The Boeing Company

01/30/2026 | Press release | Distributed by Public on 01/30/2026 13:25

Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Consolidated Results of Operations and Financial Condition
Overview
We are a global market leader in the design, development, manufacture, sale, service and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems and services. We are one of the two major manufacturers of 100+ seat airplanes for the worldwide commercial airline industry and one of the largest defense contractors in the U.S. While our principal operations are in the U.S., we conduct operations in an expanding number of countries and rely on an extensive network of U.S. and non-U.S. partners, key suppliers and subcontractors.
Our strategy is centered on successful execution in healthy core businesses - Commercial Airplanes (BCA), Defense, Space & Security (BDS) and Global Services (BGS). BCA is committed to offering airplanes that deliver superior design, safety, quality, efficiency and value to customers around the world. BDS integrates its resources in defense, intelligence, communications, security, space and services to deliver capability-driven solutions to customers. Our BDS strategy is to leverage our core businesses to capture key next-generation programs while expanding our presence in adjacent and international markets. BGS provides support for commercial and defense customers through innovative, comprehensive and cost-competitive product and service solutions.
On January 5, 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 Federal Aviation Administration (FAA) performed an investigation into the 737 quality control system and imposed certain additional requirements and restrictions. As part of our plan to improve quality and safety and to address the issues identified, we slowed production rates and delayed planned production rate increases to reduce traveled work in our factory, as well as at our suppliers. We have also taken additional actions to improve safety and quality, including investing in workforce training, simplifying plans and processes, eliminating defects, and enhancing our safety and quality culture. The 737-9 door plug accident and our resulting actions, including slowing production, significantly impacted our financial position, results of operations and cash flows during 2024 and 2025.
On November 4, 2024, the International Association of Machinists and Aerospace Workers District 751 (IAM 751), representing approximately 30,000 Boeing employees, 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.
On November 13, 2025, the International Association of Machinists and Aerospace Workers District 837 (IAM 837), representing approximately 3,200 Boeing employees, voted to ratify a new contract thereby ending the work stoppage initiated on August 4, 2025, which disrupted our St. Louis operations. Programs impacted included F/A-18, F-15, T-7A Red Hawk, MQ-25 and Weapons.
Our contracts with the Society of Professional Engineering Employees in Aerospace, representing approximately 16,000 Boeing employees, are scheduled to expire in October 2026, and could also have a material impact on our financial position, results of operations and cash flows.
During the fourth quarter of 2025, we completed a divestiture and an acquisition that are affecting our 2025 financial position, results of operations and cash flows. On October 31, 2025, we completed the divestiture of portions of our BGS segment's Digital Aviation Solutions business (Digital Aviation Solutions Divestiture) for $10.55 billion in an all-cash transaction. On December 8, 2025, we completed the acquisition of Spirit AeroSystems Holdings, Inc. (Spirit) by exchanging approximately $4.7 billion of Boeing shares for all of Spirit's outstanding shares (Spirit Acquisition). In connection with the Spirit Acquisition, we paid off certain Spirit debt and other obligations and assumed the remainder of Spirit's outstanding debt and other obligations. Boeing's acquisition includes all of Spirit's Boeing-related commercial operations, including fuselages for the 737, P-8 and KC-46 Tanker programs, as well as major structures for the 767, 777 and 787 programs. It also includes Spirit's defense and aftermarket businesses as well as portions of Spirit's operations in Belfast, Ireland. Spirit employs approximately 15,000 people. For additional discussion related to the Digital Aviation Solutions Divestiture and Spirit Acquisition, see Note 3 and Note 2 of our Consolidated Financial Statements.
Business Environment and Trends
In 2025, global air traffic expanded near historical trend rates on an annual basis. This growth came despite a lower than usual contribution from the North American market, which saw stagnant demand particularly in the low-cost space. International demand outpaced domestic demand on an annual basis as the former built on the recovery momentum from 2024, including in China, lifting demand for wide-body airplanes. Based on these trends, both single-aisle and wide-body demand remain above current industry supply levels. We are experiencing strong demand from our airline customers globally.
We and our suppliers are experiencing improving supply chain performance with fewer disruptions from production quality issues, global supply chain constraints and labor instability. We and our suppliers continue to experience inflationary pressures. We continue to monitor the health and stability of the supply chain. Notwithstanding improvements, these factors continue to challenge overall productivity and adversely impact our financial position, results of operations and cash flows.
Airline financial performance, which influences demand for new aircraft, is benefiting from the resilient demand for travel. The International Air Transport Association (IATA) is estimating 2025 industry-wide net profits of $39.5 billion, up from $28.3 billion in 2024, primarily driven by Europe, North America and the Middle East. For 2026, IATA is forecasting $41 billion in net profits for the industry globally. The overall outlook continues to stabilize. We face uncertainties in the environment in the near- to medium-term as airlines are facing persistently high and volatile costs even as fuel prices have declined. The global economy is expecting a continued easing of inflation and interest rates, with regional economic and geopolitical difficulties adding uncertainty to the outlook and the financial viability of some airlines and regions.
The long-term airline industry outlook remains positive due to the fundamental drivers of air travel demand: economic growth, increasing propensity to travel, increased trade, globalization and improved airline services driven by liberalization of air traffic rights between countries. Our Commercial Market Outlook forecast projects a 3.1% growth rate in the global fleet over a 20-year period. Based on long-term global economic growth projections of 2.3% in average annual gross domestic product, we project demand for approximately 43,600 new airplanes over the next 20 years. The industry remains vulnerable to exogenous developments including fuel price spikes, potential new or increased tariffs, changing energy policies, credit market shocks, acts of terrorism, natural disasters, conflicts, epidemics, pandemics and increased global environmental regulations.
At BDS, we see strong demand reflecting the important role our products and services have in ensuring our national security. Outside of the U.S., we are seeing similar solid demand as governments prioritize security, defense technology and global cooperation given evolving threats. Our fixed-price development programs are maturing; however, technical and schedule challenges remain and have resulted in significant earnings charges on these programs. BDS's production system and supply chain are beginning to stabilize; however, prior period performance has adversely affected margins and cash flows.
At BGS, we expect commercial revenues to remain strong in future quarters as the commercial airline industry has largely recovered and transitions to growth. The demand outlook for our government services business remains stable.
Consolidated Results of Operations
The following table summarizes key indicators of consolidated results of operations:
(Dollars in millions, except per share data)
Years ended December 31, 2025 2024 2023
Revenues $89,463 $66,517 $77,794
GAAP
Earnings/(loss) from operations $4,281 ($10,707) ($773)
Operating margins 4.8 % (16.1) % (1.0) %
Effective income tax rate 15.1 % 3.1 % (11.8) %
Net earnings/(loss) attributable to Boeing shareholders $2,235 ($11,817) ($2,222)
Diluted earnings/(loss) per share $2.48 ($18.36) ($3.67)
Non-GAAP (1)
Core operating earnings/(loss)
$3,236 ($11,811) ($1,829)
Core operating margins 3.6 % (17.8) % (2.4) %
Core earnings/(loss) per share
$1.19 ($20.38) ($5.81)
(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 47 - 48 for important information about these non-GAAP measures and reconciliations to the most directly comparable GAAP measures.
Revenues
The following table summarizes Revenues:
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Commercial Airplanes $41,494 $22,861 $33,901
Defense, Space & Security 27,234 23,918 24,933
Global Services 20,923 19,954 19,127
Unallocated items, eliminations and other (188) (216) (167)
Total $89,463 $66,517 $77,794
Revenues increased by $22,946 million in 2025 compared with 2024 primarily driven by higher revenues at BCA, BDS and BGS. BCA revenues increased by $18,633 million primarily due to higher deliveries. BDS revenues increased by $3,316 million primarily due to lower net unfavorable cumulative
contract catch-up adjustments and higher volume. BGS revenues increased by $969 million primarily due to higher government and commercial services revenue.
