BOEING CO

Previous wording

On November 4, 2024, the International Association of Machinists and Aerospace Workers District 751 (IAM 751) voted to ratify a new contract, thereby ending the work stoppage initiated on September 13, 2024, which paused production of certain commercial aircraft models (737, 767, 777 and 777X aircraft) as well as production of commercial derivative aircraft for our Defense, Space & Security business (KC-46A Tanker and P-8A Poseidon). Production for all programs resumed in December 2024 and gradually ramped up during the first half of 2025.

Current wording

On November 4, 2024, the International Association of Machinists and Aerospace Workers District 751 (IAM 751) voted to ratify a new contract, thereby ending the work stoppage initiated on September 13, 2024, which paused production of certain commercial aircraft models (737, 767, 777 and 777X aircraft) as well as production of commercial derivative aircraft for our Defense, Space & Security business (KC-46A Tanker and P-8A Poseidon). Production for all programs resumed in December 2024 and gradually ramped up during 2025.

Previous wording

Revenues for the six months ended June 30, 2025, increased by $8,810 million compared with the same period in 2024 primarily driven by higher revenues at Commercial Airplanes (BCA). BCA revenues increased by $8,365 million primarily due to higher deliveries.

Current wording

Revenues for the nine months ended September 30, 2025, increased by $14,240 million compared with the same period in 2024 primarily driven by higher revenues at Commercial Airplanes (BCA) and Defense, Space & Security (BDS). BCA revenues increased by $12,016 million primarily due to higher deliveries. BDS revenues increased by $1,310 million primarily due to lower net unfavorable cumulative contract catch-up adjustments.

Previous wording

Revenues for the three months ended June 30, 2025, increased by $5,883 million compared with the same period in 2024 primarily driven by higher revenues at BCA. BCA revenues increased by $4,871 million primarily due to higher deliveries.

Current wording

Revenues for the three months ended September 30, 2025, increased by $5,430 million compared with the same period in 2024 primarily driven by higher revenues at BCA and BDS. BCA revenues increased by $3,651 million primarily due to higher deliveries. BDS revenues increased by $1,366 million primarily due to lower net unfavorable cumulative contract catch-up adjustments and higher volume.

Previous wording

Loss from operations for the three months ended June 30, 2025, decreased by $914 million compared with the same period in 2024. The decrease in loss is primarily driven by BDS ($1,023 million), partially offset by an increase in Loss from operations on Unallocated items, eliminations and other ($401 million).

Current wording

Loss from operations for the nine months ended September 30, 2025, decreased by $2,441 million compared with the same period in 2024, primarily driven by BDS ($3,525 million), partially offset by an increase in Loss from operations on Unallocated items, eliminations and other ($781 million) and at BCA ($568 million).

Previous wording

Earnings from operations for the six months ended June 30, 2025, was $285 million compared to loss from operations of $1,176 million during the same period in 2024. The $1,461 million increase in earnings is primarily driven by Defense, Space & Security (BDS) ($1,027 million) and BCA ($764 million), partially offset by an increase in Loss from operations on Unallocated items, eliminations and other ($451 million).

Current wording

Loss from operations for the three months ended September 30, 2025, decreased by $980 million compared with the same period in 2024, primarily driven by BDS ($2,498 million), partially offset by an increase in Loss from operations at BCA ($1,332 million).

Previous wording

Core operating loss for the six and three months ended June 30, 2025, decreased by $1,546 million and $959 million compared with the same periods in 2024, primarily due to favorable changes in Segment operating earnings/(loss) as described above.

Current wording

Core operating loss for the nine and three months ended September 30, 2025, decreased by $2,486 million and $940 million compared with the same periods in 2024, primarily due to favorable changes in Segment operating loss as described above.

Previous wording

Share-based plans expense for the six and three months ended June 30, 2025, was $51 million and $21 million compared to share-based plans income of $53 million and $43 million for the same periods in 2024. The increase in share-based plans expense for the six and three months ended June 30, 2025 compared with the same period in 2024 was primarily due to the timing of corporate allocations.

