Boeing Company (the) · NYSE:BA

Boeing Company (the) — Investor Presentation (June 2013)

31 slides from Boeing Company (the)'s investor presentation, June 2013

  1. Slide 1: Current Market Outlook 2013-2032

    Current C t Market M k t Outlook O tl k 2013-2032 R d Ti Randy Tinseth th Vice President, Marketing Boeing Commercial Airplanes June 2013 The statements contained herein are based on good faith assumptions and provided for general information purposes only. These statements do not constitute an offe

  2. Slide 2: Agenda

    Agenda A focus on efficiency 20-year traffic and airplane forecast Boeing product strategy & development Copyright © 2013 Boeing. All rights reserved.

  3. Slide 3: Oil prices expected to remain elevated and volatile

    Oil prices expected to remain elevated and volatile Spot $/Barrel (Brent Crude Oil / Rotterdam Jet Fuel) ¢/Gallon 180 450 160 400 140 350 Jet Fuel 120 300 100 250 80 200 150 60 40 Brent B tCCrude d Oil 20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Historical data source: EIA Copyright ©

  4. Slide 4: Fuel has doubled as a percentage of airline costs over the past 10 years

    Fuel has doubled as a percentage of airline costs* over the past 10 years 15% 25% 2003 Fuel price: US $0.82/gal Single-aisle Wide-body 30% 2013 Fuel price: 50% US $2.73/gal *Cash operating cost, typical rules, representative aircraft Copyright © 2013 Boeing. All rights reserved.

  5. Slide 5: New technology and intense competition continue to push airline yields downward

    New technology and intense competition continue t push to h airline i li yields i ld d downwardd Cents per seat-mile Copyright © 2013 Boeing. All rights reserved.

  6. Slide 6: Airlines are focused on efficiency

    Airlines are focused on efficiency Operations Network / revenue New airplanes, technologies g Copyright © 2013 Boeing. All rights reserved.

  7. Slide 7: Impacts of efficiency push on the future

    Impacts of efficiency push on the future Efficient use of assets Modest up-gauging Continued replacement p demand Copyright © 2013 Boeing. All rights reserved.

  8. Slide 8: Agenda

    Agenda A focus on efficiency 20-year traffic and airplane forecast Boeing product strategy & development Copyright © 2013 Boeing. All rights reserved.

  9. Slide 9: Why the Current Market Outlook (CMO)?

    Why the Current Market Outlook (CMO)? Product Long-range Suppliers and airline strategy business plan customers Copyright © 2013 Boeing. All rights reserved.

  10. Slide 10: Boeing forecast accuracy

    Boeing forecast accuracy Fleet consists of all jet aircraft with at least 90 seats Medium-term 10,000 • Accurate despite market Actual 8,000 dynamics 2003 CMO 6,000 Forecast 4,000 • Long-term forecasts have 2 000 2,000 b been more conservative ti 0 2003-2012 • Single-aisle segment has Long term Long

  11. Slide 11: Market forecast drivers and considerations

    Market forecast drivers and considerations Market Airplane High liberalization capabilities Environment speed rail Airline Fuel Emerging strategies & price i markets business models Economic I f Infrastructure t t growth Current Market Outlook 2013-2032 Copyright © 2013 Boeing. All rights reserved.

  12. Slide 12: Air travel and economic growth are directly related

    Air travel and economic growth are directly related Percent annual change passenger traffic Real GDP growth 16 8 14 7 12 6 10 5 8 4 6 Long-term 3 traffic growth 4 2 2 1 0 0 -2 -1 -4 -2 1971 1976 1981 1986 1991 1996 2001 2006 2011 Pax airline traffic growth GDP Sources: Traffic growth – ICAO/IATA GDP

  13. Slide 13: Drivers of air travel

    Drivers of air travel Economic Global Traveler growth trade values 60-80% 20-40% Travel Additional demand travel demand Copyright © 2013 Boeing. All rights reserved.

  14. Slide 14: World air travel has grown 5% per year since 1980

    World air travel has grown 5% per year since 1980 6.0 • 4 recessions • 2 financial crises 50 5.0 • 2 Gulf wars • 1 oil shock RPKs (trrillions) 4.0 • 1 near pandemic (SARS) • 9/11 3.0 20 2.0 1.0 0.0 1980 1984 1988 1992 1996 2000 2004 2008 2012 RPKs = Revenue Passenger Kilometers Source: ICAO schedule

  15. Slide 15: 20-year forecast: strong long-term growth

    20-year forecast: strong long-term growth 2012 to 2032 World economy 3.2% (GDP) Number of airline 4.1% passengers Airline traffic 5.0% (RPK) Cargo traffic 5.0% (RTK) Copyright © 2013 Boeing. All rights reserved.

  16. Slide 16: Air travel growth has been met by increased frequencies and nonstops

    Air travel growth has been met by increased frequencies and nonstops Index 1992=1.00 World 2.5 Air Travel Growth Frequency Growth Nonstop 2.0 Markets 1.5 Average 1.0 Airplane Size 0.5 August OAG All routes Copyright © 2013 Boeing. All rights reserved.

  17. Slide 17: Airlines will need more than 35,000 new airplanes valued at $4.8 trillion

    Airlines will need more than 35,000 new airplanes valued l d att $4 $4.88 ttrillion illi Airplane deliveries: 35,280 Market value: $4.8T 2013 - 2032 2013 - 2032 25 000 25,000 24,670 , 2 500 2,500 $2,290B 20,000 2,000 15,000 1,500 $1 100B $1,090B $1,100B $1 090B 10,000 1,000 5,000 4,530 500 3,300 $28

  18. Slide 18: Older, less efficient airplanes will be replaced with newer generation airplanes

    Older, less efficient airplanes will be replaced with more efficient, newer generation airplanes Units 45,000 41,240 40,000 35,000 20,930 30,000 , Growth 59% 25,000 35,280 20,310 20 000 20,000 14,350 15,000 Replacement 41% 10,000 5,000 5,960 Retained fleet 0 2012 2032 Copyright © 2013 Boeing. All ri

  19. Slide 19: Fleet composition will change

    Fleet composition p will change g 2032 2012 2% 9% 6% 4% 7% 13% 13% 12% 41,240 20,310 airplanes airplanes 70% 64% Large wide-body Medium wide-body Small wide-body Single-aisle Regional jet Copyright © 2013 Boeing. All rights reserved. Data source: Ascend & Boeing CMO

  20. Slide 20: Emerging markets are driving the economic growth

    Emerging markets are driving the economic growth Annual GDP growth 2012 – 2032 South Asia 6.6 China 6.4 Southeast Asia 4.7 Asia Pacific 4.5 Africa 4.4 Latin America 4.0 Middle East 38 3.8 CIS 3.4 World 3.2 Oceania 2.6 North America 2.5 Europe 1.8 Source: Northeast IHS Global Insight Asia 1.6 Copyrig

  21. Slide 21: Air travel growth varies by market

    Air travel growth varies by market Added traffic Annual 2012 traffic 2013-2032 growth % Within Asia Pacific* 6.2% Within North America 2.3% Within China 6.9% Within Europe 3.6% Europe - Asia Pacific 5 5% 5.5% North Atlantic 3.5% Middle East - Asia Pacific 7.3% World Within Latin America 6 9% 6.9% Av

  22. Slide 22: Air travel becoming more diverse geographically

    Air travel becoming more diverse geographically Air traffic traffic, RPKs (billions) 16,000 14,000 Other 12,000 Middle East 10,000 China 8,000 Asia Pacific ( l China) (excl. Chi ) 6,000 4,000 Europe 39% 2,000 North 52% America 73% 0 1992 2012 2032 Source: Boeing 2013 CMO Copyright © 2013 Boeing. All

  23. Slide 23: Market for new airplanes to become even more geographically balanced

    Market for new airplanes to become even more geographically hi ll bbalanced l d New airplane deliveries by region Market value by region 2013–2032 2013–2032 R i Region Ai l Airplanes R i Region $B 3% 3% Asia Pacific 12,820 Asia Pacific 1,890 8% 3% 6% 3% Europe 7,460 Europe 1,020 7% 37% 11% North Ame

  24. Slide 24: World air cargo traffic has grown 5.3% per year since 1980

    World air cargo traffic has grown 5.3% per year since 1980 250 200 ons) 150 RTKs (billio 100 50 0 1980 1984 1988 1992 1996 2000 2004 2008 2012 * Revenue tonne-kilometers Copyright © 2013 Boeing. All rights reserved.

  25. Slide 25: New freighter demand - new, converted

    N New ffreighter i ht demand d d -- 850 new, 1 1,450 450 converted t d Share of fleet Delivery units 100% 130 80% Large >80 tonnes 940 60% 640 Medium 40 to 80 tonnes 2,300 40% Standard <45 tonnes 20% Converted 210 380 0% 2012 2032 2013 tto 2032 Freighters Freighters Freighters 1,730 2,810 Copyright

  26. Slide 26: Future freighter deliveries will be led by demand for large widebodies

    Future freighter deliveries will be led by demand for l large widebodies id b di New freighter deliveries: 850 Market value: $240 billion 2013–2032 2013–2032 700 640 250 600 $200B 200 Maarket value 500 Airplaane units 400 150 300 100 210 200 50 $40B 100 0 $0B 0 0 Large Medium Standard Large Medium S

  27. Slide 27: Agenda

    Agenda A focus on efficiency 20-year traffic and airplane forecast Boeing product strategy & development Copyright © 2013 Boeing. All rights reserved.

  28. Slide 28: More value to our customers in all markets

    More value to our customers in all markets Efficiency designed-in from the start • Environmentally progressive • Passenger experience • Long-range, fast, reliable • Low operating cost • Operational O ti l commonality lit • Standardization St d di ti Copyright © 2013 Boeing. All rights reserved.

  29. Slide 29: The Boeing Edge

    The Boeing Edge Aviation industry’s industry s largest portfolio of integrated services and customer support Acquire Transition Ready Refresh Operate Maintain Copyright © 2013 Boeing. All rights reserved.

  30. Slide 30: Substantial, balanced backlog validates Boeing's product strategy

    Substantial, balanced backlog validates Boeing’s product strategy Backlog ($B) Model 747 350 323 Large 319 777 4% 295 300 Single- Aisle 737 43% 250 256 Twin- 250 Aisle 53% 200 787 767 Region 150 Leasing, Gov't & North BBJ America 100 ME, Central & S. Asia L. America & Africa 50 Europe & Asia Russia

  31. Slide 31: Things to remember

    Things to remember Airline customers continue to focus on efficiency Strong demand for new, efficient aircraft; emerging economies leading growth “The products that provide the most efficiency will continue to be the products of choice”– Ray Conner, BCA President Copyright © 2013 Boeing. All rights

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