What changed in this filing

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Item 1. Financial Statements

2023-07-26 compared with 2023-04-26 · 253 added, 160 removed, 656 unchanged (39% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share data) Three months ended March 31

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

2023 2022 2023 2022

Sales of products $ 31,601 $ 25,436 $ 16,687 $ 14,009

4 unchanged sentences

Total costs and expenses ( 33,810 ) ( 28,191 ) ( 17,812 ) ( 14,553 )

Loss from operating investments, net ( 27 ) ( 20 )

3,862 2,481 1,939 2,128

Income/(loss) from operating investments, net 17 ( 3 ) 44 17

General and administrative expense ( 2,590 ) ( 1,531 ) ( 1,286 ) ( 668 )

1 unchanged sentence

Gain on dispositions, net 1 2 1 1

Loss from operations ( 149 ) ( 1,162 )

(Loss)/earnings from operations ( 248 ) ( 382 ) ( 99 ) 780

Other income, net 622 434 320 253

Interest and debt expense ( 1,270 ) ( 1,293 ) ( 621 ) ( 656 )

Loss before income taxes ( 496 ) ( 1,618 )

Income tax benefit 71 376

Net loss ( 425 ) ( 1,242 )

(Loss)/earnings before income taxes ( 896 ) ( 1,241 ) ( 400 ) 377

Income tax benefit/(expense) 322 159 251 ( 217 )

Net (loss)/earnings ( 574 ) ( 1,082 ) ( 149 ) 160

net loss attributable to noncontrolling interest ( 11 ) ( 56 ) ( 33 )

Net loss attributable to Boeing Shareholders ($ 414 ) ($ 1,219 )

Basic loss per share ($ 0.69 ) ($ 2.06 )

Diluted loss per share ($ 0.69 ) ($ 2.06 )

Net (loss)/earnings attributable to Boeing Shareholders ($ 563 ) ($ 1,026 ) ($ 149 ) $ 193

Basic (loss)/earnings per share ($ 0.93 ) ($ 1.73 ) ($ 0.25 ) $ 0.32

Diluted (loss)/earnings per share ($ 0.93 ) ($ 1.73 ) ($ 0.25 ) $ 0.32

Weighted average diluted shares (millions) 603.9 592.8 605.5 596.4

2 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

(Dollars in millions) Three months ended March 31

Net loss ($ 425 ) ($ 1,242 )

Other comprehensive income, net of tax:

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

2023 2022 2023 2022

Net (loss)/earnings ($ 574 ) ($ 1,082 ) ($ 149 ) $ 160

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

Currency translation adjustments 10 ( 52 ) ( 6 ) ( 76 )

Derivative instruments:

Unrealized gain arising during period, net of tax of ($ 5 ) and ($ 28 )

Reclassification adjustment for (gains)/losses included in net loss, net of tax of $ 1 and ($ 9 )

Total unrealized gain on derivative instruments, net of tax 13 129

Unrealized loss arising during period, net of tax of $ 7 , $ 21 , $ 12 and $ 49

( 25 ) ( 74 ) ( 43 ) ( 168 )

Reclassification adjustment for (gains)/losses included in net (loss)/earnings, net of tax of $ 1 , ($ 8 ), $ 0 and $ 1

( 2 ) 30 3 ( 5 )

Total unrealized loss on derivative instruments, net of tax ( 27 ) ( 44 ) ( 40 ) ( 173 )

Defined benefit pension plans and other postretirement benefits:

Net actuarial loss arising during the period, net of tax of $ 2 and $ 0

Net actuarial (loss)/gain arising during the period, net of tax of $ 2 , $ 0 , $ 0 and $ 0

Amortization of actuarial (gains)/losses included in net periodic pension cost, net of tax of $ 1 , ($ 84 ), $ 1 and ($ 44 )

( 4 ) 314 ( 2 ) 155

Amortization of prior service credits included in net periodic pension cost, net of tax of $ 12 , $ 12 , $ 6 and $ 6

1 unchanged sentence

Total defined benefit pension plans and other postretirement benefits, net of tax ( 50 ) 268 ( 21 ) 132

Other comprehensive income, net of tax 0 289

Comprehensive loss, net of tax ( 425 ) ( 953 )

Other comprehensive (loss)/income, net of tax ( 67 ) 172 ( 67 ) ( 117 )

Comprehensive (loss)/income, net of tax ( 641 ) ( 910 ) ( 216 ) 43

Comprehensive loss related to noncontrolling interest ( 11 ) ( 56 ) ( 33 )

Comprehensive loss attributable to Boeing Shareholders, net of tax ($ 414 ) ($ 930 )

Comprehensive (loss)/income attributable to Boeing Shareholders, net of tax ($ 630 ) ($ 854 ) ($ 216 ) $ 76

See Notes to the Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Statements of Financial Position

(Dollars in millions, except per share data) March 31

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

2023 December 31

43 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Three months ended March 31

(Dollars in millions) Six months ended June 30

Cash flows – operating activities:

Net loss ($ 574 ) ($ 1,082 )

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

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

Non-cash items –

18 unchanged sentences

Customer financing, net 419 50

Net cash used by operating activities ( 318 ) ( 3,216 )

Net cash provided/(used) by operating activities 2,557 ( 3,135 )

Cash flows – investing activities:

12 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 2 ( 71 )

Net decrease in cash & cash equivalents, including restricted ( 3,811 ) ( 650 )

Net (decrease)/increase in cash & cash equivalents, including restricted ( 7,372 ) 2,027