Current wording

Share-based plans expense for the nine months ended September 30, 2025, increased by $158 million compared with the same period in 2024. Share-based plans income for the three months ended September 30, 2025, decreased by $54 million compared with the same period in 2024. The decrease in share-based plans income for the nine and three months ended September 30, 2025, compared with the same periods in 2024 was primarily due to the timing of corporate allocations.

Previous wording

Deferred compensation expense for the six months ended June 30, 2025, increased by $31 million compared with the same period in 2024 primarily driven by changes in our stock price. Deferred compensation expense for the three months ended June 30, 2025 increased by $66 million compared with the same period in 2024 primarily driven by changes in broad stock market conditions.

Current wording

Deferred compensation expense for the nine and three months ended September 30, 2025, increased by $50 million and $19 million compared with the same periods in 2024 primarily driven by changes in our stock price.

Previous wording

Research and development expense was largely unchanged during the six and three months ended June 30, 2025, compared with the same periods in 2024.

Current wording

Research and development expense was largely unchanged during the nine and three months ended September 30, 2025, compared with the same periods in 2024.

Previous wording

Eliminations and other unallocated items expense for the six and three months ended June 30, 2025 increased by $325 million and $271 million compared with the same periods in 2024. Eliminations and other unallocated items expense for the six and three months ended June 30, 2025 and 2024, includes earnings charges of $445 million and $244 million related to agreements with the U.S. Department of Justice. For additional discussion, see Note 18 to our Condensed Consolidated Financial Statements.

Current wording

Eliminations and other unallocated items expense for the nine and three months ended September 30, 2025, increased by $587 million and $262 million compared with the same periods in 2024 primarily due to higher General and administrative expense. General and administrative expense for the nine months ended September 30, 2025, and 2024, includes earnings charges of $445 million and $244 million related to agreements with the U.S. Department of Justice. For additional discussion, see Note 19 to our Condensed Consolidated Financial Statements.

Previous wording

Other income, net for the six and three months ended June 30, 2025, increased by $123 million and $77 million compared with the same periods in 2024, primarily due to an increase in interest income on short-term investments and dividend income, partially offset by lower non-operating pension income. For information on changes related to non-operating pension and postretirement expenses, see Note 13 to our Condensed Consolidated Financial Statements.

Current wording

Other income, net for the nine months ended September 30, 2025, increased by $134 million compared with the same period in 2024, primarily due to an increase in interest income on short-term investments and dividend income, partially offset by lower non-operating pension income. Other income, net for the three months ended September 30, 2025, remained largely unchanged compared with the same period in 2024. For information on changes related to non-operating pension and postretirement expenses, see Note 14 to our Condensed Consolidated Financial Statements.

Previous wording

Interest and debt expense for the six and three months ended June 30, 2025, increased by $176 million and $37 million compared with the same periods in the prior year primarily as a result of higher average debt balances.

Current wording

Interest and debt expense for the nine months ended September 30, 2025, increased by $142 million compared with the same period in 2024 primarily as a result of higher average interest rates. Interest and debt expense for the three months ended September 30, 2025, remained largely unchanged compared with the same period in 2024.

Previous wording

Cost of sales for the six months ended June 30, 2025, increased by $7,063 million, or 23%, compared with the same period in 2024, primarily due to higher revenues at BCA. Cost of sales as a percentage of Revenues decreased during the six months ended June 30, 2025, compared with the same period in 2024, primarily due to lower charges on BDS fixed-price development programs and the absence of 737-9 customer considerations at BCA, partially offset by lower program margins at BCA.

Current wording

Cost of sales for the nine months ended September 30, 2025, increased by $11,361 million, or 22%, compared with the same period in 2024, primarily due to higher revenues and an increase in reach-forward losses at BCA, partially offset by lower charges on BDS fixed-price development programs. Cost of sales as a percentage of Revenues decreased during the nine months ended September 30, 2025, compared with the same period in 2024 primarily due to lower charges on BDS fixed-price development programs, partially offset by higher reach-forward losses at BCA.

Previous wording

Cost of sales for the three months ended June 30, 2025, increased by $4,677 million, or 30%, compared with the same period in 2024, primarily due to higher revenues at BCA. Cost of sales as a percentage of Revenues decreased during the three months ended June 30, 2025, compared with the same period in 2024 primarily due to lower charges on BDS fixed-price development programs, partially offset by lower program margins at BCA.

