2016 Address to Shareholders

Annual Meeting, Chicago, IL

Dennis A. Muilenburg
Chairman, President and Chief Executive Officer
The Boeing Company

May 2, 2016

In just a couple of months, Boeing will turn 100 years young, a tremendous accomplishment and a historic milestone few companies achieve. Even fewer do so as strong, healthy and competitive as we are today.

And we’re just getting started.

With clear strategies and strong market positions, a large and diverse order backlog worth nearly half a trillion dollars, and increasing production rates, we are well positioned for sustained profitable growth and higher cash flow to fund future innovation and provide increasing value to our customers, shareholders, employees and other partners.

Boeing is a company with a history like no other—one whose products and services positively impact hundreds of millions of people around the world every day. Together, our mission is to connect, protect, explore and inspire. The work we do matters – to commercial airplane passengers, men and women in uniform, astronauts pushing the boundaries of space, and future generations of innovators, explorers and dreamers. Lives literally depend on what we do, and that demands excellence and the utmost integrity in how we do it.

Over the past 100 years, generations of talented Boeing employees helped build the world’s largest aerospace company — and shaped the course of history along the way. In that time, humans went from walking on Earth to walking on the moon, and from riding horses to flying jet airplanes and spaceships. With each decade, aerospace technology crossed another frontier, and with each crossing, the world changed.

Succeeding year after year in a business like ours requires an intense — and sustained — focus on performance. And our team delivered admirably in 2015, posting another year of strong performance and innovation across our business units and functions, and around the world.

Thanks to the tremendous efforts of more than 160,000 employees and our global partners, we extended our aerospace industry leadership in 2015 with record deliveries and revenue at Boeing Commercial Airplanes and solid sales and healthy margins in Boeing Defense, Space & Security.

We continued to deliver on our strategies to convert our record backlog into profitable growth; drive productivity and greater affordability throughout the company; and invest in our people, products and services to strengthen and grow our businesses for the future. We also demonstrated our commitment to provide increasing returns and significant cash to our shareholders.


  • Higher commercial airplane deliveries increased revenue 6 percent to a record $96.1 billion.
  • Strong demand for our market-leading products and services produced $83 billion in new orders, sustaining our backlog at a near-record total of $489 billion.
  • Strong companywide performance drove core operating earnings of $7.7 billion and core earnings per share of $7.72, offset by charges taken on the KC-46 tanker and 747 programs.
  • These strong performance trends and our positive outlook led to our announcement last December to increase our dividend by 20 percent and raise our share repurchase authorization to $14 billion from $12 billion. We continued our balanced cash deployment strategy throughout 2015, repurchasing 47 million shares for $6.8 billion and paying $2.5 billion in dividends.

Boeing Commercial Airplanes reported record revenue of $66 billion in 2015 fueled by an industry-high 762 deliveries that extended our global market-share lead for a fourth consecutive year. An additional 768 net new airplane orders valued at $57 billion sustained our record backlog at nearly 5,800 airplanes worth approximately $432 billion. That’s nearly seven years of production at current rates.

The commercial airplane market represents a huge growth opportunity, with a combination of fleet expansions and replacement demand expected to drive the need for 38,000 aircraft worldwide over the next 20 years.

We boosted our market leadership in twin-aisle aircraft with deliveries of an industry-record 135 787s, which airlines are using to improve how people fly, opening new and more convenient non-stop routes between cities around the world. Our newest twin-aisle airplane—the 777X—remains in high demand and is on track to enter service toward the end of this decade. With a current backlog of 224 current-model 777s, ongoing market demand and a strong value proposition for customers, we remain confident in our efforts to transition production smoothly to the 777X.

In the single-aisle market, net new orders and deliveries for the 737 family reached 588 and 495, respectively, with a total program backlog at year-end of nearly 4,400 airplanes. The first 737 MAX test aircraft rolled out of the factory on schedule in December and in January conducted its first flight. Demand for the 737 MAX remains high, with nearly 3,100 aircraft sold since launch. We’ll deliver the first 737 MAX, to Southwest Airlines, in the third quarter of 2017.

Boeing Defense, Space & Security had another strong year in 2015—with solid revenue, healthy margins and progress on numerous key milestones. We delivered 186 military aircraft, nearly 16,000 weapons systems and four satellites. We also logged new orders worth $27 billion, resulting in a year-end backlog of $58 billion—40 percent of which comes from international customers.

With a solid portfolio of products and services, disciplined investments in innovation, our continued focus on affordability and productivity, and early signs of an improving U.S. defense budget environment, we remain confident about our prospects for continued success in the global defense, space and security market worth roughly $3 trillion over the next decade.

Over the past year, we’ve achieved:

  • The first flight of the KC-46A tanker and its first international sale to Japan;
  • The first EA-18G delivery to the Royal Australian Air Force;
  • The fourth and final AEW&C delivery to Turkey;
  • Completion of the final C-17 after a successful 20-year production run; and
  • The selection of the 747-8 to replace the current U.S. presidential aircraft.

