you're suggesting in Q3? And do we think about Q4 as cash usage or generation? And what's the cadence of inventories and advances, maybe over the next two to four quarters, if you can? Yeah, so sure.

Sheila: Thank you guys and good morning, Dave and Brian.

Sheila Kahyaoglu: Brian, this one's for you. Maybe if we could just think about what's the buffer on free cash flow and the cash balance.

Sheila: Brian This one's for you maybe if we could just think about what's the buffer on free cash flow and the cash balance how do we think about <unk>.

Brian West: How do we think about tapping that RC if cash flow falls below $10 billion, which is what you're suggesting in Q3, and do we think about Q4 as cash usage or generation, and what's the cadence of inventories and advances maybe over the next two to four quarters if you can. Yes, so sure. Thanks, Sheila, for the question. So the working capital drag has been pretty meaningful in the first and the second quarter, and it's the inventory as well as the advances as deliveries have been lower. Now, the third quarter is going to be a similar working capital drag as it was in the third and second quarter. Inventory will still be a headwind, albeit a smaller one, and advances timing will be an additional headwind, which again, that will gradually improve over time with deliveries.

Ken: Tapping that are full of cash flow thoughtful lots from Dalian, which is what youre, suggesting in Q3 and do we think about Q4 with cash usage, our generation and what the cadence of inventories in advance of maybe over the next two to four quarters. Thank you Ken.

Brian J. West: Thanks, Sheila, for the question. So the Wharton Capital drag has been pretty meaningful in the first and second quarters, and it's the inventory as well as the advances as deliveries have been lower. Now the third quarter is going to be a similar working capital drag as it was in the first and second quarters. Inventory will still be a headwind, albeit a smaller one, and the advanced timing will be an additional headwind, which will gradually improve over time with delivery. And we're seeing that customers are applying excess advances and lowering advance payments as they want to see delivery performance improve.

Speaker Change: Yes, so sure thanks, Sheila for the question.

Speaker Change: So the working capital drag.

Speaker Change: Has been pretty meaningful in the first and the second quarter and into the inventory as well as the advances as deliveries have been lower than.

Speaker Change: Now the third quarter is going to be a similar working capital drag as it was in the first and second quarter.

Speaker Change: Inventory will still be ahead headwind, albeit a smaller one and advance the timing will be an additional headwind, which again that will gradually improve over time with deliveries.

Brian West: Now, we're seeing that customers are applying excess advances and lowering advance payments as they want to see delivery performance improve. So we're just got to deal with that timing because once the factory moves and we start delivering, all of that will unwind on both the advances and the inventory, but it is going to take us time to do that now. In the third quarter, deliberately better, but we still have these working capital headwinds. In the fourth quarter, we're going to have stronger deliveries. We're going to have real work capital improvement, and I'd also mentioned that we're going to have a tanker lot 11 that we expect.

Speaker Change: We're seeing the customers are applying excess advances and lowering advanced payments as they want to see delivery performance improves. So we're just got to deal with that timing because once the factory moves and we start delivering all of that will unwind on both the advances in the inventory, but it is going to take us.

Brian J. West: So we've just got to deal with that timing, because once the factory moves and we start delivering, all that will unwind on both the advances and the inventory. But it is going to take us time to do that. Now, in the third quarter, deliveries will be better, but we still have these working capital headwinds. In the fourth quarter, we're going to have stronger deliveries. We're going to have real working capital improvement.

Speaker Change: Time to do that now.

Speaker Change: In the third quarter deliveries will be better, but we still have these working capital headwinds in the fourth quarter, we're going to have stronger deliveries.

Brian J. West: And I'd also mention that we're going to have a tanker lot 11 that we expect. So these cash flows can move fairly meaningfully quarter to quarter, and it's all predicated on our ability to deliver and get the factory stable and get it improved. So that's the way we're thinking about the back half on cash. What's the cash balance you feel comfortable with? You know, we've always said 10.

Speaker Change: We're going to have real working capital improvement.

Speaker Change: And I'd also mentioned that we're going to have a tanker lot 11 that we expect so these meaning these cash flows can move fairly meaningful quarter to quarter and it's all predicated on our ability to deliver and get the factory stable and getting improved.

Brian West: So these meaning these cash flows can move fairly meaningful quarter quarter, and it's all predicated on our ability to deliver and get the factory stable and getting it improved. So that's the way we're thinking about the back half on cash.

Speaker Change: So that's the way we're thinking about the back half on cash.

Brian West: What's the cash balance if you're comfortable with? You know, we've always said 10, but at any given moment, if that kind of moves a little bit given what's in front of us, we can be comfortable. I think there's a broader question around we're constantly looking at liquidity. You saw that with what we did in May. You saw that, and how we treated the spirit transaction. So right now we're comfortable with where we're at and how we get to the end of the year.

Speaker Change: What's the cash balance you're comfortable with.

Brian J. West: But at any given moment, if that kind of moves a little bit, given what's in front of us, we can be comfortable. I think there's a broader question around this; we're constantly looking at liquidity. You saw that with what we did in May. You also saw how we treated the spirit transaction. So right now, we're comfortable with where we're at and how we will get to the end of the year. Thank you. Thank you. The next question is for Myles Walton from

Speaker Change: We've always said 10, but at any given moment at that kind of moves a little bit given what's in front of us we can be comfortable I think.

Speaker Change: A broader question around we're constantly looking at liquidity you saw that with what we did in May I mean, you saw that in how we treated the spirit transaction. So right now we're comfortable with where we're at and how we get to the end of the year.

Speaker Change: Thank you.

Speaker Change: Thank you. The next question is from Myles Walton from most research. Please go ahead.

Myles Walton: The next question is from Maya Walton from both research. Please go ahead.