Current wording

Cost of sales for the three months ended September 30, 2025, increased by $4,298 million, or 20%, compared with the same period in 2024, primarily due to higher revenues and an increase in reach-forward losses at BCA, partially offset by lower charges on BDS fixed-price development programs. Cost of sales as a percentage of Revenues decreased during the three months ended September 30, 2025, compared with the same period in 2024 primarily due to lower charges on BDS fixed-price development programs, partially offset by higher reach-forward losses at BCA.

Previous wording

Research and development expense decreased by $68 million and $44 million during the six and three months ended June 30, 2025, compared to the same periods in 2024. The decrease in expense was primarily due to lower spending at BDS.

Current wording

Research and development expense decreased by $325 million and $257 million during the nine and three months ended September 30, 2025, compared to the same periods in 2024. The decrease in expense was primarily due to lower spending at BCA and BDS.

Previous wording

Contractual backlog of unfilled orders excludes purchase options, announced orders for which definitive contracts have not been executed, orders where customers have the unilateral right to terminate, and unobligated U.S. and non-U.S. government contract funding. The increase in contractual backlog of $84,945 million during the six months ended June 30, 2025, was primarily due to an $87,022 million increase in BCA backlog. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

Current wording

Contractual backlog of unfilled orders excludes purchase options, announced orders for which definitive contracts have not been executed, orders where customers have the unilateral right to terminate, and unobligated U.S. and non-U.S. government contract funding. The increase in contractual backlog of $99,749 million during the nine months ended September 30, 2025, was primarily due to a $99,438 million increase in BCA backlog. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

Previous wording

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The increase of $12,257 million in unobligated backlog during the six months ended June 30, 2025 was due to an increase in BDS backlog.

Current wording

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The increase of $14,603 million in unobligated backlog during the nine months ended September 30, 2025 was due to an increase in BDS backlog.

Previous wording

The Full-Year Continuing Appropriations and Extensions Act, 2025, enacted on March 15, 2025, largely continues federal funding at fiscal year 2024 appropriated levels through September 30, 2025. This bill has been deemed to be a full-year appropriations bill in respect to satisfying the requirements of the Fiscal Responsibility Act, avoiding a sequester of defense and non-defense spending in fiscal year 2025 (FY25).

Current wording

The Full-Year Continuing Appropriations and Extensions Act, 2025, enacted on March 15, 2025, largely continued federal funding at fiscal year 2024 appropriated levels through September 30, 2025.

Previous wording

Global Trade The global trade landscape is currently highly volatile. Various countries have announced plans for and/or have implemented new or modified tariffs.

Current wording

Global Trade The global trade landscape is currently highly volatile. Various countries have announced plans for and/or have implemented new or modified tariffs or have eliminated tariffs previously imposed.

Previous wording

During the second quarter of 2025, the United States adjusted various tariff rates, including on aluminum and steel imports, and announced broad reciprocal tariffs on imports from all countries. In May 2025, the U.S. and China reduced the reciprocal tariffs on each other's imports until August 12, 2025, while trade negotiations continue. On May 8, 2025, the United States and the United Kingdom announced a bilateral trade agreement. That agreement became effective June 30, 2025, in the United States and recognizes tariff-free trade of products within the scope of the World Trade Organization Agreement on Trade in Civil Aircraft.

Current wording

During 2025, the U.S. reached bilateral trade agreements that recognize tariff-free trade of products within the scope of the World Trade Organization Agreement on Trade in Civil Aircraft with the United Kingdom, Japan, and the European Union. As of September 30, 2025, the U.S. applies a diverse range of reciprocal tariffs to imports originating from countries that have not concluded bilateral trade agreements with the U.S. The updated reciprocal tariff rates originally announced during the second quarter of 2025 became effective on August 7, 2025. On August 11, 2025, the U.S. and China further extended the pause on the reciprocal tariffs on each other's imports until November 10, 2025, while trade negotiations continue. However, the current state of U.S.-China trade relations remains an ongoing watch item.

Previous wording

In the first quarter of 2025, the United States imposed modified tariffs on aluminum and steel imports and additional tariffs on goods from China. In addition, the United States imposed tariffs on goods imported from Canada and Mexico that are not compliant with the United States-Mexico-Canada Agreement (USMCA). We believe that the majority of our imports from Canada and Mexico are compliant with the provisions of the USMCA.

