Boeing BA · USD

Segment and Revenue InformationWe operate in three reportable segments: BCA, BDS, and BGS. All other activities fall within Unallocated items, eliminations and other. See page 59 for the Summary of Business Segment Data, which is an integral part of this note.BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide. Revenue on commercial aircraft contracts is recognized at the point in time when an aircraft is completed and accepted by the customer.BDS engages in the research, development, production and modification of the following products and related services: manned and unmanned military aircraft and weapons systems, surveillance and engagement, strategic defense and intelligence systems, satellite systems and space exploration. BDS revenue is generally recognized over the contract term (over time) as costs are incurred.BGS provides parts, maintenance, modifications, logistics support, training, data analytics and information-based services to commercial and government customers worldwide. BGS segment revenue and costs include certain products and services provided to other segments. Revenue on commercial spare parts contracts is recognized at the point in time when a spare part is delivered to the customer. Revenue on other contracts is generally recognized over the contract term (over time) as costs are incurred.Our chief operating decision maker is currently our President and Chief Executive Officer (CEO). The primary profitability measurement used by the CEO to review segment operating results is Segment operating (loss)/earnings. The CEO uses Segment operating (loss)/earnings to allocate resources (including employees, financial and capital resources) for each segment predominantly in the annual planning process. Segment operating (loss)/earnings is used to monitor segment results compared to prior period, forecasted results, and the annual plan.

The Boeing Company and SubsidiariesNotes to the Consolidated Financial StatementsSummary of Business Segment Data(Dollars in millions) Years ended December 31, 202520242023Revenues:Commercial Airplanes$41,494 $22,861 $33,901 Defense, Space & Security27,234 23,918 24,933 Global Services20,923 19,954 19,127 Unallocated items, eliminations and other(188)(216)(167)Total revenues$89,463 $66,517 $77,794 Earnings/(loss) from operations:Commercial Airplanes($7,079)($7,969)($1,635)Defense, Space & Security(128)(5,413)(1,764)Global Services13,474 3,618 3,329 Segment operating earnings/(loss)6,267 (9,764)(70)Unallocated items, eliminations and other(3,031)(2,047)(1,759)FAS/CAS service cost adjustment1,045 1,104 1,056 Earnings/(loss) from operations4,281 (10,707)(773)Other income, net1,125 1,222 1,227 Interest and debt expense(2,771)(2,725)(2,459)Earnings/(loss) before income taxes2,635 (12,210)(2,005)Income tax (expense)/benefit(397)381 (237)Net earnings/(loss)2,238 (11,829)(2,242)Less: Net earnings/(loss) attributable to noncontrolling interest3 (12)(20)Net earnings/(loss) attributable to Boeing shareholders2,235 (11,817)(2,222)Less: Mandatory convertible preferred stock dividends accumulated during the period345 58 Net earnings/(loss) attributable to Boeing common shareholders$1,890 ($11,875)($2,222)This information is an integral part of the Notes to the Consolidated Financial Statements. See Note 24 for further segment results.

