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What changed in Boeing's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Boeing's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+381 added−347 removedSource: 10-K (2025-02-03) vs 10-K (2024-01-31)

Top changes in Boeing's 2024 10-K

381 paragraphs added · 347 removed · 267 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe are subject to various federal, state, local and non-U.S. laws and regulations relating to environmental protection, including the discharge, treatment, storage, disposal and remediation of hazardous substances and wastes. We could also be affected by laws and regulations relating to climate change, including laws limiting or otherwise related to greenhouse gas emissions.
Biggest changeThese requirements are generally administered by the national aviation authorities of each country and, in the case of Europe, coordinated by the European Union Aviation Safety Agency. Environmental. We are subject to various federal, state, local and non-U.S. laws and regulations relating to environmental protection, including the utilization, discharge, treatment, storage, disposal and remediation of hazardous substances and wastes.
If any of our government contracts were to be terminated for default, generally the U.S. government would pay only for the work that has been accepted and could require us 3 Table of Contents to pay the difference between the original contract price and the cost to re-procure the contract items, net of the work accepted from the original contract.
If any of our government contracts were to be terminated for default, generally the U.S. government would pay only for the work that has been accepted and could require us to pay the difference between the original contract price and the cost to re-procure the contract items, 3 Table of Contents net of the work accepted from the original contract.
Any forward-looking statement 5 Table of Contents speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law.
Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. 5 Table of Contents
Non-U.S. sales are also subject to varying currency, political and economic risks. Raw Materials, Parts and Subassemblies We are highly dependent on the availability of essential materials, parts and subassemblies from our suppliers and subcontractors.
Non-U.S. sales are also subject to varying currency, political and economic risks. Raw Materials, Parts and Subassemblies We are highly dependent on the availability and quality of essential materials, parts and subassemblies from our suppliers and subcontractors.
Non-U.S. companies such as BAE Systems and Airbus Group continue to build a strategic presence in the U.S. market by strengthening their North American operations and partnering with U.S. defense companies. In addition, certain competitors have occasionally formed teams with other competitors to address specific customer requirements. BDS expects the trend of strong competition to continue into 2024.
Non-U.S. companies such as BAE Systems and Airbus Group continue to build a strategic presence in the U.S. market by strengthening their North American operations and partnering with U.S. defense companies. In addition, certain competitors have occasionally formed teams with other competitors to address specific customer requirements. BDS expects the trend of strong competition to continue into 2025.
For additional information relating to environmental contingencies, see Note 13 to our Consolidated Financial Statements. Non-U.S. Sales. Our non-U.S. sales are subject to both U.S. and non-U.S. governmental regulations and procurement policies and practices, including regulations relating to import-export control, tariffs, investment, exchange controls, anti-corruption and repatriation of earnings.
For additional information relating to environmental contingencies, see Note 14 to our Consolidated Financial Statements. Non-U.S. Sales. Our non-U.S. sales are subject to both U.S. and non-U.S. governmental regulations and procurement policies and practices, including regulations relating to import-export control, tariffs, investment, exchange controls, anti-corruption and repatriation of earnings.
BGS expects the market to remain highly competitive in 2024, and intends to grow market share by leveraging a high level of customer satisfaction and productivity. Regulatory Matters Our businesses are heavily regulated in most of our markets.
BGS expects the market to remain highly competitive in 2025, and intends to grow market share by leveraging a high level of customer satisfaction and productivity. Regulatory Matters Our businesses are heavily regulated in most of our markets.
While we maintain an extensive qualification and performance surveillance system to control risk associated with such reliance on third parties, failure of suppliers or subcontractors to meet commitments has and could continue to adversely affect product quality, production schedules and program/contract profitability, thereby jeopardizing our ability to fulfill commitments to our customers.
While we maintain an extensive qualification and performance surveillance system to control risk 4 Table of Contents associated with such reliance on third parties, failure of suppliers or subcontractors to meet commitments has and could continue to adversely affect product quality, production schedules and program/contract profitability, thereby jeopardizing our ability to fulfill commitments to our customers.
We intend to continue to compete with other aircraft manufacturers by providing customers with airplanes and services that deliver superior design, safety, quality, efficiency and value to customers around the world. BDS faces strong competition primarily from Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Technologies Corporation, General Dynamics Corporation and SpaceX.
We intend to continue to compete with other aircraft manufacturers by providing customers with airplanes and services that deliver superior design, safety, quality, efficiency and value to customers around the world. BDS faces strong competition primarily from Lockheed Martin Corporation, Northrop Grumman Corporation, RTX Corporation, General Dynamics Corporation and SpaceX.
Forward-Looking Statements This report, as well as our annual report to shareholders, quarterly reports and other filings we make with the SEC, press and earnings releases and other written and oral communications, contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Cautionary Note About Forward-Looking Statements This report, as well as our annual report to shareholders, quarterly reports and other filings we make with the SEC, press and earnings releases and other written and oral communications, contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Our principal collective bargaining agreements and their current status are summarized in the following table: Union Percent of our Employees Represented Status of Major Agreements with Union The International Association of Machinists and Aerospace Workers (IAM) 21% We have two major agreements; one with IAM District 751 (Washington) expiring in September 2024 and one with IAM District 837 (Missouri) expiring in July 2025.
Our principal collective bargaining agreements and their current status are summarized in the following table: Union Percent of our Total Workforce Represented Status of Major Agreements with Union The International Association of Machinists and Aerospace Workers (IAM) 21% We have two major agreements; one with IAM District 837 (Missouri) expiring in July 2025 and one with IAM District 751 (Washington) expiring in September 2028.
We also invest in rewarding performance and have established a multi-level recognition program for the purpose of acknowledging the achievements of excellent individual or team performance. 2 Table of Contents We are committed to supporting our employees’ continuous development of professional, technical and leadership skills through access to digital learning resources and through partnerships with leading professional/technical societies and organizations around the world.
We also invest in rewarding performance and have established a multi-level recognition program to acknowledge the achievements of excellent individual or team performance. 2 Table of Contents We support our employees’ continuous development of professional, technical and leadership skills through access to digital learning resources and partnerships with leading professional/technical societies and organizations around the world.
We address employee concerns and take appropriate actions that uphold our Boeing values. Competition The commercial jet aircraft market and the airline industry remain extremely competitive. We face aggressive international competitors who are intent on increasing their market share, such as Airbus and entrants from China. We are focused on improving our products and processes and continuing cost reduction efforts.
Competition The commercial jet aircraft market and the airline industry remain extremely competitive. We face aggressive international competitors who are intent on increasing their market share, such as Airbus and entrants from China. We are focused on improving our products and processes and continuing cost reduction efforts.
Investigation, remediation and operation and maintenance costs associated with environmental compliance and management of sites are a normal, recurring part of our operations. These costs often are allowable costs under our contracts with the U.S. government.
We continually assess our compliance status and management of environmental matters to monitor compliance with applicable environmental laws and regulations. Investigation, remediation and operation and maintenance costs associated with environmental compliance and management of sites are a normal, recurring part of our operations. These costs often are allowable costs under our contracts with the U.S. government.
We continue to work with a small number of sole-source suppliers to ensure continuity of supply for certain items. 4 Table of Contents Suppliers We are dependent upon the ability of a large number of U.S. and non-U.S. suppliers and subcontractors to meet performance specifications, quality standards and delivery schedules at our anticipated costs.
Suppliers We are dependent upon the ability of a large number of U.S. and non-U.S. suppliers and subcontractors to meet performance specifications, quality standards and delivery schedules at our anticipated costs.
To attract and retain the best-qualified talent, we offer competitive benefits, including market-competitive compensation, healthcare, paid time off, parental leave, retirement benefits, tuition assistance, employee skills development, leadership development and rotation programs. In 2023, our voluntary resignation rate was approximately 3%.
Our compensation program is designed to attract, reward and retain the best-qualified talent with competitive compensation and benefits, including healthcare, paid time off, parental leave, retirement benefits, tuition assistance, employee skills and leadership development programs, and mental and physical well-being programs.
Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict.
Forward-looking statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict.
Employees are also required on an annual basis to sign the Boeing Code of Conduct to reaffirm their commitment to do their work in a compliant and ethical manner. We provide several channels for all employees to speak up, ask for guidance and report concerns related to ethics or safety violations.
We aspire to achieve zero workplace injuries and provide a safe, open and accountable work environment for our employees. Employees are required on an annual basis to sign the Boeing Code of Conduct to reaffirm their commitment to do their work in a compliant and ethical manner.
Human Capital As of December 31, 2023 and 2022, Boeing’s total workforce was approximately 171,000 and 156,000 with 14% and 13% located outside of the U.S. As of December 31, 2023, our workforce included approximately 57,000 union members.
Human Capital As of December 31, 2024, Boeing’s total workforce was approximately 172,000 with 15% located outside of the U.S. As of December 31, 2024, our global workforce was comprised of approximately 24% women, and our U.S. workforce was comprised of 39% racial and ethnic minorities and 14% U.S. veterans.
We are closely monitoring developments, supporting our employees and customers, and will take mitigating actions as appropriate. Seasonality No material portion of our business is considered to be seasonal. Executive Officers of the Registrant See “Item 10. Directors, Executive Officers and Corporate Governance” in Part III.
We have also experienced significant increases in supplier prices which are adversely affecting our business. We are also dependent on the availability of energy sources, such as electricity, at affordable prices. Seasonality No material portion of our business is considered to be seasonal. Executive Officers of the Registrant See “Item 10. Directors, Executive Officers and Corporate Governance” in Part III.
Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact.
Words such as “may,” “will,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates” and other similar words or expressions, or the negative thereof, generally can be used to help identify these forward-looking statements.
On January 24, 2024, the FAA stated that it will not approve production rate increases or additional production lines for the 737 MAX until it is satisfied that we are in full compliance with required quality control procedures. New aircraft models and new derivative aircraft are required to obtain FAA certification prior to entry into service.
In addition, the FAA communicated it will not approve production rate increases beyond 38 per month or additional production lines until Boeing has complied with required quality and safety standards. New aircraft models and new derivative aircraft are required to obtain FAA certification prior to entry into service. Outside the U.S., similar requirements exist for airworthiness, installation and operational approvals.
These laws and regulations could lead to increased environmental compliance expenditures, increased energy and raw materials costs and new and/or additional investment in designs and technologies. We continually assess our compliance status and management of environmental matters to ensure our operations are in compliance with all applicable environmental laws and regulations.
We could also be affected by laws and regulations relating to climate change, including laws limiting or otherwise related to greenhouse gas emissions. These laws and regulations could lead to increased environmental compliance expenditures, increased energy and raw materials costs and new and/or additional investment in designs and technologies.
For 2023, Boeing employees completed approximately 6.9 million hours of learning. We offer the ability for our people to pursue degree programs, professional certificates and individual courses in strategic fields of study from approximately 500 accredited colleges and universities, online and across the globe through our tuition assistance program. Approximately 13,000 Boeing employees leveraged these programs in 2023.
In 2024, Boeing employees completed approximately 5.9 million hours of learning and approximately 14,000 Boeing employees leveraged our tuition assistance program to pursue degrees, professional certificates and individual courses in strategic fields of study. Safety, quality, integrity and sustainability are at the core of how Boeing operates.
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Guided by our values, we are committed to creating a company where everyone is included and respected, and where we support each other in reaching our full potential. We are committed to diverse representation across all levels of our workforce to reflect the vibrant and thriving diversity of the communities in which we live and work.
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As of December 31, 2024, our workforce included approximately 58,000 union members.
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In May 2023, we released our third Global Equity, Diversity and Inclusion report with our workforce composition. As of December 2022, our global workforce was comprised of approximately 24% women, and our U.S. workforce was comprised of 35% racial and ethnic minorities and 15% U.S. veterans.
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Our prior contract with the International Association of Machinists and Aerospace Workers District 751 (IAM 751) expired on September 12, 2024, and 96% of IAM 751 members voted to initiate a strike. The strike lasted until November 4, 2024, when IAM 751 members voted to ratify a new contract.
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We also support Business Resource Groups open to all employees with more than 15,000 participants across 176 chapters globally that focus on gender, race and ethnicity, generations, gender identity, sexual orientation, disability or veteran status.
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As a result of the strike, we paused production of our commercial aircraft (other than the 787 production in Charleston) and certain of our BDS products, adversely impacting our business and financial position. During the strike, we implemented hiring freezes and announced plans to reduce our overall workforce.
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These groups help foster inclusion among all teammates, build awareness, recruit and retain a diverse workforce and support the company in successfully operating in a global, multicultural business environment.
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For information on risks related to our human capital, see “Risks Related to Our Business and Operations” in Item 1A. Risk Factors. We are committed to creating a work environment where every teammate around the world can perform at their best and grow their careers while supporting our company’s mission to protect, connect and explore our world and beyond.
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Additionally, we hired approximately 23,000 new employees in 2023 for critical skills and had an offer acceptance rate of 82%. Employees are encouraged to provide feedback about their experience through ongoing employee engagement activities. Boeing actively listens to its employees via surveys ranging from pre-hire to exiting the company.
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Additionally, we continue to focus on creating a culture where all employees feel empowered to speak up and provide multiple channels for all employees to ask for guidance and report concerns, including those related to ethics, safety or quality. We address employee concerns and take appropriate actions that uphold our Boeing values.
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These voluntary surveys provide aggregate trend reports for the company to address in real time and ensure Boeing maintains an employee-focused experience and culture.
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For example, as a result of the Alaska Airlines 737-9 accident in January 2024, the FAA investigated the 737 quality control system, including Spirit AeroSystems Holdings, Inc. (Spirit), and increased its oversight of our production and quality and safety management systems.
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Safety, quality, integrity and sustainability are at the core of how Boeing operates. We aspire to achieve zero workplace injuries and provide a safe, open and accountable work environment for our employees.
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Many major components and product equipment items are procured or subcontracted on a sole-source basis. We continue to work with a small number of sole-source suppliers to ensure continuity of supply for certain items.
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On January 10, 2024, the FAA notified us that it has initiated an investigation into our quality control system.
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Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate.
