BOEING CO

Previous wording

The Alaska Airlines accident and the resulting actions we are taking, including slowing production, to improve compliance with our manufacturing quality control requirements have significantly impacted our financial position, results of operations and cash flows during the first quarter of 2024.

Current wording

The Alaska Airlines accident and the resulting actions we are taking, including slowing production, to improve compliance with our manufacturing quality control requirements have significantly impacted our financial position, results of operations and cash flows during the first half of 2024.

Previous wording

(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 43-44 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.

Current wording

(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 51-52 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.

Previous wording

Revenues for the three months ended March 31, 2024 decreased by $1,352 million compared with the same period in 2023 driven by lower revenues at Commercial Airplanes (BCA), partially offset by higher revenues at Defense, Space & Security (BDS) and Global Services (BGS). BCA revenues decreased by $2,051 million primarily driven by lower 737 deliveries and 737-9 customer considerations. BDS revenues increased by $411 million primarily due to higher volume on weapons and proprietary programs and MQ-25 contract modifications in 2024, partially offset by the U.S. Air Force (USAF) KC-46A Tanker Lot 9 award in 2023. BGS revenues increased by $325 million primarily due to higher commercial services revenue.

Current wording

Revenues for the six months ended June 30, 2024, decreased by $4,237 million compared with the same period in 2023 driven by lower revenues at Commercial Airplanes (BCA), partially offset by higher revenues at Global Services (BGS) and Defense, Space & Security (BDS). BCA revenues decreased by $4,888 million primarily driven by lower 737 and 787 deliveries and 737-9 customer considerations related to the January 2024 grounding. BGS revenues increased by $468 million primarily due to higher commercial services revenue, partially offset by lower government services revenue. BDS revenues increased by $265 million primarily due to higher volume on weapons and proprietary programs, partially offset by higher net unfavorable cumulative catch-up adjustments on major fixed-price development programs.

Previous wording

** Core operating loss is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 43-44.

Current wording

** Core operating loss is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 51-52.

Previous wording

Core operating loss for the three months ended March 31, 2024 decreased by $52 million compared with the same period in 2023, primarily due to changes in Loss from operations as described above.

Current wording

Core operating loss for the six and three months ended June 30, 2024, increased by $950 million and $1,002 million compared with the same periods in 2023, primarily due to changes in Loss from operations as described above.

Previous wording

Share-based plans expense for the three months ended March 31, 2024 decreased by $62 million compared with the same period in 2023 primarily due to fewer outstanding share-based awards in 2024.

Current wording

Share-based plans income for the six and three months ended June 30, 2024, was $53 million and $43 million compared to share-based plans expense of $38 million and income of $14 million for the same periods in 2023. The increase in share-based plans income for the six and three months ended June 30, 2024 compared with the same periods in 2023 was primarily due to fewer outstanding share-based awards in 2024.

Previous wording

Deferred compensation expense for the three months ended March 31, 2024 decreased by $24 million compared with the same period in 2023 primarily driven by changes in our stock price.

Current wording

Deferred compensation expense for the six months ended June 30, 2024, decreased by $47 million compared with the same period in 2023 primarily driven by changes in our stock price. Deferred compensation expense for the three months ended June 30, 2024, decreased by $23 million compared with the same period in 2023 primarily driven by changes in broad stock market conditions.

Previous wording

Other income, net for the three months ended March 31, 2024 remained relatively consistent compared with the same period in 2023. For information on changes related to non-operating pension and postretirement expenses, see Note 11 to our Condensed Consolidated Financial Statements.

Current wording

Other income, net for the six and three months ended June 30, 2024, decreased by $97 million and $72 million compared with the same periods in 2023 primarily due to a decrease in interest income on short-term investments and non-operating pension income. For information on changes related to non-operating pension and postretirement expenses, see Note 13 to our Condensed Consolidated Financial Statements.

Previous wording

Interest and debt expense for the three months ended March 31, 2024 was lower compared with the same period in the prior year primarily as a result of lower average debt balances.

Current wording

Interest and debt expense for the six and three months ended June 30, 2024, decreased by $28 million and increased by $52 million compared with the same periods in the prior year.

Previous wording

Cost of sales for the three months ended March 31, 2024 decreased by $1,305 million, or 8% compared with the same periods in 2023, primarily due to lower revenues at BCA, partially offset by higher revenues at BDS and BGS. Cost of sales as a percentage of Revenues remained largely consistent during the three months ended March 31, 2024 compared with the same period in 2023.

