Boeing Reports First-Quarter Results 2019

CHICAGOApril 24, 2019 /PRNewswire/ —

  • Engaging global regulators and customers on safe return to service of the 737 MAX
  • Revenue of $22.9 billion reflecting 149 commercial deliveries and higher defense and services volume
  • GAAP EPS of $3.75 and core EPS (non-GAAP)* of $3.16
  • Operating cash flow of $2.8 billion; paid $1.2 billion of dividends
  • Total backlog of $487 billion, including more than 5,600 commercial airplanes
  • Cash and marketable securities of $7.7 billion provide strong liquidity
  • Previously issued 2019 guidance does not reflect 737 MAX impacts; new guidance to be issued at a future date

Table 1. Summary Financial Results

First Quarter

(Dollars in Millions, except per share data)

2019

2018

Change

Revenues

$22,917

$23,382

(2)%

GAAP

Earnings From Operations

$2,350

$2,875

(18)%

Operating Margin

10.3%

12.3%

(2.0) Pts

Net Earnings

$2,149

$2,477

(13)%

Earnings Per Share

$3.75

$4.15

(10)%

Operating Cash Flow

$2,788

$3,136

(11)%

Non-GAAP*

Core Operating Earnings

$1,986

$2,510

(21)%

Core Operating Margin

8.7%

10.7%

(2.0) Pts

Core Earnings Per Share

$3.16

$3.64

(13)%

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

The Boeing Company [NYSE: BA] reported first-quarter revenue of $22.9 billion, GAAP earnings per share of $3.75 and core earnings per share (non-GAAP)* of $3.16, reflecting lower 737 deliveries partially offset by higher defense and services volume (Table 1). Boeing generated operating cash flow of $2.8 billion and paid $1.2 billion of dividends.

The previously issued 2019 financial guidance does not reflect 737 MAX impacts. Due to the uncertainty of the timing and conditions surrounding return to service of the 737 MAX fleet, new guidance will be issued at a future date. Boeing is making steady progress on the path to final certification for a software update for the 737 MAX, with over 135 test and production flights of the software update complete. The company continues to work closely with global regulators and our airline partners to comprehensively test the software and finalize a robust package of training and educational resources.

“Across the company, we are focused on safety, returning the 737 MAX to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. “As we work through this challenging time for our customers, stakeholders and the company, our attention remains on driving excellence in quality and performance and running a healthy sustained growth business built on strong, long-term fundamentals.”

The quarter’s operating performance was highlighted by key defense wins, strong commercial widebody performance and orders, continued robust services growth, and receiving Embraer shareholder approval for the proposed strategic partnership.

Table 2. Cash Flow

First Quarter

(Millions)

2019

2018

Operating Cash Flow

$2,788

$3,136

Less Additions to Property, Plant & Equipment

($501)

($394)

Free Cash Flow*

$2,287

$2,742

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

Operating cash flow was $2.8 billion in the quarter, primarily reflecting lower 737 deliveries as well as timing of receipts and expenditures (Table 2). During the quarter, the company paid $1.2 billion in dividends, reflecting a 20 percent increase in dividends per share compared to the same period of the prior year. The company repurchased 6.1 million shares for $2.3 billion in the quarter, all of which occurred prior to mid-March.

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q1 19

Q4 18

Cash

$6.8

$7.7

Marketable Securities1

$0.9

$0.9

Total

$7.7

$8.6

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$12.6

$11.3

Boeing Capital, including intercompany loans

$2.1

$2.5

Total Consolidated Debt

$14.7

$13.8

1 Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities totaled $7.7 billion, compared to $8.6 billion at the beginning of the quarter (Table 3). Debt was $14.7 billion, up from $13.8 billion at the beginning of the quarter primarily due to the issuance of new debt.

Total company backlog at quarter-end remained robust at $487 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

First Quarter

(Dollars in Millions)

2019

2018

Change

Commercial Airplanes Deliveries

149

184

(19%)

Revenues

$11,822

$12,945

(9%)

Earnings from Operations

$1,173

$1,412

(17%)

Operating Margin

9.9%

10.9%

(1.0) Pts

Commercial Airplanes first-quarter revenue was $11.8 billion reflecting lower 737 deliveries partially offset by favorable mix (Table 4). First-quarter operating margin was 9.9 percent reflecting lower 737 deliveries partially offset by a higher margin on the 787 program. The reported margin also reflects increased costs associated with the recent 737 production rate adjustment.