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This was followed by the FAA announcing actions to increase its oversight of us, including conducting (1) an audit involving the 737-9 production line and suppliers to evaluate compliance with approved quality procedures, (2) increased monitoring of 737-9 in-service events, and (3) an assessment of safety risks around delegated authority and quality oversight, and examination of options to move these functions under independent third parties.
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Outside the U.S., similar requirements exist for airworthiness, installation and operational approvals. These requirements are generally administered by the national aviation authorities of each country and, in the case of Europe, coordinated by the European Union Aviation Safety Agency. Environmental.
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As a result of the Russia Ukraine war, we ceased purchasing titanium from Russia. This has not disrupted our operations as we have been able to use inventory on hand and identify alternative sources. Many major components and product equipment items are procured or subcontracted on a sole-source basis.
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We are also dependent on the availability of energy sources, such as electricity, at affordable prices. The current conflict in Israel and the Gaza Strip has the potential to impact certain of our suppliers, and has impacted some operations for our airline and lessor customers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA number of factors could cause us to incur increased borrowing costs and to have greater difficulty accessing public and private markets for 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 changes in demand for our products and services.
Biggest changeAny such downgrades, as well as other factors including disruptions or declines in the global capital markets, a decline in our financial performance or outlook, a delay in our ability to ramp up production and deliveries, and changes in demand for our products and services, could increase the cost of borrowing, jeopardize our ability to incur debt on terms acceptable to us, and negatively impact our access to the capital and financial markets and our ability to fund our operations and commitments.
Work stoppages and instability in our union relationships could delay the production and/or development of our products, which could strain relationships with customers and result in lower revenues. Competition within our markets and with respect to our products and services may reduce our future contracts and sales.
Work stoppages and instability in our union relationships delay the production and/or development of our products, which could strain relationships with customers and result in lower revenues. Competition within our markets and with respect to our products and services may reduce our future contracts and sales.
Cost Accounting Standards, which can also affect contract profitability. We also provide other postretirement benefits to certain of our employees, consisting principally of health care coverage for eligible retirees and qualifying dependents. Our estimates of future costs associated with these benefits are also subject to assumptions, including estimates of the level of medical cost increases.
Cost Accounting Standards (CAS), which can also affect contract profitability. We also provide other postretirement benefits to certain of our employees, consisting principally of health care coverage for eligible retirees and qualifying dependents. Our estimates of future costs associated with these benefits are also subject to assumptions, including estimates of the level of medical cost increases.
We are involved in a number of litigation matters. These matters may divert financial and management resources that would otherwise be used to benefit our operations. No assurances can be given that the results of these matters will be favorable to us.
We are involved in a number of litigation matters. These matters divert financial and management resources that would otherwise be used to benefit our operations. No assurances can be given that the results of these matters will be favorable to us.
Any significant production delays, or any destruction, manipulation or improper use of Boeing’s or our suppliers’ data, information systems or networks could impact our sales, increase our expenses and/or have an adverse effect on the reputation of Boeing and of our products and services. 14 Table of Contents Risks Related to Legal and Regulatory Matters The outcome of litigation and of government inquiries and investigations involving our business is unpredictable, and an adverse decision in any such matter could have a material effect on our financial position and results of operations.
Any significant production delays, or any destruction, manipulation or improper use of Boeing’s or our suppliers’ data, information systems or networks could impact our sales, increase our expenses and/or have an adverse effect on the reputation of Boeing and of our products and services. 15 Table of Contents Risks Related to Legal and Regulatory Matters The outcome of litigation and of government inquiries and investigations involving our business is unpredictable, and an adverse decision in any such matter could have a material effect on our financial position and results of operations.
We are subject to various U.S. federal, state, local and non-U.S. laws and regulations related to environmental protection, including the discharge, treatment, storage, disposal and remediation of pollutants, hazardous substances and wastes.
We are subject to various U.S. federal, state, local and non-U.S. laws and regulations related to environmental protection, including the utilization, discharge, treatment, storage, disposal and remediation of pollutants, hazardous substances and wastes.
In addition, because our commercial aircraft backlog consists of aircraft scheduled for delivery over a period of several years, any of these macroeconomic, industry or customer impacts could unexpectedly affect deliveries over a long period.
In addition, because our commercial aircraft backlog consists of aircraft scheduled for delivery over a period of several years, any of these macroeconomic, industry or customer impacts could affect deliveries over a long period.
For example, certain jurisdictions including the State of California and the European Union have enacted legislation which would require more stringent greenhouse gas emissions and climate risk reporting.
For example, certain jurisdictions including the State of California and the European Union have enacted legislation which require more stringent greenhouse gas emissions and climate risk reporting.
The commercial aircraft business is extremely complex, involving extensive coordination and integration with U.S. and non-U.S. suppliers, highly-skilled labor performed by thousands of employees of ours and other partners, and stringent and evolving regulatory requirements and performance and reliability standards. We have experienced and may continue to experience production quality issues, including in our supply chain.
The commercial aircraft business is extremely complex, involving extensive coordination and integration with suppliers, highly-skilled labor performed by thousands of employees of ours and other partners, and stringent and evolving regulatory requirements and performance and reliability standards. We have experienced and may continue to experience production quality issues, including in our supply chain.
While the impact of these factors is difficult to predict, any one or more of these factors could adversely affect our operations in the future. For example, 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.
While the impact of these factors is difficult to predict, any one or more of these factors could adversely affect our operations in the future. For example, 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 10 Table of Contents tariffs.
Physical impacts of climate change, increasing global chemical restrictions and bans, and 15 Table of Contents water and waste requirements may drive increased costs to us and our suppliers and impact our production continuity and data facilities.
Physical impacts of climate change, increasing global chemical restrictions and bans, and water and 16 Table of Contents waste requirements may drive increased costs to us and our suppliers and impact our production continuity and data facilities.
In addition, fleet decisions, airline consolidations or financial challenges involving any of our major commercial airline customers could significantly reduce our revenues and limit our opportunity to generate profits from those customers. Airlines also are experiencing increased fuel and other costs, and the global economy has experienced high inflation.
In addition, fleet decisions, airline consolidations or financial challenges involving any of our major commercial airline customers could significantly reduce our revenues and limit our opportunity to generate profits from those customers. Airlines also are experiencing increased fuel and other costs, and the global economy has experienced and may continue to experience high inflation.
For additional information relating to environmental contingencies, see Note 13 to our Consolidated Financial Statements. We may be adversely affected by global climate change or by legal, regulatory or market responses to such change.
For additional information relating to environmental contingencies, see Note 14 to our Consolidated Financial Statements. We may be adversely affected by global climate change or by legal, regulatory or market responses to such change.
Nonperformance by those divested businesses could affect our future financial results through additional payment obligations, higher costs or asset write-downs. Risks Related to Our Contracts We conduct a significant portion of our business pursuant to U.S. government contracts, which are subject to unique risks.
Nonperformance by those divested businesses could affect our future financial results through additional payment obligations, higher costs or asset write-downs. 12 Table of Contents Risks Related to Our Contracts We conduct a significant portion of our business pursuant to U.S. government contracts, which are subject to unique risks.
The markets in which we operate are highly competitive and one or more of our competitors may have more extensive or more specialized engineering, manufacturing and marketing capabilities than we do in some areas. In our BCA business, we face aggressive international competition intent on increasing market share.
The markets in which we operate are highly competitive and one or more of our competitors may have more extensive or more specialized engineering, manufacturing and marketing capabilities than we do 9 Table of Contents in some areas. In our BCA business, we face aggressive international competition intent on increasing market share.
Whether we realize the anticipated benefits from these acquisitions and related activities depends, in part, upon our ability to integrate the operations of the acquired business, the performance of the underlying product and service portfolio, and the performance of the management team and other personnel of the acquired operations.
Whether we realize the anticipated benefits from these acquisitions, including our acquisition of Spirit, and related activities depends, in part, upon our ability to integrate the operations of the acquired business, the performance of the underlying product and service portfolio, and the performance of the management team and other personnel of the acquired operations.
Furthermore, we are facing increased international competition and cross-border consolidation of competition, and U.S. procurement and compliance requirements that could limit our ability to be cost-competitive in the 9 Table of Contents international market.
Furthermore, we are facing increased international competition and cross-border consolidation of competition, and U.S. procurement and compliance requirements that could limit our ability to be cost-competitive in the international market.
In 2023, 37% of our revenues were earned pursuant to U.S. government contracts, which include Foreign Military Sales (FMS) through the U.S. government. Business conducted pursuant to such contracts is subject to extensive procurement regulations and other unique risks. Our sales to the U.S. government are subject to extensive procurement regulations, and changes to those regulations could increase our costs.
In 2024, 42% of our revenues were earned pursuant to U.S. government contracts, which include Foreign Military Sales (FMS) through the U.S. government. Business conducted pursuant to such contracts is subject to extensive procurement regulations and other unique risks. Our sales to the U.S. government are subject to extensive procurement regulations, and changes to those regulations could increase our costs.
As a result, we are sometimes subject to government inquiries and investigations due, among other things, to our business relationships with the U.S. government, the heavily regulated nature of our industry, and in the case of environmental proceedings, our current or past ownership of certain property.
As a result, we are subject to government inquiries and investigations due, among other things, to our business relationships with the U.S. government, the heavily regulated nature of our industry, accidents involving our products and in the case of environmental proceedings, our current or past ownership of certain property.
We are subject to risks of doing business internationally, including: • changes in regulatory requirements or other executive branch actions, such as Executive Orders; • changes in the global trade environment, including disputes with authorities in non-U.S. jurisdictions, including international trade authorities, that could impact sales and/or delivery of products and services outside the U.S. and/or impose costs on our customers in the form of tariffs, duties or penalties attributable to the importation of Boeing products and services; • changes to U.S. and non-U.S. government policies, including sourcing restrictions, requirements to expend a portion of program funds locally and governmental industrial cooperation or participation requirements; • fluctuations in international currency exchange rates; • volatility in international political and economic environments and changes in non-U.S. national priorities and budgets, which can lead to delays or fluctuations in orders; • the complexity and necessity of using non-U.S. representatives and consultants; • the uncertainty of the ability of non-U.S. customers to finance purchases, including the availability of financing from the Export-Import Bank of the United States; • uncertainties and restrictions concerning the availability of funding credit or guarantees; • imposition of domestic and international taxes, export controls, tariffs, embargoes, sanctions (such as those imposed on Russia) and other trade restrictions; • the difficulty of management and operation of an enterprise spread over many countries; • compliance with a variety of non-U.S. laws, as well as U.S. laws affecting the activities of U.S. companies abroad; and • unforeseen developments and conditions, including terrorism, war, epidemics and international tensions and conflicts.
We are subject to risks of doing business internationally, including: • changes in regulatory requirements or other executive branch actions, such as Executive Orders; • changes in the global trade environment, including potential deterioration in geopolitical or trade relations between countries; • disputes with authorities in non-U.S. jurisdictions, including international trade authorities; • tariffs, duties or penalties attributable to the importation of raw materials, parts, products and services, which could impact sales and/or delivery of products and services outside the U.S. and/or impose costs on us, our suppliers or our customers; • changes to U.S. and non-U.S. government policies, including sourcing restrictions, requirements to expend a portion of program funds locally and governmental industrial cooperation or participation requirements; • fluctuations in international currency exchange rates; • volatility in international political and economic environments and changes in non-U.S. national priorities and budgets, which can lead to delays or fluctuations in orders; • the complexity and necessity of using non-U.S. representatives and consultants; • the uncertainty of the ability of non-U.S. customers to finance purchases, including the availability of financing from the Export-Import Bank of the United States; • uncertainties and restrictions concerning the availability of funding credit or guarantees; • imposition of domestic and international taxes, export controls, tariffs, embargoes, sanctions and other trade restrictions; • the difficulty of management and operation of an enterprise spread over many countries; • compliance with a variety of non-U.S. laws, as well as U.S. laws affecting the activities of U.S. companies abroad; and • unforeseen developments and conditions, including terrorism, war, epidemics and international tensions and conflicts.
Accordingly, our financial results could be adversely affected by unanticipated performance issues, legacy liabilities, transaction-related charges, amortization of expenses related to intangibles, charges for impairment of long-term assets, credit 11 Table of Contents guarantees, partner performance and indemnifications. Consolidations of joint ventures could also impact our reported results of operations or financial position.
Accordingly, our financial results could be adversely affected by unanticipated performance issues, legacy liabilities, cybersecurity issues or vulnerabilities, transaction-related charges, amortization of expenses related to intangibles, charges for impairment of long-term assets, credit guarantees, partner performance and indemnifications. Consolidations of joint ventures could also impact our reported results of operations or financial position.
Operational issues, including delays or defects in supplier components, failure to meet internal performance plans, or delays or failures to achieve required regulatory approval, could result in additional out-of-sequence work and increased production costs, as well as delayed deliveries to customers, impacts to aircraft performance and/or increased warranty or fleet support costs.
Operational issues, including delivery and/or certification delays or defects in supplier components, failure to meet internal performance plans, or delays or failures to achieve required regulatory approval, results in additional out-of-sequence work and increased production costs, as well as delayed deliveries to customers, impacts to aircraft performance and/or increased warranty or fleet support costs.
We have experienced, and may in the future experience, whether directly or through our supply chain, third-party service providers or other channels, cybersecurity incidents.
We have experienced, and may in the future experience, whether directly or through our supply chain, third-party service providers or other channels, cyber-related incidents.
In 2023, non-U.S. customers, which include foreign military sales (FMS), accounted for approximately 42% of our revenues. We expect that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable future.
In 2024, non-U.S. customers, which include foreign military sales (FMS), accounted for approximately 46% of our revenues. We expect that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable future.
We enter into firm fixed-price aircraft sales contracts with indexed price escalation clauses, which could subject us to losses if we have cost overruns or if increases in our costs exceed the applicable escalation rate. Commercial aircraft sales contracts are often entered into years before the aircraft are delivered.
We enter into firm fixed-price aircraft sales contracts with indexed price escalation clauses, which subjects us to losses if we have cost overruns or if increases in our costs exceed the applicable escalation rate. Commercial aircraft sales contracts are typically entered into years before the aircraft are delivered.