Cash & cash equivalents, including restricted, at beginning of year 14,647 8,104

5 unchanged sentences

Condensed Consolidated Statements of Equity

For the three months ended March 31, 2023 and 2022

For the six months ended June 30, 2023 and 2022

Boeing shareholders

(Dollars in millions, except per share data) Common

(Dollars in millions) Common

Stock Additional

10 unchanged sentences

Treasury shares issued for 401(k) contribution 164 448 612

Balance at March 31, 2022 $ 5,061 $ 9,295 ($ 51,573 ) $ 33,189 ($ 11,370 ) $ 130 ($ 15,268 )

Balance at June 30, 2022 $ 5,061 $ 9,475 ($ 51,319 ) $ 33,382 ($ 11,487 ) $ 97 ($ 14,791 )

Balance at January 1, 2023 $ 5,061 $ 9,947 ($ 50,814 ) $ 29,473 ($ 9,550 ) $ 35 ($ 15,848 )

Net loss ( 563 ) ( 11 ) ( 574 )

Other comprehensive income, net of tax of $ 4

Other comprehensive loss, net of tax of $ 23

( 67 ) ( 67 )

Share-based compensation 381 381

1 unchanged sentence

Treasury shares issued for other share-based plans, net

( 73 ) 49 ( 24 )

Treasury shares issued for 401(k) contribution 350 512 862

Balance at March 31, 2023 $ 5,061 $ 10,298 ($ 50,376 ) $ 29,059 ($ 9,550 ) $ 24 ($ 15,484 )

Subsidiary shares purchased from noncontrolling interests ( 267 ) ( 267 )

Balance at June 30, 2023 $ 5,061 $ 10,310 ($ 50,181 ) $ 28,910 ($ 9,617 ) $ 24 ($ 15,493 )

See Notes to the Condensed Consolidated Financial Statements.

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Equity

For the three months ended June 30, 2023 and 2022

Boeing shareholders

(Dollars in millions, except per share data) Common

Stock Additional

Capital Treasury Stock Retained

Earnings Accumulated Other Comprehensive Loss Non-

Interests Total

Balance at April 1, 2022 $ 5,061 $ 9,295 ($ 51,573 ) $ 33,189 ($ 11,370 ) $ 130 ($ 15,268 )

Net earnings 193 ( 33 ) 160

Other comprehensive loss, net of tax of $ 12

( 117 ) ( 117 )

Share-based compensation 149 149

Treasury shares issued for stock options exercised, net

Treasury shares issued for other share-based plans, net

( 5 ) 2 ( 3 )

Treasury shares issued for 401(k) contribution 38 245 283

Balance at June 30, 2022 $ 5,061 $ 9,475 ($ 51,319 ) $ 33,382 ($ 11,487 ) $ 97 ($ 14,791 )

Balance at April 1, 2023 $ 5,061 $ 10,298 ($ 50,376 ) $ 29,059 ($ 9,550 ) $ 24 ($ 15,484 )

Net loss ( 149 ) ( 149 )

Other comprehensive loss, net of tax of $ 19

( 67 ) ( 67 )

Share-based compensation 159 159

Treasury shares issued for stock options exercised, net ( 1 ) 1

Treasury shares issued for other share-based plans, net ( 6 ) 12 6

Treasury shares issued for 401(k) contribution 127 182 309

Subsidiary shares purchased from noncontrolling interests ( 267 ) ( 267 )

Balance at June 30, 2023 $ 5,061 $ 10,310 ($ 50,181 ) $ 28,910 ($ 9,617 ) $ 24 ($ 15,493 )

See Notes to the Condensed Consolidated Financial Statements.

The Boeing Company and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Summary of Business Segment Data

(Dollars in millions) Three months ended March 31

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

2023 2022 2023 2022

Commercial Airplanes $ 15,544 $ 10,452 $ 8,840 $ 6,258

3 unchanged sentences

Total revenues $ 37,672 $ 30,672 $ 19,751 $ 16,681

Loss from operations:

(Loss)/earnings from operations:

Commercial Airplanes ($ 998 ) ($ 1,116 ) ($ 383 ) ($ 219 )

1 unchanged sentence

Global Services 1,703 1,360 856 728

Segment operating earnings/(loss) 20 ( 1,194 )

Segment operating (loss)/earnings ( 34 ) ( 614 ) ( 54 ) 580

Unallocated items, eliminations and other ( 796 ) ( 335 ) ( 336 ) ( 84 )

FAS/CAS service cost adjustment 582 567 291 284

Loss from operations ( 149 ) ( 1,162 )

(Loss)/earnings from operations ( 248 ) ( 382 ) ( 99 ) 780

Other income, net 622 434 320 253

Interest and debt expense ( 1,270 ) ( 1,293 ) ( 621 ) ( 656 )

Loss before income taxes ( 496 ) ( 1,618 )

Income tax benefit 71 376

Net loss ( 425 ) ( 1,242 )

(Loss)/earnings before income taxes ( 896 ) ( 1,241 ) ( 400 ) 377

Income tax benefit/(expense) 322 159 251 ( 217 )

Net (loss)/earnings ( 574 ) ( 1,082 ) ( 149 ) 160

net loss attributable to noncontrolling interest ( 11 ) ( 56 ) ( 33 )

Net loss attributable to Boeing Shareholders ($ 414 ) ($ 1,219 )

Net (loss)/earnings attributable to Boeing Shareholders ($ 563 ) ($ 1,026 ) ($ 149 ) $ 193

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

6 unchanged sentences

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 March 31, 2023 are not necessarily indicative of the operating results for the full year.

The results of operations for the period ended June 30, 2023 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 2022 Annual Report on Form 10-K.

8 unchanged sentences

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

(In millions - except per share amounts) Three months ended March 31

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

2023 2022 2023 2022

Decrease to Revenue ($ 782 ) ($ 885 ) ($ 470 ) ($ 273 )

Increase to Loss from operations ($ 518 ) ($ 1,130 )

Increase to (Loss)/(decrease) to earnings from operations ($ 1,348 ) ($ 1,541 ) ($ 830 ) ($ 411 )

Decrease to Diluted EPS ($ 1.43 ) ($ 2.27 ) ($ 0.51 ) ($ 0.29 )

5 unchanged sentences

Diluted earnings per share is calculated by taking net earnings, less earnings available to participating securities, divided by the diluted weighted average common shares outstanding.