Current wording

In addition, as of September 30, 2025, the U.S. maintains tariffs announced during the first quarter of 2025 on goods imported from China, as well as goods imported from Canada and Mexico that are not compliant with the United States-Mexico-Canada Agreement (USMCA). We believe that the majority of our imports from Canada and Mexico are compliant with the provisions of the USMCA.

Previous wording

Collectively, these tariffs and any retaliatory actions taken by countries in response to the United States tariffs could have a material impact on our financial position, results of operations and/or cash flows. Our second quarter results reflect our best estimate of the impacts of the tariffs enacted as of June 30, 2025, and certain potential mitigating actions.

Current wording

Collectively, these tariffs, and any retaliatory actions taken by countries in response to the U.S. tariffs, could have a material impact on our financial position, results of operations and/or cash flows. Our year-to-date and third quarter results reflect our best estimate of the impacts of the tariffs enacted as of September 30, 2025, and certain potential mitigating actions.

Previous wording

Supply Chain We and our suppliers are experiencing inflationary pressures, as well as supply chain disruptions as a result of global supply chain constraints and labor instability. Our supply chain is also being impacted by the tariffs and export restrictions discussed above. Certain of our suppliers are also experiencing financial difficulties. We continue to monitor the health and stability of the supply chain. These factors have reduced overall productivity and adversely impacted our financial position, results of operations and cash flows. During 2024, we recorded a reach-forward loss of $1,770 million on the T-7A Red Hawk program that was primarily driven by projected increases in supplier cost estimates. In addition, we recorded losses on the KC-46A Tanker and Commercial Crew programs during 2024 that were partially attributable to higher supplier costs.

Current wording

Supply Chain We and our suppliers are experiencing inflationary pressures, as well as supply chain disruptions as a result of global supply chain constraints and labor instability. Our supply chain is also being impacted by the tariffs and export restrictions discussed above. Certain of our suppliers are also experiencing financial difficulties. We continue to monitor the health and stability of the supply chain. These factors have reduced overall productivity and adversely impacted our financial position, results of operations and cash flows. During 2024, we recorded a reach-forward loss of $1,770 million on the T-7A Red Hawk program that was primarily driven by projected increases in supplier cost estimates. In addition, we recorded losses on the KC-46A Tanker and Commercial Crew programs during 2024 that were partially attributable to higher supplier costs. We recorded a reach-forward loss on the 777X program during the third quarter of 2025 that was partially attributable to higher estimated supplier costs.

Previous wording

BCA revenues increased by $8,365 million for the six months ended June 30, 2025, compared with the same period in 2024 primarily due to higher deliveries across all programs and the absence of 737-9 customer considerations. BCA revenues increased by $4,871 million for the three months ended June 30, 2025, compared with the same period in 2024 primarily due to higher deliveries across all programs.

Current wording

BCA revenues increased by $12,016 million for the nine months ended September 30, 2025, compared with the same period in 2024 primarily due to higher deliveries across all programs and the absence of 737-9 customer considerations. BCA revenues increased by $3,651 million for the three months ended September 30, 2025, compared with the same period in 2024 primarily due to higher deliveries.

Previous wording

BCA loss from operations was $1,094 million for the six months ended June 30, 2025, compared with $1,858 million in the same period in 2024 reflecting higher deliveries, the absence of 737-9 customer considerations and lower abnormal costs partially offset by lower program margins. BCA loss from operations was $557 million for the three months ended June 30, 2025, compared with $715 million in the same period in 2024 reflecting higher deliveries and lower period expenses, partially offset by lower program margins.

Current wording

BCA loss from operations was $6,447 million for the nine months ended September 30, 2025, compared with $5,879 million in the same period in 2024 reflecting a higher reach-forward loss on the 777X program and lower program margins, partially offset by higher deliveries, the absence of 737-9 customer considerations and lower abnormal costs. BCA loss from operations was $5,353 million for the three months ended September 30, 2025, compared with $4,021 million in the same period in 2024 primarily reflecting the higher reach-forward loss on the 777X program, partially offset by higher deliveries and lower period expenses.