Current wording

Cost of sales for the six months ended June 30, 2024, decreased by $3,480 million, or 10%, compared with the same period in 2023, primarily due to lower revenues at BCA. Cost of sales as a percentage of Revenues remained largely unchanged during the six months ended June 30, 2024, compared with the same period in 2023.

Previous wording

Research and development expense increased by $127 million during the three months ended March 31, 2024 compared to the same period in 2023. The increase at BCA is primarily due to higher spending on the 777X program.

Current wording

Research and development expense increased by $284 million and $157 million during the six and three months ended June 30, 2024, compared to the same periods in 2023. The increase in expense was primarily due to higher spending on the 777X program at BCA.

Previous wording

Contractual backlog of unfilled orders excludes purchase options, announced orders for which definitive contracts have not been executed, orders where customers have the unilateral right to terminate, and unobligated U.S. and non-U.S. government contract funding. The increase in contractual backlog during the three months ended March 31, 2024 was primarily due to increases in BCA and BDS backlog. We may experience reductions to backlog and/or significant order cancellations due to production disruptions and/or further delays to entry into service of the 777X, 737-7 and/or 737-10.

Current wording

Contractual backlog of unfilled orders excludes purchase options, announced orders for which definitive contracts have not been executed, orders where customers have the unilateral right to terminate, and unobligated U.S. and non-U.S. government contract funding. The decrease in contractual backlog during the six months ended June 30, 2024, was primarily due to a decrease in BCA backlog. We may experience reductions to backlog and/or significant order cancellations due to production disruptions and/or further delays to entry into service of the 777X, 737-7 and/or 737-10.

Previous wording

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. Unobligated backlog was largely unchanged during the three months ended March 31, 2024.

Current wording

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. Unobligated backlog was largely unchanged during the six months ended June 30, 2024.

Previous wording

Supply Chain We and our suppliers are experiencing supply chain disruptions as a result of global supply chain constraints and labor instability. We and our suppliers are also experiencing inflationary pressures. We continue to monitor the health and stability of the supply chain. These factors have reduced overall productivity and adversely impacted our financial position, results of operations and cash flows.

Current wording

Supply Chain We and our suppliers are experiencing supply chain disruptions as a result of global supply chain constraints and labor instability. We and our suppliers are also experiencing inflationary pressures. We continue to monitor quality and safety as well as the health and stability of the supply chain. These factors have reduced overall productivity and adversely impacted our financial position, results of operations and cash flows.

Previous wording

BCA total backlog increased from $440,507 million as of December 31, 2023 to $447,533 million at March 31, 2024 reflecting new orders in excess of deliveries. Aircraft order cancellations and net ASC 606 adjustments during the three months ended March 31, 2024 were not significant. ASC 606 adjustments include consideration of aircraft orders where a customer-controlled contingency may exist, as well as an assessment of whether the customer is committed to perform, impacts of geopolitical events or related sanctions, or whether it is probable that the customer will pay the full amount of consideration when it is due. We may experience reductions to backlog and/or significant order cancellations due to production disruptions and/or further delays to entry into service of the 777X, 737-7 and/or 737-10.

Current wording

BCA total backlog decreased from $440,507 million as of December 31, 2023, to $436,574 million at June 30, 2024 reflecting an increase in the value of existing orders that, in our assessment, do not meet the accounting requirements of ASC 606 for inclusion in backlog and cancellations, partially offset by new orders in excess of deliveries. Aircraft order cancellations during the six months ended June 30, 2024 totaled $2,400 million and primarily relate to 737 aircraft. Net ASC 606 adjustments during the six months ended June 30, 2024 totaled $4,784 million and primarily related to 737 aircraft. ASC 606 adjustments include consideration of aircraft orders where a customer-controlled contingency may exist, as well as an assessment of whether the customer is committed to perform, impacts of geopolitical events or related sanctions, or whether it is probable that the customer will pay the full amount of consideration when it is due. We may experience reductions to backlog and/or significant order cancellations due to production disruptions and/or further delays to entry into service of the 777X, 737-7 and/or 737-10.

Previous wording

*Approximate undelivered orders by minor model: 737-7 (7%), 737-8 (65%), 737-9 (3%) and 737-10 (25%).

Current wording

*Approximate undelivered orders by minor model: 737-7 (7%), 737-8 (65%), 737-9 (5%) and 737-10 (23%).