Impacts from future potential deterioration in geopolitical or trade relations between the U.S. and one or more other countries could have a material adverse impact on our financial position, results of operations and/or cash flows. 10 Table of Contents We use estimates and make assumptions in accounting for contracts and programs.
Impacts from future potential deterioration in geopolitical or trade relations between the U.S. and one or more other countries could have a material adverse impact on our financial position, results of operations and/or cash flows. We use estimates and make assumptions in accounting for contracts and programs. Changes in our estimates and/or assumptions could adversely affect our future financial results.
Our BDS and BGS defense businesses generated approximately 42% and 35% of their 2023 revenues from cost-type contracting arrangements. Some of these are development programs that have complex design and technical challenges. These cost-type programs typically have award or incentive fees that are subject to uncertainty and may be earned over extended periods.
Our BDS and BGS defense businesses generated approximately 46% and 37% of their 2024 revenues from cost-type contracting arrangements. Some of these are development programs that have complex design and technical challenges. These cost-type programs typically have award or incentive fees that are subject to uncertainty and may be earned over extended periods.
Further uncertainty with respect to ongoing programs could also result in the event that the U.S. government finances its operations through temporary funding measures such as “Continuing Resolutions” rather than full-year appropriations.
Further uncertainty with respect to ongoing programs could result in the U.S. government financing its operations through temporary funding measures such as “Continuing Resolutions” rather than full-year appropriations.
In addition, there continues to be uncertainty with respect to future acquisition priorities and program-level appropriations for the U.S. DoD and other government agencies (including NASA), including changes to national security and defense priorities, and tension between modernization investments, sustainment investments, and investments in new technologies or emergent capabilities.
Government Funding” on page 31 of this Form 10-K. In addition, there continues to be uncertainty with respect to future acquisition priorities and program-level appropriations for the U.S. DoD and other government agencies (including NASA), including changes to national security and defense priorities, and tension between modernization investments, sustainment investments, and investments in new technologies or emergent capabilities.
If we experience delays in achieving certification and/or incorporating safety enhancements, our financial position, results of operations and cash flows would be adversely impacted. A number of our customers have contractual remedies, including compensation for late deliveries or rights to reject individual airplane deliveries based on delivery delays.
There have been delays on each of these development programs and if we experience additional delays in achieving certification, our financial position, results of operations and cash flows would be adversely impacted. A number of our customers have contractual remedies, including compensation for late deliveries or rights to reject individual airplane deliveries based on delivery delays.
There is uncertainty regarding which government functions would shut down or continue operations during a lapse in appropriations, and corresponding uncertainty regarding the extent or magnitude of potential impacts to our operations. For additional information on U.S. government appropriations and budgets, see “Management’s Discussion & Analysis - Additional Considerations - U.S. Government Funding” on page 28 of this Form 10-K.
There is uncertainty regarding which government functions would shut down or continue operations during a lapse in appropriations, and corresponding uncertainty regarding the extent or magnitude of potential impacts to our operations. For additional information on U.S. government appropriations and budgets, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Additional Considerations – U.S.
For a discussion regarding how our financial statements can be affected by pension and other postretirement plan accounting policies, see “Management's Discussion and Analysis – Critical Accounting Estimates – Pension Plans” on pages 47 - 48 of this Form 10-K.
For a discussion regarding how our financial statements can be affected by pension and other postretirement plan accounting policies, see “Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates – Pension Plans” on page 51 of this Form 10-K.
In addition, if one or more of the raw materials on which we depend (such as aluminum, titanium or composites) becomes unavailable to us or our suppliers, or is available only at very high prices, we may be unable to deliver one or more of our products in a timely fashion or at budgeted costs.
In addition, if one or more of the raw materials on which we depend (such as aluminum, titanium or composites) becomes unavailable to us or our suppliers, or is available only at very high prices, including as a result of increased tariffs and trade restrictions, or has quality issues or defects, we may be unable to deliver one or more of our products in a timely fashion or at budgeted costs.
Although under Generally Accepted Accounting Principles in the United States of America (GAAP) the timing of periodic pension and other postretirement benefit expense and plan contributions are not directly related, the key economic factors that affect GAAP expense would also likely affect the amount of cash or stock we would contribute to our plans. 16 Table of Contents Our insurance coverage may be inadequate to cover all significant risk exposures.
Although under Generally Accepted Accounting Principles in the United States of America (GAAP) the timing of periodic pension and other postretirement benefit expense and plan contributions are not directly related, the key economic factors that affect GAAP expense would also likely affect the amount of cash or stock we would contribute to our plans.
We rely extensively on information technology systems and networks to operate our company and meet our business objectives. We face various cyber security threats, including attempts to gain unauthorized access to our systems and networks, denial-of-service attacks, threats to our information technology infrastructure, ransomware and phishing attacks, and attempts to gain unauthorized access to our company-, customer- and employee-sensitive information.
We face various cybersecurity threats, including attempts to gain unauthorized access to our systems and networks, denial-of-service attacks, threats to our information technology infrastructure, ransomware and phishing attacks, and attempts to gain unauthorized access to our company-, customer- and employee-sensitive information.
Any such inquiry or investigation could result in an adverse ruling against us, which could have a material impact on our financial position, results of operations and/or cash flows. Our operations expose us to the risk of material environmental liabilities.
Any such inquiry or investigation could result in an adverse ruling against us, which could have a material impact on our financial position, results of operations and/or cash flows. For additional information about legal proceedings, investigations and inquiries, see Note 22 to our Consolidated Financial Statements. Our operations expose us to the risk of material environmental liabilities.
For additional information on our accounting policies for recognizing sales and profits, see our discussion under “Management’s Discussion and Analysis – Critical Accounting Estimates – Accounting for Long-term Contracts/Program Accounting” on pages 46 - 47 and Note 1 to our Consolidated Financial Statements on pages 57 - 67 of this Form 10-K.
For additional information on our accounting policies for recognizing sales and profits, see our discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical 11 Table of Contents Accounting Estimates – Accounting for Long-term Contracts/Program Accounting” on pages 49 - 51 and Note 1 to our Consolidated Financial Statements on pages 60 - 70 of this Form 10-K.
We continue to experience production disruptions and inefficiencies due to technical challenges, supplier disruption and factory performance. These factors have contributed to significant earnings charges on a number of fixed-price development programs which are expected to adversely affect cash flows in future periods, and may result in future earnings charges and adverse cash flow effects.
These factors have contributed to significant earnings charges on a number of fixed-price development programs which are expected to adversely affect cash flows in future periods, and may result in future earnings charges and adverse cash flow effects.
We are exposed to liabilities that are unique to the products and services we provide. We maintain insurance for certain risks and, in some circumstances, we may receive indemnification from the U.S. government. The amount of our insurance coverage may not cover all claims or liabilities, and we may be forced to bear substantial costs.
Our insurance coverage may be inadequate to cover all significant risk exposures. We are exposed to liabilities that are unique to the products and services we provide. We maintain insurance for certain risks and, in some circumstances, we may receive indemnification from the U.S. government.
We may not realize the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures. As part of our business strategy, we may merge with or acquire businesses and/or form joint ventures and strategic alliances.
For additional information on the acquisition, see Note 2 to our Consolidated Financial Statements. We may not realize the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures. As part of our business strategy, we may merge with or acquire businesses and/or form joint ventures and strategic alliances.
We also 12 Table of Contents could suffer reputational harm if allegations of impropriety were made against us, even if such allegations are later determined to be false. We enter into fixed-price contracts, which could subject us to losses if we have cost overruns.
We also could suffer reputational harm if allegations of impropriety were made against us, even if such allegations are later determined to be false. We enter into fixed-price contracts, which could subject us to losses if we have cost overruns. Our BDS and BGS defense businesses generated approximately 54% and 63% of their 2024 revenues from fixed-price contracts.
Several factors determine accounting quantity, including firm orders, letters of intent from prospective customers and market studies. Changes to customer or model mix, production costs and rates, learning curve, changes to price escalation indices, costs of derivative aircraft, supplier performance, customer and supplier negotiations/settlements, supplier claims and/or certification issues can impact these estimates.
Changes to customer or model mix, production costs and rates, learning curve, changes to price escalation indices, costs of derivative aircraft, supplier performance, customer and supplier negotiations/settlements, supplier claims and/or certification issues can impact these estimates.
Our ability to deliver products and services that satisfy customer requirements is heavily dependent on the performance and financial stability of our subcontractors and suppliers, as well as on the availability of highly skilled labor, raw materials and other components.
If we and our suppliers are unable to adjust to these changing acquisition priorities and policies, our revenues and market share could be impacted. 8 Table of Contents Our ability to deliver products and services that satisfy customer requirements is heavily dependent on the performance and financial stability of our subcontractors and suppliers, as well as on the availability of highly skilled labor, raw materials and other components.
If we fail to achieve or inadequately report our progress toward achieving such goals and commitments, the resulting negative publicity could adversely affect our reputation and/or our access to capital.
From time to time, in alignment with our sustainability priorities, we establish and publicly announce goals and commitments to improve our environmental performance, within our products and/or operations. If we fail to achieve or inadequately report our progress toward achieving such goals and commitments, the resulting negative publicity could adversely affect our reputation and/or our access to capital.
If one or more customers holding a significant portion of our portfolio assets experiences financial difficulties or otherwise defaults on or does not renew its leases with us at their expiration, and we are unable to redeploy the aircraft on reasonable terms, or if the types of aircraft that are concentrated in our portfolio suffer greater than expected declines in value, our financial position, results of operations and/or cash flows could be materially adversely affected.
If one or more customers holding a significant portion of our portfolio assets experiences financial difficulties or otherwise defaults on or does not renew its leases with us at their expiration, and we are unable to redeploy the aircraft on reasonable terms, our financial position, results of operations and/or cash flows could be materially adversely affected. 18 Table of Contents The issuance of common stock upon the closing of the Spirit acquisition and upon conversion of our Mandatory convertible preferred stock, and the possibility of the sale or issuance of our common stock in the future, could cause dilution to the interests of our existing shareholders.
While these measures are designed to prevent, detect, respond to, and mitigate unauthorized activity, there is no guarantee that they will be sufficient to prevent or mitigate the risk of a cyber-related attack or incident, or allow us to detect, report or respond adequately in a timely manner.
There is no guarantee that our controls, policy enforcement mechanisms, monitoring systems or contractual arrangements will be sufficient to prevent or mitigate the risk of cyber-related attack or incident, or allow us to detect, report or respond adequately in a timely manner.
If the satellite fails to meet contractual performance criteria, customers will not be obligated to continue making in-orbit payments and/or we may be required to provide refunds to the customer and incur significant charges. 13 Table of Contents Risks Related to Cybersecurity and Business Disruptions Unauthorized access to our, our customers’ and/or our suppliers’ information and systems could negatively impact our business.
If the satellite fails to meet contractual performance criteria, customers will not be obligated to continue making in-orbit payments and/or we may be required to provide refunds to the customer and incur significant charges.
While we believe that we have established appropriate and adequate procedures and processes to mitigate these risks, there is no assurance that these transactions will be successful. We also may make strategic divestitures from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through guarantees or other financial arrangements, following the transaction.
We also may make strategic divestitures from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through guarantees or other financial arrangements, following the transaction.
Some of our and our suppliers’ workforces are represented by labor unions, which may lead to work stoppages. Approximately 57,000 employees, which constitute 33% of our total workforce, were union represented as of December 31, 2023 under collective bargaining agreements with varying durations and expiration dates.
Approximately 58,000 employees, which constitute 34% of our total workforce, were union represented as of December 31, 2024 under collective bargaining agreements with varying durations and expiration dates.
As of December 31, 2023, our debt totaled $52.3 billion of which approximately $17.7 billion of principal payments on outstanding debt will become due over the next three years. In addition, as of December 31, 2023, our airplane financing commitments totaled $17.0 billion.
As of December 31, 2024, our debt totaled $53.9 billion, of which approximately $13.6 billion of principal payments on outstanding debt are scheduled to become due over the next three years, and our airplane financing commitments totaled $17.1 billion.
Due to the size and nature of many of our contracts and programs, the estimation of total revenues and cost at completion is complicated and subject to many variables.
Contract and program accounting require judgment relative to assessing risks, estimating revenues and costs and making assumptions for schedule and technical issues. Due to the size and nature of many of our contracts and programs, the estimation of total revenues and cost at completion is complicated and subject to many variables.
Risks Related to Our Business and Operations We depend heavily on commercial airlines, subjecting us to unique risks. Market conditions have a significant impact on demand for our commercial aircraft and related services. The commercial aircraft market is predominantly driven by long-term trends in airline passenger and cargo traffic.
Market conditions have a significant impact on demand for our commercial aircraft and related services. The commercial aircraft market is predominantly driven by long-term trends in airline passenger and cargo traffic. The principal factors underlying long-term traffic growth are sustained economic growth and political stability in both developed and emerging markets.
We and our suppliers are experiencing supply chain disruptions and constraints, labor instability and inflationary pressures. We continue to monitor the health and stability of 7 Table of Contents the supply chain. These factors have and may continue to reduce overall productivity and adversely impact our financial position, results of operations and cash flows.
We and our suppliers are experiencing supply chain disruptions and constraints, labor instability and inflationary pressures. We continue to monitor the health and stability of the supply chain.
If our commercial aircraft fail to satisfy performance and reliability requirements and/or potentially required sustainability standards, we could face additional costs and/or lower revenues. Developing and manufacturing commercial aircraft that meet or exceed our performance and reliability standards and/or potentially required sustainability standards, as well as those of customers and regulatory agencies, can be costly and technologically challenging.
Developing and manufacturing commercial aircraft that meet or exceed our performance and reliability standards and/or potentially required sustainability standards, as well as those of customers and regulatory agencies, is costly and technologically challenging. These challenges are particularly significant with newer aircraft programs.
Production and supplier disruptions, inefficiencies, technical challenges, quality issues and labor instability also contributed to lower earnings on fixed-price production programs in 2023. New programs could also have risk for reach-forward loss upon contract award and during the period of contract performance.
