What changed in this filing

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Item 1. Financial Statements

2024-04-24 compared with 2023-10-25 · 223 added, 322 removed, 614 unchanged (47% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations

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

2023 2022 2023 2022

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

Sales of products $ 13,268 $ 14,914

4 unchanged sentences

Total costs and expenses ( 14,693 ) ( 15,998 )

5,027 1,666 1,165 ( 815 )

Income/(loss) from operating investments, net 67 ( 27 )

1 unchanged sentence

Research and development expense, net ( 868 ) ( 741 )

Gain on dispositions, net 1 2

Loss from operations ( 86 ) ( 149 )

2 unchanged sentences

Loss before income taxes ( 378 ) ( 496 )

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

Income tax benefit 23 71

Net loss ( 355 ) ( 425 )

7 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

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

2023 2022 2023 2022

(Dollars in millions) Three months ended March 31

Net loss ($ 355 ) ($ 425 )

1 unchanged sentence

Currency translation adjustments ( 35 ) 16

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

1 ( 2 ) 1 ( 2 )

Derivative instruments:

Unrealized loss arising during period, net of tax of $ 17 , $ 46 , $ 10 and $ 25

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

Unrealized (losses)/gains arising during period, net of tax of $ 19 and ($ 5 )

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

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

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

Defined benefit pension plans and other postretirement benefits:

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 , ($ 129 ), $ 0 and ($ 45 )

( 6 ) 469 ( 2 ) 155

Net actuarial loss arising during the period, net of tax of $ 17 and $ 2

Amortization of actuarial losses/(gains) included in net periodic pension cost, net of tax of ($ 12 ) and $ 0

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

9 unchanged sentences

Condensed Consolidated Statements of Financial Position

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

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

2024 December 31

3 unchanged sentences

Unbilled receivables, net 9,673 8,317

Current portion of customer financing, net 88 154

Current portion of financing receivables, net 57 99

Inventories 83,471 79,741

1 unchanged sentence

Total current assets 106,532 109,275

Customer financing, net 963 1,450

Financing receivables and operating lease equipment, net 833 860

Property, plant and equipment, net of accumulated depreciation of $ 22,414 and $ 22,245

33 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Nine months ended September 30

(Dollars in millions) Three months ended March 31

Cash flows – operating activities:

6 unchanged sentences

Investment/asset impairment charges, net 21 11

Customer financing valuation adjustments ( 4 ) 39

Gain on dispositions, net ( 1 ) ( 2 )

Other charges and credits, net 10 33

10 unchanged sentences

Pension and other postretirement plans ( 261 ) ( 244 )

Customer financing, net 472 76

Net cash provided by operating activities 2,579 55

Financing receivables and operating lease equipment, net 79 101

Net cash used by operating activities ( 3,362 ) ( 318 )

Cash flows – investing activities:

1 unchanged sentence

Proceeds from disposals of property, plant and equipment 11 5

Acquisitions, net of cash acquired ( 19 )

Contributions to investments ( 243 ) ( 3,561 )

1 unchanged sentence

Other ( 34 ) ( 2 )

Net cash (used)/provided by investing activities ( 5,241 ) 6,521

Net cash provided/(used) by investing activities 2,074 ( 1,823 )

Cash flows – financing activities:

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 28 ) 10

Net (decrease)/increase in cash & cash equivalents, including restricted ( 7,815 ) 5,426

Net decrease in cash & cash equivalents, including restricted ( 5,778 ) ( 3,811 )

Cash & cash equivalents, including restricted, at beginning of year 12,713 14,647

5 unchanged sentences

Condensed Consolidated Statements of Equity

For the nine months ended September 30, 2023 and 2022

For the three months ended March 31, 2024 and 2023

Boeing shareholders

12 unchanged sentences

Treasury shares issued for 401(k) contribution 223 330 553

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

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

Balance at January 1, 2024 $ 5,061 $ 10,309 ($ 49,549 ) $ 27,251 ($ 10,305 ) $ 5 ($ 17,228 )

3 unchanged sentences

Share-based compensation 119 119

Treasury shares issued for stock options exercised, net

Treasury shares issued for other share-based plans, net

1 unchanged sentence

Treasury shares issued for 401(k) contribution 227 379 606

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

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.