Revenues decreased by $11,277 million in 2024 compared with 2023 driven by lower revenues at BCA and BDS, partially offset by higher revenues at BGS. BCA revenues decreased by $11,040 million primarily driven by lower deliveries across all programs and 737-9 customer considerations related to the January 2024 grounding. BDS revenues decreased by $1,015 million primarily due to higher net unfavorable cumulative contract catch-up adjustments on major fixed-price development programs. BGS revenues increased by $827 million primarily due to higher commercial services revenue.
Earnings/(Loss) From Operations
The following table summarizes Earnings/(loss) from operations:
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Commercial Airplanes ($7,079) ($7,969) ($1,635)
Defense, Space & Security (128) (5,413) (1,764)
Global Services 13,474 3,618 3,329
Segment operating earnings/(loss)
6,267 (9,764) (70)
Unallocated items, eliminations and other (3,031) (2,047) (1,759)
Pension FAS/CAS service cost adjustment 784 811 799
Postretirement FAS/CAS service cost adjustment 261 293 257
Earnings/(loss) from operations (GAAP)
$4,281 ($10,707) ($773)
FAS/CAS service cost adjustment(1)
(1,045) (1,104) (1,056)
Core operating earnings/(loss) (Non-GAAP)(2)
$3,236 ($11,811) ($1,829)
(1)The FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments.
(2)Core operating earnings/(loss) is a non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 47 - 48.
Earnings from operations increased by $14,988 million in 2025 compared with 2024, primarily driven by BGS ($9,856 million), BDS ($5,285 million) and BCA ($890 million), partially offset by an increase in loss from operations on Unallocated items, eliminations and other ($984 million). The increase in earnings at BGS is primarily driven by a gain on the Digital Aviation Solutions Divestiture. The decrease in loss from operations at BDS is primarily driven by lower net unfavorable cumulative contract catch-up adjustments. The decrease in loss from operations at BCA is primarily driven by higher deliveries partially offset by higher combined reach-forward losses on 777X and 767 programs. The increase in loss from operations on Unallocated items, eliminations and other is primarily driven by an increase in unallocated General and administrative expense.
Loss from operations increased by $9,934 million in 2024 compared with 2023. BCA loss from operations increased by $6,334 million primarily due to reach-forward losses on the 777X and 767 programs, 737-9 customer considerations related to the January 2024 grounding, lower deliveries, and lower margins driven by production disruption including the IAM 751 work stoppage and new agreement, and higher research and development expense, partially offset by lower abnormal production costs. BDS loss from operations increased by $3,649 million compared to the same period in 2023 primarily due to higher net unfavorable cumulative contract catch-up adjustments in 2024 on major fixed-price development programs. BGS earnings from operations increased by $289 million in 2024 compared with 2023 primarily due to higher commercial services revenue. Loss from operations
on Unallocated items, eliminations and other increased by $288 million in 2024 primarily due to an increase in eliminations and other unallocated items expense, partially offset by an increase in share-based plans income.
Core operating earnings increased by $15,047 million in 2025 compared with 2024 and core operating loss increased by $9,982 million in 2024 compared with 2023 primarily due to changes in Segment operating earnings/(loss) as described above.
Unallocated Items, Eliminations and Other
The most significant items included in Unallocated items, eliminations and other (expense)/income are shown in the following table:
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Share-based plans ($49) $171 $62
Deferred compensation (182) (114) (188)
Amortization of previously capitalized interest (92) (93) (95)
Research and development expense, net (411) (377) (315)
Eliminations and other unallocated items (2,297) (1,634) (1,223)
Unallocated items, eliminations and other ($3,031) ($2,047) ($1,759)
Unallocated share-based plans expense increased by $220 million in 2025 primarily due to the timing of when share-based plans expense was recorded compared with when it was allocated to our segments. Share-based plans income increased by $109 million in 2024 primarily due to fewer outstanding share-based awards in 2024 and the timing of corporate allocations.
Deferred compensation expense increased by $68 million in 2025 and decreased by $74 million in 2024 primarily driven by changes in our stock price.
Unallocated research and development expense increased by $34 million in 2025 and $62 million in 2024 primarily due to increased spending on enterprise product development.
Eliminations and other unallocated items expense increased by $663 million in 2025 primarily due to higher unallocated General and administrative expense. General and administrative expense for 2025 and 2024 includes earnings charges of $445 million and $244 million related to agreements with the U.S. Department of Justice. Eliminations and other unallocated items expense increased by $411 million in 2024 primarily due to an earnings charge of $244 million related to an agreement with the U.S. Department of Justice. For additional discussion, see Note 23 to our Consolidated Financial Statements.
Net periodic pension benefit costs included in Earnings/(loss) from operations were as follows:
(Dollars in millions) Pension
Years ended December 31, 2025 2024 2023
Allocated to business segments ($793) ($816) ($801)
Pension FAS/CAS service cost adjustment 784 811 799
Net periodic pension benefit cost included in Earnings/(loss) from operations
($9) ($5) ($2)
The pension FAS/CAS service cost adjustment recognized in Earnings/(loss) from operations in 2025 was largely consistent with 2024 and 2023. Net periodic benefit cost included in Earnings/(loss) from operations in 2025 was largely consistent with 2024 and 2023.
For additional discussion related to Postretirement Plans, see Note 18 to our Consolidated Financial Statements.
Other Earnings Items
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Earnings/(loss) from operations $4,281 ($10,707) ($773)
Other income, net 1,125 1,222 1,227
Interest and debt expense (2,771) (2,725) (2,459)
Earnings/(loss) before income taxes 2,635 (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 interest 3 (12) (20)
Net earnings/(loss) attributable to Boeing shareholders $2,235 ($11,817) ($2,222)
Non-operating pension income included in Other income, net was $176 million in 2025, $476 million in 2024 and $529 million in 2023. The decreased income in 2025 compared to 2024 was primarily due to lower expected return on plan assets. The decreased income in 2024 compared to 2023 was primarily due to lower expected return on plan assets and higher amortization of net actuarial losses, partially offset by lower interest cost.
Non-operating postretirement income included in Other income, net was $19 million in 2025, $73 million in 2024 and $58 million in 2023. The decreased income in 2025 was primarily due to lower amortization of net actuarial gains and higher interest cost. The increased income in 2024 was primarily due to lower interest cost, partially offset by amortization of prior service credits.
For additional discussion related to Postretirement Plans, see Note 18 to our Consolidated Financial Statements.
Interest and debt expense increased by $46 million in 2025 primarily due to higher average interest rates. Interest and debt expense increased by $266 million in 2024 primarily due to higher average debt balances.
For a discussion related to Income Taxes, see Note 6 to our 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:
(Dollars in millions)
Years ended December 31 2025 2024 Change 2024 2023 Change
Cost of sales $85,174 $68,508 $16,666 $68,508 $70,070 ($1,562)
Cost of sales as a % of Revenues 95.2 % 103.0 % (7.8) % 103.0 % 90.1 % 12.9 %
Cost of sales increased by $16,666 million in 2025 compared with 2024, primarily due to higher deliveries 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 in 2025 compared to 2024 primarily due to lower charges on BDS fixed-price development programs, partially offset by higher combined reach-forward losses on the 777X and 767 programs at BCA.
Cost of sales decreased by $1,562 million in 2024 compared with 2023, primarily due to lower revenues at BCA, partially offset by the reach-forward losses on the 777X and 767 programs and higher charges on the BDS fixed-price development programs. Cost of sales as a percentage of Revenues increased in 2024 compared to 2023 primarily due to the reach-forward losses on the 777X and 767 programs, lower margins at BCA, and higher charges on the BDS fixed-price development programs.
