What changed in this filing

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Item 1. Financial Statements

2021-10-27 compared with 2021-07-28 · 201 added, 178 removed, 880 unchanged (30% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share data) Six months ended June 30 Three months ended June 30

(Dollars in millions, except per share data) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

14 unchanged sentences

Interest and debt expense ( 2,021 ) ( 1,458 ) ( 669 ) ( 643 )

(Loss)/earnings before income taxes ( 23 ) ( 4,926 ) 549 ( 3,423 )

Loss before income taxes ( 333 ) ( 5,851 ) ( 310 ) ( 925 )

Income tax benefit 207 2,349 178 459

Net earnings/(loss) 6 ( 3,036 ) 567 ( 2,395 )

Net loss ( 126 ) ( 3,502 ) ( 132 ) ( 466 )

net loss attributable to noncontrolling interest ( 67 ) ( 49 ) ( 23 ) ( 17 )

Net earnings/(loss) attributable to Boeing Shareholders $ 50 ($ 3,004 ) $ 587 ($ 2,376 )

Basic earnings/(loss) per share $ 0.09 ($ 5.31 ) $ 1.00 ($ 4.20 )

Diluted earnings/(loss) per share $ 0.09 ($ 5.31 ) $ 1.00 ($ 4.20 )

Net loss attributable to Boeing Shareholders ($ 59 ) ($ 3,453 ) ($ 109 ) ($ 449 )

Basic loss per share ($ 0.10 ) ($ 6.10 ) ($ 0.19 ) ($ 0.79 )

Diluted loss per share ($ 0.10 ) ($ 6.10 ) ($ 0.19 ) ($ 0.79 )

Weighted average diluted shares (millions) 587.3 566.3 589.0 566.6

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Condensed Consolidated Statements of Comprehensive Income

(Dollars in millions) Six months ended June 30 Three months ended June 30

(Dollars in millions) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

Net earnings/(loss) $ 6 ($ 3,036 ) $ 567 ($ 2,395 )

Other comprehensive income/(loss), net of tax:

Net loss ($ 126 ) ($ 3,502 ) ($ 132 ) ($ 466 )

Other comprehensive income, net of tax:

Currency translation adjustments ( 63 ) 15 ( 41 ) 48

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64 ( 107 ) ( 1 ) 79

Reclassification adjustment for (gains)/losses included in net earnings/(loss), net of tax of $ 0 , ($ 4 ), $ 0 and ($ 3 )

Reclassification adjustment for (gains)/losses included in net loss, net of tax of $ 2 , ($ 6 ), $ 2 and ($ 2 )

( 6 ) 20 ( 4 ) 8

Total unrealized gain/(loss) on derivative instruments, net of tax 58 ( 87 ) ( 5 ) 87

Defined benefit pension plans and other postretirement benefits:

Prior service credit arising during the period, net of tax of $ 0 , ($ 4 ), $ 0 and ($ 4 )

Amortization of prior service credits included in net periodic pension cost, net of tax of $ 18 , $ 22 , $ 6 and $ 10

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690 562 227 172

Settlements and curtailments included in net earnings/(loss), net of tax of ($ 1 ), ($ 1 ), ($ 1 ) and ($ 1 )

Settlements included in net loss, net of tax of ($ 11 ), ($ 1 ), ($ 10 ) and $ 0

Pension and postretirement cost related to our equity method investments, net of tax of ($ 1 ), $ 0 , $ 0 and $ 0

7 unchanged sentences

Condensed Consolidated Statements of Financial Position

(Dollars in millions, except per share data) June 30

(Dollars in millions, except per share data) September 30

2021 December 31

43 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Six months ended June 30

(Dollars in millions) Nine months ended September 30

Cash flows – operating activities:

Net earnings/(loss) $ 6 ($ 3,036 )

Adjustments to reconcile net earnings/(loss) to net cash used by operating activities:

Net loss ($ 126 ) ($ 3,502 )

Adjustments to reconcile net loss to net cash used by operating activities:

Non-cash items –

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Property, plant and equipment reductions 385 275

Acquisitions, net of cash acquired ( 6 )

Contributions to investments ( 27,902 ) ( 25,846 )

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Condensed Consolidated Statements of Equity

For the six months ended June 30, 2021 and 2020

For the nine months ended September 30, 2021 and 2020

Boeing shareholders

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( 201 ) 42 ( 159 )

Balance at June 30, 2020 $ 5,061 $ 6,648 ($ 54,829 ) $ 47,478 ($ 16,025 ) $ 285 ($ 11,382 )

Balance at September 30, 2020 $ 5,061 $ 6,687 ($ 54,819 ) $ 47,029 ($ 15,779 ) $ 268 ($ 11,553 )

Balance at January 1, 2021 $ 5,061 $ 7,787 ($ 52,641 ) $ 38,610 ($ 17,133 ) $ 241 ($ 18,075 )

Net earnings 50 ( 44 ) 6

Net loss ( 59 ) ( 67 ) ( 126 )

Other comprehensive income, net of tax of ($ 298 )

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Treasury shares issued for 401(k) contribution 441 510 951

Balance at June 30, 2021 $ 5,061 $ 8,481 ($ 52,223 ) $ 38,660 ($ 16,661 ) $ 197 ($ 16,485 )

Balance at September 30, 2021 $ 5,061 $ 8,796 ($ 52,030 ) $ 38,551 ($ 14,818 ) $ 174 ($ 14,266 )

See Notes to the Condensed Consolidated Financial Statements.

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Condensed Consolidated Statements of Equity

For the three months ended June 30, 2021 and 2020

For the three months ended September 30, 2021 and 2020

Boeing shareholders

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Interests Total

Balance at April 1, 2020 $ 5,061 $ 6,595 ($ 54,842 ) $ 49,854 ($ 16,333 ) $ 305 ($ 9,360 )

Balance at July 1, 2020 $ 5,061 $ 6,648 ($ 54,829 ) $ 47,478 ($ 16,025 ) $ 285 ($ 11,382 )

Net loss ( 449 ) ( 17 ) ( 466 )

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( 9 ) 4 ( 5 )

Changes in noncontrolling interests ( 1 ) ( 1 )

Balance at June 30, 2020 $ 5,061 $ 6,648 ($ 54,829 ) $ 47,478 ($ 16,025 ) $ 285 ($ 11,382 )

Balance at April 1, 2021 $ 5,061 $ 8,155 ($ 52,395 ) $ 38,073 ($ 16,952 ) $ 217 ($ 17,841 )

Net earnings 587 ( 20 ) 567

Balance at September 30, 2020 $ 5,061 $ 6,687 ($ 54,819 ) $ 47,029 ($ 15,779 ) $ 268 ($ 11,553 )

Balance at July 1, 2021 $ 5,061 $ 8,481 ($ 52,223 ) $ 38,660 ($ 16,661 ) $ 197 ($ 16,485 )

Net loss ( 109 ) ( 23 ) ( 132 )

Other comprehensive income, net of tax of ($ 167 )

3 unchanged sentences

Treasury shares issued for 401(k) contribution 145 178 323

Balance at June 30, 2021 $ 5,061 $ 8,481 ($ 52,223 ) $ 38,660 ($ 16,661 ) $ 197 ($ 16,485 )

Balance at September 30, 2021 $ 5,061 $ 8,796 ($ 52,030 ) $ 38,551 ($ 14,818 ) $ 174 ($ 14,266 )