Higher supplier pricing, the IAM 751 work stoppage, higher labor costs and an inexperienced workforce also contributed to earnings charges and lower earnings in 2024. New programs could also have risk for reach-forward loss upon contract award and during the period of contract performance.
If our estimated costs exceed our estimated price, we recognize reach-forward losses which can significantly affect our reported results. For example, during the year ended December 31, 2023, BDS recorded $1,585 million of additional losses on its five most significant fixed-price development programs (Commercial Crew, KC-46A Tanker, MQ-25, T-7A Red Hawk, and VC-25B Presidential Aircraft).
For example, during the year ended December 31, 2024, BDS recorded $5.0 billion of 13 Table of Contents additional losses on its five most significant fixed-price development programs (KC-46A Tanker, T-7A Red Hawk, Commercial Crew, VC-25B Presidential Aircraft, and MQ-25). We continue to experience production disruptions and inefficiencies due to technical challenges, supplier disruption and factory performance.
The principal factors underlying long-term traffic growth are sustained economic growth and political stability both in developed and emerging markets. Demand for our commercial aircraft is further influenced by airline profitability, availability of aircraft financing, world trade policies, government-to-government relations, technological advances, price and other competitive factors, fuel prices, terrorism, pandemics, epidemics and environmental regulations.
Demand for our commercial aircraft is further influenced by additional factors including airline profitability, availability of aircraft financing, trade policies, geopolitics, technological advances, price and other competitive factors, fuel prices, inflationary pressures, terrorism, pandemics, epidemics, sustainability-related preferences, environmental regulations, and reputational factors.
We are following the lead of the FAA as we work through the certification process, and the FAA will ultimately determine the timing of certification and entry into service. In addition, the development schedules of the 737-7 and 737-10 could be impacted by actions resulting from the Alaska Airlines accident.
The introduction of new aircraft programs and/or derivatives, such as the 777X, 737-7 and 737-10, involves risks associated with meeting development, testing, certification and production schedules. We are following the lead of the FAA as we work through the certification process, and the FAA will ultimately determine the timing of certification and entry into service.
Changes in levels of U.S. government defense spending or acquisition priorities, as well as significant delays in U.S. government appropriations, could negatively impact our business, financial position and results of operations. We derive a substantial portion of our revenue from the U.S. government, primarily from defense related programs with the United States Department of Defense (U.S. DoD).
We derive a substantial portion of our revenue from the U.S. government, primarily from defense related programs with the United States Department of Defense (U.S. DoD) and contracts with other government agencies, including NASA.
These challenges are particularly significant with newer aircraft programs. Any failure of any Boeing aircraft to satisfy performance or reliability requirements could result in disruption to our operations, higher costs and/or lower revenues.
Any failure of any Boeing aircraft to satisfy performance or reliability requirements could result in disruption to our operations, higher costs and/or lower revenues. Changes in levels of U.S. government defense spending or acquisition priorities, as well as significant delays in U.S. government appropriations, could negatively impact our business, financial position and results of operations.
Our BDS and BGS defense businesses generated approximately 58% and 65% of their 2023 revenues from fixed-price contracts. While fixed-price contracts enable us to benefit from performance improvements, cost reductions and efficiencies, they also subject us to the risk of reduced margins or incurring losses if we are unable to achieve estimated costs and revenues.
Fixed-price development contracts subject us to the risk of reduced margins or incurring losses if we are unable to achieve estimated costs and revenues. If our estimated costs exceed our estimated price, we recognize reach-forward losses which can significantly affect our reported results.
Risks Related to Financing and Liquidity We may be unable to obtain debt to fund our operations and contractual commitments at competitive rates, on commercially reasonable terms or in sufficient amounts. We depend, in part, upon the issuance of debt to fund our operations and contractual commitments.
Risks Related to Financing and Liquidity We may be unable to effectively manage our liquidity, which could adversely affect our business, financial position and results of operations. We depend, in part, on our ability to successfully access the capital and financial markets to fund our operations and contractual commitments.
If we require additional funding in order to pay off existing debt, address further impacts to our business related to market developments, fund outstanding financing commitments or meet other business requirements, our market liquidity may not be sufficient. These risks will be particularly acute if we are subject to further credit rating downgrades such as those we experienced in 2020.
If we require additional capital to support our operations, pay off existing debt, address impacts to our business related to market developments, fund dividend payments or outstanding financing commitments or meet other business requirements, we may need to refinance or restructure our debt, reduce or delay capital investments, or issue equity, equity-linked or debt securities, and these activities could have terms that are unfavorable or could be dilutive.
The occurrence of any or all of these events may adversely affect our ability to fund our operations and contractual or financing commitments. Substantial pension and other postretirement benefit obligations have a material impact on our earnings, shareholders’ equity and cash flows from operations, and could have significant adverse impacts in future periods.
We cannot be assured that we will be able to maintain an investment grade rating, and any additional actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under further review for a downgrade, may impact us in a similar manner and have a negative impact on our liquidity, financial position, and access to the capital or financial markets. 17 Table of Contents Substantial pension and other postretirement benefit obligations have a material impact on our earnings, shareholders’ equity and cash flows from operations, and could have significant adverse impacts in future periods.
We cannot predict how stable our union relationships, currently with 10 U.S. labor organizations and 4 non-U.S. labor organizations, will be or whether we will be able to meet the unions’ requirements without impacting our financial condition. The unions may also limit our flexibility in managing our workforce and operations. Union actions at suppliers can also affect us.
As of December 31, 2024, we had 9 unions in the U.S. with 27 independent agreements and 18 employee representative bodies internationally, and we cannot predict how stable our union relationships will be or whether we will be able to meet the unions’ requirements.
Removed
Item 1A. Risk Factors An investment in our common stock or debt securities involves risks and uncertainties, and our actual results and future trends may differ materially from our past or projected future performance. We urge investors to consider carefully the risk factors described below in evaluating the information contained in this report.
Added
Item 1A. Risk Factors An investment in our securities involves risks and uncertainties, including those described below, which can materially affect our business, financial position, results of operations and cash flows.
Removed
On January 10, 2024, the FAA notified us that it has initiated an investigation into our quality control system.
Added
These risk factors should be carefully reviewed in conjunction with the other information in this report, including “Management's Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes.
Removed
This was followed by the FAA announcing actions to increase its oversight of us, including conducting (1) an audit involving the 737-9 production line and suppliers to evaluate compliance with approved quality procedures, (2) increased monitoring of 737-9 in-service events, and (3) an assessment of safety risks around delegated authority and quality oversight, and examination of options to move these functions under independent third parties.
Added
Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Risks Related to Our Business and Operations We depend heavily on commercial airlines, subjecting us to unique risks.
Removed
On January 24, 2024, the FAA stated that it will not approve production rate increases or additional production lines for the 737 MAX until it is satisfied that we are in full compliance with required quality control procedures.
Added
For example, as a result of the Alaska Airlines 737-9 accident in January 2024, the FAA investigated the 737 quality control system, including Spirit, and increased its oversight of our production and quality and safety management systems. The FAA identified multiple instances where we and Spirit failed to comply with manufacturing quality control requirements.
Removed
We are currently unable to reasonably estimate what impact the January 5, 2024 Alaska Airlines accident and the related FAA actions will have on our financial position, results of operations and cash flows. The introduction of new aircraft programs and/or derivatives, such as the 777X, 737-7 and 737-10, involves risks associated with meeting development, testing, certification and production schedules.
Added
As part of our plan to improve safety and quality and to address the issues identified by the FAA, we slowed 737 production rates and delayed planned production rate increases to reduce traveled work in our factory and at our suppliers.
Removed
If we and our suppliers 8 Table of Contents are unable to adjust to these changing acquisition priorities and policies, our revenues and market share could be impacted.
Added
These actions significantly impacted our financial position, results of operations and cash flows during the year ended December 31, 2024, and are expected to continue to impact our financial position, results of operations and cash flows as we work to increase production and improve factory performance.
Removed
We continue proactively working to ensure sufficient material and parts to avoid potential near-term production disruptions, while also working to mitigate the risk of future impacts from disruptions to our supply chain. In some instances, we depend upon a single source of supply.
Added
These factors have and may continue to reduce overall productivity and adversely impact our financial position, results of operations and cash flows. 7 Table of Contents If our commercial aircraft fail to satisfy performance and reliability requirements and/or potentially required sustainability standards, we could face additional costs and/or lower revenues.
Removed
For additional information on our principal collective bargaining agreements, see “Business – Human Capital” on page 2 of this Form 10-K. We experienced a work stoppage in 2008 when a labor strike halted commercial aircraft and certain BDS program production. We may experience additional work stoppages in the future, which could adversely affect our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+1 added−2 removed13 unchanged
Biggest changeWe also leverage government partnerships, industry and government associations, third-party benchmarking, the results from regular internal and third-party audits, threat intelligence feeds, and other similar resources to inform our cybersecurity processes and allocate resources.
Biggest changeWe also leverage government partnerships, industry and government associations, third-party benchmarking, the results from regular internal and third-party audits, threat intelligence feeds, and other similar resources to inform our cybersecurity processes and allocate resources. 19 Table of Contents We maintain security programs that include physical, administrative and technical safeguards, and we maintain plans and procedures whose objective is to help us prevent and timely and effectively respond to cybersecurity threats or incidents.
The Council also includes, among other senior executives, our Chief Engineer, Chief Information Officer, Chief Aerospace Safety Officer and Chief Product Security Engineer, who each have several decades of business and senior leadership experience managing risks in their respective fields, collectively covering all aspects of cybersecurity, data and analytics, product security engineering, enterprise engineering, safety and the technical integrity of our products and services.
The Council also includes, among other senior executives, our CIDO, Chief Engineer, Chief Information Officer, Chief Aerospace Safety Officer and Chief Product Security Engineer, who each have several decades of business and senior leadership experience managing risks in their respective fields, collectively covering all aspects of cybersecurity, data and analytics, product security engineering, enterprise engineering, safety and the technical integrity of our products and services.
The Council meets monthly and updates key members of the Company’s Executive Council on progress towards specific cybersecurity objectives. A strong partnership exists between Information Technology, Enterprise Security, Corporate Audit, and Legal so that identified issues are addressed in a timely manner and incidents are reported to the appropriate regulatory bodies as required.
The Council meets monthly and updates key members of the Company’s Executive Council on progress towards specific cybersecurity objectives. A strong partnership exists between Information Technology, Enterprise Security, Corporate Audit, and Law so that identified issues are addressed in a timely manner and incidents are reported to the appropriate regulatory bodies as required.
Our Chief Information Officer and Senior Vice President, Information Technology & Data Analytics (CIO) and our Chief Security Officer (CSO) provide presentations to the Audit Committee on cybersecurity risks at each of its bimonthly meetings. These briefings include assessments of cyber risks, the threat landscape, updates on incidents, and reports on our investments in cybersecurity risk mitigation and governance.
Our Chief Information Digital Officer and Senior Vice President, Information Technology & Data Analytics (CIDO) and our Chief Security Officer (CSO) provide presentations to the Audit Committee on cybersecurity risks at each of its bimonthly meetings. These briefings include assessments of cyber risks, the threat landscape, updates on incidents, and reports on our investments in cybersecurity risk mitigation and governance.
The Aerospace Safety Committee receives regular updates and reports from senior management, including the Chief 18 Table of Contents Engineer, the Chief Aerospace Safety Officer, and the Chief Product Security Engineer, who provide briefings on significant cybersecurity threats or incidents that may pose a risk to the safe operation of our aerospace products.
The Aerospace Safety Committee receives regular updates and reports from senior management, including the Chief Engineer, the Chief Aerospace Safety Officer, and the Chief Product Security Engineer, who provide briefings on significant cybersecurity threats or incidents that may pose a risk to the safe operation of our aerospace products.
In the event of a potentially material cybersecurity event, the Chair of the Audit Committee is notified and briefed, and meetings of the Audit Committee and/or full Board of Directors would be held, as appropriate. The Aerospace Safety Committee provides oversight of the risks from cybersecurity threats related to our aerospace products and services.
In the event of a potentially material cybersecurity event, 20 Table of Contents the Chair of the Audit Committee is notified and briefed, and meetings of the Audit Committee and/or full Board of Directors would be held, as appropriate. The Aerospace Safety Committee provides oversight of the risks from cybersecurity threats related to our aerospace products and services.
Through our cybersecurity risk management process, we continuously monitor cybersecurity vulnerabilities and potential attack vectors to company systems as well as our aerospace products and services, and we evaluate the potential operational and financial 17 Table of Contents effects of any threat and of cybersecurity countermeasures made to defend against such threats.
Through our cybersecurity risk management process, we continuously monitor cybersecurity vulnerabilities and potential attack vectors to company systems as well as our aerospace products and services, and we evaluate the potential operational and financial effects of any threat and of cybersecurity countermeasures made to defend against such threats.
Both committees brief the full Board on cybersecurity matters discussed during committee meetings, and the CIO provides annual briefings to the Board on information technology and data analytics related matters, including cybersecurity.
Both committees brief the full Board on cybersecurity matters discussed during committee meetings, and the CIDO provides annual briefings to the Board on information technology and data analytics related matters, including cybersecurity.
He reports directly to the CIO and meets regularly with other members of senior management and the Audit Committee.
He reports directly to the CIDO and meets regularly with other members of senior management and the Audit Committee.
See “Risks Related to Cybersecurity and Business Disruptions” in “Risk Factors” on page 14 of this Form 10-K. Governance Our Board of Directors has overall responsibility for risk oversight, with its committees assisting the Board in performing this function based on their respective areas of expertise.
See “Risks Related to Technology, Security and Business Disruptions” in “Risk Factors” on pages 14 - 15 of this Form 10-K. Governance Our Board of Directors has overall responsibility for risk oversight, with its committees assisting the Board in performing this function based on their respective areas of expertise.
Richard Puckett, as our CSO, serves as the chair of the Council. He is responsible for overseeing a unified security program that provides cybersecurity, fire and protection operations, physical security, insider threat, and classified security. Mr.
