# The Boeing Company (NYSE: BA) — Business, Risks and Management's Discussion

## Business

*From the annual report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001628280-26-004357.*

Boeing designs, builds and supports commercial jetliners, military aircraft, satellites, missile
defense, and human space flight and launch systems. It is one of two manufacturers of 100-plus-seat
airplanes for the worldwide commercial airline industry and one of the largest defense contractors in
the United States. The company reports in three segments — Commercial Airplanes (BCA), Defense, Space
& Security (BDS) and Global Services (BGS) — which generated revenues of $41.5 billion, $27.2 billion
and $20.9 billion respectively in 2025 against total company revenues of $89.5 billion. Non-U.S.
customers, including Foreign Military Sales routed through the U.S. government, accounted for 46% of
total 2025 revenues and 60% of Commercial Airplanes revenue from customer contracts; 35% of revenues
were earned under U.S. government contracts.

**Commercial Airplanes** develops, produces and markets commercial jet aircraft principally to the
airline industry worldwide. The in-production family comprises the 737 narrow-body and the 767, 777
and 787 wide-bodies, with development continuing on the 777X program and the 737-7 and 737-10
derivatives. Revenue is recognized at a point in time, when an aircraft is completed and accepted by
the customer, and the segment accounts for cost of sales under program accounting rather than per
unit. Approximately 85% of BCA's backlog in dollar terms is with non-U.S. airlines.

**Defense, Space & Security** researches, develops, produces and modifies manned and unmanned military
aircraft and weapons systems for strike, surveillance and mobility — fighter and trainer aircraft,
rotorcraft and tilt-rotor aircraft, and commercial derivative aircraft such as anti-submarine and
tanker aircraft. It also supplies strategic defense and intelligence systems, including strategic
missile and defense systems; command, control, communications, computers, intelligence, surveillance
and reconnaissance; cyber and information solutions; government and commercial satellites; and space
exploration. Revenue is generally recognized over the contract term as costs are incurred. BDS and the
BGS defense business each generated roughly 60% of their 2025 revenues from fixed-price contracts and
roughly 40% from cost-type arrangements. At December 31, 2025, 26% of BDS backlog was attributable to
non-U.S. customers.

**Global Services** sustains aerospace platforms and systems for commercial and defense customers
worldwide: supply chain and logistics management, engineering, maintenance and modifications, upgrades
and conversions, spare parts, pilot and maintenance training systems, technical and maintenance
documentation, and digital solutions and analytics. Commercial spare parts revenue is recognized when
a part is delivered; other contracts are generally recognized over the contract term. The U.S.
government is the single largest individual served market for the government services business.

**Backlog.** At December 31, 2025 total backlog by segment stood at $567,290 million (BCA),
$84,786 million (BDS) and $29,720 million (BGS). BCA backlog rose from $435,175 million a year earlier
on new orders in excess of deliveries; aircraft order cancellations in 2025 totaled $11,094 million,
primarily 777X, 737 and 787 aircraft, and net ASC 606 adjustments totaled $17,759 million, primarily
777X and 787 aircraft.

**Competition.** BCA faces aggressive international competitors intent on increasing share, notably
Airbus and entrants from China. BDS competes primarily with General Dynamics, Lockheed Martin,
Northrop Grumman, RTX and SpaceX, with non-U.S. firms such as BAE Systems and Airbus Group building
U.S. presence. The commercial and defense services markets draw many of the same competitors plus
others, and the company expects all three markets to remain highly competitive.

**Regulation.** The business is heavily regulated. U.S. commercial aircraft products must comply with
FAA rules governing production and quality systems, airworthiness and installation approvals, repair
procedures and continuing operational safety; new models and derivatives require FAA certification
before entry into service. Following the January 2024 737-9 door plug accident, the FAA investigated
the 737 quality control system, including Spirit AeroSystems, and increased oversight — the 737
program may only increase production rates or implement new production lines with FAA concurrence. The
U.S. government and other governments may terminate contracts at convenience or for default.

**Supply and inputs.** The most important raw materials are aluminum, titanium and composites
(including carbon and boron). Alternative sources generally exist but qualifying them could take a
year or more, and many major components and product equipment items are procured or subcontracted on
a sole-source basis. No material portion of the business is considered seasonal.

