What changed in this filing

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Item 1. Financial Statements

2023-10-25 compared with 2023-07-26 · 190 added, 163 removed, 746 unchanged (32% 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

2023 2022 2023 2022

10 unchanged sentences

Gain on dispositions, net 1 2

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

Loss from operations ( 1,056 ) ( 3,174 ) ( 808 ) ( 2,792 )

Other income, net 919 722 297 288

Interest and debt expense ( 1,859 ) ( 1,921 ) ( 589 ) ( 628 )

(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

Loss before income taxes ( 1,996 ) ( 4,373 ) ( 1,100 ) ( 3,132 )

Income tax expense ( 216 ) ( 17 ) ( 538 ) ( 176 )

Net loss ( 2,212 ) ( 4,390 ) ( 1,638 ) ( 3,308 )

net loss attributable to noncontrolling interest ( 13 ) ( 89 ) ( 2 ) ( 33 )

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

Net loss attributable to Boeing Shareholders ($ 2,199 ) ($ 4,301 ) ($ 1,636 ) ($ 3,275 )

Basic loss per share ($ 3.64 ) ($ 7.24 ) ($ 2.70 ) ($ 5.49 )

Diluted loss per share ($ 3.64 ) ($ 7.24 ) ($ 2.70 ) ($ 5.49 )

Weighted average diluted shares (millions) 605.0 594.0 607.2 596.3

2 unchanged sentences

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

2023 2022 2023 2022

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

Net loss ($ 2,212 ) ($ 4,390 ) ($ 1,638 ) ($ 3,308 )

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

Currency translation adjustments ( 29 ) ( 123 ) ( 39 ) ( 71 )

Unrealized gain/(loss) on certain investments, net of tax of $ 0 , $ 0 , $ 0 and $ 0

1 ( 2 ) 1 ( 2 )

Derivative instruments:

1 unchanged sentence

( 60 ) ( 157 ) ( 35 ) ( 83 )

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

( 2 ) 30 3 ( 5 )

Reclassification adjustment for losses/(gains) included in net loss, net of tax of $ 0 , ($ 6 ), ($ 1 ) and $ 2

Total unrealized loss on derivative instruments, net of tax ( 58 ) ( 133 ) ( 31 ) ( 89 )

5 unchanged sentences

( 61 ) ( 68 ) ( 21 ) ( 22 )

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

Total defined benefit pension plans and other postretirement benefits, net of tax ( 72 ) 399 ( 22 ) 131

Other comprehensive (loss)/income, net of tax ( 158 ) 141 ( 91 ) ( 31 )

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

Comprehensive loss, net of tax ( 2,370 ) ( 4,249 ) ( 1,729 ) ( 3,339 )

Comprehensive loss related to noncontrolling interest ( 13 ) ( 89 ) ( 2 ) ( 33 )

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

Comprehensive loss attributable to Boeing Shareholders, net of tax ($ 2,357 ) ($ 4,160 ) ($ 1,727 ) ($ 3,306 )

See Notes to the Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Statements of Financial Position

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

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

2023 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 loss ($ 2,212 ) ($ 4,390 )

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

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

Non-cash items –

18 unchanged sentences

Customer financing, net 472 76

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

Net cash provided by operating activities 2,579 55

Cash flows – investing activities:

1 unchanged sentence

Proceeds from disposals of property, plant and equipment 19 19

Acquisitions, net of cash acquired ( 19 )

Contributions to investments ( 14,485 ) ( 2,773 )

17 unchanged sentences

Condensed Consolidated Statements of Equity

For the six months ended June 30, 2023 and 2022

For the nine months ended September 30, 2023 and 2022

Boeing shareholders

12 unchanged sentences

Treasury shares issued for 401(k) contribution 225 703 928

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

Balance at September 30, 2022 $ 5,061 $ 9,705 ($ 51,054 ) $ 30,107 ($ 11,518 ) $ 64 ($ 17,635 )

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

8 unchanged sentences

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 )

Other changes in noncontrolling interests ( 10 ) ( 10 )

Balance at September 30, 2023 $ 5,061 $ 10,616 ($ 49,972 ) $ 27,274 ($ 9,708 ) $ 12 ($ 16,717 )

See Notes to the Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Statements of Equity