Trent Cox, Vice President of Product and Business Operations, is serving as our interim CSO. In that role, he chairs the Council and is responsible for overseeing a unified security program that provides cybersecurity, fire and protection operations, physical security, insider threat, and classified security. Mr.
These exercises are conducted at both the technical level and senior management level, which has included participation by a member of our Board of Directors. In addition, all employees are required to pass a mandatory cybersecurity training course on an annual basis and receive monthly phishing simulations to provide “experiential learning” on how to recognize phishing attempts.
In addition, all employees are required to complete a mandatory cybersecurity training course on an annual basis and receive monthly phishing simulations to provide “experiential learning” on how to recognize phishing attempts.
Removed
We maintain security programs that include physical, administrative and technical safeguards, and we maintain plans and procedures whose objective is to help us prevent and timely and effectively respond to cybersecurity threats or incidents.
Added
Cox has over 25 years of experience in the aerospace and defense industry, including, prior to joining Boeing in 2024, Chief Information Officer of Raytheon UK, Deputy CIO and Executive Director of Collins Aerospace and Raytheon Intelligence and Space, and Executive Director for Program Execution for the Raytheon Missile Systems businesses.
Removed
Puckett has nearly 30 years of experience in the cybersecurity industry, including, prior to joining Boeing in 2022, as Chief Information Security Officer of SAP SE and Thomson Reuters Corporation, Vice President, Product and Commercial Security of General Electric, Inc., and Senior Security Architect at Cisco Systems, Inc.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−1 removed0 unchanged
Biggest changeIn addition, the U.S. government furnishes us certain office space, installations and equipment at U.S. government bases for use in connection with various contract activities. Item 3. Legal Proceedings Currently, we are involved in a number of legal proceedings.
Biggest changeIn addition, the U.S. government furnishes us certain office space, installations and equipment at U.S. government bases for use in connection with various contract activities. Item 3. Legal Proceedings We incorporate by reference into this Item our disclosures made in Note 22 to our Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable 22 Table of Contents PART II
Louis, MO; Greater Seattle, WA; Greater Los Angeles, CA; Philadelphia, PA; Mesa, AZ; Huntsville, AL; Oklahoma City, OK; Heath, OH; Greater Washington, DC; Australia; Houston, TX; Kennedy Space Center and Greater Portland, OR • Global Services – San Antonio, TX; Greater Dallas, TX; Great Britain; Greater Miami, FL; China; Jacksonville, FL; and Germany • Other – India; Chicago, IL; Greater Los Angeles, CA; Greater St.
Louis, MO; Greater Seattle, WA; Greater Los Angeles, CA; Philadelphia, PA; Mesa, AZ; Huntsville, AL; Oklahoma City, OK; Heath, OH; Australia; Greater Washington, DC; Houston, TX; Kennedy Space Center and Greater Portland, OR • Global Services – San Antonio, TX; Greater Dallas, TX; Jacksonville, FL; Great Britain; Greater Miami, FL; China; and Germany • Other – India; Chicago, IL; Greater Los Angeles, CA; and Greater Washington, DC.
Item 2. Properties We had approximately 89 million square feet of floor space on December 31, 2023 for manufacturing, warehousing, engineering, administration and other productive uses, of which approximately 86% was located in the United States.
Item 2. Properties We had approximately 94 million square feet of floor space on December 31, 2024 for manufacturing, warehousing, engineering, administration and other productive uses, of which approximately 86% was located in the United States.
Louis, MO; and Greater Washington, DC. Most runways and taxiways that we use are located on airport properties owned by others and are used jointly with others. Our rights to use such facilities are provided for under long-term leases with municipal, county or other government authorities.
Most runways and taxiways that we use are located on airport properties owned by others and are used jointly with others. Our rights to use such facilities are provided for under long-term leases with municipal, county or other government authorities.
The following table provides a summary of the floor space by business as of December 31, 2023: (Square feet in thousands) Owned Leased Government Owned Total Commercial Airplanes 39,919 7,795 47,714 Defense, Space & Security 22,849 4,404 27,253 Global Services 1,265 7,004 8,269 Other (1) 2,205 2,809 315 5,329 Total 66,238 22,012 315 88,565 (1) Other includes sites used for corporate offices, enterprise research and development and common internal services. 19 Table of Contents At December 31, 2023, the combined square footage at the following major locations totaled more than 82 million square feet: • Commercial Airplanes – Greater Seattle, WA; China; Greater Charleston, SC; Greater Los Angeles, CA; Greater Portland, OR; Greater Salt Lake City, UT; Australia: Canada and Germany • Defense, Space & Security – Greater St.
The following table provides a summary of the floor space by business as of December 31, 2024: (Square feet in thousands) Owned Leased Government Owned Total Commercial Airplanes 40,073 11,011 51,084 Defense, Space & Security 24,166 4,752 28,918 Global Services 1,256 7,354 8,610 Other (1) 2,158 3,099 315 5,572 Total 67,653 26,216 315 94,184 (1) Other includes sites used for corporate offices, enterprise research and development and common internal services. 21 Table of Contents At December 31, 2024, the combined square footage at the following major locations totaled more than 88 million square feet: • Commercial Airplanes – Greater Seattle, WA; China; Greater Charleston, SC; Greater Los Angeles, CA; Greater Portland, OR; Greater Salt Lake City, UT; Australia; Canada; Malaysia; and Mexico • Defense, Space & Security – Greater St.
Removed
For a discussion of contingencies related to legal proceedings, see Note 21 to our Consolidated Financial Statements, which is hereby incorporated by reference. Item 4. Mine Safety Disclosures Not applicable 20 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table provides information about purchases we made during the quarter ended December 31, 2023 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act: (Dollars in millions, except per share data) (a) (b) (c) (d) Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs 10/1/2023 thru 10/31/2023 7,546 $190.17 11/1/2023 thru 11/30/2023 12,373 192.12 12/1/2023 thru 12/31/2023 1,428,309 246.44 Total 1,448,228 $245.68 (1) A total of 1,448,228 shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period.
Biggest changeIssuer Purchases of Equity Securities The following table provides information about purchases we made during the quarter ended December 31, 2024, of our common stock, which is registered by us pursuant to Section 12 of the Exchange Act: (Dollars in millions, except per share data) (a) (b) (c) (d) Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs 10/1/2024 thru 10/31/2024 25,899 $152.30 11/1/2024 thru 11/30/2024 738 151.66 12/1/2024 thru 12/31/2024 39,360 161.89 Total 65,997 $158.01 (1) A total of 65,997 shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period.
We did not purchase any shares of our common stock in the open market pursuant to a repurchase program. Item 6. [Reserved] 21 Table of Contents
We did not purchase any shares of our common stock in the open market pursuant to a repurchase program. Item 6. [Reserved] 23 Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market for our common stock is the New York Stock Exchange where it trades under the symbol BA. As of January 24, 2024, there were 84,633 shareholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The principal market for our common stock is the New York Stock Exchange where it trades under the symbol BA. As of January 27, 2025, there were 80,843 common shareholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

154 edited+63 added−54 removed43 unchanged
Biggest changeBCA deliveries, including intercompany deliveries, as of December 31 were as follows: 737 * 747 767 * 777 787 Total 2023 Cumulative deliveries 8,528 1,573 1,303 1,727 1,110 Deliveries 396 (9) 1 32 (14) 26 73 528 2022 Cumulative deliveries 8,132 1,572 1,271 1,701 1,037 Deliveries 387 (13) 5 33 (15) 24 31 480 2021 Cumulative deliveries 7,745 1,567 1,238 1,677 1,006 Deliveries 263 (16) 7 32 (13) 24 14 340 * Intercompany deliveries identified by parentheses Loss From Operations BCA loss from operations was $1,635 million in 2023 compared with $2,341 million in 2022 reflecting higher deliveries and lower period expenses including lower abnormal production costs, partially offset by higher spending on research and development.
Biggest changeBCA deliveries, including intercompany deliveries, as of December 31 were as follows: 737 * 747 767 * 777 787 Total 2024 Cumulative deliveries 8,793 1,573 1,321 1,741 1,161 Deliveries 265 (5) 18 (8) 14 51 348 2023 Cumulative deliveries 8,528 1,573 1,303 1,727 1,110 Deliveries 396 (9) 1 32 (14) 26 73 528 2022 Cumulative deliveries 8,132 1,572 1,271 1,701 1,037 Deliveries 387 (13) 5 33 (15) 24 31 480 * Intercompany deliveries identified by parentheses Loss From Operations BCA loss from operations was $7,969 million in 2024 compared with $1,635 million in 2023 reflecting reach-forward losses of $4,079 million on the 777X and 767 programs in the third and fourth quarter of 2024, $443 million of 737-9 customer considerations related to the January 2024 grounding, lower deliveries, lower margins driven by production disruption including the IAM 751 work stoppage and new agreement, and higher research and development expense, partially offset by $1,271 million of lower abnormal production costs.
Examples of fixed-price development programs include Commercial Crew, KC-46A Tanker, MQ-25, T-7A Red Hawk, VC-25B, and commercial and military satellites. A number of our ongoing fixed-price development programs have reach-forward losses. New programs could also have risk for reach-forward loss upon contract award and during the period of contract performance. Many development programs have highly complex designs.
Examples of significant fixed-price development programs include Commercial Crew, KC-46A Tanker, MQ-25, T-7A Red Hawk, VC-25B, and commercial and military satellites. A number of our ongoing fixed-price development programs have reach-forward losses. New programs could also have risk for reach-forward loss upon contract award and during the period of contract performance. Many development programs have highly complex designs.
Backlog excludes options and Boeing customer financing orders as well as orders where customers have the unilateral right to terminate. A number of our customers may have contractual remedies, including rights to reject individual airplane deliveries if the actual delivery date is significantly later than the contractual delivery date.
Backlog excludes options and customer financing orders as well as orders where customers have the unilateral right to terminate. A number of our customers may have contractual remedies, including rights to reject individual airplane deliveries if the actual delivery date is significantly later than the contractual delivery date.
In developing total program estimates, all of these items within the accounting quantity must be considered. 31 Table of Contents The following table provides details of the accounting quantities and firm orders by program as of December 31. Cumulative firm orders represent the cumulative number of commercial jet aircraft deliveries plus undelivered firm orders.
In developing total program estimates, all of these items within the accounting quantity must be considered. 34 Table of Contents The following table provides details of the accounting quantities and firm orders by program as of December 31. Cumulative firm orders represent the cumulative number of commercial jet aircraft deliveries plus undelivered firm orders.
Industry Competitiveness The commercial aircraft market and the airline industry both remain extremely competitive. Continued access to global markets remains vital to our ability to fully realize our sales potential and long-term investment returns. Approximately 78% of BCA’s total backlog, in dollar terms, is with non-U.S. airlines. We face aggressive international competitors who are intent on increasing their market share.
Industry Competitiveness The commercial aircraft market and the airline industry both remain extremely competitive. Continued access to global markets remains vital to our ability to fully realize our sales potential and long-term investment returns. Approximately 80% of BCA’s total backlog, in dollar terms, is with non-U.S. airlines. We face aggressive international competitors who are intent on increasing their market share.
Firm orders include military derivative aircraft that are not included in program accounting quantities. All revenues and costs associated with military derivative aircraft production are reported in the BDS segment.
Firm orders include certain military derivative aircraft that are not included in program accounting quantities. All revenues and costs associated with military derivative aircraft production are reported in the BDS segment.
The long-term outlook for the industry remains positive due to the fundamental drivers of air travel demand: economic growth, increasing propensity to travel due to increased trade, globalization and improved airline services driven by liberalization of air traffic rights between countries. Our Commercial Market Outlook forecast projects a 3.5% growth rate in the global fleet over a 20-year period.
The long-term outlook for the industry remains positive due to the fundamental drivers of air travel demand: economic growth, increasing propensity to travel due to increased trade, globalization and improved airline services driven by liberalization of air traffic rights between countries. Our Commercial Market Outlook forecast projects a 3.2% growth rate in the global fleet over a 20-year period.
On January 5, 2024, an Alaska Airlines 737-9 flight made an emergency landing after a mid-exit door plug detached in flight. Following the accident, the Federal Aviation Administration (FAA) grounded and required inspections of all 737-9 aircraft with a mid-exit door plug, which constitute the large majority of the approximately 220 737-9 aircraft in the in-service fleet .
On January 5, 2024, an Alaska Airlines 737-9 flight made an emergency landing after a mid-exit door plug detached in flight. Following the accident, the Federal Aviation Administration (FAA) grounded and required inspections of all 737-9 aircraft with a mid-exit door plug, which constituted the large majority of the approximately 220 737-9 aircraft in the in-service fleet.
Non-GAAP Measures Core Operating Earnings/(Loss), Core Operating Margin and Core Earnings/(Loss) Per Share Our Consolidated Financial Statements are prepared in accordance with GAAP which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently.
Non-GAAP Measures Core Operating Earnings/(Loss), Core Operating Margins and Core Earnings/(Loss) Per Share Our Consolidated Financial Statements are prepared in accordance with GAAP which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently.
A program consists of the estimated number of units (accounting quantity) of a product to be produced in a continuing, long-term production effort for 46 Table of Contents delivery under existing and anticipated contracts. The determination of the accounting quantity is limited by the ability to make reasonably dependable estimates.
A program consists of the estimated number 49 Table of Contents of units (accounting quantity) of a product to be produced in a continuing, long-term production effort for delivery under existing and anticipated contracts. The determination of the accounting quantity is limited by the ability to make reasonably dependable estimates.
Management believes these core earnings measures provide investors additional insights into operational performance as unallocated pension and other postretirement benefit cost primarily represent costs driven by market factors and costs not allocable to U.S. government contracts. 44 Table of Contents Reconciliation of Non-GAAP Measures to GAAP Measures The table below reconciles the non-GAAP financial measures of core operating earnings/(loss), core operating margins and core earnings/(loss) per share with the most directly comparable GAAP financial measures of Earnings/(loss) from operations, operating margins and Diluted earnings/(loss) per share.