Research and Development
The following table summarizes our Research and development expense:
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Commercial Airplanes $2,202 $2,386 $2,036
Defense, Space & Security 877 917 919
Global Services 125 132 107
Other 411 377 315
Total $3,615 $3,812 $3,377
Research and development expense decreased by $197 million in 2025 compared with 2024. The decrease in expense was primarily due to lower spending at BCA.
Research and development expense increased by $435 million in 2024 compared with 2023 primarily due to the 777X program at BCA and higher enterprise investments in product development.
Backlog
Our backlog at December 31 was as follows:
(Dollars in millions)
Years ended December 31, 2025 2024
Commercial Airplanes $567,290 $435,175
Defense, Space & Security 84,786 64,023
Global Services 29,720 21,403
Unallocated items, eliminations and other 411 735
Total Backlog $682,207 $521,336
Contractual backlog $639,721 $498,802
Unobligated backlog 42,486 22,534
Total Backlog $682,207 $521,336
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 during 2025 was primarily due to an 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.
Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The increase in unobligated backlog during 2025 was due to an increase in BDS backlog.
Additional Considerations
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.
From October 1 through November 12, 2025, funding for U.S. government departments and agencies, including the Department of War (DoW), the National Aeronautics and Space Administration (NASA), and the Department of Transportation (DOT), including the FAA, had lapsed. The Continuing Appropriations, Agriculture, Legislative Branch, Military Construction Veterans Affairs Appropriations Bill and Extensions Act, 2026, enacted November 12, 2025, largely funded the DoW, NASA and the DOT at fiscal year 2025 (FY25) appropriated levels through January 30, 2026. The Commerce, Justice Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026 (H.R. 6938), enacted January 23, 2026, funded certain federal departments and agencies, including NASA, through FY26.
After January 30, 2026, the government will enter a partial shutdown unless and until Congress and the President enact either full-year FY26 appropriations bills or an additional Continuing Resolution. We rely on the U.S. government in various aspects of our defense, commercial and services businesses. During a shutdown, requirements to furlough employees in the DoW, the DOT or other government agencies could result in payment delays, impair our ability to perform work on existing contracts or otherwise impact our operations, negatively impact future orders and/or cause other disruptions or delays that could have a material effect on our financial position, results of operations and/or cash flows.
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.
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 countries including the United Kingdom, Japan, South Korea, Malaysia, and the European Union. As of December 31, 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 November 1, 2025, the U.S. and China announced a bilateral trade arrangement and further extended the pause on the reciprocal and retaliatory tariffs on each other's imports until November 10, 2026. However, the current state of U.S.-China trade relations remains 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. During 2025, certain customers in China temporarily paused accepting delivery of our aircraft in response to ongoing tariff negotiations between the U.S. and China.
In addition, as of December 31, 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.
As of December 31, 2025, the U.S. also maintains new and modified tariffs on aluminum, steel, and copper imports implemented during 2025, and has announced reviews of additional sectors.
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 results reflect our best estimate of the impacts of the tariffs enacted as of December 31, 2025, and certain potential mitigating actions.
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 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.
Segment Results of Operations and Financial Condition
Commercial Airplanes
Business Environment and Trends
Airline Industry Environment See Overview to Management's Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the airline industry environment.
Industry Competitiveness The commercial aircraft market and the airline industry both remain extremely competitive. Continued access to global markets remains vital to our ability to fully realize our sales potential and long-term investment returns. Approximately 85% of BCA's total backlog, in dollar terms, is with non-U.S. airlines. We face aggressive international competitors who are intent on defending or increasing their market share. They offer competitive products and have access to most of the same customers and suppliers. This market environment has resulted in intense pressures on pricing and other competitive factors, and we expect these pressures to continue or intensify in the coming years.
Results of Operations
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Revenues $41,494 $22,861 $33,901
% of total company revenues 46 % 34 % 44 %
Loss from operations ($7,079) ($7,969) ($1,635)
Operating margins (17.1) % (34.9) % (4.8) %
Research and development $2,202 $2,386 $2,036
Revenues
BCA revenues increased by $18,633 million in 2025 compared with 2024 primarily due to higher deliveries across all programs and the absence of $443 million of 737-9 customer considerations related to the January 2024 grounding.
BCA revenues decreased by $11,040 million in 2024 compared with 2023 primarily due to lower deliveries across all programs and 737-9 customer considerations.
BCA deliveries, including intercompany deliveries, as of December 31 were as follows:
737 * 747 767 * 777 787 Total
2025
Cumulative deliveries 9,240 1,573 1,351 1,776 1,249
Deliveries 447 (7) 30 (15) 35 88 600
2024
Cumulative deliveries 8,793 1,573 1,321 1,741 1,161
Deliveries 265 (5) 18 (8) 14 51 348
2023
Cumulative deliveries 8,528 1,573 1,303 1,727 1,110
Deliveries 396 (9) 1 32 (14) 26 73 528
*Intercompany deliveries identified by parentheses
Loss From Operations
BCA loss from operations was $7,079 million in 2025 compared with $7,969 million in 2024 reflecting higher deliveries across all programs, the absence of 737-9 customer considerations related to the January 2024 grounding, lower abnormal production costs, and lower research and development costs, partially offset by higher combined reach-forward losses of $5,283 million on the 777X and 767 programs in 2025 and lower program margins.
BCA loss from operations was $7,969 million in 2024 compared with $1,635 million in 2023 reflecting reach-forward losses of $4,079 million on the 777X and 767 programs in 2024, $443 million of 737-9 customer considerations related to the January 2024 grounding, lower deliveries, lower margins driven by production disruption including the IAM 751 work stoppage and new agreement, and higher research and development expense, partially offset by $1,271 million of lower abnormal production costs.
Backlog
Our total backlog represents the estimated transaction prices on unsatisfied and partially satisfied performance obligations to our customers where we believe it is probable that we will collect the consideration due and where no contingencies remain before we and the customer are required to perform. Backlog does not include prospective orders where customer-controlled contingencies remain, such as the customer receiving approval from its board of directors, shareholders or government or completing financing arrangements. All such contingencies must be satisfied or have expired prior to recording a new firm order even if satisfying such conditions is highly probable. Backlog excludes options and customer financing orders as well as orders where customers have the unilateral right to terminate. A number of our customers may have contractual remedies, including rights to reject individual airplane deliveries if the actual delivery date is significantly later than the contractual delivery date. We address customer claims and requests for other contractual relief as they arise. The value of orders in backlog is adjusted as changes to price and schedule are agreed to with customers and is reported in accordance with the requirements of Accounting Standards Codification (ASC) 606.
BCA total backlog of $567,290 million at December 31, 2025 increased from $435,175 million at December 31, 2024, 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 year ended December 31, 2025 totaled $11,094 million and primarily relate to 777X, 737, and 787 aircraft. Net ASC 606 adjustments for the year ended December 31, 2025 totaled $17,759 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.
Accounting QuantityThe accounting quantity is our estimate of the quantity of airplanes that will be produced for delivery under existing and anticipated contracts. The determination of the accounting quantity is limited by the ability to make reasonably dependable estimates of the revenue and cost of existing and anticipated contracts. It is a key determinant of the gross margins we recognize on sales of individual airplanes throughout a program's life. Estimation of each program's accounting quantity takes into account several factors that are indicative of the demand for that program, including firm orders, letters of intent from prospective customers and market studies. We review our program accounting quantities quarterly.
The accounting quantity for each program may include units that have been delivered, undelivered units under contract and units anticipated to be under contract in the reasonable future (anticipated orders). In developing total program estimates, all of these items within the accounting quantity must be considered.
The following table provides details of the accounting quantities and firm orders by program as of December 31. Cumulative firm orders represent the cumulative number of commercial jet aircraft deliveries plus undelivered firm orders. Firm orders include certain military derivative aircraft that are not included in program accounting quantities. All revenues and costs associated with military derivative aircraft production are reported in the BDS segment.
