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Boeing Company (the) — The Boeing Company — Bank of America Merrill Lynch Global Industrials & EU Autos Conference 2016

19 slides from Boeing Company (the)'s conference presentation, Mar 16, 2016

  1. Slide 1: Market Update

    Market Update Randy Tinseth Vice President, Marketing The statements contained herein are based on good faith assumptions are to be used for general information purposes only. Boeing Commercial Airplanes These statements do not constitute an offer, promise, warranty or guarantee of performance. Copy

  2. Slide 2: Forward-looking statements

    Certain statements we make during this conference are “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 expr

  3. Slide 3: Global economic growth rate

    Global Passenger Cargo Airlines economic market market managing growth rate resilient, weak, better than below average growing challenging ever before NOTE: Annual growth rates (%) and cumulative profit ($B) Copyright © 2016 Boeing. All rights reserved.

  4. Slide 4: Backlog and deliveries growing near same rate over the last 10 years

    Backlog and deliveries growing near same rate over the last 10 years 7000 2000 CAGR 2005 – 2015 6000 Backlog – 10.1% Deliveries – 12.5% 5000 1500 4000 Deliveries Backlog 1000 3000 2000 500 1000 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Backlog Deliveries Sou

  5. Slide 5: Backlog movement at a historical low

    Backlog movement at a historical low 7000 6000 5000 # of airplanes 4000 3000 2000 1000 30% 9% 20% 6% 9% 1% 2% 7% 4% 2% 3% 0% 1% 2% 1% 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Backlog Net Deferals/Accelerations Debookings/Cancelations (Total change as a % of backlo

  6. Slide 6: Healthy consumer economy supports travel

    Traffic growth continues at above-average levels Annual Growth (RPKs)  Healthy consumer economy supports 10% travel above trend  Emerging markets middle class growth growth  New airline business models 5%  Demographics support leisure travel  Air travel relative affordability 0% 2010 2011 2012

  7. Slide 7: Airline traffic growth exceeding airline capacity growth

    Airline traffic growth exceeding airline capacity growth Year-over-year growth – 12 month rolling avg 7% • Traffic growth > long-term average 6% 5% • Load factors at/near record highs 4% • Parked fleet - typical seasonal trends 3% 2% • Utilization at historic peaks 1% 0% Jan-14 Apr-14 Jul-14 Oct-14

  8. Slide 8: Average Annual Passenger Load Factor

    Airplane load factors indicate that assets are fully utilized…. no overcapacity 85% Average Annual Passenger Load Factor 80% 75% 70% 65% 60% 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: ICAO Copyright © 2016 Boeing. All rights reserved.

  9. Slide 9: Airline Productivity Rising

    Airline Productivity Rising Assets are being efficiently utilized World Load Factors Airplane Utilization Hours/Day 82% 9.5 80% 9.0 78% 8.5 76% 8.0 74% 7.5 72% 70% 7.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: Utilization –

  10. Slide 10: Airlines adjust fleet to market conditions

    Airlines adjust fleet to market conditions Flexibility adds to industry stability low oil ~50% growth ~70% growth ~50% replacement ~30% replacement (2003) (2004-07) ~20% growth ~60% growth high oil ~80% replacement ~40% replacement (2008) (2011) low growth high growth Copyright © 2016 Boeing. All ri

  11. Slide 11: Growth vs replacement fluctuates over time

    Growth vs replacement fluctuates over time Replacement of 2.5-3% annually, plus Growth of 3.5-4% makes up delivery mix 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growth Replacement Source: Ascend Copyright © 2016 Boeing

  12. Slide 12: Deliveries tracking with historical ratios

    Deliveries tracking with historical ratios Replacement of 2.5-3% plus Growth of 3.5-4% Annual deliveries Deliveries as % of fleet 2000 10.0% 1800 9.0% 1600 8.0% 1400 7.0% 1200 6.0% 1000 5.0% 800 4.0% 600 3.0% 400 2.0% 200 1.0% 0 0.0% Source: Ascend 12 Copyright © 2016 Boeing. All rights reserved.

  13. Slide 13: Single Aisle replacement demand increasing

    Single Aisle replacement demand increasing Some replacements delayed, others accelerated 800 700 600 Airplanes turning 25 yrs old 500 400 300 200 100 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Excludes over 700 airplanes that are older than

  14. Slide 14: Widebody replacement demand increasing

    Widebody replacement demand increasing Some replacements delayed, others accelerated 250 200 Airplanes turning 25 yrs old 150 100 50 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Excludes over 300 airplanes that are older than 25 years SOURCE:

  15. Slide 15: China's economic transition supports air travel

    Service driven economy emerging 55 forecast 50 services Heavy industry growth slowdown Share of GDP in % 45 Service sector continuing growth 40 Air passenger travel strong industry 35 Cargo impact from weak industry Risks: 30 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 • Weakness spills i

  16. Slide 16: 737-800 market value and lease rates

    $45 Market Value of 3-year old 737-800 $0.45 New 737-800 lease rates $40 $0.40 $35 $0.35 Average lease rates (millions) Then year dollars (millions) $30 $0.30 $25 $0.25 $20 $0.20 $15 $0.15 $10 $0.10 $5 $0.05 $0 $0.00 1st-half 1st-half 1st-half 1st-half 1st-half 2011 2012 2013 2014 2015 2011 2012 201

  17. Slide 17: 777-300ER market value and lease rates

    New 777-300ER lease rates Market Value 3 year old 777-300ER $1.6 $160 $1.4 $140 Average lease rates (millions) $1.2 $120 Then year dollars (millions) $100 $1.0 $80 $0.8 $60 $0.6 $40 $0.4 $20 $0.2 $0 $0.0 1st-half 1st-half 1st-half 1st-half 1st-half 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 L

  18. Slide 18: Improving airline profitability is the primary driver of aircraft order peaks

    • Stronger passenger traffic demand 4000 6.0% 3500 • Fuel efficient airplanes operating hedge 4.0% against price volatility (near-term deliveries) 3000 2.0% Airline Net Margin 2500 • Airlines planning for higher fuel prices Net Orders (longer-term orders) 2000 0.0% • Deferred retirements provide onl

  19. Slide 19: Copyright © 2016 Boeing. All rights reserved.

    Copyright © 2016 Boeing. All rights reserved.

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