During the quarter, Commercial Airplanes delivered 149 airplanes and the production rate for the 787 increased to 14 airplanes per month. Commercial Airplanes captured several widebody orders during the quarter, including orders for 18 777X airplanes for British Airways parent company IAG, 20 787 airplanes for Lufthansa, and 10 787 airplanes for Bamboo Airways. The first 777X flight test airplane rolled out of the factory, and the program remains on track for flight testing this year and first delivery in 2020.

Commercial Airplanes backlog remains healthy with over 5,600 airplanes valued at $399 billion.

Defense, Space & Security

Table 5. Defense, Space & Security

First Quarter

(Dollars in Millions)

2019

2018

Change

Revenues

$6,611

$6,481

2%

Earnings from Operations

$847

$757

12%

Operating Margin

12.8%

11.7%

1.1 Pts

Defense, Space & Security first-quarter revenue increased to $6.6 billion primarily driven by higher volume across satellites, weapons and surveillance aircraft partially offset by lower C-17 volume (Table 5). First-quarter operating margin increased to 12.8 percent reflecting a gain on sale of property partially offset by unfavorable mix.

During the quarter, Defense, Space & Security was awarded a multi-year contract for 78 F/A-18 Super Hornets for the U.S. Navy as well as contracts for 5 Extra Large Unmanned Undersea Vehicles for the U.S. Navy, 5 E-7 AEW&C aircraft for the U.K. Royal Air Force, and 19 P-8 Poseidon aircraft for the U.S. Navy, Royal Norwegian Air Force* and U.K. Royal Air Force*. Key milestones achieved during the quarter included completion of the first Ground-based Midcourse Defense test with two interceptors, successful environmental testing of the Commercial Crew spacecraft, and the first flight of the SB>1 DEFIANT™ helicopter. Defense, Space & Security also delivered the first 7 KC-46 Tankers to the U.S. Air Force.

Defense, Space & Security booked orders valued at $12 billion during the quarter and backlog grew to $67 billion, of which 31% percent represents orders from customers outside the U.S.

*A previously issued version of this press release indicated that the customers for this contract were the Royal Norwegian Navy and U.K Royal Navy.

Global Services

Table 6. Global Services

First Quarter

(Dollars in Millions)

2019

2018

Change

Revenues

$4,619

$3,950

17%

Earnings from Operations

$653

$647

1%

Operating Margin

14.1%

16.4%

(2.3) Pts

Global Services first-quarter revenue increased to $4.6 billion, primarily driven by higher volume across the portfolio including the acquisition of KLX (Table 6). First-quarter operating margin was 14.1 percent reflecting mix of products and services and less favorable performance.

During the quarter, Global Services was awarded contracts for Performance Based Logistics for V-22 for the U.S. Navy and P-8A training for the U.K. Royal Air Force. Global Services captured an order for 10 737-800 converted freighters for GECAS, secured an agreement to optimize crew operations for Royal Air Maroc, and expanded global distribution of hardware and chemical products to Joramco. In addition, Global Services completed the acquisition of ForeFlight, a leading provider of innovative mobile and web-based aviation applications.

Additional Financial Information

Table 7. Additional Financial Information

First Quarter

(Dollars in Millions)

2019

2018

Revenues

Boeing Capital

$66

$65

Unallocated items, eliminations and other

($201)

($59)

Earnings from Operations

Boeing Capital

$20

$20

FAS/CAS service cost adjustment

$364

$365

Other unallocated items and eliminations

($707)

($326)

Other income, net

$106

$66

Interest and debt expense

($123)

($102)

Effective tax rate

7.9%

12.8%

At quarter-end, Boeing Capital’s net portfolio balance was $2.5 billion. Revenue in other unallocated items and eliminations decreased primarily due to the timing of eliminations for intercompany aircraft deliveries. The change in earnings from other unallocated items and eliminations is primarily due to a customer financing impairment, higher deferred compensation expense and increased enterprise research and development investment. The effective tax rate for the first quarter decreased from the same period in the prior year primarily due to a higher foreign-derived intangible income benefit and higher excess tax benefits related to share-based payments.

