BOEING CO

Previous wording

(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 49-50 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.

Current wording

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

Previous wording

Revenues for the six and three months ended June 30, 2026, increased by $4,532 million and $1,811 million compared with the same periods in 2025 primarily driven by higher revenues at Defense, Space & Security (BDS) and Commercial Airplanes (BCA).

Current wording

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

Previous wording

** Core operating earnings is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 49-50.

Current wording

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

Previous wording

Core operating earnings for the six and three months ended June 30, 2026, increased by $528 million and $434 million compared with the same periods in 2025, primarily due to a decrease in loss from operations on Unallocated items, eliminations, and other.

Current wording

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

Previous wording

Deferred compensation expense for the six and three months ended June 30, 2026, increased by $27 million and $39 million compared with the same periods in 2025 due to changes in broad stock market conditions.

Current wording

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

Previous wording

Research and development expense for the six and three months ended June 30, 2026, increased by $27 million and $5 million compared with the same periods in 2025 due to increases in enterprise investments in product development.

Current wording

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

Previous wording

Eliminations and other unallocated items expense for the six and three months ended June 30, 2026, decreased by $477 million and $427 million compared with the same periods in 2025. The decrease reflects the absence of an earnings charge of $445 million recorded in the second quarter of 2025 related to an agreement with the Department of Justice.

Current wording

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

Previous wording

Other income, net for the six and three months ended June 30, 2026, decreased by $375 million and $246 million compared with the same periods in 2025, primarily due to higher non-operating pension expense.

Current wording

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

Previous wording

Interest and debt expense for the six and three months ended June 30, 2026, decreased by $202 million and $110 million compared with the same periods in 2025, primarily as a result of lower debt balances.

Current wording

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

Previous wording

Research and development expense increased by $70 million and $11 million during the six and three months ended June 30, 2026, compared with the same periods in 2025, primarily due to higher spending at BCA.

Current wording

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

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 $34,785 million during the six months ended June 30, 2026, was primarily due to a $29,434 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 $53,046 million during the nine months ended September 30, 2026, was primarily due to a $44,543 million increase in BCA backlog. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.

Previous wording

Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The decrease of $1,731 million in unobligated backlog during the six months ended June 30, 2026 was due to a decrease in BDS backlog primarily reflecting reclassifications to contractual backlog, partially offset by new awards.

Current wording

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

Previous wording

Following the February 20, 2026, Supreme Court ruling regarding the imposition of tariffs under the International Emergency Economic Powers Act (IEEPA), U.S. Customs and Border Protection defined processes for submitting claims for tariffs previously paid under IEEPA. Tariffs did not have a material impact on our financial position, results of operations and cash flows during the first half of 2026.

Current wording

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

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. We recorded a reach-forward loss on the 777X program during 2025 that was partially attributable to higher estimated 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 $4.9 billion reach-forward loss on the 777X program during 2025 that was partially attributable to higher estimated supplier costs. During the third quarter of 2026, we experienced supplier shortages which have disrupted factory operations. This is adversely affecting the KC-46A Tanker and the 777 Freighter programs. We expect this disruption to continue into 2027 and result in abnormal production costs, which are expensed as incurred.

Previous wording

Human Capital Some of our and our suppliers' workforces are represented by labor unions. Work stoppages and instability in our and our suppliers' union relationships have in the past and could in the future disrupt and/or delay the production, delivery and/or development of our products and services, which could strain relationships with customers and result in lower revenues, earnings and cash flows. If we are unable to successfully negotiate successor agreements with our unions that our employees will ratify, we may experience additional work stoppages in the future and/or higher than anticipated costs, which could materially adversely affect our business, financial position, results of operations and cash flows. We have two contracts with the Society of Professional Engineering Employees in Aerospace expiring October 6, 2026, and we are currently in negotiations working toward reaching new agreements in the third quarter of 2026.

Current wording

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

Previous wording

BCA revenues increased by $1,933 million for the six months ended June 30, 2026, compared with the same period in 2025 primarily due to higher deliveries on 737 and 787 programs partially offset by lower deliveries on 777 program. BCA revenues increased by $877 million for the three months ended June 30, 2026, compared with the same period in 2025 primarily due to higher deliveries on 737 program partially offset by lower deliveries on 777 program.