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

Summary of Business Segment Data

(Dollars in millions) Six months ended June 30 Three months ended June 30

(Dollars in millions) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

16 unchanged sentences

Interest and debt expense ( 2,021 ) ( 1,458 ) ( 669 ) ( 643 )

(Loss)/earnings before income taxes ( 23 ) ( 4,926 ) 549 ( 3,423 )

Loss before income taxes ( 333 ) ( 5,851 ) ( 310 ) ( 925 )

Income tax benefit 207 2,349 178 459

Net earnings/(loss) 6 ( 3,036 ) 567 ( 2,395 )

Net loss ( 126 ) ( 3,502 ) ( 132 ) ( 466 )

Net loss attributable to noncontrolling interest ( 67 ) ( 49 ) ( 23 ) ( 17 )

Net earnings/(loss) attributable to Boeing Shareholders $ 50 ($ 3,004 ) $ 587 ($ 2,376 )

Net loss attributable to Boeing Shareholders ($ 59 ) ($ 3,453 ) ($ 109 ) ($ 449 )

This information is an integral part of the Notes to the Condensed Consolidated Financial Statements.

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In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation are reflected in the interim financial statements.

The results of operations for the period ended June 30, 2021 are not necessarily indicative of the operating results for the full year.

The results of operations for the period ended September 30, 2021 are not necessarily indicative of the operating results for the full year.

The interim financial statements should be read in conjunction with the audited Consolidated Financial Statements, including the notes thereto, included in our 2020 Annual Report on Form 10-K.

Liquidity Matters

The global outbreak of COVID-19 and residual impacts from the grounding of the 737 MAX airplane in 2019 are having a significant adverse impact on our business and are expected to continue to negatively impact revenue, earnings, and operating cash flow in future quarters.

The global outbreak of COVID-19, 787 production issues and associated rework and residual impacts from the grounding of the 737 MAX airplane in 2019 are having a significant adverse impact on our business and are expected to continue to negatively impact revenue, earnings, and operating cash flow in future quarters.

The COVID-19 pandemic has caused an unprecedented shock to demand for air travel, creating a tremendous challenge for our customers, our business, and the entire aerospace manufacturing and services sector.

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There is significant uncertainty with respect to when commercial air traffic levels will recover, and whether and at what point capacity will return to and/or exceed pre-COVID-19 levels.

During the first six months of 2021, net cash used by operating activities was $ 3.9 billion.

During the first nine months of 2021, net cash used by operating activities was $ 4.1 billion.

Our operating cash flows continue to be impacted by lower commercial airplane deliveries and increases in commercial airplane inventory.

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We used the net proceeds of these note issuances to repay $ 9.8 billion outstanding under our two-year delayed draw term loan credit agreement.

The remaining $ 4.0 billion of our two-year delayed draw term loan matures in February 2022.

As a result, our cash and short-term investment balance was $ 21.3 billion at June 30, 2021, down from $ 25.6 billion at December 31, 2020, while our debt balance was $ 63.6 billion at June 30, 2021, unchanged from December 31, 2020.

Short-term debt and the current portion of long-term debt increased to $ 6.5 billion at June 30, 2021, up from $ 1.7 billion at December 31, 2020.

The current portion of long term debt includes term notes of $ 1.5 billion maturing in the second half of 2021 and the remaining delayed draw term loan.

Our short-term and long-term credit ratings remained unchanged during the second quarter of 2021.

In the third quarter of 2021, we repaid $ 1.2 billion of term notes.

As a result, our cash and short-term investment balance was $ 20.0 billion at September 30, 2021, down from $ 25.6 billion at December 31, 2020, while our debt balance was $ 62.4 billion at September 30, 2021, down from $ 63.6 billion at December 31, 2020.

Short-term debt and the current portion of long-term debt increased to $ 5.4 billion at September 30, 2021, up from $ 1.7 billion at December 31, 2020.

The current portion of long term debt includes term notes of $ 0.3 billion maturing in the fourth quarter of 2021, $ 0.9 billion maturing in 2022, and the remaining delayed draw term loan.

While our two-year delayed draw term loan matures in February 2022, we are planning to repay the remaining $ 4.0 billion in the fourth quarter of 2021.

Our short-term and long-term credit ratings remained unchanged during the third quarter of 2021.

In the first quarter of 2021, we entered into a $ 5.3 billion two-year revolving credit agreement, which we have not drawn upon.

As of June 30, 2021, our unused borrowing capacity on revolving credit agreements is $ 14.8 billion, up from $ 9.5 billion at December 31, 2020.

As of September 30, 2021, our unused borrowing capacity on revolving credit agreements is $ 14.8 billion, up from $ 9.5 billion at December 31, 2020.

$ 3.1 billion of the $ 14.8 billion is a 364-day revolving credit facility, which was set to expire in October 2021.

In October 2021, we renewed the 364-day facility for $ 3.1 billion, which now expires in October 2022.

This 364-day facility has a one-year term out option that allows us to extend the maturity of any borrowings one additional year.

We anticipate that these credit lines will remain undrawn and primarily serve as back-up liquidity to support our general corporate borrowing needs.

At June 30, 2021, trade payables included $ 3.4 billion payable to suppliers who have elected to participate in supply chain financing programs.

At September 30, 2021, trade payables included $ 2.8 billion payable to suppliers who have elected to participate in supply chain financing programs.

While access to supply chain financing was reduced in 2020 due to our credit ratings and debt levels, we do not believe that these or future changes in the availability of supply chain financing will have a significant impact on our liquidity.

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We are executing on our plans to reduce our workforce through a combination of voluntary and involuntary layoffs and natural turnover.

We have recorded severance costs for

approximately 19,000 employees.

We have recorded severance costs for approximately 19,000 employees.

In the fourth quarter of 2020, we began using our common stock in lieu of cash to fund Company contributions to our 401(k) plans.

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DoD) has taken steps to work with its industry partners to increase liquidity in the form of increased progress payment rates and reductions in withholds among other initiatives.

We also deferred certain tax payments pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

We also deferred certain tax payments in 2020 pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act also included a five-year net operating loss carryback provision which enabled us to benefit from certain 2020 losses and resulted in tax refunds of $ 1.3 billion in the third quarter of 2021.

In July 2020, we announced our business transformation efforts to assess our business across five key pillars:

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Net cumulative catch-up adjustments to prior periods' revenue and earnings, including certain reach-forward losses, across all long-term contracts were as follows:

(In millions - except per share amounts) Six months ended June 30 Three months ended June 30

(In millions - except per share amounts) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

Increase/(decrease) to Revenue $ 167 ($ 265 ) ($ 63 ) $ 25

Increase/(decrease) to Earnings/(loss) from operations $ 58 ($ 749 ) $ 234 $ 90

(Decrease)/increase to Diluted EPS ($ 0.03 ) ($ 0.82 ) $ 0.41 $ 0.11

Decrease to Earnings/(loss) from operations ($ 84 ) ($ 787 ) ($ 142 ) ($ 38 )

Decrease to Diluted EPS ($ 0.05 ) ($ 0.83 ) ($ 0.10 ) ($ 0.03 )

Note 2 – Earnings Per Share

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The elements used in the computation of basic and diluted earnings per share were as follows:

(In millions - except per share amounts) Six months ended June 30 Three months ended June 30

(In millions - except per share amounts) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

Net earnings/(loss) attributable to Boeing Shareholders $ 50 ($ 3,004 ) $ 587 ($ 2,376 )

Net loss attributable to Boeing Shareholders ($ 59 ) ($ 3,453 ) ($ 109 ) ($ 449 )

earnings available to participating securities

Net earnings/(loss) available to common shareholders $ 50 ($ 3,004 ) $ 587 ($ 2,376 )

Net loss available to common shareholders ($ 59 ) ($ 3,453 ) ($ 109 ) ($ 449 )

Basic weighted average shares outstanding

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586.9 565.8 588.6 566.1

Net earnings/(loss) per share:

Net loss per share:

($ 0.10 ) ($ 6.10 ) ($ 0.19 ) ($ 0.79 )

1 unchanged sentence

(1) Diluted earnings per share includes any dilutive impact of stock options, restricted stock units, performance-based restricted stock units and performance awards.