Previous wording

The FAA communicated its findings from the 737-9 Production Audit of Boeing and Spirit AeroSystems (Spirit) on February 28, 2024. The FAA found multiple instances where the companies failed to comply with manufacturing quality control requirements and provided 90 days from March 1, 2024 to submit a corrective action plan. We are working to develop a comprehensive action plan to address the issues identified by the FAA.

Current wording

The FAA communicated its findings from the 737-9 Production Audit of Boeing and Spirit AeroSystems Holdings, Inc. (Spirit) on February 28, 2024. The FAA found multiple instances where the companies failed to comply with manufacturing quality control requirements and provided 90 days from March 1, 2024, to submit a corrective action plan. On May 30, 2024, we submitted our safety and quality plan to address the issues identified by the FAA.

Previous wording

Our planned production rates are dependent on our suppliers' ability to support our operations and our ability to meet heightened quality control requirements. Prior to the Alaska Airlines accident, we were operating at a production rate of 38 per month. During the first quarter of 2024, as part of our plan to address the issues identified, we slowed production rates to reduce traveled work in our factory, as well as at our suppliers. We are now conducting fuselage inspections at Spirit to ensure quality prior to shipment to Boeing.

Current wording

Our planned production rates are dependent on our suppliers' ability to support our operations and our ability to meet heightened quality control requirements. Prior to the Alaska Airlines accident, we were operating at a production rate of 38 per month. During the first half of 2024, as part of our plan to address the issues identified, we slowed production rates and delayed planned production rate increases to reduce traveled work in our factory, as well as at our suppliers. During the first quarter of 2024, we began conducting fuselage inspections at Spirit to improve quality prior to shipment to Boeing. In the second quarter of 2024, production rates gradually increased as we implemented new processes as part of our safety and quality plan. We are working to return to 38 per month by the end of 2024.

Previous wording

As of March 31, 2024, we had approximately 110 737-8 aircraft in inventory that were produced prior to 2023, including approximately 70 aircraft for customers in China. We expect to deliver most of the aircraft in inventory by the end of 2024.

Current wording

As of June 30, 2024, we had approximately 90 737-8 aircraft in inventory that were produced prior to 2023, including approximately 65 aircraft for customers in China. We expect to deliver most of the aircraft in inventory by the end of 2024.

Previous wording

We are following the lead of the FAA as we work through the certification process of the 737-7 and 737-10 models. During the first quarter of 2024, the 737-10 program completed the first phase of FAA certification flight testing. As of March 31, 2024, we had approximately 35 737-7 and 737-10 aircraft in inventory. We are planning to incorporate engineering solutions to the de-icing systems on the 737-7 and 737-10 prior to certification, which will delay certification and first deliveries.

Current wording

We are following the lead of the FAA as we work through the certification process of the 737-7 and 737-10 models. During the first quarter of 2024, the program completed the first phase of FAA certification flight testing for the 737-10. As of June 30, 2024, we had approximately 35 737-7 and 737-10 aircraft in inventory. We are planning to incorporate engineering solutions to the de-icing systems on the 737-7 and 737-10 prior to certification, which has delayed certification and first deliveries.

Previous wording

The production slow-down and certification delays had an adverse impact on our financial position, results of operations and cash flows during the first quarter of 2024. This is expected to continue until production rates recover. In the event that we are unable to deliver aircraft and/or increase future production rates consistent with our assumptions, our financial position, results of operations and cash flows will continue to be adversely affected.

Current wording

The production slow-down and certification delays had an adverse impact on our financial position, results of operations and cash flows during the first half of 2024. This is expected to continue until production rates recover. In the event that we are unable to deliver aircraft and/or increase future production rates consistent with our assumptions, our financial position, results of operations and cash flows will continue to be adversely affected.

Previous wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. The commercial program has near break-even gross margins. We are currently at a production rate of 3 aircraft per month.

Current wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. The commercial program has near break-even gross margins. We are currently at a production rate of approximately 3 aircraft per month. We are continuing to experience factory disruption, including supply chain delays and quality issues. We have slowed production in 2024 to reduce traveled work in our factory and enable supply chain recovery, resulting in higher near-term production costs. See further discussion of the KC-46A Tanker program in Note 10 to our Condensed Consolidated Financial Statements.

Previous wording

777 and 777X Programs We are currently at a combined production rate of 4 per month for the 777/777X programs.