For the three months ended June 30, 2023 and 2022

For the three months ended September 30, 2023 and 2022

Boeing shareholders

4 unchanged sentences

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

Balance at July 1, 2022 $ 5,061 $ 9,475 ($ 51,319 ) $ 33,382 ($ 11,487 ) $ 97 ($ 14,791 )

( 3,275 ) ( 33 ) ( 3,308 )

Other comprehensive loss, net of tax of ($ 11 )

5 unchanged sentences

Treasury shares issued for 401(k) contribution 61 255 316

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 )

Balance at September 30, 2022 $ 5,061 $ 9,705 ($ 51,054 ) $ 30,107 ($ 11,518 ) $ 64 ($ 17,635 )

Balance at July 1, 2023 $ 5,061 $ 10,310 ($ 50,181 ) $ 28,910 ($ 9,617 ) $ 24 ($ 15,493 )

Net loss ( 1,636 ) ( 2 ) ( 1,638 )

5 unchanged sentences

Treasury shares issued for 401(k) contribution 147 195 342

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 )

Other changes in noncontrolling interests

( 10 ) ( 10 )

Balance at September 30, 2023 $ 5,061 $ 10,616 ($ 49,972 ) $ 27,274 ($ 9,708 ) $ 12 ($ 16,717 )

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

2023 2022 2023 2022

4 unchanged sentences

Total revenues $ 55,776 $ 46,628 $ 18,104 $ 15,956

(Loss)/earnings from operations:

Loss from operations:

Commercial Airplanes ($ 1,676 ) ($ 1,738 ) ($ 678 ) ($ 622 )

1 unchanged sentence

Global Services 2,487 2,093 784 733

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

Segment operating loss ( 852 ) ( 3,301 ) ( 818 ) ( 2,687 )

Unallocated items, eliminations and other ( 1,067 ) ( 719 ) ( 271 ) ( 384 )

FAS/CAS service cost adjustment 863 846 281 279

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

Loss from operations ( 1,056 ) ( 3,174 ) ( 808 ) ( 2,792 )

Other income, net 919 722 297 288

Interest and debt expense ( 1,859 ) ( 1,921 ) ( 589 ) ( 628 )

(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

Loss before income taxes ( 1,996 ) ( 4,373 ) ( 1,100 ) ( 3,132 )

Income tax expense ( 216 ) ( 17 ) ( 538 ) ( 176 )

Net loss ( 2,212 ) ( 4,390 ) ( 1,638 ) ( 3,308 )

net loss attributable to noncontrolling interest ( 13 ) ( 89 ) ( 2 ) ( 33 )

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

Net loss attributable to Boeing Shareholders ($ 2,199 ) ($ 4,301 ) ($ 1,636 ) ($ 3,275 )

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 June 30, 2023 are not necessarily indicative of the operating results for the full year.

The results of operations for the period ended September 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.

5 unchanged sentences

Long-term Contracts

Substantially all contracts at our Defense, Space & Security (BDS) segment and certain contracts at our Global Services (BGS) segment are long-term contracts with the U.S.

government and other customers that generally extend over several years.

Changes in estimated revenues, cost of sales, and the related effect on operating income are recognized using a cumulative catch-up adjustment which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a long-term contract’s percentage-of-completion.

1 unchanged sentence

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) 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

2023 2022 2023 2022

Decrease to Revenue ($ 1,582 ) ($ 2,204 ) ($ 800 ) ($ 1,319 )

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 )

Increase to Loss from operations

($ 2,600 ) ($ 3,965 ) ($ 1,252 ) ($ 2,424 )

Increase to Diluted loss per share

($ 4.76 ) ($ 6.70 ) ($ 3.07 ) ($ 4.29 )

Note 2 – Earnings Per Share

4 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)/earnings per share were as follows:

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

The elements used in the computation of Basic and Diluted loss per share were as follows:

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

2023 2022 2023 2022

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

Net loss available to common shareholders

($ 2,199 ) ($ 4,301 ) ($ 1,636 ) ($ 3,275 )

Basic weighted average shares outstanding

4 unchanged sentences

604.7 593.7 606.9 596.0

Basic weighted average shares outstanding

603.9 592.8 605.5 594.0

Dilutive potential common shares (2)

Diluted weighted average shares outstanding

4 unchanged sentences

604.7 593.7 606.9 596.0

Net (loss)/earnings per share:

Net loss per share:

($ 3.64 ) ($ 7.24 ) ($ 2.70 ) ($ 5.49 )

1 unchanged sentence

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

(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)/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

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) Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

3 unchanged sentences

Stock options 0.8 0.7 0.7 0.8

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.

