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2020 the Boeing Company Annual Report

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2020 the Boeing Company Annual Report THE BOEING COMPANY 2020 ANNUAL REPORT GLOBAL AEROSPACE RESILIENCE AND RESOLVE RESILIENCE THROUGHOUT OUR HISTORY Throughout its more than 100-year history, Boeing and its employees have met moments of challenge with new ideas and innovations. Through global pandemics and world wars, economic downturns and industry disruptions, we have remained steadfast in our purpose. Photos, top to bottom: Investing for the future. During the 1970s recession, Battling a pandemic. Boeing Boeing modified its operations employees follow guidance to to build other profitable work at a safe distance from products, including wind each other to avoid infection turbines, which led to the during the 1918 influenza creation of one of the world’s epidemic. A company memo first wind farms, located near advised against sneezing, Goldendale, Washington, in coughing or breathing in close the early 1980s. proximity to fellow employees. Contributing to a global mission. Employees work on the Model 299 prototype for the legendary B-17 Flying Fortress. To meet the U.S. Army’s request for a large, multiengine bomber, the prototype — financed entirely by Boeing — was developed from design board to flight test in less than 12 months. COVER PHOTO THE BOEING COMPANY Boeing employees in As a leading global aerospace company, St. Louis work on the first Boeing develops, manufactures and services F-15EX advanced fighter commercial airplanes, defense products and jet for the U.S. Air Force. space systems for customers in more than 150 countries. As a top U.S. exporter, the company leverages the talents of a global supplier base to advance economic opportunity, sustainability and community impact. Boeing’s diverse team is committed to innovating for the future and living the company’s core values of safety, quality and integrity. Learn more at boeing.com. RESOLVE TO MEET TODAY’S CHALLENGES— AND TOMORROW’S In 2020, the global aerospace community rallied together in response to the COVID-19 pandemic. We marshaled collective manufacturing resources and activated transport capacity to help support vital public health and safety measures while maintaining our focus on innovations to advance a safe, sustainable future. Photos, top to bottom: Battling a pandemic. the company’s manufacturing Boeing transported more than capabilities to address the 4.5 million units of personal shortage of PPE among health protective equipment (PPE) care professionals. to front-line health care Investing for the future. professionals and communities Boeing’s ecoDemonstrator in need worldwide. Pictured: program accelerates Atlas Air operates a Dreamlifter innovation by taking promising PPE shipment. technologies out of the lab and Contributing to a global testing them in the air, including mission. Boeing Additive an air traffic management Manufacturing teams used the solution and special fins on company’s 3D-printing expertise wings that change shape with and capacity to print 40,000 temperature to improve airflow face shields, quickly adapting and environmental efficiency. CONTENTS 737 Statement 2 Form 10-K 17 Safety Is an Enduring, Caution Concerning Fundamental Value 3 Forward-Looking Statements 152 Engineering Excellence Drives Non-GAAP Measures 153 First-Time Quality 4 Selected Programs, Products Integrity: It’s the Culture and and Services 154 Character of Our Company 5 Shareholder Information 164 Innovating Alongside Our Customers 6 Board of Directors 165 Sustainability Across the Enterprise 7 Company Officers 166 Accelerating Progress on Equity, Diversity and Inclusion 8 A Letter From Boeing President and CEO David L. Calhoun 9 Executive Council 15 Company Highlights 16 1 Boeing will never forget the 346 victims of the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents. Their memories underpin our commitments to our core values of safety, quality and integrity. In November 2020, the U.S. Federal Aviation Administration (FAA) lifted the order grounding the 737-8 and 737-9. The FAA validated that once new software was loaded and other defined steps were completed, the airplanes would be safe and ready to fly. The announcement followed a comprehensive, robust and transparent certification process over 20 months. Our Boeing teams continue to work closely with global regulators and customers, and our employees are deeply committed to the safe operation of the worldwide 737 fleet. As we focus on supporting our customers in safely returning their fleets to service, we are pleased with the confidence our customers have placed in us and the airplane. Based on key lessons learned, we implemented a series of meaningful changes to strengthen our safety practices and culture and bring lasting improvements to aviation