Boeing Delivery Schedule

Year 707 717 727 737 747 757 767 777 DC-8
1958 8 
1959 77  21 
1960 91  91 
1961 80  42 
1962 68  22 
1963 34  6  19 
1964 38  95  20 
1965 61  111  31 
1966 83  135  32 
1967 118  155  4  41 
1968 111  160  105  102 
1969 59  114  114  4  85 
1970 19  55  37  92  33 
1971 10  33  29  69  13 
1972 4  41  22  30  4 
1973 11  92  23  30 
1974 21  91  55  22 
1975 7  91  51  21 
1976 9  61  41  27 
1977 8  67  25  20 
1978 13  118  40  32 
1979 6  136  77  67 
1980 3  131  92  73 
1981 2  94  108  53 
1982 8  26  95  26  2 20
1983 8  11  82  22  25 55
1984 8  8  67  16  18 29
1985 3  115  24  36 25
1986 4  141  35  35 27
1987 9  161  23  40 37
1988 165  24  48 53
1989 5  146  45  51 37
1990 4  174  70  77 60
1991 14  215  64  80 62
1992 5  218  61  99 63
1993 152  56  71 51
1994 1  121  40  69 41
1995 89  25  43 37 13 
1996 76  26  42 43 32 
1997 135  39  46 42 59 
1998 281  53  54 47 74 
1999 12  320  47  67 44 83 
2000 32  281  25  45 44 55 
2001 49  299  31  45 40 61 
2002 20  223  27  29 35 47 
2003 8  104  14  12 21 25 
1010 121 1831 4483 1333 1034 913 449 556
Total:
1982-
2001 993 857

707 717 727 737 747 757 767 777

 Total
Deliveri
DC-9 DC-10 MD-11 MD-80 MD-90 es
8
98
182
122
90
59
153
5  208
69  319
153  471
202  680
122  498
51  287
46  13  213
32  52  185
29  57  242
48  47  284
42  43  255
50  19  207
22  14  156
22  18  243
39  35  360
18  41  5  363
16  25  61  359
10  11  34  232
12  51  266
10  44  200
11  71  285
17  85  344
10  94  374
10  120  420
1  117  402
3  139  527
31  140  606
42  84  572
36  43  409
17  23  312
18  18  13  256
15  12  25  271
12  16  26  375
12  8  34  563
8  26  13  620
 4  5  491
2  527
381
184
976 446 200 1191 116 14659
 This spreadsheet supports STUDENT analysis of the case,
"The Boeing 7E7" (Case 16).

Please note that this is a working model. Assumptions can be

changed to vary the results.

Copyright © 2004 by the Trustees of the University of Virginia Darden School Foundation.
 Airframe Lifecycle
Annual Units Sold/Total Units Sold
10.00%

9.00%

8.00%

7.00%
Percent of Total Unit Sales

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Year Since Introduction

EXHIBIT 8 Forecast of Boeing 7E7 Free Cash Flows ($ in millions)

Assumptions
Initial price of 7E7 $136.95
Initial price of 7E7 Stretch $170.87
Cost of goods sold (% of sales) 80%
Working-capital requirement (WCR) as a % of sales 6.7%
General, selling, and administrative (GS&A) as a % of sales 8%
R&D expense (% of sales) 2.3% (exluding 2004-2007)
Capital expenditure (% of sales) 0.16% (excluding 2004-2007)
Development costs (2004-2009) $8,000.00
Total number of planes yrs 1-20 2500
Total number of planes yrs 20-30 Same as year 20
Inflation 2%
Marginal effective tax rate 35%

% Deliveries 1.19%
Project year 0 1 2 3 4
Delivery year 1
Revenues 2004 2005 2006 2007 2008
Cumulative planes delivered 30
Total number of planes delivered 30
7E7 planes 30
7E7 Stretch planes 0
7E7 Price $136.95
7E7 Stretch price
Total product revenues 4,108.64
Cost of goods sold 3,286.91
Gross Profit 821.73
Depreciation 7.50 29.44 102.23 117.06 123.78
GS&A expense 308.15
Operating Profit (before R&D) (7.50) (29.44) (102.23) (117.06) 389.80
R&D expense 300.00 900.00 3,000.00 900.00 694.50
Pre-tax profit (307.50) (929.44) (3,102.23) (1,017.06) (304.69)
Taxes (or tax credit) (107.63) (325.30) (1,085.78) (355.97) (106.64)
After-tax profit (199.88) (604.13) (2,016.45) (661.09) (198.05)
Capital expenditure 100.00 300.00 1,000.00 300.00 206.57
Depreciation add-back 7.50 29.44 102.23 117.06 123.78
Change in WCR 275.28
Annual free cash flow $(292.38) $(874.70) $(2,914.22) $(844.03) $(556.13)

