“Relative to the first half of 2023, we continue to expect operating and financial performance to improve in the second half.”

In context

“e of the market. Commercial demand remains strong across our key programs and services. Cargo remains healthy. Global passenger traffic was up 39% in May and is at 96% of pre-pandemic levels, 105% domestic and 91% international. China pass-through traffic in May was at 87% of pre-pandemic levels with domestic traffic up more than 300% year-on-year and above pre-pandemic levels. Defense demand is also robust, and the FY ‘24 budget continues to progress in line with our expectations. Our portfolio and capabilities are well positioned to support the needs of the nation and of our allies. With demand strong, we still find ourselves in a supply-constrained environment. And our focus continues to be on execution, both within our factories and the supply chain as we steadily increase production. Relative to the first half of 2023, we continue to expect operating and financial performance to improve in the second half. On the third quarter specifically, we expect BCA margins to improve sequentially but remain negative, and we’re not anticipating much in terms of BDS profitability. The 2Q effective tax rate of 63% included cumulative adjustments related to the projected valuation allowance. These adjustments will continue to weigh on the tax rate for the remainder of the year. And given the strong results in 2Q cash flow, 3Q will be lower sequentially, still positive and likely in the hundreds of millions of dollars. All things considered, we feel good about where we’re at on the road to recovery. Right now, we’re squarely focused on meaningful operating performance improvement, including deliveries, revenue, margins and cash flow, all of which will improve as we progress through 2023. And while the chal”