Current wording

777 and 777X Programs We are currently at a combined production rate of 4 per month for the 777/777X programs. In the fourth quarter of 2023, the 777X program resumed production. The programs are experiencing factory disruption including supply chain delays and challenges associated with the resumption of 777X production.

Previous wording

We are following the lead of the FAA as we work through the certification process including obtaining approval from the FAA to begin certification flight testing. We expect the first delivery of the 777-9 to occur in 2025 and the 777-8 freighter to occur in 2027. First delivery of the 777-8 passenger aircraft is not expected to occur before 2030.

Current wording

We are following the lead of the FAA as we work through the certification process. In July 2024, we obtained approval from the FAA to begin the first phase of FAA certification flight testing. We expect the first delivery of the 777-9 to occur in 2025 and the 777-8 freighter to occur in 2027. First delivery of the 777-8 passenger aircraft is not expected to occur before 2030.

Previous wording

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 and supply chain disruption, customer 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 reach-forward losses in future periods.

Current wording

The 777X program had near break-even gross margins at June 30, 2024. 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 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 reach-forward losses in future periods.

Previous wording

787 Program We are slowing near-term production to below 5 per month due to supply chain constraints, which are also impacting 2024 deliveries. As of March 31, 2024, we had approximately 40 aircraft in inventory that require rework which we expect to complete by the end of 2024. The inspections and rework costs on inventoried aircraft are accounted for as abnormal production costs, and we expensed $80 million in the three months ended March 31, 2024.

Current wording

787 Program In the first half of 2024, we slowed production to below 5 per month primarily reflecting supply chain constraints and production issues. Delays associated with business class seats are also adversely impacting 2024 deliveries. As of June 30, 2024, we had approximately 35 aircraft in inventory that were produced prior to 2023 and required rework which we expect to complete by the end of 2024. The inspections and rework costs on inventoried aircraft are accounted for as abnormal production costs, and we expensed $157 million in the six months ended June 30, 2024.

Previous wording

The Consolidated Appropriations Act, 2024, and the Further Consolidated Appropriations Act, 2024, enacted in March 2024, provided fiscal year 2024 appropriations for government departments and agencies, including $844 billion for the United States Department of Defense (U.S. DoD) and $25 billion for the National Aeronautics and Space Administration (NASA). They included funding for Boeing’s major programs, including P-8, CH-47 Chinook, F-15, KC-46A Tanker, AH-64 Apache, V-22 Osprey, and Space Launch System.

Current wording

The Consolidated Appropriations Act, 2024, and the Further Consolidated Appropriations Act, 2024, enacted in March 2024, provided fiscal year 2024 appropriations for government departments and agencies, including $844 billion for the U.S. Department of Defense (U.S. DoD) and $25 billion for the National Aeronautics and Space Administration (NASA). They included funding for Boeing’s major programs, including P-8, CH-47 Chinook, F-15, KC-46A Tanker, AH-64 Apache, V-22 Osprey, and Space Launch System.

Previous wording

BDS revenues for the three months ended March 31, 2024 increased by $411 million compared with the same period in 2023. The increase reflects higher volume on weapons and proprietary programs and MQ-25 contract modifications in 2024, partially offset by the USAF KC-46A Tanker Lot 9 award in 2023. Net unfavorable cumulative contract catch-up adjustments for the three months ended March 31, 2024 were $104 million lower than the prior year comparable period.

Current wording

BDS revenues for the six months ended June 30, 2024 increased by $265 million compared with the same period in 2023. The increase reflects higher volume on weapons and proprietary programs, partially offset by higher net unfavorable cumulative catch-up adjustments on major fixed-price development programs. Net unfavorable cumulative contract catch-up adjustments for the six months ended June 30, 2024 were $118 million higher than the prior year comparable period.

Previous wording

BDS earnings from operations was $151 million for the three months ended March 31, 2024 compared with loss from operations of $212 million in the same period in 2023. The increase in earnings reflects lower charges in 2024 on major fixed-price development programs of $92 million, revenue growth on weapons and proprietary programs, and improved performance across other programs that were more adversely affected by labor instability and supply chain performance in the prior year. Net unfavorable cumulative contract catch-up adjustments were $158 million lower than the comparable period in the prior year, as losses incurred on the five major fixed-price development programs totaled $222 million compared with $314 million in the same period in 2023.