IRR 15.66%

Depreciation calculations (not part of exhibit), double declining balance

Depreciation factor: 150%

Depreciation component.
Cap exp made in 2004 2005 2006 2007 2008
2004 $100.00 $7.50 $6.94 $6.42 $5.94 $5.49
 2005 $300.00 $22.50 $20.81 $19.25 $17.81
2006 $1,000.00 $75.00 $69.38 $64.17
2007 $300.00 $22.50 $20.81
2008 $206.57 $15.49
2009 $124.14
2010 $15.18
2011 $20.97
2012 $21.91
2013 $27.67
2014 $36.90
2015 $32.91
2016 $52.20
2017 $55.29
2018 $64.30
2019 $49.41
2020 $45.50
2021 $33.66
2022 $36.53
2023 $38.56
2024 $44.98
2025 $50.61
2026 $41.30
2027 $40.34
2028 $41.14
2029 $41.96
2030 $42.80
2031 $43.66
2032 $44.53
2033 $45.42
2034 $46.33
2035 $47.26
2036 $48.20
2037 $49.17

Depreciation $7.50 $29.44 $102.23 $117.06 $123.78

WCR $275.28
(exluding 2004-2007)
(excluding 2004-2007)

4.32% 2.54% 3.30% 3.35% 4.16% 5.46% 4.76% 7.41%

5 6 7 8 9 10 11 12
2 3 4 5 6 7 8 9
2009 2010 2011 2012 2013 2014 2015 2016
138 202 284 368 472 608 727 912
108 64 82 84 104 136 119 185
108 51 41 42 52 68 60 93
0 13 41 42 52 68 59 92
$139.69 $142.49 $145.34 $148.24 $151.21 $154.23 $157.32 $160.46
170.87 174.28 177.77 181.33 184.95 188.65 192.42
15,086.93 9,488.14 13,104.49 13,692.60 17,291.79 23,064.59 20,569.48 32,626.19
12,069.55 7,590.51 10,483.59 10,954.08 13,833.44 18,451.67 16,455.59 26,100.95
3,017.39 1,897.63 2,620.90 2,738.52 3,458.36 4,612.92 4,113.90 6,525.24
123.80 115.66 108.67 102.83 99.64 99.95 100.84 103.70
1,131.52 711.61 982.84 1,026.94 1,296.88 1,729.84 1,542.71 2,446.96
1,762.06 1,070.36 1,529.40 1,608.75 2,061.83 2,783.12 2,470.35 3,974.57
647.00 218.23 301.40 314.93 397.71 530.49 473.10 750.40
1,115.06 852.13 1,227.99 1,293.82 1,664.12 2,252.64 1,997.25 3,224.17
390.27 298.25 429.80 452.84 582.44 788.42 699.04 1,128.46
724.79 553.89 798.19 840.98 1,081.68 1,464.21 1,298.21 2,095.71
124.14 15.18 20.97 21.91 27.67 36.90 32.91 52.20
123.80 115.66 108.67 102.83 99.64 99.95 100.84 103.70
735.55 (375.12) 242.30 39.40 241.15 386.78 (167.17) 807.80
$(11.09) $1,029.48 $643.60 $882.50 $912.51 $1,140.48 $1,533.31 $1,339.41

2009 2010 2011 2012 2013 2014 2015 2016

$5.08 $4.70 $4.46 $4.46 $4.46 $4.46 $4.46 $4.46
 $16.47 $15.24 $14.09 $13.37 $13.37 $13.37 $13.37 $13.37
$59.36 $54.91 $50.79 $46.98 $44.57 $44.57 $44.57 $44.57
$19.25 $17.81 $16.47 $15.24 $14.09 $13.37 $13.37 $13.37
$14.33 $13.26 $12.26 $11.34 $10.49 $9.70 $9.21 $9.21
$9.31 $8.61 $7.97 $7.37 $6.82 $6.30 $5.83 $5.53
$1.14 $1.05 $0.97 $0.90 $0.83 $0.77 $0.71
$1.57 $1.45 $1.35 $1.24 $1.15 $1.06
$1.64 $1.52 $1.41 $1.30 $1.20
$2.08 $1.92 $1.78 $1.64
$2.77 $2.56 $2.37
$2.47 $2.28
$3.92