The Boeing Company and Subsidiaries

Condensed Consolidated Statements of Equity

For the three months ended September 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 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 )

( 31 ) ( 31 )

Share-based compensation 176 176

Treasury shares issued for stock options exercised, net

Treasury shares issued for other share-based plans, net

( 3 ) 2 ( 1 )

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

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 )

Other comprehensive loss, net of tax of $ 14

( 91 ) ( 91 )

Share-based compensation 167 167

Treasury shares issued for stock options exercised, net 1 1

Treasury shares issued for other share-based plans, net ( 9 ) 14 5

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

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 )

Balance at March 31, 2024 $ 5,061 $ 10,539 ($ 49,105 ) $ 26,908 ($ 10,412 ) ($ 7 ) ($ 17,016 )

See Notes to the Condensed Consolidated Financial Statements.

2 unchanged sentences

Summary of Business Segment Data

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

2023 2022 2023 2022

(Dollars in millions) Three months ended March 31

Commercial Airplanes $ 4,653 $ 6,704

7 unchanged sentences

Global Services 916 847

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

Segment operating (loss)/earnings ( 76 ) 20

Unallocated items, eliminations and other ( 312 ) ( 460 )

4 unchanged sentences

Loss before income taxes ( 378 ) ( 496 )

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

Income tax benefit 23 71

Net loss ( 355 ) ( 425 )

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

The results of operations for the period ended March 31, 2024 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 2023 Annual Report on Form 10-K.

As discussed further in Note 18, prior period amounts have been reclassified to conform to current period presentation.

Use of Estimates

6 unchanged sentences

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.

When the current estimates of total sales and costs for a long-term contract, and/or contractual options that are probable of exercise, indicate a loss, a provision for the entire loss is recognized.

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) Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

When the current estimates of total revenues and costs at completion for a long-term contract indicate a loss, a provision for the entire reach-forward loss on the long-term contract is recognized.

The table below reflects the impact of net cumulative catch-up adjustments for changes in estimated revenues and costs at completion across all long-term contracts, including the impact to Loss from operations from changes in estimated losses on unexercised options.

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

Decrease to Revenue ($ 218 ) ($ 312 )

7 unchanged sentences

Participating securities and common shares have equal rights to undistributed earnings.

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

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.

Basic earnings per share is calculated by taking net earnings attributable to Boeing Shareholders, less earnings available to participating securities, divided by the basic weighted average common shares outstanding.

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

Diluted weighted average common shares outstanding is calculated using the treasury stock method.

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

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

Net loss attributable to Boeing Shareholders ($ 343 ) ($ 414 )

earnings available to participating securities

Net loss available to common shareholders

1 unchanged sentence

Basic weighted average shares outstanding

605.0 594.0 607.2 596.3

participating securities (1)

0.3 0.3 0.3 0.3

Basic weighted average common shares outstanding

604.7 593.7 606.9 596.0

Diluted weighted average shares outstanding

605.0 594.0 607.2 596.3

participating securities (1)

0.3 0.3 0.3 0.3

Diluted weighted average common shares outstanding

604.7 593.7 606.9 596.0

Net loss per share:

3 unchanged sentences

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

Performance awards 2.1 2.5

Performance-based restricted stock units 0.4 0.4

(Shares in millions) Three months ended March 31

Performance restricted stock units 0.5

Restricted stock units 0.1

Stock options 0.8 0.8

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.

In addition, potential common shares of 3.1 million and 5.3 million for the three months ended March 31, 2024 and 2023 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.

We computed our 2024 interim tax provision using an estimated annual effective tax rate of 14.1 %, adjusted for discrete items.

Our 2024 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.

The effective tax rates were 6.1 % and 14.3 % for the three months ended March 31, 2024 and 2023, and differ from the estimated annual effective tax rates primarily due to discrete increases in the domestic valuation allowance.

As of December 31, 2023, the Company had recorded valuation allowances of $ 4,550 primarily for certain domestic deferred tax assets, and certain domestic net operating losses, tax credit and interest 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.

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.

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

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

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

5 unchanged sentences

Note 4 – Allowances for Losses on Financial Assets

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

The changes in allowances for expected credit losses for the three months ended March 31, 2024 and 2023 consisted of the following:

Accounts receivable Unbilled receivables Other current assets Financing receivables

Other assets Total

Balance at January 1, 2023 ($ 116 ) ($ 23 ) ($ 85 ) ($ 55 ) ($ 88 ) ($ 367 )

2 unchanged sentences

Recoveries 1 1

Balance at September 30, 2022

Balance at March 31, 2023

($ 111 ) ($ 22 ) ($ 76 ) ($ 55 ) ($ 92 ) ($ 356 )

3 unchanged sentences

Recoveries 1 1

Balance at September 30, 2023

Balance at March 31, 2024

($ 102 ) ($ 20 ) ($ 42 ) ($ 36 ) ($ 132 ) ($ 332 )

2 unchanged sentences

2024 December 31

Long-term contracts in progress $ 237 $ 582

Commercial aircraft programs $ 72,505 $ 68,683

Long-term contracts in progress 538 686

Capitalized precontract costs (1)

1 unchanged sentence

Total $ 83,471 $ 79,741

(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.