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

(In millions - except per share amounts) Three months ended March 31

Net loss available to common shareholders ($ 414 ) ($ 1,219 )

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

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

2023 2022 2023 2022

Net (loss)/earnings available to common shareholders ($ 563 ) ($ 1,026 ) ($ 149 ) $ 193

Basic weighted average shares outstanding

603.9 592.8 605.5 594.0

participating securities (1)

0.3 0.3 0.3 0.3

Basic weighted average common shares outstanding

603.6 592.5 605.2 593.7

Basic weighted average shares outstanding

603.9 592.8 605.5 594.0

Dilutive potential common shares (2)

Diluted weighted average shares outstanding

603.9 592.8 605.5 596.4

participating securities (1)

0.3 0.3 0.3 0.3

Diluted weighted average common shares outstanding

Net loss per share:

603.6 592.5 605.2 596.1

Net (loss)/earnings per share:

($ 0.93 ) ($ 1.73 ) ($ 0.25 ) $ 0.32

( 0.93 ) ( 1.73 ) ( 0.25 ) 0.32

(1) Participating securities include certain instruments in our deferred compensation plan.

(2) Diluted loss per share includes any dilutive impact of stock options, restricted stock units,

(2) Diluted (loss)/earnings per share includes any dilutive impact of stock options, restricted stock units,

performance-based restricted stock units and performance awards.

The following table represents potential common shares that were not included in the computation of diluted loss per share because the effect was antidilutive based on their strike price or the performance condition was not met.

(Shares in millions) Three months ended March 31

The following table represents potential common shares that were not included in the computation of diluted (loss)/earnings per share because the effect was antidilutive based on their strike price or the performance condition was not met.

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

2023 2022 2023 2022

Performance awards 1.9 2.3

2 unchanged sentences

Stock options 0.8 0.7 0.8 0.8

In addition, 5.3 million and 3.6 million potential common shares were excluded from the computation of diluted loss per share for the three months ended March 31, 2023 and 2022, respectively, because the effect would have been antidilutive as a result of incurring a net loss in those periods.

In addition, potential common shares of 5.4 million and 3.0 million for the six months ended June 30, 2023 and 2022 and 5.5 million for the three months ended June 30, 2023 were excluded from the computation of diluted (loss)/earnings per share, because the effect would have been antidilutive as a result of incurring a net loss in those periods.

Note 3 – Income Taxes

We compute our interim tax provision using an estimated annual effective tax rate, adjusted for discrete items.

We computed our interim tax provision using an estimated annual effective tax rate, adjusted for discrete items.

Our 2023 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of taxation upon foreign operations, and a forecasted increase to the valuation allowance, which is partially offset by research and development tax credits.

Our actual effective tax rates were 14.3 % and 23.2 % for the three months ended March 31, 2023 and 2022.

The effective tax rate for the three months ended March 31, 2023 included an additional increase in the valuation allowance treated as a discrete tax expense.

The effective tax rates were 35.9 % and 12.8 % for the six months ended June 30, 2023 and 2022.

The effective tax rate for the three months ended June

30, 2023, was 62.8 % and reflects additional tax benefit to adjust prior quarter's results to the annual effective tax rate.

As of December 31, 2022, the Company had recorded valuation allowances of $ 3,162 primarily for certain federal deferred tax assets, as well as for certain federal and state net operating loss and tax credit carryforwards.

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.

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.

Based on these methods, deferred tax liabilities are assumed to reverse and generate taxable income over the next 5 to 10 years while deferred tax assets related to pension and other postretirement benefit obligations are assumed to reverse and generate tax deductions over the next 15 to 20 years.

7 unchanged sentences

Note 4 – Allowances for Losses on Financial Assets

The changes in allowances for expected credit losses for the three months ended March 31, 2023 and 2022 consisted of the following:

The changes in allowances for expected credit losses for the six months ended June 30, 2023 and 2022 consisted of the following:

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

3 unchanged sentences

Recoveries 5 5

Balance at March 31, 2022

Balance at June 30, 2022

($ 148 ) ($ 26 ) ($ 61 ) ($ 60 ) ($ 80 ) ($ 375 )

3 unchanged sentences

Recoveries 2 2

Balance at March 31, 2023

Balance at June 30, 2023

($ 95 ) ($ 21 ) ($ 66 ) ($ 53 ) ($ 100 ) ($ 335 )

7 unchanged sentences

Total $ 78,322 $ 78,151

(1) Capitalized precontract costs at March 31, 2023 and December 31, 2022 includes amounts related to KC-46A Tanker, Commercial Crew, and T-7 Production Options.

(1) Capitalized precontract costs at June 30, 2023 and December 31, 2022 includes amounts related to KC-46A Tanker, Commercial Crew, and T-7 Production Options.

Commercial Aircraft Programs

Commercial aircraft programs inventory includes approximately 225 737 aircraft and 95 787 aircraft at March 31, 2023 as compared with approximately 250 737 MAX aircraft and 100 787 aircraft at December 31, 2022.

At March 31, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 737 program:

Commercial aircraft programs inventory includes approximately 220 737 aircraft and 85 787 aircraft at June 30, 2023 as compared with approximately 250 737 aircraft and 100 787 aircraft at December 31, 2022.

At June 30, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 737 program:

deferred production costs of $ 4,739 and $ 2,955 and unamortized tooling and other non-recurring costs of $ 591 and $ 626 .