$123.80 $115.66 $108.67 $102.83 $99.64 $99.95 $100.84 $103.70

$1,010.82 $635.71 $878.00 $917.40 $1,158.55 $1,545.33 $1,378.16 $2,185.95

 7.68% 8.76% 6.59% 5.95% 4.32% 4.59% 4.76% 5.46%
13 14 15 16 17 18 19 20
10 11 12 13 14 15 16 17
2017 2018 2019 2020 2021 2022 2023 2024
1104 1323 1488 1637 1745 1860 1979 2115
192 219 165 149 108 115 119 136
96 110 83 75 54 58 60 68
96 109 82 74 54 57 59 68
$163.67 $166.95 $170.29 $173.69 $177.17 $180.71 $184.32 $188.01
196.27 200.20 204.20 208.29 212.45 216.70 221.03 225.46
34,554.82 40,185.75 30,878.29 28,440.04 21,039.33 22,833.05 24,100.43 28,115.61
27,643.86 32,148.60 24,702.63 22,752.03 16,831.46 18,266.44 19,280.34 22,492.49
6,910.96 8,037.15 6,175.66 5,688.01 4,207.87 4,566.61 4,820.09 5,623.12
106.87 110.54 112.89 114.85 115.88 117.16 118.63 116.20
2,591.61 3,013.93 2,315.87 2,133.00 1,577.95 1,712.48 1,807.53 2,108.67
4,212.48 4,912.68 3,746.89 3,440.15 2,514.04 2,736.97 2,893.92 3,398.25
794.76 924.27 710.20 654.12 483.90 525.16 554.31 646.66
3,417.72 3,988.40 3,036.69 2,786.03 2,030.13 2,211.81 2,339.61 2,751.60
1,196.20 1,395.94 1,062.84 975.11 710.55 774.13 818.86 963.06
2,221.52 2,592.46 1,973.85 1,810.92 1,319.59 1,437.68 1,520.75 1,788.54
55.29 64.30 49.41 45.50 33.66 36.53 38.56 44.98
106.87 110.54 112.89 114.85 115.88 117.16 118.63 116.20
129.22 377.27 (623.60) (163.36) (495.85) 120.18 84.91 269.02
$2,143.88 $2,261.44 $2,660.94 $2,043.63 $1,897.65 $1,398.13 $1,515.90 $1,590.73

2017 2018 2019 2020 2021 2022 2023 2024

$4.46 $4.46 $4.46 $4.46 $4.46 $4.46 $4.46
 $13.37 $13.37 $13.37 $13.37 $13.37 $13.37 $13.37 $13.37
$44.57 $44.57 $44.57 $44.57 $44.57 $44.57 $44.57 $44.57
$13.37 $13.37 $13.37 $13.37 $13.37 $13.37 $13.37 $13.37
$9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $9.21 $9.21
$5.53 $5.53 $5.53 $5.53 $5.53 $5.53 $5.53 $5.53
$0.68 $0.68 $0.68 $0.68 $0.68 $0.68 $0.68 $0.68
$0.99 $0.93 $0.93 $0.93 $0.93 $0.93 $0.93 $0.93
$1.11 $1.03 $0.98 $0.98 $0.98 $0.98 $0.98 $0.98
$1.52 $1.41 $1.30 $1.23 $1.23 $1.23 $1.23 $1.23
$2.19 $2.03 $1.87 $1.73 $1.64 $1.64 $1.64 $1.64
$2.11 $1.95 $1.81 $1.67 $1.55 $1.47 $1.47 $1.47
$3.62 $3.35 $3.10 $2.87 $2.65 $2.45 $2.33 $2.33
$4.15 $3.84 $3.55 $3.28 $3.04 $2.81 $2.60 $2.46
$4.82 $4.46 $4.13 $3.82 $3.53 $3.27 $3.02
$3.71 $3.43 $3.17 $2.93 $2.71 $2.51
$3.41 $3.16 $2.92 $2.70 $2.50
$2.52 $2.34 $2.16 $2.00
$2.74 $2.53 $2.34
$2.89 $2.68
$3.37