Current wording

BDS loss from operations was $762 million for the six months ended June 30, 2024, compared with $739 million in the same period in 2023. Net unfavorable cumulative contract catch-up adjustments were $282 million higher than the comparable period in the prior year. Higher charges in 2024 on major fixed-price development programs of $438 million were partially offset by volume growth in 2024 and lower unfavorable cumulative contract catch-up adjustments on other programs. During the first half of 2024, losses incurred on the five major fixed-price development programs totaled $1,266 million, including

Previous wording

BDS earnings/(loss) from operations includes our share of earnings from equity method investments of $75 million for the three months ended March 31, 2024 compared with equity loss of $14 million for the three months ended March 31, 2023.

Current wording

BDS loss from operations includes our share of earnings from equity method investments of $95 million and $20 million for the six and three months ended June 30, 2024, compared with $10 million and $24 million for the same periods in 2023.

Previous wording

BDS backlog increased from $59,012 million as of December 31, 2023 to $60,744 million at March 31, 2024, primarily due to the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods.

Current wording

BDS backlog of $59,055 million at June 30, 2024 compared with $59,012 million as of December 31, 2023, reflects the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods.

Previous wording

BGS total backlog decreased from $19,869 million at December 31, 2023 to $19,693 million at March 31, 2024, primarily due to revenue recognized on contracts awarded in prior years, partially offset by timing of awards.

Current wording

BGS total backlog decreased from $19,869 million at December 31, 2023 to $19,487 million at June 30, 2024, primarily due to revenue recognized on contracts awarded in prior years, partially offset by timing of awards.

Previous wording

Operating Activities Net cash used by operating activities was $3.4 billion during the three months ended March 31, 2024, compared with $0.3 billion during the same period in 2023. The $3.1 billion increase in cash used by operating activities was primarily driven by changes in commercial airplane program inventory. Changes in assets and liabilities for the three months ended March 31, 2024 decreased by $3.0 billion compared with the same period in 2023 primarily driven by unfavorable changes in Inventories ($3.4 billion) and Accounts payable ($0.5 billion), and higher payments to 737 MAX customers ($0.4 billion), partially offset by an increase in Advances and progress billings ($1.3 billion).

Current wording

Operating Activities Net cash used by operating activities was $7.3 billion during the six months ended June 30, 2024, compared with cash provided of $2.6 billion during the same period in 2023. The $9.9 billion increase in cash used by operating activities was primarily driven by changes in commercial airplane program inventory. Changes in assets and liabilities for the six months ended June 30, 2024, decreased by $8.5 billion compared with the same period in 2023 primarily driven by unfavorable changes in Inventories ($5.7 billion), Accounts payable ($1.1 billion), and Unbilled receivables ($0.6 billion).

Previous wording

The growth in Inventories was primarily driven by decreased deliveries for the 737 program in the first quarter of 2024 as compared to the same period in 2023. Concessions paid to 737 MAX customers totaled $553 million and $141 million for the three months ended March 31, 2024 and 2023. Reductions in Accounts payable in 2024 were a use of cash while growth in Accounts payable in 2023 was a source of cash. The increase in Advances and progress billings is primarily driven by advances on orders received at BCA, partially offset by revenue recognized at BDS.

Current wording

The growth in Inventories was primarily driven by lower deliveries on our commercial airplane programs in the first half of 2024 as compared to the same period in 2023. Concessions paid to 737 MAX customers totaled $681 million and $273 million for the six months ended June 30, 2024 and 2023. Reductions in Accounts payable in 2024 were a use of cash while growth in Accounts payable in 2023 was a source of cash. The increase in Unbilled receivables was primarily driven by revenue recognized at BDS in excess of billings.

Previous wording

Payables to suppliers who elected to participate in supply chain financing programs decreased by $0.4 billion during the three months ended March 31, 2024 and increased by $0.1 billion during the three months ended March 31, 2023.

Current wording

Payables to suppliers who elected to participate in supply chain financing programs decreased by $0.2 billion during the six months ended June 30, 2024 and increased by $0.1 billion during the six months ended June 30, 2023.

Previous wording

Investing Activities Cash provided by investing activities was $2.1 billion during the three months ended March 31, 2024, compared with cash used of $1.8 billion during the same period in 2023. The increase in cash inflows during the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to net proceeds from investments of $2.7 billion in 2024 compared to net contributions to investments of $1.4 billion in 2023. During the three months ended March 31, 2024 and 2023, capital expenditures were $0.6 billion and $0.5 billion. We continue to expect capital expenditures in 2024 to be higher than in 2023.