As a result of incurring a net loss for the six and three months ended June 30, 2020 potential common shares of 1.8 million and 1.2 million were excluded from diluted loss per share because the effect would have been antidilutive.

In addition, the following table includes the number of shares that may be dilutive

potential common shares in the future.

These shares were not included in the computation of diluted earnings/(loss) per share because the effect was either antidilutive or the performance condition was not met.

(Shares in millions) Six months ended June 30 Three months ended June 30

As a result of incurring a net loss for the nine and three months ended September 30, 2021 and 2020, potential common shares of 2.3 million, 2.7 million, 1.6 million and 1.3 million, respectively, were excluded from diluted loss per share because the effect would have been antidilutive.

In addition, the following table includes the number of shares that may be dilutive potential common shares in the future.

These shares were not included in the computation of diluted loss per share because the effect was either antidilutive or the performance condition was not met.

(Shares in millions) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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Note 3 – Income Taxes

Our estimated annual effective tax rate as of June 30, 2021 reflects the current U.S.

federal tax rate of 21 %, research and development tax credits, and other miscellaneous permanent adjustments.

After considering discrete adjustments primarily driven by reductions in the valuation allowance, the actual effective income tax rates for the six and three months ended June 30, 2021 are 126.1 % and ( 3.3 )%.

The actual effective tax rates were 38.4 % and 30.0 % for the comparable periods in the prior year.

The actual effective income tax rate of 126.1 % for the six months ended June 30, 2021 is significantly higher than the comparable period in the prior year due primarily to the near breakeven year-to-date pre-tax loss of $ 23 for the six months ended June 30, 2021 in relation to permanent tax adjustments and discrete items during the current period.

In the three months ended June 30, 2021, discrete tax benefits primarily driven by reductions in the valuation allowance more than offset ongoing tax expense resulting in an actual effective income tax rate of ( 3.3 )%.

The 2020 tax rates include tax benefits from the CARES Act enacted on March 27, 2020 that included a five-year net operating loss carryback provision which enabled us to benefit certain 2020 losses and remeasure certain deferred tax assets and liabilities at the former federal tax rate of 35 %.

The 2020 tax rates also include research and development tax credits and excess tax benefits related to share-based payments.

As of June 30, 2021 and December 31, 2020, the Company had recorded valuation allowances of $ 3,034 and $ 3,094 primarily for certain federal deferred tax assets, state net operating loss carryforwards, and state tax credits.

Our income tax expense or benefit for interim periods has been historically determined using an estimate of our annual effective tax rate, adjusted for discrete items.

In the third quarter of 2021, we determined that we could not make a reliable estimate of the annual effective tax rate primarily due to nearly break-even pre-tax earnings.

For example during the first quarter of 2021, the Company reported pre-tax losses of $ 572 , second quarter pre-tax earnings of $ 549 and third quarter pre-tax losses of $ 310 while year-to-date pre-tax losses total $ 333 .

As a result, the effective tax rate for the nine months ended September 30, 2021 was calculated based on 2021 year-to-date results.

We recorded a tax benefit of $ 207 for the nine months ended September 30, 2021 primarily reflecting 2021 net operating losses including Research and Development tax credits that are expected to be realized.

As of September 30, 2021 and December 31, 2020, the Company had recorded valuation allowances of $ 2,810 and $ 3,094 primarily for certain federal deferred tax assets, state net operating loss carryforwards, and state tax credits.

$ 301 of the reduction in the valuation allowance was recorded to Other comprehensive income, primarily due to the remeasurement of certain pension assets and liabilities during the third quarter of 2021 that resulted in an actuarial gain.

To measure the valuation allowance, the Company estimated in what year each of its deferred tax assets and liabilities would reverse using systematic and logical methods to estimate the reversal patterns.

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The valuation allowance primarily resulted from not having sufficient income from deferred tax liability reversals in the appropriate future periods to support the realization of certain deferred tax assets.

As of June 30, 2021, based on the estimated reversal patterns of the Company’s deferred tax assets and liabilities, it is more likely than not that the Company will realize the federal deferred tax assets generated in 2021 as there is sufficient projected income from reversals of deferred tax liabilities in the next five years.

As of September 30, 2021, based on the estimated reversal patterns of the Company’s deferred tax assets and liabilities, it is more likely than not that the Company will realize the federal deferred tax assets generated in 2021 as there is sufficient projected income from reversals of deferred tax liabilities in the next five years.

Federal income tax audits have been settled for all years prior to 2018.

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Note 4 – Allowances for Losses on Financial Assets

The changes in allowances for expected credit losses for the six months ended June 30, 2021 and 2020 consisted of the following:

The changes in allowances for expected credit losses for the nine months ended September 30, 2021 and 2020 consisted of the following:

Accounts receivable, net Unbilled receivables, net Other current assets, net Customer financing, net Other assets, net Total

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Write-offs 3 3

Balance at June 30, 2020 ($ 381 ) ($ 188 ) ($ 48 ) ($ 14 ) ($ 109 ) ($ 740 )

Balance at September 30, 2020 ($ 431 ) ($ 127 ) ($ 58 ) ($ 17 ) ($ 78 ) ($ 711 )

Balance at January 1, 2021 ($ 444 ) ($ 129 ) ($ 72 ) ($ 17 ) ($ 140 ) ($ 802 )

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Write-offs 21 1 13 35

Balance at June 30, 2021 ($ 413 ) ($ 129 ) ($ 74 ) ($ 16 ) ($ 176 ) ($ 808 )

Recoveries 1 1

Balance at September 30, 2021 ($ 407 ) ($ 126 ) ($ 74 ) ($ 14 ) ($ 172 ) ($ 793 )

Note 5 – Inventories

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Total $ 81,897 $ 81,715

Commercial spare parts, used aircraft, general stock materials and other includes capitalized precontract costs of $ 605 at June 30, 2021 and $ 733 at December 31, 2020 primarily related to KC-46A Tanker and Commercial Crew.

Commercial spare parts, used aircraft, general stock materials and other includes capitalized precontract costs of $ 646 at September 30, 2021 and $ 733 at December 31, 2020 primarily related to KC-46A Tanker and Commercial Crew.

Commercial Aircraft Programs

The increase in commercial aircraft programs inventory during 2021 reflects a continued buildup of 787 aircraft caused by 787 production issues and associated rework, which resulted in a significant reduction in 787 deliveries.

This was partially offset by a decrease in 737 inventory reflecting the resumption of deliveries.

Commercial aircraft programs inventory includes approximately 390 737 MAX aircraft and 100 787 aircraft at June 30, 2021 as compared with 425 737 MAX aircraft and 80 787 aircraft at December 31, 2020.