**Workforce.** Total workforce was approximately 182,000 at December 31, 2025, with 14% outside the
U.S. Roughly 72,000 employees — about 40% of the workforce — were union represented under 32
independent agreements with nine U.S. unions plus 18 international employee representative bodies.
Principal agreements include IAM District 751 (Washington, expiring September 2028), IAM District 837
(Missouri, July 2030), IAM District 70 (Kansas, June 2027) and four SPEEA agreements, two of which
expire in October 2026.

Boeing was originally incorporated in Washington in 1916 and reincorporated in Delaware in 1934. Its
principal executive offices are in Arlington, Virginia.

## Risk factors

*From the annual report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001628280-26-004357.*

**Dependence on commercial airlines.** Demand for commercial aircraft is driven by long-term passenger
and cargo traffic, itself a function of economic growth and political stability, and is further
influenced by airline profitability, financing availability, trade policy, geopolitics, fuel prices,
inflation and reputational factors. The industry is cyclical. Because backlog consists of aircraft
scheduled for delivery over several years, macroeconomic or customer shocks can affect deliveries over
a long period. Revenues are concentrated among a limited number of commercial airlines, and no
assurance exists that customers will exercise options or fulfill existing commitments. Firm
fixed-price aircraft contracts carry indexed escalation clauses whose actual outcomes are outside the
company's control and can materially move BCA revenues and margins.

**Production system health, certification and rate increases.** The commercial aircraft business is
extremely complex, and the ability to deliver on time, satisfy regulators and achieve program
profitability is subject to significant risk. New programs and derivatives such as the 777X, 737-7 and
737-10 take years and have already seen significant delays; the 777X, launched in 2013 and expecting
first delivery in 2027, recognized additional reach-forward losses of $4.9 billion in 2025 and
$3.5 billion in 2024 on production challenges, certification and delivery delays, and higher estimated
labor and supplier costs. Customers hold contractual remedies including compensation for late
deliveries and rights to reject or terminate. Planned rate increases — the 737 to 47 per month in 2026
plus further increases requiring a new production line, and further 787 increases — may be delayed or
not occur if production health indicators do not support them or FAA concurrence is not obtained.

**U.S. government spending and appropriations.** A substantial portion of revenue comes from the U.S.
government, chiefly the Department of War and NASA. Defense spending levels are difficult to predict,
appropriations timeliness is a recurrent risk, and a lapse causing a full or partial shutdown could
delay payments, impair performance on existing contracts, delay certification of new aircraft and
reduce future orders. Future investment priority changes or budget cuts could reduce, cancel or delay
existing contracts or programs.

**Suppliers, raw materials and labor.** The company depends on subcontractors and suppliers for raw
materials, integrated components, sub-assemblies and services. Many suppliers face inflationary
pressure, resource constraints and disruption from production quality issues, global supply chain
constraints and labor instability; some are in financial difficulty. Single-source dependence exists
in some instances. Work stoppages have already done material damage: IAM District 751 struck for 53
days in 2024, halting production of most commercial aircraft and certain BDS products, and IAM
District 837 struck for 101 days in 2025, disrupting St. Louis operations and the F/A-18, F-15, T-7A,
MQ-25 and Weapons programs. Both strikes occurred despite tentative agreements recommended by union
leadership. Two SPEEA contracts expire in October 2026.

**Fixed-price and cost-type contracts.** Fixed-price contracts expose the company to reach-forward
losses when estimated costs exceed estimated price — in 2024 BDS recorded $5.0 billion of additional
losses on its five most significant fixed-price development programs (KC-46A Tanker, T-7A Red Hawk,
Commercial Crew, VC-25B Presidential Aircraft and MQ-25). Estimating cost and time on fixed-price
development and follow-on production is inherently uncertain given highly complex designs and extended
performance periods. Cost-type programs — Ground-based Midcourse Defense, Proprietary and Space
Launch System among them — carry risk of reduced award or incentive fees, lower profit rates or
cancellation. Satellite contracts include in-orbit incentive payments at risk for up to 15 years after
acceptance.

**Contract and program accounting estimates.** Program accounting requires estimates of the accounting
quantity, the period over which units can be produced, and expected sales prices, production costs,
tooling, non-recurring costs and routine warranty costs for the whole program. Materially different
revenues and profits could be recorded under different assumptions, and changes may adversely affect
future periods.