At March 31, 2023, $ 4,493 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 $ 26 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

At March 31, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 777X program:

At June 30, 2023, $ 5,297 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 $ 33 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

At June 30, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 777X program:

$ 4,226 and $ 4,059 of work in process, $ 1,385 and $ 1,330 of deferred production costs, and $ 3,868 and $ 3,774 of unamortized tooling and other non-recurring costs.

1 unchanged sentence

The production pause is resulting in abnormal production costs that are being expensed as incurred until 777X-9 production resumes.

We expensed abnormal production costs of $ 126 during the three months ended March 31, 2023.

The 777X program has near break-even margins at March 31, 2023.

At March 31, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 787 program:

We expensed abnormal production costs of $ 262 and $ 102 during the six months ended June 30, 2023 and 2022.

The 777X program has near break-even margins at June 30, 2023.

At June 30, 2023 and December 31, 2022, commercial aircraft programs inventory included the following amounts related to the 787 program:

deferred production costs of $ 12,193 and $ 12,689 , $ 1,765 and $ 1,831 of supplier advances, and $ 1,600 and $ 1,722 of unamortized tooling and other non-recurring costs.

At March 31, 2023, $ 10,211 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 $ 3,916 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

At June 30, 2023, $ 11,823 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 $ 1,970 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

We are currently producing at abnormally low rates resulting in abnormal production costs that are being expensed as incurred.

We expensed abnormal production costs of $ 379 and $ 312 during the three months ended March 31, 2023 and 2022.

Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 3,559 and $ 3,586 at March 31, 2023 and December 31, 2022.

We expensed abnormal production costs of $ 693 and $ 595 during the six months ended June 30, 2023 and 2022.

Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 3,625 and $ 3,586 at June 30, 2023 and December 31, 2022.

Note 6 – Contracts with Customers

Unbilled receivables increased from $ 8,634 at December 31, 2022 to $ 9,689 at March 31, 2023, primarily driven by revenue recognized at Defense, Space & Security (BDS) and Global Services (BGS) in excess of billings.

Advances and progress billings increased from $ 53,081 at December 31, 2022 to $ 54,498 at March 31, 2023, primarily driven by advances on orders received at Commercial Airplanes (BCA) and BDS.

Revenues recognized during the three months ended March 31, 2023 and 2022 from amounts recorded as Advances and progress billings at the beginning of each year were $ 3,881 and $ 3,401 .

Unbilled receivables increased from $ 8,634 at December 31, 2022 to $ 9,357 at June 30, 2023, primarily driven by revenue recognized at Defense, Space & Security (BDS) and Global Services (BGS) in excess of billings.

Advances and progress billings increased from $ 53,081 at December 31, 2022 to $ 55,310 at June 30, 2023, primarily driven by advances on orders received at Commercial Airplanes (BCA), partially offset by revenue recognized at BDS.

Revenues recognized during the six months ended June 30, 2023 and 2022 from amounts recorded as Advances and progress billings at the beginning of each year were $ 7,885 and $ 6,814 .

Revenues recognized during the three months ended June 30, 2023 and 2022 from amounts recorded as Advances and progress billings at the beginning of each year were $ 4,004 and $ 3,413 .

Note 7 – Customer Financing

11 unchanged sentences

Certain leases include provisions to allow the lessee to purchase the underlying aircraft at a specified price.

At March 31, 2023 and December 31, 2022, $ 405 and $ 405 were determined to be uncollectible financing receivables and placed on non-accrual status.

The allowance for losses on receivables remained largely unchanged during the three months ended March 31, 2023.

Our financing receivable balances at March 31, 2023 by internal credit rating category and year of origination consisted of the following:

At June 30, 2023 and December 31, 2022, $ 238 and $ 405 were determined to be uncollectible financing receivables and placed on non-accrual status.

The allowance for losses on receivables remained largely unchanged during the six months ended June 30, 2023.

Our financing receivable balances at June 30, 2023 by internal credit rating category and year of origination consisted of the following:

Rating categories Current 2022 2021 2020 2019 Prior Total

1 unchanged sentence

BB $ 47 $ 33 $ 209 $ 107 $ 38 155 589

B $ 18 197 215

CCC 10 35 192 237

Total carrying value of financing receivables $ 57 $ 33 $ 244 $ 107 $ 55 $ 380 $ 876

At March 31, 2023, our allowance for losses related to receivables with ratings of CCC, B, BB, and BBB.

At June 30, 2023, our allowance for losses related to receivables with ratings of CCC, B, BB, and BBB.

We applied default rates that averaged 100.0 %, 0.0 %, 2.7 %, and 0.1 %, respectively, to the exposure associated with those receivables.

10 unchanged sentences

Operating lease equipment primarily includes large commercial jet aircraft.

Lease income recorded in revenue on the Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 included $ 15 and $ 18 from sales-type/finance leases, and $ 11 and $ 15 from operating leases , of which $ 0 and $ 4 related to variable operating lease payments.

Profit at the commencement of sales-type leases was recorded in revenue for the three months ended March 31, 2023 and 2022 in the amount of $ 12 and $ 4 .

Customer financing interest income received was $ 4 and $ 3 for the three months ended March 31, 2023 and 2022.

Lease income recorded in revenue on the Condensed Consolidated Statements of Operations for the six months ended June 30, 2023 and 2022 included $ 29 and $ 36 from sales-type/finance leases, and $ 27 and $ 32 from operating leases , of which $ 1 and $ 5 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, 2023 and 2022 included $ 14 and $ 18 from sales-type/finance leases, and $ 16 and $ 17 from operating leases , of which $ 1 and $ 1 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, 2023 and 2022 in the amount of $ 20 and $ 12 .

Customer financing interest income received was $ 62 and $ 6 for the six months ended June 30, 2023 and 2022.

Profit at the commencement of sales-type leases was recorded in revenue for the three months ended June 30, 2023 and 2022 in the amount of $ 8 and $ 8 .