In addition, potential common shares of 5.6 million and 3.2 million for the nine months ended September 30, 2023 and 2022 and 6.2 million and 3.5 million for the three months ended September 30, 2023 and 2022 were excluded from the computation of Diluted loss 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 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.

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.

Our 2023 estimated annual effective tax rate is primarily driven by taxes on non-U.S.

operations and an increase to the federal and state valuation allowance.

The effective tax rates were ( 10.8 )% and ( 0.4 )% for the nine months ended September 30, 2023 and 2022.

The effective tax rate for the three months ended September 30, 2023, was ( 48.9 )% and includes cumulative adjustments to increase tax expense to our current estimate of 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 six months ended June 30, 2023 and 2022 consisted of the following:

The changes in allowances for expected credit losses for the nine months ended September 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 June 30, 2022

Balance at September 30, 2022

($ 139 ) ($ 25 ) ($ 77 ) ($ 56 ) ($ 84 ) ($ 381 )

3 unchanged sentences

Recoveries 4 4

Balance at June 30, 2023

Balance at September 30, 2023

($ 93 ) ($ 20 ) ($ 65 ) ($ 51 ) ($ 104 ) ($ 333 )

7 unchanged sentences

Total $ 78,972 $ 78,151

(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.

(1) Capitalized precontract costs at September 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 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:

Commercial aircraft programs inventory included approximately 250 737 aircraft at September 30, 2023 and December 31, 2022, and approximately 75 and 100 787 aircraft at September 30, 2023 and December 31, 2022.

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

deferred production costs of $ 5,359 and $ 2,955 and unamortized tooling and other non-recurring costs of $ 574 and $ 626 .

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.

At September 30, 2023, $ 5,899 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 $ 34 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

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

$ 1,370 and $ 1,330 of deferred production costs and $ 3,956 and $ 3,774 of unamortized tooling and other non-recurring costs.

In April 2022, we decided to pause production of the 777X-9 during 2022 and 2023.

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 $ 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:

We have been gradually restarting the 777X production system and expect all phases to resume during the fourth quarter of 2023.

We expensed abnormal production costs of $ 442 and $ 213 during the nine months ended September 30, 2023 and 2022.

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

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

deferred production costs of $ 12,188 and $ 12,689 , $ 1,734 and $ 1,831 of supplier advances, and $ 1,531 and $ 1,722 of unamortized tooling and other non-recurring costs.

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.

At September 30, 2023, $ 13,024 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 $ 695 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 $ 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.

We do not expect abnormal costs related to abnormally low production rates to continue beyond September 30, 2023, and we expect the remaining abnormal costs related to inspections and rework to be incurred by the end of 2024.

We expensed abnormal production costs of $ 937 and $ 925 during the nine months ended September 30, 2023 and 2022.

Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 3,862 and $ 3,586 at September 30, 2023 and December 31, 2022.

Note 6 – Contracts with Customers

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 .

Unbilled receivables increased from $ 8,634 at December 31, 2022 to $ 9,184 at September 30, 2023, primarily driven by revenue recognized at BDS and BGS in excess of billings.

Advances and progress billings increased from $ 53,081 at December 31, 2022 to $ 55,924 at September 30, 2023, primarily driven by advances on orders received at Commercial Airplanes (BCA), partially offset by revenue recognized from amounts previously recorded as advances or progress billings at BDS.

Revenues recognized during the nine months ended September 30, 2023 and 2022 from amounts recorded as Advances and progress billings at the beginning of each year were $ 11,602 and $ 9,501 .

Revenues recognized during the three months ended September 30, 2023 and 2022 from amounts recorded as Advances and progress billings at the beginning of each year were $ 3,717 and $ 2,687 .

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 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:

At September 30, 2023 and December 31, 2022, $ 54 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 nine months ended September 30, 2023.

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

Rating categories Current 2022 2021 2020 2019 Prior Total

3 unchanged sentences

Total carrying value of financing receivables $ 66 $ 32 $ 240 $ 105 $ 53 $ 247 $ 743

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

At September 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 %, 2.5 %, 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 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.

