BOEING CO 10-Q

Item 1. Financial Statements The Boeing Company and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (Dollars in millions, except per share data) Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Sales of products $ 41,326 $ 46,661 $ 14,534 $ 15,060 Sales of services 9,949 9,115 3,306 3,044 Total revenues 51,275 55,776 17,840 18,104 Cost of products ( 43,384 ) ( 43,140 ) ( 18,413 ) ( 14,464 ) Cost of services ( 8,293 ) ( 7,609 ) ( 2,934 ) ( 2,475 ) Total costs and expenses ( 51,677 ) ( 50,749 ) ( 21,347 ) ( 16,939 ) ( 402 ) 5,027 ( 3,507 ) 1,165 Income/(loss) from operating investments, net 59 45 ( 15 ) 28 General and administrative expense ( 3,623 ) ( 3,633 ) ( 1,085 ) ( 1,043 ) Research and development expense, net ( 2,976 ) ( 2,496 ) ( 1,154 ) ( 958 ) Gain on dispositions, net 5 1 Loss from operations ( 6,937 ) ( 1,056 ) ( 5,761 ) ( 808 ) Other income, net 790 919 265 297 Interest and debt expense ( 1,970 ) ( 1,859 ) ( 728 ) ( 589 ) Loss before income taxes ( 8,117 ) ( 1,996 ) ( 6,224 ) ( 1,100 ) Income tax benefit/(expense) 149 ( 216 ) 50 ( 538 ) Net loss ( 7,968 ) ( 2,212 ) ( 6,174 ) ( 1,638 ) Less: net loss attributable to noncontrolling interest ( 16 ) ( 13 ) ( 4 ) ( 2 ) Net loss attributable to Boeing Shareholders ($ 7,952 ) ($ 2,199 ) ($ 6,170 ) ($ 1,636 ) Basic loss per share ($ 12.91 ) ($ 3.64 ) ($ 9.97 ) ($ 2.70 ) Diluted loss per share ($ 12.91 ) ($ 3.64 ) ($ 9.97 ) ($ 2.70 ) Weighted average diluted shares (millions) 616.1 605.0 618.8 607.2 See Notes to the Condensed Consolidated Financial Statements. 1 Table of Contents The Boeing Company and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Dollars in millions) Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Net loss ($ 7,968 ) ($ 2,212 ) ($ 6,174 ) ($ 1,638 ) Other comprehensive income/(loss), net of tax: Currency translation adjustments 30 ( 29 ) 54 ( 39 ) Unrealized gain on certain investments, net of tax of $ 0 , $ 0 , $ 0 and $ 0 1 1 1 1 Derivative instruments: Unrealized (losses)/gains arising during period, net of tax of $ 3 , $ 17 , ($ 19 ) and $ 10 ( 13 ) ( 60 ) 63 ( 35 ) Reclassification adjustment for losses included in net loss, net of tax of ($ 7 ), $ 0 , $ 1 and ($ 1 ) 26 2 4 Total unrealized gain/(loss) on derivative instruments, net of tax 13 ( 58 ) 63 ( 31 ) Defined benefit pension plans and other postretirement benefits: Net actuarial (losses)/gains arising during the period, net of tax of $ 16 , $ 2 , ($ 1 ) and $ 0 ( 18 ) ( 5 ) 1 Amortization of actuarial losses/(gains) included in net periodic benefit cost, net of tax of ($ 30 ), $ 1 , ($ 10 ) and $ 0 38 ( 6 ) 12 ( 2 ) Amortization of prior service credits included in net periodic benefit cost, net of tax of $ 31 , $ 17 , $ 11 and $ 5 ( 38 ) ( 61 ) ( 12 ) ( 21 ) Pension and postretirement cost related to our equity method investments, net of tax of ($ 2 ), $ 0 , $ 1 and $ 0 6 1 Total defined benefit pension plans and other postretirement benefits, net of tax ( 12 ) ( 72 ) 1 ( 22 ) Other comprehensive income/(loss), net of tax 32 ( 158 ) 119 ( 91 ) Comprehensive loss, net of tax ( 7,936 ) ( 2,370 ) ( 6,055 ) ( 1,729 ) Less: Comprehensive loss related to noncontrolling interest ( 16 ) ( 13 ) ( 4 ) ( 2 ) Comprehensive loss attributable to Boeing Shareholders, net of tax ($ 7,920 ) ($ 2,357 ) ($ 6,051 ) ($ 1,727 ) See Notes to the Condensed Consolidated Financial Statements. 2 Table of Contents The Boeing Company and Subsidiaries Condensed Consolidated Statements of Financial Position (Unaudited) (Dollars in millions, except per share data) September 30 2024 December 31 2023 Assets Cash and cash equivalents $ 9,961 $ 12,691 Short-term and other investments 509 3,274 Accounts receivable, net 2,894 2,649 Unbilled receivables, net 9,356 8,317 Current portion of financing receivables, net 457 99 Inventories 83,341 79,741 Other current assets, net 2,918 2,504 Total current assets 109,436 109,275 Financing receivables and operating lease equipment, net 321 860 Property, plant and equipment, net of accumulated depreciation of $ 22,923 and $ 22,245 11,236 10,661 Goodwill 8,112 8,093 Acquired intangible assets, net 2,011 2,094 Deferred income taxes 44 59 Investments 1,030 1,035 Other assets, net of accumulated amortization of $ 1,054 and $ 1,046 5,505 4,935 Total assets $ 137,695 $ 137,012 Liabilities and equity Accounts payable $ 12,267 $ 11,964 Accrued liabilities 22,628 22,331 Advances and progress billings 57,931 56,328 Short-term debt and current portion of long-term debt 4,474 5,204 Total current liabilities 97,300 95,827 Deferred income taxes 249 229 Accrued retiree health care 2,121 2,233 Accrued pension plan liability, net 6,097 6,516 Other long-term liabilities 2,314 2,332 Long-term debt 53,176 47,103 Total liabilities 161,257 154,240 Shareholders’ equity: Common stock, par value $ 5.00 — 1,200,000,000 shares authorized; 1,012,261,159 shares issued 5,061 5,061 Additional paid-in capital 10,925 10,309 Treasury stock, at cost — 394,465,404 and 402,746,136 shares ( 48,564 ) ( 49,549 ) Retained earnings 19,299 27,251 Accumulated other comprehensive loss ( 10,273 ) ( 10,305 ) Total shareholders’ deficit ( 23,552 ) ( 17,233 ) Noncontrolling interests ( 10 ) 5 Total equity ( 23,562 ) ( 17,228 ) Total liabilities and equity $ 137,695 $ 137,012 See Notes to the Condensed Consolidated Financial Statements. 3 Table of Contents The Boeing Company and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in millions) Nine months ended September 30 2024 2023 Cash flows – operating activities: Net loss ($ 7,968 ) ($ 2,212 ) Adjustments to reconcile net loss to net cash (used)/provided by operating activities: Non-cash items – Share-based plans expense 310 548 Treasury shares issued for 401(k) contribution 1,315 1,204 Depreciation and amortization 1,327 1,380 Investment/asset impairment charges, net 48 12 Gain on dispositions, net ( 5 ) ( 1 ) 777X and 767 reach-forward losses 3,006 Other charges and credits, net 270 ( 25 ) Changes in assets and liabilities – Accounts receivable ( 275 ) ( 523 ) Unbilled receivables ( 1,042 ) ( 547 ) Advances and progress billings 1,666 2,963 Inventories ( 6,854 ) ( 940 ) Other current assets ( 26 ) 707 Accounts payable 122 982 Accrued liabilities 327 ( 574 ) Income taxes receivable, payable and deferred ( 282 ) 73 Other long-term liabilities ( 228 ) ( 254 ) Pension and other postretirement plans ( 736 ) ( 785 ) Financing receivables and operating lease equipment, net 258 472 Other 137 99 Net cash (used)/provided by operating activities ( 8,630 ) 2,579 Cash flows – investing activities: Payments to acquire property, plant and equipment ( 1,582 ) ( 1,096 ) Proceeds from disposals of property, plant and equipment 46 19 Acquisitions, net of cash acquired ( 50 ) ( 19 ) Contributions to investments ( 1,751 ) ( 14,485 ) Proceeds from investments 4,546 10,497 Supplier notes receivable ( 494 ) ( 162 ) Repayments on supplier notes receivable 40 Purchase of distribution rights ( 88 ) Other ( 14 ) 5 Net cash provided/(used) by investing activities 653 ( 5,241 ) Cash flows – financing activities: New borrowings 10,120 55 Debt repayments ( 4,824 ) ( 5,181 ) Stock options exercised 45 4 Table of Contents Employee taxes on certain share-based payment arrangements ( 73 ) ( 52 ) Other 15 2 Net cash provided/(used) by financing activities 5,238 ( 5,131 ) Effect of exchange rate changes on cash and cash equivalents 8 ( 22 ) Net decrease in cash & cash equivalents, including restricted ( 2,731 ) ( 7,815 ) Cash & cash equivalents, including restricted, at beginning of year 12,713 14,647 Cash & cash equivalents, including restricted, at end of period 9,982 6,832 Less restricted cash & cash equivalents, included in Investments 21 21 Cash and cash equivalents at end of period $ 9,961 $ 6,811 See Notes to the Condensed Consolidated Financial Statements. 5 Table of Contents The Boeing Company and Subsidiaries Condensed Consolidated Statements of Equity For the nine months ended September 30, 2024 and 2023 (Unaudited) Boeing shareholders (Dollars in millions) Common Stock Additional Paid-In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Non- controlling Interests Total Balance at January 1, 2023 $ 5,061 $ 9,947 ($ 50,814 ) $ 29,473 ($ 9,550 ) $ 35 ($ 15,848 ) Net loss ( 2,199 ) ( 13 ) ( 2,212 ) Other comprehensive loss, net of tax of $ 37 ( 158 ) ( 158 ) Share-based compensation 548 548 Treasury shares issued for stock options exercised, net ( 27 ) 72 45 Treasury shares issued for other share-based plans, net ( 82 ) 63 ( 19 ) Treasury shares issued for 401(k) contribution 497 707 1,204 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 ) Balance at January 1, 2024 $ 5,061 $ 10,309 ($ 49,549 ) $ 27,251 ($ 10,305 ) $ 5 ($ 17,228 ) Net loss ( 7,952 ) ( 16 ) ( 7,968 ) Other comprehensive income, net of tax of $ 11 32 32 Share-based compensation 310 310 Treasury shares issued for other share-based plans, net ( 129 ) 105 ( 24 ) Treasury shares issued for 401(k) contribution 435 880 1,315 Other changes in noncontrolling interests 1 1 Balance at September 30, 2024 $ 5,061 $ 10,925 ($ 48,564 ) $ 19,299 ($ 10,273 ) ($ 10 ) ($ 23,562 ) See Notes to the Condensed Consolidated Financial Statements. 