**Non-U.S. sales, tariffs and trade.** Risks include changes in regulatory requirements and executive
actions, trade-environment deterioration, export controls, tariffs, duties, embargoes and sanctions,
currency fluctuations, and financing availability for non-U.S. customers. Tariffs and retaliatory
action could raise product costs, lower demand, delay deliveries and cause order terminations. China
is a significant market; in the second quarter of 2025 certain Chinese customers paused accepting
deliveries during tariff negotiations, and although deliveries resumed, inability to deliver to or win
orders from China could reduce deliveries and market share.

**Acquisitions, divestitures and integration.** Realizing anticipated benefits depends on integration,
portfolio performance and retained management. The Spirit Acquisition closed in December 2025, and
integration difficulties may prevent realization of anticipated synergies and safety and quality
improvements. In connection with that acquisition the company must provide services to buyers of
divested Spirit businesses, including Airbus.

**Technology and cybersecurity.** A decentralized global technology infrastructure of millions of
systems creates interoperability, cost, monitoring and compliance exposure. Cyber threats come from
nation-state actors and criminal enterprises and evolve rapidly, including through advanced automation
and artificial intelligence. The company has experienced cyber-related incidents directly and through
subsidiaries, supply chain and third-party service providers, and gives no guarantee that a future
incident would not materially affect strategy, results or financial condition.

**Legal, environmental and climate.** Litigation and government inquiries are unpredictable and an
adverse decision could be material. Environmental liabilities may arise from current or past
manufacturing operations, acquired companies' operations, or indemnification agreements, and new or
more stringently enforced requirements could add costs. Climate-related regulation, including
California and European Union greenhouse gas and climate risk reporting requirements, and increasingly
stringent aircraft performance standards could raise costs or limit the ability to market certain
products.

**Financing and liquidity.** Debt totaled $54.1 billion at December 31, 2025, of which approximately
$15.5 billion of principal payments come due over the following three years, and airplane financing
commitments totaled $15.2 billion. Up to $345 million of cash per year is expected for dividends on
the 6.00% Series A Mandatory Convertible Preferred Stock through the mandatory conversion date of
October 15, 2027. The company has experienced credit rating downgrades in the past and cannot assure
that investment grade ratings will be maintained. Pension and other postretirement obligations are
material to earnings, shareholders' equity and cash flow, and depend heavily on discount rates and
actual asset returns. Insurance may be inadequate for the unique liabilities arising from aircraft
technologies, space systems, satellites, missile systems, weapons and related products.

**Dilution and preferred stock.** Each outstanding share of Mandatory convertible preferred stock
automatically converts on or about October 15, 2027 into between 5.8280 and 6.9940 shares of common
stock. The company may also issue common stock on exchange of the $230 million of 3.250% Exchangeable
Notes maturing November 1, 2028 assumed in the Spirit Acquisition. Common stock ranks junior to the
preferred as to dividends and liquidation, and no common dividends may be declared unless accumulated
preferred dividends have been paid or set aside.

## Management's discussion and analysis — fiscal year 2025

*From the annual report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001628280-26-004357.*

**The shape of the year.** Revenues rose to $89,463 million in 2025 from $66,517 million in 2024 and
$77,794 million in 2023. Earnings from operations of $4,281 million reversed a $10,707 million
operating loss in 2024, an improvement of $14,988 million, and net earnings attributable to Boeing
shareholders of $2,235 million compared with a loss of $11,817 million; diluted earnings per share
were $2.48 against a loss of $18.36. The swing was not primarily operational: $9,672 million of gains
on dispositions, of which $9,566 million was the gain on the Digital Aviation Solutions Divestiture,
sat inside it. By segment, the improvement came from BGS ($9,856 million, driven by that gain), BDS
($5,285 million, driven by lower net unfavorable cumulative contract catch-up adjustments) and BCA
($890 million), partly offset by a $984 million larger loss on Unallocated items, eliminations and
other. Core operating earnings, which exclude the FAS/CAS service cost adjustment, increased by
$15,047 million.