Current wording

Investing Activities Cash used by investing activities was $26 million during the six months ended June 30, 2024, compared with $4.8 billion during the same period in 2023. The decrease in cash outflows during the six months ended June 30, 2024, compared to the same period in 2023 was primarily due to net proceeds from investments of $1.6 billion in 2024 compared with net contributions to investments of $3.9 billion in 2023. During the six months ended June 30, 2024 and 2023, capital expenditures were $1.0 billion and $0.8 billion. We continue to expect capital expenditures in 2024 to be higher than in 2023.

Previous wording

Financing Activities Cash used by financing activities was $4.5 billion during the three months ended March 31, 2024 compared with $1.7 billion during the same period in 2023. During the three months ended March 31, 2024, net repayments on our debt were $4.4 billion compared with $1.7 billion in the same period in 2023.

Current wording

Financing Activities Cash provided by financing activities was $5.5 billion during the six months ended June 30, 2024, compared with cash used of $5.1 billion during the same period in 2023. During the six months ended June 30, 2024, net borrowings were $5.6 billion compared with net repayments of $5.1 billion during the same period in 2023, primarily due to the $10.0 billion of fixed-rate senior notes issued in the second quarter of 2024.

Previous wording

As of March 31, 2024 the total debt balance was $47.9 billion, down from $52.3 billion at December 31, 2023. At March 31, 2024, $1.1 billion of debt was classified as short-term.

Current wording

As of June 30, 2024, the total debt balance was $57.9 billion, up from $52.3 billion at December 31, 2023. At June 30, 2024, $4.8 billion of debt was classified as short-term.

Previous wording

We expect to be able to fund our cash requirements through cash and short-term investments and cash provided by operations, as well as continued access to capital markets. At March 31, 2024, we had $6.9 billion of cash, $0.6 billion of short-term investments, and $10.0 billion of unused borrowing capacity on revolving credit line agreements. In the third quarter of 2023, we entered into a $3.0 billion five-year revolving credit agreement expiring in August 2028 and a $0.8 billion 364-day revolving credit agreement expiring in August 2024. The 364-day credit facility has a one-year term out option which allows us to extend the maturity of any borrowings until August 2025. The legacy three-year revolving credit agreement expiring in August 2025, which consists of $3.0 billion of total commitments, and the legacy five-year revolving credit agreement expiring in October 2024, as amended, which consists of $3.2 billion of total commitments, each remain in effect. We anticipate that these credit lines will remain undrawn and primarily serve as back-up liquidity to support our general corporate borrowing needs.

Current wording

We expect to be able to fund our cash requirements through cash and short-term investments and cash provided by operations, as well as continued access to capital markets. At June 30, 2024, we had $10.9 billion of cash, $1.7 billion of short-term investments, and $10.0 billion of unused borrowing capacity on revolving credit line agreements. In the second quarter of 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 expiring in October 2024, as amended. Our legacy $3.0 billion three-year revolving credit agreement expiring in August 2025 and legacy $3.0 billion five-year revolving credit agreement expiring in August 2028 each remain in effect. We continue to be in full compliance with all covenants contained in our debt and credit facility agreements. We anticipate that these credit lines will remain undrawn and primarily serve as back-up liquidity to support our general corporate borrowing needs.

Previous wording

Our credit ratings were downgraded in 2020 and remained unchanged as of March 31, 2024. During the third quarter of 2023, S&P upgraded the outlook on our credit rating from negative to stable primarily driven by improving deliveries and expected increases in production. During the first quarter of 2024, Moody’s placed our Baa2 and Prime-2 ratings on review for downgrade primarily driven by concern that we will be unable to deliver 737 aircraft at the volumes required to materially expand free cash flow and retire debt in a reasonable timeframe. Fitch also downgraded our credit rating outlook from positive to stable driven by the financial impact of unexpected operational disruptions and the potential for additional corporate actions that should enhance longer-term operations.

Current wording

We continue to maintain investment grade credit ratings. During the second quarter of 2024, Moody’s downgraded our long-term and short-term credit ratings to Baa3/P-3 with negative outlook from Baa2/P-2 with negative watch. Our S&P and Fitch credit ratings remained unchanged; however, S&P and Fitch revised our credit outlook to negative from stable. The revisions to our credit ratings and outlook were primarily driven by concern that we will be unable to deliver commercial aircraft at the volumes required to materially expand free cash flow and retire debt in a reasonable timeframe.