Boeing to recognize charge for KC-46 tanker program in second quarter

Boeing will recognize a charge on the KC-46 aerial refueling tanker program when it announces second-quarter 2015 results on July 22. The after-tax charge of US$536m reflects higher estimated engineering and manufacturing costs to complete development, certification and initial production of the tanker aircraft, while holding to the program schedule for initial production deliveries in 2017. The KC-46 tanker is being designed, developed and tested under a fixed-price Engineering, Manufacturing and Development (EMD) contract. Increased company investment in the program primarily is being driven by required rework on the airplane’s integrated fuel system that was identified as Boeing prepared for and conducted test and verification of that system during the second quarter. The added investment will support the engineering redesign, manufacturing retrofit and qualification and certification of the fuel system changes, and the conclusion of ground and flight testing on the program.