Liabilities, Commitments and ContingenciesAccrued LiabilitiesAccrued liabilities at December 31 consisted of the following:20252024Accrued compensation and employee benefit costs$7,464 $6,110 Forward loss recognition6,711 7,634 Product warranties2,797 2,133 Other customer concessions and considerations1,696 1,552 Off-market contracts1,065 Environmental877 834 Accrued interest payable877 796 Current portion of retiree healthcare and pension liabilities442 452 737 MAX customer concessions and other considerations383 641 Current portion of lease liabilities335 324 Other4,494 3,627 Total$27,141 $24,103 737 MAX Customer Concessions and Other ConsiderationsDuring 2024, we recorded an earnings charge of $443, net of insurance recoveries, in connection with estimated considerations to customers for disruption related to the January 2024 737-9 door plug accident and grounding. This charge is reflected in the financial statements as a reduction to Sales of products.The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during 2025 and 2024.20252024Beginning balance – January 1$641 $1,327 Reductions for payments made(192)(929)Reductions for concessions and other in-kind considerations(66)(267)Changes in estimates 510 Ending balance – December 31$383 $641 At December 31, 2025, $89 of the liability balance remains subject to negotiations with customers. The remaining contracted amount is primarily expected to be liquidated by lower customer delivery payments.EnvironmentalThe following table summarizes changes in environmental remediation liabilities during the years ended December 31, 2025 and 2024.20252024Beginning balance – January 1$834 $844 Reductions for payments made, net of recoveries(95)(120)Changes in estimates138 110 Ending balance – December 31$877 $834 The liabilities recorded represent our best estimate or the low end of a range of reasonably possible costs expected to be incurred to remediate sites, including operation and maintenance over periods of up to 30 years. It is reasonably possible that we may incur costs that exceed these recorded amounts because of regulatory agency orders and directives, changes in laws and/or regulations, higher than expected costs and/or the discovery of new or additional contamination.

DebtIn August 2025, we entered into a $3,000, 364-day revolving credit agreement expiring in August 2026. This facility replaced the $3,000, three-year revolving credit agreement which was scheduled to terminate in August 2025. The 364-day credit facility has a one-year term out option which allows us to extend the maturity of any borrowings until August 2027. Our legacy $3,000, five-year revolving credit agreement expiring in August 2028 and $4,000, five-year revolving credit agreement expiring in May 2029 each remain in effect. As of December 31, 2025, we had $10,000 available under credit line agreements.We continue to be in compliance with all covenants contained in our debt and credit facility agreements.In December 2025, as a result of the Spirit Acquisition, we assumed $3,608 of debt, $2,260 of which we immediately repaid. The remaining debt assumed primarily includes the following notes issued by Spirit Sub: $300 of 3.850% Senior Notes due 2026 (the Spirit 2026 Notes), $700 of 4.600% Senior Notes due 2028 (the Spirit 2028 Notes, and together with the Spirit 2026 Notes, the Spirit Senior Notes) and $230 of 3.250% Exchangeable Notes due 2028 (the Spirit Exchangeable Notes).The Spirit Exchangeable Notes mature on November 1, 2028, unless earlier exchanged, redeemed or repurchased, and are exchangeable at an initial rate of 6.7067 shares of Boeing common stock per $1,000 principal amount, in whole dollars, of the Spirit Exchangeable Notes. Prior to August 1, 2028, if certain conditions are met, holders of the Spirit Exchangeable Notes may elect to exchange the Spirit Exchangeable Notes. On or after August 1, 2028, the holders of the Spirit Exchangeable Notes may elect to exchange the Spirit Exchangeable Notes without restriction. Upon exchange, we will pay cash and/or deliver shares of Boeing common stock, at our election, to the holders of the Spirit Exchangeable Notes.In connection with closing of the Spirit Acquisition, The Boeing Company guaranteed the obligations of Spirit Sub with respect to the Spirit Senior Notes, and as a result, each of The Boeing Company and Spirit fully and unconditionally guarantee the Spirit Senior Notes on a senior unsecured basis. The guarantees rank equally in right of payment with all of Boeing’s existing and future senior unsecured indebtedness.Interest incurred, including amounts capitalized, was $2,956, $2,874 and $2,560 for the years ended December 31, 2025, 2024 and 2023, respectively.