Management believes these core earnings measures provide investors additional insights into operational performance as unallocated pension and other postretirement benefit costs primarily represent costs driven by market factors and costs not allocable to U.S. government contracts. 47 Table of Contents Reconciliation of Non-GAAP Measures to GAAP Measures The table below reconciles the non-GAAP financial measures of Core operating loss, Core operating margins and Core loss per share with the most directly comparable GAAP financial measures of Loss from operations, Operating margins and Diluted loss per share.
Earnings From Operations BGS earnings from operations in 2023 increased by $602 million compared with 2022, primarily due to higher commercial services revenue. The net unfavorable impact of cumulative contract catch-up adjustments in 2023 was $9 million higher than the prior year.
The net unfavorable impact of cumulative contract catch-up adjustments in 2024 was $94 million higher than the prior year. BGS earnings from operations in 2023 increased by $602 million compared with 2022, primarily due to higher commercial services revenue. The net unfavorable impact of cumulative contract catch-up adjustments in 2023 was $9 million higher than the prior year.
Government Cost Accounting Standards (CAS), which employ different actuarial 43 Table of Contents assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid.
Government Cost Accounting Standards (CAS), which employ different actuarial assumptions 46 Table of Contents and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid.
We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Core operating earnings/(loss), core operating margin and core earnings/(loss) per share exclude the FAS/CAS service cost adjustment.
We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Core operating earnings/(loss), Core operating margins and Core earnings/(loss) per share exclude the FAS/CAS service cost adjustment.
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 earnings/(loss) per share excludes both the FAS/CAS service cost adjustment and non-operating pension and postretirement expenses.
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 earnings/(loss) per share excludes both the FAS/CAS service cost adjustment and non-operating pension and postretirement income.
(3) The income tax impact is calculated using the U.S. corporate statutory tax rate. 45 Table of Contents Critical Accounting Estimates Accounting for Long-term Contracts Substantially all contracts at BDS and certain contracts at BGS are long-term contracts.
(3) The income tax impact is calculated using the U.S. corporate statutory tax rate. 48 Table of Contents Critical Accounting Estimates Accounting for Long-term Contracts Substantially all contracts at BDS and certain contracts at BGS are long-term contracts.
Loss from operations in 2023 includes a $315 million impact from an agreement with one of our satellite customers which includes customer considerations as well as increased costs to enhance the constellation and meet lifecycle commitments. Net unfavorable cumulative contract catch-up adjustments were $2,328 million better than in 2022.
Loss from operations in 2023 includes a $315 million impact from an agreement with one of our satellite customers which includes customer considerations as well as increased costs to enhance the 39 Table of Contents constellation and meet lifecycle commitments. Net unfavorable cumulative contract catch-up adjustments were $2,328 million better than in 2022.
Net cumulative catch-up adjustments for changes in estimated revenues and costs at completion across all long-term contracts, including the impact of estimated losses on unexercised options, increased Loss from operations by $2,943 million, $5,253 million and $880 million in 2023, 2022 and 2021, respectively, and were primarily due to losses recognized on the VC-25B, KC-46A Tanker, Commercial Crew, T-7A Red Hawk and MQ-25 programs.
Net cumulative catch-up adjustments for changes in estimated revenues and costs at completion across all long-term contracts, including the impact of estimated losses on unexercised options, increased Loss from operations by $6,562 million, $2,943 million and $5,253 million in 2024, 2023 and 2022, respectively, and were primarily due to losses recognized on the KC-46A Tanker, T-7A Red Hawk, Commercial Crew, VC-25B, and MQ-25 programs.
If the combined gross margins for our profitable long-term contracts had been estimated to be higher or lower by 1% during 2023, it would have increased or decreased pre-tax income for the year by approximately $300 million. Program Accounting Program accounting requires the demonstrated ability to reliably estimate revenues, costs and gross profit margin for the defined program accounting quantity.
If the combined gross margins for our profitable long-term contracts had been estimated to be higher or lower by 1% during 2024, it would have increased or decreased pre-tax income for the year by approximately $290 million. Program Accounting Program accounting requires the demonstrated ability to reliably estimate revenues, costs and gross profit margin for the defined program accounting quantity.
Airlines are using data analytics to plan flight operations and predictive maintenance to improve 37 Table of Contents their productivity and efficiency. Airlines continue to look for opportunities to reduce the size and cost of their spare parts inventory, frequently outsourcing spares management to third parties. The demand outlook for our government services business has remained stable in 2023.
Airlines are using data analytics to plan flight operations and predictive maintenance to improve their productivity and efficiency. Airlines continue to look for opportunities to reduce the size and cost of their spare parts inventory, frequently outsourcing spares management to third parties. 40 Table of Contents The demand outlook for our government services business has remained stable in 2024.
Total cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, business base and other economic projections. Factors that influence these estimates include inflationary trends, technical and schedule risk, internal and supplier performance trends, production quality, labor instability, global supply chain constraints, business volume assumptions, asset utilization, and anticipated labor agreements.
Total cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, business base and other economic projections. Factors that influence these estimates include inflationary trends, technical and schedule risk, internal and supplier performance trends, production quality, labor instability, supply chain delays and quality issues, business volume assumptions, asset utilization, and anticipated labor agreements.
In certain cases, penalties could be imposed if we do not meet our industrial participation commitments. During 2023, we incurred no such penalties. As of December 31, 2023, we had outstanding industrial participation agreements totaling $24.5 billion that extend through 2034. Purchase order commitments associated with industrial participation agreements are included in purchase obligations.
In certain cases, penalties could be imposed if we do not meet our industrial participation commitments. During 2024, we incurred no such penalties. As of December 31, 2024, we had outstanding industrial participation agreements totaling $15.5 billion that extend through 2034. Purchase order commitments associated with industrial participation agreements are included in purchase obligations.
The Company had deferred income tax liabilities of $10,363 million at December 31, 2023 that will partially offset deferred income tax assets and result in higher taxable income in future years and increase income taxes payable. Tax law determines whether future reversals of temporary differences will result in taxable and deductible amounts that offset each other in future years.
The Company had deferred income tax liabilities of $10,091 million at December 31, 2024, that will partially offset deferred income tax assets and result in higher taxable income in future years and increase income taxes payable. Tax law determines whether future reversals of temporary differences will result in taxable and deductible amounts that offset each other in future years.
Increases in Accrued liabilities in both years primarily reflects accrued reach-forward losses on BDS programs. Changes in assets and liabilities for 2023 decreased by $0.1 billion compared to 2022 primarily driven by unfavorable changes in Inventories ($2.1 billion) and Accrued liabilities ($2.2 billion), partially offset by increases in Advances and progress billings ($3.3 billion).
Increases in Accrued liabilities in both years primarily reflects accrued reach-forward losses on BDS programs. Changes in assets and liabilities for 2023 decreased by $0.1 billion compared to 2022 primarily driven by unfavorable changes in Inventories ($2.1 billion) and Accrued liabilities ($2.2 billion), partially offset by 42 Table of Contents increases in Advances and progress billings ($3.3 billion).
Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to BCA and certain BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S.
Non-operating pension and postretirement income represents the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to BCA and certain BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S.
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 33 Table of Contents production rate adjustments for the 777X or other commercial aircraft programs, and contraction of the accounting quantity.
These factors include aircraft certification requirements and timing, change incorporation on completed aircraft, production disruption due to labor instability and supply chain disruption, customer considerations, delivery timing and negotiations, further production rate adjustments for the 777X or other commercial aircraft programs, and contraction of the accounting quantity.
The Company’s valuation allowance of $4,550 million at December 31, 2023 primarily relates to pension and other postretirement benefit obligation deferred tax assets, tax net operating losses, tax credits and interest carryforwards that are assumed to reverse beyond the period in which reversals of deferred tax liabilities are assumed to occur.
The Company’s valuation allowance of $7,837 million at December 31, 2024, primarily relates to pension and other postretirement benefit obligation deferred tax assets, tax net operating losses, tax credits and interest carryforwards that are assumed to reverse beyond the period in which reversals of deferred tax liabilities are assumed to occur.
If the combined gross margin percentages for our commercial airplane programs had been estimated to be 1% higher or lower it would have an approximately $330 million impact on operating earnings for the year ended December 31, 2023. Pension Plans Many of our employees have earned benefits under defined benefit pension plans.
If the combined gross margin percentages for our commercial airplane programs had 50 Table of Contents been estimated to be 1% higher or lower it would have an approximately $210 million impact on operating earnings for the year ended December 31, 2024. Pension Plans Many of our employees have earned benefits under defined benefit pension plans.
One or more of these factors could result in reach-forward losses in future periods. 787 Program The accounting quantity for the 787 program increased by 100 units during 2023 due to the program's normal progress of obtaining additional orders and delivering airplanes.
One or more of these factors could result in additional reach-forward losses in future periods. 787 Program The accounting quantity for the 787 program increased by 100 units during the year ended December 31, 2024, due to the program's normal progress of obtaining additional orders and delivering airplanes.
This adjustment is excluded from Core operating loss (non-GAAP)). (2) Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income, net and are excluded from Core loss per share (non-GAAP).
This adjustment is excluded from Core operating loss (non-GAAP). (2) Non-operating pension and postretirement income represents the components of net periodic benefit costs/(income) other than service cost/(income). This income is included in Other income, net and is excluded from Core loss per share (non-GAAP).
A decrease or increase of 25 basis points in the expected long-term rate of asset return would have increased or decreased 2023 net periodic pension cost by $150 million. See Note 16 of the Notes to our Consolidated Financial Statements, which includes the discount rate and expected long-term rate of asset return assumptions for the last three years.
A decrease or increase of 25 basis points in the expected long-term rate of asset return would have increased or decreased 2024 net periodic pension cost by $143 million. See Note 17 to our Consolidated Financial Statements, which includes the discount rate and expected long-term rate of asset return assumptions for the last three years.
The following discussions of comparative results among periods should be viewed in this context. 35 Table of Contents Deliveries of new-build production units, including remanufactures and modifications, were as follows: Years ended December 31, 2023 2022 2021 F/A-18 Models 22 14 21 F-15 Models 9 12 16 T-7A Red Hawk 3 CH-47 Chinook (New) 11 19 15 CH-47 Chinook (Remanufactured) 9 9 5 AH-64 Apache (New) 20 25 27 AH-64 Apache (Remanufactured) 57 50 56 MH-139 Grey Wolf 2 4 KC-46 Tanker 13 15 13 P-8 Models 11 12 16 Commercial Satellites 5 4 Military Satellites 1 Total 162 165 169 Revenues BDS revenues in 2023 increased by $1,771 million compared with 2022.
The following discussions of comparative results among periods should be viewed in this context. 38 Table of Contents Deliveries of new-build production units, including remanufactures and modifications, were as follows: Years ended December 31, 2024 2023 2022 F/A-18 Models 11 22 14 F-15 Models 14 9 12 T-7A Red Hawk 2 3 CH-47 Chinook (New) 4 11 19 CH-47 Chinook (Renewed) 9 9 9 AH-64 Apache (New) 16 20 25 AH-64 Apache (Remanufactured) 34 57 50 MH-139 Grey Wolf 6 2 4 KC-46 Tanker 10 13 15 P-8 Models 4 11 12 Commercial Satellites 2 5 4 Military Satellites 1 Total 112 162 165 Revenues BDS revenues in 2024 decreased by $1,015 million compared with 2023.
Results of Operations (Dollars in millions) Years ended December 31, 2023 2022 2021 Revenues $24,933 $23,162 $26,540 % of total company revenues 32 % 35 % 43 % (Loss)/earnings from operations ($1,764) ($3,544) $1,544 Operating margins (7.1) % (15.3) % 5.8 % Since our operating cycle is long-term and involves many different types of development and production contracts with varying delivery and milestone schedules, the operating results of a particular period may not be indicative of future operating results.
Results of Operations (Dollars in millions) Years ended December 31, 2024 2023 2022 Revenues $23,918 $24,933 $23,162 % of total company revenues 36 % 32 % 35 % Loss from operations ($5,413) ($1,764) ($3,544) Operating margins (22.6) % (7.1) % (15.3) % Since our operating cycle is long-term and involves many different types of development and production contracts with varying delivery and milestone schedules, the operating results of a particular period may not be indicative of future operating results.
Factors that influence these estimates include production rates, internal and supplier performance trends, production quality, labor instability, global supply chain constraints, learning curve, change incorporation, rework or safety enhancements, regulatory requirements, flight test and certification requirements and schedules, performance or reliability issues involving completed aircraft, customer and/or supplier claims or assertions, asset utilization, anticipated labor agreements, and inflationary or deflationary trends.
Factors that influence these estimates include the timing of production rate increases, internal and supplier performance trends, production quality, labor instability, supply chain delays and quality issues, learning curve, change incorporation, rework or safety enhancements, regulatory requirements, flight test and certification requirements and schedules, performance or reliability issues involving completed aircraft, customer and/or supplier claims or assertions, asset utilization, anticipated labor agreements, and inflationary or deflationary trends.
This increase is not indicative of future projected revenue trends. Revenues related to BDS’ five major fixed-price development programs increased by $1,767 million in 2023 compared with 2022. This increase reflects lower unfavorable net cumulative contract catch-up adjustments in 2023 as well as higher costs incurred in 2023 to complete these contracts.
Revenues related to BDS’ five major fixed-price development programs increased by $1,767 million in 2023 compared with 2022. This increase reflects lower unfavorable net cumulative contract catch-up adjustments in 2023 as well as higher costs incurred in 2023 to complete these contracts.
Deferred Income Taxes – Valuation Allowance The Company had deferred income tax assets of $14,743 million at December 31, 2023 that can be used in future years to offset taxable income and reduce income taxes payable.
Deferred Income Taxes – Valuation Allowance The Company had deferred income tax assets of $17,991 million at December 31, 2024, that can be used in future years to offset taxable income and reduce income taxes payable.
During 2023, the Company increased the valuation allowance by $1,388 million primarily due to tax credits and other carryforwards generated in 2023 that cannot be realized in 2023. Until the Company generates sustained levels of profitability, additional valuation allowances may have to be recorded with corresponding adverse impacts on earnings and/or other comprehensive income.