(1) Capitalized precontract costs at March 31, 2024 and December 31, 2023 included amounts related to KC-46A Tanker, Commercial Crew, and T-7A Red Hawk Production Options.

Commercial Aircraft Programs

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:

At March 31, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 737 program:

deferred production costs of $ 6,794 and $ 6,011 and unamortized tooling and other non-recurring costs of $ 872 and $ 792 .

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 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:

At March 31, 2024, $ 7,635 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 $ 31 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

At March 31, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 777X program:

$ 5,337 and $ 4,638 of work in process, $ 2,160 and $ 1,792 of deferred production costs and $ 4,139 and $ 4,063 of unamortized tooling and other non-recurring costs.

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

In the fourth quarter of 2023, the 777X program resumed production, and as a result, there were no abnormal production costs during the three months ended March 31, 2024.

At March 31, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 787 program:

deferred production costs of $ 12,107 and $ 12,384 , $ 1,606 and $ 1,764 of supplier advances, and $ 1,443 and $ 1,480 of unamortized tooling and other non-recurring costs.

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 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.

At March 31, 2024, $ 11,601 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 $ 1,949 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

We expensed abnormal production costs of $ 80 and $ 379 during the three months ended March 31, 2024 and 2023.

Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 4,558 and $ 4,126 at March 31, 2024 and December 31, 2023.

Note 6 – Contracts with Customers

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

Customer financing consisted of the following:

Unbilled receivables increased from $ 8,317 at December 31, 2023 to $ 9,673 at March 31, 2024, primarily driven by revenue recognized at BDS in excess of billings.

Advances and progress billings increased from $ 56,328 at December 31, 2023 to $ 58,972 at March 31, 2024, primarily driven by advances on orders received at Commercial Airplanes (BCA), partially offset by revenue recognized at BDS.

Revenues recognized during the three months ended March 31, 2024 and 2023 from amounts recorded as Advances and progress billings at the beginning of each year were $ 4,181 and $ 3,881 .

Note 7 – Financing Receivables and Operating Lease Equipment

Financing receivables and operating lease equipment, net consisted of the following:

2024 December 31

Financing receivables:

Investment in sales-type/finance leases $ 628 $ 804

Notes 115 385

Investment in sales-type leases $ 492 $ 556

Total financing receivables

5 unchanged sentences

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

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:

At March 31, 2024 and December 31, 2023, $ 34 and $ 44 were determined to be uncollectible financing receivables and placed on non-accrual status.

The allowance for losses on receivables decreased primarily due to cash collections during the three months ended March 31, 2024.

The components of investment in sales-type leases consisted of the following:

2024 December 31

Gross lease payments receivable $ 616 $ 697

Unearned income ( 137 ) ( 162 )

Net lease payments receivable 479 535

Unguaranteed residual assets 13 21

Total $ 492 $ 556

Financing interest income received for the three months ended March 31, 2024 and 2023 was $ 2 and $ 4 .

Our financing receivable balances at March 31, 2024 by internal credit rating category and year of origination consisted of the following:

Rating categories Current 2023 2022 2021 2020 Prior Total

BBB $ 72 $ 31 $ 194 $ 100 $ 58 $ 455

BB $ 56 $ 32 203 $ 105 $ 37 116 549

CCC 10 35 9 54

Total carrying value of financing receivables $ 72 $ 31 $ 228 $ 100 $ 152 $ 583

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

At March 31, 2024, our allowance for losses related to receivables with ratings of CCC, B and BBB.

We applied default rates that averaged 100.0 %, 0.0 % and 0.5 %, respectively, to the exposure associated with those receivables.

Customer Financing Exposure

The majority of our gross customer financing portfolio is concentrated in the following aircraft models:

Financing Receivables Exposure

The majority of our financing receivables and operating lease equipment portfolio is concentrated in the following aircraft models:

2024 December 31

717 Aircraft ($ 0 and $ 45 accounted for as operating leases)

747-8 Aircraft (accounted for as sales-type/finance leases) 131 394

717 Aircraft (Accounted for as sales type leases)

747-8 Aircraft (Accounted for as sales-type leases)

737 Aircraft ($ 142 and $ 148 accounted for as operating leases)

777 Aircraft (Accounted for as operating leases)

MD-80 Aircraft (accounted for as sales-type/finance leases) 96

757 Aircraft (accounted for as sales-type/finance leases) 63 107

747-400 Aircraft (accounted for as sales-type/finance leases) 44 46

747-400 Aircraft (Accounted for as sales-type leases)

Operating lease equipment primarily includes large commercial jet aircraft.