Program
737 747
**
767 777 777X 787 †
2025
Program accounting quantities 12,400 1,263 1,828 650 1,900
Undelivered units under firm orders 4,404
*
94 46 560 1,026 (2)
Cumulative firm orders 13,644 1,445 1,822 560 2,275
2024
Program accounting quantities 11,600 1,263 1,822 500 1,800
Undelivered units under firm orders 4,303
*
109 68 358 719 (8)
Cumulative firm orders 13,096 1,430 1,809 358 1,880
2023
Program accounting quantities 11,600 1,574 1,279 1,790 500 1,700
Undelivered units under firm orders 4,332
*
104 48 416 726 (8)
Cumulative firm orders 12,860 1,573 1,407 1,775 416 1,836
† Customer financing aircraft orders are identified in parentheses.
*Approximate undelivered orders by minor model in 2025, 2024 and 2023, respectively: 737-7 (6%, 7%, 7%), 737-8 (60%, 63%, 65%), 737-9 (5%, 5%, 3%) and 737-10 (29%, 25%, 25%).
** We completed production of the 747 in the fourth quarter of 2022 and delivery of the last aircraft occurred in February 2023.
Program Highlights
737 Program The 737 production rate was significantly disrupted in 2024 because of the 737-9 door plug accident and the IAM labor strike. Throughout 2025, the rate recovered from below 38 aircraft per month at the beginning of the year to 42 per month during the fourth quarter. 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. The program plans to increase the production rate from 42 to 47 in 2026 with the concurrence of the FAA. We are also planning for additional production rate increases beyond 47 per month as well as adding a 737 production line.
We increased the accounting quantity by 800 units during the year ended December 31, 2025, due to the program's normal progress of obtaining additional orders and delivering airplanes. In early 2026, we expect to deliver the last 737-8 aircraft produced prior to 2023.
We have a final set of design changes to address the engine anti-ice issue on the 737-7 and 737-10 and are continuing to work through the certification process of the 737-7 and 737-10 models. We continue to expect certification to occur in 2026. As of December 31, 2025, we had approximately 35 737-7 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.
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.
See further discussion of the 737 MAX in Note 9 and Note 15 to our Consolidated Financial Statements.
767 ProgramThe 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 and 2025, we recorded reach-forward losses of $580 million and $384 million primarily driven by higher production costs.
See further discussion of the KC-46A Tanker program in Note 15 to our Consolidated Financial Statements.
777 and 777X ProgramsThe 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. During 2025, we increased the accounting quantity by six units reflecting increased demand and our decision to produce more 777 models by 2027. We increased the accounting quantity for the 777X program by 100 units in the third quarter of 2025 and 50 units in the fourth quarter of 2025 reflecting strong order activity in 2025 and production plan updates. Cumulative firm orders for the 777X increased from 358 units at December 31, 2024, to 560 units at December 31, 2025.
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. In July 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. In November 2025, we obtained FAA approval to begin the third phase of flight testing which is currently ongoing.
In the third quarter of 2025, we reassessed the anticipated timing to complete FAA certification flight testing and delayed first delivery of the 777-9 to 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 2025.
During recent inspections on the 777X, we identified a potential durability issue on the engine. We are continuing certification flight testing as we work with the supplier to determine root cause and corrective action. 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.
The level of profitability on the 777X program will be subject to several factors. These factors include aircraft certification requirements and timing, flight test discoveries, design changes, 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.
787 ProgramDuring 2024, the 787 production rate was slowed to below five per month while addressing performance challenges and supply chain constraints. In 2025, while continuing to monitor supply chain health and factory performance, we increased the production rate from five to seven per month. We began increasing the production rate to eight per month during the fourth quarter of 2025 and continue to work toward stabilizing production. In February 2025, we completed the remaining rework on aircraft produced prior to 2023. At December 31, 2025, we had approximately five of those aircraft in inventory and expect to deliver them in 2026.
Fleet SupportWe provide the operators of our commercial aircraft with assistance and services to facilitate efficient and safe airplane operation. Collectively known as fleet support services, these activities and services begin prior to airplane delivery and continue throughout the operational life of the airplane. They include flight and maintenance training, field service support, engineering services, information services and systems and technical data and documents. The costs for fleet support are expensed as incurred and have historically been approximately 1% of total consolidated costs of products and services.
Additional Considerations
On December 8, 2025, we completed the acquisition of Spirit. See Note 2 to our Consolidated Financial Statements.
Defense, Space & Security
Business Environment and Trends
Overview
In May 2025, the U.S. government released the President's budget request for 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.
In July 2025, the One Big Beautiful Bill Act appropriated an additional $156 billion for national defense priorities and an additional $10 billion for NASA programs over the next several years. H.R. 6938 provided FY26 appropriations of $24 billion for NASA, an increase of approximately $5 billion from the FY26 request. On January 30, 2026, funding for the DoW will lapse. For additional information on U.S. government appropriations and budgets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations - Additional Considerations - U.S. Government Funding" on page 31 of this Form 10-K.
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.
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 December 31, 2025, 26% of BDS backlog was attributable to non-U.S. customers.
Results of Operations
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Revenues $27,234 $23,918 $24,933
% of total company revenues 30 % 36 % 32 %
Loss from operations
($128) ($5,413) ($1,764)
Operating margins (0.5) % (22.6) % (7.1) %
Since our operating cycle is long-term and involves many different types of development and production contracts with varying delivery and milestone schedules, the operating results of a particular period may not be indicative of future operating results. In addition, depending on the customer and their funding sources, our orders might be structured as annual follow-on contracts, or as one large multi-year order or long-term award. As a result, period-to-period comparisons of backlog are not necessarily indicative of future workloads. The following discussions of comparative results among periods should be viewed in this context.
Deliveries of new-build production units, remanufactures and modifications, were as follows:
Years ended December 31, 2025 2024 2023
F/A-18 Models 14 11 22
F-15 Models 9 14 9
T-7A Red Hawk
2 3
CH-47 Chinook (New) 3 4 11
CH-47 Chinook (Renewed) 11 9 9
AH-64 Apache (New) 19 16 20
AH-64 Apache (Remanufactured) 42 34 57
MH-139 Grey Wolf 9 6 2
KC-46 Tanker 14 10 13
P-8 Models 6 4 11
Commercial Satellites 4 2 5
Total 131 112 162
Revenues
BDS revenues in 2025 increased by $3,316 million compared with 2024. The increase is primarily due to $1,864 million lower net unfavorable cumulative contract catch-up adjustments and higher volume compared to the prior year.
BDS revenues in 2024 decreased by $1,015 million compared with 2023. The decrease is primarily due to higher net unfavorable cumulative contract catch-up adjustments of $909 million on BDS' five major fixed-price development programs. Overall, net unfavorable cumulative contract catch-up adjustments in 2024 were $995 million higher than 2023.
Loss From Operations
BDS loss from operations in 2025 was $128 million compared with $5,413 million in 2024. The year over year improvement in earnings is primarily due to lower net unfavorable cumulative contract catch-up adjustments of $5,196 million compared to 2024. During 2025, losses incurred on the five major fixed-price development programs totaled $802 million, primarily on KC-46A Tanker ($714 million), compared to losses of $5,013 million during 2024. In addition, the year over year earnings improvement reflects higher earnings from other programs including weapons, P-8, satellites and fighters.
BDS loss from operations in 2024 was $5,413 million compared with $1,764 million in 2023. The increase is primarily due to higher net unfavorable cumulative contract catch-up adjustments of $3,428 million on BDS' five major fixed-price development programs compared to 2023. During 2024, losses incurred on the five major fixed-price development programs totaled $5,013 million, including KC-46A Tanker ($2,002 million), T-7A Red Hawk ($1,770 million), Commercial Crew ($523 million), VC-25B ($379 million), and MQ-25 ($339 million). Net unfavorable cumulative contract catch-up adjustments were $3,534 million higher than the comparable period in the prior year.