Previous wording

BCA total backlog increased from $435,175 million as of December 31, 2024, to $522,197 million at June 30, 2025, 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 cancellations. Aircraft order cancellations during the six months ended June 30, 2025, totaled $2,649 million and primarily relate to 737 aircraft. Net ASC 606 adjustments during the six months ended June 30, 2025, totaled $12,431 million and primarily relate to 777X aircraft. ASC 606 adjustments include consideration of aircraft orders where a customer-controlled contingency may exist, as well as an assessment of whether the customer is committed to perform, impacts of geopolitical events or related sanctions, or whether it is probable that the customer will pay the full amount of consideration when it is due. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

Current wording

BCA total backlog increased from $435,175 million as of December 31, 2024, to $534,613 million at September 30, 2025, 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 cancellations. Aircraft order cancellations during the nine months ended September 30, 2025, totaled $3,037 million and primarily relate to 737 aircraft. Net ASC 606 adjustments during the nine months ended September 30, 2025, totaled $9,951 million and primarily relate to 777X and 787 aircraft. ASC 606 adjustments include consideration of aircraft orders where a customer-controlled contingency may exist, as well as an assessment of whether the customer is committed to perform, impacts of geopolitical events or related sanctions, or whether it is probable that the customer will pay the full amount of consideration when it is due. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

Previous wording

*Approximate undelivered orders by minor model for June 30, 2025 and December 31, 2024: 737-7 (7%), 737-8 (63%), 737-9 (5%) and 737-10 (25%).

Current wording

*Approximate undelivered orders by minor model for September 30, 2025 and December 31, 2024: 737-7 (7%, 7%), 737-8 (62%, 63%), 737-9 (4%, 5%) and 737-10 (27%, 25%).

Previous wording

737 Program In January 2024, a 737-9 flight made an emergency landing after a mid-exit door plug detached in flight. As a result of the accident, the FAA investigated the 737 quality control system, including Spirit AeroSystems Holdings, Inc. (Spirit), and increased its oversight of Boeing’s production and quality and safety management systems. The FAA also 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. In 2024, we submitted a comprehensive safety and quality plan to the FAA to address the issues identified in connection with the FAA's investigation. We also took additional actions to improve safety and quality, which include investing in workforce training, simplifying plans and processes, eliminating defects, and enhancing our safety and quality culture. In 2025, we are continuing to implement these improvements and align our production plans consistent with the comprehensive safety and quality plan.

Current wording

737 Program In January 2024, a 737-9 flight made an emergency landing after a mid-exit door plug detached in flight. As a result of the accident, the FAA investigated the 737 quality control system, including Spirit AeroSystems Holdings, Inc. (Spirit), and increased its oversight of Boeing’s production and quality and safety management systems. The FAA also communicated it will not support production rate increases beyond 38 per month or additional production lines until Boeing has complied with required quality and safety standards. In 2024, we submitted a comprehensive safety and quality plan to the FAA to address the issues identified in connection with the FAA's investigation. We also took additional actions to improve safety and quality, which include investing in workforce training, simplifying plans and processes, eliminating defects, and enhancing our safety and quality culture. In 2025, we are continuing to implement these improvements and align our production plans consistent with the comprehensive safety and quality plan.

Previous wording

We increased the accounting quantity by 400 units during the six months ended June 30, 2025 due to the

Current wording

We increased the accounting quantity by 400 units during the nine months ended September 30, 2025 due to the program's normal progress of obtaining additional orders and delivering airplanes. We gradually increased the production rate to 38 per month during the first half of 2025 operating within our safety and quality plan. In October 2025, after extensive reviews of the key performance indicators (KPIs), the FAA and Boeing jointly agreed the KPIs and rate readiness process guided by our Safety Management System supported an increase of the 737 production rate to 42 per month. As of September 30, 2025, we had approximately five 737-8 aircraft in inventory for customers in China that were produced prior to 2023. We are scheduled to deliver these aircraft in 2025. It is currently unclear whether the trade tensions between the U.S. and China will impact future deliveries to China.

Previous wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. We are currently targeting a production rate of approximately three aircraft per month. We expect to complete production of the 767 commercial program by 2027. This program has break-even gross margins.