Income TaxesThe components of Earnings/(loss) before income taxes were:Years ended December 31,202520242023U.S.($3,492)($12,813)($2,512)Non-U.S.6,127 603 507 Total$2,635 ($12,210)($2,005)Income tax (benefit)/expense consisted of the following:Years ended December 31,202520242023Current tax expense/(benefit)U.S. federal$2 ($277)$9 Non-U.S.287 184 179 U.S. state9 14 19 Total current298 (79)207 Deferred tax expense/(benefit)U.S. federal40 (71)6 Non-U.S.(25)3 5 U.S. state84 (234)19 Total deferred99 (302)30 Total income tax expense/(benefit)$397 ($381)$237 Net income tax payments in 2025 were as follows:Year ended December 31,2025U.S. federal$37 U.S. state(5)Non-U.S.Germany83Other160Total Non-U.S.243 Total net income tax payments$275 Net income tax payments were $187 and $204 in 2024 and 2023.The following is a reconciliation of the U.S. federal statutory tax to actual income tax expense:Year ended December 31,2025AmountRateU.S. federal statutory tax$553 21.0 %State and local income tax, net of federal income tax effect (1)73 2.8 Foreign tax effectsGermany - Digital Aviation Solutions Divestiture (2)(751)(28.5)Sweden - Digital Aviation Solutions Divestiture (2)(393)(14.9) Other foreign121 4.6 Effect of cross-border tax laws - Global Intangible Low-Taxed Income - Digital Aviation Solutions Divestiture (3)1,242 47.1 Tax Credits - Research and development credits(559)(21.2)Changes in valuation allowances (4)(50)(1.9)Nontaxable or nondeductible itemsNon-prosecution agreement liability93 3.5 Digital Aviation Solutions Divestiture(61)(2.3)Changes in prior year worldwide unrecognized tax benefits69 2.6 Other provision adjustments60 2.3 Income tax expense$397 15.1 %(1) During the year ended December 31, 2025, the tax effect in this category was primarily driven by state taxes in California (greater than 50 percent).(2) We recorded a tax expense of $59 in the foreign jurisdictions related to the Digital Aviation Solutions Divestiture. The German Digital Aviation Solutions Divestiture rate benefit was due to the statutory rate difference of ($203) (7.7)% and a participation exemption of ($548) (20.8)%. The Swedish rate benefit was entirely due to a participation exemption.(3) Related to the Digital Aviation Solutions Divestiture, in the U.S., we recorded a Global Intangible Low-Taxed Income inclusion, which is offset by a decrease in the federal valuation allowance, resulting in no federal tax expense.

Share-Based Compensation and Other Compensation ArrangementsShare-Based CompensationOur 2023 Incentive Stock Plan, permits awards of incentive and non-qualified stock options, stock appreciation rights, restricted stock or units, performance restricted stock or units, and other stock and cash-based awards to our employees, officers, directors, consultants, and independent contractors. The aggregate number of shares of our common stock authorized for issuance under the plan is 12,900,000, plus shares that remained or became available under our 2003 Incentive Stock Plan, as amended and restated. Following approval of our 2023 Incentive Stock Plan in 2023, no further awards have been or may be granted under our 2003 Incentive Stock Plan.Shares issued under the 2023 Incentive Stock Plan will be funded out of treasury shares, except to the extent there are insufficient treasury shares, in which case new shares will be issued. We believe we currently have adequate treasury shares to satisfy these issuances during 2026.Share-based plans expense is primarily included in Total costs and expenses and General and administrative expense, as well as a portion allocated to production as inventoried costs. The share-based plans expense and related income tax benefit were as follows:Years ended December 31,202520242023Restricted stock units and other awards$427$409$697Income tax benefit (before consideration of valuation allowance)$92$107$157Stock OptionsOptions have been granted to our executive officers that are generally scheduled to vest and become exercisable three years after the grant date and expire ten years after the grant date. If an executive terminates employment because of retirement, layoff, disability, or death, the executive (or beneficiary) may remain eligible to exercise some or all of their stock options depending on certain age and service conditions. The fair values of the stock options granted were estimated using a Monte-Carlo simulation model using the assumptions presented below. The model includes no expected dividend yield.In 2025, we granted premium-priced stock options to our executive officers as part of our long-term incentive program. These stock options have an exercise price equal to 120% of the fair market value of our stock on the date of grant. Grant DateOptions GrantedExpected LifeExpected VolatilityRisk Free Interest RateGrant Date Fair Value Per Option2/19/2025366,869 7.0 years39.0 %4.5 %$79.53 2/24/202517,785 7.0 years39.0 %4.

