The Boeing Company

are standing by. Good day, everyone, and welcome to the Boeing Company's second quarter 2025 earnings conference call. At this time, all participants are in listening mode. Please be advised that today's call is being recorded. The management discussion and slide presentation, plus the analyst question and answer session, are being broadcast live over the internet. To ask a question on today's call, please press star then one on your telephone. At this time, I turn the call over to Mr. Eric Hill, Vice President of Investor Relations, for opening remarks and introductions. Mr. Hill, please go ahead.

Thank you and good morning. Welcome to Boeing's quarterly earnings call. With me today are Kelly Orpert, Boeing's President and Chief Executive Officer, and Brian West, Boeing's Executive Vice President and Chief Financial Officer. This quarter's webcast, earnings release, and presentation, which include relevant disclosures and non-GAAP reconciliations, are available on our website. Today's discussion includes forward-looking statements that are subject to risks and uncertainties, including the ones described in our education filings. As always, we will leave time at the end of the call for analyst questions. With that, I will turn the call over to Kelly Orpert. Well, thank you, Eric, and it's great to have you on board, and thanks to everyone for joining today's call. First, I want to express our sincere condolences to the loved ones of everyone on board Air India Flight 171, as well as those affected on the ground. Our team continues to provide technical assistance to the ongoing investigation, led by India's Aircraft Accident Investigation Bureau, or AAID, and we're supporting our customers in any way we can. So now let's shift our focus to the quarter. It's clear our recovery plan is taking hold. We're making steady progress to stabilize our business, strengthen development program execution, and change our culture to set up for the future. In May, we announced our largest wide-body order ever for up to 210 commercial airplanes, which adds to the momentum from recent wins in our defense business, like the F-47. Our market demand remains strong. We're just over halfway through 2025, and I'm pleased with our progress. We're starting to see real momentum, and the nice thing is that we're seeing it across the business. At the same time, we also have to acknowledge the remaining work ahead of us on this recovery. And while we continue to manage through a dynamic environment, we're certainly encouraged with a very recent trade deal. Turning now to VCA, we're seeing the benefit of our ongoing investments to stabilize our production system as we continue to remain on track with the safety and quality plan that we established and submitted to the FAA. A few highlights are we've reduced traveled work at rollout by 50%. We've addressed employee feedback from our safety and quality stand-downs. We've employed structured on-the-job training, and we've simplified more than 1,500 work instruction documents. This is critical to our performance to deliver safe and high-quality aircraft on time to our customers and steadily execute our plan production increases. With more stability in operations, we've delivered 150 commercial jobs in the quarter and 280 in the first half of the year. That makes it the most deliveries in the second quarter and first six months of the year since 2018. More importantly, almost every customer I talk to has said they're seeing higher-quality airplane deliveries. On 737, you'll recall our plan was to methodically ramp up to 38 per month, stabilize at that rate, and then request an approval from the FAA for the next rate increase to 42 aircraft a month. In a quarter, we achieved a rate of 38 airplanes per month, and we're now focused on demonstrating stability at that rate. We'll continue to use key performance indicators that have been agreed to with the FAA to measure the health of the production system. Those KPIs continue to steadily progress in line with our expectations we set at the beginning of the year. We expect to be in a position to request approval from the FAA in the coming months to increase to 42 aircraft per month. On 787, we successfully completed a capsule review in the quarter, and the program is now at a production rate of seven airplanes per month. Like our team in Renton, our team in Charleston is now focused on stabilizing at the new production rate and using KPIs that we're tracking, and they still look good. They're all green. We'll continue to track those over the near term before preparing for the next rate increase. Turning now to our commercial development programs, we continue to progress with our 777X flight test program and remain focused on the work ahead to get the airplanes certified and delivered to our customers. With our full test fleet activated, including four dedicated airplanes, the program has completed more than 1,400 flights and 4,000 flight hours.

Flight testing continues with no new technical issues to report. So good progress so far, but we still have a lot of work to do.