A：The new production rate for the 737 is 42 airplanes per month. Future rate increases beyond 42 per month will be in increments of 5, but these will not occur until the company achieves stability and readiness at the current rate.

A：The key achievements include a 75% reduction in tooling work on 737 and a 60% reduction across all airplanes, successfully ramping up 737 production to 38 airplanes per month, and presenting a plan to the FAA to increase production to 42 airplanes a month. The team is guided by a safety and quality plan, and performance is monitored against six KPIs.

A：The FAA announced it will allow delegation to Boeing to issue airworthiness certificates for some 737 Max and 787 airplanes.

A：The 780 7th team is performing well and is working towards demonstrating stability at rate 7. A successful Rate 8 Capstone review with the FAA was completed, and an investment in the expansion of the South Carolina site has been made to meet exceptional market demand.

A：The delay in the 777X program was caused by an expectation that the certification would take longer than anticipated. The new expected delivery timeframe is in the third quarter of the next year.

A：The 737, 7, and 10 programs will have a final set of design changes to address the Engine anti-Ice issue, with certification expected in 2026.

A：Progress in the defense business includes derisking development programs, stability on the EACs, and proactive engagement with customers and suppliers. Notable milestones include the delivery of the 100th KC 46 tanker and a $2.8 billion contract for the Evolved Strategic Satcom program from the US Space Force, as well as multi-year contracts valued at $2.7 billion to produce additional PAC 3 seekers.

A：The company is executing its contingency plan by continuing to work with a reduced workforce to maintain production rates similar to those before the work stoppage. They are building JDMS at the same rate and progressing on MQ 25 and T 7 A development programs.

A：Global Services, through Boeing, has secured contracts for digital capabilities related to fleet maintenance operations and repair, such as an agreement with EBA Aire that includes digital diagnostic tools and advanced analytics to improve efficiency and maintenance operations.

A：The company culture change is progressing positively, with employees actively embracing new values and behaviors. Production teams are using these to improve collaboration, and the company is seeing improvements in relationships with customers. A voice of employee survey will be conducted to gauge progress and areas needing improvement.

A：Financially, the company saw revenue up 30% to $23.3 billion, core loss per share of $7.47, and positive free cash flow of $238 million. They anticipate further improvements, such as increased production rates, positive cash flow, and continuing to address the challenges outlined by the Lyx program delays.

A：The 737 program delivered 121 airplanes with a factory production rate stabilization at 38 per month. A rate increase to 42 per month was agreed upon with the FAA. For the 770, inventory levels were stable at approximately 35 airplanes, and the company continued working on anti-ice design updates with the FAA for certification. A provision of $1.4 billion was recorded for the 770 program with first delivery now expected in 2023, adjusted from the prior expectation of 2022.

A：The incremental loss provision and cash flow impacts are mainly due to the certification program delay, additional customer concessions, rework costs on built aircraft, learning curve adjustments, and increased carrying costs of production operations. These costs are higher because of rework on built aircraft, incremental production disruptions, and learning curve adjustments. The cash flow impact includes headwinds of about $2 billion in 2026 from delayed deliveries, which will turn into tailwinds later in the decade as delayed units are delivered.

A：The company obtained important verification data to support technical risk burnout even though it did not receive certification credit from the Federal Aviation Administration (FA) for those flights.

A：Bds delivered 30 aircraft and two satellites, with revenue growth of 25% to $6.9 billion due to improved operational performance and a higher volume. The operating margin increased significantly to 1.7%, largely reflecting better operational performance and included minor impacts from the Iam work stoppage. Bds booked $9 billion in orders and backlog grew to a record $76 billion. The company made progress stabilizing fixed price development programs and benefits from active management in risk retirement and developing win-win opportunities.

A：Global Services performed well with revenue up 10% to $5.4 billion, primarily from improved commercial and government volume. Operating margin was 17.5%, up 50 basis points, and the business booked $8 billion in orders with a year-to-date book-to-bill ratio of 1.2.

A：Cash and marketable securities ended at $23 billion, and the debt balance was $53.4 billion. With access to $10 billion in undrawn revolving credit facilities, the company remains committed to balance sheet strength and maintaining an investment-grade rating. For the fourth quarter, cash flow is expected to be positive before any impact from potential payments for future products and growth, with a CapEx spend now expected to be closer to $8 billion for the year.

A：The company expects a free cash flow usage of about $2 billion, barring the impact of a prolonged government shutdown. Even with higher CapEx, better-than-expected performance year-to-date supports the updated outlook.

A：The company is experiencing a reset due to challenges with the 737 program, but the overall performance is trending favorably with limited FAA delegation for airworthiness certificates, higher production rates, improved company performance, and positive free cash flow in the quarter. The markets the company serves are significant, with a strong backlog of over $600 billion.

A：The negative cash flow is a headwind of about $2 billion due to delivery timing and will convert to a tailwind later in the decade as delayed units are delivered. The 737 program is expected to reach neutrality in cash flow around 2024, becoming a source of positive free cash flow as inventory grows and payments from aircraft deliveries and advances increase.

A：The main issue that has caused a delay in receiving TIA approval is the underestimated amount of work required to get the TIA approvals and for the FIA to review all the necessary data submissions.

