BOEING CO

Consolidated Results of Operations

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

(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 44-45 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.

The following table summarizes Revenues:

Revenues for the three months ended March 31, 2026, increased by $2,721 million compared with the same period in 2025 primarily driven by higher revenues at Defense, Space & Security (BDS) and Commercial Airplanes (BCA).

Earnings from Operations

The following table summarizes Earnings from operations:

• The FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments.

** Core operating earnings is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 44-45.

Earnings from operations for the three months ended March 31, 2026, decreased by $13 million compared with the same period in 2025, primarily driven by unfavorable changes in the FAS/CAS service cost adjustment ($107 million) and higher loss from operations at BCA ($26 million), partially offset by higher earnings from operations at BDS ($78 million) and Global Services (BGS) ($28 million).

Core operating earnings for the three months ended March 31, 2026, increased by $94 million compared with the same period in 2025, primarily due to higher Segment operating earnings and changes in the FAS/CAS service cost adjustment as described above.

For information related to Postretirement Plans, see Note 13 to our Condensed Consolidated Financial Statements.

Unallocated Items, Eliminations and Other

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

Unallocated share-based plans expense for the three months ended March 31, 2026, increased by $25 million compared with the same period in 2025 primarily due to the timing of when share-based plans expense was recorded compared with when it was allocated to our segments.

Deferred compensation income for the three months ended March 31, 2026, increased by $12 million compared with the same period in 2025 driven by changes in broad stock market conditions, including changes in our stock price.

Research and development expense for the three months ended March 31, 2026, increased by $22 million compared with the same period in 2025 due to increases in enterprise investments in product development.

Eliminations and other unallocated items expense for the three months ended March 31, 2026, decreased by $50 million compared with the same periods in 2025 primarily due to lower unallocated expenses.

Other Earnings Items

Other income, net for the three months ended March 31, 2026, decreased by $129 million compared with the same period in 2025, primarily due to higher non-operating pension expense.

Interest and debt expense for the three months ended March 31, 2026, decreased by $92 million compared with the same period in 2025 primarily as a result of lower debt balances.

For a discussion related to Income Taxes, see Note 4 to our Condensed Consolidated Financial Statements.

Total Costs and Expenses (“Cost of Sales”)

Cost of sales, for both products and services, consists primarily of raw materials, parts, sub-assemblies, labor, overhead and subcontracting costs. Our BCA segment predominantly uses program accounting to account for cost of sales. Under program accounting, cost of sales for each commercial aircraft program equals the product of (i) revenue recognized in connection with customer deliveries and (ii) the estimated cost of sales percentage applicable to the total remaining program. For long-term contracts, the amount reported as cost of sales is recognized as incurred. Substantially all contracts at our BDS segment and certain contracts at our BGS segment are long-term contracts with the U.S. government and other customers that generally extend over several years. Cost of sales for commercial spare parts is recorded at average cost.

The following table summarizes cost of sales:

Cost of sales for the three months ended March 31, 2026, increased by $2,592 million, or 15%, compared with the same period in 2025, primarily due to higher revenues at BCA and BDS. Cost of sales as a percentage of Revenues increased during the three months ended March 31, 2026, compared with the same period in 2025 primarily due to lower margins at BGS.

Research and Development

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

Research and development expense increased by $59 million during the three months ended March 31, compared to the same period in 2025. The increase in expense was primarily due to higher spending at BCA.

Backlog

Contractual backlog of unfilled orders excludes purchase options, announced orders for which definitive contracts have not been executed, orders where customers have the unilateral right to terminate, and unobligated U.S. and non-U.S. government contract funding. The increase in contractual backlog of $12,950 million during the three months ended March 31, 2026, was primarily due to a $8,293 million increase in BCA backlog and $2,856 million increase in BGS contractual backlog. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The decrease of $448 million in unobligated backlog during the three months ended March 31, 2026 was due to a decrease in BDS unobligated backlog partially offset by an increase in BGS unobligated backlog.

U.S. Government Funding Considerable uncertainty exists regarding how future U.S. government budget and program decisions will unfold, including the spending priorities of the Administration and Congress. As of March 31, 2026, the majority of government departments and agencies, including the Department of War (DoW), the National Aeronautics and Space Administration (NASA), and the Department of Transportation are funded through September 30, 2026.

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

Following the February 20, 2026, Supreme Court ruling regarding the imposition of tariffs under the International Emergency Economic Powers Act (IEEPA), U.S. Customs and Border Protection is developing refund procedures for tariffs previously paid under IEEPA. Concurrently, the Administration imposed a temporary 10% general tariff under Section 122 of the Trade Act of 1974 subject to several exemptions, including the import into the United States of certain aerospace products. These developments did not have a material impact on our financial position, results of operations and cash flows during the first quarter of 2026.

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

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

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

Human Capital Some of our and our suppliers' workforces are represented by labor unions. Work stoppages and instability in our and our suppliers' union relationships have in the past and could in the future disrupt and/or delay the production, delivery and/or development of our products, which could strain relationships with customers and result in lower revenues, earnings and cash flows. If we are unable to successfully negotiate successor agreements with our unions that our employees will ratify (including with Society of Professional Engineering Employees in Aerospace who have two contacts expiring October 2026), we may experience additional work stoppages in the future, which could materially adversely affect our business, financial position, results of operations and cash flows.