波音 (BA) 2007 Q2 法說會逐字稿

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  • Operator

  • Good day everyone and welcome to the Boeing Company's second quarter 2007 earnings conference call.

  • Today's call is being recorded.

  • The management discussion and slide presentation plus the analyst and media question answer sessions are being broadcast live over the Internet.

  • At this time for opening remarks and introductions I'm turning the call over to Mr.

  • David Dohnalek, Vice President of Investor Relations for the Boeing Company.

  • Mr.

  • Dohnalek, please go ahead.

  • - VP of Investor Relations

  • Good morning and welcome to Boeing's second quarter earnings call.

  • I'm Dave Dohnalek and with me today are Jim McNerney, Boeing's Chairman, President and Chief Executive Officer; and James Bell, Boeing's Chief Financial Officer.

  • After brief comments by Jim and James we will take your questions and in the interest of time we ask that you limit yourself to one question, please.

  • As always, we have provided detailed financial information in our press release issued earlier today.

  • And as a reminder you can follow today's call in slide presentation through our website at boeing.com.

  • Now before we begin I need to remind you that any projections and goals we may include in our discussions this morning are likely to involve risks which are detailed in our news release in our various SEC filings and in the forward-looking statements at the end of this web presentation.

  • Now I will turn the meeting over to Jim McNerney.

  • - Chairman, President, CEO

  • Thanks, Dave and good morning, everyone.

  • Let me begin with some comments about the second quarter and then James will walk you through our results more specifically.

  • After that, I will say a few words about what's ahead for us and then take your questions.

  • We continued to make solid progress across all of our businesses during the quarter.

  • We delivered double digit top line growth and sharply grew our operating margin, net income, earnings per share and cash flow.

  • Our commercial airplane and defense businesses are performing well as we made progress on our significant growth and productivity goals.

  • Based on our strong first half performance, we are raising our 2007 financial guidance.

  • We will say more about that in a few minutes.

  • Our total backlog expanded again this quarter to another record level of $279 billion, which represents more than four times our current revenue.

  • Our backlog has grown 27% over the past year, thanks to the strong demand for our commercial airplane products and our key defense program wins.

  • Boeing products and services continue to be the choice of commercial and defense customers around the globe.

  • Our integrated defense systems business generated solid growth and double digit margins by executing well on its large and balanced portfolio.

  • IDS also made great progress on the business development side with some key wins, including the U.S.

  • Air Force A-10 wing replacement program, a significant proprietary contract, and the U.S.

  • joint cargo aircraft program.

  • We also made the decision during the quarter to sustain our long lead supply chain for the C-17 since we see positive indications of continued U.S.

  • purchases of the airplane.

  • And we're looking forward to the U.S.

  • Air Force decision later this year on the tanker platform.

  • A national priority that this entire Company is committed to and supporting.

  • We submitted our proposal for that program during the second quarter and we believe that not only is the KC-767 the best match for the Air Force's requirement, but that Boeing can uniquely deliver both the military and commercial expertise and teamwork to make it successful.

  • Boeing commercial airplanes continued building on its strong momentum during the quarter.

  • DCA officially increased production, expanded its operating margin and continued to strengthen its product line with key development programs.

  • BCA had another strong quarter for airplane orders and has now grown its backlog to more than $200 billion.

  • That backlog reflects the growth we are experiencing in virtually all our commercial airplane models.

  • Our product strategy is clearly yielding very strong results in the marketplace.

  • Earlier this month the world watched us roll out the first 787 airplane.

  • That revolutionary airplane embodies the inspiration and hard work of our very talented global team.

  • Although the rollout was a great success and well deserved celebration of the team's progress, we have lots of work ahead of us as we approach our flight test program.

  • Since the rollout, we have continued with final assembly activities as well as installation and testing of our various systems on the airplane.

  • We have also begun final assembly work on airplane number two in Everett.

  • And partners in our supply base are working all the way up the airplane number seven as we speak.

  • While we are pleased with the progress we are making with regard to schedule, weight reduction and supplier ramp-up, we are spending more than originally planned to ensure we meet our commitment to deliver the first airplane in May 2008.

  • As a result, we are raising R&D guidance for 2007 primarily to preserve 787 schedule.

  • This is absolutely the right thing to do, because keeping our commitments to customers is paramount here.

  • BCA's continued growth and productivity improvements will allow it to more than offset the impact of this R&D growth.

  • So we were raising our BCA margin guidance for 2007 despite the higher R&D forecast.

  • Now let me tell you what we need to accomplish on the 87 program between now and the start of flight testing which we were targeting to begin by the end of September.

  • First of all, I'm confident we are beyond what I'll call the invention activities.

  • We proven the airplane's technologies, especially its large composite sections and its major systems.

  • It took longer and cost more than planned, but we are confident we know how to build this airplane.

  • Now that we know how to make the 787, we have to fly it and certify it.

  • We are working three areas right now.

  • Areas that we understand because they are common at this stage of a new airplane development program.

  • We're not inventing anything at this point, we just have a lot of hard work to do in a compressed timeframe.

  • But we have the resources to get the job done.

  • That work includes integrating the airplane with its systems so we're sure that the systems we successfully tested individually work as well together on the airplane, completing and testing the flight critical software and working through preflight static test points so we know that structural components such as the fuselage, control services and wings meet their strength requirements.

  • As I said, the target is to complete these activities so we can begin flight testing by the end of September.

  • However, we recognize the risks inherent in what we're doing and we won't fly the airplane until it's ready.

  • Now, on the demand side, interest in the 787 from customers around the world remains very strong.

  • We now have 683 firm orders from 47 customers, which continues to set records as the highest order tally ever achieved by a commercial jet program at this stage.

  • Our order book for the 787 has grown to more than $100 billion at list prices.

  • And despite higher spending, the tremendous market success we've enjoyed with the 787 makes the current business case for this airplane even stronger than when we launched the program.

  • Overall, mindful of the inherent challenges and risks that lie ahead, particularly in the latter stages of major airplane development programs, we are satisfied with the progress we're making on the 787.

  • Scott Carson and Mike Bear will discuss the program again in our next 787 webcast update scheduled for September.

  • Let me wrap up my opening comments by saying that we have raised our financial guidance for 2007 revenue, EPS and cash flow despite the higher R&D forecast.

  • James will cover this increase in guidance in more detail.

  • The growth in productivity we see coming from our core businesses gives us the confidence to set even higher goals for ourselves and higher commitments to our customers and shareholders.

