The Boeing Company at RBC Dain Rauscher Premier Client Investor Conference - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

BOB, RBC DAIN RAUSCHER: Well, again, I want to extend my thanks and appreciation to all of you for being here today. We had another fantastic line up of companies and it is not over yet. We got another great presentation here at lunch. One thing I did want to remind people of is that all of these presentations are going to be webcast and those webcasts will be archived on our -- the RBC Dain Rauscher Website. So, if you are not able to attend a session that you would like to hear, an archive of that presentation will be available on our Website for I think 30 or 45 days.

Well, again, we were really honored to have Boeing presenting at our conference. As you know, it is a stock that I followed closely and have enjoyed following over the year, both from the buy side and the sell side and we have back with us again this year Kent Fisher, who is Vice President of Future Customer and Markets, which is part of Boeing's commercial marketing and business strategy group. Kent has responsibility for Boeing's understanding of the future of commercial aviation and that includes where demand for commercial aircraft will be, what business models, trends and political factors will be most important and ultimately where and how passengers and freight of the future will want to move. Kent team analyses of the basis for the formation of Boeing's commercial strategy, product decisions, marketing communications, and sales targets.

Prior to Kent's current position, he was Director of programs for Boeing's air traffic management units. He also previously served as Director of commercial airplane group sale, where he managed several high visibility accounts including American Airlines, Atlas Air, WestJet, and Midwest. From 1996 to 1998, he was responsible for assisting the commercial airplanes customers, with their financing needs, as Director of Customer Financing and before joining Boeing, he held positions at Price Waterhouse in its litigation and bankruptcy consulting group. So again, without further ado please join me in welcoming Kent Fisher from the Boeing Corporation.

KENT FISHER, VP, MARKET ANALYSIS, BOEING COMMERCIAL AIRPLANES: Thank you Bob. I think this is the third year that I have been here at lunch literally and figuratively. And the good news is this last year, we really had a lot happening and so it is a pleasure to be here. I have some good news and some bad news. The good news is I only have a few charts. So, I am not going to try and kill you with PowerPoint this afternoon. And then we can go straight into Q&A, which is more fun for me and I hope more fun fore you. The bad news is that I have to read this thing that the lawyers gave us, which you probably heard from a few other companies today. So before we start, I need to remind you that any projections and goals we may include in our discussion this morning or this afternoon are likely to involve risks and uncertainties. The assumptions behind our projections and the factors that could cause actual results to vary are detailed in our quarterly news release and in our various filings with the Securities and Exchange Commission. I urge you to read them thoroughly and now we have that out of the way.

First of particularly in this community, I think it's important to recognize that we 10 years ago set off on a journey of transforming Boeing from a primarily a commercial airplane company into a integrated aerospace company. And that vision is being realized as you can see that the revenues increased substantially; integrated defense systems is now more than 50 percent of our revenues, and going forward, we expect that it fluctuate as a commercial airplane cycle moves along. The interesting thing about this in addition to delivering really good operating results, this enterprise is going to generate a little bit more in $3.6 billion in cash flow this year, and that's after a very significant $3.5 billion contribution to our pension funds. So the structure of the idea of an integrated aerospace company has been realized and it creates a lot of synergies. As Bob explained, I'm focused on commercial airplanes. I can answer some questions as long as they are simple about ideas in the Q&A period. I want to spend the rest of the time talking about the commercial airplane industry because its certainly in a period of great change, and I want to talk about how we are positioned to take advantage of that change.

This is how we think about our long-term market and what this graph is showing you is the growth in passenger traffic, and you can see down the right hand corner we expect TDP growth long term 20 years to average about 3 percent, and we expect passenger traffic to increase at about 5 percent per year, and cargo growth increasing about 6 percent per year. Now stating the fact that I didn't draw cycles on the right hand side of the chart, we certainly experienced them in last 2 years, and right now we continue to face questions about oil prices and bankruptcy's. And so going forward, we anticipate this to be a cyclical business, and we're structuring our business to recognize that fact and maintain profitability through the cycle. And I'm pleased to report that our operation folks have changed the company in such a way that during the downturn, which was the severest in history, we remained profitable, and that's positioned us very well from a cost perspective going into the next upturn. But the point is looking forward, we anticipate future cycles and we plan to be ready for them. Fundamental to our beliefs about the long-term market is liberalization.

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