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.

Lease income recorded in Sales of services on the Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 included $ 10 and $ 15 of interest income from sales-type leases and $ 18 and $ 11 from operating lease payments.

Profit at the commencement of sales-type leases was recorded in Sales of services for the three months ended March 31, 2024 and 2023 in the amount of $ 0 and $ 12 .

Note 8 – Investments

2 unchanged sentences

Time deposits (1)

$ 105 $ 2,753

Equity method investments (2)

3 unchanged sentences

Total $ 1,657 $ 4,309

(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.

(1) Primarily included in Short-term and other investments on our Condensed Consolidated Statements of Financial Position.

(2) Dividends received were $ 20 and $ 0 during the three months ended March 31, 2024 and 2023.

(3) Reflects amounts restricted in support of our workers’ compensation programs and insurance premiums.

Contributions to investments and Proceeds from investments on our Condensed Consolidated Statements of Cash Flows primarily relate to time deposits and available-for-sale debt investments.

Cash used for the purchase of time deposits during the three months ended March 31, 2024 and 2023 was $ 90 and $ 3,435 .

Cash proceeds from the maturities of time deposits during the three months ended March 31, 2024 and 2023 were $ 2,740 and $ 2,095 .

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 September 30, 2023.

All instruments are considered investment grade, and we have not recognized an allowance for credit losses as of March 31, 2024.

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 nine months ended September 30, 2023 and 2022.

During the three months ended March 31, 2024, we recorded an earnings charge of $ 443 , net of insurance recoveries, in connection with estimated considerations to customers for disruption related to the Alaska Airlines 737-9 accident and 737-9 grounding.

This charge is reflected in the financial statements as a reduction to revenue.

The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the three months ended March 31, 2024 and 2023.

Beginning balance – January 1 $ 1,327 $ 1,864

Reductions for payments made ( 553 ) ( 141 )

Reductions for concessions and other in-kind considerations ( 55 ) ( 29 )

Changes in estimates 510

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 $ 0.3 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.

Ending balance – March 31 $ 1,284 $ 1,723

At March 31, 2024, $ 430 of the liability balance remains subject to negotiations with customers, the majority of which we expect to pay in 2024.

Of the contracted amount, we expect to pay $ 332 in 2024, while the remaining amounts are primarily expected to be liquidated by lower customer delivery payments.

Environmental

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

The following table summarizes changes in environmental remediation liabilities during the three months ended March 31, 2024 and 2023.

Beginning balance – January 1 $ 844 $ 752

1 unchanged sentence

Changes in estimates 7 46

Ending balance – September 30 $ 855 $ 754

Ending balance – March 31 $ 837 $ 788

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 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 .

At March 31, 2024 and December 31, 2023, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 971 and $ 1,030 .

Product Warranties

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

The following table summarizes changes in product warranty liabilities recorded during the three months ended March 31, 2024 and 2023.

Beginning balance – January 1 $ 2,448 $ 2,275

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Changes in estimates ( 31 )

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

Ending balance – March 31 $ 2,395 $ 2,175

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 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 .

Trade-in commitment agreements at March 31, 2024 have expiration dates from 2024 through 2030.

At March 31, 2024 and December 31, 2023 total contractual trade-in commitments were $ 1,426 and $ 1,415 .

As of March 31, 2024 and December 31, 2023, we estimated it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $ 311 and $ 407 and the fair value of the related trade-in aircraft was $ 311 and $ 407 .

Financing Commitments

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

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $ 17,008 and $ 17,003 as of March 31, 2024 and December 31, 2023.

The estimated earliest potential funding dates for these commitments as of March 31, 2024 are as follows:

April through December 2024

Thereafter 3,069

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

As of March 31, 2024, $ 13,682 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.

Other Financial Commitments

We have financial commitments to make additional capital contributions totaling $ 274 to certain joint ventures over the next five years .

We have financial commitments to make additional capital contributions totaling $ 262 to certain joint ventures over the next nine years .

Standby Letters of Credit and Surety Bonds

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 $ 4,420 and $ 5,070 as of September 30, 2023 and December 31, 2022.

Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $ 4,480 and $ 4,548 as of March 31, 2024 and December 31, 2023.

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 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.

At March 31, 2024 and December 31, 2023, Accounts payable included $ 2.5 billion and $ 2.9 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.

