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 half 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 nine months ended September 30, 2024.

Previous 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.

Current wording

(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 55-56 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.

Previous 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.

Current wording

Revenues for the nine months ended September 30, 2024, decreased by $4,501 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 $5,321 million primarily driven by lower deliveries across all programs and 737-9 customer considerations related to the January 2024 grounding. BGS revenues increased by $557 million primarily due to higher commercial services revenue, partially offset by lower government services revenue. BDS revenues increased by $320 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

Revenues for the three months ended June 30, 2024, decreased by $2,885 million compared with the same period in 2023 driven by lower revenues at BCA and BDS, partially offset by higher revenues at BGS. BCA revenues decreased by $2,837 million primarily driven by lower 787 and 737 deliveries. BDS revenues decreased by $146 million compared with the same period in 2023 primarily driven by higher unfavorable cumulative contract catch-up adjustments on certain major fixed-price development programs, partially offset by increased volume on weapons and proprietary programs. BGS revenues increased by $143 million primarily due to higher commercial services revenue, partially offset by lower government services revenue.

Current wording

Revenues for the three months ended September 30, 2024, decreased by $264 million compared with the same period in 2023 driven by lower revenues at BCA, partially offset by higher revenues at BGS and BDS. BCA revenues decreased by $433 million primarily driven by lower 777 and 787 deliveries, partially offset by higher 737 deliveries. BGS revenues increased by $89 million primarily due to higher commercial services revenue. BDS revenues increased by $55 million compared with the same period in 2023 primarily driven by higher volume on weapons and proprietary programs, offset by higher net unfavorable cumulative contract 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 51-52.

Current wording

** Core operating loss is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 55-56.

Previous wording

Loss from operations for the six months ended June 30, 2024, increased by $928 million compared with the same period in 2023. BCA loss from operations increased by $860 million reflecting lower deliveries, lower margins driven by production disruption, and 737-9 customer considerations related to the January 2024 grounding, partially offset by lower abnormal production costs. BDS loss from operations increased by $23 million compared to the same period in 2023 primarily due to higher charges in 2024 on certain major fixed-price development programs, partially offset by volume growth in 2024 and lower unfavorable cumulative contract catch-up adjustments on other programs. BGS earnings from operations increased by $83 million primarily due to higher commercial services revenue, partially offset by lower government services revenue. Loss from operations on Unallocated items, eliminations and other increased by $150 million compared with the same period in 2023 primarily due to an increase in eliminations and other unallocated items, partially offset by a decrease in share-based plans expense.

Current wording

Loss from operations for the nine months ended September 30, 2024, increased by $5,881 million compared with the same period in 2023. BCA loss from operations increased by $4,203 million reflecting reach-forward losses on 777X and 767, lower deliveries, lower margins driven by production disruption including the IAM 751 work stoppage, 737-9 customer considerations related to the January 2024 grounding and higher research and development expense, partially offset by lower abnormal production costs. BDS loss from operations increased by $1,483 million compared to the same period in 2023 primarily due to higher charges in 2024 on certain major fixed-price development programs, partially offset by less unfavorable cumulative contract catch-up adjustments on satellite and fighter programs, higher revenues from weapons and proprietary programs, and lower period expenses. BGS earnings from operations increased by $133 million primarily due to higher commercial services revenue, partially offset by lower government services revenue. Loss from operations on Unallocated items, eliminations and other increased by $297 million compared with the same period in 2023 primarily due to an increase in eliminations and other unallocated items and higher research and development expense, partially offset by a decrease in share-based plans expense.

Previous wording

Loss from operations for the three months ended June 30, 2024, increased by $991 million compared with the same period in 2023. BDS loss from operations increased by $386 million compared to the same period in 2023 primarily due to an increase in unfavorable cumulative contract catch-up adjustments driven by higher charges in 2024 on certain major fixed-price development programs. BCA loss from operations increased by $332 million reflecting lower deliveries and lower margins driven by production disruption, partially offset by lower abnormal production costs. BGS earnings from operations increased by $14 million primarily due to higher commercial services revenue, partially offset by lower government services revenue. Loss from operations on Unallocated items, eliminations and other increased by $298 million compared with the same period in 2023 primarily due to an increase in eliminations and other unallocated items.

Current wording

Loss from operations for the three months ended September 30, 2024, increased by $4,953 million compared with the same period in 2023. BCA loss from operations increased by $3,343 million reflecting reach-forward losses on 777X and 767, lower margins driven by production disruption including the IAM 751 work stoppage, and higher research and development expense, partially offset by lower abnormal production costs. BDS loss from operations increased by $1,460 million compared to the same period in 2023 primarily due to an increase in unfavorable cumulative contract catch-up adjustments driven by higher charges in 2024 on certain major fixed-price development programs. BGS earnings from operations increased by $50 million primarily due to higher commercial services revenue. Loss from operations on Unallocated items, eliminations and other increased by $147 million compared with the same period in 2023 primarily due to an increase in eliminations and other unallocated items.