Myles Walton: Thanks, morning. Maybe to follow up briefly on that.

Myles Alexander Walton: Research. Thanks, good morning. Maybe to follow up briefly on that, Brian, can you comment on the abnormality of those advanced payments? You mentioned some are applying previous repayments to the current profile in Selmar until they see better performance. Can you categorize where you are on advances? Have you over collected in the past and therefore we're in a divot?

Myles Alexander Walton: Thanks, Good morning, maybe to follow up briefly on that Brian can you comment on on the abnormality of those advanced payments. You mentioned some are applying previous prepayments to to the current profile and summer basically deferring their payments until they see better performance can you categorize.

Brian West: Brian, can you come in on the abnormality of those advanced payments? You mentioned some are applying previous prepayments to the current profile, and some are basically deferring their payments until they see better performance. Can you categorize where you are on advances? Have you over collected in the past and therefore we're in a divot, or are you under collecting now and there'll be a, you know, an actual beneficial recovery, if you will, at some point in the near term. So both the answer question. You know, we do have the accesses that are people are applying as well as people are withholding the PDPs until they get that delivery structure, delivery schedule more stable.

Speaker Change: Where you are on advances have you over collected in the past and therefore, we're in a a debit or you under collecting now and there'll be a.

Brian J. West: Or are you under collecting now, and there'll be an actual beneficial recovery if you do? So both. Let me answer your question. You know, we do have the excesses that people are applying, as well as people withholding the PDPs until they get that delivery schedule more stable. So it's both.

Speaker Change: And actual beneficial.

Speaker Change: Recovery, if you will at some point in the near term.

Speaker Change: So both any answer your question.

Speaker Change: We do have the excesses.

Speaker Change: People are applying as well as people are withholding the PDP until they get that delivery structure.

Speaker Change: Delivery schedule more stable. So it's both I mean, what you saw in the in the quarter that we had a pullback of about $1 billion on the advance balance those two things are both happening and that balance and we expect that in the second half to continue but when we start to deliver with predictability all of that will begin to unwind. So this really is.

Brian West: So it's both. I mean, you saw in the quarter that we had a pullback of about a billion dollars on the advanced balance. Those two things are both happening in that balance, and we expect that and the second half to continue. But when we start to deliver with predictability, all that will begin to unwind. So this really is timing, and it's timing over quarters is our best guess, and it's all again predicated on our ability to get deliveries in a different position.

Brian J. West: I mean, you saw in the quarter that we had a pullback of about a billion dollars on the advance balance. Those two things are both happening to that balance, and we expect that in the second half to continue. But when we start to deliver with predictability, all that will begin to unwind. So this really is timing, and its timing over quarters is our best guess. And it's all, again, predicated on our ability to get deliveries in a different position.

Speaker Change: Timing and its timing over quarters.

Brian J. West: As our best guests and it's all again predicated on our ability to get deliveries in a different position.

Brian West: and the overarching opportunity for us is still the shortage of airplanes and the demand scenarios. So this isn't a soft spot in the market where people are trying to sort of get something, create a fundamental change. This is a short term management which we all understand, and we're trying to accommodate. But the demand is still so strong for airplanes that that that that provides the incentive for everybody to want to get us money so they can get the plane.

Brian J. West: And the overarching opportunity for us is still the shortage of airplanes and the demand scenarios. So this isn't a soft spot in the market where people are trying to sort of get something that creates a fundamental change.

Speaker Change: And the overarching.

Speaker Change: Opportunity for us is still the shortage of airplanes and the demand scenarios. So.

Brian J. West: This isn't a soft spot in the market where people are trying to sort of get something create a fundamental change. This is short term management with which we all understand and we're trying to accommodate but the demand is still so strong for airplanes that that that that that provides the incentive for everybody to want to get us money. So they can get their planes.

Brian J. West: This is short-term management with which we all understand we're trying to accommodate. But the demand is still so strong for airplanes that that provides the incentive for everybody to want to give us money so they can get their plane. And on advances on 777X to offset that $800 million a quarter inventory growth, is that a material offset to the $800 million, or is the $800 million more or less?

Brian West: And on advances on triple seven X to offset that $800 million quarter inventory growth, is that a material offset to the 800, or is it 800 more or less than net triple seven X performance that we're seeing? Yeah, the 800 is really the inventory; specifically, the advance that was not meaningful at this moment. It's the inventory that is the real one that we're dealing with, which again is the investment in the entry to service.

Speaker Change: And on the advances on Triple seven X to offset that $800 million quarter inventory growth is that a material offset to the 800 or is it 800 more or less the net.

Speaker Change: Triple seven ex performance that we're seeing.

Brian J. West: Thank you. You know, the 800 is really the inventory. Specifically, the advance; it is not meaningful at this moment.

Speaker Change: Yes, the 800 is really the inventory.

Speaker Change: Specifically the advance it was not meaningful at this moment is the inventory that is the real one that.

Brian J. West: We're dealing with which again is the investment and the entry into service.

Unknown Attendee: Okay, thank you.

Brian J. West: It's the inventory that is the real one that we're dealing with, which again is the investment in entry into service. Okay, thank you. The next question is from David Strauss from Barclays. Please go ahead.

Speaker Change: Okay. Thank you.

Unknown Attendee: Thank you.

Speaker Change: Thank you. The next question is from David Strauss from Barclays. Please go ahead.

David Strauss: The next question is from David Strauss.

David Strauss: Some bark, please. Please go ahead.