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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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Air Force’s (USAF) VC-25B Presidential Aircraft, commonly known as Air Force One, is a $ 4 billion program to develop and modify two 747-8 commercial aircraft.

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

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;

During 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;

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In 2011, we were awarded a contract from the USAF to design, develop, manufacture, and deliver four next generation aerial refueling tankers as well as priced options for 13 annual production lots totaling 179 aircraft.

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 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.

Since 2016, the USAF has authorized ten low rate initial production (LRIP) lots for a total of 139 aircraft.

The EMD contract and authorized LRIP lots total approximately $ 27 billion as of March 31, 2024.

During 2023, we increased the reach-forward loss on the KC-46A Tanker program by $ 309 primarily resulting from factory disruption and additional rework due to a supplier quality issue.

During the three months ended March 31, 2024, we increased the reach-forward loss on the KC-46A Tanker program by $ 128 , primarily due to factory disruption associated with supply chain constraints.

As of March 31, 2024, we had approximately $ 130 of capitalized precontract costs and $ 214 of potential termination liabilities to

suppliers related to future production lots.

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

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 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.

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.

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 .

In connection with winning the competition, we recognized a reach-forward loss of $ 291 in the third quarter of 2018.

During 2023, we increased the reach-forward loss by $ 231 primarily driven by production and flight testing delays as well as higher than anticipated production costs to complete EMD aircraft attributable to factory performance.

During the first quarter of 2024, we were awarded a cost-type contract modification totaling $ 657 for two additional test aircraft plus other scope increases.

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

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The EMD portion of the contract is a $ 860 fixed-price contract and includes five aircraft and seven simulators.

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.

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 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 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.

During 2023, we increased the reach-forward loss on the T-7A Red Hawk program by $ 275 primarily reflecting higher estimated production costs.

During the three months ended March 31, 2024, we increased the reach-forward loss on the T-7A Red Hawk program by $ 94 primarily reflecting further increases in estimated production costs.

At March 31, 2024, we had approximately $ 235 of capitalized precontract costs and $ 305 of potential termination liabilities to suppliers related to future production lots.

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

Commercial Crew

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 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 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.

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

During 2023, we increased the reach-forward loss by $ 288 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.

A crewed flight test is planned for May 2024.

At March 31, 2024, we had approximately $ 229 of capitalized precontract costs and $ 158 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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2024 December 31

2022 September 30

2023 March 31

2024 December 31

2022 September 30

2023 March 31

2024 December 31

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15 15 $ 14 $ 14

Contingent Repurchase Commitments In conjunction with signing a definitive agreement for the sale of commercial aircraft, we have entered into contingent repurchase commitments with certain customers wherein we agree to repurchase the sold aircraft at a specified price, generally 10 to 15 years after delivery.

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

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Credit Guarantees We have issued credit guarantees where we are obligated to make payments to a guaranteed party in the event that the original lessee or debtor does not make payments or perform certain specified services.

Generally, these guarantees have been extended on behalf of guaranteed parties with less than investment-grade credit and are collateralized by certain assets.

We record a liability for the fair value of guarantees and the expected contingent loss amount, which is reviewed quarterly.

Generally, these guarantees have been extended on behalf of guaranteed parties with less than investment-grade credit.

Current outstanding credit guarantees expire through 2036.

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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 11 – Postretirement Plans

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

Nine months ended September 30 Three months ended September 30

Pension Plans 2023 2022 2023 2022

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

Pension Postretirement

2024 2023 2024 2023

Service cost $ 2 $ 1 $ 12 $ 12

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Amortization of prior service credits ( 20 ) ( 20 ) ( 3 ) ( 6 )

Recognized net actuarial loss 125 681 42 227

Settlement/curtailment gain ( 4 ) ( 4 )

Recognized net actuarial loss/(gain) 67 42 ( 44 ) ( 44 )

Net periodic benefit income ($ 121 ) ($ 133 ) ($ 6 ) ($ 3 )

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($ 121 ) ($ 133 ) ($ 7 ) $ 0

Nine months ended September 30 Three months ended September 30

Other Postretirement Plans 2023 2022 2023 2022

Service cost $ 36 $ 54 $ 12 $ 18

Interest cost 111 73 37 24

Expected return on plan assets ( 6 ) ( 8 ) ( 2 ) ( 3 )

Amortization of prior service credits ( 17 ) ( 26 ) ( 6 ) ( 9 )

Recognized net actuarial gain ( 132 ) ( 83 ) ( 44 ) ( 27 )

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

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 before income taxes

$ 3 $ 15 $ 1 $ 5

Note 12 – Share-Based Compensation and Other Compensation Arrangements

Restricted Stock Units

On February 16, 2023, we granted 327,523 restricted stock units (RSU) to our executives as part of our long-term incentive program.

