The Boeing Company

10/29/2025 | Press release | Distributed by Public on 10/29/2025 10:57

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
On January 5, 2024, a 737-9 flight made an emergency landing after a mid-exit door plug detached in flight. Following the accident, the Federal Aviation Administration (FAA) grounded and required inspections of all 737-9 aircraft with a mid-exit door plug, which constituted the large majority of the approximately 220 737-9 aircraft in the in-service fleet. On January 24, 2024, the FAA approved an enhanced maintenance and inspection process that was required to be performed on each of the grounded 737-9 aircraft. Our 737-9 operators returned their fleets to service in the first quarter of 2024. All 737-9 aircraft in production are undergoing this same enhanced inspection process prior to delivery.
As a result of the accident, the FAA performed an investigation into the 737 quality control system. In the second quarter of 2024, we submitted a comprehensive safety and quality plan to the FAA to address the issues identified. 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 also began taking additional actions to improve safety and quality, which include investing in workforce training, simplifying plans and processes, eliminating defects, and enhancing our safety and quality culture.
On November 4, 2024, the International Association of Machinists and Aerospace Workers District 751 (IAM 751) voted to ratify a new contract, thereby ending the work stoppage initiated on September 13, 2024, which paused production of certain commercial aircraft models (737, 767, 777 and 777X aircraft) as well as production of commercial derivative aircraft for our Defense, Space & Security business (KC-46A Tanker and P-8A Poseidon). Production for all programs resumed in December 2024 and gradually ramped up during 2025.
Consolidated Results of Operations and Financial Condition
Consolidated Results of Operations
The following table summarizes key indicators of consolidated results of operations:
(Dollars in millions, except per share data) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Revenues $65,515 $51,275 $23,270 $17,840
GAAP
Loss from operations ($4,496) ($6,937) ($4,781) ($5,761)
Operating margins (6.9) % (13.5) % (20.5) % (32.3) %
Effective income tax rate (5.2) % 1.8 % (2.7) % 0.8 %
Net loss attributable to Boeing shareholders ($5,985) ($7,952) ($5,337) ($6,170)
Diluted loss per share ($8.25) ($12.91) ($7.14) ($9.97)
Non-GAAP (1)
Core operating loss ($5,283) ($7,769) ($5,049) ($5,989)
Core operating margins (8.1) % (15.2) % (21.7) % (33.6) %
Core loss per share ($9.22) ($14.52) ($7.47) ($10.44)
(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 53-54 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) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Commercial Airplanes $30,115 $18,099 $11,094 $7,443
Defense, Space & Security 19,817 18,507 6,902 5,536
Global Services 15,714 14,835 5,370 4,901
Unallocated items, eliminations and other (131) (166) (96) (40)
Total $65,515 $51,275 $23,270 $17,840
Revenues for the nine months ended September 30, 2025, increased by $14,240 million compared with the same period in 2024 primarily driven by higher revenues at Commercial Airplanes (BCA) and Defense, Space & Security (BDS). BCA revenues increased by $12,016 million primarily due to higher deliveries. BDS revenues increased by $1,310 million primarily due to lower net unfavorable cumulative contract catch-up adjustments.
Revenues for the three months ended September 30, 2025, increased by $5,430 million compared with the same period in 2024 primarily driven by higher revenues at BCA and BDS. BCA revenues increased by $3,651 million primarily due to higher deliveries. BDS revenues increased by $1,366 million primarily due to lower net unfavorable cumulative contract catch-up adjustments and higher volume.
Loss from Operations
The following table summarizes Loss from operations:
(Dollars in millions) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Commercial Airplanes ($6,447) ($5,879) ($5,353) ($4,021)
Defense, Space & Security 379 (3,146) 114 (2,384)
Global Services 2,930 2,620 938 834
Segment operating loss (3,138) (6,405) (4,301) (5,571)
Unallocated items, eliminations and other (2,145) (1,364) (748) (418)
Pension FAS/CAS service cost adjustment 588 608 198 148
Postretirement FAS/CAS service cost adjustment 199 224 70 80
Loss from operations (GAAP)
($4,496) ($6,937) ($4,781) ($5,761)
FAS/CAS service cost adjustment * (787) (832) (268) (228)
Core operating loss (Non-GAAP) **
($5,283) ($7,769) ($5,049) ($5,989)
* The FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments.