Outlook

The previously issued 2019 financial guidance does not reflect 737 MAX impacts. Due to the uncertainty of the timing and conditions surrounding return to service of the 737 MAX fleet, new guidance will be issued at a future date.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Earnings Per Share

Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core earnings per share is defined as GAAP diluted earnings per shareexcluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings/per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on page 13.

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow without capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

Caution Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) the timing and conditions surrounding the return to service of the 737 MAX fleet; (2) general conditions in the economy and our industry, including those due to regulatory changes; (3) our reliance on our commercial airline customers; (4) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (5) changing budget and appropriation levels and acquisition priorities of the U.S. government; (6) our dependence on U.S. government contracts; (7) our reliance on fixed-price contracts; (8) our reliance on cost-type contracts; (9) uncertainties concerning contracts that include in-orbit incentive payments; (10) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (11) changes in accounting estimates; (12) changes in the competitive landscape in our markets; (13) our non-U.S. operations, including sales to non-U.S. customers; (14) threats to the security of our or our customers’ information; (15) potential adverse developments in new or pending litigation and/or government investigations; (16) customer and aircraft concentration in our customer financing portfolio; (17) changes in our ability to obtain debt on commercially reasonable terms and at competitive rates; (18) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (19) the adequacy of our insurance coverage to cover significant risk exposures; (20) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (21) work stoppages or other labor disruptions; (22) substantial pension and other postretirement benefit obligations; and (23) potential environmental liabilities.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Contact:

Investor Relations:

Maurita Sutedja or Keely Moos (312) 544-2140

Communications:

Caroline Hutcheson (312) 544-2002

The Boeing Company and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

Three months ended
March 31

(Dollars in millions, except per share data)

2019

2018

Sales of products

$20,225

$20,820

Sales of services

2,692

2,562

Total revenues

22,917

23,382

Cost of products

(16,238)

(16,816)

Cost of services

(2,389)

(1,992)

Boeing Capital interest expense

(18)

(16)

Total costs and expenses

(18,645)

(18,824)

4,272

4,558

Income from operating investments, net

20

74

General and administrative expense

(1,184)

(997)

Research and development expense, net

(866)

(764)

Gain on dispositions, net

108

4

Earnings from operations

2,350

2,875

Other income, net

106

66

Interest and debt expense

(123)

(102)

Earnings before income taxes

2,333

2,839

Income tax expense

(184)

(362)

Net earnings

$2,149

$2,477

Basic earnings per share

$3.79

$4.19

Diluted earnings per share

$3.75

$4.15

Weighted average diluted shares (millions)

572.4

597.2

The Boeing Company and Subsidiaries

Consolidated Statements of Financial Position

(Unaudited) 

(Dollars in millions, except per share data)

March 31
2019

December 31
2018

Assets

Cash and cash equivalents

$6,836

$7,637

Short-term and other investments

893

927

Accounts receivable, net

3,669

3,879

Unbilled receivables, net

10,208

10,025

Current portion of customer financing, net

340

460

Inventories

65,369

62,567

Other current assets

2,194

2,335

Total current assets

89,509

87,830

Customer financing, net

2,236

2,418

Property, plant and equipment, net of accumulated depreciation of $18,821 and $18,568

12,594

12,645

Goodwill

7,967

7,840

Acquired intangible assets, net

3,498

3,429

Deferred income taxes

281

284

Investments

1,183

1,087

Other assets, net of accumulated amortization of $544 and $503

2,941

1,826

Total assets

$120,209

$117,359

Liabilities and equity

Accounts payable

$14,693

$12,916

Accrued liabilities

13,007

14,808

Advances and progress billings

52,534

50,676

Short-term debt and current portion of long-term debt

3,381

3,190

Total current liabilities

83,615

81,590

Deferred income taxes

1,656

1,736

Accrued retiree health care

4,535

4,584

Accrued pension plan liability, net

15,077

15,323

Other long-term liabilities

3,731

3,059

Long-term debt

11,363

10,657

Shareholders’ equity:

Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued

5,061

5,061

Additional paid-in capital

6,573

6,768

Treasury stock, at cost – 448,849,765 and 444,619,970 shares

(54,630)

(52,348)

Retained earnings

58,090

55,941

Accumulated other comprehensive loss

(14,969)

(15,083)

Total shareholders’ equity

125

339

Noncontrolling interests

107

71

Total equity

232

410

Total liabilities and equity

$120,209

$117,359

The Boeing Company and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Three months ended
March 31

(Dollars in millions)

2019

2018

Cash flows – operating activities:

Net earnings

$2,149

$2,477

Adjustments to reconcile net earnings to net cash provided by operating activities:

Non-cash items – 

Share-based plans expense

47

45

Depreciation and amortization

521

501

Investment/asset impairment charges, net

34

20

Customer financing valuation adjustments

249

(1)

Gain on dispositions, net

(108)

(4)

Other charges and credits, net

74

60

Changes in assets and liabilities – 

Accounts receivable

206

92

Unbilled receivables

(183)

(1,628)

Advances and progress billings

1,857

1,917

Inventories

(2,725)

283

Other current assets

164

(103)

Accounts payable

1,624

591

Accrued liabilities

(919)

(1,337)

Income taxes receivable, payable and deferred

116

348

Other long-term liabilities

(281)

(243)

Pension and other postretirement plans

(188)

(50)

Customer financing, net

152

44

Other

(1)

124

Net cash provided by operating activities

2,788

3,136

Cash flows – investing activities:

Property, plant and equipment additions

(501)

(394)

Property, plant and equipment reductions

110

27

Acquisitions, net of cash acquired

(276)

Contributions to investments

(457)

(249)

Proceeds from investments

366

752

Purchase of distribution rights

(20)

Other

(9)

3

Net cash (used)/provided by investing activities

(767)

119

Cash flows – financing activities:

New borrowings

5,237

2,687

Debt repayments

(4,374)

(1,371)

Contributions from noncontrolling interests

7

20

Stock options exercised

42

51

Employee taxes on certain share-based payment arrangements

(233)

(226)

Common shares repurchased

(2,341)

(3,000)

Dividends paid

(1,161)

(1,006)

Net cash used by financing activities

(2,823)

(2,845)

Effect of exchange rate changes on cash and cash equivalents, including restricted

1

8

Net (decrease) / increase in cash & cash equivalents, including restricted

(801)

418

Cash & cash equivalents, including restricted, at beginning of year

7,813

8,887

Cash & cash equivalents, including restricted, at end of period

7,012

9,305

Less restricted cash & cash equivalents, included in Investments

176

70

Cash and cash equivalents at end of period

$6,836

$9,235

The Boeing Company and Subsidiaries 
Summary of Business Segment Data 
(Unaudited)

Effective at the beginning of 2019, all revenues and costs associated with military derivative aircraft production are reported in the Defense, Space & Security segment. Revenues and costs associated with military derivative aircraft production were previously reported in the Commercial Airplanes and Defense, Space & Security segments. Business segment data for 2018 reflects the realignment for military derivative aircraft as well as the realignment of certain programs from Defense, Space & Security to Global Services.

Three months ended
March 31

(Dollars in millions)

2019

2018

Revenues:

Commercial Airplanes

$11,822

$12,945

Defense, Space & Security

6,611

6,481

Global Services

4,619

3,950

Boeing Capital

66

65

Unallocated items, eliminations and other

(201)

(59)

Total revenues

$22,917

$23,382

Earnings from operations:

Commercial Airplanes

$1,173

$1,412

Defense, Space & Security

847

757

Global Services

653

647

Boeing Capital

20

20

Segment operating profit

2,693

2,836

Unallocated items, eliminations and other

(707)

(326)

FAS/CAS service cost adjustment

364

365

Earnings from operations

2,350

2,875

Other income, net

106

66

Interest and debt expense

(123)

(102)

Earnings before income taxes

2,333

2,839

Income tax expense

(184)