The RSUs granted under this program have a grant date fair value of $ 214.35 per unit.

On February 20 and March 11, 2024, we granted 2,008,499 restricted stock units (RSU) to our executives and 125,432 RSUs to our executive officers as part of our long-term incentive program.

The RSUs granted under this program have a grant date fair value of $ 204.15 and $ 192.94 per unit.

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

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Performance Restricted Stock Units

On February 16, 2023, we granted 195,526 performance restricted stock units (PRSU) to our elected executive officers as part of our long-term incentive program.

On March 11, 2024, we granted 153,306 performance restricted stock units (PRSU) to our executive officers as part of our long-term incentive program that will result in that number of PRSUs being paid out if the target performance metric is achieved.

The PRSUs granted under this program have a grant date fair value of $ 192.94 per unit.

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 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.

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, 2024 through December 31, 2026 as compared to the target set at the start of the performance period, as well as the achievement of certain safety goals.

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

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 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 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)

Balance at January 1, 2022 ($ 105 ) $ 1 $ 6 ($ 11,561 ) ($ 11,659 )

Other comprehensive loss before reclassifications ( 123 ) ( 2 ) ( 157 ) ( 2 ) ( 284 )

Amounts reclassified from AOCI

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

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

Changes in Accumulated other comprehensive loss (AOCI) by component for the three months ended March 31, 2024 and 2023 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

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

Other comprehensive (loss)/income before reclassifications

Other comprehensive income/(loss) before reclassifications

16 18 ( 7 ) 27

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( 5 ) ( 22 ) (2)

Net current period Other comprehensive (loss)/income

Net current period Other comprehensive income/(loss)

16 13 ( 29 ) 0

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, 2023 ($ 151 ) ($ 11 ) ($ 9,388 ) ($ 9,550 )

Balance at January 1, 2024 ($ 134 ) $ 2 $ 12 ($ 10,185 ) ($ 10,305 )

Other comprehensive loss before reclassifications

Amounts reclassified from AOCI

( 35 ) ( 65 ) ( 14 ) ( 114 )

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 )

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

Amounts reclassified from AOCI

4 ( 23 ) ( 19 )

Net current period Other comprehensive (loss)/income

Net current period Other comprehensive loss

( 35 ) ( 58 ) ( 14 ) ( 107 )

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

Balance at March 31, 2024 ($ 169 ) $ 2 ($ 46 ) ($ 10,199 ) ($ 10,412 )

(1) Net of tax.

(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.

(2) Primarily relates to the amortization of prior service credits and actuarial losses/(gains) included in net periodic pension cost for the three months ended March 31, 2024 and 2023 totaling $ 0 and ($ 22 ) (net of tax of $ 0 and $ 6 ).

Note 14 – Derivative Financial Instruments

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2024 December 31

2022 September 30

2023 March 31

2024 December 31

2022 September 30

2023 March 31

2024 December 31

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(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

Three months ended March 31

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

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Commodity contracts ( 8 ) 8

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

Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

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

Three months ended March 31

Foreign exchange contracts

Revenues $ 1 $ 1

Costs and expenses ($ 7 ) ($ 2 )

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General and administrative expense $ 2 2

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.

Gains/(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, 2024 and 2023.

Based on our portfolio of cash flow hedges, we expect to reclassify losses of $ 55 (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 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 September 30, 2023, there was no collateral posted related to our derivatives.

The fair value of those contracts in a net liability position at March 31, 2024 was $ 20 .

For other particular commodity contracts, our counterparties

could require collateral posted in an amount determined by our credit ratings.

At March 31, 2024, 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.

September 30, 2023 December 31, 2022

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

March 31, 2024 December 31, 2023

Total Level 1 Level 2 Total Level 1 Level 2

Money market funds $ 1,919 $ 1,919 $ 1,514 $ 1,514

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Corporate notes 200 200 183 183

government agencies 36 36 47 47

and local government agencies 17 17 25 25

Other equity investments 75 75 44 44

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Commodity derivatives are valued using an income approach based on the present value of the commodity index prices less the contract rate multiplied by the notional amount.

