Scott FittererThank you, and good morning. Welcome to Boeing's third quarter earnings call. I'm Scott Fitterer, and with me today are Jim McNerney, Boeing's Chairman, President and Chief Executive Officer; and James Bell, Boeing's Corporate President and Chief Financial Officer. After comments by Jim and James, we'll take your questions. In fairness to others on the call, we ask that you please limit yourself to one question. As always, we have provided detailed financial information in our press release issued earlier today. And as a reminder, you can follow today's broadcast and slide presentation through our website at boeing.com. Before we begin, I need to remind you that any projections and goals we may include in our discussions this morning are likely to involve risks, which are detailed in our news release, in our various SEC filings and in the forward-looking disclaimers at the end of this web presentation. Now I'll turn the conference over to Jim McNerney. W. James McNerney Thanks, Scott, and good morning, everybody. Let me begin by addressing the current business environment, followed by some thoughts on our performance during the quarter. After that, James will walk through our results, and then we'd glad to take your questions. Starting with the business environment on Slide 2. Although the global economy has slowed in recent months and uncertainties such as the European sovereign debt crisis remain, we continue to see worldwide expansion in air traffic. Passenger traffic in particular remains resilient, led by trends in emerging markets. Cargo traffic, on the other hand, has declined in recent months, and that's one area we will watch closely in the months ahead. Despite this mix of signals, strong consumer demand continues for our products and services. For example, through the third quarter, we booked 310 orders for the single-aisle 737NG, while exceptionally strong twin-aisle demand was led by the 777 with 125 orders across packs [ph] and Freighter models. We expect order traffic for our current production programs to remain strong through year end with a book-to-bill ratio finishing above 1.
Customer interest and demand for the 737 MAX also has been high since we formally launched this new engine variant in August with nearly 500 order commitments. As we work to finalize those agreements, we are having extensive discussions with other customers about the advantages the MAX will bring to today's single-aisle leader in efficiency and performance.Our Commercial Airplanes backlog has climbed to $273 billion, including $20 billion in new orders during the quarter. With over 3,500 airplanes on order, this backlog is diverse by geographic region and product type, and more than 2/3 of it is committed from airlines based outside of the U.S. and Europe. The strength of this backlog underpins the production rate increases we've planned and announced across our product family. We are monitoring the European debt situation for potential impacts on the market for financing new airplanes. But we believe any affect will be manageable and other sources will provide sufficient funding capacity. Sources of financing for Boeing airplanes are broad and diverse as our planes represent an attractive, well-performing asset investment. In addition, current financing costs remain at record low levels for our customers. Turning to Defense, Space & Security. Overall, global demand for our products and services remains solid, with growth in international markets, like the Middle East and South Asia, working to offset flat to potentially lower defense outlays here at home. Our baseline assumption for the U.S. market is that we have entered a period of significant fiscal constraints. The extent of these constraints will be influenced by the success or failure of the congressional super committee to achieve its $1.2 trillion deficit reduction target. With $450 billion of defense cuts already envisioned over the next 10 years, the industry could face further exposure if the full deficit reduction target is not met and additional cuts automatically kick in. We are hopeful that the committee members recognize the risks to national security and the health of our defense industrial base as they work through to reach a successful agreement.
Given this environment, we believe that our portfolio of proven, reliable and affordable products and services provides even more relevant and economically attractive choices for our customers. Our strategy remains to extend and grow our existing programs, capture a larger share of international and services opportunities and invest in growth areas such as unmanned systems, cybersecurity and intelligence. In addition to these objectives, our teams are aggressively pursuing all opportunities to improve productivity and reduce overhead and infrastructure costs in support of the Defense Department's affordability initiatives. These efforts are generating meaningful cost savings for our customers while ensuring the solid operating performance and cash generation we need to fund our investments and growth.Read the rest of this transcript for free on seekingalpha.com