See further discussion of fixed-price contracts in Note 15 to our Consolidated Financial Statements.
BDS earnings/(loss) from operations includes our share of income from equity method investments of $21 million, $125 million and $44 million primarily from our United Launch Alliance and other joint ventures in 2025, 2024 and 2023, respectively.
Backlog
BDS backlog was $84,786 million at December 31, 2025 compared with $64,023 million at December 31, 2024. The increase reflects the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods.
Additional Considerations
Our BDS business includes a variety of development programs which have complex design and technical challenges. Some of these programs have cost-type contracting arrangements. In these cases, the associated financial risks are primarily reduced award or incentive fees, lower profit rates or program cancellation if cost, schedule or technical performance issues arise. Examples of these programs include Ground-based Midcourse Defense, Proprietary and Space Launch System programs.
Some of our development programs are contracted on a fixed-price basis. Examples of significant fixed-price development programs include Commercial Crew, KC-46A Tanker, MQ-25, T-7A Red Hawk, VC-25B, and commercial and military satellites. A number of our ongoing fixed-price development programs have reach-forward losses. New programs could also have risk for reach-forward loss upon contract award and during the period of contract performance. Many development programs have highly complex designs. As technical or quality issues arise during development, we may experience schedule delays and cost impacts, which could increase our estimated cost to perform the work or reduce our estimated price, either of which could result in a material charge or otherwise adversely affect our financial condition. These programs are ongoing, and while we believe the cost and fee estimates incorporated in the financial statements are appropriate, the technical complexity of these programs creates financial risk as additional completion costs may become necessary or scheduled delivery dates could be extended, which could trigger termination provisions or other financially significant exposure. Risk remains that we may be required to record additional reach-forward losses in future periods.
Global Services
Business Environment and Trends
The aerospace markets we serve include parts distribution, logistics and other inventory services; maintenance, engineering and upgrades; training and professional services; and digital solutions and analytics. We expect BGS commercial revenues to remain strong in future quarters as the commercial airline industry has largely recovered and transitions to growth.
Over the long-term, as the size of the worldwide commercial airline fleet continues to grow, so does demand for after-market services designed to increase efficiency and extend the economic lives of aircraft. Airlines are using data analytics to plan flight operations and predictive maintenance to improve their productivity and efficiency. Airlines continue to look for opportunities to reduce the size and cost of their spare parts inventory, frequently outsourcing spares management to third parties.
The demand outlook for our government services business has remained stable with low growth in 2025. Government services market segments are growing on pace with related fleets, but vary based on the utilization and age of the aircraft. U.S. government services is the single largest individual served market. Over the next decade, we expect U.S. growth to remain flat and non-U.S. fleets to add rotorcraft and commercial derivative aircraft at faster rates. We expect approximately 30 percent of the worldwide fleet of military aircraft to be retired and replaced over the next 10 years, driving increased demand for services to maintain aging aircraft and enhance aircraft capability.
BGS' major customer, the U.S. government, remains subject to budget availability and uncertainty, which could restrict the execution of certain program activities and delay new programs or competitions.
Industry Competitiveness Aviation services is a competitive market with many domestic and international competitors. This market environment has resulted in intense pressures on pricing, and we expect these pressures to continue or intensify in the coming years. Continued access to global markets remains vital to our ability to fully realize our sales growth potential and long-term investment returns.
Results of Operations
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Revenues $20,923 $19,954 $19,127
% of total company revenues 23 % 30 % 25 %
Earnings from operations $13,474 $3,618 $3,329
Operating margins 64.4 % 18.1 % 17.4 %
Revenues
BGS revenues in 2025 increased by $969 million compared with 2024 primarily due to higher government and commercial services revenue. The net unfavorable impact of cumulative contract catch-up adjustments in 2025 was $14 million lower than the prior year comparable period.
BGS revenues in 2024 increased by $827 million compared with 2023 primarily due to higher commercial services revenue. The net unfavorable impact of cumulative contract catch-up adjustments in 2024 was $96 million higher than the prior year comparable period.
Earnings From Operations
BGS earnings from operations in 2025 increased by $9,856 million compared with 2024, primarily due to a 2025 gain on the Digital Aviation Solutions Divestiture of $9,566 million. The net unfavorable impact of cumulative contract catch-up adjustments in 2025 was $4 million higher than the prior year.
BGS earnings from operations in 2024 increased by $289 million compared with 2023, primarily due to higher commercial services revenue. The net unfavorable impact of cumulative contract catch-up adjustments in 2024 was $94 million higher than the prior year.
Backlog
BGS total backlog of $29,720 million at December 31, 2025 increased by 39% from $21,403 million at December 31, 2024, primarily due to the timing of awards, partially offset by revenue recognized on contracts awarded in prior years.
Liquidity and Capital Resources
Cash Flow Summary
(Dollars in millions)
Years ended December 31, 2025 2024 2023
Net earnings/(loss) $2,238 ($11,829) ($2,242)
Non-cash items (171) 8,517 4,113
Changes in assets and liabilities (1,002) (8,768) 4,089
Net cash provided/(used) by operating activities 1,065 (12,080) 5,960
Net cash provided/(used) by investing activities 499 (11,973) (2,437)
Net cash (used)/provided by financing activities (3,763) 25,209 (5,487)
Effect of exchange rate changes on cash and cash equivalents 40 (47) 30
Net (decrease)/increase in cash & cash equivalents, including restricted (2,159) 1,109 (1,934)
Cash & cash equivalents, including restricted, at beginning of year 13,822 12,713 14,647
Cash & cash equivalents, including restricted, at end of year $11,663 $13,822 $12,713
Operating ActivitiesNet cash provided by operating activities was $1.1 billion during 2025 compared with net cash used of $12.1 billion during 2024. The $13.1 billion increase in net cash provided by operating activities was primarily driven by higher commercial airplane deliveries, lower customer considerations and working capital improvements.
The change in Non-cash items of $8.7 billion compared with 2024 was primarily due to a gain on the Digital Aviation Solutions Divestiture in October 2025, partially offset by higher combined 777X and 767 reach-forward losses recorded during 2025 compared to 2024.
Changes in assets and liabilities for 2025 improved by $7.8 billion compared to 2024 primarily driven by favorable changes in Inventories ($10.9 billion) and Accounts payable ($1.5 billion), partially offset by unfavorable changes in Advances and progress billings ($4.8 billion). The change in Inventories was primarily driven by higher deliveries on our commercial airplane programs during 2025 as compared to 2024. The change in Accounts payable during 2025 compared to 2024 reflects increased production primarily in our commercial airplanes business. The change in Advances and progress billings during 2025 compared to 2024 was primarily driven by increased commercial airplane deliveries and revenue recognized at BDS, partially offset by higher advances on commercial airplane orders. Concessions paid to 737 MAX customers totaled $0.2 billion and $0.9 billion during 2025 and 2024.
Net cash used by operating activities was $12.1 billion during 2024 compared with net cash provided of $6.0 billion during 2023. The increase in cash outflows from operating activities in 2024 was primarily driven by our commercial airplanes business. Commercial airplane cash outflows reflected slowed and/or paused production and lower deliveries as a result of ongoing safety and quality improvement actions the Company is taking following the 737-9 door plug accident on January 5, 2024, supply chain constraints, and the IAM 751 work stoppage.
The higher net loss of $11.8 billion during 2024 compared to $2.2 billion in 2023 primarily reflects higher losses from operations at BCA and BDS. The change in Non-cash items was primarily due to the 777X and 767 reach-forward losses of $4.1 billion recorded in 2024.
Changes in assets and liabilities for 2024 decreased by $12.9 billion compared to 2023 primarily driven by unfavorable changes in Inventories ($10.7 billion), Accounts payable ($2.5 billion) and Unbilled receivables ($0.4 billion), partially offset by changes in Accrued Liabilities ($0.8 billion) and Advances
and progress billings ($0.7 billion). The growth in Inventories was primarily driven by lower deliveries on our commercial airplane programs during 2024 as compared to 2023. Changes in Accounts payable during 2024 compared to 2023 reflects slowed/paused production primarily in our commercial airplanes business. The increase in Unbilled receivables during 2024 was primarily driven by revenue recognized in excess of billings at BDS compared to higher billings at BDS and BGS during 2023. The increase in Accrued liabilities was primarily driven by higher accrued losses on BDS fixed-price development programs. Concessions paid to 737 MAX customers totaled $0.9 billion and $0.4 billion during 2024 and 2023. Cash provided by Advances and progress billings during 2024 was $4.1 billion compared to cash provided of $3.4 billion during 2023.
Payables to suppliers who elected to participate in supply chain financing programs decreased by $0.7 billion and $0.2 billion in 2025 and 2024, and increased by $0.4 billion in 2023. Supply chain financing is not material to our overall liquidity.
Investing ActivitiesNet cash provided by investing activities during 2025 was $0.5 billion, compared with cash used of $12.0 billion during 2024 and $2.4 billion during 2023. The increase in net cash provided in 2025 compared to 2024 was primarily due to an increase in Proceeds from dispositions of $10.5 billion and a decrease in net contributions to investments of $3.8 billion, partially offset by an increase in cash paid for Acquisitions, net of cash acquired of $1.2 billion. Proceeds from dispositions in 2025 were primarily driven by the Digital Aviation Solutions Divestiture in October 2025. Acquisitions, net of cash acquired of $1.2 billion in 2025 reflects the Spirit Acquisition in December 2025. The increase in net cash used by investing activities in 2024 compared to 2023 was primarily due to net contributions to investments of $9.1 billion in 2024 compared to net contributions to investments of $0.7 billion in 2023. Capital expenditures totaled $2.9 billion in 2025, compared with $2.2 billion in 2024 and $1.5 billion in 2023. We expect capital expenditures to grow in 2026 compared with 2025.
Financing ActivitiesNet cash used by financing activities was $3.8 billion during 2025, compared with net cash provided of $25.2 billion during 2024, and net cash used of $5.5 billion in 2023. Net cash used during 2025 was primarily driven by net repayments of $3.5 billion. Net cash provided during 2024 was primarily driven by the issuance of common stock and Mandatory convertible preferred stock in the fourth quarter of 2024, which resulted in cash proceeds of $18.2 billion and $5.7 billion, net of issuance costs.
At December 31, 2025 and 2024 debt balances totaled $54.1 billion and $53.9 billion, of which $8.5 billion and $1.3 billion were classified as short-term.
We had 0.2 million, 0.4 million and 1.7 million shares transferred to us from employee tax withholdings in 2025, 2024 and 2023, respectively. The increase in 2023 was primarily due to the vesting of a one-time RSU grant awarded to most employees in December 2020. Our dividend to common shareholders has been suspended since 2020.
Capital Resources
The following table summarizes certain cash requirements for known contractual and other obligations as of December 31, 2025, and the estimated timing thereof. See Note 14 for future operating lease payments.
(Dollars in millions) Current Long-term Total
Long-term debt (including current portion) $8,475 $46,106 54,581
Interest on debt 2,486 36,035 38,521
Pension and other postretirement 462 4,936 5,398
Purchase obligations 80,965 109,911 190,876
At December 31, 2025, we had $10.9 billion of cash, $18.5 billion of short-term investments, and $10.0 billion of unused borrowing capacity on revolving credit line agreements. We expect to pay $8.5 billion in short-term and long-term debt due within the next 12 months from our available cash balance. In August 2025, we entered into a $3.0 billion, 364-day revolving credit agreement expiring in August 2026. This facility replaced the $3.0 billion, 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 $3.0 billion, five-year revolving credit agreement expiring in August 2028and $4.0 billion, five-year revolving credit agreement expiring in May 2029each remain in effect.We anticipate that these credit lines will primarily serve as back-up liquidity to support our general corporate borrowing needs.
For discussion related to the Spirit Acquisition and Digital Aviation Solutions Divestiture, see Note 2 and Note 3 to our Consolidated Financial Statements.
We currently maintain investment grade credit ratings across all three credit rating agencies. In June 2025, Fitch affirmed the BBB- credit rating and revised the outlook to stable from negative. In October 2025, S&P affirmed the BBB- credit rating and revised the outlook to stable from negative. In December 2025, Moody's affirmed the Baa3 credit rating and revised the outlook to stable from negative.
We may, from time to time, purchase, redeem or retire any of our outstanding debt securities in open market or privately negotiated transactions, by tender offer or otherwise, after consideration of market conditions, our liquidity needs and other factors.
We expect to be able to access capital markets when we require additional funding to support our operations, pay off existing debt, address impacts to our business related to market developments, fund outstanding financing commitments or meet other business requirements; however, a number of factors could increase the cost of borrowing, jeopardize our ability to incur debt on terms acceptable to us, and negatively impact our access to the capital and financial markets and our ability to fund our operations and commitments. These factors include downgrades in our credit ratings, disruptions or declines in the global capital markets, a decline in our financial performance or outlook, a delay in our ability to ramp up production and deliveries, and changes in demand for our products and services. The occurrence of any or all of these events may adversely affect our ability to fund our operations and financing or contractual commitments. See "Risks Related to Financing and Liquidity" under "Item 1A. Risk Factors".
Any future borrowings may affect our credit ratings and are subject to various debt covenants. The most restrictive covenants include a limitation on mortgage debt and sale and leaseback transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements), and a limitation on consolidated debt as a percentage of total capital (as defined in the credit agreements). When considering debt covenants, we continue to have substantial borrowing capacity.
Pension and Other Postretirement BenefitsPension cash requirements are based on an estimate of our minimum funding requirements, pursuant to Employee Retirement Income Security Act (ERISA) regulations, although we may make additional discretionary contributions. Estimates of other postretirement benefits are based on both our estimated future benefit payments and the estimated contributions to plans that are funded through trusts.
At December 31, 2025 and 2024, our pension plans were $4.3 billion and $4.8 billion underfunded as measured under U.S. generally accepted accounting principles (GAAP). On an ERISA basis, our plans are more than 90% funded at December 31, 2025. We do not expect to make significant contributions to our pension plans in 2026. We may be required to make higher contributions to our pension plans in future years.
For the foreseeable future, we expect to continue to use common stock in lieu of cash to fund Company contributions to our 401(k) plans.
Purchase ObligationsPurchase obligations represent contractual agreements to purchase goods or services that are legally binding; specify a fixed, minimum or range of quantities; specify a fixed, minimum, variable or indexed price provision; and specify approximate timing of the transaction. Purchase obligations include amounts recorded as well as amounts that are not recorded on the Consolidated Statements of Financial Position.
Purchase obligations not recorded on the Consolidated Statements of Financial Position include agreements for inventory procurement, information technology software and hardware, aircraft trade-ins, engineering and research and development, property, plant and equipment, tooling costs, and other miscellaneous production related obligations. The most significant obligation relates to inventory procurement contracts. We have entered into certain significant inventory procurement contracts that specify determinable prices and quantities, and long-term delivery timeframes. In addition, we purchase raw materials on behalf of our suppliers. These agreements require suppliers and vendors to be prepared to build and deliver items in sufficient time to meet our production schedules. The need for such arrangements with suppliers and vendors arises from the extended production planning horizon for many of our products. A significant portion of these inventory commitments is supported by firm contracts with customers and/or has historically resulted in settlement through reimbursement from customers for penalty payments to the supplier should the customer not take delivery. These amounts are also included in our forecasts of costs for program and contract accounting. Some inventory procurement contracts may include escalation adjustments. In these limited cases, we have included our best estimate of the effect of the escalation adjustment in the amounts disclosed in the table above.
Purchase obligations recorded on the Consolidated Statements of Financial Position primarily include accounts payable and certain other current and long-term liabilities, including accrued compensation and product warranties.
We have entered into various industrial participation agreements with certain customers outside of the U.S. to facilitate economic flow back and/or technology or skills transfer to their businesses or government agencies as the result of their procurement of goods and/or services from us. These commitments may be satisfied by our local operations there, placement of direct work or vendor orders for supplies, opportunities to bid on supply contracts, transfer of technology or other forms of assistance. However, in some instances, our commitments may be satisfied through other parties (such as our vendors) who purchase supplies from our non-U.S. customers. In certain cases, penalties could be imposed if we do not meet our industrial participation commitments. During 2025, we incurred no such penalties. As of December 31, 2025, we had outstanding industrial participation agreements totaling $16.4 billion that extend through 2034. Purchase order commitments associated with industrial participation agreements are included in purchase obligations. To be eligible for such a purchase order
commitment from us, a non-U.S. supplier must have sufficient capability to meet our requirements and must be competitive in cost, quality and schedule.
Off-Balance Sheet ArrangementsWe are a party to certain off-balance sheet arrangements including certain guarantees. For discussion of these arrangements, see Note 16 to our Consolidated Financial Statements.
Commercial Commitments
The following table summarizes our commercial commitments outstanding as of December 31, 2025.
(Dollars in millions) Total Amounts
Committed/Maximum
Amount of Loss 		Less than
1 year 		1-3
years 		4-5
years 		After 5
years
Standby letters of credit and surety bonds $3,295 $1,729 $1,318 $20 $228
Commercial aircraft financing commitments 15,229 2,362 7,943 3,649 1,275
Total commercial commitments $18,524 $4,091 $9,261 $3,669 $1,503
Commercial aircraft financing commitments include commitments to provide financing related to aircraft on order, under option for deliveries or proposed as part of sales campaigns or refinancing with respect to delivered aircraft, based on estimated earliest potential funding dates. Customer financing commitments totaled $15.2 billion and $17.1 billion at December 31, 2025 and 2024. We anticipate that we will not be required to fund a significant portion of our financing commitments as we continue to work with third party financiers to provide alternative financing to customers. Historically, we have not been required to fund significant amounts of outstanding commitments. However, there can be no assurances that we will not be required to fund greater amounts than historically required. See Note 15 to our Consolidated Financial Statements.
Contingent Obligations
We have significant contingent obligations that arise in the ordinary course of business, which include the following:
LegalVarious legal proceedings, claims and investigations are pending against us. Legal contingencies are discussed in Note 23 to our Consolidated Financial Statements.
Environmental RemediationWe are involved with various environmental remediation activities and have recorded a liability of $877 million at December 31, 2025. For additional information, see Note 15 to our Consolidated Financial Statements.
Non-GAAP Measures
Core Operating Earnings/(Loss), Core Operating Margins and Core Earnings/(Loss) Per Share
Our Consolidated Financial Statements are prepared in accordance with GAAP which we supplement with certain non-GAAP financial information. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Core operating earnings/(loss), Core operating margins and Core earnings/(loss) per share exclude the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core earnings/(loss) per share excludes both the FAS/CAS service cost adjustment and non-operating pension and postretirement income. Non-operating pension and postretirement income represents the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to BCA and certain BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid.
The Pension FAS/CAS service cost adjustments recognized in Earnings/(loss) from operations were benefits of $784 million in 2025, $811 million in 2024 and $799 million in 2023. The lower benefits in 2025 were primarily due to reductions in allocated pension cost year over year, while the higher benefits in 2024 were primarily due to increases in allocated pension cost year over year. The non-operating pension income included in Other income, net was $176 million in 2025, $476 million in 2024 and $529 million in 2023. The lower benefits in 2025 were primarily due to lower expected return on plan assets. The lower benefits in 2024 were primarily due to lower expected return on plan assets and higher amortization of net actuarial losses, partially offset by lower interest costs. For further discussion of pension and other postretirement costs, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 28 and 29 of this Form 10-K and see Note 24 to our Consolidated Financial Statements.
Management uses Core operating earnings/(loss), Core operating margins and Core earnings/(loss) per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as unallocated pension and other postretirement benefit costs primarily represent costs driven by market factors and costs not allocable to U.S. government contracts.
Reconciliation of Non-GAAP Measures to GAAP Measures
The table below reconciles the non-GAAP financial measures of Core operating earnings/(loss), Core operating margins and Core earnings/(loss) per share with the most directly comparable GAAP financial measures of Earnings/(loss) from operations, Operating margins and Diluted earnings/(loss) per share.
(Dollars in millions, except per share data)
Years ended December 31,
2025 2024 2023
Revenues $89,463 $66,517 $77,794
Earnings/(loss) from operations, as reported
$4,281 ($10,707) ($773)
Operating margins 4.8 % (16.1) % (1.0) %
Pension FAS/CAS service cost adjustment(1)
($784) ($811) ($799)
Postretirement FAS/CAS service cost adjustment(1)
(261) (293) (257)
FAS/CAS service cost adjustment(1)
($1,045) ($1,104) ($1,056)
Core operating earnings/(loss) (non-GAAP)
$3,236 ($11,811) ($1,829)
Core operating margins (non-GAAP) 3.6 % (17.8) % (2.4) %
Diluted earnings/(loss) per share, as reported
$2.48 ($18.36) ($3.67)
Pension FAS/CAS service cost adjustment(1)
(1.03) (1.26) (1.32)
Postretirement FAS/CAS service cost adjustment(1)
(0.34) (0.45) (0.42)
Non-operating pension income(2)
(0.24) (0.74) (0.87)
Non-operating postretirement income(2)
(0.02) (0.11) (0.10)
Provision for deferred income taxes on adjustments (3)
0.34 0.54 0.57
Core earnings/(loss) per share (non-GAAP)
$1.19 ($20.38) ($5.81)
Diluted weighted average common shares outstanding (in millions) 762.3 646.9 605.8
(1)FAS/CAS service cost adjustment represents the difference between the FAS pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. This adjustment is excluded from Core operating earnings/(loss) (non-GAAP).
(2)Non-operating pension and postretirement income represents the components of net periodic benefit costs/(income) other than service cost/(income). This income is included in Other income, net and is excluded from Core earnings/(loss) per share (non-GAAP).
(3)The income tax impact is calculated using the U.S. corporate statutory tax rate.
Critical Accounting Estimates
Accounting for Long-term Contracts
Substantially all contracts at BDS and certain contracts at BGS are long-term contracts. Our long-term contracts typically represent a single distinct performance obligation due to the highly interdependent and interrelated nature of the underlying goods and/or services and the significant service of integration that we provide.
Accounting for long-term contracts involves a judgmental process of estimating the total revenue, costs, and profit for each performance obligation. Cost of sales is recognized as incurred, and revenue is determined by adding a proportionate amount of the estimated profit to the amount reported as cost of sales.
Due to the size, duration and nature of many of our long-term contracts, the estimation of total revenues and costs through completion is complicated and subject to many variables. Total revenue estimates are based on negotiated contract prices and quantities, modified by our assumptions regarding contract options, change orders, incentive and award fee provisions associated with technical performance, and price adjustment clauses (such as inflation or index-based clauses). The majority of these long-term contracts are with the U.S. government where the price is generally based on the estimated cost to produce the product or service plus profit. Federal Acquisition Regulations provide guidance on the types of cost that will be reimbursed in establishing contract price. Total cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, business base and other economic projections. Factors that influence these estimates include inflationary trends, technical and schedule risk, internal and supplier performance trends, production quality, labor instability, supply chain delays and quality issues, business volume assumptions, asset utilization, and anticipated labor agreements.