Brian West: Maureen, thanks for taking the question. Brian, I know it's difficult to put a fine point on the cash burn, but you know, I guess for the full year, are you looking at a number closer to a $5 billion burn or a $10 billion burn? That's the first question. And then, you know, you've obviously said you're prioritizing your investment-grade rating. To the extent that you need more funding, do you expect the reagency to allow you to issue debt again and keep IG or, you know, are you potentially thinking about, you know, having to do the equity offering?

David Egon Strauss: Maureen, thanks for taking the question. Brian, I know it's difficult to put a fine point on the cash burn, but, you know, I guess for the full year, are you looking at a number closer to a $5 billion burn or a $10 billion burn? That's the first question. And then, you know, you've obviously said you're prioritizing your investment grade rating. To the extent that you need more funding, do you expect the rating agency to allow you to issue debt again and keep IG, or, you know, are you potentially thinking about, you know, having to do an equity offering?

David Egon Strauss: Good morning, Thanks for taking the question.

Speaker Change: Brian and I know, it's I know, it's difficult to put a fine point on on.

David Egon Strauss: On the cash burn, but I guess for.

David Egon Strauss: For the full year or are you looking at a number closer to a $5 billion burn or a $10 billion burn.

Speaker Change: The first question and then.

Speaker Change: You've obviously said you're prioritizing your investment grade rating.

Speaker Change: So to the extent that you need more funding do you expect the rating agencies to allow you to issue debt again and keep our E. R. R E.

Speaker Change: Are you potentially thinking about having to do the equity offering. Thank you.

Brian West: Thank you. Yeah, I'm just not smart enough right at this moment to say whether it's 5 or 10. As you know, as we ramp deliveries, it's pretty meaningful movement in our cash balance. So I'm going to steer away from trying to get more specific. It will be a usage, and we're working away through it. And as we work through the time, the elements, we know that as we move forward, that's going to go in the right direction.

Brian J. West: Yeah, David, I'm just not smart enough right now to say whether it's 5 or 10. As you know, as we ramp up deliveries, it's a pretty meaningful movement in our cash balance. So I'm going to steer away from trying to get more specific. It will be a usage, and we're working our way through it. And as we work through the timing elements, we know that as we move forward, this is going to go in the right direction. In terms of the question around the rating agencies, we are in regular conversations with all three rating agencies.

David Egon Strauss: Yes, David.

Speaker Change: I'm, just not smart enough right at this moment to say, whether it's five or 10 as you know as we ramp.

Speaker Change: Deliveries, it's pretty meaningful movement in our cash balance so I'm going to steer away from trying to get more specific.

Speaker Change: It will be a usage and we're working our way through it and as we work through the timing elements, we know that as move forward, that's going to go into right direction.

Brian West: In terms of the question around rating agencies, you know, we are in regular conversations with all three rating agencies. They, like us, are all focused on the operating performance of the company, on our ability to generate free cash flow, and the absolute debt reduction. And we tell them what we consistently said to everyone. The investment grade is the number one priority. And as we regularly monitor liquidity, if we are ever to bump up against maturities, or to do what it takes to protect that rating, period. And we've been consistent since April 2020 on that front, and evidenced by the spirit financing decision.

Brian J. West: In terms of the question around.

Speaker Change: The rating agencies, we are in regular conversations with all three rating agencies.

Brian J. West: They, like us, are all focused on the operating performance of the company, on our ability to generate free cash flow, and on absolute debt reduction. And we tell them what we have consistently said to everyone, that investment grade is the number one priority. And as we regularly monitor our liquidity, if we are ever to bump up against maturities, we're going to do what it takes to protect that rating, period. And we've been consistent since April 2020 on that front, as evidenced by the Spirit financing decision. So we stay ready; we stay agile. That rating is the priority. Thanks very much. Houston is fun.

Speaker Change: They like US are all focused on the operating performance the company on our ability to generate free cash flow and the absolute debt reduction.

Speaker Change: And we tell them, what we consistently said to everyone. The investment grade is the number one priority and as we regularly monitor our liquidity. If we were able to bump up against maturities or to do what it takes to protect that rating period and we've been consistent since our.

Speaker Change: April 2020 on that front.

Speaker Change: Evidenced by the spirit financing decision. So we stay ready we stay agile that rating is the priority.

Brian West: So we stay ready; we stay agile. That rating is the priority.

David Egon Strauss: Yeah.

Unknown Attendee: Thanks very much.

Speaker Change: Thanks very much.

Jason Gursky: The next question is from Jason Gersky. What is the group?

Brian J. West: The next question is from Jason Gursky with Citi.

Ronald Jay Epstein: C Group, please go ahead. Yeah, good morning, everyone. I just want to go back to the 777 for a minute.

Jason Gursky: Please go ahead. Yeah, good morning, everyone.

Speaker Change: Please go ahead.

Brian J. West: And Brian, maybe I should ask you to talk a little bit about the expected, you know, future burn on that program from a cash flow perspective in the quarters leading up to certification and Initial Delivery. And then a lot of that's being driven by inventory, of course, so maybe we should talk about what the inventory burn looks like on the back side of that, kind of what you are expecting at this point from, you know, production, and we get out in that 25, 26 time, kind of what you're thinking.

Speaker Change: Yes, good morning, everyone.

Brian West: I just want to go back to the triple seven for a minute. And Brian, he asked you to talk a little bit about the expected, you know, future burn on that program from a cash flow perspective. in the quarters leading up to certification and initial delivery. And then I know a lot of that's being driven by inventory. Of course, so maybe as well talk about what the inventory burn looks like on the back side of that. And kind of what you are expecting at this point from production, and we get out in that 2526 timeframe.

Speaker Change: Just wanted to go back to the Triple seven.

Speaker Change #100: For a minute.

Speaker Change: [noise] Bryan maybe ask you to talk a little bit about.

Brian J. West: The expected.