LeasesOur operating lease assets primarily represent manufacturing and research and development facilities, warehouses and offices. Total operating lease expense was $601, $530 and $457 for the years ended December 31, 2025, 2024 and 2023, of which $83, $75 and $76 was attributable to variable lease expenses, respectively.For the years ended December 31, 2025, 2024 and 2023, cash payments against operating lease liabilities totaled $467, $408 and $323, and non-cash transactions totaled $414, $490 and $488 to recognize operating assets and liabilities for new leases and modifications.Supplemental information related to leases included in the Consolidated Statements of Financial Position at December 31 is as follows:20252024Operating leases:Operating lease right-of-use assets$2,123$1,984Operating lease liabilities:Current portion of lease liabilities335324Non-current portion of lease liabilities1,9321,770Total operating lease liabilities$2,267$2,094Weighted average remaining lease term (years)1312Weighted average discount rate3.97%3.43%Operating lease assets are included in Other assets, net, with the related liabilities included in Accrued liabilities and Other long-term liabilities.Scheduled payments for operating lease liabilities are as follows:Operating leases2026$433 2027571 2028330 2029250 2030203 Thereafter1,233 Total lease payments3,020 Less imputed interest(753)Total$2,267 As of December 31, 2025, we have entered into leases that have not yet commenced of $65 for offices. These leases will commence in 2026 with lease terms of 1 years to 20 years.

Spirit AcquisitionOn December 8, 2025, we completed our acquisition of Spirit AeroSystems Holdings, Inc. (Spirit) pursuant to the Agreement and Plan of Merger dated June 30, 2024 (Merger Agreement). In connection with the closing of the transactions contemplated by the Merger Agreement (Spirit Acquisition), Boeing became the ultimate parent company of Spirit and its respective subsidiaries, including Spirit AeroSystems, Inc. (Spirit Sub). The Spirit Acquisition enables Boeing and Spirit to align our commercial production systems, including our Safety and Quality Management Systems, and our workforces to the same priorities, incentives and outcomes.Total consideration for the Spirit Acquisition was $8,371 comprised of the following:Boeing common stock exchanged for Spirit common stock (1)$4,704 Settlement of loans, advances and other payments to Spirit2,571 Debt repaid on Spirit’s behalf948 Premium on assumed Spirit Exchangeable Notes109 Exchange of Spirit share-based awards (1)39 Fair value of total consideration$8,371 (1) Fair value of consideration reflects the price per share of Boeing common stock on the acquisition date.In accordance with the Merger Agreement, 117.5 million shares of Spirit common stock were exchanged for 22.98 million shares of Boeing common stock at an exchange ratio of 0.1955. The exchange ratio was calculated as $37.25 divided by the $190.493 volume weighted average price per share of Boeing common stock on the New York Stock Exchange for the 15-trading-day period ended on December 4, 2025.Since 2023, Boeing has provided funding in the form of loans and advance payments to Spirit to support its liquidity, rate readiness, and 787 tooling and capital expenditures. Pursuant to the terms of the Merger Agreement, Boeing also provided funding to Spirit for the portion of the payment to Airbus SE (Airbus) that Spirit was unable to satisfy with cash on hand as of the closing of the transactions contemplated by the Stock and Asset Purchase Agreement, dated April 27, 2025, between Spirit and Airbus, which closing occurred concurrently with the Spirit Acquisition. Such amounts totaling $2,571 were deemed to be consideration.We expensed $53 of acquisition related costs in the Consolidated Statements of Operations as General and administrative expense during the year ended December 31, 2025. The results of Spirit’s operations between the acquisition date and December 31, 2025, were not material.