Lease income recorded in revenue on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2023 and 2022 included $ 43 and $ 52 from sales-type/finance leases, and $ 45 and $ 50 from operating leases , of which $ 4 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, 2023 and 2022 included $ 14 and $ 16 from sales-type/finance leases, and $ 18 and $ 18 from operating leases , of which $ 3 and $ 1 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, 2023 and 2022 in the amount of $ 24 and $ 16 .

Customer financing interest income received was $ 122 and $ 10 for the nine months ended September 30, 2023 and 2022.

Profit at the commencement of sales-type leases was recorded in revenue for the three months ended September 30, 2023 and 2022 in the amount of $ 4 and $ 4 .

Customer financing interest income received was $ 60 and $ 4 for the three months ended September 30, 2023 and 2022.

Note 8 – Investments

1 unchanged sentence

2023 December 31

Equity method investments (1)

Time deposits $ 6,042 $ 2,093

Equity method investments (1)

Available-for-sale debt investments 498 479

2 unchanged sentences

Total $ 7,622 $ 3,589

(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.

(1) Dividends received were $ 28 and $ 23 during the nine and three months ended September 30, 2023 and $ 95 and $ 52 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 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.

All instruments are considered investment grade, and we have not recognized an allowance for credit losses as of September 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 six months ended June 30, 2023 and 2022.

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

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

2 unchanged sentences

Changes in estimates ( 54 ) ( 16 )

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.

Ending balance – September 30 $ 1,451 $ 1,936

The liability balance of $ 1.5 billion at September 30, 2023 includes $ 1.4 billion of contracted customer concessions and other liabilities and $ 0.1 billion that remains subject to negotiation with customers.

The contracted amount includes $ 0.6 billion expected to be liquidated by lower customer delivery payments, $ 0.7 billion expected to be paid in cash and $ 0.1 billion in other concessions.

Of the cash payments to customers, we expect to pay $ 0.2 billion in 2023 and the remaining $ 0.4 billion in future years.

Of the cash payments to

customers, we expect to pay $ 0.3 billion in 2023 and the remaining $ 0.4 billion in future years.

The type of consideration to be provided for the remaining $ 0.1 billion will depend on the outcomes of negotiations with customers.

Environmental

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

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

Beginning balance – January 1 $ 752 $ 605

1 unchanged sentence

Changes in estimates 149 171

Ending balance – June 30 $ 800 $ 725

Ending balance – September 30 $ 855 $ 754

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 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 .

At September 30, 2023 and December 31, 2022, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 1,017 and $ 1,058 .

Product Warranties

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

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

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

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Changes in estimates 285 355

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

Ending balance – September 30 $ 2,423 $ 2,093

Commercial Aircraft Trade-In 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, 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 .

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

At September 30, 2023 and December 31, 2022 total contractual trade-in commitments were $ 1,430 and $ 1,117 .

As of September 30, 2023 and December 31, 2022, we estimated it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $ 360 and $ 286 and the fair value of the related trade-in aircraft was $ 360 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 $ 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

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $ 16,499 and $ 16,105 as of September 30, 2023 and December 31, 2022.

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

October through December 2023

Thereafter 3,618

As of June 30, 2023, all of these financing commitments relate to customers we believe have less than investment-grade credit.

As of September 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 $ 5,006 and $ 5,070 as of June 30, 2023 and December 31, 2022.

Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $ 4,420 and $ 5,070 as of September 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 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.

At September 30, 2023 and December 31, 2022, Accounts payable included $ 2.9 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 would have a significant impact on our liquidity.

Recoverable Costs on Government Contracts

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Fixed-Price Contracts

Substantially all contracts at our BDS segment and certain contracts at our BGS segment are long-term contracts with the U.S.

government and other customers that generally extend over several years.

Long-term contracts that are contracted on a fixed-price basis could result in losses in future periods.

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This development work scope is inherently uncertain and subject to significant variability in estimates of the cost and time required to complete the work by us and our suppliers.

The operational and technical complexities of fixed-price development contracts create financial risk, which could trigger additional earnings charges, termination provisions, order cancellations, or other financially significant exposure.