Speaker Change: Future burn on that program from a cash flow perspective.

Speaker Change: And the and the quarters, leading up to <unk>.

Speaker Change: Certification.

Brian J. West: And initial delivery and then.

Speaker Change: And there are a lot of that's being driven by by inventory of course, so maybe as well talk about.

Speaker Change: What the inventory burn looks like on the back side of that.

Speaker Change: And kind of what you are expecting at this point from.

Brian J. West: Production and we get out in that 'twenty, five 'twenty six timeframe and kind of what's your thinking on.

Brian West: And kind of what you're thinking on the delivery is out in that 26 timeframe, given the backlog, assuming that you get the certification done there in 2025 and first deliveries get started. Thanks.

Brian J. West:

Brian J. West: Deliveries out on that 26th time frame, given the backlog, assuming that you get certification done there in 2025. Well, the good news on the last part of the question is the backlog is pretty robust, and we just had some terrific performances at the air show on the wide-body front. I would say, in general, the 777X cash is going to look similar to all the other development programs. You know, we use cash prior to the entry into service. You've seen that.

Speaker Change: Deliveries out of that 26 timeframe given the backlog assuming that you get.

Brian J. West: The certification done there in 2025 and first deliveries get started thanks.

Brian West: Well, the good news on the last part of that question is the backlog is pretty robust, and we just had some terrific performance of the air show on the wide body front. I would say in general, the triple seven X cash is going to look similar to all the other development programs. You know, we use cash prior to the entry and service. You've seen that I talked about the 100 million this quarter; that's been consistent, and that is all driven by the natural inventory bill as we prepare for that entry and service.

Speaker Change: Well the good news on the last part of the question is the backlog is pretty robust and we just had some terrific performance at the air show on the on the wide body front.

Speaker Change: I would say in general the Triple seven ex cash is going to look similar to all of the other development programs. We used cash prior to the entry in service you've seen that I talked about 800 million this quarter thats been consistent and that is all driven by the natural inventory build as we prepare for that entry in service now we also know that it will turn.

Brian J. West: I talked about the $800 million this quarter. That's been consistent, and that is all driven by the natural inventory bill as we prepare for that entry into service. Now, we also know that it will turn positive about a year after EIS as deliveries begin to ramp up. And that will play out in a very normal way that most development programs play out.

Brian West: Now, we also know that it will turn positive about a year after EIS as deliveries begin to ramp. And that'll play out in a very normal way that most development programs play out. And yes, it's going to be underwritten by that robust backlog that we have a high confidence in, and the customers love the airplane. So we feel pretty good. And these are just investments and timing, and over the long term, there's going to be a great payoff.

Brian J. West: Positive about a year after.

Brian J. West: As deliveries begin to ramp and that will play out in a very normal way that most developed programs play out and yes, it's going to be underwritten by that robust backlog that we have a high confidence in and the customers love. The airplanes. So we feel pretty good and these are just investments and timing and over the long term, it's going to be.

Brian J. West: And, yes, it's going to be underwritten by that robust backlog that we have high confidence in, and customers love the airplane. So we feel pretty good, and these are just investments in timing. And over the long term, it's going to be a great payoff. Thank you. And our next question is from Kristine Liwag from Morgan Stanley. Please go ahead. Hey Dave, Brian, on the IAM labor negotiations, can you provide an update on where you are? How far apart are you and the union and economics? And what operating contingencies are in place in case the union were to go on strike?

Speaker Change: Payoff.

Speaker Change: Yeah.

Speaker Change: Yeah.

Unknown Attendee: Thank you.

Speaker Change: Thank you and our next question is from Christine Li Wang from Morgan Stanley. Please go ahead.

Christine Lee Wang: And our next question is from Christine Lee Wang from Oregon Family.

Christine Lee Wang: Please go ahead. Hey, Dave. Brian on the IAM labor negotiations. Can you provide an update on where you are? How far apart are you and the union and economics? And what operating contingencies are in place in case the union were to go on strike? Thanks.

Speaker Change: Hey, Dave Brian.

Speaker Change: The Iam labor negotiations can you provide an update on where you are how far apart are you and the union and economics and what operating contingencies are in place in case of Union Board to go on strike. Thanks.

David Calhoun: Oh, we're definitely not planning on a strike for starters. I can't really; it's too early to call out a gap analysis with respect to the puts and takes because we're too early in the process. And you know, I like the framework. I like I like the investments that we want to make with respect to training and development of people. We know that asks will be big. We know wage asks will be big. We're not afraid to treat our employees well in this process. So we're just going to work as hard as we can not to not to have a strike.

Kristine Liwag: Thanks. Well, we're definitely not planning on a strike, just for starters. I can't really, it's too early to call out a gap analysis with respect to the puts and takes because we're too early in the process. But, you know, I like the framework. I like the investments that we want to make with respect to the training and development of people. We know that demands will be big. We know wage demands will be big.

Speaker Change: We're definitely not planning on a strike.

Speaker Change: For starters.

Speaker Change: I can't really.

Kristine Liwag: It's too early to call out a gap analysis with respect to the puts and takes.

Kristine Liwag: Because we're too early in the process.

Kristine Liwag: And I.

Speaker Change: I like the framework I like I like the investments that we want to make with respect to training and development of people.

Speaker Change: We know that asks will be big we know wage asks there'll be big we're not afraid to treat our employees well in this process. So we're just going to work as hard as we can not to not to have a strike and anyway.

Kristine Liwag: We're not afraid to treat our employees well in this process. So we're just going to work as hard as we can not to have a strike. And anyway, this will be in Kelly and Stephanie's backyard by the time we get to that negotiation.