Previous 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.

Current wording

Core operating loss for the nine and three months ended September 30, 2024, increased by $5,850 million and $4,900 million compared with the same periods in 2023, primarily due to changes in Loss from operations as described above.

Previous wording

The most significant items included in Unallocated items, eliminations and other (expense)/income are shown in the following table:

Current wording

The most significant items included in Unallocated items, eliminations and other income/(expense) are shown in the following table:

Previous 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.

Current wording

Share-based plans income for the nine and three months ended September 30, 2024, was $118 million and $65 million compared to share-based plans expense of $33 million and income of $5 million for the same periods in 2023. The increase in share-based plans income for the nine and three months ended September 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 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.

Current wording

Deferred compensation expense for the nine months ended September 30, 2024, increased by $29 million compared with the same period in 2023 driven by changes in broad stock market conditions, partially offset by changes in our stock price. Deferred compensation expense for the three months ended September 30, 2024, decreased by $76 million compared with the same period in 2023 primarily driven by changes in broad stock market conditions.

Previous wording

Research and development expense for the six and three months ended June 30, 2024, increased by $39 million and $26 million compared with the same periods in 2023 due to higher spending on enterprise product development.

Current wording

Research and development expense for the nine and three months ended September 30, 2024, increased by $71 million and $32 million compared with the same periods in 2023 due to higher spending on enterprise product development.

Previous wording

Eliminations and other unallocated items expense for the six and three months ended June 30, 2024, includes an earnings charge of $244 million 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.

Current wording

Eliminations and other unallocated items expense for the nine and three months ended September 30, 2024, increased by $349 million and $99 million compared with the same periods in 2023. The increase during the year includes a second quarter earnings charge of $244 million 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.

Previous 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.

Current wording

Other income, net for the nine and three months ended September 30, 2024, decreased by $129 million and $32 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 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.

Current wording

Interest and debt expense for the nine and three months ended September 30, 2024, increased by $111 million and $139 million compared with the same periods in the prior year primarily as a result of higher debt balances.

Previous wording

For additional discussion related to Income Taxes, see Note 4 to our Condensed Consolidated Financial Statements.

Current wording

For a discussion related to Income Taxes, see Note 4 to our Condensed Consolidated Financial Statements.

Previous wording

Cost of sales for the three months ended June 30, 2024, decreased by $2,175 million, or 12%, compared with the same period in 2023, primarily due to lower revenues at BCA. Cost of sales as a percentage of Revenues increased during the three months ended June 30, 2024, compared with the same period in 2023 primarily due to higher charges on BDS fixed-price development programs and lower margins at BCA.

Current wording

Cost of sales for the three months ended September 30, 2024, increased by $4,408 million, or 26%, compared with the same period in 2023, primarily due to the reach-forward losses on the 777X and 767 programs and higher charges on the BDS fixed-price development programs, partially offset by lower revenues at BCA. Cost of sales as a percentage of Revenues increased during the three months ended September 30, 2024, compared with the same period in 2023 primarily due to the reach-forward losses on the 777X and 767 program, lower margins at BCA, and higher charges on BDS fixed-price development programs.

Previous 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.

Current wording

Research and development expense increased by $480 million and $196 million during the nine and three months ended September 30, 2024, compared to the same periods in 2023. The increase in expense was primarily due to 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 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.

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 nine months ended September 30, 2024, was primarily due to a decrease in BCA backlog. 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.

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 six months ended June 30, 2024.

Current wording

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The decrease in unobligated backlog during the nine months ended September 30, 2024, was primarily due to reclassifications to contractual backlog at BDS.

Previous wording

The current state of U.S.-China relations remains an ongoing watch item. Since 2018, the U.S. and China have imposed tariffs on each other’s imports. Certain aircraft parts and components that Boeing procures are subject to these tariffs. We are mitigating import costs through Duty Drawback Customs procedures. China is a significant market for commercial aircraft and we have long-standing relationships with our Chinese customers, who represent a key component of our commercial aircraft backlog. Overall, the U.S.-China trade relationship remains stalled as economic and national security concerns continue to be a challenge.

Current wording

The current state of U.S.-China relations remains an ongoing watch item. China is a significant market for commercial aircraft and we have long-standing relationships with our Chinese customers, who represent a key component of our commercial aircraft backlog. Overall, the U.S.-China trade relationship remains stalled as economic and national security concerns continue to be a challenge.

Previous wording

We are complying with all U.S. and other government export control restrictions and sanctions imposed on certain businesses and individuals in Russia. We continue to monitor and evaluate additional sanctions and export restrictions that may be imposed by the U.S. Government or other governments, as well as any responses from Russia that could affect our supply chain, business partners or customers, for any additional impacts to our business.