The increase in commercial aircraft programs inventory during 2021 reflects a continued buildup of 787 aircraft, as well as growth in 777X inventory.

These increases were partially offset by a decrease in 737 MAX inventory reflecting the resumption of deliveries.

Commercial aircraft programs inventory includes approximately 370 737 MAX aircraft and 105 787 aircraft at September 30, 2021 as compared with 425 737 MAX aircraft and 80 787 aircraft at December 31, 2020.

A number of customers have requested to defer deliveries or to cancel orders.

We are currently remarketing certain aircraft and may have to remarket additional aircraft in future periods.

If we are unable to successfully remarket the aircraft, determine further production rate reductions are necessary, and/or contract the program accounting quantities, future earnings may be reduced and/or additional reach-forward losses may have to be recorded.

At June 30, 2021 and December 31, 2020, commercial aircraft programs inventory included the following amounts related to the 737 program:

At September 30, 2021 and December 31, 2020, commercial aircraft programs inventory included the following amounts related to the 737 program:

deferred production costs of $ 1,676 and $ 2,159 and unamortized tooling and other non-recurring costs of $ 619 and $ 480 .

At June 30, 2021, $ 2,386 of 737 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $ 204 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

At June 30, 2021 and December 31, 2020, commercial aircraft programs inventory included the following amounts related to the 777X program:

At September 30, 2021, $ 2,276 of 737 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $ 19 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

At September 30, 2021 and December 31, 2020, commercial aircraft programs inventory included the following amounts related to the 777X program:

unamortized tooling and other non-recurring costs of $ 3,444 and $ 3,295 .

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The resulting reach-forward loss of $ 6,493 was recorded as a reduction to deferred production costs.

As a result, 777X deferred production costs were immaterial at June 30, 2021 and December 31, 2020.

As a result, 777X deferred production costs were immaterial at September 30, 2021 and December 31, 2020.

The level of profitability on the 777X program will be subject to a number of factors.

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One or more of these factors could result in additional reach-forward losses on the 777X program in future periods.

At June 30, 2021 and December 31, 2020, commercial aircraft programs inventory included the following amounts related to the 787 program:

At September 30, 2021 and December 31, 2020, commercial aircraft programs inventory included the following amounts related to the 787 program:

deferred production costs of $ 15,153 and $ 14,976 , $ 1,808 and $ 1,865 of supplier advances, and $ 1,814 and $ 1,863 of unamortized tooling and other non-recurring costs.

At June 30, 2021, $ 12,131 of 787 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $ 4,608 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 3,319 and $ 2,992 at June 30, 2021 and December 31, 2020.

At September 30, 2021, $ 11,643 of 787 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $ 5,324 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

The 787 program produced at abnormally low production rates during the third quarter of 2021 as we prioritized production resources on inspections and rework.

As a result, we expect to incur approximately $ 1 billion of abnormal production costs on a cumulative basis, which are being expensed as incurred.

Abnormal 787 production costs are associated with abnormally low production rates, as well as costs to complete inspections and rework.

In the third quarter of 2021, we recorded period expense of $ 183 .

We expect to record approximately $ 800 in future quarters while production rates remain low and inspections and rework continues.

In the event we are unable to increase production, complete inspections and rework and/or resume deliveries consistent with our assumptions, our estimate of future abnormal costs could be increased.

Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 3,238 and $ 2,992 at September 30, 2021 and December 31, 2020.

Note 6 – Contracts with Customers

Unbilled receivables increased from $ 7,995 at December 31, 2020 to $ 9,203 at June 30, 2021, primarily driven by revenue recognized at Defense, Space & Security (BDS) and Global Services (BGS) in excess of billings .

Advances and progress billings increased from $ 50,488 at December 31, 2020 to $ 50,738 at June 30, 2021, primarily driven by advances on orders received at Commercial Airplanes (BCA), BDS, and BGS, partially offset by revenue recognized and the return of customer advances at BCA.

Revenues recognized during the six months ended June 30, 2021 and 2020 from amounts recorded as Advances and progress billings at the beginning of each year were $ 7,315 and $ 5,255 .

Revenues recognized during the three months ended June 30, 2021 and 2020 from amounts recorded as Advances and progress billings at the beginning of each year were $ 2,597 and $ 1,465 .

Unbilled receivables increased from $ 7,995 at December 31, 2020 to $ 10,009 at September 30, 2021, primarily driven by revenue recognized at Defense, Space & Security (BDS) and Global Services (BGS) in excess of billings .

Advances and progress billings increased from $ 50,488 at December 31, 2020 to $ 51,269 at September 30, 2021, primarily driven by advances on orders received at Commercial Airplanes (BCA), BDS, and BGS, partially offset by revenue recognized and the return of customer advances at BCA.

Revenues recognized during the nine months ended September 30, 2021 and 2020 from amounts recorded as Advances and progress billings at the beginning of each year were $ 10,131 and $ 6,752 .

Revenues recognized during the three months ended September 30, 2021 and 2020 from amounts recorded as Advances and progress billings at the beginning of each year were $ 2,816 and $ 1,497 .

Note 7 – Customer Financing

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We determine a receivable is impaired when, based on current information and events, it is probable that we will be unable to collect amounts due according to the original contractual terms.

At June 30, 2021 and December 31, 2020, we individually evaluated for impairment customer financing receivables of $ 379 and $ 391 , of which $ 379 and $ 380 were determined to be impaired.

At September 30, 2021 and December 31, 2020, we individually evaluated for impairment customer financing receivables of $ 378 and $ 391 , of which $ 378 and $ 380 were determined to be impaired.

We recorded no allowance for losses on these impaired receivables as the collateral values exceeded the carrying values of the receivables.

We determine a receivable is past due when cash has not been received upon the due date specified in the contract.

There were no past due customer financing receivables as of June 30, 2021.

Customer financing receivables past due as of June 30, 2020 was $ 8 .

There were no past due customer financing receivables as of September 30, 2021 and September 30, 2020.

We evaluate the collectability of customer financing receivables at commencement and on a recurring basis.

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If there is not sufficient collateral, then revenue is not recognized until payments exceed the principal balance.

Receivables in non-accrual status as of June 30, 2021 and December 31, 2020 were $ 379 and $ 380 .

Interest income received was $ 11 and $ 5 for the six and three months ended June 30, 2021 and $ 21 and $ 13 for the six and three months ended June 30, 2020.

Receivables in non-accrual status as of September 30, 2021 and December 31, 2020 were $ 378 and $ 380 .

Interest income received was $ 14 and $ 3 for the nine and three months ended September 30, 2021 and $ 26 and $ 5 for the nine and three months ended September 30, 2020.

The adequacy of the allowance for losses is assessed quarterly.

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Our rating categories are comparable to those used by the major credit rating agencies.

Our financing receivable balances at June 30, 2021 by internal credit rating category and year of origination consisted of the following:

Our financing receivable balances at September 30, 2021 by internal credit rating category and year of origination consisted of the following:

Rating categories Current 2020 2019 2018 2017 Prior Total

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Total carrying value of financing receivables $ 266 $ 131 $ 72 $ 13 $ 286 $ 612 $ 1,380

At June 30, 2021, our allowance related to receivables with ratings of CCC, B, BB, and BBB.

At September 30, 2021, our allowance related to receivables with ratings of CCC, B, BB, and BBB.