** Core operating earnings/(loss) is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 53-54.
Loss from operations for the nine months ended September 30, 2025, decreased by $2,441 million compared with the same period in 2024, primarily driven by BDS ($3,525 million), partially offset by an increase in Loss from operations on Unallocated items, eliminations and other ($781 million) and at BCA ($568 million).
Loss from operations for the three months ended September 30, 2025, decreased by $980 million compared with the same period in 2024, primarily driven by BDS ($2,498 million), partially offset by an increase in Loss from operations at BCA ($1,332 million).
Core operating loss for the nine and three months ended September 30, 2025, decreased by $2,486 million and $940 million compared with the same periods in 2024, primarily due to favorable changes in Segment operating loss as described above.
For information related to Postretirement Plans, see Note 14 to our Condensed Consolidated Financial Statements.
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) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Share-based plans ($40) $118 $11 $65
Deferred compensation (150) (100) (70) (51)
Amortization of previously capitalized interest (64) (70) (22) (24)
Research and development expense, net (285) (293) (102) (105)
Eliminations and other unallocated items (1,606) (1,019) (565) (303)
Unallocated items, eliminations and other ($2,145) ($1,364) ($748) ($418)
Share-based plans expense for the nine months ended September 30, 2025, increased by $158 million compared with the same period in 2024. Share-based plans income for the three months ended September 30, 2025, decreased by $54 million compared with the same period in 2024. The decrease in share-based plans income for the nine and three months ended September 30, 2025, compared with the same periods in 2024 was primarily due to the timing of corporate allocations.
Deferred compensation expense for the nine and three months ended September 30, 2025, increased by $50 million and $19 million compared with the same periods in 2024 primarily driven by changes in our stock price.
Research and development expense was largely unchanged during the nine and three months ended September 30, 2025, compared with the same periods in 2024.
Eliminations and other unallocated items expense for the nine and three months ended September 30, 2025, increased by $587 million and $262 million compared with the same periods in 2024 primarily due to higher General and administrative expense. General and administrative expense for the nine months ended September 30, 2025, and 2024, includes earnings charges of $445 million and $244 million related to agreements with the U.S. Department of Justice. For additional discussion, see Note 19 to our Condensed Consolidated Financial Statements.
Other Earnings Items
(Dollars in millions) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Loss from operations ($4,496) ($6,937) ($4,781) ($5,761)
Other income, net 924 790 276 265
Interest and debt expense (2,112) (1,970) (694) (728)
Loss before income taxes (5,684) (8,117) (5,199) (6,224)
Income tax (expense)/benefit (298) 149 (140) 50
Net loss (5,982) (7,968) (5,339) (6,174)
Less: Net earnings/(loss) attributable to noncontrolling interest 3 (16) (2) (4)
Net loss attributable to Boeing shareholders ($5,985) ($7,952) ($5,337) ($6,170)
Other income, net for the nine months ended September 30, 2025, increased by $134 million compared with the same period in 2024, primarily due to an increase in interest income on short-term investments and dividend income, partially offset by lower non-operating pension income. Other income, net for the three months ended September 30, 2025, remained largely unchanged compared with the same period in 2024. For information on changes related to non-operating pension and postretirement expenses, see Note 14 to our Condensed Consolidated Financial Statements.
Interest and debt expense for the nine months ended September 30, 2025, increased by $142 million compared with the same period in 2024 primarily as a result of higher average interest rates. Interest and debt expense for the three months ended September 30, 2025, remained largely unchanged compared with the same period in 2024.
For a discussion related to Income Taxes, see Note 5 to our Condensed Consolidated Financial Statements.