  • Now let me turn it over to James for a review of the numbers.

  • James?

  • - CFO

  • Thank you, Jim, and good morning.

  • I'll begin with second quarter results in slide three.

  • Our revenue increased 14% in the quarter driven by sharply higher commercial airplane revenue and modest growth in our defense business.

  • Our EPS grew to $1.35 per share while our net income expanded to $1.1 billion.

  • Earnings from operations increased to $1.5 billion.

  • Our earnings were driven by higher commercial airplane deliveries and good performance across BCA and IDS.

  • Last year's results included charges of $0.77 per share for a legal settlement and $0.41 per share for the AEW&C program.

  • Excluding the legal settlement, our adjusted EPS more than doubled this quarter from $0.56 per share to $1.35 per share.

  • Even after excluding the AEW&C charge we delivered strong growth.

  • Our core business engine is running very well in delivering great performance.

  • Now turning to our business unit review beginning with commercial airplanes on slide four.

  • BCA continues to profitably manage its production ramp up while investing in growth and achieving a record backlog.

  • BCA delivered 114 airplanes in the quarter, which along with higher service volumes, drove total revenues to $8.7 billion, a 22% increase.

  • The delivery mix this quarter was approximately 75% single aisle, and 25% twin aisle aircraft.

  • Operating earnings grew 34% to $960 million and operating margins grew to 11%.

  • VCA margins reflect growth and productivity improvements across its products and services which more than offset a planned increase of $243 million in R&D.

  • R&D spending for the second quarter was slightly lower than that in the first quarter.

  • Now, as Jim discussed, we have increased our R&D guidance for 2007 primarily to address the risk we see in the 787 program.

  • We now expect total R&D for all Boeing programs to be approximately $3.7 billion in 2007 which is $300 million above the high end of our previous range.

  • The increased R&D for 787 is to protect schedule, provide supplier support, and to continue weight reduction efforts.

  • Now, on protecting schedule, our focus is now on completing our systems development work.

  • We are running slightly behind in certain areas.

  • We need to add lab capacity to enable concurrent testing and we expect to hold on to testing resources longer than originally planned.

  • The good news is that the testing that we've already completed so far is going very well which tells us that our designs to's are working effectively.

  • In fact, many of the software and system glitches that are typically discovered during flight tests are being found and addressed early in this ground test phase.

  • On suppliers support we continue to assist partners as needed with design and integration activities to a greater extent than we had originally planned, and on weight reduction, as we talked about previously, we've had to redesign some parts of the airplane to address our weight challenges.

  • Examples of this includes redesigning parts of the wing and changing the design in materials on the window frames.

  • We continue to be a bit over where we want to be on weight but we remain confident that we will deliver the unprecedented operating efficiency that our customers expect.

  • So putting all this together, we've told you that R&D spending in the second half of this year would be lower than in the first and we still believe that will happen.

  • Engineering head count has already begun declining on the 787, but at a slower rate than planned.

  • We're devoting additional resources to ensure that our development programs stay on schedule.

  • Now turning to commercial airplane orders, we've captured 360 gross orders in the second quarter which lifted BCA's backlog to another record of $208 billion which is approximately six times current BCA revenues.

  • We also achieved important milestones during the quarter.

  • As Jim mentioned, we premiered the first 787 and we certified two large cargo freighters known as Dreamlifters.

  • We also delivered the first 737-900 extended range aircraft to Lion Air during this quarter.

  • Program margins exceeded unit margins as expected this quarter due to new customer introduction costs and pricing mix that reflect airplanes sold two to three years ago in a tougher pricing environment.

  • We expect this trend to continue for the rest of this year.

  • Boeing commercial airplanes delivered very strong financial performance in the first half of 2007.

  • This performance has led us to increase our 2007 revenue and operating margin guidance for BCA despite the additional R&D pressure we discussed.

  • Now moving to slide five in our defense business.

  • IDS delivered 3% revenue growth and double digit margins in the second quarter driven by higher volume across all three of its segments.

  • The unit delivered 27 production aircraft and one satellite during the quarter.

  • Results were led by strong performance in support systems and double digit margins in precision engagement in mobility systems.

  • Margins in the network and space systems area grew to 8.7% on a modest increase in revenue.

  • For the first half of 2007, volume increased across all IDS segments and operating earnings were higher by 45% compared to the first six months of last year.

  • We've made important progress capturing new business during the quarter.

  • The U.S.

  • Air Force selected Boeing for its A-10 wing replacement program and the Republic of Korea indicated its plans to proceed with the acquisition of 20 additional F-15K aircraft.

  • IDS also completed major milestones during the quarter including a critical design review of the P-8A program, a successful first flight of the Phase 2 small diameter bomb program and the completion of the critical design review for the future combat systems, Spin Out 1.

  • IDS remains well positioned for growth and profitability with its broad portfolio of development, production and support programs.

  • The IDS team is performing very well across this business and is on track to achieve its goals for both 2007 and 2008.

  • Next slide, please.

  • Boeing Capital delivered another strong quarter with pre-tax earnings of $70 million on revenue of $209 million.

  • BCA -- BCC grew its earnings despite the planned reduction of its portfolio during the quarter, totaling approximately $900 million.

  • The portfolio reduction was driven by a normal runoff and customer prepayments during the quarter.

  • The aircraft financing market continues to be robust and BCC is executing well as it supports Boeing's core business.

  • The other expense category improved by $60 million in the quarter, due mainly through our exit last year from the connection business.

  • Unallocated expenses also fell sharply due to lower expenses on share base plans and deferred compensation.

  • Both of these declines due to changes to our long-term compensation plan we implemented last year.

  • Non-cash pension expense grew as expected to $251 million in the second quarter.

  • We expect to realize significant savings in these areas this year.

  • We expect total other expense this year to be under $150 million.

  • We also expect total unallocated expense to be about $1.4 billion this year which includes about $600 million of FAS cash pension adjustments and $300 million of share base expense.

  • These savings are included in our guidance.

  • Now let's move to our balance sheet on slide 7.

  • Our balance sheet liquidity remains strong.

  • We ended the second quarter with $10.5 billion in cash and liquid investments which is up 30% from the end of first quarter on strong order flow and working capital performance.

  • Total consolidated debt was stable for the quarter and our credit quality is very strong and we continue to earn credit ratings that are at the top of our industry.