During 2024, the Company 51 Table of Contents increased the valuation allowance by $3,287 million primarily due to tax credits and other carryforwards generated in 2024 that cannot be realized in 2024. Until the Company generates sustained levels of profitability, additional valuation allowances may have to be recorded with corresponding adverse impacts on earnings and/or other comprehensive income.
Risk remains that we may be required to record additional reach-forward losses in future periods. Global Services Business Environment and Trends The aerospace markets we serve include parts distribution, logistics and other inventory services; maintenance, engineering and upgrades; training and professional services; and data analytics and digital services. In 2023, commercial services volume at BGS exceeded pre-pandemic levels.
Risk remains that we may be required to record additional reach-forward losses in future periods. Global Services Business Environment and Trends The aerospace markets we serve include parts distribution, logistics and other inventory services; maintenance, engineering and upgrades; training and professional services; and data analytics and digital services.
At December 31, 2023 and 2022, our pension plans were $5.4 billion and $5.3 billion underfunded as measured under U.S. generally accepted accounting principles (GAAP). On an ERISA basis, our plans are more than 100% funded at December 31, 2023. We do not expect to make significant contributions to our pension plans in 2024.
At December 31, 2024 and 2023, our pension plans were $4.8 billion and $5.4 billion underfunded as measured under U.S. generally accepted accounting principles (GAAP). On an ERISA basis, our plans are more than 90% funded at December 31, 2024. We do not expect to make significant contributions 44 Table of Contents to our pension plans in 2025.
Abnormal production costs in 2021 were $2,355 million, including $1,887 million related to the 737 program and $468 million related to the 787 program. 30 Table of Contents Backlog Our total backlog represents the estimated transaction prices on unsatisfied and partially satisfied performance obligations to our customers where we believe it is probable that we will collect the consideration due and where no contingencies remain before we and the customer are required to perform.
Abnormal production costs in 2022 were $1,753 million, including $1,240 million related to the 787 program, $325 million related to the 777X program, and $188 million related to the 737 program. 33 Table of Contents Backlog Our total backlog represents the estimated transaction prices on unsatisfied and partially satisfied performance obligations to our customers where we believe it is probable that we will collect the consideration due and where no contingencies remain before we and the customer are required to perform.
For discussion of these arrangements, see Note 14 to our Consolidated Financial Statements. 42 Table of Contents Commercial Commitments The following table summarizes our commercial commitments outstanding as of December 31, 2023.
For discussion of these arrangements, see Note 15 to our Consolidated Financial Statements. 45 Table of Contents Commercial Commitments The following table summarizes our commercial commitments outstanding as of December 31, 2024.
The International Air Transport Association (IATA) is estimating 2023 industry-wide profit of $23.3 billion, up from its forecast of $4.6 billion a year ago, primarily driven by North America, Europe and the Middle East. For 2024, IATA is forecasting $25.7 billion in profits for the industry globally.
The International Air Transport Association (IATA) is estimating 2024 industry-wide net profits of $31.5 billion, up from its forecast of $25.7 billion a year ago, primarily driven by North America, Europe and the Middle East. For 2025, IATA is forecasting $36.6 billion in net profits for the industry globally.
The decreased income in 2023 compared to 2022 was primarily due to higher interest cost and lower expected return on plan assets, partially offset by lower amortization of net actuarial losses. The increased income in 2022 compared to 2021 was primarily due to lower amortization of net actuarial losses in 2022 and a settlement loss recorded in 2021.
The decreased income in 2024 compared to 2023 was primarily due to lower expected return on plan assets and higher amortization of net actuarial losses, partially offset by lower interest cost.
Research and Development The following table summarizes our Research and development expense: (Dollars in millions) Years ended December 31, 2023 2022 2021 Commercial Airplanes $2,036 $1,510 $1,140 Defense, Space & Security 919 945 818 Global Services 107 119 107 Other 315 278 184 Total $3,377 $2,852 $2,249 Research and development expense increased by $525 million in 2023 compared with 2022 primarily due to higher research and development expenditures on the 777X program as well as other BCA and enterprise investments in product development.
Research and Development The following table summarizes our Research and development expense: (Dollars in millions) Years ended December 31, 2024 2023 2022 Commercial Airplanes $2,386 $2,036 $1,510 Defense, Space & Security 917 919 945 Global Services 132 107 119 Other 377 315 278 Total $3,812 $3,377 $2,852 Research and development expense increased by $435 million in 2024 compared with 2023 primarily due to the 777X program at BCA and higher enterprise investments in product development.
Cost of sales as a percentage of Revenues decreased in 2023 compared to 2022 primarily due to lower charges on BDS development programs. Cost of sales increased by $3,841 million in 2022 compared with 2021, primarily due to charges recorded at BDS and higher revenues at BCA.
Cost of sales increased by $6,992 million in 2023 compared with 2022, primarily due to higher revenues at BCA and BGS, partially offset by lower development charges at BDS. Cost of sales as a percentage of Revenues decreased in 2023 compared to 2022 primarily due to lower charges on BDS development programs.
Capital expenditures totaled $1.5 billion in 2023, compared with $1.2 billion in 2022 and $1.0 billion in 2021. We expect capital expenditures to grow in 2024 compared with 2023. Financing Activities Cash used by financing activities was $5.5 billion during 2023, compared with $1.3 billion during 2022, and $5.6 billion in 2021.
We expect capital expenditures to grow in 2025 compared with 2024. Financing Activities Cash provided by financing activities was $25.2 billion during 2024, compared with cash used of $5.5 billion during 2023, and $1.3 billion in 2022.
Substantially all contracts at our BDS segment and certain contracts at our 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.
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 BGS segment are long-term contracts with the U.S. government and other customers that generally extend over several years.
Customer financing commitments totaled $17.0 billion and $16.1 billion at December 31, 2023 and 2022. The increase relates to new financing commitments. We anticipate that we will not be required to fund a significant portion of our financing commitments as we continue to work with third party financiers to provide alternative financing to customers.
Customer financing commitments totaled $17.1 billion and $17.0 billion at December 31, 2024 and 2023. We anticipate that we will not be required to fund a significant portion of our financing commitments as we continue to work with third party financiers to provide alternative financing to customers. Historically, we have not been required to fund significant amounts of outstanding commitments.
Total estimated program sales are determined by estimating the model mix and sales price for all unsold units within the accounting quantity, added together with the sales prices for all undelivered units under contract. The sales prices for all undelivered units within the accounting quantity include an escalation adjustment for inflation that is updated quarterly.
Total estimated program sales are determined by estimating the model mix and sales price for all unsold units within the accounting quantity, added together with the sales prices for all undelivered units under contract.
Research and development expense increased by $603 million in 2022 compared with 2021 primarily due to higher research and development expenditures on 777X, 737 MAX, as well as BCA and enterprise investments in product development. 27 Table of Contents Backlog Our backlog at December 31 was as follows: (Dollars in millions) Years ended December 31, 2023 2022 Commercial Airplanes $440,507 $329,824 Defense, Space & Security 59,012 54,373 Global Services 19,869 19,338 Unallocated items, eliminations and other 807 846 Total Backlog $520,195 $404,381 Contractual backlog $497,094 $381,977 Unobligated backlog 23,101 22,404 Total Backlog $520,195 $404,381 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.
Research and development expense increased by $525 million in 2023 compared with 2022 primarily due to higher research and development expenditures on the 777X program and enterprise investments in product development. 30 Table of Contents Backlog Our backlog at December 31 was as follows: (Dollars in millions) Years ended December 31, 2024 2023 Commercial Airplanes $435,175 $440,507 Defense, Space & Security 64,023 59,012 Global Services 21,403 19,869 Unallocated items, eliminations and other 735 807 Total Backlog $521,336 $520,195 Contractual backlog $498,802 $497,094 Unobligated backlog 22,534 23,101 Total Backlog $521,336 $520,195 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.
(Dollars in millions, except per share data) Years ended December 31, 2023 2022 2021 Revenues $77,794 $66,608 $62,286 Loss from operations, as reported ($773) ($3,519) ($2,870) Operating margins (1.0) % (5.3) % (4.6) % Pension FAS/CAS service cost adjustment (1) ($799) ($849) ($882) Postretirement FAS/CAS service cost adjustment (1) (257) (294) (291) FAS/CAS service cost adjustment (1) ($1,056) ($1,143) ($1,173) Core operating loss (non-GAAP) ($1,829) ($4,662) ($4,043) Core operating margins (non-GAAP) (2.4) % (7.0) % (6.5) % Diluted loss per share, as reported ($3.67) ($8.30) ($7.15) Pension FAS/CAS service cost adjustment (1) (1.32) (1.43) (1.50) Postretirement FAS/CAS service cost adjustment (1) (0.42) (0.49) (0.49) Non-operating pension expense (2) (0.87) (1.47) (0.91) Non-operating postretirement expense (2) (0.10) (0.10) Provision for deferred income taxes on adjustments (3) 0.57 0.73 0.61 Core loss per share (non-GAAP) ($5.81) ($11.06) ($9.44) Weighted average diluted shares (in millions) 606.1 595.2 588.0 (1) FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments.
(Dollars in millions, except per share data) Years ended December 31, 2024 2023 2022 Revenues $66,517 $77,794 $66,608 Loss from operations, as reported ($10,707) ($773) ($3,519) Operating margins (16.1) % (1.0) % (5.3) % Pension FAS/CAS service cost adjustment (1) ($811) ($799) ($849) Postretirement FAS/CAS service cost adjustment (1) (293) (257) (294) FAS/CAS service cost adjustment (1) ($1,104) ($1,056) ($1,143) Core operating loss (non-GAAP) ($11,811) ($1,829) ($4,662) Core operating margins (non-GAAP) (17.8) % (2.4) % (7.0) % Diluted loss per share, as reported ($18.36) ($3.67) ($8.30) Pension FAS/CAS service cost adjustment (1) (1.26) (1.32) (1.43) Postretirement FAS/CAS service cost adjustment (1) (0.45) (0.42) (0.49) Non-operating pension income (2) (0.74) (0.87) (1.47) Non-operating postretirement income (2) (0.11) (0.10) (0.10) Provision for deferred income taxes on adjustments (3) 0.54 0.57 0.73 Core loss per share (non-GAAP) ($20.38) ($5.81) ($11.06) Weighted average diluted shares (in millions) 647.2 606.1 595.2 (1) FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments.
Purchase obligations include amounts recorded as well as amounts that are not recorded on the Consolidated Statements of Financial Position. Purchase obligations not recorded on the Consolidated Statements of Financial Position include agreements for inventory procurement, tooling costs, electricity and natural gas contracts, property, plant and equipment, information technology software and hardware, and other miscellaneous production related obligations.
Purchase obligations not recorded on the Consolidated Statements of Financial Position include agreements for inventory procurement, information technology software and hardware, aircraft trade-ins, property, plant and equipment, electricity and natural gas contracts, tooling costs, and other miscellaneous production related obligations. The most significant obligation relates to inventory procurement contracts.
Results of Operations (Dollars in millions) Years ended December 31, 2023 2022 2021 Revenues $19,127 $17,611 $16,328 % of total company revenues 25 % 26 % 26 % Earnings from operations $3,329 $2,727 $2,017 Operating margins 17.4 % 15.5 % 12.4 % Revenues BGS revenues in 2023 increased by $1,516 million compared with 2022 primarily due to higher commercial services revenue driven by market recovery across the commercial portfolio.
Results of Operations (Dollars in millions) Years ended December 31, 2024 2023 2022 Revenues $19,954 $19,127 $17,611 % of total company revenues 30 % 25 % 26 % Earnings from operations $3,618 $3,329 $2,727 Operating margins 18.1 % 17.4 % 15.5 % Revenues BGS revenues in 2024 increased by $827 million compared with 2023 primarily due to higher commercial services revenue.
Environmental Remediation We are involved with various environmental remediation activities and have recorded a liability of $844 million at December 31, 2023. For additional information, see Note 13 to our Consolidated Financial Statements.
Legal contingencies are discussed in Note 22 to our Consolidated Financial Statements. Environmental Remediation We are involved with various environmental remediation activities and have recorded a liability of $834 million at December 31, 2024. For additional information, see Note 14 to our Consolidated Financial Statements.
Backlog Total backlog of $59,012 million at December 31, 2023 was $4,639 million higher than December 31, 2022 due to the timing of awards and revenue recognized on contracts awarded in prior years. Additional Considerations Our BDS business includes a variety of development programs which have complex design and technical challenges. Some of these programs have cost-type contracting arrangements.
Backlog Total backlog of $64,023 million at December 31, 2024 was $5,011 million higher than December 31, 2023, reflecting the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods. Additional Considerations Our BDS business includes a variety of development programs which have complex design and technical challenges. Some of these programs have cost-type contracting arrangements.
It is a key determinant of the gross margins we recognize on sales of individual airplanes throughout a program’s life. Estimation of each program’s accounting quantity takes into account several factors that are indicative of the demand for that program, including firm orders, letters of intent from prospective customers and market studies. We review our program accounting quantities quarterly.
Estimation of each program’s accounting quantity takes into account several factors that are indicative of the demand for that program, including firm orders, letters of intent from prospective customers and market studies. We review our program accounting quantities quarterly.
(Loss)/earnings From Operations BDS loss from operations in 2023 of $1,764 million decreased by $1,780 million compared with $3,544 million in 2022. The decrease is primarily due to $2,863 million of lower charges in 2023 on fixed-price development programs that were partially offset by lower earnings across other programs including satellites and F-15, as well as higher period expenses.
The decrease is primarily due to $2,863 million of lower charges in 2023 on fixed-price development programs that were partially offset by lower earnings across other programs including satellites and F-15, as well as higher period expenses. During 2023, losses incurred on the five fixed-price development programs totaled $1,585 million compared with $4,448 million in 2022.
Adverse changes to the revenue and/or cost estimates for these programs could result in earnings charges in future periods. Due to the significance of judgment in the estimation process described above, it is reasonably possible that changes in underlying circumstances or assumptions could have a material effect on program gross margins.