Total Costs and Expenses ("Cost of Sales")
Cost of sales, for both products and services, consists primarily of raw materials, parts, sub-assemblies, labor, overhead and subcontracting costs. Our BCA segment predominantly uses program accounting to account for cost of sales. Under program accounting, cost of sales for each commercial aircraft program equals the product of (i) revenue recognized in connection with customer deliveries and (ii) the estimated cost of sales percentage applicable to the total remaining program. For long-term contracts, the amount reported as cost of sales is recognized as incurred. Substantially all contracts at our BDS segment and certain contracts at our Global Services (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) Nine months ended September 30 Three months ended September 30
2025 2024 Change 2025 2024 Change
Cost of sales $63,038 $51,677 $11,361 $25,645 $21,347 $4,298
Cost of sales as a % of Revenues
96.2 % 100.8 % (4.6) % 110.2 % 119.7 % (9.5) %
Cost of sales for the nine months ended September 30, 2025, increased by $11,361 million, or 22%, compared with the same period in 2024, primarily due to higher revenues and an increase in reach-forward losses at BCA, partially offset by lower charges on BDS fixed-price development programs. Cost of sales as a percentage of Revenues decreased during the nine months ended September 30, 2025,
compared with the same period in 2024 primarily due to lower charges on BDS fixed-price development programs, partially offset by higher reach-forward losses at BCA.
Cost of sales for the three months ended September 30, 2025, increased by $4,298 million, or 20%, compared with the same period in 2024, primarily due to higher revenues and an increase in reach-forward losses at BCA, partially offset by lower charges on BDS fixed-price development programs. Cost of sales as a percentage of Revenues decreased during the three months ended September 30, 2025, compared with the same period in 2024 primarily due to lower charges on BDS fixed-price development programs, partially offset by higher reach-forward losses at BCA.
Research and Development
Research and development expense, net is summarized in the following table:
(Dollars in millions) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Commercial Airplanes $1,657 $1,852 $565 $779
Defense, Space & Security 618 728 198 234
Global Services 91 103 32 36
Other 285 293 102 105
Total $2,651 $2,976 $897 $1,154
Research and development expense decreased by $325 million and $257 million during the nine and three months ended September 30, 2025, compared to the same periods in 2024. The decrease in expense was primarily due to lower spending at BCA and BDS.
Backlog
(Dollars in millions) September 30
2025 		December 31
2024
Commercial Airplanes $534,613 $435,175
Defense, Space & Security 76,084 64,023
Global Services 24,634 21,403
Unallocated items, eliminations and other 357 735
Total Backlog $635,688 $521,336
Contractual backlog $598,551 $498,802
Unobligated backlog 37,137 22,534
Total Backlog $635,688 $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 of $99,749 million during the nine months ended September 30, 2025, was primarily due to a $99,438 million increase in BCA backlog. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.
Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The increase of $14,603 million in unobligated backlog during the nine months ended September 30, 2025 was due to an increase in BDS backlog.
Additional Considerations
U.S. Government FundingConsiderable uncertainty exists regarding how future U.S. government budget and program decisions will unfold, including the spending priorities of the Administration and Congress.
The Full-Year Continuing Appropriations and Extensions Act, 2025, enacted on March 15, 2025, largely continued federal funding at fiscal year 2024 appropriated levels through September 30, 2025.
As of October 1, 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, has lapsed. Elements of the federal government that have not been deemed to be "excepted" have ceased operations. 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, NASA, the DOT, including the FAA, 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 the United Kingdom, Japan, and the European Union. As of September 30, 2025, the U.S. applies a diverse range of reciprocal tariffs to imports originating from countries that have not concluded bilateral trade agreements with the U.S. The updated reciprocal tariff rates originally announced during the second quarter of 2025 became effective on August 7, 2025. On August 11, 2025, the U.S. and China further extended the pause on the reciprocal tariffs on each other's imports until November 10, 2025, while trade negotiations continue. However, the current state of U.S.-China trade relations remains an ongoing watch item.
In addition, as of September 30, 2025, the U.S. maintains tariffs announced during the first quarter of 2025 on goods imported from China, as well as goods imported from Canada and Mexico that are not compliant with the United States-Mexico-Canada Agreement (USMCA). We believe that the majority of our imports from Canada and Mexico are compliant with the provisions of the USMCA.
As of September 30, 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 and third quarter results reflect our best estimate of the impacts of the tariffs enacted as of September 30, 2025, and certain potential mitigating actions.
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.
The current state of U.S.-China relations remains an ongoing watch item. China is a significant market for commercial aircraft, and we have long-standing relationships with our Chinese customers. After pausing deliveries in April 2025, China resumed accepting deliveries in June 2025. Overall, the U.S.-China trade relationship is challenged due to tariffs, export restrictions and related supply chain constraints, and other economic and national security concerns.
Supply Chain We and our suppliers are experiencing inflationary pressures, as well as supply chain disruptions as a result of global supply chain constraints and labor instability. Our supply chain is also being impacted by the tariffs and export restrictions discussed above. Certain of our suppliers are also experiencing financial difficulties. We continue to monitor the health and stability of the supply chain. These factors have reduced overall productivity and adversely impacted our financial position, results of operations and cash flows. During 2024, we recorded a reach-forward loss of $1,770 million on the T-7A Red Hawk program that was primarily driven by projected increases in supplier cost estimates. In addition, we recorded losses on the KC-46A Tanker and Commercial Crew programs during 2024 that were partially attributable to higher supplier costs. We recorded a reach-forward loss on the 777X program during the third quarter of 2025 that was partially attributable to higher estimated supplier costs.
Segment Results of Operations and Financial Condition
Commercial Airplanes
Results of Operations
(Dollars in millions) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Revenues $30,115 $18,099 $11,094 $7,443
Loss from operations ($6,447) ($5,879) ($5,353) ($4,021)
Operating margins (21.4)% (32.5)% (48.3) % (54.0) %
Revenues
BCA revenues increased by $12,016 million for the nine months ended September 30, 2025, compared with the same period in 2024 primarily due to higher deliveries across all programs and the absence of 737-9 customer considerations. BCA revenues increased by $3,651 million for the three months ended September 30, 2025, compared with the same period in 2024 primarily due to higher deliveries.
Commercial airplane deliveries, including intercompany deliveries, were as follows:
737 * 767 * 777 787 Total
Deliveries during the first nine months of 2025 330 (5) 20 (10) 29 61 440
Deliveries during the first nine months of 2024 229 (4) 15 (7) 11 36 291
Deliveries during the third quarter of 2025 121 (2) 6 (3) 9 24 160
Deliveries during the third quarter of 2024 92 (2) 6 (2) 4 14 116
Cumulative deliveries as of 9/30/2025 9,123 1,341 1,770 1,222
Cumulative deliveries as of 12/31/2024 8,793 1,321 1,741 1,161
*Intercompany deliveries identified by parentheses.
Loss From Operations
BCA loss from operations was $6,447 million for the nine months ended September 30, 2025, compared with $5,879 million in the same period in 2024 reflecting a higher reach-forward loss on the 777X program and lower program margins, partially offset by higher deliveries, the absence of 737-9 customer considerations and lower abnormal costs. BCA loss from operations was $5,353 million for the three months ended September 30, 2025, compared with $4,021 million in the same period in 2024 primarily reflecting the higher reach-forward loss on the 777X program, partially offset by higher deliveries and lower period expenses.
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 increased from $435,175 million as of December 31, 2024, to $534,613 million at September 30, 2025, reflecting new orders in excess of deliveries and a decrease in the value of existing orders that, in our assessment, do not meet the accounting requirements of ASC 606 for inclusion in backlog, partially offset by cancellations. Aircraft order cancellations during the nine months ended September 30, 2025, totaled $3,037 million and primarily relate to 737 aircraft. Net ASC 606 adjustments during the nine months ended September 30, 2025, totaled $9,951 million and primarily relate to 777X and 787 aircraft. ASC 606 adjustments include consideration of aircraft orders where a customer-controlled contingency may exist, as well as an assessment of whether the customer is committed to perform, impacts of geopolitical events or related sanctions, or whether it is probable that the customer will pay the full amount of consideration when it is due. We may experience reductions to backlog and/or significant order cancellations due to various factors including delivery delays, production disruptions and delays to entry into service of the 777X, 737-7 and/or 737-10.
Accounting Quantity
The following table provides details of the accounting quantities and firm orders by program. 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
As of 9/30/2025 737 767 777 777X 787 †
Program accounting quantities 12,000 1,263 1,828 600 1,900
Undelivered units under firm orders 4,349 * 89 50 473 993 (2)
Cumulative firm orders 13,472 1,430 1,820 473 2,215
As of 12/31/2024 737 767 777 777X 787 †
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
† Customer financing aircraft orders are identified in parentheses.
*Approximate undelivered orders by minor model for September 30, 2025 and December 31, 2024: 737-7 (7%, 7%), 737-8 (62%, 63%), 737-9 (4%, 5%) and 737-10 (27%, 25%).
Program Highlights
737 Program In January 2024, a 737-9 flight made an emergency landing after a mid-exit door plug detached in flight. As a result of the accident, the FAA investigated the 737 quality control system, including Spirit AeroSystems Holdings, Inc. (Spirit), and increased its oversight of Boeing's production and quality and safety management systems. The FAA also communicated it will not support production rate increases beyond 38 per month or additional production lines until Boeing has complied with required quality and safety standards. In 2024, we submitted a comprehensive safety and quality plan to the FAA to address the issues identified in connection with the FAA's investigation. We also took additional actions to improve safety and quality, which include investing in workforce training, simplifying plans and processes, eliminating defects, and enhancing our safety and quality culture. In 2025, we are continuing to implement these improvements and align our production plans consistent with the comprehensive safety and quality plan.
We increased the accounting quantity by 400 units during the nine months ended September 30, 2025 due to the program's normal progress of obtaining additional orders and delivering airplanes. We gradually increased the production rate to 38 per month during the first half of 2025 operating within our safety and quality plan. In October 2025, after extensive reviews of the key performance indicators (KPIs), the FAA and Boeing jointly agreed the KPIs and rate readiness process guided by our Safety Management System supported an increase of the 737 production rate to 42 per month. As of September 30, 2025, we had approximately five 737-8 aircraft in inventory for customers in China that were produced prior to 2023. We are scheduled to deliver these aircraft in 2025. It is currently unclear whether the trade tensions between the U.S. and China will impact future deliveries to China.
We are continuing to work through the certification process of the 737-7 and 737-10 models, which have been delayed, while we continue to work through the engineering solution for the engine anti-ice system. We now expect certification to occur in 2026. As of September 30, 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 future 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 7 and Note 11 to our Condensed Consolidated Financial Statements.
767 Program The 767 assembly line includes the commercial program and a derivative to support the KC-46A Tanker program. We are currently targeting a production rate of approximately three aircraft per month. We expect to complete production of the 767 commercial program by 2027. During 2024, we recorded reach-forward losses of $580 million. During the nine months ended September 30, 2025, we recorded further reach-forward losses of $241 million primarily driven by higher production costs.
See further discussion of the KC-46A Tanker program in Note 11 to our Condensed Consolidated Financial Statements.
777 and 777X ProgramsThe accounting quantity for the 777 program extends through year-end 2027. We increased the accounting quantity by six units during the nine months ended September 30, 2025, because we now expect to produce an additional six units in that timeframe. Cumulative firm orders for the 777X increased from 358 units at December 31, 2024, to 473 units at September 30, 2025. We increased the accounting quantity for the 777X program by 100 units to 600 units during the nine months ended September 30, 2025.
In July 2024, we obtained approval from the FAA to begin the first phase of certification flight testing. Flight testing was paused starting in August 2024 and resumed in January 2025. During the first nine months of 2025, we obtained approval from the FAA to begin the second major phase of certification flight testing, and we had anticipated beginning the third major phase of certification flight testing in the third quarter of 2025. It has taken longer than expected to complete the supporting analysis and obtain FAA approval to begin this phase of testing. We anticipate obtaining FAA approval and starting the third phase of flight testing later this year or early next year. We have also reassessed the anticipated timing to complete subsequent phases of FAA certification flight testing. As a result, we now expect first delivery of the 777-9 to occur in 2027. Due to these delays and to address continued production challenges, we slowed our production rate plans, which resulted in higher estimated production and change-incorporation costs, as well as associated customer and supply chain impacts. The impact of these changes on estimated revenues and costs were partially offset by the 100-unit accounting quantity increase, resulting in an incremental reach-forward loss of $4,899 million during the third quarter of 2025.
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, 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 Program The 787 program began increasing the production rate to seven per month during the second quarter of 2025 and continues to work toward stabilizing production. We are continuing to monitor supply chain health and factory performance as we work to increase production rates. As of September 30, 2025, and December 31, 2024, we had approximately 10 aircraft and 25 aircraft in inventory that were produced prior to 2023 and required rework. In February 2025, we completed the rework of the last aircraft, and we expect to deliver the 10 aircraft in inventory in 2025 and 2026. It is currently unclear whether the trade tensions between the U.S. and China will impact future deliveries to China.
Additional Considerations
On June 30, 2024, we entered into an agreement to acquire Spirit. See Note 2 to our Condensed Consolidated Financial Statements.
Defense, Space & Security
Overview
In May 2025, the U.S. government released the President's budget request for fiscal year 2026 (FY26), which requested $848 billion in funding for the DoW and $19 billion for NASA. The corresponding FY25 appropriated levels are $856 billion for the DoW and $25 billion for NASA.
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.
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 September 30, 2025, 20% of BDS backlog was attributable to non-U.S. customers.
Results of Operations
(Dollars in millions) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Revenues $19,817 $18,507 $6,902 $5,536
Earnings/(loss) from operations
$379 ($3,146) $114 ($2,384)
Operating margins 1.9 % (17.0) % 1.7 % (43.1) %
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, including remanufactures and modifications, were as follows:
Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
F/A-18 Models 12 5 3 1
F-15 Models 7 10 3 3
T-7A Red Hawk 1 1
CH-47 Chinook (New) 1 2
CH-47 Chinook (Renewed) 9 7 2 2
AH-64 Apache (New) 14 10 8 7
AH-64 Apache (Remanufactured) 28 24 7 11
MH-139 Grey Wolf 6 3 1 3
P-8 Models 4 4 2 1
KC-46 Tanker 9 10 4 5
Commercial Satellites 4 2
Total 94 76 32 34
Revenues
BDS revenues for the nine months ended September 30, 2025, increased by $1,310 million compared with the same period in 2024. The increase is primarily due to $1,438 million lower net unfavorable cumulative contract catch-up adjustments compared to the prior year comparable period. The increase in revenue was partially offset by the absence of a favorable MQ-25 contract modification that was awarded during the first quarter of 2024.
BDS revenues for the three months ended September 30, 2025, increased by $1,366 million compared with the same period in 2024. The increase reflects $830 million lower net unfavorable cumulative contract catch-up adjustments. The increase also reflects higher volume of $525 million primarily on E-7, KC-46A, and weapons programs.
Earnings/(Loss) From Operations
BDS earnings from operations for the nine months ended September 30, 2025, was $379 million, compared with a loss from operations of $3,146 million in the same period in 2024. The year-over-year improvement in earnings is primarily due to lower net unfavorable cumulative catch-up adjustments of $3,714 million compared to the prior year comparable period. During the nine months ended September
30, 2024, losses incurred on the five major fixed-price development programs totaled $3,302 million. Losses on the five major development programs were not significant in 2025. In addition, the year over year earnings improvement reflects higher earnings from other programs including fighters, P-8, satellites and weapons.
BDS earnings from operations was $114 million for the three months ended September 30, 2025, compared with loss from operations of $2,384 million in the same period in 2024. The year over year improvement in earnings reflects a decrease in net unfavorable cumulative contract catch-up adjustments which were $2,362 million lower than the comparable period in the prior year. Higher volume also contributed to the comparative earnings increase. During the third quarter of 2024, losses incurred on the five major fixed-price development programs totaled $2,036 million. In addition, earnings in 2024 were adversely impacted by lower earnings on several programs including fighters, P-8 and E-7, reflecting production and engineering inefficiencies.
See further discussion of fixed-price contracts in Note 11 to our Condensed Consolidated Financial Statements.
BDS earnings/(loss) from operations includes our share of earnings from equity method investments of $30 million and $10 million for the nine and three months ended September 30, 2025, compared with $104 million and $9 million for the same periods in 2024.
Backlog
BDS backlog was $76,084 million at September 30, 2025 compared with $64,023 million as of 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.
Approximately 3,200 International Association of Machinists and Aerospace Workers District 837 (IAM 837) represented employees at our St. Louis area sites have been on strike since August 4, 2025. This is disrupting our St. Louis operations. Programs impacted include F/A-18, F-15, T-7A, MQ-25 and Weapons. If we are unable to successfully negotiate a new contract with IAM 837 and the strike continues for a prolonged period, our financial position, results of operations and cash flows could be materially impacted.
Global Services
Results of Operations
(Dollars in millions) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Revenues $15,714 $14,835 $5,370 $4,901
Earnings from operations $2,930 $2,620 $938 $834
Operating margins 18.6 % 17.7 % 17.5 % 17.0 %
Revenues
BGS revenues for the nine months ended September 30, 2025 increased by $879 million compared with the same period in 2024, primarily due to higher government and commercial services revenue. The net unfavorable impact of cumulative contract catch-up adjustments for the nine months ended September 30, 2025 was $93 million lower than the prior year comparable period.