A：To address the issues with the TIA approval process, the team is rebaselining the program to incorporate the learnings from the process and is looking for ways to streamline the process.

A：Clarification provided regarding the TIA process indicates that the delays are due to a combination of factors. On the FAA side, it's the first airplane going through this incremental TIA process, requiring specific analysis and data to be completed and submitted. Additionally, the process has taken longer for the FAA to review the submittals and grant approval.

A：The company is managing the 777x supply chain by flowing the new revised schedule out to suppliers and negotiating the impact of the delay on a case-by-case basis. The revised estimate and charge contemplated the impact of the supply chain as part of the management of the delay.

A：The expectation for the 737 production ramp is that the company will exit the year at a rate of 42 units per month, having already begun loading at this rate in preparation. The next anticipated production rate increase will be to 47 units per month, following the demonstrated stability at the higher rate and ensuring that the system is ready before moving up. Early implementation of the next rate is avoided to ensure system maturity.

A：The follow-on cadence and inventory levels are influenced by the deliberate approach to doing the right thing and meeting key metrics, which allows for faster movement than initially planned. They are also impacted by alignment with the supply chain in terms of inventory balances and expectations, and by how quickly the supply chain can ramp up.

A：The same process that was used for the BBC Ed will be applied for future rate increases, including using the same metrics and capstone review process. The expectation is that this process will not be an impediment in the future and has already proven to be efficient, albeit with some initial challenges in the first approval process.

A：For the Dash 7 and 10, the team has completed a significant number of hours of testing on the anti-ice design and needs to make hardware and software modifications to the test aircraft. The outlook is positive as they have a lot of test data and analysis to aid in the certification process with the FAA, which is considered straightforward. The process is expected to be completed within the next few months.

A：The impact of the rate increase on the 87 program includes an increase in production rates from the current Ed to the next phase, with a focus on having a stable supply chain before the rate increase. There is an expectation that moving from Ed to will be more challenging due to the supply chain, particularly with seat certifications, which are expected to remain a constraining item. The plan is to ensure stability at the Ed month rate before increasing production.

A：Positive core free cash flow is expected in Q4 pre the DOJ payment, with an anticipated uptick in Bds due to seasonality and a tanker award, contributing to a modest excess of a billion dollars. However, there are expectations of lower receipts in the fourth quarter due to a mix of lower expected deliveries of ed. Interest payments are expected to be about $900 million plus, which is a step up from the second quarter by about $600 million. The potential impact of the DOJ payment, which is about $700 million, needs to be reconciled with these factors to understand the full picture for Q4 free cash flow.

A：The company expects better performance operationally in the fourth quarter relative to the third and a good exit rate for next year. While the performance has improved throughout the year, particularly in free cash flow, it is still early to make strong conclusions. The speaker is still going through the planning process and will provide more color on the full year financials in January. Nonetheless, things are trending favorably, and the company is bullish on its outlook.

A：The company believes that the foundation is in place for a steady and gradual improvement in financials over the upcoming years, leading to an expectation that the financials will flow again. While it is too early to provide a specific long-term framework, the company is confident in its underlying cash generation capability to return to historical levels. The key to unlocking cash flow potential is operational excellence, and the speaker plans to develop the framework after assessing operating plans. There is not yet a projected timeline for achieving the $5 billion free cash flow target.

A：The company's current M&A focus is on closing the Jefferson deal, which is expected to happen before the Spirit transaction, and then proceeding with the integration phase. The integration will involve deintegrating the Jefferson business from the digital business and reintegrating the Spirit business. As for the impact on free cash flow, the speaker is confident in the company's ability to achieve historical levels of cash flow, with the operational excellence driving the potential for returning to those levels. However, detailed assessments of operating plans and cash flow drivers are needed to develop a full framework, which will be presented at the appropriate time.

A：The company has already started making steps toward higher production rates in Charleston. It plans to double the manufacturing footprint, essentially expanding the Charleston facility to support production rates higher than 10 units a month. The expansion is focused on achieving production rates in the teens, supported by market demand. The investment in the expansion is related to the goal of increasing production to 12 to 14 units a month, and the company is taking concrete steps towards this, including a formal groundbreaking.

A：While the supply chain is doing well and there are no showstoppers, there are concerns around seating and engine production. Specific actions are being taken with suppliers to address the certification of seat installations on the aircraft and monitoring the demand for engines in both the forward fit and the aftermarket, as well as durability upgrades. The speaker suggests that the entire supply chain needs to be watched closely, and while there are no specific concerns at the moment, the situation could change suddenly. However, people are gaining confidence in the company's production capabilities, which is reducing fears of supply chain bottlenecks.

A：The new leadership has observed a lot of enthusiasm and commitment among the team towards the company's recovery efforts. In the short term, priorities include getting up to speed with the company, maintaining a focus on restoring the health of the balance sheet, driving improvements in the recovery, and ensuring their sustainability. Looking ahead, the leadership is keeping an eye on the future while maintaining focus on short-term and medium-term recovery. The company expects the cash balance after the Jefferson sale to be around the high teens, which is lower than the starting cash balance of about $33 billion. The leadership is working towards contributing to and driving the recovery efforts.