(362)

Net earnings

$2,149

$2,477

Research and development expense, net:

Commercial Airplanes

$564

$549

Defense, Space & Security

188

183

Global Services

40

34

Other

74

(2)

Total research and development expense, net

$866

$764

Unallocated items, eliminations and other:

Share-based plans

($14)

($18)

Deferred compensation

(102)

(29)

Amortization of previously capitalized interest

(24)

(25)

Customer financing impairment

(250)

Research and development expense, net

(74)

2

Eliminations and other unallocated items

(243)

(256)

Sub-total (included in core operating earnings)

(707)

(326)

Pension FAS/CAS service cost adjustment

274

283

Postretirement FAS/CAS service cost adjustment

90

82

FAS/CAS service cost adjustment

364

365

Total

($343)

$39

The Boeing Company and Subsidiaries

Operating and Financial Data

(Unaudited)

Deliveries

Three months ended
March 31

Commercial Airplanes

2019

2018

737

89

132

747

2

2

767

12

4

777

10

(1)

12

787

36

34

Total

149

184

Note: Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses

Defense, Space & Security

AH-64 Apache (New)

6

AH-64 Apache (Remanufactured)

22

6

CH-47 Chinook (New)

7

4

CH-47 Chinook (Renewed)

4

4

F-15 Models

4

2

F/A-18 Models

7

5

KC-46 Tanker

7

P-8 Models

3

4

Commercial and Civil Satellites

Military Satellites

Total backlog (Dollars in millions)

March 31
2019

December 31
2018

Commercial Airplanes

$399,371

$408,140

Defense, Space & Security

66,790

61,277

Global Services

20,688

21,064

Total backlog

$486,849

$490,481

Contractual backlog

$458,998

$462,070

Unobligated backlog

27,851

28,411

Total backlog

$486,849

$490,481

The Boeing Company and Subsidiaries
Reconciliation of Non-GAAP Measures
(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating earnings, core operating margin, and core earnings per share with the most directly comparable GAAP financial measures, earnings from operations, operating margin, and diluted earnings per share. See page 6 of this release for additional information on the use of these non-GAAP financial measures.

(Dollars in millions, except per share data)

First Quarter 2019

First Quarter 2018

$ millions

Per Share

$ millions

Per Share

Revenues

22,917

23,382

Earnings from operations (GAAP)

2,350

2,875

Operating margin (GAAP)

10.3%

12.3%

FAS/CAS service cost adjustment:

Pension FAS/CAS service cost adjustment

(274)

(283)

Postretirement FAS/CAS service cost adjustment

(90)

(82)

FAS/CAS service cost adjustment

(364)

(365)

Core operating earnings (non-GAAP)

$1,986

$2,510

Core operating margin (non-GAAP)

8.7%

10.7%

Diluted earnings per share (GAAP)

$3.75

$4.15

Pension FAS/CAS service cost adjustment

($274)

(0.48)

($283)

(0.47)

Postretirement FAS/CAS service cost adjustment

(90)

(0.16)

(82)

(0.14)

Non-operating pension expense

(93)

(0.16)

(42)

(0.07)

Non-operating postretirement expense

27

0.05

24

0.04

Provision for deferred income taxes on adjustments 1

90

0.16

80

0.13

Subtotal of adjustments

($340)

($0.59)

($303)

($0.51)

Core earnings per share (non-GAAP)

$3.16

$3.64

Weighted average diluted shares (in millions)

572.4

597.2

The income tax impact is calculated using the U.S. corporate statutory tax rate.

SOURCE Boeing

 

Source : Boeing WEBSITE

Boeing Statement on 737 MAX Disagree Alert

We want to provide a response to several news stories yesterday and today reporting on the disagree alert on the 737 MAX.

Boeing included the disagree alert as a standard feature on the MAX, although this alert has not been considered a safety feature on airplanes and is not necessary for the safe operation of the airplane. Boeing did not intentionally or otherwise deactivate the disagree alert on its MAX airplanes.

The disagree alert was intended to be a standard, stand-alone feature on MAX airplanes. However, the disagree alert was not operable on all airplanes because the feature was not activated as intended.