Customer financing interest income received was $ 58 and $ 3 for the three months ended June 30, 2023 and 2022.

Note 8 – Investments

3 unchanged sentences

Time deposits 5,988 2,093

Available for sale debt instruments 493 479

Available-for-sale debt investments 499 479

Equity and other investments 32 36

1 unchanged sentence

Total $ 7,533 $ 3,589

(1) Dividends received were $ 0 and $ 27 during the three months ended March 31, 2023 and 2022.

(1) Dividends received were $ 5 during the six and three months ended June 30, 2023 and $ 43 and $ 16 during the same periods in prior year.

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

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

All instruments are considered investment grade and we have not recognized an allowance for credit losses as of March 31, 2023.

Allowance for losses on available-for-sale debt investments are assessed quarterly.

All instruments are considered investment grade, and we have not recognized an allowance for credit losses as of June 30, 2023.

Note 9 – Liabilities, Commitments and Contingencies

737 MAX Customer Concessions and Other Considerations

The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the three months ended March 31, 2023 and 2022.

The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the six months ended June 30, 2023 and 2022.

Beginning balance – January 1 $ 1,864 $ 2,940

2 unchanged sentences

Changes in estimates ( 26 ) 17

Ending balance – March 31 $ 1,723 $ 2,419

The liability balance of $ 1.7 billion at March 31, 2023 includes $ 1.4 billion of contracted customer concessions and other liabilities and $ 0.3 billion that remains subject to negotiation with customers.

Ending balance – June 30 $ 1,514 $ 2,108

The liability balance of $ 1.5 billion at June 30, 2023 includes $ 1.3 billion of contracted customer concessions and other liabilities and $ 0.2 billion that remains subject to negotiation with customers.

The contracted amount includes $ 0.6 billion expected to be liquidated by lower customer delivery payments, $ 0.6 billion expected to be paid in cash and $ 0.1 billion in other concessions.

2 unchanged sentences

Environmental

The following table summarizes changes in environmental remediation liabilities during the three months ended March 31, 2023 and 2022.

The following table summarizes changes in environmental remediation liabilities during the six months ended June 30, 2023 and 2022.

Beginning balance – January 1 $ 752 $ 605

1 unchanged sentence

Changes in estimates 72 131

Ending balance – March 31 $ 788 $ 653

Ending balance – June 30 $ 800 $ 725

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.

2 unchanged sentences

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

At March 31, 2023 and December 31, 2022, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 1,043 and $ 1,058 .

At June 30, 2023 and December 31, 2022, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 1,045 and $ 1,058 .

Product Warranties

The following table summarizes changes in product warranty liabilities recorded during the three months ended March 31, 2023 and 2022.

The following table summarizes changes in product warranty liabilities recorded during the six months ended June 30, 2023 and 2022.

Beginning balance – January 1 $ 2,275 $ 1,900

2 unchanged sentences

Changes in estimates 338 261

Ending balance – March 31 $ 2,175 $ 1,966

Ending balance – June 30 $ 2,526 $ 2,030

Commercial Aircraft Trade-In Commitments

3 unchanged sentences

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 March 31, 2023 have expiration dates from 2023 through 2029.

At March 31, 2023 and December 31, 2022 total contractual trade-in commitments were $ 1,328 and $ 1,117 .

As of March 31, 2023 and December 31, 2022, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $ 283 and $ 286 and the fair value of the related trade-in aircraft was $ 283 and $ 286 .

Trade-in commitment agreements at June 30, 2023 have expiration dates from 2023 through 2029.

At June 30, 2023 and December 31, 2022 total contractual trade-in commitments were $ 1,455 and $ 1,117 .

As of June 30, 2023 and December 31, 2022, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $ 302 and $ 286 and the fair value of the related trade-in aircraft was $ 302 and $ 286 .

Financing Commitments

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $ 15,328 and $ 16,105 as of March 31, 2023 and December 31, 2022.

The estimated earliest potential funding dates for these commitments as of March 31, 2023 are as follows:

April through December 2023

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $ 16,423 and $ 16,105 as of June 30, 2023 and December 31, 2022.

The estimated earliest potential funding dates for these commitments as of June 30, 2023 are as follows:

July through December 2023

Thereafter 2,273

As of March 31, 2023, all of these financing commitments relate to customers we believe have less than investment-grade credit.

As of June 30, 2023, all 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 and security agreements.

Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $ 5,062 and $ 5,070 as of March 31, 2023 and December 31, 2022.

Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $ 5,006 and $ 5,070 as of June 30, 2023 and December 31, 2022.

Supply Chain Financing Programs

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The majority of amounts payable under these programs are due within 30 to 90 days but may extend up to 12 months.

At March 31, 2023 and December 31, 2022, Accounts payable included $ 2.6 billion and $ 2.5 billion payable to suppliers who have elected to participate in these programs.

At June 30, 2023 and December 31, 2022, Accounts payable included $ 2.6 billion and $ 2.5 billion payable to suppliers who have elected to participate in these programs.

We do not believe that future changes in the availability of supply chain financing will have a significant impact on our liquidity.

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VC-25B Presidential Aircraft

The Company’s firm fixed-price contract for the Engineering, Manufacturing, and Development (EMD) effort on the U.S.

The Company’s firm fixed-price contract for the Engineering and Manufacturing Development (EMD) effort on the U.S.

Air Force’s (USAF) VC-25B Presidential Aircraft, commonly known as Air Force One, is a $ 4.3 billion program to develop and modify two 747-8 commercial aircraft.

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Since 2016, the USAF has authorized nine low rate initial production (LRIP) lots for a total of 124 aircraft.

The EMD contract and authorized LRIP lots total approximately $ 24 billion as of March 31, 2023.

As of March 31, 2023, we had approximately $ 166 of capitalized precontract costs and $ 95 of potential termination liabilities to suppliers related to unexercised future lots.

The EMD contract and authorized LRIP lots total approximately $ 24 billion as of June 30, 2023.

As of June 30, 2023, we had approximately $ 167 of capitalized precontract costs and $ 143 of potential termination liabilities to suppliers related to unexercised future lots.

During the year ended December 31, 2022, we increased the reach-forward loss on the KC-46A Tanker program by $ 1,374 .

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In the third quarter of 2018, we were awarded the MQ-25 EMD contract by the U.S.

The contract is a fixed-price contract that now includes development and delivery of seven aircraft and test articles at a contract price of $ 890 .

The contract is a fixed-price contract that includes development and delivery of seven aircraft and test articles at a contract price of $ 890 .

During the year ended December 31, 2022, we increased the MQ-25 reach-forward loss by $ 579 .

During the three months ended June 30, 2023, we increased the reach-forward loss by $ 68 primarily driven by production and flight testing delays for EMD aircraft.

Risk remains that we may record additional losses in future periods.

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During the year ended December 31, 2022, we recorded earnings charges of $ 203 related to the T-7A Red Hawk fixed-price EMD contract, which had a reach-forward loss at December 31, 2022.

We continue to expect EMD aircraft flight testing to start in 2023.

The production portion of the contract includes 11 production lots for aircraft and related services for 346 T-7A Red Hawk aircraft that we believe are probable of being exercised.

We continue to expect the first production and support contract option to be exercised in 2024.

We increased the estimated reach-forward loss by $ 552 during the year ended December 31, 2022 primarily driven by ongoing supply chain negotiations.

At March 31, 2023, we had approximately $ 75 of capitalized precontract costs and $ 339 of potential termination liabilities to suppliers related to future production lots.

We expect the first production and support contract option to be exercised in 2025.

During the year ended December 31, 2022, we increased the reach-forward loss by $ 552 .

During the three months ended June 30, 2023, we increased the reach-forward loss on the T-7A program by $ 189 primarily reflecting higher estimated production costs.

At June 30, 2023, we had approximately $ 97 of capitalized precontract costs and $ 391 of potential termination liabilities to suppliers related to future production lots.

Risk remains that we may record additional losses in future periods.

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During the second quarter of 2022 we successfully completed the uncrewed Orbital Flight Test.

A crewed flight test is now

planned for July 2023.

During the year ended December 31, 2022, we increased the reach-forward loss by $ 288 .

At March 31, 2023, we had approximately $ 188 of capitalized precontract costs and $ 199 of potential termination liabilities to suppliers related to unauthorized future missions.

During the second quarter of 2023, we increased the reach-forward loss by $ 257 primarily as a result of delaying the crewed flight test previously scheduled for July 2023 following notification by a parachute supplier of an issue identified through testing.

We anticipate being ready to launch later in 2023 or early 2024 and we are working with NASA to identify a new launch window.

At June 30, 2023, we had approximately $ 189 of capitalized precontract costs and $ 198 of potential termination liabilities to suppliers related to fixed-price unauthorized future missions.

Risk remains that we may record additional losses in future periods.

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2023 December 31

2022 March 31

2023 December 31

2022 March 31

2023 December 31

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Our repurchase of the aircraft is contingent upon entering into a mutually acceptable agreement for the sale of additional new aircraft in the future.

The commercial aircraft repurchase price specified in contingent repurchase commitments is generally lower than the expected fair value at the specified repurchase date.

The commercial aircraft repurchase price specified in

contingent repurchase commitments is generally lower than the expected fair value at the specified repurchase date.

Estimated proceeds from collateral/recourse in the table above represent the lower of the contracted repurchase price or the expected fair value of each aircraft at the specified repurchase date.

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Note 11 – Postretirement Plans

The components of net periodic benefit (income)/cost for the three months ended March 31 were as follows:

Pension Postretirement

2023 2022 2023 2022

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

Six months ended June 30 Three months ended June 30

Pension Plans 2023 2022 2023 2022

Service cost $ 2 $ 2 $ 1 $ 1

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Amortization of prior service credits ( 41 ) ( 41 ) ( 21 ) ( 21 )

Recognized net actuarial loss/(gain) 42 227 ( 44 ) ( 28 )

Recognized net actuarial loss 83 454 41 227

Net periodic benefit income ($ 266 ) ($ 439 ) ($ 133 ) ($ 220 )

Net periodic benefit cost included in (Loss)/earnings from operations $ 2 $ 2 $ 1 $ 1

Net periodic benefit income included in Other income, net ( 268 ) ( 441 ) ( 134 ) ( 221 )

Net periodic benefit income included in (Loss)/earnings before income taxes ($ 266 ) ($ 439 ) ($ 133 ) ($ 220 )

Six months ended June 30 Three months ended June 30

Other Postretirement Plans 2023 2022 2023 2022

Service cost $ 24 $ 36 $ 12 $ 18

Interest cost 74 49 37 25

Expected return on plan assets ( 4 ) ( 5 ) ( 2 ) ( 3 )

Amortization of prior service credits ( 11 ) ( 17 ) ( 5 ) ( 8 )

Recognized net actuarial gain ( 88 ) ( 56 ) ( 44 ) ( 28 )

Net periodic benefit (income)/cost ($ 5 ) $ 7 ($ 2 ) $ 4

Net periodic benefit cost included in Loss from operations $ 1 $ 1 $ 15 $ 19

Net periodic benefit (income)/cost included in Other income, net ( 134 ) ( 220 ) ( 15 ) ( 15 )

Net periodic benefit (income)/cost included in Loss before income taxes ($ 133 ) ($ 219 ) $ 0 $ 4

Net periodic benefit cost included in (Loss)/earnings from operations $ 31 $ 39 $ 16 $ 20

Net periodic benefit income included in Other income, net ( 29 ) ( 29 ) ( 14 ) ( 14 )

Net periodic benefit cost included in (Loss)/earnings before income taxes $ 2 $ 10 $ 2 $ 6

Note 12 – Share-Based Compensation and Other Compensation Arrangements

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The award payout can range from 0 % to 200 % of the initial PRSU grant based on cumulative free cash flow achievement over the period January 1, 2023 through December 31, 2025 as compared to goals set at the start of the performance period.