Current wording

BCA revenues increased by $1,559 million for the nine months ended September 30, 2026, compared with the same period in 2025 primarily due to higher deliveries on 737 program, and favorable pricing on 787 program, partially offset by lower deliveries on 777 program. BCA revenues decreased by $374 million for the three months ended September 30, 2026, compared with the same period in 2025 primarily due to less favorable delivery mix.

Previous wording

BCA total backlog increased from $567,290 million as of December 31, 2025, to $596,724 million at June 30, 2026, reflecting new orders in excess of deliveries. Aircraft order cancellations during the six months ended June 30, 2026, totaled $2,777 million and primarily relate to 737 aircraft. Net ASC 606 adjustments during the six months ended June 30, 2026, totaled $2,089 million and primarily relate to 737 and 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 $567,290 million as of December 31, 2025, to $611,833 million at September 30, 2026, reflecting new orders in excess of deliveries. Aircraft order cancellations during the nine months ended September 30, 2026, totaled $3,164 million and primarily relate to 737 and 787 aircraft. Net ASC 606 adjustments decreased backlog by $1,886 million during the nine months ended September 30, 2026, primarily related to 777X aircraft partially offset by 737 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, 2026 and December 31, 2025: 737-7 (6%, 6%), 737-8 (58%, 60%), 737-9 (5%, 5%) and 737-10 (31%, 29%).

Current wording

*Approximate undelivered orders by minor model for September 30, 2026 and December 31, 2025: 737-7 (6%, 6%), 737-8 (58%, 60%), 737-9 (3%, 5%) and 737-10 (33%, 29%).

Previous wording

737 Program We increased the accounting quantity by 400 units during the six months ended June 30, 2026, due to the program's normal progress of obtaining additional orders and delivering airplanes. During the first half of 2026, the 737 program began to transition from a production rate of 42 to 47 per month with the concurrence of the Federal Aviation Administration (FAA). We are also planning for additional production rate increases beyond 47 per month and began low-rate production on a new 737 production line in July 2026. The new production line must be production-certified by the FAA prior to first delivery.

Current wording

737 Program We increased the accounting quantity by 400 units during the nine months ended September 30, 2026, due to the program's normal progress of obtaining additional orders and delivering airplanes. The accounting quantity was unchanged during the three months ended September 30, 2026. During the second quarter of 2026, the 737 program began to transition from a production rate of 42 to 47 per month with the concurrence of the Federal Aviation Administration (FAA). We continue to work toward stabilizing production at 47 per month and now expect to stabilize in 2027. Consistent with our focus on safety and quality, after demonstrating stability at rate 47 for a period of time, we plan to increase to rate 52. We began low-rate production on a new 737 production line in July 2026. The new production line must be production-certified by the FAA prior to first delivery.

Previous wording

We continue to expect certification of the 737-7 and 737-10 in 2026, including the final certification of the engine anti-ice solution. As of June 30, 2026, we had approximately 40 737-7 and 737-10 aircraft in inventory. 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

In the third quarter of 2026, we achieved certification of the 737-7 and the engine anti-ice solution. In October 2026, we achieved certification of the 737-10. As of September 30, 2026, we had approximately 45 737-7 and 737-10 aircraft in inventory.

Previous wording

If we are unable to deliver aircraft and/or increase production rates or certify the 737-7 and 737-10 models consistent with our assumptions, our financial position, results of operations and cash flows will be adversely affected.

Current wording

The delay in future production rate increases is adversely affecting our financial position, results of operations and cash flows. If we are unable to deliver aircraft and/or increase production rates consistent with our assumptions, our financial position, results of operations and cash flows will be further adversely affected.

Previous wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. We are targeting a production rate of approximately three aircraft per month. We expect to complete production of the 767 commercial program by 2027. This program recorded a reach-forward loss of $40 million during the first half of 2026 and $191 million in the same period in 2025.

Current wording

767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. We are targeting a production rate of approximately three aircraft per month. We expect to complete production of the 767 commercial program by 2027. This program recorded a reach-forward loss of $86 million during the nine months ended September 30, 2026, and $241 million in the same period in 2025, primarily driven by higher production costs.

Previous wording

777 and 777X Programs The accounting quantity for the 777 program extends through year-end 2027 and reflects the number of units we expect to produce and deliver by 2027.