  • Moving to cash flow on slide eight.

  • We generated $3.6 billion of operating cash in the quarter, a 49% increase over the same period last year.

  • Strong net income, aircraft finance prepayments and effective working capital management drove these results.

  • We continued our balance cash deployment strategy during the quarter as we invested in organic growth programs, repurchased 6.5 million shares for $620 million and paid our quarterly dividend.

  • Now let's turn to our financial guidance on slide nine.

  • As Jim mentioned, we are increasing our financial guidance for 2007 and reaffirming our outlook for 2008.

  • We're increasing our 2007 revenue guidance to approximately $65 billion on higher commercial airplane revenues.

  • Our 2007 EPS guidance is raised to between $4.80 and $4.95 per share driven by higher BCA revenues and margins.

  • Operating cash flow guidance for 2007 is increased to greater than $6 billion on effective working capital management, customer financing prepayments and very strong airplane orders.

  • We raised BCA guidance due to a higher outlook for revenue and operating margins.

  • BCA revenue guidance is up to approximately $33 billion while margin guidance has been increased to approximately 10.5%.

  • We expect BCA to deliver between 440 and 445 airplanes this year.

  • The timing of customer deliveries that we see for the second half of this year will probably bring us in at the lower end of that range.

  • IDS segment guidance is unchanged.

  • We are raising our R&D guidance for 2007 to approximately $3.7 billion to hold schedule on our key development programs.

  • For 2008, we continue to expect that R&D will trend down to a range of between $2.8 billion and $3 billion.

  • But given the nature of development programs, there is upward pressure on the 2008 R&D number.

  • However, we do not currently believe that that R&D pressure will affect the EPS guidance we have given you for 2008.

  • You will find more details on our outlook in the earnings release we issued this morning.

  • With that, I'll turn it back over to Jim for final comments.

  • Jim?

  • - Chairman, President, CEO

  • Thanks, James.

  • Let me make a few points before we take your questions.

  • You can tell from how we are raising our outlook that our businesses are delivering strong results and exceeding our growth and productivity goals.

  • Almost every day I learn about additional productivity improvements that we're making in some area of the Company.

  • We are focused on reaching Boeing's potential by pursuing prudent growth strategies and seeking to continually to boost productivity across the enterprise.

  • As we discussed this morning, we're facing some challenges that require us to investment more in R&D than originally planned.

  • Increasing our R&D now is the right thing to do, as I said before, because it will allow us to meet our commitments to our customers and keep our very successful new airplane programs on track.

  • The growth and productivity initiative we are driving are aimed at ensuring that we can meet or exceed our financial objectives despite the challenges that we know will surface along the way.

  • Our goal is simply stated, and I believe we are achieving it.

  • We want to be the world's strongest, best integrated aerospace company.

  • With that, we'd be happy to take your questions now.

  • Operator

  • Thank you.

  • (OPERATOR INSTRUCTIONS) And our first question comes from Howard Rubel of Jefferies.

  • - Analyst

  • Thank you very much.

  • Jim, one of the things that you talked about earlier was that you wanted to manage the supply chain so that you wouldn't increase production at an inordinate rate or too fast.

  • You continue to capture orders at a rate that are putting pressure on schedule to raise production.

  • What point might we see a decision on some further rate increases?

  • - Chairman, President, CEO

  • Well, you're right about the headset.

  • Having said that, we're examining all the time the potential to raise rates on those programs that are growing well.

  • And they include the narrow body 7-3.

  • The 7-8 itself.

  • Although we haven't got it out yet.

  • And 777 in particular.

  • And it's always a tussle between waiting until you've got the supply chain in the shape you want it to be before you go up on one hand and customer demand on the other.

  • We'll continue to be prudent but our bias is toward raising over time as you could tell from the order book we've got.

  • And so we're seriously examining it.

  • - Analyst

  • Thank you.

  • - Chairman, President, CEO

  • Yes.

  • Operator

  • Thank you.

  • Our next question comes from Ron Epstein of Merrill Lynch.

  • - Analyst

  • Good morning, Jim.

  • Just a quick product strategy question.

  • Given some of the traction that the A-350 has gotten in the market particularly on the heels of Le Bourget, can you speak about your thinking on the 777 and the possibility of you modifying it, replacing it or how you're thinking about the product strategy with 777?

  • - Chairman, President, CEO

  • Well, I think there's no doubt that the model, the 1000 A-350 model is in part targeted at the long range 777.

  • Now I'm not sure when that model will be delivered, seven, eight, nine years from now.

  • I'm not sure it's exactly been articulated.

  • But we have time to think about how we would respond to that.

  • And it should materialize as planned.

  • And we are examining lots of options.

  • But I think the current thinking is that there will be some technology insertions we can make that will affectively respond to an airplane that is already a little bit bigger than the A-350, the 1000.

  • It has some customer advantages already built in.

  • It's the most modern long-range airplane in the world right now, these 777.

  • So we have time to think about it and we have some technologies that we base the 787 on and some other technologies that can be inserted in plenty of time to respond effectively.

  • - Analyst

  • Great.

  • Thank you.

  • - Chairman, President, CEO

  • You're welcome.

  • Operator

  • Thank you.

  • Our next question comes from Joe Campbell of Lehman Brothers.

  • - Analyst

  • Good morning.

  • I understand that we've done very, very well in the production of the existing airplanes and in the back half of the year.

  • That's more than offset the R&D.

  • I was curious about what was happening in '08, though, with the improved performance on the existing aircraft one would have thought that without the corresponding rise in the '08 R&D guidance, that the '08 guidance might have gone up on the heels of the the performance being seen in the first half and anticipated for the second half of '07.

  • If that continues I would have thought that would have forced the guidance up.

  • Thanks.

  • - CFO

  • Joe, this is James.

  • Obviously this's something that we're going to take a harder look on later in this year.

  • Clearly there is opportunity for it to go up.

  • But just as we've experienced this year, there are also risks.

  • And as we get through flight tests and we have a better understanding of what is going to happen on 787, then I think we would be in a bit -- much better position to revisit '08 guidance.

  • So I think you'll see that in either the third or fourth quarter.

  • - Analyst

  • So we'll have that in the back half of this year?

  • - CFO

  • Yes.

  • - Analyst

  • Do you -- will you say something about what you're going to do with the 87?

  • I thought that might have been part of the answer about what it is that you're going to book.