The disagree alert was tied or linked into the angle of attack indicator, which is an optional feature on the MAX. Unless an airline opted for the angle of attack indicator, the disagree alert was not operable.

On every airplane delivered to our customers, including the MAX, all flight data and information needed to safely operate the aircraft is provided in the flight deck and on the flight deck display. This information is readily accessible to pilots, and it always has been.

The air speed, attitude, and altitude displays, together with the stick shaker, are the primary flight information indicators in the flight deck. All recommended pilot actions, checklists, and training are based upon these primary indicators, not on the AOA disagree alert or the angle of attack indicator.

As the MAX safely returns to the air after the software modifications are approved and certified, all MAX production aircraft will have an activated and operable disagree alert and an optional angle of attack indicator. All customers with previously delivered MAX airplanes will have the ability to activate the disagree alert per a service bulletin to airlines.

We are confident that when the MAX returns to the skies, it will be one of the safest airplanes ever to fly.

 

Source :  Boeing WEBSITE

Boeing Statement on AOA Disagree Alert

On every airplane delivered to our customers, including the MAX, all flight data and information needed to safely operate the aircraft is provided in the flight deck on the primary flight deck displays. This information is provided full-time in the pilots’ primary field of view, and it always has been.

Air speed, attitude, altitude, vertical speed, heading and engine power settings are the primary parameters the flight crews use to safely operate the airplane in normal flight. Stick shaker and the pitch limit indicator are the primary features used for the operation of the airplane at elevated angles of attack. All recommended pilot actions, checklists, and training are based upon these primary indicators. Neither the angle of attack indicator nor the AOA Disagree alert are necessary for the safe operation of the airplane. They provide supplemental information only, and have never been considered safety features on commercial jet transport airplanes.

The Boeing design requirements for the 737 MAX included the AOA Disagree alert as a standard, standalone feature, in keeping with Boeing’s fundamental design philosophy of retaining commonality with the 737NG. In 2017, within several months after beginning 737 MAX deliveries, engineers at Boeing identified that the 737 MAX display system software did not correctly meet the AOA Disagree alert requirements. The software delivered to Boeing linked the AOA Disagree alert to the AOA indicator, which is an optional feature on the MAX and the NG. Accordingly, the software activated the AOA Disagree alert only if an airline opted for the AOA indicator.

When the discrepancy between the requirements and the software was identified, Boeing followed its standard process for determining the appropriate resolution of such issues. That review, which involved multiple company subject matter experts, determined that the absence of the AOA Disagree alert did not adversely impact airplane safety or operation. Accordingly, the review concluded, the existing functionality was acceptable until the alert and the indicator could be delinked in the next planned display system software update. Senior company leadership was not involved in the review and first became aware of this issue in the aftermath of the Lion Air accident.

Approximately a week after the Lion Air accident, on November 6, 2018, Boeing issued an Operations Manual Bulletin (OMB), which was followed a day later by the FAA’s issuance of an Airworthiness Directive (AD). In identifying the AOA Disagree alert as one among a number of indications that could result from erroneous AOA, both the OMB and the AD described the AOA Disagree alert feature as available only if the AOA indicator option is installed.

Boeing discussed the status of the AOA Disagree alert with the FAA in the wake of the Lion Air accident. At that time, Boeing informed the FAA that Boeing engineers had identified the software issue in 2017 and had determined per Boeing’s standard process that the issue did not adversely impact airplane safety or operation. In December 2018, Boeing convened a Safety Review Board (SRB) to consider again whether the absence of the AOA Disagree alert from certain 737 MAX flight displays presented a safety issue. That SRB confirmed Boeing’s prior conclusion that it did not. Boeing shared this conclusion and the supporting SRB analysis with the FAA.

Boeing is issuing a display system software update, to implement the AOA Disagree alert as a standard, standalone feature before the MAX returns to service. When the MAX returns to service, all MAX production aircraft will have an activated and operable AOA Disagree alert and an optional angle of attack indicator. All customers with previously delivered MAX airplanes will have the ability to activate the AOA Disagree alert.

