BOEING CO

Cash Flow Summary

Operating Activities Net cash used by operating activities was $8.6 billion during the nine months ended September 30, 2024, compared with net cash provided of $2.6 billion during the same period in 2023. The $11.2 billion increase in cash used by operating activities was primarily driven by our commercial airplanes business. Commercial airplane cash outflows reflect slowed and/or paused production and lower deliveries as a result of ongoing safety and quality improvement actions the Company is taking following the Alaska Airlines accident on January 5, 2024, supply chain constraints, and the ongoing work stoppage initiated on September 13, 2024, by IAM 751.

The higher net loss of $8.0 billion during the nine months ended September 30, 2024, compared to $2.2 billion during the same period in 2023 primarily reflects higher losses from operations at BCA and BDS. The change in Non-cash items is primarily due to the 777X and 767 reach-forward losses of $3.0 billion recorded in the third quarter of 2024.

Changes in assets and liabilities during the nine months ended September 30, 2024, decreased by $8.6 billion compared with the same period in 2023, primarily driven by unfavorable changes in Inventories ($5.9 billion), Advances and progress billings ($1.3 billion), Accounts payable ($0.9 billion) and Unbilled receivables ($0.5 billion). The growth in Inventories was primarily driven by lower deliveries on our commercial airplane programs during the nine months ended September 30, 2024 as compared to the same period in 2023. Concessions paid to 737 MAX customers totaled $0.8 billion and $0.3 billion for the nine months ended September 30, 2024 and 2023. Cash provided by Advances and progress billings during the nine months ended September 30, 2024, was $1.7 billion compared to cash provided of $3.0 billion during the same period in 2023. Changes in Accounts payable during the nine months ended September 30, 2024 compared to the same period in 2023 reflects slowed/paused production primarily in our commercial airplanes business. The increase in Unbilled receivables was primarily driven by revenue recognized at BDS in excess of billings.

Payables to suppliers who elected to participate in supply chain financing programs decreased by $0.2 billion during the nine months ended September 30, 2024, and increased by $0.4 billion during the nine months ended September 30, 2023.

Investing Activities Net cash provided by investing activities was $0.7 billion during the nine months ended September 30, 2024, compared with net cash used of $5.2 billion during the same period in 2023. The increase in cash provided by investing activities was primarily due to net proceeds from investments of $2.8 billion in 2024 compared with net contributions to investments of $4.0 billion in 2023. During the nine months ended September 30, 2024 and 2023, capital expenditures were $1.6 billion and $1.1 billion. We continue to expect capital expenditures in 2024 to be higher than in 2023.

Financing Activities Net cash provided by financing activities was $5.2 billion during the nine months ended September 30, 2024, compared with net cash used of $5.1 billion during the same period in 2023. During the nine months ended September 30, 2024, net borrowings were $5.3 billion compared with net repayments of $5.1 billion during the same period in 2023, primarily due to $10.0 billion of fixed-rate senior notes issued in the second quarter of 2024.

As of September 30, 2024, the total debt balance was $57.7 billion, up from $52.3 billion at December 31, 2023. At September 30, 2024, $4.5 billion of debt was classified as short-term.

Capital Resources

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 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.

On June 30, 2024, we entered into an agreement to acquire Spirit in an all-stock transaction at an equity value of approximately $4.7 billion, or $37.25 per share of Spirit Class A Common Stock. The transaction will include the assumption of Spirit's net debt at closing. See Note 2 to our Condensed Consolidated Financial Statements.

At September 30, 2024, we had $10.0 billion of cash, $0.5 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 $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 that these credit lines will remain undrawn and primarily serve as back-up liquidity to support our general corporate borrowing needs. On October 14, 2024, we entered into a $10.0 billion 364-day supplemental credit agreement (see Note 12 to our Condensed Consolidated Financial Statements 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.

We expect to be able to access capital markets when we require additional funding in order to pay off existing debt, address further impacts to our business related to the strike by IAM 751, a delay in our ability to resume production and ramp up production and deliveries, or market developments, fund outstanding financing commitments or meet other business requirements. A number of factors could cause us to incur increased borrowing costs and to have greater difficulty accessing public and private markets for equity or debt. These factors include disruptions or declines in the global capital markets and/or a decline in our financial performance, outlook or credit ratings, and/or associated changes in demand for our products and services. These risks will be particularly acute if we are subject to further credit rating downgrades. The occurrence of any or all of these events may adversely affect our ability to fund our operations and financing or contractual commitments.

Any future borrowings may affect our credit ratings and are subject to various debt covenants. The most restrictive covenants include a limitation on mortgage debt and sale and leaseback transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements), and a limitation on consolidated debt as a percentage of total capital (as defined in the credit agreements). When considering debt covenants, we continue to have substantial borrowing capacity.

Off-Balance Sheet Arrangements

We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion of these arrangements, see Note 11 to our Condensed Consolidated Financial Statements.