BOEING CO

Consolidated Results of Operations

The following table summarizes key indicators of consolidated results of operations:

(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 50-51 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.

The following table summarizes Revenues:

Revenues for the nine and three months ended September 30, 2026, increased by $5,450 million and $918 million compared with the same periods in 2025 primarily driven by higher revenues at Defense, Space & Security (BDS).

Earnings/(Loss) from Operations

The following table summarizes Earnings/(loss) from operations:

• The 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.

** Core operating earnings is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 50-51.

Earnings from operations and Core operating earnings for the nine and three months ended September 30, 2026, increased by $5,454 million and $5,135 million compared with the same period in 2025, primarily driven by decreases in loss from operations at Commercial Airplanes (BCA) of $4,865 million and $4,656 million.

For information related to Postretirement Plans, see Note 14 to our Condensed Consolidated Financial Statements.

Unallocated Items, Eliminations and Other

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

Deferred compensation expense for the nine and three months ended September 30, 2026, decreased by $46 million and $73 million compared with the same periods in 2025 due to changes in broad stock market conditions.

Research and development expense for the nine and three months ended September 30, 2026, increased by $30 million and $3 million compared with the same periods in 2025 due to increases in enterprise investments in product development.

Eliminations and other unallocated items expense for the nine and three months ended September 30, 2026, decreased by $550 million and $73 million compared with the same periods in 2025. The decrease during the nine months ended September 30, 2026 reflects the absence of an earnings charge of $445 million recorded in the second quarter of 2025 related to an agreement with the Department of Justice. The decrease during the three months ended September 30, 2026 reflects lower General and administrative expenses.

Other Earnings Items

Other income, net for the nine and three months ended September 30, 2026, decreased by $555 million and $180 million compared with the same periods in 2025, primarily due to higher non-operating pension cost.

Interest and debt expense for the nine and three months ended September 30, 2026, decreased by $323 million and $121 million compared with the same periods in 2025, primarily as a result of lower debt balances.

For a discussion related to Income Taxes, see Note 5 to our Condensed Consolidated Financial Statements.

Total Costs and Expenses (“Cost of Sales”)

Cost of sales, for both products and services, consists primarily of raw materials, parts, sub-assemblies, labor, overhead and subcontracting costs. Our BCA segment predominantly uses program accounting to account for cost of sales. Under program accounting, cost of sales for each commercial aircraft program equals the product of (i) revenue recognized in connection with customer deliveries and (ii) the estimated cost of sales percentage applicable to the total remaining program. For long-term contracts, the amount reported as cost of sales is recognized as incurred. 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. Cost of sales for commercial spare parts is recorded at average cost.

The following table summarizes cost of sales:

Cost of sales for the nine months ended September 30, 2026, increased by $800 million, or 1% compared with the same periods in 2025, primarily due to higher revenues at BCA, BDS, and BGS, lower margins at BCA, and lower Cost of sales attributable to Unallocated items, eliminations and other, partially offset by a $4.9 billion reach-forward loss recognized at BCA in 2025.

Cost of sales for the three months ended September 30, 2026, decreased by $3,624 million, or 14% compared with the same periods in 2025, primarily due to a $4.9 billion reach-forward loss recognized at BCA in 2025, partially offset by higher revenues at BDS.

Cost of sales as a percentage of Revenues decreased during the nine and three months ended September 30, 2026, compared with the same period in 2025 due to a $4.9 billion reach-forward loss recognized at BCA in 2025.

Research and Development

Research and development expense, net is summarized in the following table:

Research and development expense increased by $3 million during the nine months ended September 30, 2026, and decreased $67 million during the three months ended September 30, 2026, compared with the same periods in 2025, primarily due to changes in spending at BCA.

Backlog

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 of $53,046 million during the nine months ended September 30, 2026, was primarily due to a $44,543 million increase 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.

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The increase of $10,178 million in unobligated backlog during the nine months ended September 30, 2026 was due to an increase in BDS backlog primarily reflecting new awards, partially offset by reclassifications to contractual backlog.

U.S. Government Funding Considerable uncertainty exists regarding how future U.S. government budget and program decisions will unfold, including the spending priorities of the Administration and Congress. As of September 30, 2026, government departments and agencies, including the Department of War (DoW), the National Aeronautics and Space Administration (NASA), and the Department of Transportation are funded through December 11, 2026.

Global Trade The global trade landscape continues to evolve.

Following the February 20, 2026, Supreme Court ruling regarding the imposition of tariffs under the International Emergency Economic Powers Act (IEEPA), U.S. Customs and Border Protection defined processes for submitting claims for tariffs previously paid under IEEPA. During the nine months ended September 30, 2026, we received approximately $420 million in refunds related to prior tariff assessments.

The current state of U.S.-China trade relations remains an ongoing watch item. China is a significant market for commercial aircraft, and we have long-standing relationships with our Chinese customers. Overall, the U.S.-China trade relationship remains challenged due to tariffs, sanctions, and export restrictions, as well as other economic and national security concerns.

We seek to comply with all U.S. and other government import requirements, export control requirements and sanctions. We continually monitor the global trade environment for new and/or changing tariffs, retaliatory actions, trade agreements, export restrictions, sanctions or other restrictions that may impact us or our supply chain or customers, and work to mitigate impacts to our business.

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. Our supply chain is also being impacted by the tariffs and export restrictions discussed above. Certain of our suppliers are also experiencing financial difficulties. 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. During 2024, we recorded a reach-forward loss of $1,770 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 during 2024 that were partially attributable to higher supplier costs. We recorded a $4.9 billion reach-forward loss on the 777X program during 2025 that was partially attributable to higher estimated supplier costs. During the third quarter of 2026, we experienced supplier shortages which have disrupted factory operations. This is adversely affecting the KC-46A Tanker and the 777 Freighter programs. We expect this disruption to continue into 2027 and result in abnormal production costs, which are expensed as incurred.

Human Capital Some of our and our suppliers' workforces are represented by labor unions. Work stoppages and instability in our and our suppliers' union relationships have in the past and could in the future disrupt and/or delay the production, delivery and/or development of our products and services, which could strain relationships with customers and result in lower revenues, earnings and cash flows. If we are unable to successfully negotiate successor agreements with our unions that our employees will ratify, we may experience additional work stoppages in the future and/or higher than anticipated costs, which could materially adversely affect our business, financial position, results of operations and cash flows. On October 1, 2026, engineers and technicians represented by the Society of Professional Engineering Employees in Aerospace voted to ratify two new contracts with terms effective through 2030.