Current wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. We are currently targeting a production rate of approximately three aircraft per month. We expect to complete production of the 767 commercial program by 2027. During 2024, we recorded reach-forward losses of $580 million. During the nine months ended September 30, 2025, we recorded further reach-forward losses of $241 million primarily driven by higher production costs.

Previous wording

777 and 777X Programs The accounting quantity for the 777 program extends through year-end 2027. We increased the accounting quantity by three units during the six months ended June 30, 2025, because we now expect to produce an additional three units in that timeframe. We are currently targeting a combined production rate of four per month for the 777/777X programs.

Current wording

777 and 777X Programs The accounting quantity for the 777 program extends through year-end 2027. We increased the accounting quantity by six units during the nine months ended September 30, 2025, because we now expect to produce an additional six units in that timeframe. Cumulative firm orders for the 777X increased from 358 units at December 31, 2024, to 473 units at September 30, 2025. We increased the accounting quantity for the 777X program by 100 units to 600 units during the nine months ended September 30, 2025.

Previous wording

In July 2024, we obtained approval from the FAA to begin the first phase of FAA certification flight testing. The first phase of flight testing was paused starting in August 2024 and resumed in January 2025. During the first six months of 2025, we obtained approval from the FAA to begin additional phases of certification flight testing.

Current wording

In July 2024, we obtained approval from the FAA to begin the first phase of certification flight testing. Flight testing was paused starting in August 2024 and resumed in January 2025. During the first nine months of 2025, we obtained approval from the FAA to begin the second major phase of certification flight testing, and we had anticipated beginning the third major phase of certification flight testing in the third quarter of 2025. It has taken longer than expected to complete the supporting analysis and obtain FAA approval to begin this phase of testing. We anticipate obtaining FAA approval and starting the third phase of flight testing later this year or early next year. We have also reassessed the anticipated timing to complete subsequent phases of FAA certification flight testing. As a result, we now expect first delivery of the 777-9 to occur in 2027. Due to these delays and to address continued production challenges, we slowed our production rate plans, which resulted in higher estimated production and change-incorporation costs, as well as associated customer and supply chain impacts. The impact of these changes on estimated revenues and costs were partially offset by the 100-unit accounting quantity increase, resulting in an incremental reach-forward loss of $4,899 million during the third quarter of 2025.

Previous wording

We continue to anticipate first delivery of the 777-9 to occur in 2026 and the 777-8 Freighter to occur in 2028. First delivery of the 777-8 passenger aircraft is not expected to occur before 2030. We are following the lead of the FAA as we work through the certification process and the ultimate timing will be determined by the regulators.

Current wording

We continue to anticipate first delivery of the 777-8 Freighter to occur approximately two years after the first delivery of the 777-9. First delivery of the 777-8 passenger aircraft is not expected to occur before 2030. We are continuing to follow the lead of the FAA as we work through the certification process and the ultimate timing will be determined by the regulators.

Previous wording

The 777X program had break-even gross margins at June 30, 2025. The level of profitability on the 777X program will be subject to several factors. These factors include aircraft certification requirements and timing, change incorporation on completed aircraft, production disruption due to labor instability and supply chain disruption, customer considerations, delivery timing and negotiations, further production rate adjustments for the 777X or other commercial aircraft programs, and any change in the accounting quantity. One or more of these factors could result in reach-forward losses in future periods.

Current wording

The level of profitability on the 777X program will be subject to several factors. These factors include aircraft certification requirements and timing, change incorporation on completed aircraft, production disruption due to labor instability and supply chain disruption, customer considerations, delivery timing and negotiations, further production rate adjustments for the 777X or other commercial aircraft programs, and any change in the accounting quantity. One or more of these factors could result in additional reach-forward losses in future periods.

Previous wording

787 Program During the second quarter of 2025, the program began increasing the production rate to seven per month. We are continuing to monitor supply chain health and factory performance as we work to increase production rates. As of June 30, 2025, we had approximately 15 aircraft in inventory, including three aircraft for customers in China, that were produced prior to 2023 and required rework. In February 2025, we completed the rework of the last aircraft and expect to deliver the majority of these aircraft in 2025. It is currently unclear whether the trade tensions between the U.S. and China will impact future deliveries to China.