We applied default rates that averaged 24.1 %, 5.9 %, 2.7 %, and 0.2 %, respectively, to the exposure associated with those receivables.

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747-400 Aircraft ($ 11 and $ 19 accounted for as operating leases)

Lease income recorded in Revenue on the Condensed Consolidated Statements of Operations for the six months ended June 30, 2021 and 2020 included $ 25 and $ 29 from sales-type/finance leases, and $ 37 and $ 62 from operating leases, of which $ 5 and $ 4 related to variable operating lease payments.

Lease income recorded in Revenue on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2021 and 2020 included $ 12 and $ 14 from sales-type/finance leases, and $ 19 and $ 31 from operating leases, of which $ 3 and $ 3 related to variable operating lease payments.

Profit at the commencement of sales-type leases was recorded in revenue for the six months ended June 30, 2021 and 2020 in the amount of $ 36 and $ 10 .

Profit at the commencement of sales-type leases was recorded in revenue for the three months ended June 30, 2021 and 2020 in the amount of $ 20 and $ 6 .

Lease income recorded in Revenue on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2021 and 2020 included $ 38 and $ 44 from sales-type/finance leases, and $ 53 and $ 99 from operating leases, of which $ 6 and $ 6 related to variable operating lease payments.

Lease income recorded in Revenue on the Condensed Consolidated Statements of Operations for the three months ended September 30, 2021 and 2020 included $ 13 and $ 15 from sales-type/finance leases, and $ 16 and $ 37 from operating leases, of which $ 1 and $ 2 related to variable operating lease payments.

Profit at the commencement of sales-type leases was recorded in revenue for the nine months ended September 30, 2021 and 2020 in the amount of $ 57 and $ 18 .

Profit at the commencement of sales-type leases was recorded in revenue for the three months ended September 30, 2021 and 2020 in the amount of $ 21 and $ 8 .

Note 8 – Investments

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Total $ 11,194 $ 18,854

(1) Dividends received were $ 43 and $ 38 for the six and three months ended June 30, 2021 and $ 53 and $ 20 during the same periods in the prior year.

(2) Reflects amounts restricted in support of our workers’ compensation programs, employee benefit programs, and insurance premiums.

(1) Dividends received were $ 52 and $ 9 for the nine and three months ended September 30, 2021 and $ 58 and $ 5 during the same periods in the prior year.

During the third quarter of 2021, Boeing and AE Industrial Partners announced a strategic partnership to establish a dedicated aerospace venture fund.

This transaction resulted in the deconsolidation of HorizonX and generated a gain of $ 117 which is included in Income from operating investments, net.

(2) Reflects amounts restricted in support of our property sales, workers’ compensation programs, employee benefit programs, and insurance premiums.

Allowance for losses on available for sale debt instruments are assessed quarterly.

All instruments are considered investment grade and, as such, we have not recognized an allowance for credit losses as of June 30, 2021.

All instruments are considered investment grade and, as such, we have not recognized an allowance for credit losses as of September 30, 2021.

Note 9 – Commitments and Contingencies

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jurisdictions, including China.

Flight tests were completed in China during the third quarter of 2021, and we are continuing to work towards approval by the end of 2021, with the resumption of deliveries to follow in the first quarter of 2022.

Multiple legal actions have been filed against us as a result of the accidents.

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We do not expect this matter to have a material financial impact on the 737 program.

In the first half of 2021, we delivered 105 aircraft, and we have assumed that the remaining non-U.S.

regulatory approvals will occur and enable deliveries in all jurisdictions during 2021.

We have approximately 390 airplanes in inventory as of June 30, 2021.

In the first nine months of 2021, we delivered 167 aircraft.

We have approximately 370 airplanes in inventory as of September 30, 2021 and we anticipate delivering most of these aircraft by the end of 2023.

A number of customers have requested to defer deliveries or to cancel orders for 737 MAX aircraft, and we are remarketing and/or delaying deliveries of certain aircraft included within inventory.

We continue to expect to deliver about half of the 737 MAX aircraft in inventory as of December 31, 2020 by the end of 2021.

In the event that we are

unable to resume aircraft deliveries in certain non-U.S.

In the event that we are unable to resume aircraft deliveries in certain non-U.S.

jurisdictions consistent with our assumptions of regulatory approval timing, our expectation of delivery timing could be impacted.

We produced at abnormally low production rates in 2020 and expect to continue to do so through 2021.

As a result, we expect to incur approximately $ 5 billion of abnormal production costs on a cumulative basis, which are being expensed as incurred.

We expensed abnormal production costs of $ 2,567 during 2020, $ 1,083 during the six months ended June 30, 2021 and $ 515 during the three months ended June 30, 2021.

As a result, we expect to incur approximately $ 4.6 billion of abnormal production costs on a cumulative basis, which are being expensed as incurred, of which $ 2,567 was recorded during the year ended December 31, 2020 and $ 1,501 was recorded during the nine months ended September 30, 2021.

In addition to impacts related to the 737 MAX accidents and subsequent grounding, the 737 program continues to be significantly impacted by the COVID-19 pandemic and its effect on aircraft demand.

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We may need to recognize additional costs associated with remarketing and/or reconfiguring aircraft in inventory, which may reduce revenue and/or earnings in future periods.

We have also recorded additional expenses of $ 103 and $ 50 due to the 737 MAX grounding during the six and three months ended June 30, 2021, and $ 121 and $ 60 during the six and three months ended June 30, 2020.

We have also recorded additional expenses of $ 136 and $ 33 due to the 737 MAX grounding during the nine and three months ended September 30, 2021, and $ 239 and $ 118 during the nine and three months ended September 30, 2020.

These expenses include costs related to storage, inventory impairment, pilot training, and software updates.

The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the six months ended June 30, 2021 and 2020.

The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the nine months ended September 30, 2021 and 2020.

Beginning balance – January 1 $ 5,537 $ 7,389

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Changes in estimates ( 1 ) 370

Ending balance – June 30 $ 3,964 $ 6,664

Ending balance – September 30 $ 3,443 $ 5,981

We are working with our customers to minimize the impact to their operations from grounded and undelivered aircraft.

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It is subject to change in future quarters as negotiations with customers mature and timing and conditions of return to service are better understood.

The liability balance of $ 4.0 billion at June 30, 2021 includes $ 1.5 billion expected to be liquidated by lower customer delivery payments, $ 0.8 billion expected to be paid in cash and $ 0.2 billion in other concessions.

The liability balance of $ 3.4 billion at September 30, 2021 includes $ 1.3 billion expected to be liquidated by lower customer delivery payments, $ 1.0 billion expected to be paid in cash and $ 0.2 billion in other concessions.

Of the cash payments to customers, we expect to pay $ 0.2 billion in 2021 and $ 0.7 billion in 2022.

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Our assumptions reflect our current best estimate, but actual timing and conditions of return to service and resumption of deliveries could differ from this estimate, the effect of which could be material.

We are unable at this time to reasonably estimate potential future additional financial impacts or a range of loss, if any, due to continued uncertainties related to the timing and conditions of return to service in certain jurisdictions.

For example, a significant portion of our 737 MAX inventory consists of aircraft scheduled to be delivered to

customers based in China.

We are unable at this time to

reasonably estimate potential future additional financial impacts or a range of loss, if any, due to continued uncertainties related to the timing and conditions of return to service in certain jurisdictions.