  • I think a lot of people are thinking with a big block size you're going to have more normal profits than you would usually have here, but so we're pretty much in the dark about how to think of this 787 in '08.

  • - CFO

  • Well, think about it in two ways.

  • It will be profitable from the first airplane which is something that is different than what we've experienced in the past.

  • But on the same token, it will not be --

  • - Analyst

  • Boeing always makes everything profitable in the beginning!

  • - CFO

  • It's not accounting.

  • It's the hard work of the people in the commercial airplane business that --

  • - Analyst

  • You're saying it'll be profitable in a unit cost basis from the beginning.

  • - CFO

  • I think it'll be profitable on a program accounting basis and it may also be slightly profitable in a unit basis.

  • We'll have to take a look at that.

  • But clearly, it'll be dilutive to the mature margins we experienced on the 777 and the 737 today.

  • So I think the way you think about it is, it is going to contribute, but it's going to contribute at a much lower margin rate than our other airplanes.

  • Then of course we're not going to have a lot of them in there in the first year, but we'll have over the first two years about 112 of those airplanes delivered.

  • - Analyst

  • Terrific.

  • Thanks very much.

  • It was a great quarter.

  • - CFO

  • Thank you.

  • Operator

  • Thank you.

  • Our next question comes from Steve Binder of Bear Stearns.

  • - Analyst

  • Hi, good morning.

  • Good quarter.

  • With respect to the deferred production costs of the 777, either James or Jim, can you maybe just touch on it was a pretty big increase, I don't know if it was a block adjustment or that's cost related to the implementation of the 777 moving along.

  • Could you touch on that?

  • - CFO

  • Yes, there are two pieces of it.

  • One is that the block was extended by 50 units.

  • But the other is is the aggressive pricing you're seeing today on the day's delivery.

  • This year's delivery, Steve, that we entered in to two or three years ago to bridge to a better market.

  • And so what you're seeing is there is better pricing in the future and that impact on pricing on the program accounting side impacts the increase in the deferred production costs because the prices on the units being delivered today on the 777s are a little more aggressive than we expect to see over the course of the production run.

  • - Analyst

  • And then with respect to the 787 bump in R&D, does it reflect any additional investment in weight reduction?

  • And does it reflect any resolution of some of these outstanding supplier issues you've had with respect to negotiations?

  • - Chairman, President, CEO

  • It's more -- we had a weight program that we've been working over the last year and we're spending about at the anticipated rate.

  • I think it's more schedule compression, additional resources both us and our suppliers to get things done on time.

  • And then therefore the roll-off of people off the program at a slower rate as James said than we had anticipated.

  • And it's just getting -- it's the scramble near the end of a program.

  • - Analyst

  • And Jim, just one last thing, if you look at the changes in management structure over at Airbus and the ADS, do you expect any change in pricing behavior out of Airbus in the future?

  • - Chairman, President, CEO

  • I really don't know.

  • I really don't.

  • - Analyst

  • Thank you.

  • Operator

  • Thank you.

  • Our next question comes from Heidi Wood of Morgan Stanley.

  • - Analyst

  • Great.

  • Thank you.

  • Jim and James, can you provide a little bit of color on where you stand on sort of supplier issues in the raw material issues on the current production aircraft?

  • I know last year I recall that you had clear concerns as you ramped up from the '06 deliveries into the '07.

  • But now as you think about adding another 75 planes to the production rate, what kind of key things need to happen and how do you feel this year about supply issues and raw materials versus last year?

  • - Chairman, President, CEO

  • I think a quick answer, Heidi, this is Jim.

  • A quick answer would be slightly better.

  • But still very vigilant.

  • I think that would be the summary.

  • I think the rate increases that we've pursued this year have all gone smoothly.

  • Raw material prices have stabilized.

  • Albeit at higher levels than we've historically experienced.

  • And we're still helping our tier one suppliers with their supply chains.

  • Examples would be the perennial seating company issues that we have and some of our major structural suppliers who are looking for fasteners and bearings and hydraulic fittings and the like.

  • But, at the end of the day our needs are being met and we're confident that we can do it and we've got pretty good visibility over the next year or two.

  • So slightly less concerned, always worried, vigilant.

  • - Analyst

  • All right.

  • - Chairman, President, CEO

  • I don't know what else to say.

  • - Analyst

  • Well, it does sound like you seem more comfortable than you did last year.

  • I'm just trying to read your tone.

  • - Chairman, President, CEO

  • Little bit more.

  • - Analyst

  • All right.

  • And then in terms of orders and slots available, can you walk us through available slots by product line and how much of your production rates full '08, '09 20-ton.

  • - Chairman, President, CEO

  • You're talking about commercial airplanes?

  • - Analyst

  • Right.

  • - Chairman, President, CEO

  • I don't have the precise skylines here in front of me.

  • But I think you're aware on the 8-7 that we're well out into the 13 area.

  • Not quite that far in 737s.

  • And not quite that far on 777s.

  • We've a lot of demand which led to my earlier response which is that we are looking at the feasibility of rate increases.

  • The 7-4 demand.

  • 7-4 demand is continuing to come in.

  • I wouldn't say sold out on all models.

  • But I'd say out there.

  • Dave can give you the precise answer on the skyline if I'm a little off on that answer.

  • - Analyst

  • And then last question, you're at 549 orders year to date.

  • Where do you think you're going to likely end the year and in 2008?

  • - Chairman, President, CEO

  • I think exactly right now we may be up a little bit from the 549 to about 616 if you go through the end of last week.

  • It's hard to predict exactly where we will end up the year.

  • As you know we have an approach to book the orders as they come.

  • We don't try to aggregate them at any one point in time, for example, at an air show.

  • And I think -- I am confident that I can say this, the latter half of the year we'll be taking more orders than we will be making airplanes probably so book-to-bill will continue to increase.

  • Exactly where it'll go, I'm not exactly sure.

  • - Analyst

  • But do you think you can get to 1,000 airplanes by the end of the year.

  • You know the robustness of your conversations with airlines and probably have a reasonable stab as to when things might --

  • - Chairman, President, CEO

  • Yes, you mentioned the T-word before I did.

  • But if everything broke, at good prices, good deals for the Company and the shareholders.

  • Sure, it could happen.

  • Our internal projections don't have it quite that high.

  • But it could.

  • There's a scenario that says it could be that high.

  • Operator

  • Thank you.

  • And as a reminder, please limit yourself to one single part question.