The PRSU granted under this program will vest at the payout amount and settle in common stock (on a one-for-one basis) on the third anniversary of the grant date.

The PRSUs granted under this program will vest at the payout amount and settle in common stock (on a one-for-one basis) on the third anniversary of the grant date.

If an executive terminates employment because of retirement, layoff, disability, or death, the executive (or beneficiary) remains eligible under the award and, if the award is earned, may receive some or all of their stock units depending on certain age and service conditions.

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Note 13 – Shareholders' Equity

Additional Paid-in Capital

During the second quarter of 2023, Additional paid-in capital included a decrease of $ 267 largely related to a non-cash transaction to purchase shares in a consolidated subsidiary from the noncontrolling interests.

Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss (AOCI) by component for the three months ended March 31, 2023 and 2022 were as follows:

Changes in Accumulated other comprehensive loss (AOCI) by component for the six and three months ended June 30, 2023 and 2022 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, 2022 ($ 105 ) $ 1 $ 6 ($ 11,561 ) ($ 11,659 )

Other comprehensive income before reclassifications 24 94 118

Other comprehensive loss before reclassifications ( 52 ) ( 74 ) ( 126 )

Amounts reclassified from AOCI

Net current period Other comprehensive income 24 129 136 289

Balance at March 31, 2022 ($ 81 ) $ 1 $ 135 ($ 11,425 ) ($ 11,370 )

Net current period Other comprehensive (loss)/income ( 52 ) ( 44 ) 268 172

Balance at June 30, 2022 ($ 157 ) $ 1 ($ 38 ) ($ 11,293 ) ($ 11,487 )

Balance at January 1, 2023 ($ 167 ) ($ 24 ) ($ 9,359 ) ($ 9,550 )

1 unchanged sentence

Amounts reclassified from AOCI

( 2 ) ( 44 ) ( 46 )

Net current period Other comprehensive income/(loss) 10 ( 27 ) ( 50 ) ( 67 )

Balance at June 30, 2023 ($ 157 ) ($ 51 ) ($ 9,409 ) ($ 9,617 )

Balance at March 31, 2022 ($ 81 ) $ 1 $ 135 ($ 11,425 ) ($ 11,370 )

Other comprehensive loss before reclassifications ( 76 ) ( 168 ) ( 244 )

Amounts reclassified from AOCI

( 5 ) 132 (2)

Net current period Other comprehensive (loss)/income ( 76 ) ( 173 ) 132 ( 117 )

Balance at June 30, 2022 ($ 157 ) $ 1 ($ 38 ) ($ 11,293 ) ($ 11,487 )

Balance at March 31, 2023 ($ 151 ) ($ 11 ) ($ 9,388 ) ($ 9,550 )

Other comprehensive (loss)/income before reclassifications ( 6 ) ( 43 ) 1 ( 48 )

Amounts reclassified from AOCI

3 ( 22 ) ( 19 )

Net current period Other comprehensive loss ( 6 ) ( 40 ) ( 21 ) ( 67 )

Balance at June 30, 2023 ($ 157 ) ($ 51 ) ($ 9,409 ) ($ 9,617 )

(1) Net of tax.

(2) Primarily relates to amortization of actuarial losses for the three months ended March 31, 2022 totaling $ 159 (net of tax of ($ 40 )), which is included in the net periodic pension cost.

(2) Primarily relates to amortization of actuarial losses for the six and three months ended June 30, 2022 totaling $ 314 and $ 155 (net of tax of ($ 84 ) and ($ 44 )), which are included in the net periodic pension cost.

(3) Includes losses of $ 39 (net of tax of ($ 11 )) from cash flow hedges reclassified to Other income, net because the forecasted transactions are probable of not occurring.

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2023 December 31

2022 March 31

2023 December 31

2022 March 31

2023 December 31

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(1) Notional amounts represent the gross contract/notional amount of the derivatives outstanding.

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

Three months ended March 31

Recognized in Other comprehensive income/(loss), net of taxes:

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

Six months ended June 30 Three months ended June 30

2023 2022 2023 2022

Recognized in Other comprehensive (loss)/income, net of taxes:

Foreign exchange contracts $ 11 ($ 104 ) $ 1 ($ 96 )

1 unchanged sentence

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

Three months ended March 31

Six months ended June 30 Three months ended June 30

2023 2022 2023 2022

Foreign exchange contracts

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General and administrative expense 5 2 3 1

During the three months ended March 31, 2022, we reclassified losses associated with certain cash flow hedges of $ 50 from AOCI to Other income, net because it was probable the forecasted transactions would not occur.

Losses related to undesignated derivatives on foreign exchange and commodity cash flow hedging transactions recognized in Other income, net were insignificant for the three months ended March 31, 2023 and 2022.

Based on our portfolio of cash flow hedges, we expect to reclassify losses of $ 8 (pre-tax) out of Accumulated other comprehensive loss into earnings during the next 12 months.

During the six months ended June 30, 2022, we reclassified losses associated with certain cash flow hedges of $ 50 from AOCI to Other income, net because it was probable the forecasted transactions would not occur.

Losses related to undesignated derivatives on foreign exchange and commodity cash flow hedging transactions recognized in Other income, net were insignificant for the six months ended June 30, 2023 and 2022.

