How far can Boeing’s remaining cash cow, the 787, pay the company bills, Part 2?

By Bjorn Fehrm
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January 16, 2020, © Leeham News: Last week we started the analysis of how much margin the Boeing 787 program is generating to cover the costs for The Boeing Company’s Commercial Airplanes division when the other cash cow, the 737 MAX program, brings no revenue or margin.

The 787 program is now in a state where it generates significant revenue and margin. The other programs, the 767 and 747 freighters, the 737NG  (P-8A Poseidon) and 777 Classic make up less than 45% of deliveries with the 787 covering 55% of deliveries, and these programs are in phases where they deliver less margin.

  • The 787 program accounting employs different accounting block production costs for the different 787 variants.
  • The 787-10 carries the highest accounting block cost and is accordingly the most important variant for the payback of the deferred costs.
  • The 787-8, despite leading the program, generated the largest deferred costs (due to learning curve effects), amortizes the least of the variants.

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