Current wording

787 Program The 787 program began increasing the production rate to seven per month during the second quarter of 2025 and continues to work toward stabilizing production. We are continuing to monitor supply chain health and factory performance as we work to increase production rates. As of September 30, 2025, and December 31, 2024, we had approximately 10 aircraft and 25 aircraft in inventory that were produced prior to 2023 and required rework. In February 2025, we completed the rework of the last aircraft, and we expect to deliver the 10 aircraft in inventory in 2025 and 2026. It is currently unclear whether the trade tensions between the U.S. and China will impact future deliveries to China.

Previous wording

In May 2025, the U.S. government released the President's budget request for fiscal year 2026 (FY26), which requested $848 billion in funding for the U.S. Department of Defense (U.S. DoD) and $19 billion for the National Aeronautics and Space Administration (NASA). The corresponding FY25 appropriated levels are $856 billion for U.S. DoD and $25 billion for NASA.

Current wording

In May 2025, the U.S. government released the President's budget request for fiscal year 2026 (FY26), which requested $848 billion in funding for the DoW and $19 billion for NASA. The corresponding FY25 appropriated levels are $856 billion for the DoW and $25 billion for NASA.

Previous wording

There is ongoing uncertainty with respect to final program-level spending for the U.S. DoD, NASA and other government agencies for FY26 and beyond. Future budget cuts or investment priority changes, including changes associated with the authorizations and appropriations process, could result in reductions, cancellations and/or delays of existing contracts or programs. Any of these impacts could have a material effect on our financial position, results of operations and/or cash flows.

Current wording

There is ongoing uncertainty with respect to final program-level spending for the DoW, NASA and other government agencies for FY26 and beyond. Future budget cuts or investment priority changes, including changes associated with the authorizations and appropriations process, could result in reductions, cancellations and/or delays of existing contracts or programs. Any of these impacts could have a material effect on our financial position, results of operations and/or cash flows.

Previous wording

The non-U.S. market continues to be driven by complex and evolving security challenges and the need to modernize aging equipment and inventories. BDS expects that it will continue to have a wide range of opportunities across Asia, Europe and the Middle East given the diverse regional threats. At June 30, 2025, 22% of BDS backlog was attributable to non-U.S. customers.

Current wording

The non-U.S. market continues to be driven by complex and evolving security challenges and the need to modernize aging equipment and inventories. BDS expects that it will continue to have a wide range of opportunities across Asia, Europe and the Middle East given the diverse regional threats. At September 30, 2025, 20% of BDS backlog was attributable to non-U.S. customers.

Previous wording

BDS revenues for the six months ended June 30, 2025, decreased by $56 million compared with the same period in 2024. The decrease is primarily due to lower volume on certain programs including P-8, Ground-based Midcourse Defense and E-7, as well as the absence of a favorable MQ-25 contract modification that was awarded during the first quarter of 2024. The decrease in revenue was largely offset by $608 million of lower net unfavorable cumulative contract catch-up adjustments compared to the prior year comparable period.

Current wording

BDS revenues for the nine months ended September 30, 2025, increased by $1,310 million compared with the same period in 2024. The increase is primarily due to $1,438 million lower net unfavorable cumulative contract catch-up adjustments compared to the prior year comparable period. The increase in revenue was partially offset by the absence of a favorable MQ-25 contract modification that was awarded during the first quarter of 2024.

Previous wording

BDS earnings from operations for the six months ended June 30, 2025, was $265 million, compared with loss from operations of $762 million in the same period in 2024. The increase in earnings is primarily due to lower net unfavorable cumulative catch-up adjustments of $1,352 million compared to the prior year comparable period. The lower net unfavorable cumulative contract catch-up adjustments were partially offset by lower volume. During the six months ended June 30, 2024, losses incurred on the five major fixed-price development programs totaled $1,266 million.

Current wording

BDS earnings from operations for the nine months ended September 30, 2025, was $379 million, compared with a loss from operations of $3,146 million in the same period in 2024. The year-over-year improvement in earnings is primarily due to lower net unfavorable cumulative catch-up adjustments of $3,714 million compared to the prior year comparable period. During the nine months ended September