Current wording

777 and 777X Programs We increased the accounting quantity for the 777 program by 21 units during the three months ended September 30, 2026, after FAA approval was received to enable production and delivery of 777 Freighters beyond January 1, 2028. The 777 accounting quantity reflects the number of units we expect to produce and deliver by 2029.

Previous wording

We continue to expect first delivery of the 777-9 to occur in 2027. 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.

Current wording

On the 777X program, we continue to work through certification flight testing and expect to receive approval on the final phases of flight testing by the end of 2026. We continue to work with the FAA and our supplier to incorporate and certify their solution related to the engine durability issue identified in 2025. We continue to expect first delivery of the 777-9 to occur in 2027. 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 level of profitability on the 777X program will be subject to several factors. These factors include aircraft certification requirements and timing, resolution of the engine durability issue, flight test discoveries, design changes, change incorporation on completed aircraft, supply chain shortages, 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.

Current wording

The 777 and 777X programs have near break-even gross margins as of September 30, 2026. The level of profitability on these programs will be subject to several factors. These factors include supply chain shortages, production disruption due to labor and supply chain instability, customer considerations, delivery timing and negotiations, further production rate adjustments for these programs or other commercial aircraft programs, and any change in the accounting quantity. For the 777X program, these factors also include aircraft certification requirements and timing, resolution of the engine durability issue, flight test discoveries, design changes, and change incorporation on completed aircraft. One or more of these factors could result in higher than expected abnormal costs and/or additional reach-forward losses in future periods.

Previous wording

787 Program We increased the accounting quantity by 100 units during the three months ended March 31, 2026, due to the program's normal progress of obtaining additional orders and delivering airplanes. The accounting quantity was unchanged during the three months ended June 30, 2026. During the fourth quarter of 2025, we began increasing the production rate to eight per month. We continued to work toward stabilizing production during the first quarter of 2026. We briefly slowed the factory in April 2026 due to supply chain shortages. The factory recovered in May, and we have now stabilized at eight per month enabled by continued supply chain and factory recovery.

Current wording

787 Program We increased the accounting quantity by 100 units during the three months ended March 31, 2026, due to the program's normal progress of obtaining additional orders and delivering airplanes. During the fourth quarter of 2025, we began increasing the production rate to eight per month. We continued to work toward stabilizing production during the first quarter of 2026. We briefly slowed the factory in April 2026 due to supply chain shortages. The factory recovered in May, and we have now stabilized at eight per month enabled by continued supply chain and factory recovery. During the third quarter of 2026, we decided to delay planned production rate increases with the next increase beyond eight per month now planned to begin in December 2026. Subsequent increases in production rates will be enabled by the completion of expansion projects underway in our Charleston facility and the ability of our supply chain to support higher rates. Delays in planned production rate increases are adversely affecting our financial position, results of operations and 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, 2026, 27% 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, 2026, 23% of BDS backlog was attributable to non-U.S. customers.

Previous wording

BDS revenues for the six months ended June 30, 2026, increased by $2,167 million compared with the same period in 2025. The increase was primarily due to increased revenues on proprietary and weapons programs, higher KC-46 volume and Foreign Military Sales to Israel and Japan, and the acquisition of Spirit's defense business. Revenue was further increased by $135 million 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, 2026, increased by $3,200 million compared with the same period in 2025. The increase was primarily due to increased revenues on proprietary and weapons programs, KC-46A programs, and the acquisition of Spirit's defense business. Revenue was further increased by $445 million lower net unfavorable cumulative contract catch-up adjustments compared to the prior year comparable period.

Previous wording

BDS revenues for the three months ended June 30, 2026, increased by $866 million compared with the same period in 2025. The increase was primarily due to increased revenues on proprietary and weapons programs, higher KC-46 volume and the acquisition of Spirit's defense business. The net cumulative contract catch-up adjustments were $11 million less unfavorable than the comparable period in the prior year.

Current wording

BDS revenues for the three months ended September 30, 2026, increased by $1,033 million compared with the same period in 2025. The increase was primarily due to increased revenues on proprietary and weapons programs, KC-46A, and the acquisition of Spirit's defense business. Revenues were further increased by $310 million lower unfavorable cumulative contract catch-up adjustments than the comparable period in the prior year.