David Calhoun: And anyway, I I this will be in Kelly and Stephanie's, you know, backyard by the time we get to that negotiation. But, as you know, as well as I do, until the last week is in play, you don't, you don't know much. So I'll just leave it at that and try not to predict other than to tell you we have an express intent to not have to strike.

Kristine Liwag: This will be an Kelly and Stephanie's a backyard by the time, we get to that negotiation, but as you know.

David L. Calhoun: But as you know, as well as I do, until the last week is in play, you don't know much. So I'll just leave it at that and try not to predict. Other than to tell you we have an express intent to not have to strike. Great, thank you.

Speaker Change: As well as I do until the last week is in play you don't you don't know much so.

David L. Calhoun: Just leave it at that and try not to predict other than to tell you we are in.

David L. Calhoun: Express intent to not have to strike.

Unknown Attendee: Great.

Speaker Change: Great. Thank you.

Unknown Attendee: Thank you. And thank you.

Speaker Change: Thank you.

Operator: And thank you. The next question is from Cai Van Rumohr from TD Cowan. Please go ahead. Yes, thanks so much.

Cai Rumohr: The next question is from Kaivon rumor from TD Taiwan. Please go ahead.

Speaker Change: Thank you. The next question is from Bank of America TD Cowen. Please go ahead.

Cai Rumohr: Yes. Thanks so much. So.

Operator: Yes.

Speaker Change: So much so.

Cai Rumohr: Production in July looked like it remained pretty depressed. In August, you basically have vacations.

Cai von Rumohr: So, production in July looked like it remained pretty depressed. In August, you basically have vacations. So how should we think about the recovery in terms of production and deliveries? Because it looks like August isn't that great. And sort of related, a number of your suppliers, you know, who are going at higher rates than you are producing, are talking about, you know, they're keeping some inventory there because you don't pull it yet, and they're asking you for advances.

Speaker Change: Production in July looked like it remained pretty depressed.

Cai von Rumohr: In August you basically have.

Cai von Rumohr: Vacations.

Speaker Change: So how.

Cai Rumohr: So how should we think about the recovery in terms of production and delivery? Because it looks like August isn't that great. And sort of related, a number of your suppliers, you know, who are going at higher rates than you are producing. They are talking about, you know, they're keeping some inventory there because you don't pull it yet. And they're asking you for advances.

Cai von Rumohr: How should we think about the recovery in terms of production and deliveries because it looks like August isn't that great.

Speaker Change: Sort of related a number of your suppliers, who are going at higher rates than you were producing are talking about.

Speaker Change: They're keeping some inventory there because you don't pull it yet.

Cai von Rumohr: So, what are you having to do with your suppliers in terms of giving them a lifeline of some advances so that they can continue to produce, won't have to cut back, and then ramp up later? So yeah, so what, maybe talk about those two issues.

Cai von Rumohr: And they're asking you for advances so what are you having to do with your suppliers in terms of giving them a lifeline of some advances so that they can continue to produce won't have to cut back and then ramp up later.

David Calhoun: So what are you having to do with your suppliers in terms of giving them a lifeline of some advances, so that they can continue to produce, won't have to cut back and then wrap up later.

David Calhoun: So, yeah, so what maybe talk about those two issues? So, in terms of your question around the 737 rate ramps, keep in mind, beginning part of this year, we were very, very low production, like single digit. And now we're getting to the point in June, July, where we're kind of mid 20s. And, you know, August will likely be an improvement ahead of that. But then we're going to have a nice study ramp through the back half of the year, again predicated on a successful line three being brought to bear and also the China resumption. So everything we see, we've got the labor, we've got the inventory, we've got the fuselages.

Cai von Rumohr: So yeah, so what maybe talk about those two issues.

Brian J. West: So in terms of your question around the 737 rate ramps, keep in mind that at the beginning part of this year, we were very, very low on production, like single digits. And now we're getting to the point in June-July where we're kind of in the mid-20s. And, you know, August will likely be an improvement ahead of that. But then we're going to have a nice steady ramp through the back half of the year, again, predicated on a successful Line 3 being brought to bear and also the Chinese resumption. So everything we see, we've got the labor, we've got the inventory, we've got the fuselages. It's all lined up for us to continue to improve our delivery ramp. And that's on us to go execute it.

Speaker Change: So in terms of your question around the 737 rate ramps.

Brian J. West: Keep in mind.

Brian J. West: Beginning part of this year, we were very very low production like single digit and now we're getting to the point in June July where we're kind of mid twenties and.

Brian J. West: Yeah August will likely be an improvement of ahead of that.

Brian J. West: But then we're going to have a nice steady ramp through the back half of the year again predicated on a successful line three being.

Brian J. West: Brought to bear and also the China resumption. So everything we see we've got the labor we've got the inventory we got the fuselages, it's all lined up for us to continue to improve our delivery ramp and that's on us to go execute it.

David Calhoun: It's all lined up for us to continue to improve our delivery ramp. And that's on us to go execute it.

Brian J. West: So we feel good about the progress we've made. And we've got proof points that say we've got a real ability to hit our 38 per month as we exit the year. In terms of the discussion of the supply chain, they're all unique. It's one by one.

David Calhoun: So we feel good about the progress we've made, and we've got proof points that says we've got a real ability to hit our 38 per month as we exit the year. In terms of the discussion of supply chain, they're all unique. It's one by one. We're very careful to make sure that the way we're trying to protect stability in our own factory, we're trying to protect stability across the supply chain. And we do make certain moves here and there, probably spirits the best example. And we have to do that so that when we move through the course of this year and going forward, we do so in a very stable, predictable way with a supply chain that's right there with us.

Brian J. West: So we feel good about the progress we've made and we've got proof points that says we've got a real ability to hit our 38 per month as we exit the year in.

