Boeing is aiming to borrow $10 billion or more to help it get through the 737 Max crisis, CNBC reported today, citing people familiar with the matter.You might say that they need more financial runway to get this bird off the ground.
Boeing's debt load has already increased substantially over the past year. Boeing had $20.3 billion in long-term debt as of September 30, 2019, nearly double the $10.7 billion of long-term debt it had on December 31, 2018, according to a Boeing SEC filing. By contrast, Boeing added less than $1 billion in long-term debt in all of 2017.So the balance sheet is turning a bright shade of red.
The 737 MAX looks to be around a $10B drain on the company to date. No wonder they're borrowing money. Man, relocating their company HQ to Chicago sure was a genius move, wasn't it?Boeing in October reported Q3 2019 revenue of $20 billion, down from $25.1 billion year-over-year. Revenue for the first nine months of 2019 was $58.6 billion, down 19 percent year-over-year. Net earnings in Q3 2019 were $1.2 billion, down from $2.4 billion in Q3 2018.In July 2019, Boeing announced an after-tax charge of $4.9 billion to cover "potential concessions and other considerations to customers for disruptions related to the 737 MAX grounding and associated delivery delays."