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 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

Losses Fair Value Total

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

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:

Fair Value Level 2 Level 3 Total

Losses Fair Value Level 2 Level 3 Total

Investments ($ 4 ) ($ 11 )

Customer financing assets

Operating lease equipment

$ 15 $ 15 ( 5 )

Property, plant and equipment 18 $ 18 ( 9 )

Other assets and Acquired intangible assets ( 1 ) 1 ( 21 )

Total $ 33 $ 18 $ 15 ($ 21 ) ($ 11 )

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.

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

Level 2 Property, plant and equipment were valued based on a third party valuation using a combination of

income and market approaches that considered estimates of net operating income, capitalization rates, comparable property sales and adjusted for as-is condition.

The fair value of the impaired operating lease equipment 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.

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

For Level 3 assets that were measured at fair value on a nonrecurring basis during the period ended March 31, 2024, the following table presents the fair value of those assets as of the measurement date, valuation techniques and related unobservable inputs of those assets.

Value Valuation

Technique(s) Unobservable Input Range

Median or Average

Operating Lease Equipment

$ 15 Market approach Aircraft value publications $ 21 - $ 27 (1)

Aircraft condition adjustments ($ 8 ) - $ 0 (2)

(1) The range represents the sum of the highest and lowest values for all aircraft subject to fair value measurement, according to the third party aircraft valuation publications that we use in our valuation process.

(2) The negative amount represents the sum, for all aircraft subject to fair value measurement, of all downward adjustments based on consideration of individual aircraft attributes and condition.

The positive amount represents the sum of all such upward adjustments.

Fair Value Disclosures

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:

September 30, 2023

March 31, 2024

Amount Total Fair

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Debt, excluding finance lease obligations ( 52,055 ) ( 51,039 ) ( 51,039 )

The fair values of notes receivable are estimated with discounted cash flow analysis using interest rates currently offered on loans with similar terms to borrowers of similar credit quality.

The fair value of notes receivables classified as Level 2 is estimated with discounted cash flow analysis using interest rates currently offered on loans with similar terms to borrowers of similar credit quality.

The fair value of notes receivables classified as Level 3 is based on our best estimate using available counterparty financial data.

The fair value of our debt that is traded in the secondary market is classified as Level 2 and is based on current market yields.

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.

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 September 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 March 31, 2024 and December 31, 2023.

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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Various legal proceedings, claims and investigations related to products, contracts, employment and other matters are pending against us.

In addition, we are subject to various U.S.

government inquiries and investigations from which civil, criminal or administrative proceedings could result or have resulted in the past.

In addition, we are subject to various government inquiries and investigations from which civil, criminal or administrative proceedings could result or have resulted in the past.

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.

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.

Where it is reasonably possible that we will incur losses in excess of recorded amounts in connection with any of the matters set forth below, we will disclose either the amount or range of reasonably possible losses in excess of such amounts or, where no such amount or range can be reasonably estimated, the reasons why no such estimate can be made.

Multiple legal actions have been filed against us as a result of the October 29, 2018 accident of Lion Air Flight 610 and the March 10, 2019 accident of Ethiopian Airlines Flight 302.

In January 2021, we entered into a Deferred Prosecution Agreement with the U.S.

Department of Justice that resolved the Department’s investigation into matters concerning the 737 MAX.

We remain subject to obligations under this three-year agreement, including reporting requirements and ongoing oversight by the Department of Justice of the Company’s compliance program.

While we have resolved a number of other investigations and cases related to the 737 MAX, we cannot reasonably estimate a range of loss, if any, not covered by available insurance that we may incur as a result of the remaining pending lawsuits or other matters related to the accidents and the 737 MAX.

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

We believe, based upon current information, that the outcome of any currently pending legal proceeding, claim, or government dispute, inquiry or investigation will not have a material effect on our financial position, results of operations or cash flows.

With respect to the matters set forth below, we cannot reasonably estimate a range of loss in excess of recorded amounts, if any.

Multiple legal actions and inquiries were initiated as a result of the October 29, 2018 accident of Lion Air Flight 610 and the March 10, 2019 accident of Ethiopian Airlines Flight 302.

On January 7, 2021, we entered into a Deferred Prosecution Agreement (DPA) with the U.S.

Department of Justice that resolved the Department of Justice’s investigation into us regarding the evaluation of the 737 MAX by the Federal Aviation Administration.

Among other obligations, the DPA includes a three-year reporting period, which ended earlier this year.

The Department is currently considering whether we fulfilled our obligations under the DPA and whether to move to dismiss the information, which motion will require court approval.

Multiple legal actions were initiated as a result of the January 5, 2024 Alaska Airlines Flight 1282 accident.

We are also subject to multiple governmental and regulatory investigations and inquiries relating to the Alaska Airlines Flight 1282 accident and our commercial airplanes business.