For example, a significant portion of our 737 MAX inventory consists of aircraft scheduled to be delivered to customers based in China.

If we are unable to resume deliveries to China consistent with our assumptions, or if further deterioration in trade relations between the U.S.

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Environmental

The following table summarizes environmental remediation activity during the six months ended June 30, 2021 and 2020.

The following table summarizes environmental remediation activity during the nine months ended September 30, 2021 and 2020.

Beginning balance – January 1 $ 565 $ 570

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Changes in estimates 99 27

Ending balance – June 30 $ 582 $ 560

Ending balance – September 30 $ 629 $ 571

The liabilities recorded represent our best estimate or the low end of a range of reasonably possible costs expected to be incurred to remediate sites, including operation and maintenance over periods of up to 30 years.

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There are some potential remediation obligations where the costs of remediation cannot be reasonably estimated.

At June 30, 2021 and December 31, 2020, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 1,055 and $ 1,095 .

At September 30, 2021 and December 31, 2020, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 1,057 and $ 1,095 .

Product Warranties

The following table summarizes product warranty activity recorded during the six months ended June 30, 2021 and 2020.

The following table summarizes product warranty activity recorded during the nine months ended September 30, 2021 and 2020.

Beginning balance – January 1 $ 1,527 $ 1,267

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Changes in estimates 439 444

Ending balance – June 30 $ 1,768 $ 1,547

Ending balance – September 30 $ 1,855 $ 1,559

Commercial Aircraft Commitments

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Trade-in commitments, which can be terminated by mutual consent with the customer, may be exercised only during the period specified in the agreement, and require advance notice by the customer.

Trade-in commitment agreements at June 30, 2021 have expiration dates from 2021 through 2028.

At June 30, 2021 and December 31, 2020 total contractual trade-in commitments were $ 623 and $ 950 .

As of June 30, 2021 and December 31, 2020, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $ 335 and $ 599 and the fair value of the related trade-in aircraft was $ 335 and $ 580 .

Trade-in commitment agreements at September 30, 2021 have expiration dates from 2021 through 2028.

At September 30, 2021 and December 31, 2020 total contractual trade-in commitments were $ 685 and $ 950 .

As of September 30, 2021 and December 31, 2020, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $ 269 and $ 599 and the fair value of the related trade-in aircraft was $ 269 and $ 580 .

Financing Commitments

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $ 13,475 and $ 11,512 as of June 30, 2021 and December 31, 2020.

The estimated earliest potential funding dates for these commitments as of June 30, 2021 are as follows:

July through December 2021 $ 1,519

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $ 13,311 and $ 11,512 as of September 30, 2021 and December 31, 2020.

The estimated earliest potential funding dates for these commitments as of September 30, 2021 are as follows:

October through December 2021 $ 1,419

Thereafter 1,249

As of June 30, 2021, all of these financing commitments relate to customers we believe have less than investment-grade credit.

As of September 30, 2021, $ 13,189 of these financing commitments relate to customers we believe have less than investment-grade credit.

We have concluded that no reserve for future potential losses is required for these financing commitments based upon the terms, such as collateralization and interest rates, under which funding would be provided.

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We have entered into standby letters of credit and surety bonds with financial institutions primarily relating to the guarantee of our future performance on certain contracts.

Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $ 3,917 and $ 4,238 as of June 30, 2021 and December 31, 2020.

Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $ 3,885 and $ 4,238 as of September 30, 2021 and December 31, 2020.

United States Government Defense Environment Overview

The Omnibus appropriations acts for fiscal year 2021 (FY21), enacted in December 2020, provided FY21 appropriations for government departments and agencies, including $704 billion for the U.S.

DoD, $23 billion for the National Aeronautics and Space Administration (NASA) and $18 billion for the Federal Aviation Administration (FAA).

DoD, $23 billion for the National Aeronautics and Space Administration (NASA) and $18 billion for the FAA.

FY21 appropriations included funding for Boeing’s major programs, such as the F/A-18 Super Hornet, F-15EX, CH-47 Chinook, AH-64 Apache, V-22 Osprey, KC-46A Tanker, P-8 Poseidon and Space Launch System.

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DoD, $25 billion in funding for NASA and $19 billion for the FAA.

While the President’s Budget request for FY22 includes funding for a majority of Boeing’s programs, it did not include funding for F/A-18 Super Hornet, P-8 Poseidon and H-47F Block II production aircraft.

While there is some continued congressional support for F/A-18 and H-47F Block II production aircraft for FY22, there is ongoing uncertainty with respect to these and other program-level appropriations for FY22 and future fiscal years.

Future budget cuts or investment priority changes, including changes associated with the authorizations and appropriations process, could result in reductions, cancellations, and/or delays of existing contracts or programs.

Any of these impacts could have a material effect on our results of operations, financial position, and/or cash flows.

While the President’s budget request for FY22 includes funding for a majority of Boeing’s programs, it did not include funding for F/A-18 Super Hornet, P-8 Poseidon and CH-47F Block II production aircraft.

While there is some continued congressional support for F/A-18 and CH-47F Block II production aircraft for FY22, there is ongoing uncertainty with respect to these and other program-level appropriations for FY22 and future fiscal years.

These programs also continue to pursue non-U.S.

sales opportunities.

The Continuing Resolution (CR), enacted by U.S.

Congress on September 30, 2021, continues federal funding at FY21 appropriated levels through December 3, 2021.

Congress and the President must enact either full-year FY22 appropriations bills or an additional CR to fund government departments and agencies beyond December 3, 2021 or a government shutdown could result, which may impact the Company’s operations.

Any of these impacts could have a material effect on our results of operations, financial position, and/or cash flows.

BDS Fixed-Price Development Contracts

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Since 2016, the USAF has authorized seven low rate initial production (LRIP) lots for a total of 94 aircraft.

The EMD contract and authorized LRIP lots total approximately $ 19 billion as of June 30, 2021.

At June 30, 2021, we had approximately $ 254 of capitalized precontract costs and $ 280 of potential termination liabilities to suppliers.

The EMD contract and authorized LRIP lots total approximately $ 19 billion as of September 30, 2021.

At September 30, 2021, we had approximately $ 252 of capitalized precontract costs and $ 305 of potential termination liabilities to suppliers.

Recoverable Costs on Government Contracts

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If we are unable to satisfactorily resolve disputed costs, we could be required to record an earnings charge and/or provide refunds to the U.S.

The following table summarizes changes in the severance liability during the six months ended June 30, 2021 and 2020.

The following table summarizes changes in the severance liability during the nine months ended September 30, 2021 and 2020.

Beginning balance – January 1 $ 283

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Changes in estimates ( 179 ) 328

Ending balance - June 30 $ 30 $ 405

Ending balance – September 30 $ 20 $ 585

During 2020, the Company recorded severance costs for approximately 26,000 employees expected to leave the Company through a combination of voluntary and involuntary terminations.

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During the second quarter of 2021, we further reduced the estimated number of employees expected to leave the Company through voluntary and involuntary terminations to approximately 19,000.

As of June 30, 2021, our severance liability primarily relates to remaining severance payments to terminated employees.

As of September 30, 2021, our severance liability primarily relates to remaining severance payments to terminated employees.

Note 10 – Arrangements with Off-Balance Sheet Risk

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2021 December 31

2020 September 30

2021 December 31

2020 September 30

2021 December 31

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We used the net proceeds of these note issuances to repay $ 9,825 outstanding under our two-year delayed draw term loan credit agreement.