Based on our portfolio of cash flow hedges, we expect to reclassify losses of $ 22 (pre-tax) out of AOCI into earnings during the next 12 months.

We have derivative instruments with credit-risk-related contingent features.

If we default on our five-year credit facility, our derivative counterparties could require settlement for foreign exchange and certain

commodity contracts with original maturities of at least five years .

The fair value of those contracts in a net liability position at March 31, 2023 was $ 29 .

If we default on our five-year credit facility, our derivative counterparties could require settlement for foreign exchange and certain commodity contracts with original maturities of at least five years .

The fair value of those contracts in a net liability position at June 30, 2023 was $ 24 .

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

At March 31, 2023, there was no collateral posted related to our derivatives.

At June 30, 2023, there was no collateral posted related to our derivatives.

Note 15 – 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.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

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Certain assets have been measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3).

The following table presents the nonrecurring losses recognized for the three months ended March 31 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 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:

Fair Value Total

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

The fair value of the impaired customer financing assets includes operating lease equipment and investments in sales type-leases/finance leases and is derived by calculating a median collateral value from a consistent group of third party aircraft value publications.

The fair value of the impaired customer financing assets includes operating lease equipment and

investments in sales type-leases/finance leases and is derived by calculating a median collateral value from a consistent group of third party aircraft value publications.

The values provided by the third party aircraft publications are derived from their knowledge of market trades and other market factors.

3 unchanged sentences

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:

March 31, 2023

June 30, 2023

Amount Total Fair

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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.

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 March 31, 2023 and December 31, 2022.

The carrying values of those items, as reflected in the Condensed Consolidated Statements of Financial Position, approximate their fair value at June 30, 2023 and December 31, 2022.

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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Such proceedings involve or could involve claims by the government for fines, penalties, compensatory and treble damages, restitution and/or forfeitures.

Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations.

Under government regulations, a company, or one or more of its operating

divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations.

Except as described below, we believe, based upon current information, that the outcome of any such legal proceeding, claim, or government dispute and investigation will not have a material effect on our financial position, results of operations or cash flows.

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Prior period amounts have been reclassified to conform to the current period presentation.

Our primary profitability measurements to review a segment’s operating results are Earnings/(loss) from operations and operating margins.

Our primary profitability measurement to review a segment’s operating results is (Loss)/earnings from operations.

We operate in three reportable segments:

BCA, BDS, and BGS.

other activities fall within Unallocated items, eliminations and other.

All other activities fall within Unallocated items, eliminations and other.

See page 7 for the Summary of Business Segment Data, which is an integral part of this note.

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BCA revenues by customer location consisted of the following:

(Dollars in millions) Three months ended March 31

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

2023 2022 2023 2022

Revenue from contracts with customers:

1 unchanged sentence

Latin America and Caribbean 204 1,136 98 308

Asia 2,355 2,027 1,549 1,298

Middle East 1,466 1,088 750 770

Other non-U.S.

878 568 631 387

Total non-U.S.

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

(Dollars in millions) Three months ended March 31

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

2023 2022 2023 2022

Revenue from contracts with customers:

1 unchanged sentence

customers (1)

2,368 2,892 1,139 1,557

Total segment revenue from contracts with customers $ 12,706 $ 11,674 $ 6,167 $ 6,191

3 unchanged sentences

government (1)

90 % 89 % 90 % 89 %

(1) Includes revenues earned from foreign military sales through the U.S.

BGS revenues consisted of the following:

(Dollars in millions) Three months ended March 31

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

2023 2022 2023 2022

Revenue from contracts with customers:

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government (1)

31 % 34 % 31 % 33 %

(1) Includes revenues earned from foreign military sales through the U.S.

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Backlog is converted into revenue, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable revenue recognition model.

Our backlog at March 31, 2023 was $ 411,446 .

Our backlog at June 30, 2023 was $ 439,564 .

We expect approximately 26 % to be converted to revenue through 2024 and approximately 77 % through 2027, with the remainder thereafter.

3 unchanged sentences

We generally allocate costs to business segments based on the U.S.

federal cost accounting standards (CAS).

Government Cost Accounting Standards (CAS).

Components of Unallocated items, eliminations and other (expense)/income are shown in the following table.

Three months ended March 31

Six months ended June 30 Three months ended June 30

2023 2022 2023 2022

Share-based plans ($ 38 ) ($ 108 ) $ 14 ($ 25 )

5 unchanged sentences

($ 796 ) ($ 335 ) ($ 336 ) ($ 84 )

Pension FAS/CAS service cost adjustment $ 223 $ 208

Postretirement FAS/CAS service cost adjustment 68 75

FAS/CAS service cost adjustment $ 291 $ 283

Pension and Other Postretirement Benefit Expense

5 unchanged sentences

These expenses are included in Other income, net.

Components of FAS/CAS service cost adjustment are shown in the following table:

Six months ended June 30 Three months ended June 30

2023 2022 2023 2022

Pension FAS/CAS service cost adjustment $ 445 $ 413 $ 222 $ 205

Postretirement FAS/CAS service cost adjustment 137 154 69 79

FAS/CAS service cost adjustment $ 582 $ 567 $ 291 $ 284

Segment assets are summarized in the table below:

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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 March 31, 2023, the related condensed consolidated statements of operations, comprehensive income, equity and cash flows for the three-month periods ended March 31, 2023 and 2022, 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 June 30, 2023, the related condensed consolidated statements of operations, comprehensive income, and equity for the three-month and six-month periods ended June 30, 2023 and 2022, and of cash flows for the six-month periods ended June 30, 2023 and 2022, and the related notes (collectively referred to as the "condensed consolidated interim financial information").

Based on our reviews, 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.

12 unchanged sentences

Chicago, Illinois

April 26, 2023

July 26, 2023

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