We also added to our leadership momentum in manned spaceflight with:

  • A successful flight software demonstration on the CST-100 spacecraft, which is scheduled to fly to the International Space Station in 2017;
  • A five-year NASA contract extension to continue providing engineering support services, resources and personnel for Space Station operations; and
  • The completion of the Space Launch System critical design review, including the Boeing-built core rocket stage and avionics system.

Few, if any, of the many accomplishments our people achieved in 2015 would have been possible without working together as a “One Boeing” team. That includes the successful first flight of the KC-46A tanker, reaching key production and delivery milestones on the 787 program, winning reauthorization of the U.S. Export-Import Bank, and making important growth investments in our people, products and services to name a few. Continued progress on enterprise-wide efforts, including quality, productivity and workplace safety, are strengthening our competitiveness in the marketplace and driving lasting improvements across the company.

Strategic growth and diversification of our manufacturing and engineering footprint are further enhancing our capabilities and capacities, improving business continuity and productivity, and increasing our access to new talent and technology. In 2015, $700 million of new construction and building expansions totaling 3.8 million square feet provided additional capability for the 777X, 787-10 and 737 MAX. Boeing South Carolina strengthened airplane design and performance with a new propulsion system facility, and we opened 13 new engineering career-development centers across the globe to ensure we have the best team and talent to support our continued leadership in innovation. 

No matter how well we’re doing or how far we’ve come, our future in an increasingly “more-for-less” world is not guaranteed.

Attractive, growing markets like ours draw increasingly capable new competitors and inspire existing challengers to do better. Global economic and geopolitical tides are changing constantly, and our customers consistently demand more value for less money. And when it comes to talent, influence and capital, we compete with the world’s best global companies. In short, success going forward will require the very best from our team and ever-higher levels of business performance throughout the company.

As we look to our future, the potential for incredible discovery and amazing achievement is as great for us as it was for Bill Boeing and other aerospace pioneers. The goals and standards we set for ourselves should be equally as bold, visionary and inspiring as those set by our leaders a century ago.

With our storied past as inspiration for the future, our goal is to be the world’s aerospace leader and an enduring global industrial champion.  That means achieving world-class performance in all dimensions of our business year-over-year as compared against peer industrial companies of similar size and scope (including some of our competitors), and as measured by all our stakeholders — from customers to employees, shareholders and the communities where we work.

To achieve these lofty goals in our second century, we are focusing on two primary strategies: First, to continue building strength-on-strength to deliver on our existing plans and commitments, and improve them where needed. And, second, to stretch beyond those plans and sharpen and accelerate our pace of progress on key growth and productivity efforts to achieve our full potential.

Both strategies will require a clear and consistent focus across the enterprise on the following priorities:

  • Ramping up commercial airplane production profitably;
  • Continuing to strengthen our defense and space business;
  • Delivering on our development programs;
  • Driving to world-class levels of productivity and performance throughout the enterprise to fund our investments in innovation and growth; and
  • Attracting, developing and retaining the best team and talent in the industry.

To accelerate the company’s growth strategy over the next decade, we also are focused on:

  • Advancing our design and manufacturing capabilities to reduce development time and improve customer responsiveness;
  • Growing our services business in commercial aviation and defense;
  • Achieving step-function improvements in safety, quality and productivity; and
  • Growing globally to capture new capabilities and efficiencies and increased market share.

While we focus on building a bigger, better Boeing, we also remain committed to building a better planet. Once again last year, through their actions and kindness, Boeing employees demonstrated a deep commitment to improving the environment and our communities.

For example, in 2015 Boeing completed the largest single restoration project on the Duwamish River in Washington state — the right thing to do for a community that relies so heavily on healthy waterways. Our 757 ecoDemonstrator aircraft tested more than 15 technologies aimed at improved environmental performance. And at our facilities, despite record-level airplane production, we continue to target zero growth by 2017 in greenhouse gas emissions, water intake, hazardous waste and solid waste sent to landfills.

Additionally in 2015, Boeing – and our employees and retirees – invested $190 million to help improve lives and build better communities worldwide. During our global month of service, our employees and their family members and friends joined more than 180 projects benefitting community partners across 16 countries.

Before I conclude, I want to acknowledge the contributions of Jim McNerney, former Boeing chairman, president and CEO. After 10 years under his leadership, we are well-positioned with the right products, the right strategies and the right people for continued growth and competitiveness. Through this decade of restoration and renewal, we rediscovered our self-confidence, rebuilt our reputation, and began producing consistently strong financial results enabling further investments in our people, products and services. We are forever grateful for Jim’s service.

After nearly a year as CEO and more than 30 years with Boeing, I am humbled and energized by the opportunity to lead this iconic company and this exceptional team. We have a big year ahead of us and a bold, challenging and inspiring vision for our future. Drawing on our founders’ passion for innovation, integrity and technical excellence, we’re eager and ready to solve the world’s toughest challenges for our customers and embrace the unique role Boeing plays in global advancement.

Every Boeing employee is a steward of our incredible aerospace legacy, and I can think of no better team to entrust with this great privilege and responsibility. Our eyes are fixed on the future and our commitment to build an even bigger, better Boeing and an even stronger team for winning in our second century.