$106.87 $110.54 $112.89 $114.85 $115.88 $117.16 $118.63 $116.20

$2,315.17 $2,692.45 $2,068.85 $1,905.48 $1,409.63 $1,529.81 $1,614.73 $1,883.75

 6.00% 4.81% 4.59% 4.59% 4.59% 4.59% 4.59% 4.59%
21 22 23 24 25 26 27 28
18 19 20 21 22 23 24 25
2025 2026 2027 2028 2029 2030 2031 2032
2265 2385 2500 2615 2730 2845 2960 3075
150 120 115 115 115 115 115 115
75 60 58 58 58 58 58 58
75 60 57 57 57 57 57 57
$191.77 $195.61 $199.52 $203.51 $207.58 $211.73 $215.96 $220.28
229.96 234.56 239.26 244.04 248.92 253.90 258.98 264.16
31,630.06 25,810.13 25,209.53 25,713.72 26,228.00 26,752.56 27,287.61 27,833.36
25,304.05 20,648.10 20,167.63 20,570.98 20,982.40 21,402.05 21,830.09 22,266.69
6,326.01 5,162.03 5,041.91 5,142.74 5,245.60 5,350.51 5,457.52 5,566.67
105.31 62.54 50.92 43.54 39.86 41.10 42.13 43.19
2,372.25 1,935.76 1,890.72 1,928.53 1,967.10 2,006.44 2,046.57 2,087.50
3,848.45 3,163.73 3,100.27 3,170.68 3,238.64 3,302.97 3,368.82 3,435.98
727.49 593.63 579.82 591.42 603.24 615.31 627.62 640.17
3,120.96 2,570.09 2,520.45 2,579.26 2,635.39 2,687.66 2,741.21 2,795.81
1,092.33 899.53 882.16 902.74 922.39 940.68 959.42 978.53
2,028.62 1,670.56 1,638.29 1,676.52 1,713.00 1,746.98 1,781.78 1,817.28
50.61 41.30 40.34 41.14 41.96 42.80 43.66 44.53
105.31 62.54 50.92 43.54 39.86 41.10 42.13 43.19
235.47 (389.94) (40.24) 33.78 34.46 35.15 35.85 36.57
$1,847.86 $2,081.74 $1,689.12 $1,645.13 $1,676.45 $1,710.13 $1,744.41 $1,779.37

2025 2026 2027 2028 2029 2030 2031 2032

 $44.57
$13.37 $13.37
$9.21 $9.21 $9.21
$5.53 $5.53 $5.53 $5.53
$0.68 $0.68 $0.68 $0.68 $0.68
$0.93 $0.93 $0.93 $0.93 $0.93 $0.93
$0.98 $0.98 $0.98 $0.98 $0.98 $0.98 $0.98
$1.23 $1.23 $1.23 $1.23 $1.23 $1.23 $1.23 $1.23
$1.64 $1.64 $1.64 $1.64 $1.64 $1.64 $1.64 $1.64
$1.47 $1.47 $1.47 $1.47 $1.47 $1.47 $1.47 $1.47
$2.33 $2.33 $2.33 $2.33 $2.33 $2.33 $2.33 $2.33
$2.46 $2.46 $2.46 $2.46 $2.46 $2.46 $2.46 $2.46
$2.87 $2.87 $2.87 $2.87 $2.87 $2.87 $2.87 $2.87
$2.32 $2.20 $2.20 $2.20 $2.20 $2.20 $2.20 $2.20
$2.31 $2.14 $2.03 $2.03 $2.03 $2.03 $2.03 $2.03
$1.85 $1.71 $1.58 $1.50 $1.50 $1.50 $1.50 $1.50
$2.17 $2.01 $1.86 $1.72 $1.63 $1.63 $1.63 $1.63
$2.47 $2.29 $2.12 $1.96 $1.81 $1.72 $1.72 $1.72
$3.12 $2.89 $2.67 $2.47 $2.28 $2.11 $2.01 $2.01
$3.80 $3.51 $3.25 $3.00 $2.78 $2.57 $2.38 $2.26
$3.10 $2.86 $2.65 $2.45 $2.27 $2.10 $1.94
$3.03 $2.80 $2.59 $2.39 $2.21 $2.05
$3.09 $2.85 $2.64 $2.44 $2.26
$3.15 $2.91 $2.69 $2.49
$3.21 $2.97 $2.75
$3.27 $3.03
$3.34