Previous wording

BDS loss from operations for the three months ended June 30, 2026, was $15 million compared with earnings from operations of $110 million in the same period in 2025. The $125 million decrease in earnings is primarily due to higher net unfavorable cumulative catch-up adjustments of $186 million compared to the prior year comparable period and higher general and administrative expense, partially offset by higher volume. The higher net unfavorable cumulative catch-up adjustments were primarily driven by the 2026 reach-forward loss on VC-25B ($280 million). See Note 10.

Current wording

BDS earnings from operations for the nine months ended September 30, 2026, was $710 million, compared with earnings from operations of $379 million in the same period in 2025. The $331 million increase in earnings is primarily due to a $252 million gain recognized on the sale of an equity method investment, higher volume compared to the prior year, and $29 million less net unfavorable cumulative catch-up adjustments, partially offset by higher general and administrative expense. The cumulative catch-up adjustment includes $312 million of losses on VC-25B in 2026 partially offset by $149 million of losses on KC-46A in 2025.

Previous wording

BDS earnings/(loss) from operations includes our share of earnings from equity method investments of $4 million and $8 million for the six and three months ended June 30, 2026, compared with $20 million and $14 million for the same periods in 2025.

Current wording

BDS earnings from operations includes our share of loss from equity method investments of $11 million and $15 million for the nine and three months ended September 30, 2026, compared with earnings of $30 million and $10 million for the same periods in 2025.

Previous wording

BDS backlog was $85,322 million at June 30, 2026 compared with $84,786 million as of December 31, 2025. The increase reflects the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods.

Current wording

BDS backlog was $100,505 million at September 30, 2026 compared with $84,786 million as of December 31, 2025. The increase reflects the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods.

Previous wording

BGS revenues for the six months ended June 30, 2026 increased by $370 million compared with the same period in 2025, primarily due to higher commercial and government services revenue, partially offset by the absence of $632 million of revenue as a result of the Digital Aviation Solutions Divestiture. The net favorable impact of cumulative contract catch-up adjustments for the six months ended June 30, 2026, was $51 million higher than the net unfavorable impact in the prior year comparable period.

Current wording

BGS revenues for the nine months ended September 30, 2026 increased by $574 million compared with the same period in 2025, primarily due to higher commercial and government services revenue, partially offset by the absence of $969 million of revenue as a result of the Digital Aviation Solutions Divestiture. The net favorable impact of cumulative contract catch-up adjustments for the nine months ended September 30, 2026, was $18 million higher than the net unfavorable impact in the prior year comparable period.

Previous wording

BGS revenues for the three months ended June 30, 2026 increased by $63 million compared with the same period in 2025, primarily due to higher commercial and government services revenue, partially offset by the absence of $327 million of revenue as a result of the Digital Aviation Solutions Divestiture. The net favorable impact of cumulative contract catch-up adjustments for the three months ended June 30, 2026 was $13 million higher than the net favorable impact in the prior year comparable period.

Current wording

BGS revenues for the three months ended September 30, 2026 increased by $204 million compared with the same period in 2025, primarily due to higher commercial and government services revenue, partially offset by the absence of $337 million of revenue as a result of the Digital Aviation Solutions Divestiture. The net unfavorable impact of cumulative contract catch-up adjustments for the three months ended September 30, 2026 was $33 million higher than the net favorable impact in the prior year comparable period.

Previous wording

BGS earnings from operations for the six months ended June 30, 2026 decreased by $53 million compared with the same period in 2025 primarily due to the absence of $145 million of earnings as a result of the Digital Aviation Solutions Divestiture, partially offset by higher government services revenue. A 2026 gain on asset disposition offset a similar gain on asset disposition in 2025. The net unfavorable impact of cumulative contract catch-up adjustments for the six months ended June 30, 2026, was $57 million lower than the net unfavorable impact in the prior year comparable period. The Digital Aviation Solutions Divestiture and ongoing disruption in one of our distribution businesses resulting from the transition to a new enterprise resource planning system in late 2025 contributed to the year-over-year reduction in operating margins.