Current wording

We are complying with all U.S. and other government export control restrictions and sanctions. We continue to monitor and evaluate additional sanctions and export restrictions that may be imposed by the U.S. Government or other governments, as well as any responses that could affect our supply chain, business partners or customers, for any additional impacts to our business.

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 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.

Current wording

Supply Chain We and our suppliers are experiencing inflationary pressures, as well as supply chain disruptions as a result of global supply chain constraints and labor instability. Certain of our suppliers are also experiencing financial difficulties. We continue to monitor quality and safety as well as the health and stability of the supply chain. These factors have reduced overall productivity, disrupted our operations and adversely impacted our financial position, results of operations and cash flows. During the third quarter of 2024, we recorded a reach-forward loss of $908 million on the T-7A Red Hawk program that was primarily driven by projected increases in supplier cost estimates. In addition, we recorded losses on the KC-46A Tanker and Commercial Crew programs that were partially attributable to higher supplier costs.

Previous wording

BCA revenues decreased by $4,888 million for the six months ended June 30, 2024, compared with the same period in 2023 driven by lower 737 and 787 deliveries and 737-9 customer considerations related to the January 2024 grounding. BCA revenues decreased by $2,837 million for the three months ended June 30, 2024, compared with the same period in 2023 driven by lower 787 and 737 deliveries.

Current wording

BCA revenues decreased by $5,321 million for the nine months ended September 30, 2024, compared with the same period in 2023 driven by lower deliveries across all programs and 737-9 customer considerations related to the January 2024 grounding. BCA revenues decreased by $433 million for the three months ended September 30, 2024, compared with the same period in 2023 driven by lower 777 and 787 deliveries, partially offset by higher 737 deliveries.

Previous wording

BCA loss from operations was $1,858 million for the six months ended June 30, 2024, compared with $998 million in the same period in 2023 reflecting lower deliveries, lower margins driven by production disruption, and 737-9 customer considerations related to the January 2024 grounding, partially offset by lower abnormal production costs. BCA loss from operations was $715 million for the three months ended June 30, 2024, compared with $383 million in the same period in 2023 reflecting lower deliveries and lower margins driven by production disruption, partially offset by lower abnormal production costs.

Current wording

BCA loss from operations was $5,879 million for the nine months ended September 30, 2024, compared with $1,676 million in the same period in 2023 reflecting reach-forward losses on 777X and 767, lower deliveries, lower margins driven by production disruption including the IAM 751 work stoppage, 737-9 customer considerations related to the January 2024 grounding and higher research and development expense, partially offset by lower abnormal production costs. BCA loss from operations was $4,021 million for the three months ended September 30, 2024, compared with $678 million in the same period in 2023 reflecting reach-forward losses on 777X and 767, lower margins driven by production disruption including the IAM 751 work stoppage, and higher research and development expense, partially offset by lower abnormal production costs.

Previous 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.

Current wording

BCA total backlog decreased from $440,507 million as of December 31, 2023, to $427,733 million at September 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 nine months ended September 30, 2024, totaled $2,692 million and primarily relate to 737 aircraft. Net ASC 606 adjustments during the nine months ended September 30, 2024, totaled $15,642 million and primarily related to 777X and 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 various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

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 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.

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 nine months ended September 30, 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. In the third quarter of 2024, we continued to gradually increase production aligned with our safety and quality plan. However, production has been paused since September 13, 2024, as a result of the ongoing work stoppage initiated by IAM 751. Prior to the work stoppage, we were working toward a production rate of 38 per month by the end of 2024, which we now expect to be delayed by the work stoppage.

Previous 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.

Current wording

As of September 30, 2024, we had approximately 60 737-8 aircraft in inventory that were produced prior to 2023, including approximately 45 aircraft for customers in China. Deliveries are being impacted by the work stoppage.

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 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.

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 September 30, 2024, we had approximately 35 737-7 and 737-10 aircraft in inventory. We are planning to incorporate engineering solutions to the anti-icing systems on the 737-7 and 737-10 prior to certification, which has delayed certification and first deliveries.

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 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.

Current wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. 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.

Previous 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.

Current wording

777 and 777X Programs The accounting quantity for the 777 program increased by 20 units during the three months ended September 30, 2024, due to the program's normal progress of obtaining additional orders and delivering airplanes. While production is currently paused, prior to the work stoppage, we were at a combined production rate of 4 per month for the 777/777X programs. Prior to the work stoppage, the programs experienced factory disruption including 777 supply chain delays and quality issues, and challenges associated with 777X production. In July 2024, we obtained approval from the FAA to begin the first phase of FAA certification flight testing. Flight testing was paused in August when a cracked engine thrust link was discovered in a flight test aircraft and remained paused as of September 30, 2024. The flight test aircraft were subsequently approved for flight; however, the resumption of flight activities will be impacted by the work stoppage.