Due to the significance of judgment in the estimation process described above, it is reasonably possible that changes in underlying circumstances or assumptions could have a material effect on program gross margins.
Consolidated Results of Operations The following table summarizes key indicators of consolidated results of operations: (Dollars in millions, except per share data) Years ended December 31, 2023 2022 2021 Revenues $77,794 $66,608 $62,286 GAAP Loss from operations ($773) ($3,519) ($2,870) Operating margins (1.0) % (5.3) % (4.6) % Effective income tax rate (11.8) % (0.6) % 14.8 % Net loss attributable to Boeing Shareholders ($2,222) ($4,935) ($4,202) Diluted loss per share ($3.67) ($8.30) ($7.15) Non-GAAP (1) Core operating loss ($1,829) ($4,662) ($4,043) Core operating margins (2.4 %) (7.0 %) (6.5 %) Core loss per share ($5.81) ($11.06) ($9.44) (1) These measures exclude certain components of pension and other postretirement benefit expense.
The demand outlook for our government services business remains stable. 25 Table of Contents Consolidated Results of Operations The following table summarizes key indicators of consolidated results of operations: (Dollars in millions, except per share data) Years ended December 31, 2024 2023 2022 Revenues $66,517 $77,794 $66,608 GAAP Loss from operations ($10,707) ($773) ($3,519) Operating margins (16.1) % (1.0) % (5.3) % Effective income tax rate 3.1 % (11.8) % (0.6) % Net loss attributable to Boeing shareholders ($11,817) ($2,222) ($4,935) Diluted loss per share ($18.36) ($3.67) ($8.30) Non-GAAP (1) Core operating loss ($11,811) ($1,829) ($4,662) Core operating margins (17.8) % (2.4) % (7.0) % Core loss per share ($20.38) ($5.81) ($11.06) (1) These measures exclude certain components of pension and other postretirement benefit expense.
This market environment has resulted in intense pressures on pricing and other competitive factors, and we expect these pressures to continue or intensify in the coming years. 29 Table of Contents Results of Operations (Dollars in millions) Years ended December 31, 2023 2022 2021 Revenues $33,901 $26,026 $19,714 % of total company revenues 44 % 39 % 32 % Loss from operations ($1,635) ($2,341) ($6,377) Operating margins (4.8) % (9.0) % (32.3) % Research and development $2,036 $1,510 $1,140 Revenues BCA revenues increased by $7,875 million in 2023 compared with 2022 primarily due to higher 787 deliveries in 2023.
This market environment has resulted in intense pressures on pricing and other competitive factors, and we expect these pressures to continue or intensify in the coming years. 32 Table of Contents Results of Operations (Dollars in millions) Years ended December 31, 2024 2023 2022 Revenues $22,861 $33,901 $26,026 % of total company revenues 34 % 44 % 39 % Loss from operations ($7,969) ($1,635) ($2,341) Operating margins (34.9) % (4.8) % (9.0) % Research and development $2,386 $2,036 $1,510 Revenues BCA revenues decreased by $11,040 million in 2024 compared with 2023 primarily due to lower deliveries across all programs and 737-9 customer considerations related to the January 2024 grounding.
BCA total backlog of $440,507 million at December 31, 2023 increased from $329,824 million at December 31, 2022, reflecting new orders in excess of deliveries and a decrease in the value of existing orders that in our assessment do not meet the accounting requirements of ASC 606 for inclusion in backlog, partially offset by order cancellations.
BCA total backlog of $435,175 million at December 31, 2024 decreased from $440,507 million at December 31, 2023, 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, cancellations and decreases in estimated contractual prices, partially offset by new orders in excess of deliveries.
During 2023, losses incurred on the five fixed-price development programs totaled $1,585 million compared with $4,448 million in 2022. Charges on fixed-price development programs in 2023 included VC-25B ($482 million), KC-46A Tanker ($309 million), Commercial Crew ($288 million), T-7A Red Hawk ($275 million) and MQ-25 ($231 million).
Charges on fixed-price development programs in 2023 included VC-25B ($482 million), KC-46A Tanker ($309 million), Commercial Crew ($288 million), T-7A Red Hawk ($275 million) and MQ-25 ($231 million).
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. Airline financial performance, which influences demand for new capacity, has benefited from the resilient demand for travel.
These factors have reduced overall productivity and adversely impacted our financial position, results of operations and cash flows. Airline financial performance, which influences demand for new capacity, has benefited from the resilient demand for travel.
Net unfavorable cumulative contract catch-up adjustments in 2023 were $648 million better than in 2022 largely due to lower charges on development programs in 2023, partially offset by unfavorable performance on other programs. BDS revenues in 2022 decreased by $3,378 million compared with 2021 primarily due to charges on development programs.
Net unfavorable cumulative contract catch-up adjustments in 2023 were $648 million better than in 2022 largely due to lower charges on development programs in 2023, partially offset by unfavorable performance on other programs. Loss From Operations BDS loss from operations in 2024 was $5,413 million compared with $1,764 million in 2023.
The non-operating pension expense included in Other income, net was a benefit of $529 million in 2023, $881 million in 2022 and $528 million in 2021. The lower benefits in 2023 were primarily due to higher interest cost and lower expected return on plan assets, offset by lower amortization of net actuarial losses.
The decreased non-operating pension income in 2023 compared to 2022 was primarily due to higher interest cost and lower expected return on plan assets, partially offset by lower amortization of net actuarial losses. Non-operating postretirement income included in Other income, net was $73 million in 2024 and $58 million in 2023 and 2022.
The projected benefit obligation would decrease by $1,280 million or increase by $1,425 million if the discount rate increased or decreased by 25 basis points. A 25 basis point change in the discount rate would not have a significant impact on pension cost. However, net periodic pension cost is sensitive to changes in the expected long-term rate of asset return.
A 25 basis point change in the discount rate would not have a significant impact on pension cost. However, net periodic pension cost is sensitive to changes in the expected long-term rate of asset return.
We expect approximately 30 percent of the worldwide fleet of military aircraft to be retired and replaced over the next ten years, driving increased demand for services to maintain aging aircraft and enhance aircraft capability.
Over the next decade, we expect U.S. growth to remain flat and non-U.S. fleets to add rotorcraft and commercial derivative aircraft at faster rates. We expect approximately 30 percent of the worldwide fleet of military aircraft to be retired and replaced over the next ten years, driving increased demand for services to maintain aging aircraft and enhance aircraft capability.
BCA revenues increased by $6,312 million in 2022 compared with 2021 primarily due to higher 737 and 787 deliveries in 2022.
BCA revenues increased by $7,875 million in 2023 compared with 2022 primarily due to higher 787 deliveries in 2023.
Due to the significance of judgment in the estimation process described above, it is likely that materially different earnings could be recorded if we used different assumptions or if the underlying circumstances were to change. Changes in underlying assumptions/estimates, internal and supplier performance, inflationary trends, or other circumstances may adversely or positively affect financial performance in future periods.
Due to the significance of judgment in the estimation process described above, it is likely that materially different earnings could be recorded if we used different assumptions or if the underlying circumstances were to change.
The net unfavorable impact of cumulative contract catch-up adjustments in 2023 was $16 million worse than the net favorable impact in the prior year comparable period. BGS revenues in 2022 increased by $1,283 million compared with 2021 primarily due to higher commercial services volume, partially offset by lower government services volume and performance.
The net unfavorable impact of cumulative contract catch-up adjustments in 2023 was $16 million worse than the net favorable impact in the prior year comparable period. Earnings From Operations BGS earnings from operations in 2024 increased by $289 million compared with 2023, primarily due to higher commercial services revenue.
Capital Resources The following table summarizes certain cash requirements for known contractual and other obligations as of December 31, 2023, and the estimated timing thereof. See Note 12 for future operating lease payments.
As a result, we did not pay any dividends to common shareholders in 2024, 2023 and 2022. Capital Resources The following table summarizes certain cash requirements for known contractual and other obligations as of December 31, 2024, and the estimated timing thereof. See Note 13 for future operating lease payments.
(2) Core operating loss is a non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 43 - 45. 24 Table of Contents Loss from operations decreased by $2,746 million in 2023 compared with 2022.
(2) Core operating loss is a non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 46 - 48. Loss from operations increased by $9,934 million in 2024 compared with 2023.
On January 24, 2024, the FAA approved an enhanced maintenance and inspection process that must be performed on each of the grounded 737-9 aircraft. Our 737-9 operators have begun returning their fleets to service, and many 737-9s have completed inspections and resumed revenue flights. All 737-9 aircraft in production will undergo this same enhanced inspection process prior to delivery.
On January 24, 2024, the FAA approved an enhanced maintenance and inspection process that was required to be performed on each of the grounded 737-9 aircraft. Our 737-9 operators returned their fleets to service in the first quarter. All 737-9 aircraft in production are undergoing this same enhanced inspection process prior to delivery.
The Pension FAS/CAS service cost adjustments recognized in Loss from operations were benefits of $799 million in 2023, $849 million in 2022 and $882 million in 2021. The lower benefits in 2023 and 2022 were primarily due to reductions in allocated pension cost year over year.
The Pension FAS/CAS service cost adjustments recognized in Loss from operations were benefits of $811 million in 2024, $799 million in 2023 and $849 million in 2022.
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 26 Table of Contents 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.
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.
Contingent Obligations We have significant contingent obligations that arise in the ordinary course of business, which include the following: Legal Various legal proceedings, claims and investigations are pending against us. Legal contingencies are discussed in Note 21 to our Consolidated Financial Statements.
However, there can be no assurances that we will not be required to fund greater amounts than historically required. See Note 14 to our Consolidated Financial Statements. Contingent Obligations We have significant contingent obligations that arise in the ordinary course of business, which include the following: Legal Various legal proceedings, claims and investigations are pending against us.
BCA revenues increased by $7,875 million primarily driven by higher 787 deliveries. BDS revenues increased by $1,771 million primarily due to higher revenues on fixed-price development programs. BGS revenues increased by $1,516 million primarily due to higher commercial services revenue driven by market recovery across the commercial portfolio.
BGS revenues increased by $1,516 million primarily due to higher commercial services revenue driven by market recovery across the commercial portfolio.
The most significant obligation relates to inventory procurement contracts. We have entered into certain significant inventory procurement contracts that specify determinable prices and quantities, and long-term delivery timeframes. In addition, we purchase raw materials on behalf of our suppliers.
We have entered into certain significant inventory procurement contracts that specify determinable prices and quantities, and long-term delivery timeframes. In addition, we purchase raw materials on behalf of our suppliers. These agreements require suppliers and vendors to be prepared to build and deliver items in sufficient time to meet our production schedules.
The increase in use of cash in 2023 compared to 2022 was primarily due to net contributions to investments of $0.7 billion in 2023 compared to net proceeds from investments of $5.6 billion in 2022. The decrease in cash inflows in 2022 compared to 2021 was primarily due to $4.2 billion of higher net proceeds from investments in 2021.
The increase in cash outflows in 2023 compared to 2022 was primarily due to net contributions to investments of $0.7 billion in 2023 compared to net proceeds from investments of $5.6 billion in 2022. Capital expenditures totaled $2.2 billion in 2024, compared with $1.5 billion in 2023 and $1.2 billion in 2022.
Unallocated Items, Eliminations and Other The most significant items included in Unallocated items, eliminations and other (expense)/income are shown in the following table: (Dollars in millions) Years ended December 31, 2023 2022 2021 Share-based plans $62 ($114) ($174) Deferred compensation (188) 117 (126) Amortization of previously capitalized interest (95) (95) (107) Research and development expense, net (315) (278) (184) Eliminations and other unallocated items (1,223) (1,134) (636) Unallocated items, eliminations and other ($1,759) ($1,504) ($1,227) Share-based plans expense decreased by $176 million in 2023 and $60 million in 2022, primarily due to fewer share-based grants and the timing of corporate allocations in 2023.
Core operating loss increased by $9,982 million in 2024 compared with 2023 and decreased by $2,833 million in 2023 compared with 2022 primarily due to changes in Segment operating loss as described above. 27 Table of Contents Unallocated Items, Eliminations and Other The most significant items included in Unallocated items, eliminations and other (expense)/income are shown in the following table: (Dollars in millions) Years ended December 31, 2024 2023 2022 Share-based plans $171 $62 ($114) Deferred compensation (114) (188) 117 Amortization of previously capitalized interest (93) (95) (95) Research and development expense, net (377) (315) (278) Eliminations and other unallocated items (1,634) (1,223) (1,134) Unallocated items, eliminations and other ($2,047) ($1,759) ($1,504) Share-based plans income increased by $109 million in 2024 primarily due to fewer outstanding share-based awards in 2024 and the timing of corporate allocations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeMarket Risk Participants in deferred compensation plans can diversify the deferred amounts among investment funds which are subject to potential changes in fair value. As of December 31, 2023, the deferred compensation liability, which is being marked to market, was $1.6 billion.
Biggest changeMarket Risk Participants in deferred compensation plans can diversify the deferred amounts among investment funds which are subject to potential changes in fair value. As of December 31, 2024, the deferred compensation liability, which is being marked to market, was $1.7 billion.
At December 31, 2023, a 10% increase or decrease in the exchange rate in our portfolio of foreign currency contracts would have increased or decreased our unrealized losses by $361 million.
At December 31, 2024, a 10% increase or decrease in the exchange rate in our portfolio of foreign currency contracts would have increased or decreased our unrealized losses by $428 million.
A 10% change in the fair value of these investment funds would increase or decrease the liability by $164 million. Changes in the liability are recorded in operating earnings. 49 Table of Contents
A 10% change in the fair value of these investment funds would increase or decrease the liability by $168 million. Changes in the liability are recorded in operating earnings. 52 Table of Contents
At December 31, 2023, a 10% increase or decrease in the market price in our commodity derivatives would have increased or decreased our unrealized losses by $37 million.
At December 31, 2024, a 10% increase or decrease in the market price in our commodity derivatives would have increased or decreased our unrealized losses by $28 million.

Other BA 10-K year-over-year comparisons