The operational and

technical complexities of fixed-price development contracts create financial risk, which could trigger additional earnings charges, termination provisions, order cancellations, or other financially significant exposure.

VC-25B Presidential Aircraft

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During the year ended December 31, 2022, we increased the reach-forward loss on the contract by $ 1,452 .

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

This year we made progress completing engineering and production requirements.

During the three months ended September 30, 2023, we increased the reach-forward loss on the contract by $ 482 driven by engineering changes to support the build and installation process;

the resolution of supplier negotiations;

and factory performance related to labor instability.

While we have provisioned for all of our anticipated costs to complete the contract, risk remains that we may record additional losses in future periods.

KC-46A Tanker

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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 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.

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

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

During the three months ended March 31, 2023, we increased the reach-forward loss on the KC-46A Tanker program by $ 245 resulting from factory disruption and additional rework due to a supplier quality issue.

As of September 30, 2023, we had approximately $ 160 of capitalized precontract costs and $ 150 of potential termination liabilities to suppliers related to unexercised future lots.

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

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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.

During the three months ended September 30, 2023, we increased the reach-forward loss by $ 71 reflecting higher than anticipated production costs to complete EMD aircraft attributable to recent factory performance.

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

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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.

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

At September 30, 2023, we had approximately $ 162 of capitalized precontract costs and $ 421 of potential termination liabilities to suppliers related to unexercised future lots.

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

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National Aeronautics and Space Administration (NASA) has contracted us to design and build the CST-100 Starliner spacecraft to transport crews to the International Space Station.

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

During the second

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

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

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.

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

At September 30, 2023, we had approximately $ 191 of capitalized precontract costs and $ 196 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 September 30

2023 December 31

2022 September 30

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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To the extent that claims have been made under these indemnities and/or are probable and reasonably estimable, liabilities associated with these indemnities are included in the environmental liability disclosure in Note 9.

Note 11 – Debt

In the third quarter of 2023, we entered into a $ 3,000 five-year revolving credit agreement expiring in August 2028 and a $ 800 364 -day revolving credit agreement expiring in August 2024.

The 364 -day credit facility has a one-year term out option which allows us to extend the maturity of any borrowings until August 2025.

The legacy three-year revolving credit agreement expiring in August 2025, which consists of $ 3,000 of total commitments, and the legacy five-year revolving credit agreement expiring in October 2024, as amended, which consists of $ 3,200 of total commitments, each remain in effect.

As of September 30, 2023, we had $ 10,000 available under credit line agreements.

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

Note 12 – Postretirement Plans

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 2023 2022 2023 2022

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Recognized net actuarial loss 125 681 42 227

Settlement/curtailment gain ( 4 ) ( 4 )

Net periodic benefit income ($ 399 ) ($ 664 ) ($ 133 ) ($ 225 )

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

Net periodic benefit cost included in Loss from operations $ 3 $ 2 $ 1

Net periodic benefit income included in Other income, net ( 402 ) ( 666 ) ( 134 ) ($ 225 )

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

Net periodic benefit income included in Loss before income taxes

($ 399 ) ($ 664 ) ($ 133 ) ($ 225 )

Nine months ended September 30 Three months ended September 30

Other Postretirement Plans 2023 2022 2023 2022

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Net periodic benefit (income)/cost ($ 8 ) $ 10 ($ 3 ) $ 3

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

Net periodic benefit cost included in Loss from operations $ 47 $ 59 $ 16 $ 20

Net periodic benefit income included in Other income, net ( 44 ) ( 44 ) ( 15 ) ( 15 )

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

Net periodic benefit cost included in Loss before income taxes

$ 3 $ 15 $ 1 $ 5

Note 13 – Share-Based Compensation and Other Compensation Arrangements

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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.