**Two structural transactions closed in the fourth quarter.** On October 31, 2025 the company
completed the divestiture of portions of the BGS segment's Digital Aviation Solutions business for
$10.55 billion in an all-cash transaction. On December 8, 2025 it completed the acquisition of Spirit
AeroSystems Holdings, Inc. by exchanging approximately $4.7 billion of Boeing shares for all of
Spirit's outstanding shares, paying off certain Spirit debt and other obligations and assuming the
remainder. The acquisition covers all of Spirit's Boeing-related commercial operations — fuselages for
the 737, P-8 and KC-46 Tanker programs and major structures for the 767, 777 and 787 — plus Spirit's
defense and aftermarket businesses and portions of its Belfast, Ireland operations. Spirit employs
approximately 15,000 people.

**Commercial Airplanes.** Revenues increased $18,633 million on higher deliveries across all programs
and the absence of $443 million of 737-9 customer considerations tied to the January 2024 grounding.
Loss from operations narrowed to $7,079 million from $7,969 million, as higher deliveries, lower
abnormal production costs and lower research and development were partly offset by combined
reach-forward losses of $5,283 million on the 777X and 767 programs and lower program margins. The 737
rate recovered from below 38 per month at the start of 2025 to 42 per month in the fourth quarter
after the FAA and Boeing jointly agreed in October 2025 that the key performance indicators and rate
readiness process supported the increase; the program planned to move from 42 to 47 in 2026 with FAA
concurrence and to add a production line. Certification of the 737-7 and 737-10 remained expected in
2026 with approximately 35 aircraft of those models in inventory at year end. On the 777X, first
delivery of the 777-9 was pushed to 2027 during the third quarter of 2025; the resulting slower rate
plans, higher production and change-incorporation costs and customer and supply chain impacts, partly
offset by a 100-unit accounting quantity increase, produced an incremental reach-forward loss of
$4,899 million in 2025. A potential engine durability issue identified during recent 777X inspections
remained under investigation with the supplier. The 767 recorded a $384 million reach-forward loss in
2025 ($580 million in 2024) and production of the commercial program is expected to complete by 2027.
The 787 rate went from five to seven per month during 2025 and began moving to eight in the fourth
quarter.

**Defense, Space & Security.** Revenues increased $3,316 million on $1,864 million lower net
unfavorable cumulative contract catch-up adjustments and higher volume. Loss from operations narrowed
sharply to $128 million from $5,413 million, as losses on the five major fixed-price development
programs fell to $802 million — primarily KC-46A Tanker at $714 million — from $5,013 million in 2024,
with additional improvement from weapons, P-8, satellites and fighters.

**Global Services.** Revenues increased $969 million on higher government and commercial services
revenue. Earnings from operations increased $9,856 million, almost entirely the $9,566 million
divestiture gain.

**Unallocated items and other earnings.** Eliminations and other unallocated items expense rose
$663 million on 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. Non-operating pension income within Other income, net
fell to $176 million from $476 million on lower expected return on plan assets. Interest and debt
expense rose $46 million on higher average rates.

**Cash flow and capital.** Net cash provided by operating activities was $1.1 billion in 2025 against
$12.1 billion used in 2024, a $13.1 billion swing driven by higher commercial airplane deliveries,
lower customer considerations and working capital improvements — favorable changes in Inventories
($10.9 billion) and Accounts payable ($1.5 billion) against unfavorable Advances and progress billings
($4.8 billion). Investing activities provided $0.5 billion, helped by $10.5 billion higher proceeds
from dispositions, against $1.2 billion of cash paid for the Spirit Acquisition net of cash acquired;
capital expenditures were $2.9 billion and were expected to grow in 2026. Financing used $3.8 billion,
driven by $3.5 billion of net repayments. Debt totaled $54.1 billion at year end, $8.5 billion of it
short-term and expected to be paid from available cash. The company held $10.9 billion of cash,
$18.5 billion of short-term investments and $10.0 billion of unused revolving credit capacity. The
common dividend has been suspended since 2020. Pension plans were $4.3 billion underfunded on a GAAP
basis and more than 90% funded on an ERISA basis, with no significant 2026 contributions expected.
Investment grade ratings were held at all three agencies, each of which moved the outlook to stable
from negative during 2025 (Fitch BBB- in June, S&P BBB- in October, Moody's Baa3 in December).

