Bulletin: Ratings On Boeing Co. Not Affected By Plans To Acquire KLX Inc.

WASHINGTON D.C. (S&P Global Ratings) May 1, 2018--S&P Global Ratings said today that its ratings on Boeing Co. (A/Stable/A-1) are not affected by the company's plans to acquire KLX Inc. ('B+/Positive') for $4.25 billion ($3.25 billion in cash plus the assumption of $1 billion of net debt). Although an acquisition of this size was not in our forecast and the company still plans to return all its substantial free cash flow to shareholders, Boeing's earnings and cash flow in 2018 will likely be much higher than we had previously expected due to tax reform and higher deliveries. Therefore, pro forma funds from operations-to-debt (assuming the acquisition took place at the beginning of 2018) will likely be in the range of

...WASHINGTON D.C. (S&P Global Ratings) May 1, 2018--S&P Global Ratings said today that its ratings on Boeing Co. (A/Stable/A-1) are not affected by the company's plans to acquire KLX Inc. ('B+/Positive') for $4.25 billion ($3.25 billion in cash plus the assumption of $1 billion of net debt). Although an acquisition of this size was not in our forecast and the company still plans to return all its substantial free cash flow to shareholders, Boeing's earnings and cash flow in 2018 will likely be much higher than we had previously expected due to tax reform and higher deliveries. Therefore, pro forma funds from operations-to-debt (assuming the acquisition took place at the beginning of 2018) will likely be in the range of our previous expectations of 50%-55%, and well above our downgrade trigger of 40%. Boeing had about $10 billion of cash and about $5 billion of revolver availability as of March 31, 2018, and plans to finance the acquisition with cash and some debt, so liquidity should remain...

Bulletin