During the nine months ended September 30, 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 six and three months ended June 30, 2023 and 2022 were as follows:

Changes in Accumulated other comprehensive loss (AOCI) by component for the nine and three months ended September 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)

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Net current period Other comprehensive (loss)/income ( 123 ) ( 2 ) ( 133 ) 399 141

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

Balance at September 30, 2022 ($ 228 ) ($ 1 ) ($ 127 ) ($ 11,162 ) ($ 11,518 )

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

Other comprehensive income/(loss) before reclassifications 10 ( 25 ) ( 6 ) ( 21 )

Other comprehensive (loss)/income before reclassifications

( 29 ) $ 1 ( 60 ) ( 5 ) ( 93 )

Amounts reclassified from AOCI

2 ( 67 ) ( 65 )

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

Net current period Other comprehensive (loss)/income

( 29 ) 1 ( 58 ) ( 72 ) ( 158 )

Balance at September 30, 2023 ($ 196 ) $ 1 ($ 82 ) ($ 9,431 ) ($ 9,708 )

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

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

Other comprehensive loss before reclassifications ( 71 ) ( 2 ) ( 83 ) ( 2 ) ( 158 )

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Net current period Other comprehensive (loss)/income ( 71 ) ( 2 ) ( 89 ) 131 ( 31 )

Balance at September 30, 2022 ($ 228 ) ($ 1 ) ($ 127 ) ($ 11,162 ) ($ 11,518 )

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

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

Other comprehensive (loss)/income before reclassifications ( 39 ) $ 1 ( 35 ) 1 ( 72 )

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4 ( 23 ) ( 19 )

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

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

Net current period Other comprehensive (loss)/income

( 39 ) 1 ( 31 ) ( 22 ) ( 91 )

Balance at September 30, 2023 ($ 196 ) $ 1 ($ 82 ) ($ 9,431 ) ($ 9,708 )

(1) Net of tax.

(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.

(2) Primarily relates to amortization of actuarial losses for the nine and three months ended September 30, 2022 totaling $ 469 and $ 155 (net of tax of ($ 129 ) and ($ 45 )), 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 not probable of occurring.

Note 15 – Derivative Financial Instruments

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Our cash flow hedges include foreign currency forward contracts, commodity swaps and commodity purchase contracts.

We use foreign currency forward contracts to manage currency risk associated with certain transactions, specifically forecasted sales and purchases made in foreign currencies.

Our foreign currency contracts hedge forecasted transactions through 2031.

We use foreign currency forward contracts to manage currency risk associated with certain expected sales and purchases through 2031.

We use commodity derivatives, such as fixed-price purchase commitments and swaps to hedge against potentially unfavorable price changes for commodities used in production.

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2023 December 31

2022 September 30

2023 December 31

2022 September 30

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 (loss)/income are presented in the following table:

Six months ended June 30 Three months ended June 30

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

Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

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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

2023 2022 2023 2022

Foreign exchange contracts

Revenues $ 1 $ 1

Costs and expenses ($ 11 ) 9 ($ 5 ) ( 1 )

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General and administrative expense 6 6 1 4

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.

During the nine months ended September 30, 2022, we reclassified losses associated with certain cash flow hedges of $ 50 from AOCI to Other income, net because it became 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 nine months ended September 30, 2023 and 2022.

Based on our portfolio of cash flow hedges, we expect to reclassify losses of $ 43 (pre-tax) out of AOCI into earnings during the next 12 months.

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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 .

The fair value of those contracts in a net liability position at September 30, 2023 was $ 32 .

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

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

At September 30, 2023, 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, 2023 December 31, 2022

September 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 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:

Fair Value Total

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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, 2023

September 30, 2023

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.

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, 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 September 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 measurement to review a segment’s operating results is (Loss)/earnings from operations.

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

We operate in three reportable segments:

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BCA revenues by customer location consisted 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

2023 2022 2023 2022

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

2023 2022 2023 2022

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BGS revenues consisted 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

2023 2022 2023 2022

14 unchanged sentences

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 June 30, 2023 was $ 439,564 .

Our backlog at September 30, 2023 was $ 469,178 .

We expect approximately 21 % to be converted to revenue through 2024 and approximately 71 % through 2027, with the remainder thereafter.

5 unchanged sentences

Components of Unallocated items, eliminations and other (expense)/income 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

2023 2022 2023 2022

14 unchanged sentences

Components of FAS/CAS service cost adjustment 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

2023 2022 2023 2022

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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, 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").

We have reviewed the accompanying condensed consolidated statement of financial position of The Boeing Company and subsidiaries (the “Company”) as of September 30, 2023, the related condensed consolidated statements of operations, comprehensive income, and equity for the three-month and nine-month periods ended September 30, 2023 and 2022, and of cash flows for the nine-month periods ended September 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

July 26, 2023

October 25, 2023

FORWARD-LOOKING STATEMENTS

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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