Brian J. West: In terms of the.

Brian J. West: A discussion of our supply chain.

Brian J. West: They're all unique it's one by one we're very careful to make sure that the way we're trying to protect stability in our own factory, we're trying to protect stability across the supply chain and we do make certain moves here and there.

Brian J. West: We're very careful to make sure that the way we're trying to protect stability in our own factory, we're trying to protect stability across the supply chain. And we do make certain moves here and there. Probably Spirit is the best example.

Brian J. West: And we have to do that so that when we move through the course of this year and going forward, we do so in a very stable, predictable way with a supply chain that's right there with us. Nothing that we see gives us any pause or concern. We've got all the assets and resources. We just have to start working our way through and delivering these airplanes for our customers. But collectively, if you add up all of your advances to suppliers, have those peaked, or are they continuing to move up? You know, there's not really been a material change, Cai.

Brian J. West: Spirit is the Best example, and we have to do that so that when we move through the course of this year and going forward, we do in a very stable predictable way with the supply chain, it's right there with us.

David Calhoun: Nothing that we see gives us any pause or concern. We've got all the assets and resources. We just have to start working our way through and delivering these airplanes for our customers.

Brian J. West: Nothing that we see gives us any pause or concern.

Brian J. West: We've got all the assets and resources, we just have to start working our way through and delivering these airplanes for our customers.

Brian West: But so collectively, if you add all of your advances to suppliers, have those peaked, or are they continuing to move out? You know, there's not really a material change, Kai. You know, here and there, there might be some differences, but nothing material and nothing that's not contemplating our forward look.

Cai: But so collectively if you add all of your advances to suppliers had those peak or are they continuing to move up.

Brian J. West: There's not really a material change Cai.

Brian J. West: You know, here and there, there might be some differences, but nothing material and nothing that's not contemplated in our forward look. Thank you very much. Our next question is from Seth Seifman from J.P. Morgan. Please go ahead. Hey, thanks very much.

Cai: Here and there there might be some differences, but nothing material and nothing that's not contemplated in our forward look.

Unknown Attendee: Thank you very much.

Speaker Change: Thank you very much.

Seth Seifman: And our next question is from Seth Seifman from JP Morgan.

Speaker Change: And our next question is from Seth Zachman from J P. Morgan. Please go ahead.

Seth Seifman: Please go ahead. Hey, thanks very much, and good morning.

Seth Michael Seifman: And good morning. I wanted to ask you about Spirit, which you mentioned in the last question, when you think about their ability to fund themselves through the close of this transaction in mid 2025, is that, you know, are you contemplating having to take any additional action to fund Spirit through the close? And then secondly, when you think about the investment plan for Boeing into Spirit, once Spirit is part of Boeing, you know, what can you tell us qualitatively or quantitatively to characterize that investment plan to prepare Spirit for the rate ramp ahead? So be careful not to speak for Spirit too much.

Seth Michael Seifman: Hey, thanks, very much and good morning.

David Calhoun: I wanted to ask it on spirit, which you mentioned on the last question. When you think about their ability to fund themselves through the close of this transaction in mid 2025, is that, you know, are you contemplating having to take any additional action to fund Spirit through close.

Speaker Change: Wanted to ask.

Speaker Change: On spirit.

Speaker Change: Mentioned on the last question.

Speaker Change: When you think about their ability to fund themselves through the close of this transaction in mid 2025 is that in our.

Speaker Change: Are you contemplating having to take any additional action to fund spirit through close and then secondly, when you think about the investment plan for Boeing into Spirit, one spirit as part of Boeing.

David Calhoun: And then secondly, when you think about the investment plan for Boeing into Spirit, one Spirit is part of Boeing. You know, what can you tell us qualitatively or quantitatively to characterize that investment plan to prepare Spirit for the rate ramp ahead? So, I'll be careful not to speak for Spirit too much. On the other hand, they're performing well. We expect them to continue to perform well, and we've got confidence that we're going to get clean fuselages that helps coincide with our delivery schedule. So, we feel pretty good about where they sit, and they're continuing performance.

Seth Michael Seifman: What can you tell us qualitatively or quantitatively to characterize that that investment plan to compare spirit for the rate ramp ahead.

Speaker Change: So I'll be careful not to.

Seth Michael Seifman: Speak for spirit too much on the other hand.

Brian J. West: On the other hand, they're performing well. We expect them to continue to perform well, and we've got confidence that we're gonna get clean fuselages that help coincide with our delivery schedule. So we feel pretty good about where they sit and their continued performance. So nothing there gives us any concern at the moment. And in terms of investing,

Speaker Change: They're performing well, we expect them to continue to perform well and we've got confidence that we're going to get clean fuselages helps cowen.

Brian J. West: Coincide with our delivery schedule, so we feel pretty good about where they sit in their continued performance. So nothing there gives us any concern at the moment.

David Calhoun: So, nothing there gives us any concern at the moment.

David Calhoun: And in terms of investing, we look forward to closing this acquisition. We look forward towards bringing them into the Boeing world, and we will not be shy or bashful with any investments that are needed in order for long-term stability. We feel really good about what is in front of us on that front, and we can't wait to close.

Brian J. West: And in terms of.

Brian J. West: We look forward to closing this acquisition. We look forward to bringing them into the Boeing world. And, you know, we will not be shy or bashful with any investments that are needed in order for long-term stability. We feel really good about what is in front of us on that front, and we can't wait to close. Thanks very much.

Brian J. West: Investing.

Speaker Change: We look forward to closing this acquisition and we look forward towards bringing them into the Boeing world and we will not be shy or bashful with any investments that are needed in order for long term stability.

Brian J. West: We feel really good about what is in front of us on that front and we can't wait to close.