The remaining $ 4,000 of our two-year delayed draw term loan matures in February 2022.

While our two-year delayed draw term loan matures in February 2022, we are planning to repay the remaining $ 4,000 in the fourth quarter of 2021.

In the first quarter of 2021, we entered into a $ 5,280 two-year revolving credit agreement.

As of June 30, 2021, we have $ 14,753 currently available under credit line agreements, of which $ 3,073 expires in October 2021, $ 3,200 expires in October 2022, $ 5,280 expires in March 2023, and $ 3,200 expires in October 2024.

The facility scheduled to expire in October 2021 has a one-year term out option that allows us to extend the maturity of any borrowings one additional year.

As of September 30, 2021, we had $ 14,753 currently available under credit line agreements, of which $ 3,073 expires in October 2021, $ 3,200 expires in October 2022, $ 5,280 expires in March 2023, and $ 3,200 expires in October 2024.

In October 2021, we renewed the 364-day facility for $ 3,060 , which now expires in October 2022.

This 364-day facility has a one-year term out option that allows us to extend the maturity of any borrowings one additional year.

We continue to be in full compliance with all covenants contained in our debt or credit facility agreements.

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The components of net periodic benefit (income)/cost were as follows:

Six months ended June 30 Three months ended June 30

Nine months ended September 30 Three months ended September 30

Pension Plans 2021 2020 2021 2020

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Recognized net actuarial loss 924 774 304 258

Settlement loss 4 3 3 3

Settlement charge 156 6 152 3

Net periodic benefit income ($ 379 ) ($ 253 ) ($ 29 ) ($ 83 )

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Net periodic benefit income included in Other income, net ( 381 ) ( 255 ) ($ 29 ) ( 84 )

Net periodic benefit income included in (Loss)/earnings before income taxes ($ 350 ) ($ 170 ) ($ 174 ) ($ 83 )

Six months ended June 30 Three months ended June 30

Net periodic benefit income included in Loss before income taxes ($ 379 ) ($ 253 ) ($ 29 ) ($ 83 )

Nine months ended September 30 Three months ended September 30

Other Postretirement Plans 2021 2020 2021 2020

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Recognized net actuarial gain ( 52 ) ( 33 ) ( 17 ) ( 10 )

Settlement charge ( 2 ) ( 2 )

Net periodic benefit cost $ 50 $ 102 $ 16 $ 32

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Net periodic benefit (income)/cost included in Other income, net ( 16 ) 37 ( 6 ) 10

Net periodic benefit cost included in (Loss)/earnings before income taxes $ 34 $ 71 $ 17 $ 37

Net periodic benefit cost included in Loss before income taxes $ 50 $ 104 $ 16 $ 33

In the third quarter of 2021, we recorded a $ 151 settlement charge in Other income, net and remeasured assets and benefit obligations related to one of the Company’s pension plans.

The remeasurement resulted in a net actuarial gain of $ 1,642 , which is included in Other comprehensive income.

The $ 1,642 reflects a gain of $ 923 primarily driven by an increase in the discount rate from approximately 2.6 % at

December 31, 2020 to approximately 2.8 % as of the remeasurement date, as well as a gain of $ 719 primarily driven by asset returns in excess of expected returns.

Note 13 – Share-Based Compensation and Other Compensation Arrangements

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Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss (AOCI) by component for the six and three months ended June 30, 2021 and 2020 were as follows:

Changes in Accumulated other comprehensive loss (AOCI) by component for the nine and three months ended September 30, 2021 and 2020 were as follows:

Currency Translation Adjustments Unrealized Gains and Losses on Certain Investments Unrealized Gains and Losses on Derivative Instruments Defined Benefit Pension Plans & Other Postretirement Benefits Total (1)

Balance at January 1, 2020 ($ 128 ) $ 1 ($ 84 ) ($ 15,942 ) ($ 16,153 )

Other comprehensive loss before reclassifications ( 33 ) ( 186 ) ( 12 ) ( 231 )

Other comprehensive income/(loss) before reclassifications 15 ( 107 ) ( 52 ) ( 144 )

Amounts reclassified from AOCI

Net current period Other comprehensive (loss)/income

( 33 ) ( 174 ) 335 128

Balance at June 30, 2020 ($ 161 ) $ 1 ($ 258 ) ($ 15,607 ) ($ 16,025 )

Net current period Other comprehensive income/(loss) 15 ( 87 ) 446 374

Balance at September 30, 2020 ($ 113 ) $ 1 ($ 171 ) ($ 15,496 ) ($ 15,779 )

Balance at January 1, 2021 ($ 30 ) $ 1 ($ 43 ) ($ 17,061 ) ($ 17,133 )

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( 63 ) 58 2,320 2,315

Balance at September 30, 2021 ($ 93 ) $ 1 $ 15 ($ 14,741 ) ($ 14,818 )

Balance at June 30, 2020 ($ 161 ) $ 1 ($ 258 ) ($ 15,607 ) ($ 16,025 )

Balance at March 31, 2020 ($ 205 ) $ 1 ($ 357 ) ($ 15,772 ) ($ 16,333 )

Other comprehensive income/(loss) before reclassifications 48 79 ( 40 ) 87

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Net current period Other comprehensive income 48 87 111 246

Balance at September 30, 2020 ($ 113 ) $ 1 ($ 171 ) ($ 15,496 ) ($ 15,779 )

Balance at June 30, 2021 ($ 52 ) $ 1 $ 20 ($ 16,630 ) ($ 16,661 )

Balance at March 31, 2021 ($ 66 ) $ 1 ($ 34 ) ($ 16,853 ) ($ 16,952 )

Other comprehensive income before reclassifications 14 54 8 76

Other comprehensive (loss)/income before reclassifications ( 41 ) ( 1 ) 1,543 (3)

Amounts reclassified from AOCI

Net current period Other comprehensive income 14 54 223 291

Balance at June 30, 2021 ($ 52 ) $ 1 $ 20 ($ 16,630 ) ($ 16,661 )

( 4 ) 346 (2)

Net current period Other comprehensive (loss)/income ( 41 ) ( 5 ) 1,889 1,843

Balance at September 30, 2021 ($ 93 ) $ 1 $ 15 ($ 14,741 ) ($ 14,818 )

(1) Net of tax.

(2) Primarily relates to amortization of actuarial losses for the six and three months ended June 30, 2020 $ 390 and $ 197 (net of tax of ($ 103 ) and ($ 50 )) and six and three months ended June 30, 2021 totaling $ 463 and $ 235 (net of tax of ($ 122 ) and ($ 57 )).

(2) Primarily relates to amortization of actuarial losses for the nine and three months ended September 30, 2020 $ 562 and $ 172 (net of tax of ($ 179 ) and ($ 76 )) and nine and three months ended September 30, 2021 totaling $ 690 and $ 227 (net of tax of ($ 182 ) and ($ 60 )).

These are included in the net periodic pension cost.

(3) Primarily relates to remeasurement of assets and benefit obligations related to the Company's pension plans resulting in an actuarial gain for the nine and three months ended September 30, 2021 of $ 1,551 and $ 1,544 (net of tax of ($ 106 ) and ($ 104 )).