Revenue and cost estimates for all significant long-term contract performance obligations are reviewed and reassessed quarterly. Changes in these estimates could result in recognition of cumulative catch-up adjustments to the contract's inception to date revenues, cost of sales and profit in the period in which such changes are made. Changes in revenue and cost estimates could also result in a reach-forward loss or an adjustment to a reach-forward loss which would be recorded immediately in earnings. Net cumulative catch-up adjustments for changes in estimated revenues and costs at completion across all long-term contracts, including the impact of estimated losses on unexercised options, decreased Earnings from operations by $1,377 million in 2025 and increased Loss from operations by $6,562 million and $2,943 million in 2024 and 2023, respectively, and were primarily due to losses recognized on the KC-46A Tanker, VC-25B, T-7A Red Hawk, MQ-25, and Commercial Crew programs. These are all fixed-price development programs, and there is ongoing risk that similar losses may have to be recognized in future periods on these and/or other programs.
Due to the significance of judgment in the estimation process described above, it is likely that materially different earnings could be recorded if we used different assumptions or if the underlying circumstances were to change. For example, changes in underlying operational assumptions, inability to implement planned risk mitigation plans, failure to achieve productivity targets, supplier shortages, quality issues and/or pricing issues, inflationary trends, or other circumstances may adversely affect financial performance in future periods. If the combined gross margins for our profitable long-term contracts had been estimated to be higher or lower by 1% during 2025, it would have increased or decreased pre-tax income for the year by approximately $320 million.
Program Accounting
Program accounting requires the demonstrated ability to reliably estimate revenues, costs and gross profit margin for the defined program accounting quantity. A program consists of the estimated number
of units (accounting quantity) of a product to be produced in a continuing, long-term production effort for delivery under existing and anticipated contracts. The determination of the accounting quantity is limited by the ability to make reasonably dependable estimates.
Factors that must be estimated include program accounting quantity, sales price, production rates, labor and employee benefit costs, material costs, procured part costs, major component costs, overhead costs, program tooling and other non-recurring costs, and warranty costs. Estimation of the accounting quantity for each program takes into account several factors that are indicative of the demand for the particular program, such as firm orders, letters of intent from prospective customers and market studies. Total estimated program sales are determined by estimating the model mix and sales price for all unsold units within the accounting quantity, added together with the sales prices for all undelivered units under contract. The sales prices for all undelivered units within the accounting quantity include an escalation adjustment for inflation that is updated quarterly, as well as customer consideration driven by delivery delays. Cost estimates are based largely on negotiated and anticipated contracts with suppliers, historical performance trends, and business base and other economic projections. Factors that influence these estimates include the timing of production rate increases, internal and supplier performance trends, production quality, labor instability, supply chain delays and quality issues, learning curve, change incorporation, rework or safety enhancements, regulatory requirements, flight test and certification requirements and schedules, performance or reliability issues involving completed aircraft, customer and/or supplier claims or assertions, asset utilization, anticipated labor agreements, and inflationary or deflationary trends. Since the 737-9 door plug accident in January 2024, the 737 program may only increase production rates and/or implement new production lines with the concurrence of the FAA.If we are unable to increase production rates consistent with our assumptions, our financial position, results of operations and cash flows could be materially impacted.
The introduction of new aircraft and derivatives, such as the 777X, 737-7 and 737-10, involves increased risks associated with meeting development, certification, and production schedules. These challenges include significant global regulatory scrutiny of all development aircraft. We have experienced significant certification delays with the 777X, 737-7 and 737-10 aircraft. As a result, our ability to deliver aircraft on time, satisfy performance and reliability standards and achieve or maintain, as applicable, program profitability is subject to significant risks. We are following the lead of the FAA as we work through the certification processes for the 777X, 737-7 and 737-10 models and the ultimate timing will be determined by the regulators.
To ensure reliability in our estimates, we employ a rigorous estimating process that is reviewed and updated on a quarterly basis. This includes reassessing the accounting quantity. Changes in estimates of program gross profit margins are normally recognized on a prospective basis; however, when estimated costs to complete a program plus costs already included in inventory exceed estimated revenues from the program, a loss is recorded in the current period. Reductions to the estimated loss are included in the gross profit margin for undelivered units in the accounting quantity whereas increases to the estimated loss are recorded as an earnings charge in the period in which the loss is determined.
The 777X and 767 programs recognized earnings charges totaling $4,899 million and $384 million during the year ended December 31, 2025. Adverse changes to the revenue and/or cost estimates for these programs could result in further earnings charges in future periods.
Due to the significance of judgment in the estimation process described above, it is reasonably possible that changes in underlying circumstances or assumptions could have a material effect on program gross margins. If the combined gross margin percentages for our commercial airplane programs had been estimated to be 1% higher or lower it would have an approximately $390 million impact on operating earnings for the year ended December 31, 2025.
Pension Plans
Many of our employees have earned benefits under defined benefit pension plans. The majority of employees that had participated in defined benefit pension plans have transitioned to a company-funded defined contribution retirement savings plan. Accounting rules require an annual measurement of our projected obligation and plan assets. These measurements are based upon several assumptions. Future changes in assumptions or differences between actual and expected outcomes can significantly affect our future annual expense, projected benefit obligation and Shareholders' equity.
The projected benefit obligation is sensitive to discount rates. The projected benefit obligation would decrease by $1,185 million or increase by $1,310 million if the discount rate increased or decreased by 25 basis points. A 25 basis point change in the discount rate would not have a significant impact on pension cost. However, net periodic pension cost is sensitive to changes in the expected long-term rate of asset return. A decrease or increase of 25 basis points in the expected long-term rate of asset return would have increased or decreased 2025 net periodic pension cost by $134 million. See Note 18 to our Consolidated Financial Statements, which includes the discount rate and expected long-term rate of asset return assumptions for the last three years.
Deferred Income Taxes - Valuation Allowance
The Company had deferred income tax assets of $21,065 million at December 31, 2025, that can be used in future years to offset taxable income and reduce income taxes payable. The Company had deferred income tax liabilities of $11,420 million at December 31, 2025, that will partially offset deferred income tax assets and result in higher taxable income in future years and increase income taxes payable. Tax law determines whether future reversals of temporary differences will result in taxable and deductible amounts that offset each other in future years. The particular years in which temporary differences result in taxable or deductible amounts generally are determined by the timing of the recovery of the related asset or settlement of the related liability.
On a quarterly basis, we assess the likelihood that we will be able to recover our deferred tax assets against future sources of taxable income and reduce the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the available evidence, it is more likely than not (defined as a likelihood of more than 50%) that all or a portion of such assets will not be realized.
This assessment takes into account both positive and negative evidence. A recent history of financial reporting losses is heavily weighted as a source of objectively verifiable negative evidence. Due to our recent history of losses, we determined we could not include future projected earnings in our analysis. Rather, we use systematic and logical methods to estimate when deferred tax liabilities will reverse and generate taxable income and when deferred tax assets will reverse and generate tax deductions. The selection of methodologies and assessment of when temporary differences will result in taxable or deductible amounts involves significant management judgment and is inherently complex and subjective. We believe that the methodologies we use are reasonable and can be replicated on a consistent basis in future periods.
The Company's valuation allowance of $9,754 million at December 31, 2025, primarily relates to certain domestic deferred tax assets and domestic tax net operating losses, tax credits and interest carryforwards that are assumed to reverse beyond the period in which reversals of deferred tax liabilities are assumed to occur. The Company's valuation allowance increased by $1,917 million in 2025 primarily reflecting $1,833 million recorded as part of acquisition accounting against acquired Spirit deferred tax assets as well as tax credits and other carryforwards generated in 2025 that cannot be realized in 2025. Until the Company generates sustained levels of profitability, additional valuation allowances may have to be recorded with corresponding adverse impacts on earnings and/or other comprehensive income.
For additional information regarding income taxes, see Note 6 to our Consolidated Financial Statements.
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