6 Table of Contents The Boeing Company and Subsidiaries Condensed Consolidated Statements of Equity For the three months ended September 30, 2024 and 2023 (Unaudited) Boeing shareholders (Dollars in millions, except per share data) Common Stock Additional Paid-In Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Non- controlling Interests Total 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 July 1, 2024 $ 5,061 $ 10,727 ($ 48,841 ) $ 25,469 ($ 10,392 ) ($ 6 ) ($ 17,982 ) Net loss ( 6,170 ) ( 4 ) ( 6,174 ) Other comprehensive income, net of tax of ($ 17 ) 119 119 Share-based compensation 102 102 Treasury shares issued for other share-based plans, net ( 7 ) 18 11 Treasury shares issued for 401(k) contribution 103 259 362 Balance at September 30, 2024 $ 5,061 $ 10,925 ($ 48,564 ) $ 19,299 ($ 10,273 ) ($ 10 ) ($ 23,562 ) See Notes to the Condensed Consolidated Financial Statements. 7 Table of Contents The Boeing Company and Subsidiaries Notes to Condensed Consolidated Financial Statements Summary of Business Segment Data (Unaudited) (Dollars in millions) Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Revenues: Commercial Airplanes $ 18,099 $ 23,420 $ 7,443 $ 7,876 Defense, Space & Security 18,507 18,187 5,536 5,481 Global Services 14,835 14,278 4,901 4,812 Unallocated items, eliminations and other ( 166 ) ( 109 ) ( 40 ) ( 65 ) Total revenues $ 51,275 $ 55,776 $ 17,840 $ 18,104 Loss from operations: Commercial Airplanes ($ 5,879 ) ($ 1,676 ) ($ 4,021 ) ($ 678 ) Defense, Space & Security ( 3,146 ) ( 1,663 ) ( 2,384 ) ( 924 ) Global Services 2,620 2,487 834 784 Segment operating loss ( 6,405 ) ( 852 ) ( 5,571 ) ( 818 ) Unallocated items, eliminations and other ( 1,364 ) ( 1,067 ) ( 418 ) ( 271 ) FAS/CAS service cost adjustment 832 863 228 281 Loss from operations ( 6,937 ) ( 1,056 ) ( 5,761 ) ( 808 ) Other income, net 790 919 265 297 Interest and debt expense ( 1,970 ) ( 1,859 ) ( 728 ) ( 589 ) Loss before income taxes ( 8,117 ) ( 1,996 ) ( 6,224 ) ( 1,100 ) Income tax benefit/(expense) 149 ( 216 ) 50 ( 538 ) Net loss ( 7,968 ) ( 2,212 ) ( 6,174 ) ( 1,638 ) Less: net loss attributable to noncontrolling interest ( 16 ) ( 13 ) ( 4 ) ( 2 ) Net loss attributable to Boeing Shareholders ($ 7,952 ) ($ 2,199 ) ($ 6,170 ) ($ 1,636 ) This information is an integral part of the Notes to the Condensed Consolidated Financial Statements. See Note 19 for further segment results. 8 Table of Contents The Boeing Company and Subsidiaries Notes to the Condensed Consolidated Financial Statements (Dollars in millions, except per share amounts or as otherwise stated) (Unaudited) Note 1 – Basis of Presentation The condensed consolidated interim financial statements included in this report have been prepared by management of The Boeing Company (herein referred to as “Boeing”, the “Company”, “we”, “us”, or “our”). 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, 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. We added a new financial statement line item to the Condensed Consolidated Statements of Cash Flows for cash invested in Supplier notes receivable and reclassified the corresponding amounts in the prior period financial statements to conform to the current period presentation. Liquidity Matters During the nine months ended September 30, 2024, net cash used by operating activities was $ 8.6 billion. The cash outflow was primarily driven by our commercial airplane business. Commercial airplane cash outflows reflect slowed production and deliveries as a result of ongoing safety and quality improvement actions the Company is taking following the Alaska Airlines accident on January 5, 2024, as well as supply chain constraints. Additionally, the ongoing work stoppage initiated on September 13, 2024, by the International Association of Machinists and Aerospace Workers District 751 (IAM 751) has paused production of certain commercial aircraft models (737, 767, 777 and 777X aircraft) as well as production of commercial derivative aircraft for our Defense, Space & Security business (KC-46A Tanker and P-8A Poseidon). The IAM 751 work stoppage is also significantly reducing aircraft deliveries and adversely impacting our financial position, results of operations and cash flows. At September 30, 2024, cash and short-term investments totaled $ 10.5 billion. Our total debt balance was $ 57.7 billion at September 30, 2024, up from $ 52.3 billion at December 31, 2023. On May 1, 2024, we issued $ 10 billion of fixed-rate senior notes. At September 30, 2024, we had $ 10.0 billion of unused borrowing capacity on revolving credit line agreements. On May 15, 2024, we entered into a $ 4.0 billion five-year revolving credit agreement expiring in May 2029. Our $ 3.0 billion three-year revolving credit agreement expiring in August 2025 and $ 3.0 billion five-year revolving credit agreement expiring in August 2028 each remain in effect. We anticipate these credit lines will primarily serve as back-up liquidity to support our general borrowing needs. On October 14, 2024, we entered into a $ 10.0 billion 364 -day supplemental credit agreement (see Note 12 for additional information). We continue to be in full compliance with all covenants contained in our debt and credit facility agreements. We continue to maintain investment grade credit ratings. Moody’s downgraded our short term and long term credit ratings to Baa3/P-3 in April 2024. Moody's and S&P placed our ratings on review for downgrade in September 2024 and October 2024, respectively. A number of factors could cause us to incur increased borrowing costs and/or to have greater difficulty accessing public and private markets, including further credit rating downgrades. At September 30, 2024, trade payables included $ 2.7 billion payable to suppliers who have elected to participate in supply chain financing programs compared with $ 2.9 billion at December 31, 2023. In future quarters, our suppliers' access to supply chain financing could be curtailed or more expensive if our credit ratings are further downgraded. We are implementing actions to improve liquidity. We instituted temporary furloughs and hiring freezes across the Company for all levels and paused pay increases for executive and management promotions. We are reducing discretionary spending as well as reducing or deferring non-essential capital expenditures. We are also pausing the issuance of the majority of supplier purchase orders on the 737, 767, 777, and 777X programs due to IAM 751's ongoing work stoppage. In addition, on October 11, 2024, we announced that we plan to reduce the size of our total workforce by roughly 10 percent. 9 Table of Contents Our planned acquisition of Spirit AeroSystems Holdings, Inc. (Spirit) will be an all-stock transaction pursuant to the Agreement and Plan of Merger entered into on June 30, 2024 (see Note 2 for additional information). Notwithstanding the actions described above to improve liquidity, we expect negative operating cash flows in future quarters until IAM 751 employees return to work, production resumes and deliveries ramp up. Based on our current best estimates of market demand, planned production rates, timing of cash receipts and expenditures, and our expected ability to successfully implement actions to improve liquidity, we believe it is probable that we will be able to fund our operations for the foreseeable future. We also believe we have the ability to access additional liquidity. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Goodwill We performed our annual goodwill impairment test as of April 1, 2024, using a qualitative assessment. We determined the fair value of each of our reporting units substantially exceeded their respective carrying values. Our Military Aircraft reporting unit within our Defense, Space & Security (BDS) segment had goodwill of $ 1,295 and a negative carrying value at September 30, 2024. Long-term Contracts Substantially all contracts at our 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. 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) Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Decrease to Revenue ($ 1,928 ) ($ 1,582 ) ($ 963 ) ($ 800 ) Increase to Loss from operations ($ 4,322 ) ($ 2,600 ) ($ 2,622 ) ($ 1,252 ) Increase to Diluted loss per share ($ 6.89 ) ($ 4.76 ) ($ 4.20 ) ($ 3.07 ) Note 2 – Spirit Acquisition On June 30, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which we have agreed to acquire Spirit in an all-stock transaction at an equity value of approximately $ 4,700 , or $ 37.25 per share of Spirit Class A Common Stock. The transaction will include the assumption of Spirit's net debt at closing. 10 Table of Contents Each share of Spirit common stock will be exchanged for a number of shares of Boeing common stock equal to an exchange ratio between 0.18 and 0.25 , calculated as $ 37.25 divided by the volume weighted average share price of Boeing shares over the 15 -trading-day period ending on the second trading day prior to the closing (subject to a floor of $ 149.00 per share and a ceiling of $ 206.94 per share). Spirit stockholders will receive 0.25 Boeing shares for each of their Spirit shares if the volume-weighted average price is at or below $ 149.00 , and 0.18 Boeing shares for each of their Spirit shares if the volume-weighted average price is at or above $ 206.94 per share. Boeing's acquisition of Spirit will include substantially all Boeing-related commercial operations, as well as certain other operations. Spirit has also entered into a binding term sheet with Airbus SE (Airbus) setting forth the terms upon which Airbus will, assuming the parties enter into definitive agreements and receive all required regulatory approvals, acquire certain commercial work packages that Spirit performs for Airbus concurrently with the closing of the Boeing-Spirit merger. In addition, Spirit is proposing to sell certain of its operations, including those in Belfast, Northern Ireland (non-Airbus operations); Prestwick, Scotland; Subang, Malaysia; Biddeford, Maine; and Woonsocket, Rhode Island. The transaction is expected to close mid-2025 and is subject to the sale of the Spirit operations related to certain Airbus commercial work packages and the satisfaction of customary closing conditions, including regulatory and Spirit stockholder approvals. The Merger Agreement contains certain termination rights, including that either Boeing or Spirit may terminate the Merger Agreement if, subject to certain limitations, the transaction has not been consummated by March 31, 2025 (subject to three automatic three-month extensions if on each such date all of the closing conditions except those relating to regulatory approvals have been satisfied or waived) (the Outside Date). Additionally, Spirit may terminate the Merger Agreement under specified circumstances to accept an unsolicited Superior Proposal (as defined in the Merger Agreement) from a third party, and we may terminate the Merger Agreement if, before Spirit stockholder approval has been obtained, the Spirit Board of Directors changes its recommendation that Spirit’s stockholders adopt the Merger Agreement. In addition, if either party breaches or fails to perform any of its representations, warranties or covenants under the Merger Agreement such that the related conditions to the other party's obligation to consummate the Merger would not be satisfied, and such breach or failure is not curable by the Outside Date or, if curable by the Outside Date, has not been cured within 30 days following notice thereof, such other party may terminate the Merger Agreement. The Merger Agreement provides that Spirit will be required to pay Boeing a termination fee of $ 150 if the Merger Agreement is terminated under specified circumstances in which the Spirit Board of Directors changes its recommendation that Spirit’s stockholders adopt the Merger Agreement, Spirit terminates the Merger Agreement in order to accept a Superior Proposal as set forth in the Merger Agreement, or Spirit consummates a Qualifying Transaction (as defined in the Merger Agreement) following the termination of the Merger Agreement. The Merger Agreement also provides that we will be required to pay Spirit a termination fee of $ 300 if the Merger Agreement is terminated by Spirit or Boeing under certain specified circumstances as a result of the parties' failure to obtain the required regulatory approvals by the Outside Date or in the event that any law or order related to the required regulatory approvals or any applicable antitrust law or foreign investment law prohibits the consummation of the Merger. Note 3 – Earnings Per Share Basic and diluted earnings per share are computed using the two-class method, which is an earnings allocation method that determines earnings per share for common shares and participating securities. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. Participating securities and common shares have equal rights to undistributed earnings. 11 Table of Contents 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 2024 2023 2024 2023 Net loss attributable to Boeing Shareholders ($ 7,952 ) ($ 2,199 ) ($ 6,170 ) ($ 1,636 ) Less: earnings available to participating securities Net loss available to common shareholders ($ 7,952 ) ($ 2,199 ) ($ 6,170 ) ($ 1,636 ) Basic Basic weighted average shares outstanding 616.1 605.0 618.8 607.2 Less: participating securities (1) 0.3 0.3 0.2 0.3 Basic weighted average common shares outstanding 615.8 604.7 618.6 606.9 Diluted Diluted weighted average shares outstanding 616.1 605.0 618.8 607.2 Less: participating securities (1) 0.3 0.3 0.2 0.3 Diluted weighted average common shares outstanding 615.8 604.7 618.6 606.9 Net loss per share: Basic ($ 12.91 ) ($ 3.64 ) ($ 9.97 ) ($ 2.70 ) Diluted ( 12.91 ) ( 3.64 ) ( 9.97 ) ( 2.70 ) (1) Participating securities include certain instruments in our deferred compensation plan. 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 2024 2023 2024 2023 Performance restricted stock units 0.7 0.7 Restricted stock units 0.7 Stock options 0.8 0.8 0.8 0.7 In addition, potential common shares of 2.9 million and 5.6 million for the nine months ended September 30, 2024 and 2023 and 2.9 million and 6.2 million for the three months ended September 30, 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 4 – Income Taxes We computed our 2024 interim tax provision using an estimated annual effective tax rate of ( 1.9 )%, adjusted for discrete items. Our 2024 estimated annual effective tax rate is primarily driven by taxes on non-U.S. operations. The forecasted 2024 tax provision as estimated at September 30, 2024, remained relatively consistent with that estimated in the second quarter of 2024, despite increased forecasted pre- 12 Table of Contents tax losses. This resulted in a corresponding change in the annualized effective tax rate during the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2024, was 0.8 % and reflects additional tax benefits to adjust prior quarters' results to the annual effective tax rate. The effective tax rates were 1.8 % and ( 10.8 )% for the nine months ended September 30, 2024 and 2023. As of December 31, 2023, we 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 results from not having sufficient income from deferred tax liability reversals in the appropriate future periods to support the realization of deferred tax assets. In the third quarter of 2024, we determined that earnings from our non-U.S. subsidiaries are no longer considered to be permanently reinvested. This resulted in a discrete income tax provision of $ 13 for the three months ended September 30, 2024. Federal income tax audits have been settled for all years prior to 2021. The Internal Revenue Service is expected to begin the 2021-2023 federal tax audit in the third quarter of 2025. We are also subject to examination in major state and international jurisdictions for the 2010-2023 tax years. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. Note 5 – Allowances for Losses on Financial Assets The changes in allowances for expected credit losses for the nine months ended September 30, 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 ) Changes in estimates ( 8 ) 3 15 4 ( 16 ) ( 2 ) Write-offs 27 5 32 Recoveries 4 4 Balance at September 30, 2023 ($ 93 ) ($ 20 ) ($ 65 ) ($ 51 ) ($ 104 ) ($ 333 ) Balance at January 1, 2024 ($ 89 ) ($ 19 ) ($ 50 ) ($ 51 ) ($ 122 ) ($ 331 ) Changes in estimates ( 28 ) ( 2 ) ( 2 ) 41 ( 66 ) ( 57 ) Write-offs 15 11 26 Recoveries 1 1 Balance at September 30, 2024 ($ 101 ) ($ 21 ) ($ 41 ) ($ 10 ) ($ 188 ) ($ 361 ) 13 Table of Contents Note 6 – Inventories Inventories consisted of the following: September 30 2024 December 31 2023 Commercial aircraft programs $ 72,101 $ 68,683 Long-term contracts in progress 164 686 Capitalized precontract costs (1) 981 946 Commercial spare parts, used aircraft, general stock materials and other 10,095 9,426 Total $ 83,341 $ 79,741 (1) Capitalized precontract costs at September 30, 2024 and December 31, 2023, included amounts related to T-7A Red Hawk Production Options, Commercial Crew, and KC-46A Tanker. See Note 10. Commercial Aircraft Programs At September 30, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 737 program: deferred production costs of $ 8,670 and $ 6,011 and unamortized tooling and other non-recurring costs of $ 879 and $ 792 . At September 30, 2024, $ 9,505 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 $ 44 is expected to be recovered from units included in the program accounting quantity that represent expected future orders. At September 30, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 777X program: $ 3,818 and $ 4,638 of work in process (including deferred production costs of $ 552 and $ 1,792 ) and $ 4,255 and $ 4,063 of unamortized tooling and other non-recurring costs. We expensed abnormal production costs of $ 442 during the nine months ended September 30, 2023. In the fourth quarter of 2023, the 777X program resumed production, and as a result, there were no abnormal production costs during the nine months ended September 30, 2024. During the third quarter of 2024, we determined that estimated costs to complete the 777X program plus the costs already included in 777X inventory exceed estimated revenues from the program. The resulting reach-forward loss of $ 2,608 was recorded as a reduction of deferred production costs. The level of profitability on the 777X program will be subject to a number of factors. These factors include aircraft certification requirements and timing, change incorporation on completed aircraft, production disruption due to labor instability (including the ongoing work stoppage) and supply chain disruption, customer delivery timing and negotiations, further production rate adjustments for the 777X or other commercial aircraft programs, and contraction of the accounting quantity. One or more of these factors could result in additional reach-forward losses in future periods. At September 30, 2024 and December 31, 2023, commercial aircraft programs inventory included the following amounts related to the 787 program: deferred production costs of $ 12,452 and $ 12,384 , supplier advances of $ 1,394 and $ 1,764 , and unamortized tooling and other non-recurring costs of $ 1,402 and $ 1,480 . At September 30, 2024, $ 11,403 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 $ 2,451 is expected to be recovered from units included in the program accounting quantity that represent expected future orders. We expensed abnormal production costs of $ 209 and $ 937 during the nine months ended September 30, 2024 and 2023. Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $ 4,716 and $ 4,126 at September 30, 2024 and December 31, 2023. 14 Table of Contents Note 7 – Contracts with Customers Unbilled receivables increased from $ 8,317 at December 31, 2023, to $ 9,356 at September 30, 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 $ 57,931 at September 30, 2024, primarily driven by advances on orders received at Commercial Airplanes (BCA). Revenues recognized during the nine months ended September 30, 2024 and 2023, from amounts recorded as Advances and progress billings at the beginning of each year were $ 11,804 and $ 11,602 . Revenues recognized during the three months ended September 30, 2024 and 2023, from amounts recorded as Advances and progress billings at the beginning of each year were $ 3,927 and $ 3,717 . Note 8 – Financing Receivables and Operating Lease Equipment Financing receivables and operating lease equipment, net consisted of the following: September 30 2024 December 31 2023 Financing receivables: Investment in sales-type leases $ 457 $ 556 Notes 87 102 Total financing receivables 544 658 Less allowance for losses on receivables 10 51 Financing receivables, net 534 607 Operating lease equipment, at cost, less accumulated depreciation of $ 47 and $ 70 244 352 Total $ 778 $ 959 15 Table of Contents Our financing arrangements range in terms from 1 to 8 years, and include $ 447 of Investment in sales-type leases, net of allowances, that will be repaid in one year or less. Financing arrangements may include options to extend or terminate. Certain leases include provisions to allow the lessee to purchase the underlying aircraft at a specified price. At September 30, 2024 and December 31, 2023, $ 10 and $ 44 were determined to be uncollectible financing receivables and placed on non-accrual status. The allowance for losses on financing receivables decreased primarily due to cash collections during the nine months ended September 30, 2024. The components of investment in sales-type leases consisted of the following: September 30 2024 December 31 2023 Gross lease payments receivable $ 497 $ 697 Unearned income ( 40 ) ( 162 ) Net lease payments receivable 457 535 Unguaranteed residual assets 21 Total $ 457 $ 556 Financing interest income recorded for the nine months ended September 30, 2024 and 2023, was $ 5 and $ 122 . Financing interest income recorded for the three months ended September 30, 2024 and 2023, was $ 1 and $ 60 . Our financing receivable balances at September 30, 2024 by internal credit rating category and year of origination consisted of the following: Rating categories Current 2023 2022 2021 2020 Prior Total BBB $ 19 $ 69 $ 29 $ 185 $ 100 $ 45 $ 447 B 87 87 CCC 10 10 Total carrying value of financing receivables $ 19 $ 69 $ 29 $ 195 $ 100 $ 132 $ 544 At September 30, 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 0.1 %, respectively, to the exposure associated with those receivables. Financing Receivables Exposure The majority of our financing receivables and operating lease equipment portfolio is concentrated in the following aircraft models: September 30 2024 December 31 2023 717 Aircraft (Accounted for as sales-type leases) $ 447 $ 478 747-8 Aircraft (Primarily accounted for as notes) 97 129 737 Aircraft (Primarily accounted for as operating leases) 47 156 777 Aircraft (Accounted for as operating leases) 187 194 747-400 Aircraft (Accounted for as sales-type leases) 43 Lease income recorded in Sales of services on the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024 and 2023, included $ 39 and $ 43 of interest income from sales-type leases and $ 45 and $ 45 from operating lease payments. Lease income recorded in Sales of services on the Condensed Consolidated Statements of Operations for the three months ended September 30, 2024 and 2023, included $ 18 and $ 14 of interest income from sales-type leases and $ 13 and $ 18 from operating lease payments. 16 Table of Contents Variable lease payments for sales-type leases recognized in interest income for the nine and three months ended September 30, 2024 and 2023, were insignificant. Variable lease payments on operating leases for the nine and three months ended September 30, 2024 and 2023, were insignificant. Profit at the commencement of sales-type leases was recorded in Sales of services for the nine months ended September 30, 2024 and 2023, in the amount of $ 9 and $ 24 . Profit at commencement of sales-type leases was recorded in Sales of services for the three months ended September 30, 2024 and 2023, was $ 5 and $ 4 . Note 9 – Investments Our investments, which are recorded in Short-term and other investments or Investments, consisted of the following: September 30 2024 December 31 2023 Time deposits (1) $ 2,753 Equity method investments (2) $ 952 966 Available-for-sale debt investments (1) 505 499 Equity and other investments 61 69 Restricted cash & cash equivalents (1)(3) 21 22 Total $ 1,539 $ 4,309 (1) Primarily included in Short-term and other investments on our Condensed Consolidated Statements of Financial Position. (2) Dividends received were $ 41 and $ 4 during the nine and three months ended September 30, 2024, and $ 28 and $ 23 during the same periods in prior year. (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 nine months ended September 30, 2024 and 2023, was $ 1,298 and $ 13,964 . Cash proceeds from the maturities of time deposits during the nine months ended September 30, 2024 and 2023, were $ 4,053 a nd $ 10,022 . 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, 2024. Note 10 – Liabilities, Commitments and Contingencies 737 MAX Customer Concessions and Other Considerations During the first quarter of 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 Sales of products. 17 Table of Contents The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the nine months ended September 30, 2024 and 2023. 2024 2023 Beginning balance – January 1 $ 1,327 $ 1,864 Reductions for payments made ( 767 ) ( 304 ) Reductions for concessions and other in-kind considerations ( 256 ) ( 55 ) Changes in estimates 510 ( 54 ) Ending balance – September 30 $ 814 $ 1,451 At September 30, 2024, $ 92 of the liability balance remains subject to negotiations with customers. The contracted amount includes $ 171 expected to be paid in cash primarily 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, 2024 and 2023. 2024 2023 Beginning balance – January 1 $ 844 $ 752 Reductions for payments made, net of recoveries ( 67 ) ( 46 ) Changes in estimates 98 149 Ending balance – September 30 $ 875 $ 855 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. It is reasonably possible that we may incur costs that exceed these recorded amounts because of regulatory agency orders and directives, changes in laws and/or regulations, higher than expected costs and/or the discovery of new or additional contamination. As part of our estimating process, we develop a range of reasonably possible alternate scenarios that includes the high end of a range of reasonably possible cost estimates for all remediation sites for which we have sufficient information based on our experience and existing laws and regulations. There are some potential remediation obligations where the costs of remediation cannot be reasonably estimated. At September 30, 2024 and December 31, 2023, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $ 997 and $ 1,030 . Product Warranties The following table summarizes changes in product warranty liabilities recorded during the nine months ended September 30, 2024 and 2023. 2024 2023 Beginning balance – January 1 $ 2,448 $ 2,275 Additions for current year deliveries 67 121 Reductions for payments made ( 297 ) ( 258 ) Changes in estimates ( 27 ) 285 Ending balance – September 30 $ 2,191 $ 2,423 Commercial Aircraft Trade-In Commitments In conjunction with signing definitive agreements for the sale of new aircraft, we have entered into trade-in commitments with certain customers that give them the right to trade in used aircraft at a specified price. The probability that trade-in commitments will be exercised is determined by using both quantitative information from valuation sources and qualitative information from other sources. The probability of 18 Table of Contents exercise is assessed quarterly, or as events trigger a change, and takes into consideration the current economic and airline industry environments. 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, 2024, have expiration dates from 2024 through 2030. At September 30, 2024 and December 31, 2023, total contractual trade-in commitments were $ 1,325 and $ 1,415 . As of September 30, 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 $ 431 and $ 407 and the fair value of the related trade-in aircraft was $ 428 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 $ 17,379 and $ 17,003 as of September 30, 2024 and December 31, 2023. The estimated earliest potential funding dates for these commitments as of September 30, 2024 are as follows: Total October through December 2024 $ 517 2025 3,162 2026 4,214 2027 3,489 2028 2,272 Thereafter 3,725 Total $ 17,379 As of September 30, 2024, $ 14,053 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 $ 261 to certain joint ventures over the next eight 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 $ 2,912 and $ 4,548 as of September 30, 2024 and December 31, 2023. Supply Chain Financing Programs The Company has supply chain financing programs in place under which participating suppliers may elect to obtain payment from an intermediary. The Company confirms the validity of invoices from participating suppliers and agrees to pay the intermediary an amount based on invoice totals. 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, 2024 and December 31, 2023, Accounts payable included $ 2.7 billion and $ 2.9 billion payable to suppliers who have elected to participate in these programs. See Note 1. Recoverable Costs on Government Contracts Our final incurred costs for each year are subject to audit and review for allowability by the U.S. government, which can result in payment demands related to costs they believe should be disallowed. 19 Table of Contents We work with the U.S. government to assess the merits of claims and where appropriate reserve for amounts disputed. If we are unable to satisfactorily resolve disputed costs, we could be required to record an earnings charge and/or provide refunds to the U.S. government. In addition, we are making certain capital expenditures in anticipation of future contract awards that have risk for impairment if we are not selected. Fixed-Price Contracts Long-term contracts that are contracted on a fixed-price basis could result in losses in future periods. Certain of the fixed-price contracts are for the development of new products, services and related technologies. Estimating the cost and time for us and our suppliers to complete these contracts is inherently uncertain due to operational and technical complexities. This uncertainty requires us to make significant judgments and assumptions about future operational and technical performance, and the outcome of customer and/or supplier contractual negotiations. The risk that actual performance, technical or contractual outcomes could be different than those previously assumed creates financial risk that could trigger additional material earnings charges, termination provisions, order cancellations, or other financially significant exposure. VC-25B Presidential Aircraft The Company’s firm fixed-price contract for the Engineering and Manufacturing Development (EMD) effort on the U.S. Air Force’s (USAF) VC-25B Presidential Aircraft, commonly known as Air Force One, is a $ 4 billion program to develop and modify two 747-8 commercial aircraft. 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; and factory performance related to labor instability. During the second quarter of 2024, we increased the reach-forward loss on the contract by $ 250 primarily driven by higher than anticipated costs due to engineering design changes related to wiring and other structural requirements. Risk remains that we may record additional losses in future periods. KC-46A Tanker 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 10 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 September 30, 2024. The KC-46A Tanker is a derivative of the 767 commercial airplane program with the majority of the manufacturing costs being incurred in the 767 factory and the remaining costs being incurred in the military finishing and delivery centers. 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 first quarter of 2024, we increased the reach-forward loss by $ 128 , primarily due to factory disruption associated with supply chain constraints. During the second quarter of 2024, we increased the reach-forward loss on the contract by $ 391 , primarily reflecting higher than anticipated factory disruption, including supply chain constraints and parts shortages. During the three months ended September 30, 2024, we increased the reach-forward loss on the contract by $ 661 to reflect higher than anticipated factory disruption, higher estimated supplier costs, the projected impacts of IAM 751 contract negotiations and the ongoing work stoppage, and increased cost allocations primarily resulting from lower commercial airplane production rates. As of September 30, 2024, we had approximately $ 137 of capitalized precontract costs and $ 313 of potential termination liabilities to suppliers related to future production lots. Risk remains that we may record additional losses in future periods. MQ-25 In the third quarter of 2018, we were awarded the MQ-25 EMD contract by the U.S. Navy. 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 20 Table of Contents $ 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. During the three months ended September 30, 2024, we increased the reach-forward loss by $ 217 primarily reflecting higher than anticipated production costs to complete EMD aircraft. The initial EMD units are currently progressing through the factory and the increase reflects recent and projected factory performance as well as the higher than anticipated complexity of the production build. We expect the initial units to complete production in 2025 and begin flight testing. We will be initiating final assembly operations at our new facility at Mid-America St. Louis Airport in Mascoutah, Illinois, in early 2025. Risk remains that we may record additional losses in future periods. T-7A Red Hawk EMD Contract & Production Options In 2018, we were awarded the T-7A Red Hawk program. The EMD portion of the contract is a $ 860 fixed-price contract and includes five aircraft and seven simulators. 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. Four EMD aircraft have been delivered as of September 30, 2024, and the flight testing is ongoing. We expect the first production and support contract option to be exercised in 2025 with the remaining lots expected to be exercised annually thereafter. 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 first quarter of 2024, we increased the reach-forward loss on the T-7A Red Hawk program by $ 94 primarily reflecting further increases in estimated production costs. During the second quarter of 2024, we increased the reach-forward loss on the program by $ 278 primarily driven by higher than anticipated costs to meet certain technical and support requirements, and flight test program inefficiencies and delays. During the three months ended September 30, 2024, we increased the reach-forward loss on the program by $ 908 primarily to reflect higher estimated supplier costs related to future production lots. The higher estimated supplier costs are based on our updated assessment that previously assumed cost estimates are not projected to be realized in the current environment based on ongoing contracting activity and discussions with suppliers. The revised estimates include priced options or not-to-exceed pricing for contractually committed suppliers and escalated current prices for uncontracted work. We also provisioned for a supplier not fulfilling their contractual requirements for certain production lots. The charge also includes a provision related to certain equipment no longer assumed to be customer-furnished. At September 30, 2024, we had approximately $ 285 of capitalized precontract costs and $ 594 of potential termination liabilities to suppliers related to certain long-lead items for the first 4 production lots. Risk remains that we may record additional losses in future periods. Commercial Crew National Aeronautics and Space Administration has contracted us to design and build the CST-100 Starliner spacecraft to transport crews to the International Space Station (ISS). 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 (CFT) following notification by a parachute supplier of an issue identified through testing. The CFT launched on June 5, 2024, and docked with the ISS. The Starliner spacecraft had a minimum mission duration of 8 days. Its return to Earth was delayed to allow time to perform further testing of propulsion system anomalies and returned to Earth uncrewed in September 2024. As a result of the CFT delays, during the second quarter of 2024, we increased the reach-forward loss on the program by $ 125 . During the three months ended September 30, 2024, we increased the reach-forward loss on the program by $ 250 primarily to reflect schedule delays and higher testing and certification costs. At September 30, 2024, we had approximately $ 240 of capitalized precontract costs and $ 257 of potential termination liabilities to suppliers related to fixed-price unauthorized future missions. Risk remains that we may record additional losses in future periods. 21 Table of Contents Note 11 – Arrangements with Off-Balance Sheet Risk We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in the form of guarantees. The following table provides quantitative data regarding our third-party guarantees. The maximum potential payments represent a “worst-case scenario” and do not necessarily reflect amounts that we expect to pay. The carrying amount of liabilities represents the amount included in Accrued liabilities. Maximum Potential Payments Estimated Proceeds from Collateral/Recourse Carrying Amount of Liabilities September 30 2024 December 31 2023 September 30 2024 December 31 2023 September 30 2024 December 31 2023 Contingent repurchase commitments $ 342 $ 404 $ 342 $ 404 Credit guarantees 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. 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. If a future sale agreement is reached and a customer elects to exercise its right under a contingent repurchase commitment, the contingent repurchase commitment becomes a trade-in commitment. Our historical experience is that contingent repurchase commitments infrequently become trade-in commitments. 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. Current outstanding credit guarantees expire through 2036. Other Indemnifications In conjunction with our sales of Electron Dynamic Devices, Inc. and Rocketdyne Propulsion and Power businesses and our BCA facilities in Wichita, Kansas and Tulsa and McAlester, Oklahoma, we agreed to indemnify, for an indefinite period, the buyers for costs relating to pre-closing environmental conditions and certain other items. We are unable to assess the potential number of future claims that may be asserted under these indemnifications, nor the amounts thereof (if any). As a result, we cannot estimate the maximum potential amount of future payments under these indemnities. 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 10. Note 12 – Debt On May 1, 2024, we issued $ 10.0 billion of fixed-rate senior notes consisting of $ 1.0 billion due May 1, 2027 that bear an annual interest rate of 6.259 %, $ 1.5 billion due May 1, 2029 that bear an annual interest rate of 6.298 %, $ 1.0 billion due May 1, 2031 that bear an annual interest rate of 6.388 %, $ 2.5 billion due May 1, 2034 that bear an annual interest rate of 6.528 %, $ 2.5 billion due May 1, 2054 that bear an annual interest rate of 6.858 %, and $ 1.5 billion due May 1, 2064 that bear an annual interest rate of 7.008 %. The notes are unsecured senior obligations and rank equally in right of payment with our existing and future unsecured and unsubordinated indebtedness. 22 Table of Contents On May 15, 2024, we entered into a $ 4.0 billion five-year revolving credit agreement expiring in May 2029. Effective May 15, 2024, we terminated the $ 0.8 billion 364 -day revolving credit agreement expiring in August 2024, and the $ 3.2 billion five-year revolving credit agreement, as amended, expiring in October 2024. Our $ 3.0 billion three-year revolving credit agreement expiring in August 2025 and $ 3.0 billion five-year revolving credit agreement expiring in August 2028 each remain in effect. As of September 30, 2024, we had $ 10.0 billion available under credit line agreements. On October 14, 2024, we entered into a $ 10.0 billion 364 -day supplemental credit agreement (Credit Agreement) that allows us to make up to five draws of no less than $ 2.0 billion per draw. Under the Credit Agreement, we will pay a funding fee of 0.50 % of the aggregate principal amount of each advance made under the Credit Agreement. Under the Credit Agreement, we will also pay a duration fee between 0.50 % and 1.00 % of the aggregate amount of outstanding advances and unused commitments under the Credit Agreement, which shall be payable 90 to 270 days after the closing date, as applicable. Borrowings under the Credit Agreement that are not based on the secured overnight funding rate (“SOFR”) will bear interest at an annual rate equal to the highest of (1) the rate announced publicly by Citibank, from time to time, as its “base” rate, (2) the federal funds rate plus 0.50 % and (3) Adjusted Term SOFR (as defined in the Credit Agreement) for a period of one month plus 1.00 %, in each case plus between 0.375 % and 1.00 %, depending on Boeing’s credit rating. Borrowings under the Credit Agreement that are based on SOFR will generally bear interest based on Adjusted Term SOFR (as defined in the Credit Agreement) plus between 1.375 % and 2.00 %, depending on our credit rating. Commitments under the Credit Agreement are scheduled to terminate 120 days after the date of the Credit Agreement and any outstanding advances mature 364 days after the date of the Credit Agreement. The Credit Agreement contains prepayment events that require the Company to prepay outstanding advances or reduce the commitments if the Company has any debt incurrence, equity issuance or disposition of assets, subject to customary terms and conditions set forth in the Credit Agreement. We continue to be in full compliance with all covenants contained in our debt and credit facility agreements. 23 Table of Contents Note 13 – Postretirement Plans The components of net periodic benefit cost/(income) were as follows: Nine months ended September 30 Three months ended September 30 Pension Plans 2024 2023 2024 2023 Service cost $ 5 $ 3 $ 2 $ 1 Interest cost 1,976 2,115 658 705 Expected return on plan assets ( 2,483 ) ( 2,581 ) ( 827 ) ( 861 ) Amortization of prior service credits ( 61 ) ( 61 ) ( 20 ) ( 20 ) Recognized net actuarial loss 200 125 66 42 Net periodic benefit income ($ 363 ) ($ 399 ) ($ 121 ) ($ 133 ) Net periodic benefit cost included in Loss from operations $ 5 $ 3 $ 2 $ 1 Net periodic benefit income included in Other income, net ( 368 ) ( 402 ) ( 123 ) ($ 134 ) Net periodic benefit income included in Loss before income taxes ($ 363 ) ($ 399 ) ($ 121 ) ($ 133 ) Nine months ended September 30 Three months ended September 30 Other Postretirement Plans 2024 2023 2024 2023 Service cost 38 $ 36 $ 13 $ 12 Interest cost 93 111 31 37 Expected return on plan assets ( 8 ) ( 6 ) ( 2 ) ( 2 ) Amortization of prior service credits ( 8 ) ( 17 ) ( 3 ) ( 6 ) Recognized net actuarial gain ( 132 ) ( 132 ) ( 44 ) ( 44 ) Net periodic benefit income ($ 17 ) ($ 8 ) ($ 5 ) ($ 3 ) Net periodic benefit cost included in Loss from operations 35 $ 47 $ 12 $ 16 Net periodic benefit income included in Other income, net ( 55 ) ( 44 ) ( 18 ) ( 15 ) Net periodic benefit (income)/cost included in Loss before income taxes ($ 20 ) $ 3 ($ 6 ) $ 1 Note 14 – Share-Based Compensation and Other Compensation Arrangements Restricted Stock Units 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. If an executive terminates employment because of retirement, layoff, disability, or death, the executive (or beneficiary) may receive some or all of their stock units depending on certain age and service conditions. In all other cases, the RSUs will not vest and all rights to the stock units will terminate. 24 Table of Contents Performance Restricted Stock Units 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, 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. In all other cases, the PRSUs will not vest and all rights to the stock units will terminate. 25 Table of Contents Note 15 – Shareholders' Equity Accumulated Other Comprehensive Loss Changes in Accumulated other comprehensive loss (AOCI) by component for the nine and three months ended September 30, 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 Total (1) Balance at January 1, 2023 ($ 167 ) ($ 24 ) ($ 9,359 ) ($ 9,550 ) Other comprehensive (loss)/income before reclassifications ( 29 ) 1 ( 60 ) ( 5 ) ( 93 ) Amounts reclassified from AOCI 2 ( 67 ) (2) ( 65 ) 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 January 1, 2024 ($ 134 ) $ 2 $ 12 ($ 10,185 ) ($ 10,305 ) Other comprehensive income/(loss) before reclassifications 30 1 ( 13 ) ( 12 ) 6 Amounts reclassified from AOCI 26 26 Net current period Other comprehensive income/(loss) 30 1 13 ( 12 ) 32 Balance at September 30, 2024 ($ 104 ) $ 3 $ 25 ($ 10,197 ) ($ 10,273 ) 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 ) (2) ( 19 ) Net current period Other comprehensive (loss)/income ( 39 ) 1 ( 31 ) ( 22 ) ( 91 ) Balance at September 30, 2023 ($ 196 ) $ 1 ($ 82 ) ($ 9,431 ) ($ 9,708 ) Balance at June 30, 2024 ($ 158 ) $ 2 ($ 38 ) ($ 10,198 ) ($ 10,392 ) Other comprehensive income before reclassifications 54 1 63 1 119 Amounts reclassified from AOCI Net current period Other comprehensive income 54 1 63 1 119 Balance at September 30, 2024 ($ 104 ) $ 3 $ 25 ($ 10,197 ) ($ 10,273 ) (1) Net of tax. (2) Primarily relates to the amortization of prior service credits and actuarial gains included in net periodic benefit cost for the nine and three months ended September 30, 2023 totaling ($ 67 ) and ($ 23 ) (net of tax of $ 18 and $ 5 ). Note 16 – Derivative Financial Instruments Cash Flow Hedges 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 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. Our commodity contracts hedge forecasted transactions through 2028. 