We cannot reasonably estimate a range of loss, if any, not covered by available insurance that may result given the current status of pending lawsuits, investigations and inquiries related to the 737 program.

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

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In 2020, we exercised our contractual right to terminate these agreements based on Embraer’s failure to meet certain required closing conditions.

Embraer has disputed our right to terminate the agreements, and the dispute is currently in arbitration.

We cannot reasonably estimate a range of loss, if any, that may result from the arbitration, which we currently expect to be completed in late 2023 or early 2024.

Embraer has disputed our right to terminate the agreements, and the dispute is currently in arbitration, which we currently expect to be resolved in 2024.

Note 17 – Segment and Revenue Information

Segment results reflect the realignment of the Boeing Customer Financing team and portfolio into the BCA segment during the first quarter of 2023.

Interest and debt expense now includes interest and debt expense previously attributable to Boeing Capital and classified as a component of Total Costs and Expenses ("Cost of Sales").

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 from operations.

Our primary profitability measurement to review segment 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) Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

(Dollars in millions) Three months ended March 31

Revenue from contracts with customers:

Europe $ 770 $ 1,355

Latin America and Caribbean 629 1,586 425 450

Asia 2,113 806

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Other non-U.S.

1,090 918 212 350

Total non-U.S.

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United States 985 3,435

Estimated potential concessions and other considerations to 737 MAX customers, net 54 16 28 33

Estimated potential concessions and other considerations to 737 MAX customers, net of insurance recoveries

Total revenues from contracts with customers 4,603 6,665

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

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

2023 2022 2023 2022

(Dollars in millions) Three months ended March 31

Revenue from contracts with customers:

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customers (1)

3,501 4,488 1,133 1,596

Total segment revenue from contracts with customers $ 6,950 $ 6,539

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government (1)

91 % 90 % 94 % 91 %

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

BGS revenues consisted of the following:

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

2023 2022 2023 2022

(Dollars in millions) Three months ended March 31

Revenue from contracts with customers:

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government (1)

31 % 33 % 30 % 32 %

(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 September 30, 2023 was $ 469,178 .

Our backlog at March 31, 2024 was $ 528,749 .

We expect approximately 27 % to be converted to revenue through 2025 and approximately 71 % through 2028, with the remainder thereafter.

There is significant uncertainty regarding the timing of when backlog will convert into revenue due to timing of 737 and 787 deliveries from inventory and timing of entry into service of the 777X, 737-7 and/or 737-10.

There is significant uncertainty regarding the timing of when backlog will convert into revenue.

We may experience reductions to backlog and/or significant order cancellations due to production disruptions, and/or further delays to entry into service of the 777X, 737-7 and/or 737-10.

Unallocated Items, Eliminations and Other

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

Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

Three months ended March 31

Share-based plans $ 10 ($ 52 )

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

Nine months ended September 30 Three months ended September 30

2023 2022 2023 2022

Three months ended March 31

Pension FAS/CAS service cost adjustment $ 230 $ 223

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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 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").

We have reviewed the accompanying condensed consolidated statement of financial position of The Boeing Company and subsidiaries (the “Company”) as of March 31, 2024, the related condensed consolidated statements of operations, comprehensive income, equity, and cash flows for the three-month periods ended March 31, 2024 and 2023, 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.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the "PCAOB"), the consolidated statement of financial position of the Company as of December 31, 2022, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for the year then ended (not presented herein);

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Company as of December 31, 2023, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for the year then ended (not presented herein);

and in our report dated January 31, 2024, we expressed an unqualified opinion on those consolidated financial statements.

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Chicago, Illinois

October 25, 2023

April 24, 2024

FORWARD-LOOKING STATEMENTS

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(2) our reliance on our commercial airline customers;

(3) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our ability to successfully develop and certify new aircraft or new derivative aircraft, and the ability of our aircraft to meet stringent performance and reliability standards;

(3) the overall health of our aircraft production system, production quality issues, commercial airplane production rates, our ability to successfully develop and certify new aircraft or new derivative aircraft, and the ability of our aircraft to meet stringent performance and reliability standards;

(4) changing budget and appropriation levels and acquisition priorities of the U.S.

government, as well as the potential impact of a government shutdown;

government, as well as significant delays in U.S.

government appropriations;

(5) our dependence on our subcontractors and suppliers, as well as the availability of highly skilled labor and raw materials;

(6) work stoppages or other labor disruptions;

(7) competition within our markets;

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(23) customer and aircraft concentration in our customer financing portfolio.

(23) work stoppages or other labor disruptions.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Any forward-looking information speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

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