Previous 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.

Current wording

Based on flight test delays and our latest assessment of certification timelines, we now anticipate the first delivery of the 777-9 to occur in 2026 and the 777-8 freighter to occur in 2028. First delivery of the 777-8 passenger aircraft is not expected to occur before 2030. In addition, we are slowing the rate ramp of 777X to address production challenges, which is leading to higher production costs and further customer delivery delays. As a result of these changes, as well as higher estimated labor and supplier costs, we recorded a $2.6 billion reach-forward loss on the 777X program in the third quarter of 2024.

Previous 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.

Current 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 (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.

Previous 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.

Current wording

787 Program During the first quarter of 2024, we disclosed that we were slowing near-term production to below 5 per month due to supply chain constraints. The program continues to experience supply chain constraints and production issues. Delays associated with business class seats are also adversely impacting 2024 deliveries. As of September 30, 2024, we had approximately 30 aircraft in inventory that were produced prior to 2023 and required rework. This required rework is currently paused as a result of the IAM 751 work stoppage. The inspections and rework costs on inventoried aircraft are accounted for as abnormal production costs, and we expensed $209 million in the nine months ended September 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 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.

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. 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

In March 2024, the U.S. government released the President's budget request for fiscal year 2025 (FY25), which requested $850 billion in funding for the U.S. DoD and $25 billion for NASA.

Current wording

In March 2024, the U.S. government released the President's budget request for FY25, which requested $850 billion in funding for the U.S. DoD and $25 billion for NASA.

Previous wording

The non-U.S. market continues to be driven by complex and evolving security challenges and the need to modernize aging equipment and inventories. BDS expects that it will continue to have a wide range of opportunities across Asia, Europe and the Middle East given the diverse regional threats. At June 30, 2024, 31% of BDS backlog was attributable to non-U.S. customers.

Current wording

The non-U.S. market continues to be driven by complex and evolving security challenges and the need to modernize aging equipment and inventories. BDS expects that it will continue to have a wide range of opportunities across Asia, Europe and the Middle East given the diverse regional threats. At September 30, 2024, 28% of BDS backlog was attributable to non-U.S. customers.

Previous 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.

Current wording

BDS revenues for the nine months ended September 30, 2024 increased by $320 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 nine months ended September 30, 2024 were $258 million higher than the prior year comparable period.

Previous wording

BDS revenues for the three months ended June 30, 2024 decreased by $146 million compared with the same period in 2023. Unfavorable cumulative contract catch-up adjustments were $222 million higher than the comparable period in the prior year largely due to charges on certain major fixed-price development programs. This was partially offset by increased volume on weapons and proprietary programs.

Current wording

BDS revenues for the three months ended September 30, 2024 increased by $55 million compared with the same period in 2023. The increase reflects higher volume on weapons and proprietary programs, offset by higher net unfavorable cumulative contract catch-up adjustments on major fixed-price development programs. Unfavorable cumulative contract catch-up adjustments were $140 million higher than the comparable period in the prior year largely due to charges on certain major fixed-price development programs.

Previous wording

KC-46A Tanker $519 million, T-7A Red Hawk $372 million, VC-25B $250 million, and Commercial Crew $125 million. During the first half of 2023, losses incurred on development programs totaled $828 million, including Commercial Crew $288 million, KC-46A Tanker $245 million, T-7A Red Hawk $189 million and MQ-25 $106 million. These higher charges were offset by less unfavorable cumulative contract catch-up adjustments on fighter and satellite programs and higher volume from weapons and proprietary programs. See further discussion of fixed-price contracts in Note 10 to our Condensed Consolidated Financial Statements.

Current wording

BDS loss from operations was $3,146 million for the nine months ended September 30, 2024, compared with $1,663 million in the same period in 2023. Net unfavorable cumulative contract catch-up adjustments were $1,630 million higher than the comparable period in the prior year. During the nine months ended September 30, 2024, losses incurred on the five major fixed-price development programs totaled $3,302 million, including T-7A Red Hawk $1,280 million, KC-46A Tanker $1,180 million, Commercial Crew $375 million, VC-25B $250 million, and MQ-25 $217 million. During the nine months ended September 30, 2023, losses incurred on development programs totaled $1,446 million, including VC-25B $482 million. Commercial Crew $288 million, KC-46A Tanker $258 million, T-7A Red Hawk $241 million and MQ-25 $177 million. These unfavorable adjustments were partially offset by less unfavorable cumulative contract catch-up adjustments on satellite and fighter programs, higher revenues from weapons and proprietary programs, and lower period expenses. See further discussion of fixed-price contracts in Note 10 to our Condensed Consolidated Financial Statements.