26 Table of Contents Derivative Instruments Not Receiving Hedge Accounting Treatment We have entered into agreements to purchase and sell aluminum to address long-term strategic sourcing objectives and non-U.S. business requirements. These agreements are derivative instruments for accounting purposes. The quantities of aluminum in these agreements offset and are priced at prevailing market prices. We also hold certain foreign currency forward contracts and commodity swaps which do not qualify for hedge accounting treatment. Notional Amounts and Fair Values The notional amounts and fair values of derivative instruments in the Condensed Consolidated Statements of Financial Position were as follows: Notional amounts (1) Other assets Accrued liabilities September 30 2024 December 31 2023 September 30 2024 December 31 2023 September 30 2024 December 31 2023 Derivatives designated as hedging instruments: Foreign exchange contracts $ 3,838 $ 4,120 $ 84 $ 85 ($ 50 ) ($ 63 ) Commodity contracts 418 514 75 83 ( 1 ) ( 8 ) Derivatives not receiving hedge accounting treatment: Foreign exchange contracts 720 254 10 1 ( 25 ) ( 32 ) Commodity contracts 33 115 ( 2 ) Total derivatives $ 5,009 $ 5,003 $ 169 $ 169 ($ 76 ) ($ 105 ) Netting arrangements ( 47 ) ( 47 ) 47 47 Net recorded balance $ 122 $ 122 ($ 29 ) ($ 58 ) (1) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. (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 2024 2023 2024 2023 Recognized in Other comprehensive (loss)/income, net of taxes: Foreign exchange contracts ($ 18 ) ($ 30 ) $ 57 ($ 41 ) Commodity contracts 5 ( 30 ) 6 6 (Losses)/gains 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 2024 2023 2024 2023 Foreign exchange contracts Costs and expenses ($ 19 ) ($ 11 ) ($ 7 ) ($ 5 ) General and administrative expense ( 13 ) ( 21 ) 2 Commodity contracts Costs and expenses ($ 6 ) $ 24 $ 6 ($ 3 ) General and administrative expense 5 6 2 1 27 Table of Contents Gains/(losses) related to undesignated derivatives on foreign exchange and commodity cash flow hedging transactions recognized in Other income, net were insignificant for the nine and three months ended September 30, 2024 and 2023. Based on our portfolio of cash flow hedges, we expect to reclassify losses of $ 24 (pre-tax) out of AOCI into earnings during the next 12 months. We have derivative instruments with credit-risk-related contingent features. If we default on our five-year credit facilities, 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, 2024 was $ 3 . For other particular commodity contracts, our counterparties could require collateral posted in an amount determined by our credit ratings. At September 30, 2024, there was no collateral posted related to our derivatives. Note 17 – Fair Value Measurements The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant unobservable inputs. 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, 2024 December 31, 2023 Total Level 1 Level 2 Total Level 1 Level 2 Assets Money market funds $ 3,232 $ 3,232 $ 1,514 $ 1,514 Available-for-sale debt investments: Commercial paper 205 $ 205 291 $ 291 Corporate notes 296 296 183 183 U.S. and local government agencies 17 17 25 25 Other equity investments 36 36 44 44 Derivatives 122 122 122 122 Total assets $ 3,908 $ 3,268 $ 640 $ 2,179 $ 1,558 $ 621 Liabilities Derivatives ($ 29 ) ($ 29 ) ($ 58 ) ($ 58 ) Total liabilities ($ 29 ) ($ 29 ) ($ 58 ) ($ 58 ) Money market funds, available-for-sale debt investments and equity securities are valued using a market approach based on the quoted market prices or broker/dealer quotes of identical or comparable instruments. Derivatives include foreign currency and commodity contracts. Our foreign currency forward contracts are valued using an income approach based on the present value of the forward rate less the contract rate multiplied by the notional amount. 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. 28 Table of Contents Certain assets have been measured at fair value on a nonrecurring basis. 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 of the related assets as of the impairment date: 2024 2023 Fair Value Total Losses Fair Value Total Losses Investments ($ 30 ) ($ 11 ) Operating lease equipment $ 15 ( 5 ) Property, plant and equipment ( 10 ) Other assets ( 3 ) ( 1 ) Total $ 15 ($ 48 ) ($ 12 ) Level 3 Investments 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 and adjusted for as-is condition. These approaches are considered estimates of net operating income, capitalization rates, and/or comparable property sales. Level 3 operating lease equipment is valued 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. Management reviews the publications quarterly to assess the continued appropriateness and consistency with market trends. 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 September 30, 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. Fair Value Valuation Technique Unobservable Input Range Median or Average Operating lease equipment $ 15 Market approach Aircraft value publications $ 21 - $ 27 (1) Median $ 23 Aircraft condition adjustments ($ 8 ) - $ 0 (2) Net ($ 8 ) (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. 29 Table of Contents 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, 2024 Carrying Amount Total Fair Value Level 1 Level 2 Level 3 Assets Notes receivable, net $ 748 $ 768 $ 749 $ 19 Liabilities Debt, excluding finance lease obligations ( 57,397 ) ( 55,821 ) ( 55,821 ) December 31, 2023 Carrying Amount Total Fair Value Level 1 Level 2 Level 3 Assets Notes receivable, net $ 257 $ 270 $ 270 Liabilities Debt, excluding finance lease obligations ( 52,055 ) ( 51,039 ) ( 51,039 ) 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. 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, 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). 30 Table of Contents Note 18 – Legal Proceedings 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 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 U.S. 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. Except as otherwise described below, we cannot reasonably estimate a range of loss in excess of recorded amounts, if any, for the matters set forth below. 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 (the Department) relating to the Department’s investigation into us regarding the evaluation of the 737 MAX by the Federal Aviation Administration (the Investigation). Among other obligations, the DPA includes a three-year reporting period, which ended earlier this year. On May 14, 2024, the Department notified us of its determination that we did not fulfill our obligations under the DPA and that the Department would not move to dismiss the information. On July 24, 2024, we and the Department filed a plea agreement with the U.S. District Court for the Northern District of Texas (the Court) to resolve the Investigation. If approved by the Court, under the terms of the agreement, Boeing would agree to plead guilty to the charge that was the basis for the DPA; would pay an additional fine of $ 244 ; would commit to invest at least $ 455 in compliance, quality and safety programs over a three-year period; and would agree to the appointment of an independent compliance monitor for three years . We are actively engaging with the U.S. Department of Defense regarding potential impacts on our business with the U.S. government and are assessing other related risks. 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. (Embraer) to establish joint ventures that included the commercial aircraft and services operations of Embraer, of which we were expected to acquire an 80 percent ownership stake for $ 4,200 , as well as a joint venture to promote and develop new markets for the C-390 Millennium. In 2020, we exercised our contractual right to terminate these agreements based on Embraer’s failure to meet certain required closing conditions. Embraer disputed our right to terminate the agreements, and the dispute was submitted to arbitration. Arbitration proceedings concluded on September 13, 2024. Pursuant to a collar agreement entered into between the parties, we paid Embraer $ 150 in October 2024, resolving the dispute between the parties. Note 19 – Segment and Revenue Information Our primary profitability measurement to review segment operating results is Loss from operations. We operate in three reportable segments: BCA, BDS, and BGS. All other activities fall within Unallocated items, eliminations and other. See page 8 for the Summary of Business Segment Data, which is an integral part of this note. BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide. Revenue on commercial aircraft contracts is recognized at the point in time when an aircraft is completed and accepted by the customer. 