safety. We acknowledged where we fell short of our values and expectations, and we reaffirmed the critical obligation to be transparent with our regulators and stakeholders. Our committed and talented engineering workforce came together to form a single organization focused on continuous engineering skill development and knowledge sharing, common processes and digital systems, and rapid deployment of technical expertise from across the enterprise to address any challenges that arise. We created a dedicated Product & Services Safety organization, began implementing an enterprise Safety Management System and deployed global training to every single employee of the company to strengthen our positive safety culture and recommit to our values. We believe every airplane we build and every action we take is a chance to earn the trust of those who depend on us. 2 SAFETY IS AN ENDURING, Health and safety are front and FUNDAMENTAL VALUE center in Boeing’s pandemic operations. In response to the COVID-19 pandemic, Boeing employees took critical steps to help keep themselves, their colleagues, their families and our communities safe. A majority of our employees began working remotely, while others quickly incorporated new COVID-19 safety practices into their work, which made it possible to safely reopen paused production lines. Boeing’s Safety Management System strengthens our safety- first focus. Boeing is implementing an enterprise Safety Management System to support our commitment to the highest levels of safety and quality in our products and services. With oversight by the U.S. Federal Aviation Administration, we are embedding this best-practice framework, embracing its principles and enhancing safety processes to continue to improve performance. “Our efforts to model and champion continuous improvement in safety, mission success and compliance of our products and services are vital for Boeing and the aerospace industry,” said Beth Pasztor, vice president and general manager of Product & Services Safety. “Safety is—and will continue to be —at the center of everything we do.” 3 ENGINEERING EXCELLENCE The U.S. Air Force designated DRIVES FIRST-TIME QUALITY the T-7A Red Hawk advanced trainer as the first in its digital “eSeries” of aircraft. Embracing model-based engineering and 3D design tools, the T-7A Red Hawk achieved a 75% increase in first-time engineering quality and an 80% reduction in assembly hours. “It’s exciting and energizing to be surrounded by colleagues who take seriously the challenge and profound responsibility that is producing high-integrity and safety-critical aerospace products.” Jinnah Hosein, vice president, Software Engineering 4 INTEGRITY: IT’S THE CULTURE AND Doing our jobs with integrity is CHARACTER OF OUR COMPANY at the heart of our values and our Boeing Code of Conduct. This includes being transparent with, and respectful of, our regulators, customers and one another. When we fall short, the consequences are real. Recently, we have seen the serious consequences our whole company can face if any one of us acts in a way that conflicts with these values. We all must demonstrate integrity. We’ve recommitted to our values and emphasized our individual responsibility to speak up and be accountable. “We will be remembered not only for what we did in a challenging environment to position Boeing for a brighter future but also for how we did it. In this pivotal moment in our history, we must act in a way that leaves no doubt about our integrity or our collective commitment to our values that will see us through this challenging environment as we continue to strengthen our company for the future.” David Calhoun, Boeing president and CEO 5 INNOVATING ALONGSIDE The National Aeronautic OUR CUSTOMERS Association recognized the U.S. Department of the Air Force and Boeing with the prestigious Robert J. Collier Trophy, which honors the greatest American achievements in aeronautics and astronautics. “The X-37B team win of the Robert J. Collier Trophy exemplifies the kind of lean, agile and innovative technological development our nation needs to secure its interests,” said U.S. Space Force Chief of Space Operations Gen. John “Jay” Raymond. Delivering a 737-800BCF (Boeing Converted Freighter) in Shanghai in the midst of the COVID-19 pandemic required resourcefulness and out-of-the-box ideas. The freighter needed to be weighed, but travel was restricted. Thanks to technology called the Interoperable Remote Imaging System (IRIS), the team weighed the plane virtually from two continents away, crossing over 15 time zones. The IRIS also allowed engineers to virtually troubleshoot airplane systems issues and complete delivery and certification on schedule without additional cost to the customer. 6 SUSTAINABILITY ACROSS THE ENTERPRISE In 2020, Boeing appointed a Chief Sustainability
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