Revised Schedule for the New Boeing 787 Results in a Third-Quarter Charge

The first test flight of Boeing’s “787 Dreamliner is scheduled to take off at the end of 2009, with delivery to carriers occurring within the fourth quarter of 2010.

The Boeing Company explained that this revised schedule reflects the need to reinforce an area along the side of the aircraft, while providing a several week cushion for flight-testing and certification. Currently, Boeing is projecting a production rate of 10 airplanes per month by late 2013.

"This new schedule provides us the time needed to complete the remaining work necessary to put the 787's game-changing capability in the hands of our customers," said Boeing Chairman, President and Chief Executive Officer Jim McNerney.

In an updated program profitability assessment, Boeing has concluded that the initial flight-test airplanes have no commercial market value beyond the development effort due to the extensive amount of rework and modifications made to the aircraft.  Accordingly, costs initially recorded for the first three flight-test airplanes are being reclassified from “program inventory” to a “research and development” expense.  This has resulted in a non-cash charge of $2.5 billion pre-tax ($2.21 per share), against Boeing’s third-quarter results.

Moving forward with the 787’s “side-of-body” reinforcement, initial testing has been completed on the aircraft and design details for the new fittings are being finalized.

Boeing says that it will update its 2009 financial guidance in October when it reports its third-quarter results.


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