 

Source : Boeing Website

Boeing Reports Third-Quarter Deliveries

CHICAGO, Oct. 9, 2018 /PRNewswire/ — The Boeing Company [NYSE: BA] announced today deliveries across its commercial and defense operations for the third quarter of 2018.
Major program deliveries during the third quarter were as follows:
Major Programs
3rd Quarter
2018

Year-to-Date
2018

Commercial Airplanes Programs

737
138

407

747
2

5

767
4

13

777
12

37

787
34

106

Total
190

568

Defense, Space & Security Programs

AH-64 Apache (New)

AH-64 Apache (Remanufactured)
6

12

CH-47 Chinook (New)
2

11

CH-47 Chinook (Renewed)
6

14

F-15 Models
3

8

F/A-18 Models
5

10

P-8 Models
2

10

Commercial and Civil Satellites
1

1

Military Satellites

Contact: Maurita Sutedja (312) 544-2140 (Investor Relations)
Ben Hackman (312) 544-2140 (Investor Relations)
Allison Bone (312) 544-2002 (Communications)
Chaz Bickers (312) 544-2002 (Communications)

SOURCE :Boeing Website

 

Boeing, Air Lease Corporation Announce Orders and Commitments for 78 Boeing Jets

FARNBOROUGH, United KingdomJuly 17, 2018 /PRNewswire/ — Boeing [NYSE:BA] and Air Lease Corporation [NYSE: AL] today announced orders and commitments for up to 78 Boeing airplanes, including 75 737 MAX 8s and three 787-9 Dreamliners, at the 2018 Farnborough International Airshow.

The order, valued at $9.6 billion at current list prices, expands ALC’s 737 MAX portfolio to 213 jets. The three 787-9s and the first 20 737 MAX airplanes of the order are firm purchases. The subsequent 55 737 MAX airplanes are commitments until both companies finalize them into firm orders.

In total, ALC has now placed orders and commitments for 361 Boeing airplanes since 2010, including 288 737s, 21 777s and 52 787 Dreamliners.

“Demand for reliable, fuel-efficient airplanes is at an all-time high. The capabilities of these new airplanes continue to meet the high expectations of our growing airline customer base,” said Steven Udvar-Házy, Executive Chairman of Air Lease Corporation.

John Plueger, CEO and President of Air Lease Corporation added, “The economic and operating advantages of the 737 MAX and 787 Dreamliner will provide our airline customers with the competitive advantage they need.”

“This new order by one of the world’s leading lessors demonstrates the market-leadership of the 737 MAX and 787 Dreamliner,” said Kevin McAllister, president & CEO of Boeing Commercial Airplanes.  “The combination of operational efficiency and unmatched passenger comfort underlines the advantages of the 737 MAX and 787. We are delighted that ALC is adding more Boeing airplanes to their world-class portfolio.”

The 737 MAX family is designed to offer operators exceptional performance, including lower operating costs and more range to open up new destinations. The 737 MAX incorporates the latest CFM International LEAP-1B engines, Advanced Technology winglets, Boeing Sky Interior, large flight deck displays and other features to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market.

The 737 MAX is the fastest-selling airplane in Boeing history, accumulating more than 4,600 orders from 100 customers worldwide. For more information and feature content, visit
www.boeing.com/commercial/737max.

The 787 Dreamliner is a family of super-efficient and long-range airplanes that use 20 percent less fuel than the airplanes it replaces. Since entering service in 2011, the 787 family has allowed airlines to launch more than 180 new nonstop routes around the world. More than seventy customers have placed nearly 1,400 orders for the airplane, making the Dreamliner the fastest selling twin-aisle airplane in history.

About Air Lease Corporation (NYSE: AL)

ALC is a leading aircraft leasing company based in Los Angeles, California that has airline customers throughout the world.  ALC and its team of dedicated and experienced professionals are principally engaged in purchasing commercial aircraft and leasing them to its airline customers worldwide through customized aircraft leasing and financing solutions.  For more information, visit ALC’s website at www.airleasecorp.com.

Contact:
Paul Bergman
Boeing Communications
+ 1 206 724 7292
paul.r.bergman2@boeing.com

SOURCE Boeing