BGS revenues for the three months ended September 30, 2025 increased by $469 million compared with the same period in 2024, primarily due to higher commercial and government services revenue. The net favorable impact of cumulative contract catch-up adjustments for the three months ended September 30, 2025 was $42 million higher than the net unfavorable impact in the prior year comparable period.
Earnings From Operations
BGS earnings from operations for the nine months ended September 30, 2025 increased by $310 million compared with the same period in 2024, due to higher commercial and government services revenue and a 2025 gain on asset disposition. The net unfavorable impact of cumulative contract catch-up adjustments for the nine months ended September 30, 2025 was $71 million lower than the prior year comparable period.
BGS earnings from operations for the three months ended September 30, 2025 increased by $104 million compared with the same period in 2024, primarily due to higher commercial and government services revenue. The net favorable impact of cumulative contract catch-up adjustments for the three months ended September 30, 2025 was $54 million higher than the net unfavorable impact in the prior year comparable period.
Backlog
BGS total backlog increased from $21,403 million at December 31, 2024 to $24,634 million at September 30, 2025, 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) Nine months ended September 30
2025 2024
Net loss ($5,982) ($7,968)
Non-cash items 8,259 6,271
Changes in assets and liabilities (2,543) (6,933)
Net cash used by operating activities (266) (8,630)
Net cash (used)/provided by investing activities (5,901) 653
Net cash (used)/provided by financing activities (812) 5,238
Effect of exchange rate changes on cash and cash equivalents 39 8
Net decrease in cash & cash equivalents, including restricted (6,940) (2,731)
Cash & cash equivalents, including restricted, at beginning of year 13,822 12,713
Cash & cash equivalents, including restricted, at end of period $6,882 $9,982
Operating ActivitiesNet cash used by operating activities was $0.3 billion during the nine months ended September 30, 2025, compared with $8.6 billion during the same period in 2024. The $8.3 billion decrease in net cash used by operating activities was primarily driven by higher commercial airplane deliveries, lower customer considerations and working capital improvements.
Non-cash items for the nine months ended September 30, 2025, was $8.3 billion compared with $6.3 billion during the same period in 2024. The change in Non-cash items was primarily due to higher 777X reach-forward losses recorded during the nine months ended September 30, 2025 compared with the same period in 2024.
Changes in assets and liabilities during the nine months ended September 30, 2025, improved by $4.4 billion compared with the same period in 2024, primarily driven by favorable changes in Inventories ($6.7 billion) and Accounts payable ($0.4 billion), partially offset by unfavorable changes in Advances and progress billings ($3.7 billion). The change in Inventories was primarily driven by higher deliveries on our commercial airplane programs during the nine months ended September 30, 2025, as compared to the same period in 2024. The change in Accounts payable during the nine months ended September 30, 2025, compared to the same period in 2024 reflects increased production primarily in our commercial airplanes business. The change in Advances and progress billings during the nine months ended September 30, 2025, compared to the same period in 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 $0.1 billion and $0.8 billion for the nine months ended September 30, 2025 and 2024.
Payables to suppliers who elected to participate in supply chain financing programs decreased by $0.8 billion and $0.2 billion during the nine months ended September 30, 2025 and 2024. Supply chain financing is not material to our overall liquidity.
Investing ActivitiesNet cash used by investing activities during the nine months ended September 30, 2025, was $5.9 billion, compared with net cash provided of $0.7 billion during the same period in 2024. The increase in cash used was primarily due to net contributions to investments of $3.7 billion in 2025 compared with net proceeds from investments of $2.8 billion in 2024. During the nine months ended September 30, 2025 and 2024, capital expenditures were $2.0 billion and $1.6 billion. We continue to expect capital expenditures in 2025 to be higher than in 2024.
Financing ActivitiesNet cash used by financing activities was $0.8 billion during the nine months ended September 30, 2025, compared with net cash provided of $5.2 billion during the same period in 2024. During the nine months ended September 30, 2025, net repayments were $0.6 billion compared with net
borrowings of $5.3 billion during the same period in 2024. Dividends paid on mandatory convertible preferred stock during the nine months ended September 30, 2025, was $0.2 billion.
As of September 30, 2025, the total debt balance was $53.4 billion, down from $53.9 billion at December 31, 2024. At September 30, 2025, $8.7 billion of debt was classified as short-term.
Capital Resources
At September 30, 2025, we had $6.2 billion of cash, $16.8 billion of short-term investments, and $10.0 billion of unused borrowing capacity on revolving credit line agreements. 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 2028 and $4.0 billion, five-year revolving credit agreement expiring in May 2029 each remain in effect. We anticipate that these credit lines will primarily serve as back-up liquidity to support our general corporate borrowing needs. At September 30, 2025 we were in full compliance with all covenants contained in our debt and credit facility agreements.
For discussion related to the Spirit Acquisition and Digital Aviation Solutions Divestiture, see Note 2 and Note 3 to our Condensed 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 April 2025, S&P affirmed the BBB- credit rating with a negative outlook and removed the credit watch negative. At Moody's we are rated Baa3 with a negative outlook.
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 further 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" of our 2024 Annual Report on Form 10-K.
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.
Off-Balance Sheet Arrangements
We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion of these arrangements, see Note 12 to our Condensed 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 19 to our Condensed Consolidated Financial Statements.
Environmental RemediationWe are involved with various environmental remediation activities and have recorded a liability of $908 million at September 30, 2025. For additional information, see Note 11 to our Condensed Consolidated Financial Statements.
Non-GAAP Measures
Core Operating Earnings/(Loss), Core Operating Margins and Core Earnings/(Loss) Per Share
Our unaudited condensed consolidated interim financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (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 Loss from operations were benefits of $588 millionand $198 million for the nine and three months ended September 30, 2025, compared with benefits of $608 million and $148 million for the same periods in 2024. The lower benefits in 2025 were primarily due to reductions in allocated pension cost year over year. The non-operating pension income included in Other income, net was $127 millionand $42 million for the nine and three months ended September 30, 2025, compared with $368 millionand $123 million for the same periods in 2024.The lower benefits in 2025 were primarily due to lower expected return on plan assets. 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 our 2024 Annual Report on Form 10-K.
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 loss, Core operating margins and Core loss per share with the most directly comparable GAAP financial measures of Loss from operations, Operating margins and Diluted loss per share.
(Dollars in millions, except per share data) Nine months ended September 30 Three months ended September 30
2025 2024 2025 2024
Revenues $65,515 $51,275 $23,270 $17,840
Loss from operations, as reported
($4,496) ($6,937) ($4,781) ($5,761)
Operating margins (6.9) % (13.5) % (20.5) % (32.3) %
Pension FAS/CAS service cost adjustment(1)
($588) ($608) ($198) ($148)
Postretirement FAS/CAS service cost adjustment(1)
(199) (224) (70) (80)
FAS/CAS service cost adjustment(1)
($787) ($832) ($268) ($228)
Core operating loss (non-GAAP)
($5,283) ($7,769) ($5,049) ($5,989)
Core operating margins (non-GAAP) (8.1) % (15.2) % (21.7) % (33.6) %
Diluted loss per share, as reported ($8.25) ($12.91) ($7.14) ($9.97)
Pension FAS/CAS service cost adjustment(1)
(0.78) (0.99) (0.26) (0.24)
Postretirement FAS/CAS service cost adjustment(1)
(0.26) (0.36) (0.09) (0.13)
Non-operating pension income(2)
(0.17) (0.60) (0.06) (0.20)
Non-operating postretirement income(2)
(0.02) (0.09) (0.01) (0.03)
Provision for deferred income taxes on adjustments(3)
0.26 0.43 0.09 0.13
Core loss per share (non-GAAP) ($9.22) ($14.52) ($7.47) ($10.44)
Diluted weighted average common shares outstanding (in millions) 756.7 615.8 759.9 618.6
(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 loss (non-GAAP).
(2)Non-operating pension and postretirement income represents the components of net periodic benefit costs/(income) other than service cost. This income is included in Other income, net and is excluded from Core operating loss (non-GAAP).
(3)The income tax impact is calculated using the U.S. corporate statutory tax rate.
The Boeing Company published this content on October 29, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 29, 2025 at 16:57 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]