Unknown Attendee: Great. Thanks very much.

Speaker Change: Great. Thanks very much.

Unknown Attendee: Thank you.

Operator: Thank you. Our next question is from Noah Poponak from Goldman Sachs. Please go ahead. Hey, good morning, everyone. Good morning, Noah.

Speaker Change: Thank you. Our next question is from Noah <unk> from Goldman Sachs. Please go ahead.

Noah Poponak: Our next question is from Noah Poponak, from Goldman Sachs. Please go ahead.

Noah Poponak: Hey, good morning, everyone. You know, morning, Noah.

Noah Poponak: Hey, good morning, everyone.

Speaker Change: Good morning Noah.

David Calhoun: Can you talk a little bit more about the leadership decisions that you've made? You know, I know Kelly has had a lot of experience in the industry, but kind of out of an operating role for a bit.

Noah Poponak: Can you talk a little bit more about the leadership decisions that you've made? You know, I know Kelly has had a lot of experience in the industry, but kind of out of an operating role for a bit, what's the potential for wanting to hit the reset button on a lot of the transitions you're in the middle of right now versus ability to hit the ground running? And, you know, how should we think about Pat, Stephanie, and other roles as you move forward here? Well, I'll take a crack and I'm not going to, you know, divulge anything that I'm not perfectly aware of.

Speaker Change: Can you talk a little bit more about the leadership decisions that you've made.

Noah Poponak: I know Kelly has had a lot of experience in the industry, but.

Noah Poponak: Out of an operating role for a bit.

David Calhoun: What's the potential for wanting to hit the reset button on a lot of the transitions you're in the middle of right now versus the ability to hit the ground running? And, you know, how should we think about Pat, Stephanie, and other roles as you move forward here? Well, I'll take your crack, and I'm not going to, you know, divulge anything that I'm not perfectly aware of.

Noah Poponak: What's the potential for wanting to hit the reset button on a lot of the transactions are in the middle of right now versus ability to hit the ground running.

Noah Poponak: And.

Noah Poponak: How should we think about Pat Stephanie other other roles.

Noah Poponak: As you move forward here.

Noah Poponak: Well I'll take a crack and I'm not going to.

Noah Poponak: Divulge anything that that I'm not.

David L. Calhoun: The board made this decision. Over the last nine months, when I think about the number of people they've called around the industry on the supply side, the buy side, the regulatory side, pretty remarkable, thorough discussions. And at the end of the day, a couple of names surfaced, and they landed on Kelly. And I could not be happier with the call, because I know Kelly. I've been around Kelly.

Noah Poponak: Perfectly aware of the board made this decision.

David Calhoun: The board made this decision. Over the last nine months, when I think about the number of people they've called around the industry at the supply side, the buy side, the regulatory side. Pretty remarkable thorough discussions. And at the end of the day, a couple of names surface, and they landed on Kelly and I. I could not be happier with the call because I know Kelly had been around Kelly. He's a seasoned operator. He's got experience. He knows what we do for a living. And I hope to bring that experience immediately to bear.

David L. Calhoun: Over the last nine months.

David L. Calhoun: When I think about the number of people they've called around the industry.

David L. Calhoun: Apply side the buy side.

David L. Calhoun: The regulatory side.

David L. Calhoun: Pretty remarkable.

David L. Calhoun: Aro discussions.

David L. Calhoun: At the end of the day, a couple of names surface and they landed on Kelly and.

David L. Calhoun: I could not be happier with the call because I know Kelly had been around Kelly is a seasoned operator, he's got experience he knows what we do for a living.

David L. Calhoun: He's a seasoned operator. He's got experience. He knows what we do for a living, and he'll bring that experience immediately to bear. So I wasn't really in the decision-making process. So I don't want to kid you about that. But on the other hand, where it ended up is, in my view, a very, very strong place.

David L. Calhoun: And it'll bring that experience immediately to bear so I wasn't really in the decision making process. So I don't want to I don't want to Kid you about that on the other hand, where it ended up as a in my view a very very strong place.

David Calhoun: So I wasn't really in the decision-making process, so I don't want to, I don't want to kid you about that. On the other hand, where it ended up is, in my view, a very, very strong place. And then, with respect to Kelly, Kelly was quite informed about everything going on at Boeing leadership team, et cetera. And anyway, I don't, I don't think he's coming in with a notion to want to change a lot of folks. And my guess is he's going to put his arms around Stephanie and the rest of the team in a big way and just try to support their work.

David L. Calhoun: And then with respect to Kelly, Kelly was quite informed about everything going on at Boeing, the leadership team, et cetera. And anyway, I don't think he's coming in with the notion of wanting to change a lot of folks. And my guess is he's going to put his arms around Stephanie and the rest of the team in a big way and just try to support their work.

David L. Calhoun: And then with respect to Kelly.

David L. Calhoun: Kelly was quite informed about everything going on at Boeing.

David L. Calhoun: Our leadership team et cetera, and maybe.

David L. Calhoun: I don't think he's coming in with a notion to want to change a lot of folks and my guess is he's going to put his arms around Stephanie in the rest of the team in a big way and just tried to support their work.

David Calhoun: They, he knows full well that we're in a recovery mode, and he knows full well. We got to complete the recovery mode, and we got to get the stable and move forward.

David L. Calhoun: He knows full well that we're in a recovery mode, and he knows full well we've got to complete the recovery mode, and we've got to get this stable and move forward. So that's me talking, and anyway, I don't think Brian's going to add much to this, but I don't think this is intended to be a large leadership overhaul. Okay, Brian, just a quick one. Do you have a number on whether billions of dollars or the number of airplanes? How much inventory do you hold that's specifically from having the supply chain stay ahead of you? There's not a number that we disclose, but it's not immaterial.