Current wording

BGS earnings from operations for the nine months ended September 30, 2026 increased by $28 million compared with the same period in 2025 primarily due to higher government and commercial services revenue, partially offset by the absence of $229 million of earnings as a result of the Digital Aviation Solutions Divestiture. A 2026 gain on asset disposition offset a similar gain on asset disposition in 2025. The net unfavorable impact of cumulative contract catch-up adjustments for the nine months ended September 30, 2026 was $22 million lower than the net unfavorable impact in the prior year comparable period. The Digital Aviation Solutions Divestiture and ongoing disruption in one of our distribution businesses resulting from the transition to a new enterprise resource planning system in late 2025 contributed to the year-over-year reduction in operating margins.

Previous wording

BGS earnings from operations for the three months ended June 30, 2026 decreased by $81 million compared with the same period in 2025 primarily due to the absence of $78 million of earnings as a result of the Digital Aviation Solutions Divestiture. A 2026 gain on asset disposition offset a similar gain on asset disposition in 2025. The net unfavorable impact of cumulative contract catch-up adjustments for the three months ended June 30, 2026 was $16 million lower than the net unfavorable impact in the prior year comparable period. The year-over-year reduction in operating margins reflects the Digital Aviation Solutions Divestiture and ongoing disruption in one of our distribution businesses resulting from the transition to a new enterprise resource planning system in late 2025.

Current wording

BGS earnings from operations for the three months ended September 30, 2026 increased by $81 million compared with the same period in 2025 primarily due higher commercial and government services revenue, partially offset by the absence of $84 million of earnings as a result of the Digital Aviation Solutions Divestiture. The net unfavorable impact of cumulative contract catch-up adjustments for the three months ended September 30, 2026 was $34 million higher than the net favorable impact in the prior year comparable period.

Previous wording

BGS total backlog increased from $29,720 million at December 31, 2025 to $32,840 million at June 30, 2026, primarily due to the timing of awards, partially offset by revenue recognized on contracts awarded in prior years.

Current wording

BGS total backlog increased from $29,720 million at December 31, 2025 to $32,725 million at September 30, 2026, primarily due to the timing of awards, partially offset by revenue recognized on contracts awarded in prior years.

Previous wording

Operating Activities Net cash provided by operating activities was $1.2 billion during the six months ended June 30, 2026, compared with cash used of $1.4 billion during the same period in 2025, primarily driven by favorable changes in working capital.

Current wording

Operating Activities Net cash provided by operating activities was $2.7 billion during the nine months ended September 30, 2026, compared with cash used of $0.3 billion during the same period in 2025, primarily driven by favorable changes in working capital.

Previous wording

Changes in assets and liabilities during the six months ended June 30, 2026, improved by $2.1 billion compared with the same period in 2025, primarily driven by favorable changes in Advances and progress billings ($5.3 billion) and Accounts payable ($1.4 billion), partially offset by unfavorable changes in Inventories ($3.5 billion), Other current assets ($0.9 billion), and Accrued liabilities ($0.8 billion). The change in Advances and progress billings was primarily driven by higher advances and progress billings at BCA and BDS. The changes in Accounts payable and Inventories reflect increased production in our commercial airplanes business.

Current wording

Changes in assets and liabilities during the nine months ended September 30, 2026, improved by $2.3 billion compared with the same period in 2025, primarily driven by favorable changes in Advances and progress billings ($10.2 billion) and Accounts payable ($1.9 billion), partially offset by unfavorable changes in Inventories ($6.6 billion) and Accrued liabilities ($2.1 billion). The change in Advances and progress billings was primarily driven by higher advances and progress billings at BCA and BDS. The changes in Accounts payable and Inventories reflect increased production in our commercial airplanes business. The change in Accrued liabilities reflects the payments made during the third quarter of 2026 pursuant to the May 2025 non-prosecution agreement with the U.S. Department of Justice. See Note 19 for additional discussion.

Previous wording

Payables related to suppliers who elected to participate in supply chain financing programs were largely unchanged during the six months ended June 30, 2026 and decreased by $1.1 billion during the same period in 2025. At June 30, 2026 and December 31, 2025, payables related to suppliers who elected to participate in supply chain programs were $2.0 billion.

Current wording

Payables related to suppliers who elected to participate in supply chain financing programs increased by $0.2 billion during the nine months ended September 30, 2026 and decreased by $0.8 billion during the nine months ended September 30, 2025.