31 Table of Contents BDS engages in the research, development, production and modification of the following products and related services: manned and unmanned military aircraft and weapons systems, surveillance and engagement, strategic defense and intelligence systems, satellite systems and space exploration. BDS revenue is generally recognized over the contract term (over time) as costs are incurred. BGS provides parts, maintenance, modifications, logistics support, training, data analytics and information-based services to commercial and government customers worldwide. BGS segment revenue and costs include certain products and services provided to other segments. Revenue on commercial spare parts contracts is recognized at the point in time when a spare part is delivered to the customer. Revenue on other contracts is generally recognized over the contract term (over time) as costs are incurred. The following tables present BCA, BDS and BGS revenues from contracts with customers disaggregated in a number of ways, such as geographic location, contract type and the method of revenue recognition. We believe these best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. BCA revenues by customer location consisted of the following: (Dollars in millions) Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Revenue from contracts with customers: Europe $ 3,046 $ 4,443 $ 1,499 $ 1,050 Asia 7,028 3,978 2,635 1,623 Middle East 1,618 2,723 444 1,257 Other non-U.S. 1,245 1,719 491 637 Total non-U.S. revenues 12,937 12,863 5,069 4,567 United States 5,512 10,435 2,354 3,260 Estimated potential concessions and other considerations to 737 MAX customers, net of insurance recoveries ( 443 ) 54 28 Total revenues from contracts with customers 18,006 23,352 7,423 7,855 Intersegment revenues eliminated on consolidation 93 68 20 21 Total segment revenues $ 18,099 $ 23,420 $ 7,443 $ 7,876 Revenue recognized on fixed-price contracts 100 % 100 % 100 % 100 % Revenue recognized at a point in time 99 % 99 % 99 % 99 % 32 Table of Contents 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 2024 2023 2024 2023 Revenue from contracts with customers: U.S. customers $ 14,324 $ 14,686 $ 4,361 $ 4,348 Non-U.S. customers (1) 4,183 3,501 1,175 1,133 Total segment revenue from contracts with customers $ 18,507 $ 18,187 $ 5,536 $ 5,481 Revenue recognized over time 99 % 99 % 99 % 99 % Revenue recognized on fixed-price contracts 53 % 57 % 49 % 54 % Revenue from the U.S. government (1) 91 % 91 % 92 % 94 % (1) Includes revenues earned from foreign military sales through the U.S. government. BGS revenues consisted of the following: (Dollars in millions) Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Revenue from contracts with customers: Commercial $ 8,782 $ 8,218 $ 2,882 $ 2,799 Government 5,764 5,793 1,935 1,919 Total revenues from contracts with customers 14,546 14,011 4,817 4,718 Intersegment revenues eliminated on consolidation 289 267 84 94 Total segment revenues $ 14,835 $ 14,278 $ 4,901 $ 4,812 Revenue recognized at a point in time 53 % 51 % 53 % 52 % Revenue recognized on fixed-price contracts 87 % 87 % 86 % 88 % Revenue from the U.S. government (1) 29 % 31 % 29 % 30 % (1) Includes revenues earned from foreign military sales through the U.S. government. Backlog Our total backlog includes contracts that we and our customers are committed to perform. The value in backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. 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, 2024 was $ 510,509 . We expect approximately 19 % to be converted to revenue through 2025 and approximately 64 % through 2028, with the remainder thereafter. 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 various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10. 33 Table of Contents Unallocated Items, Eliminations and Other Unallocated items, eliminations and other include common internal services that support Boeing’s global business operations and eliminations of certain sales between segments. We generally allocate costs to business segments based on the U.S. Government Cost Accounting Standards (CAS). Components of Unallocated items, eliminations and other income/(expense) are shown in the following table. Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Share-based plans $ 118 ($ 33 ) $ 65 $ 5 Deferred compensation ( 100 ) ( 71 ) ( 51 ) 25 Amortization of previously capitalized interest ( 70 ) ( 71 ) ( 24 ) ( 24 ) Research and development expense, net ( 293 ) ( 222 ) ( 105 ) ( 73 ) Eliminations and other unallocated items ( 1,019 ) ( 670 ) ( 303 ) ( 204 ) Unallocated items, eliminations and other ($ 1,364 ) ($ 1,067 ) ($ 418 ) ($ 271 ) Eliminations and other unallocated items for the nine months ended September 30, 2024 includes an earnings charge of $ 244 that reflects a fine that would be paid if an agreement with the U.S. Department of Justice is approved by the federal district court. For additional discussion, see Note 18 to our Condensed Consolidated Financial Statements. Pension and Other Postretirement Benefit Expense Pension costs are allocated to BDS and BGS businesses supporting government customers using CAS, which employ different actuarial assumptions and accounting conventions than GAAP. These costs are allocable to government contracts. Other postretirement benefit costs are allocated to business segments based on CAS, which is generally based on benefits paid. FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income, net. Components of FAS/CAS service cost adjustment are shown in the following table: Nine months ended September 30 Three months ended September 30 2024 2023 2024 2023 Pension FAS/CAS service cost adjustment $ 608 $ 663 $ 148 $ 218 Postretirement FAS/CAS service cost adjustment 224 200 80 63 FAS/CAS service cost adjustment $ 832 $ 863 $ 228 $ 281 34 Table of Contents Assets Segment assets are summarized in the table below: September 30 2024 December 31 2023 Commercial Airplanes $ 81,050 $ 77,047 Defense, Space & Security 15,739 14,921 Global Services 16,724 16,193 Unallocated items, eliminations and other 24,182 28,851 Total $ 137,695 $ 137,012 Assets included in Unallocated items, eliminations and other primarily consist of Cash and cash equivalents, Short-term and other investments, tax assets, capitalized interest and assets managed centrally on behalf of the three principal business segments and intercompany eliminations. Note 20 – Subsequent Events On October 11, 2024, we announced that we plan to reduce the size of our total workforce by roughly 10 percent. On October 14, 2024, we entered into a $ 10,000 364 -day supplemental credit agreement (see Note 12 for additional information). 35 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of The Boeing Company Arlington, Virginia 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, 2024, the related condensed consolidated statements of operations, comprehensive income, and equity for the three-month and nine-month periods ended September 30, 2024 and 2023, and of cash flows for the nine-month periods ended September 30, 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) (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. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived. Basis for Review Results This condensed consolidated interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /s/ Deloitte & Touche LLP Chicago, Illinois October 23, 2024 36 Table of Contents FORWARD-LOOKING STATEMENTS This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates” and other similar words or expressions, or the negative thereof, generally can be used to help identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) general conditions in the economy and our industry, including those due to regulatory changes; (2) our reliance on our commercial airline customers; (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) our pending acquisition of Spirit AeroSystems Holdings, Inc. (Spirit), including the satisfaction of closing conditions in the expected timeframe or at all; (5) changing budget and appropriation levels and acquisition priorities of the U.S. government, as well as significant delays in U.S. government appropriations; (6) our dependence on our subcontractors and suppliers, as well as the availability of highly skilled labor and raw materials; (7) work stoppages or other labor disruptions; (8) competition within our markets; (9) our non-U.S. operations and sales to non-U.S. customers; (10) changes in accounting estimates; (11) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures, including anticipated synergies and quality improvements related to our pending acquisition of Spirit; (12) our dependence on U.S. government contracts; (13) our reliance on fixed-price contracts; (14) our reliance on cost-type contracts; (15) contracts that include in-orbit incentive payments; (16) unauthorized access to our, our customers’ and/or our suppliers' information and systems; 37 Table of Contents (17) potential business disruptions, including threats to physical security or our information technology systems, extreme weather (including effects of climate change) or other acts of nature, and pandemics or other public health crises; (18) potential adverse developments in new or pending litigation and/or government inquiries or investigations; (19) potential environmental liabilities; (20) effects of climate change and legal, regulatory or market responses to such change; (21) credit rating agency actions and changes in our ability to obtain debt financing on commercially reasonable terms, at competitive rates and in sufficient amounts; (22) substantial pension and other postretirement benefit obligations; (23) the adequacy of our insurance coverage; and (24) customer and aircraft concentration in our customer financing portfolio. 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 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. 38 Table of Contents