**Business environment.** Global air traffic expanded near historical trend rates in 2025, with
international demand outpacing domestic and North America contributing less than usual; both
single-aisle and wide-body demand remain above industry supply. IATA estimated 2025 industry-wide net
profits of $39.5 billion, up from $28.3 billion in 2024, and forecast $41 billion for 2026. The
Commercial Market Outlook projects a 3.1% global fleet growth rate over 20 years and demand for
approximately 43,600 new airplanes. Tariffs and trade were a live variable through the year: bilateral
agreements recognizing tariff-free trade in civil aircraft were reached with the United Kingdom,
Japan, South Korea, Malaysia and the European Union, while reciprocal tariffs applied to countries
without agreements and the U.S.-China pause was extended to November 10, 2026.

**Critical estimates.** Net cumulative catch-up adjustments across all long-term contracts decreased
2025 earnings from operations by $1,377 million, against increases to loss from operations of
$6,562 million in 2024 and $2,943 million in 2023, primarily on the KC-46A Tanker, VC-25B, T-7A Red
Hawk, MQ-25 and Commercial Crew programs. A 1% change in combined gross margins on profitable
long-term contracts would have moved 2025 pre-tax income by approximately $320 million; a 1% change in
combined commercial airplane program gross margin percentages would have moved operating earnings by
approximately $390 million. Deferred income tax assets were $21,065 million against deferred tax
liabilities of $11,420 million, with a valuation allowance of $9,754 million that increased by
$1,917 million in 2025, including $1,833 million recorded in acquisition accounting against acquired
Spirit deferred tax assets. Because of the recent history of losses, future projected earnings could
not be included in the realizability analysis.

**Litigation.** On May 29, 2025 Boeing entered a non-prosecution agreement with the U.S. Department of
Justice resolving the Department's determination that Boeing had not fulfilled its obligations under
the January 2021 deferred prosecution agreement relating to the October 2018 Lion Air flight 610 and
March 2019 Ethiopian Airlines flight 302 accidents. The agreement requires a $244 million fine
(accrued in 2024) and $445 million of additional compensation for family members (accrued in the
second quarter of 2025), both held in escrow pending final court approval of the Department's motion
to dismiss the criminal information.

## Current quarter — second quarter and first half of 2026

*From the quarterly report on Form 10-Q for the period ended June 30, 2026, accession 0001628280-26-050038, and the second-quarter results release furnished on Form 8-K dated July 28, 2026, accession 0001628280-26-049929.*

**Results.** Second-quarter revenues were $24,560 million, up 8% from $22,749 million, on 171
commercial deliveries against 150 a year earlier. Earnings from operations were $156 million against a
$176 million loss, a 1.4-point margin improvement to 0.6%. Net loss attributable to Boeing
shareholders was $444 million against $611 million; after $86 million of mandatory convertible
preferred stock dividends accumulated in each period, the loss attributable to common shareholders
was $530 million against $697 million, and diluted loss per share was $0.67 against $0.92. Core
operating earnings, a non-GAAP measure excluding the FAS/CAS service cost adjustment, were $1 million
against a $433 million loss, and core loss per share was $0.76 against $1.24. For the first half,
revenues were $46,777 million, up 11%; earnings from operations were $604 million against
$285 million; net loss attributable to shareholders was $448 million against $648 million, or
$620 million against $820 million after $172 million of accumulated preferred dividends in each
period; and diluted loss per share was $0.79 against $1.09.

The quarter's operating improvement came mainly from a $405 million smaller loss on Unallocated items,
eliminations and other — reflecting the absence of the $445 million Department of Justice charge taken
in the second quarter of 2025 — and a $235 million smaller loss at BCA, partly offset by $125 million
lower BDS earnings and a $102 million unfavorable move in the FAS/CAS service cost adjustment. Other
income, net fell $246 million in the quarter on higher non-operating pension expense, while interest
and debt expense fell $110 million on lower debt balances. Cost of sales as a percentage of revenues
rose in both the quarter and half on lower margins at BGS and BDS.