David L. Calhoun: He knows full well that we're in a recovery mode and he knows full well we got to complete the recovery mode, and we got to get to stay stable and move forward. So.

Brian West: So that's me talking, and anyway, I don't think Brian's going to add much to this. But I don't think this is intended to be a large leadership overhaul.

David L. Calhoun: That's me talking in any way I don't think Brian can add much to this.

David L. Calhoun: But I don't think this is intended to be a large leadership overhaul.

Brian West: Brian, just a quick one.

David L. Calhoun: Okay, Brian just a quick one do you have a number whether one billions of dollars or number of airplanes, how much inventory you hold that specifically from having the supply chain stay ahead of you.

Brian West: Do you have a number on whether billions of dollars are a number of airplanes? How much inventory you hold that specifically from having the supply chain stay ahead of you? You know, is that a number that we disclose? It's not immaterial. The good news is that you see it right there in the casual statements in total. It's a big driver in the good news is that this is timing. This will unwind as we deliver airplanes for our customers, which we look forward to being able to do more predictably.

Brian J. West: The good news is that you see it right there in the cash flow statements in total. That's a big driver. And the good news is that this is timing. This will unwind as we deliver airplanes for our customers, which we look forward to being able to do more. Okay, thank you. Lois, we have time for one final question. Thank you. And that will come from Ken Herbert from RBC Capital Markets. Please go ahead.

Brian: Yes, there is not a number that we disclose it.

Speaker Change: It's not a material.

Brian J. West: The good news is is that you see it right there in the cash flow statements in total that's a big driver and the good news is that this is timing this will unwind as we deliver airplanes for our customers, which we look forward to be able to do more predictably.

Unknown Attendee: Okay, thank you.

Ken Herbert: Okay. Thank you.

Unknown Attendee: Lois, we have time for one final question.

Speaker Change: Louis we have time for one final question.

Kenneth Herbert: Thank you.

Kenneth Herbert: And it will come from Kin Herbert from RBC Capital Markets.

Brian J. West: And that will come from Ken Herbert from RBC capital markets. Please go ahead.

Kenneth Herbert: Please go ahead. Yeah, good morning, Dave and Brian.

Ken Herbert: Hey, good morning, Dave and Brian. Thanks for squeezing me in. I just wondered, Dave, maybe you can provide a little bit more color on certification timing for the 7 and the 10. I know it's now 25 you're confident in for the de-icing certification, but can you give any more granularity on how we think about that timing and some of the next milestones for those two particular variants on the MAX? Well, really, the milestone is to complete the engineering work and make sure that it passes the certification tests, et cetera.

Ken Herbert: Hey, good morning, David and Brian Thanks for squeezing me in.

David Calhoun: Thanks for squeezing me in. Um, I just wondered, Dave, maybe if you can provide a little bit more color on certification timing on the seven and the ten. I know it's now 25. You're confident in the DIC certification. But can you give any more granularity on how we think about that timing in some of the next milestones for those two particular variants on the max? Well, really, the milestone is to complete the engineering work and make sure that it passes the certification tests, et cetera. And it literally is that one discrete item that is the choke point.

Ken Herbert: I just wondered Dave maybe if you can provide a little bit more color on certification timing on the seven and the 10 I know, it's now 25, you're confident in the Deicing certification, but can you give any more granularity on how we think about that timing and some of the next milestones for those two particular variants on the Max.

Dave: Well really the milestone is to complete the engineering work and make sure that it passes the certification tests et cetera.

Ken Herbert: And it literally is that one discrete item that is the choke point. But I have a high level of confidence that we're going to complete that and probably complete the engineering well before the end of the year. Then we've got to get through the test certification work, and then we're off. I don't think there are any other sort of issues that we have to contend with other than to get that done and prove it out. So, first half 25 sounds realistic. Sounds realistic to me.

Speaker Change: And it's literally as that one discrete item.

Ken Herbert: That is the is the choke point, but high level of confidence that we're going to complete that and probably complete the engineering.

David Calhoun: But high level of confidence that we're going to complete that and probably complete the engineering well before the end of the year. Then we've got to get through the test certification work, and then we're off. I don't think there are any other sort of issues that we have to contend with other than to get that done and prove it out. So first half 25 sounds realistic. Sounds realistic to me.

Ken Herbert: Well before the end of the year that we've got to get through the test certification work and then and then and then we're off.

Ken Herbert: I think there are any other sort of issues that we have to contend with other than to get that done and prove it out.

Ken Herbert: So first half 'twenty five sounds realistic.

Ken Herbert: It sounds realistic to me.

Unknown Attendee: But they're in charge.

David L. Calhoun: But they're in charge. Alright, Lois, everybody, that concludes our call. Thank you for joining. Thank you. That concludes the call. Thank you for joining the Boeing Company second quarter 2020 earnings conference call. We're sorry, your conference is ending now. Please hang up.

Speaker Change: But they are in charge.

David L. Calhoun: Okay.

David L. Calhoun: Yeah.

Unknown Attendee: All right, Lois, everybody, that concludes our call. Thank you for joining. Thank you. That concludes the call.

David L. Calhoun: Alright Lewis everybody that concludes our call. Thank you for joining.

Speaker Change: Thank you.

Speaker Change: On the call.

Unknown Attendee: Thank you for joining the Boeing Company Second Quarter, 2024 earnings confidence call.

Speaker Change: Thank you for joining Boeing company's second quarter 2024 earnings conference call.

David L. Calhoun: Okay.

Unknown Attendee: We're sorry, your conference is ending now. Please hang up.

Speaker Change: We're sorry your conferences ending now please hang up.