Boeing reduces debt but some challenges remain

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January 27, 2022
Boeing
Boeing 777X N7779XW. Credit Matt Cawby . @mattcawby

Boeing has reported fourth-quarter revenue of US$14.8 billion, reflecting higher commercial volume and lower defense revenue.

The company reported full year revenue of $62.3 billion and an operating cash flow of $0.7 billion.

David Calhoun, Boeing President, and Chief Executive Officer said “2021 was a rebuilding year for us as we overcame hurdles and reached key milestones across our commercial, defense, and services portfolios.

“We increased 737 MAX production and deliveries, and safely returned the 737 MAX to service in nearly all global markets.

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“As the commercial market recovery gained traction, we also generated robust commercial orders, including record freighter sales. Demonstrating progress in our overall recovery, we also returned to generating positive cash flow in the fourth quarter.”

Mr. Calhoun (below) added that “on the 787 program, we’re progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications.

“While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term.

“Across the enterprise, we remain focused on safety and quality as we deliver for our customers and invest in our people and in our sustainable future.”

Boeing said that “cash and investments in marketable securities decreased to $16.2 billion, compared to $20.0 billion at the beginning of the quarter, primarily driven by debt repayment partially offset by operating cash flow.

Debt was $58.1 billion, down from $62.4 billion at the beginning of the quarter due to the prepayment of a term loan and repayment of maturing debt.

The total company backlog at quarter-end was $377 billion.

Boeing said it is continuing to make progress on the global safe return to service of the 737 MAX. In December, the Civil Aviation Administration of China issued an airworthiness directive outlining changes required for Chinese airlines to prepare their fleets to resume service.

Boeing added that since the FAA’s approval to return the 737 MAX to operations in November 2020, over 300,000 revenue flights have been completed, and the reliability of the 737 MAX fleet remains above 99 percent (as of January 24, 2022).

The 737 program is currently producing at a rate of 26 per month and continues to progress towards a production rate of 31 per month in early 2022.

Boeing said it’s evaluating the timing of further rate increases.

It said that it continues to perform rework on 787 airplanes in inventory (100 aircraft) and is engaged in detailed discussions with the FAA regarding required actions to resume deliveries.

It said that in the fourth quarter, it determined that these activities will take longer than previously expected, resulting in further delays in customer delivery dates and associated customer considerations.

Accordingly, Commercial Airplanes recorded a $3.5 billion pre-tax non-cash charge on the 787 program. The program is producing at a very low rate and will continue to do so until deliveries resume, with an expected gradual return to five per month over time.

Boeing Commercial Airplanes secured orders for 164 737 MAX and 24 freighter aircraft in the quarter delivered 99 aircraft and the backlog stands at 4,200 aircraft valued at $297 billion.