  • Our next question comes from Robert Stallard of Banc of America.

  • - Analyst

  • Good morning.

  • - Chairman, President, CEO

  • Morning.

  • - Analyst

  • I'll stick to one question.

  • Jim, to follow on the order outlook, you seeing clearly another very strong year for order intake.

  • What's your thoughts on when the airline order market will start to roll over and where do you see any regional variances in the pound?

  • - Chairman, President, CEO

  • Well, it's again hard to know.

  • I mean, I think you will see more orders over the next year or two from the so-called legacy carriers in Europe and United States.

  • These are the folks that typically start most cycles, and it's sort of interesting that they are in the middle of this cycle.

  • We're already beginning to see some reordering from some of the initial folks who ordered.

  • For example IOFC's recent order and they tend to be a pretty savvy group of purchasers, IOFC.

  • They're reordering, that's a strong statement that they don't see an abrupt end to the cycle.

  • You combine that with what's the legacy carrier momentum.

  • And you could see an extended cycle here.

  • So I don't see an end to it right now.

  • And it's in the momentum is I would say stronger than expected.

  • - Analyst

  • You don't worry that some of these wobbles in the debt market could have an influence on the order intake going forward?

  • - Chairman, President, CEO

  • Well, I think some catastrophe in the debt market as opposed to a wobble could have an impact.

  • Remember, they're buying technology that significantly improve their operating economics.

  • And you contrast that with another 100 basis points on the debt, it doesn't make that much difference.

  • - Analyst

  • That's great.

  • Thank you.

  • - Chairman, President, CEO

  • You're welcome.

  • Operator

  • Thank you.

  • Your next question comes from Cai von Rumohr of Cowen and Company.

  • - Analyst

  • Thank you.

  • Could you update us on the 787 with respect to when power on is scheduled?

  • Is that still mid August?

  • And secondly you indicated the plane was a little above target on weight, what percent of the plane has been weighed?

  • How much is it overweight and do you think that will be off by gains and engine fuel consumption?

  • - Chairman, President, CEO

  • Cai, this is Jim.

  • The weight is about -- I think we weighed about 30, 35% of the airplane physically.

  • The weight is pretty much spot on, maybe a smidgen lighter than we'd projected.

  • But you don't want to get euphoric over that trend right now.

  • I think our projection remains at a very small weight gain, a percent or two, if -- that would be a guess right now.

  • We think a lot of people think we can do a little better than that.

  • Most of our commitments to customers are along the lines of operating economics and even with some small increases in weight we're way above our operating cost guarantees and commitments to airlines.

  • I think weight is something we're working every day and we want to get right to exactly where we said we'd get to.

  • But we could absorb a little bit.

  • Power on, was that your first question, as you know, you've seen a bunch of these programs.

  • Power on happens when all the systems in the software get integrated on the airplane and we're right in the midst of that right now.

  • The team is targeting power on in time to fly the airplane at the end of September.

  • And they're working it Cai and I think it is possible that they'll have it close to where you suggest.

  • It's hard to know, as you know.

  • It's hard to know.

  • Operator

  • Our next question comes from Troy Lahr of Stifel Nicolaus.

  • - Analyst

  • Thanks.

  • James, when you talk about upward pressure in 2008 R&D, are you kind of talking within that range or actually exceeding the range and maybe could you just kind of give us an idea on how much cushion you have in that 2008 R&D number?

  • - CFO

  • Well what we're looking at right now is that the forecast for what we'll spend is within the range.

  • But when I say upward pressure, I mean upward pressure outside of it that would come out of something that we had to deal with in flight tests and where we'd have to spend more resources in '08 than we're anticipating in order to support the first delivery in May.

  • And so that's the kind of thing I'm talking about.

  • We don't see it today.

  • I'm just saying that given where we are in the program and how much we're stuffing into the remaining time before delivery and it's taken us a little longer on some things and we're having to put more effort in order to hold schedule and hold some resources longer than anticipated.

  • We know very well that could turn out to be true next year.

  • And the point is that if that should happen, we think we would be able to offset it with our productivity so that there would not be any deterioration to the earnings of guidance we have on the Street.

  • - Analyst

  • Would you say that you've been kind of using up some the cushion that was in that number or is there some cushion in that 2008 number?

  • - CFO

  • There is contingency in every number but we haven't gotten to '08 yet so we're not using it yet.

  • But what we're looking at is our experience in '07 and saying that very possibly we could be in the beginning of '08 in similar positions where we still have a lot to work to do all things we know how to do but we need to put more resources on it getting it in a more constrained time period.

  • That's not what we're projecting today in our current forecast but it clearly is a risk that we want to address.

  • - Analyst

  • Okay, thanks.

  • Operator

  • Thank you.

  • Our next question comes from Doug Harned of Sanford Bernstein.

  • - Analyst

  • Good morning.

  • - CFO

  • Good morning.

  • - Analyst

  • Could you talk a little bit about the 787-10, how you're thinking about the timing of that launch now, what you need?

  • And since you're getting from customers in terms of what they want with that airplane.

  • - Chairman, President, CEO

  • It's clear as we talked to a number of customers that there is a requirement.

  • But we haven't gotten to the point yet where it's hardened up into marketing a specific configuration or launch.

  • But we're in that period.

  • And it's probably impacted somewhat by the A-350 as customers are trying to assess precisely what that airplane's performance can be for them.

  • I think it's -- I think that may be impacting some decision making.

  • But it wouldn't surprise me if over the medium, short to medium term if we didn't harden up into something that we began to offer people.

  • - Analyst

  • Is it impacted also by the sold out positions on the dash-nines and eights.

  • - Chairman, President, CEO

  • Marginally, but it's more driven by a requirement that is different than what the dash-eight and the dash-nine can do.

  • - Analyst

  • Okay.

  • Great, thanks.

  • - Chairman, President, CEO

  • Your welcome, Doug.

  • Operator

  • Thank you.

  • Your next question comes from Robert Spingarn of Credit Suisse.

  • - Analyst

  • Morning.

  • - Chairman, President, CEO

  • Good morning.

  • - Analyst

  • Guys, single question with a couple of parts to it on the R&D.

  • James, you talked about three basic buckets where this funding is going in terms of protecting the schedule, assisting the partners and then the weight.

  • Back in Paris it didn't seem like this was going to be necessary, at least that was my interpretation.

  • At what point did you decide to do this and then can you characterize for us how that 400 million flows into those three buckets and will the suppliers participate in any of that spending down the line?

  • - CFO

  • It came up when we got back and got an updated forecast from the businesses as to how much we spent and what we'd accomplished on the program and clearly as Jim mentioned we spent more getting through the invention phase of the program and it took us longer.

  • And so now some of the effort that supply chain is engaged in we'll have to help them.

  • And yes, they'll have to help themselves in terms of what it will look like on their side as well.

  • I don't have a split out per se on allocation of where the money will go.

  • But those are the things that's helping with the same with the weight as you have less time and you still have some opportunities that you believe you can capture.

  • You want to go ahead and get that done sooner than later and that's what we're doing there.

  • And clearly the work we're doing in-house, there's just a lot of it to do as we integrate and produce the airplane and we want to make sure we get it done on schedule so we've added additional resources and that came out of their last update of where we were and what it takes to get where we want to be and support our customer commitment.

  • - Analyst

  • And just to clarify on the funding and the suppliers, are you saying that you could recover some of the 400 million down the road from them?

  • Or they are spending it simultaneously in addition to that?

  • - CFO

  • No, I think they have the same pressure we have in order to support their deliveries to us.

  • And I'm saying what we've identified as what we would spend and we wouldn't necessarily go after a recovery.

  • We will sort all this out once the airplane gets dealt.

  • There could be some of that that's grey that we would look at.

  • But quite frankly we aren't planning on it right now.

  • We're trying to all get together as a team and get this airplane built on time.

  • And all I 'm saying is because we have that pressure and I suspect they do also.

  • - Analyst

  • I see.

  • Thank for clarifying.

  • Operator

  • Our next question comes from David Strauss of UBS.

  • - Analyst

  • Good morning, thank you.

  • - Chairman, President, CEO

  • Good morning.

  • - Analyst

  • Jim, could you just update us on the progress on the couple of productivity initiatives you have in place?

  • Obviously it appears you're making good progress based on the numbers that are coming through BCA.

  • But if you could just run us through where you stand on each of those.

  • - Chairman, President, CEO

  • I would say the ones that are impacting our results most quickly are the lean initiative which was already a robust initiative when I arrived here which we have extended and deepened and supported even more aggressively.

  • And the other one that is beginning to pay off quickly is what we're calling our internal productivity initiative which has to do with some of our centralized and indirect non-procurement costs.

  • Both lean and that are beginning to have an impact on our cost structure, which is not to say that our sourcing initiative and our development initiative isn't beginning to help us, but both of those will be longer term in nature just given the rhythm of procurement and the rhythm of development.

  • As James said, the reason we're driving these so hard is that we know that there are going to be cost pressures in our business.

  • And they are going to be lumpy and they are not always going to meet our projections and so we just have to be ready.

  • Because we know they are going to happen.

  • For example, the R&D pressure that James was just talking about on the 7-8.

  • We didn't know exactly the kind of pressure we were going to face toward the end of this program, but we knew we had to be ready for it and not disappoint our shareholders when it happened.

  • - Analyst

  • Great.

  • One quick follow-up if I may.

  • Could you just address program performance at IDS and maybe specifically touch on Wedgetail and how progress is going there?

  • - Chairman, President, CEO

  • I think the charge you saw in Wedgetail this quarter had to do with an equitable price adjustment.

  • Nothing to do with performance on the program.

  • This is sort of a normal adjustment, I think you know that.

  • But I would say overall the program performance in IDS is good.

  • I think a lot -- Jim Albaugh and his team wrung a lot of risk out of that business over the past couple of years.

  • Whether you're talking about AEW&C, whether you're talking about FIA, whether you're talking about some of the other programs.

  • And we have a better base line now which doesn't mean we don't have challenges.

  • I mean, international tanker for the Italians and the Japanese which are both very important programs for a lot of reasons, one of which is we're getting a lot of experience fabricating and testing and flying the next generation tanker in advance of competing with the U.S.

  • government on this which we think differentiates us, by the way, but we still have some challenges there to get both of those programs done.

  • So I'd characterize international tankers one that still has program risk associated with it.

  • Just to note one that we're facing into either half of this year.

  • - Analyst

  • Thanks a lot.

  • Operator

  • Thank you.

  • Our next question comes from Myles Walton of CIBC World Markets.

  • - Analyst

  • Thanks.

  • Good quarter.

  • - CFO

  • Thank you.

  • - Analyst

  • Jim, I was hoping you could comment on cash deployment particularly given the upward move to cash outlook for the year.

  • If you look and you exclude BCC, you're in a 7 or $8 billion net cash position, you haven't really been active on the acquisition front and repurchase is ongoing, but about flat year-over-year.

  • So I guess the question is what's holding you back from redoubling that repurchase effort?

  • Or are you warming up on becoming more active in M&A?

  • - CFO

  • We're absolutely always re-evaluating that.

  • We actually in the first half of the year spent more than we had originally thought in terms of the repurchase program.

  • And as long as we think our stock is a good value which we still think it is, we'll consider it upping the tempo in the second half because of the cash generation we're seeing.

  • On the M&A front, we're looking at where it makes good sense for us to add on to our Company through that way.

  • As you know, our primary strategy is organic growth so where we can support that through selective M&A we'll consider looking at it.

  • But on the other hand, I don't think it's all that bad to just throw a little cash balance either in case something does go really, really bad we would be able to deal with it.

  • - Analyst

  • All right.

  • But it looks like 9% of your market cap, that's a pretty safe cushion in building.

  • Is that a fair way to gauge it?

  • - CFO

  • That's where we are today.

  • As I said, we'll look at whether or not we will up the -- accelerate our share repurchase program.

  • And again we will look at M&A.

  • I'm not going to talk about specific what we're looking at but we will continue to look at what's appropriate to buy that would support our organic growth strategy and see where that takes us at the end of the year with cash.

  • - Analyst

  • Fair enough.

  • Thanks.

  • Operator

  • Thank you.

  • Your next question comes from Joe Nadol of J.P.

  • Morgan.

  • - Analyst

  • Thanks.

  • Good morning, Jim and James.

  • - CFO

  • Good morning, Joe.

  • - Analyst

  • My question is, Jim, you mentioned in your earlier comments in terms of the scope of your activity on the 8-7, you mentioned integration, software and static tests I guess on the structure.

  • And I'm wondering if you could give maybe a little bit more color on each of those, quantify if's at all possible where you are in terms of I guess progress through the -- all the different milestones on each of them.

  • And then most importantly rank each of them -- rank them by where you are in terms of comfort level.

  • Which do you feel most comfortable with, which do you feel maybe you have the most work to do on?

  • - Chairman, President, CEO

  • It's hard to rank them since a glitch in any of them would -- a serious glitch in any of them would represent a slowdown in the program.

  • So I think they're all important.

  • Static test is going well.

  • We have no reason to believe, as James said, that the design tools have produced anything other than the structural strength we need and in each component of the airplane and when they're all hooked together similar strengths.

  • So that's going well.

  • So we were feel good about that.

  • I think the most of the software and systems have been tested individually either in sim labs or on other airplane platforms.

  • Avionics systems, for example, have been tested on the 777 platform.

  • So we've done a lot of individual testing.

  • Software and systems and the issue is, as always, in any information base system is getting them to ensure that they talk together and work together and that's where we're in the phase of right now.

  • And we have, again, we have no reason to believe that we're going to face a major issue there, but there is risk inherent in that kind of work and we're sort of halfway through it.

  • And then the subsystems, the ducts, wiring, the secondary structures that go inside the airplane, those again are going well.

  • We've completed the first wiring plan on the first airplane and so we feel good about that.

  • So I can sort of go on, but maybe that gives you a little more granular feel.

  • - Analyst

  • Yes, that's real good.

  • On the software portion, is that mostly Boeing activity bringing together your own people, is that bringing in software from suppliers, integrating with other things that you've been doing?

  • Just maybe a little more on that.

  • - Chairman, President, CEO

  • Both.

  • I mean, you know, there are -- we're working with a number of-- Honeywell's an example, working on flight control software.

  • Obviously we're working on the high level specs together and they're doing a lot of the implementation and we're -- and there's a working together team that makes sure that the hooks and handles that link into other elements of the system are anticipated.

  • And so it's not as easy to say that we get a package from somebody and run it together with a package from somewhere else.

  • I mean, we're in the middle of all of it and we are doing some of the software development ourselves.

  • - Analyst

  • Okay.

  • Thanks, guys.

  • Good quarter.

  • - Chairman, President, CEO

  • You're welcome, Joe.

  • Operator

  • Thank you.

  • Our next question comes from David Gremmels of Thomas Wiesel Partners.

  • - Analyst

  • Yes, hi, this is actually Alex in for David.

  • Your guidance to switch to IDS for a second, your guidance in the second half implies a slowdown particularly in network space and support system.

  • Is that just being conservative or there is some particular programs you're looking to slow down?

  • - CFO

  • We really aren't trying to signal that.

  • I think it's just timing on some of the what's going to happen in the second half versus the first.

  • In terms of deliveries.

  • - Chairman, President, CEO

  • Yes, I think that's true, James.

  • I don't think there is any --

  • - CFO

  • No.

  • - Analyst

  • Okay.

  • Great.

  • Thanks.

  • Operator

  • Thank you.

  • Our next question comes from George Shapiro of Citigroup.

  • - Analyst

  • Good morning.

  • - CFO

  • Good morning, George.

  • - Analyst

  • If I look at the flight test, it looks like a kind of delaying it a month from what you would hope would have been the end of August.

  • So my question is, you're now going to be down to about eight months between the flight test and delivery which is three months or so faster than what you've done on any other plane.

  • Now you're probably going to fly more planes, more hours a day, but how do you think you handle the fact that you're trying to do this much more accelerated than what you've seen before?

  • - Chairman, President, CEO

  • Well, there's no doubt, George, we have a compressed flight test program scheduled.

  • We have anticipated this.

  • I think in our contingency planning throughout we have 20% fewer flight test hours in the plan than we did for example on the 777 if that's the benchmark you're looking at.

  • We've figured out a way to turn the aircraft, use multi-shift operations to differentiate assessments from actual flying in ways we've never done before.

  • We do have fewer models, fewer engine types so we need less testing.

  • So when you add it up it's aggressive but it hangs together.

  • So off we go and we think we can do it.

  • - Analyst

  • Okay.

  • And then just one quick follow-up for you, Jim.

  • If you look at the domestic airline market, you've seen Southwest order more planes, but they really exercise options and deferred deliveries five years because they are slowing their growth rate.

  • We're seeing AirTran defer deliveries, not that it matters to you guys, but Jet Blue is doing the same.

  • Continental has deferred a few airplanes.

  • American's accelerated a few coming in.

  • So it's all I guess in response to slower revenue growth domestically.

  • How do you size up what you're seeing in the domestic market right now?

  • - Chairman, President, CEO

  • Well, what I see overall is very tight capacity.

  • I think, as you know, airlines, our customers are struggling with service levels, very high load factors.

  • I think you're right.

  • Airline by airline, there's some fit and finish in terms of either slightly pushing out or accelerating.

  • But I think we're on the front end of an order cycle that's hard for me to predict exactly how big it will be.

  • But just based on the pipeline of activity we've got, I think driven by both capacity and by technology and dealing with higher fuel costs, I see more upside than downside in terms of growth rates of procurement U.S.

  • airlines.

  • - Analyst

  • Okay, thanks very much.

  • - Chairman, President, CEO

  • You're welcome.

  • - CFO

  • Operator, we have time for one last analyst question, please.

  • Operator

  • Thank you.

  • Our next question comes from J.B.

  • Grow of D.A.

  • Davidson.

  • - Analyst

  • Morning, guys.

  • - Chairman, President, CEO

  • Good morning.

  • - Analyst

  • When I look at the decline in the R&D that you've got baked into your '08 guidance of 400 million, is the majority of that in BCA and how should we be thinking about the split between the two?

  • Should IDS sort of remain constant as a percentage of sales and should the decline come mostly in BCA?

  • And then I'm guessing that there's something factored in for tweaks to 777 as well as ongoing 787.

  • - CFO

  • Absolutely, the decline where you'll see in the reduction in R&D would absolutely be in BCA.

  • IDS will run at a more constant level and a very minimal level.

  • So most of that would be BCA related.

  • Now, there's nothing if you're asking is there something for the 777 in response yet to a A-350, probably not distinctly.

  • I think there is something that we would have to deal with generic kinds of things that could be devoted to that for some initial studies if needed.

  • But it would -- the decline would definitely be in BCA and would be related to the work being done on 787.

  • - Analyst

  • But is your upward pressure comment related more to 787 or potential tweaks to some sort of competitive response?

  • - CFO

  • Absolutely related to pressure on 787.

  • - Analyst

  • Great.

  • Thank you.

  • Operator

  • Thank you.

  • That completes the analyst question-and-answer session.

  • For members of the media, if you have a question please press the star key followed by the digit one on your touch-tone phone.

  • I will now return you to the Boeing Company for introductory remarks by Mr.

  • Tom Downey, Senior Vice President of Communications.

  • Mr.

  • Downey, please go ahead.

  • - SVP of Communications

  • Thank you.

  • We'll continue with the questions for Jim and James.

  • If you have any questions after the session ends, please call our media relations team at 312-544-2002.

  • Operator, we're ready for the first question and in the interest of time, we ask that you limit everyone to just one question.

  • Operator

  • Thank you.

  • Our first question comes from August Cole of Wall Street Journal.

  • - Media

  • Good afternoon.

  • I just wanted to ask a quick question about the R&D testing schedule for the 787.

  • What are the biggest hold ups right now and what do you think the increased funding will do to address those?

  • - Chairman, President, CEO

  • Well, it's less a matter of individual hold ups, August, than it is a compressed time schedule across a number of the elements we have to complete.

  • So it's a bit of a backup schedule with more resources requirement to get through things that we're confident we know how to do but which are time challenged.

  • - Media

  • And does the money fix that?

  • - Chairman, President, CEO

  • We believe it does.

  • - Media

  • Thank you.

  • Operator

  • Thank you.

  • Our next question comes from James Gonzalez of Bloomberg News.

  • - Media

  • Good morning.

  • Just looking at the stock price today, you guys are doing really, really well, that's a historical high.

  • What are your thoughts on splits?

  • - Chairman, President, CEO

  • To be honest, we haven't given it a great deal of thought.

  • Obviously with a stock price that stays sustainably at significantly high levels we would think about it.

  • But it's not part of our thinking today.

  • Operator

  • Thank you.

  • Our next question comes from Peter Pae of Los Angeles Times.

  • - Media

  • Good morning.

  • Can you guys give us sort of a historical perspective on when's the last time you had this kind of commercial aircraft demand, the big cycle?

  • Or is there a comparison?

  • - Chairman, President, CEO

  • Well I think I'll generalize a little.

  • We've had a number of cycles.

  • Rarely have we had one that is as extended as this one.

  • We've had cycles that have reached analogous heights but they tended to have sharper upslopes and somewhat sharper downslopes.

  • This one has been more gradual and more sustainable driven by, in my opinion, driven by a very strong global economy.

  • Driven by the technology of the new airplanes, enabling airlines to deal with high fuel prices, the efficiency is, particularly on the 787, is a step function change.

  • So new technology.

  • But a robust world economy and more liberalization of routing around the world.

  • All these things have come together for an extended as well as a high cycle.

  • - Media

  • Any idea how long you think the cycle will last?

  • - Chairman, President, CEO

  • It's really tough to predict.

  • I can see what's in front of us and for the next few years it continues to look strong.

  • Beyond that, my opinion is it continues to look strong but I don't have the evidence.

  • - Media

  • Thank you.

  • - Chairman, President, CEO

  • You're welcome.

  • Operator

  • Thank you.

  • Your next question come from James Wallace of Seattle PI Newspaper.

  • - Media

  • I'm showing in the past Boeing has always indicated that even though there was a window for first flight of about a month, that window would open in late August and into September.

  • Obviously you've now pushed that toward the end of the window.

  • Can you add a little color on why that has happened and how far into October can you go and not make first flight and still deliver the plane on time?

  • - Chairman, President, CEO

  • Well, James, you're right, I think we are at the back end of the window right now and it's just based on the facts of where we are, which we tried to portray here today as straight forwardly as we could.

  • I think we do have contingency plans if it moves beyond the end of September into October that we are putting in place in case we need them.

  • And so we feel that we could still deliver the plane on time in May of '08 even if we pushed a little bit beyond that.

  • But that's not the plan.

  • The plan is to fly by the end of September.

  • - Media

  • Thank you.

  • Operator

  • Thank you.

  • Our next question come from Paul Merrion of Crain's Chicago Business.

  • - Media

  • Hi, thanks a lot.

  • From day one you've been saying that the 787 would be 20% more efficient.

  • But now that it's almost ready to fly and you've done a lot of testing, do you have any reason to think that number might creep up a bit to 22, 23?

  • - Chairman, President, CEO

  • I think the fuel efficiency and the direct operating efficiency based on the numbers we see in front of us today is about where we thought it would be.

  • I think the thing that leads in the direction you're implying is that maintenance, as we get more experience with what it takes to maintain the airplane I think those costs are improving in our minds and in our customers' minds.

  • So, I don't have an exact quantification, but I think it's fair to say that the operating economics are a little better than we thought they were going to be and that maintenance cost is a big driver of that..

  • - Media

  • Okay.

  • Thanks a lot.

  • - Chairman, President, CEO

  • You're welcome.

  • Operator

  • Thank you.

  • (OPERATOR INSTRUCTIONS) Our next question comes from Molly McMillan of Wichita Eagle.

  • - Media

  • Hi, good morning.

  • - Chairman, President, CEO

  • Morning.

  • - Media

  • I, of course, wondering what you mentioned extra work was required, that leads of course to Spirit and how much extra help or additional help are you having to give to Spirit and its part of the program and can you be kind of specific on that?

  • - Chairman, President, CEO

  • Yes, I think Spirit has done an outstanding job.

  • And I think it's fair to say that they have required far less help than many of our suppliers.

  • They've just done a superb job and we couldn't be more pleased with our partners there.

  • - Media

  • When do you anticipate that they'll be able to start delivering their pieces, like staffed (ph), I know that's the ultimate goal, but the first ones aren't?

  • - Chairman, President, CEO

  • Well, we've already got a number of pieces in Everett.

  • I don't know precisely how many.

  • I think there was some traveled work.

  • But again, I think if you measure it either by traveled work or by the quality of the work done, we have some far bigger challenges than Spirit.

  • - Media

  • Okay.

  • Thank you.

  • - Chairman, President, CEO

  • You're welcome.

  • - SVP of Communications

  • Operator, seeing as there are no further questions in the queue, we will conclude our earnings call.

  • Again, for members of the media, if you have further questions, please call our media relations team at 312-544-2002.

  • Thank you.