Note 15 – Derivative Financial Instruments

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2021 December 31

2020 September 30

2021 December 31

2020 September 30

2021 December 31

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Gains/(losses) associated with our hedging transactions and forward points recognized in Other comprehensive income are presented in the following table:

Six months ended June 30 Three months ended June 30

Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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Gains/(losses) associated with our hedging transactions and forward points reclassified from AOCI to earnings are presented in the following table:

Six months ended June 30 Three months ended June 30

Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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General and administrative expense 4 ( 1 ) 1

Gains related to undesignated derivatives on foreign exchange and commodity cash flow hedging transactions recognized in Other income, net were insignificant for the six and three months ended June 30, 2021 and 2020.

Gains related to undesignated derivatives on foreign exchange and commodity cash flow hedging transactions recognized in Other income, net were insignificant for the nine and three months ended September 30, 2021 and 2020.

Based on our portfolio of cash flow hedges, we expect to reclassify gains of $ 20 (pre-tax) out of Accumulated other comprehensive loss into earnings during the next 12 months.

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For certain commodity contracts, our counterparties could require collateral posted in an amount determined by our credit ratings.

The fair value of foreign exchange and commodity contracts that have credit-risk-related contingent features that are in a net liability position at June 30, 2021 was $ 1 .

At June 30, 2021, there was no collateral posted related to our derivatives.

The fair value of foreign exchange and commodity contracts that have credit-risk-related contingent features that are in a net liability position at September 30, 2021 was $ 9 .

At September 30, 2021, there was no collateral posted related to our derivatives.

Note 16 – Fair Value Measurements

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The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Total Level 1 Level 2 Total Level 1 Level 2

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Certain assets have been measured at fair value on a nonrecurring basis.

The following table presents the nonrecurring losses recognized for the six months ended June 30 due to long-lived asset impairment and the fair value and asset classification of the related assets as of the impairment date:

The following table presents the nonrecurring losses recognized for the nine months ended September 30 due to long-lived asset impairment and the fair value and asset classification of the related assets as of the impairment date:

Total Level 2 Level 3 Total

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Level 3 Investments, Property, plant and equipment, Other Assets and Acquired Intangibles were primarily valued using an income approach based on the discounted cash flows associated with the underlying assets.

Level 2 Property, plant and equipment were valued based on a third party appraisal using a combination of income and market approaches that considered estimates of net operating income,

capitalization rates, comparable property sales and adjusted for as-is condition.

Level 2 Property, plant and equipment were valued based on a third party valuation using a combination of income and market approaches that considered estimates of net operating income,

capitalization rates and adjusted for as-is condition.

The fair value of the impaired customer financing assets is derived by calculating a median collateral value from a consistent group of third party aircraft value publications.

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Under certain circumstances, we adjust values based on the attributes and condition of the specific aircraft or equipment, usually when the features or use of the aircraft vary significantly from the more generic aircraft attributes covered by third party publications, or on the expected net sales price for the aircraft.

For Level 3 assets that were measured at fair value on a nonrecurring basis during the year ended June 30, 2021, the following table presents the fair value of those assets as of the measurement date, valuation techniques and related unobservable inputs of those assets.

For Level 3 assets that were measured at fair value on a nonrecurring basis during the year ended September 30, 2021, the following table presents the fair value of those assets as of the measurement date, valuation techniques and related unobservable inputs of those assets.

Value Valuation

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The fair values and related carrying values of financial instruments that are not required to be remeasured at fair value on the Condensed Consolidated Statements of Financial Position were as follows:

June 30, 2021

September 30, 2021

Amount Total Fair

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For our debt that is not traded in the secondary market, the fair value is classified as Level 2 and is based on our indicative borrowing cost derived from dealer quotes or discounted cash flows.

The fair values of

our debt classified as Level 3 are based on discounted cash flow models using the implied yield from similar securities.

With regard to other financial instruments with off-balance sheet risk, it is not practicable to estimate the fair value of our indemnifications and financing commitments because the amount and timing of those arrangements are uncertain.

The fair values of our debt classified as Level 3 are based on discounted cash flow models using the implied yield from similar securities.

With regard to other financial instruments with off-balance sheet risk, it is not practicable

to estimate the fair value of our indemnifications and financing commitments because the amount and timing of those arrangements are uncertain.

Items not included in the above disclosures include cash, restricted cash, time deposits and other deposits, commercial paper, money market funds, Accounts receivable, Unbilled receivables, Other current assets, Accounts payable and long-term payables.

The carrying values of those items, as reflected in the Condensed Consolidated Statements of Financial Position, approximate their fair value at June 30, 2021 and December 31, 2020.

The carrying values of those items, as reflected in the Condensed Consolidated Statements of Financial Position, approximate their fair value at September 30, 2021 and December 31, 2020.

The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash (Level 1).

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During the first quarter, consistent with the terms of the Deferred Prosecution Agreement, the monetary penalty was paid, and the $ 500 million compensation amount was transferred to a fund established to benefit the heirs and/or beneficiaries of the victims of the 737 MAX accidents.

addition, the $ 1.77 billion amount related to the Company’s airline customers was included in amounts reserved in prior quarters for 737 MAX customer considerations.

In addition, the $ 1.77 billion amount related to the Company’s airline customers was included in amounts reserved in prior quarters for 737 MAX customer considerations.

During 2019, we entered into agreements with Embraer S.A.

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BCA revenues by customer location consist of the following:

(Dollars in millions) Six months ended June 30 Three months ended June 30

(Dollars in millions) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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BDS revenues on contracts with customers, based on the customer's location, consist of the following:

(Dollars in millions) Six months ended June 30 Three months ended June 30

(Dollars in millions) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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BGS revenues consist of the following:

(Dollars in millions) Six months ended June 30 Three months ended June 30

(Dollars in millions) Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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Backlog is converted into revenue in future periods as work is performed, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable accounting method.

Our backlog at June 30, 2021 was $ 363,466 .

Our backlog at September 30, 2021 was $ 367,108 .

We expect approximately 25 % to be converted to revenue through 2022 and approximately 78 % through 2025, with the remainder thereafter.

There is significant uncertainty regarding the timing of when backlog will convert into revenue due to the 737 MAX grounding in non-U.S.

jurisdictions, entry into service of the 777X, 737 MAX 7 and/or 737 MAX 10, and COVID-19 impacts.

jurisdictions, 787 production issues and associated rework, timing of entry into service of the 777X, 737 MAX 7 and/or 737 MAX 10, and COVID-19 impacts.

Unallocated Items, Eliminations and other

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Components of Unallocated items, eliminations and other are shown in the following table.

Six months ended June 30 Three months ended June 30

Nine months ended September 30 Three months ended September 30

2021 2020 2021 2020

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Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated statement of financial position of The Boeing Company and subsidiaries (the “Company”) as of June 30, 2021, the related condensed consolidated statements of operations, comprehensive income, and equity for the three-month and six-month periods ended June 30, 2021 and 2020, and of cash flows for the six-month periods ended June 30, 2021 and 2020, and the related notes (collectively referred to as the "condensed consolidated interim financial information").

We have reviewed the accompanying condensed consolidated statement of financial position of The Boeing Company and subsidiaries (the “Company”) as of September 30, 2021, the related condensed consolidated statements of operations, comprehensive income, and equity for the three-month and nine-month periods ended September 30, 2021 and 2020, and of cash flows for the nine-month periods ended September 30, 2021 and 2020, and the related notes (collectively referred to as the "condensed consolidated interim financial information").

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

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Chicago, Illinois

July 28, 2021

October 27, 2021

FORWARD-LOOKING STATEMENTS

35 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements