Acquisitions and Joint Ventures Acquisitions and Joint Ventures

12 Months Ended

Dec. 31, 2019

Acquisitions and Joint Ventures Disclosure [Abstract]

Acquisitions and Joint Ventures

Acquisitions and Joint Ventures

Strategic Partnership with Embraer

During the first quarter of 2019, we entered into definitive transaction documents with respect to a strategic partnership with Embraer S.A. (Embraer). The partnership contemplates that the parties enter into a joint venture comprising the commercial aircraft and services operations of Embraer, in which Boeing will acquire an 80 percent ownership stake for $4,200, as well as a joint venture to promote and develop new markets for the multi-mission, medium airlift C-390 Millennium, in which Boeing will hold a 49 percent ownership stake.

Embraer shareholders approved the transaction, which remains subject to regulatory approvals and other customary closing conditions. We are actively engaged with the European Commission and have obtained unconditional clearance to close in all other required jurisdictions, including the United States, China, and Japan. In Brazil, the Administrative Council for Economic Defense (CADE)’s General-Superintendence (SG) has provided unconditional approval; the decision will become final in mid-February unless a review is requested by CADE Commissioners. We continue to be engaged with the European Commission as it progresses its Phase II investigation of the transaction. Pending timely resolution of the remaining regulatory approvals, the transaction is expected to close in the first half of 2020. If the transaction is not completed due to failure to obtain antitrust approvals, we would be required to pay a termination fee of $100.

KLX Inc.

On October 9, 2018, we acquired all the outstanding shares of KLX Inc. (KLX). KLX is a global provider of aviation parts and services in the aerospace industry. Its capabilities include distribution and supply chain services. The KLX acquisition is intended to accelerate growth in our services business by allowing Boeing to offer commercial, defense, business and general aviation customers a broader range of offerings. The results of KLX’s operations have been included in our Global Services segment from the acquisition date. KLX’s revenues and earnings from operations from October 9, 2018 through December 31, 2018 were $356 and $50.

The final allocation of the purchase price was as follows:

Cash and cash equivalents		$225
Accounts receivable	260
Inventories	1,298
Other current assets	43
Property, plant & equipment	36
Goodwill	2,056
Intangible assets	963
Other assets	78
Current liabilities	(350		)
Other long-term liabilities	(113		)
Long-term debt	(1,210		)
Total net assets acquired		$3,286

The goodwill has been allocated to the Global Services and Commercial Airplanes segments based on revenue synergies expected to be realized from the integration of KLX’s products and services and expected cost synergies primarily resulting from the consolidation of procurement spending and functional support. Approximately $533 of the acquired goodwill and intangible assets is deductible for tax purposes. The acquired intangible assets primarily relate to customer and supplier relationships and have a weighted-average useful life of 17.5 years.