$105.31 $62.54 $50.92 $43.54 $39.86 $41.10 $42.13 $43.19

$2,119.21 $1,729.28 $1,689.04 $1,722.82 $1,757.28 $1,792.42 $1,828.27 $1,864.84

 4.59% 4.59% 4.59% 4.59% 4.59%
29 30 31 32 33
26 27 28 29 30
2033 2034 2035 2036 2037
3190 3305 3420 3535 3650
115 115 115 115 115
58 58 58 58 58
57 57 57 57 57
$224.69 $229.18 $233.77 $238.44 $243.21
269.44 274.83 280.33 285.93 291.65
28,390.03 28,957.83 29,536.99 30,127.73 30,730.28
22,712.02 23,166.26 23,629.59 24,102.18 24,584.22
5,678.01 5,791.57 5,907.40 6,025.55 6,146.06
44.07 44.59 45.33 45.25 45.08
2,129.25 2,171.84 2,215.27 2,259.58 2,304.77
3,504.68 3,575.14 3,646.80 3,720.72 3,796.21
652.97 666.03 679.35 692.94 706.80
2,851.71 2,909.11 2,967.45 3,027.78 3,089.41
998.10 1,018.19 1,038.61 1,059.72 1,081.29
1,853.61 1,890.92 1,928.84 1,968.06 2,008.12
45.42 46.33 47.26 48.20 49.17
44.07 44.59 45.33 45.25 45.08
37.30 38.04 38.80 39.58 40.37
$1,814.96 $1,851.14 $1,888.10 $1,925.52 $1,963.65

2033 2034 2035 2036 2037

 $1.64
$1.47 $1.47
$2.33 $2.33 $2.33
$2.46 $2.46 $2.46 $2.46
$2.87 $2.87 $2.87 $2.87 $2.87
$2.20 $2.20 $2.20 $2.20 $2.20 $2.20
$2.03 $2.03 $2.03 $2.03 $2.03 $2.03 $2.03
$1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50
$1.63 $1.63 $1.63 $1.63 $1.63 $1.63 $1.63 $1.63 $1.63
$1.72 $1.72 $1.72 $1.72 $1.72 $1.72 $1.72 $1.72 $1.72
$2.01 $2.01 $2.01 $2.01 $2.01 $2.01 $2.01 $2.01 $2.01
$2.26 $2.26 $2.26 $2.26 $2.26 $2.26 $2.26 $2.26 $2.26
$1.84 $1.84 $1.84 $1.84 $1.84 $1.84 $1.84 $1.84 $1.84
$1.89 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80
$2.09 $1.93 $1.83 $1.83 $1.83 $1.83 $1.83 $1.83 $1.83
$2.30 $2.13 $1.97 $1.87 $1.87 $1.87 $1.87 $1.87 $1.87
$2.54 $2.35 $2.17 $2.01 $1.91 $1.91 $1.91 $1.91 $1.91
$2.80 $2.59 $2.40 $2.22 $2.05 $1.95 $1.95 $1.95 $1.95
$3.09 $2.86 $2.64 $2.45 $2.26 $2.09 $1.98 $1.98 $1.98
$3.41 $3.15 $2.91 $2.70 $2.49 $2.31 $2.13 $2.02 $2.02
$3.47 $3.21 $2.97 $2.75 $2.54 $2.35 $2.18 $2.07
$3.54 $3.28 $3.03 $2.81 $2.59 $2.40 $2.22
$3.62 $3.34 $3.09 $2.86 $2.65 $2.45
$3.69 $3.41 $3.16 $2.92 $2.70

$44.07 $44.59 $45.33 $45.25 $45.08

$1,902.13 $1,940.17 $1,978.98 $2,018.56 $2,058.93

$1.72
$2.01 $2.01
$2.26 $2.26 $2.26
$1.84 $1.84 $1.84 $1.84
$1.80 $1.80 $1.80 $1.80 $1.80
$1.83 $1.83 $1.83 $1.83 $1.83 $1.83
$1.87 $1.87 $1.87 $1.87 $1.87 $1.87 $1.87
$1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91
$1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95
$1.98 $1.98 $1.98 $1.98 $1.98 $1.98 $1.98 $1.98 $1.98
$2.02 $2.02 $2.02 $2.02 $2.02 $2.02 $2.02 $2.02 $2.02
$2.07 $2.07 $2.07 $2.07 $2.07 $2.07 $2.07 $2.07 $2.07
$2.11 $2.11 $2.11 $2.11 $2.11 $2.11 $2.11 $2.11 $2.11
$2.26 $2.15 $2.15 $2.15 $2.15 $2.15 $2.15 $2.15 $2.15
$2.50 $2.31 $2.19 $2.19 $2.19 $2.19 $2.19 $2.19 $2.19
$1.98
$2.02 $2.02
$2.07 $2.07 $2.07
$2.11 $2.11 $2.11 $2.11
$2.15 $2.15 $2.15 $2.15 $2.15
$2.19 $2.19 $2.19 $2.19 $2.19 $2.19