**Commercial Airplanes** had quarterly revenues of $11,751 million, up 8% on higher 737 deliveries
partly offset by lower 777 deliveries, and narrowed its loss from operations to $322 million from
$557 million on higher revenues and a smaller 767 reach-forward loss, partly offset by higher research
and development spending. Half-year revenues were $20,954 million and the loss was $885 million
against $1,094 million. The 737 program began transitioning from 42 to 47 per month with FAA
concurrence during the first half, increased its accounting quantity by 400 units, and began low-rate
production on a new 737 production line in July 2026 — a line that must be production-certified by the
FAA before first delivery. Certification of the 737-7 and 737-10 remains expected in 2026, including
final certification of the engine anti-ice solution, with approximately 40 such aircraft in inventory
at June 30, 2026. On the 777X, approval to begin the fourth phase of certification flight testing was
received in the first half and approval on the final phases is expected in the second half of 2026;
work continues with the supplier and the FAA on the engine durability issue identified in 2025, and
first delivery of the 777-9 remains expected in 2027, with the 777-8 Freighter roughly two years later
and the 777-8 passenger aircraft not before 2030. The 767 recorded a $40 million reach-forward loss in
the first half against $191 million a year earlier. The 787 accounting quantity rose 100 units in the
first quarter; the factory briefly slowed in April 2026 on supply chain shortages, recovered in May
and has stabilized at eight per month. BCA backlog rose to $596,724 million at June 30, 2026 from
$567,290 million, with first-half cancellations of $2,777 million and net ASC 606 adjustments of
$2,089 million. The company booked 246 net orders in the quarter, including from Korean Air, Delta Air
Lines and SMBC Capital.

**Defense, Space & Security** had quarterly revenues of $7,483 million, up 13% on proprietary and
weapons programs, higher KC-46 volume and the acquired Spirit defense business, but swung to a
$15 million loss from operations against $110 million of earnings, on $186 million higher net
unfavorable cumulative catch-up adjustments and higher general and administrative expense. The driver
was a $280 million reach-forward loss on the VC-25B Presidential Aircraft program, taken for higher
estimated costs to complete structural and wiring installation and satisfy airworthiness certification
requirements; finalization of contract terms to reset the schedule and adjust requirements is expected
in the third quarter of 2026, and first delivery is anticipated in 2028. Half-year revenues were
$15,082 million with earnings of $218 million against $265 million. In the quarter MQ-25 completed its
first flight and the U.S. Navy approved Milestone C, with a low-rate initial production contract
expected later in 2026; the U.S. Air Force approved Milestone C on T-7A Red Hawk and authorized a
first low-rate lot of 14 aircraft. BDS backlog was $85,322 million, 27% from customers outside the U.S.
On Commercial Crew, the company now expects an uncrewed mission no earlier than the fourth quarter of
2026, having previously expected an uncrewed mission followed by a crewed mission during 2026;
discussions with NASA on timing and requirements for follow-on missions are ongoing and their outcome
is uncertain.

**Global Services** had quarterly revenues of $5,344 million, up 1%, with earnings from operations of
$968 million down $81 million and margin of 18.1% against 19.9%. The decline reflects the absence of
$78 million of earnings from the divested Digital Aviation Solutions business and ongoing disruption
in one of the distribution businesses from a transition to a new enterprise resource planning system
in late 2025. Half-year revenues were $10,714 million with earnings of $1,939 million. BGS backlog
rose to $32,840 million from $29,720 million.

**Cash and balance sheet.** Operating cash flow was $1,364 million in the quarter against $227 million,
and free cash flow, a non-GAAP measure net of $733 million of capital additions, was $631 million
against negative $200 million. For the first half, operating cash flow was $1,185 million against
$1,389 million used, and free cash flow was negative $823 million against negative $2,490 million;
first-half capital expenditures were $2.0 billion against $1.1 billion, with 2026 still expected to
exceed 2025. Investing provided $3.6 billion in the half on $5.6 billion of net proceeds from
investments. Financing used $8.5 billion on $7.8 billion higher net repayments. Total debt fell to
$45.9 billion at June 30, 2026 from $54.1 billion at December 31, 2025, with $4.6 billion classified
as short-term. Cash was $7,239 million and short-term and other investments $12,783 million, with
$10.0 billion of revolving credit capacity undrawn. Total company backlog reached a record
$715 billion, including over 6,200 commercial airplanes. Inventories were $88,388 million and advances
and progress billings $64,059 million against total equity of $6,115 million. In June 2026 Fitch
revised its BBB- outlook to positive from stable; S&P rates BBB- stable and Moody's Baa3 stable.

**Other developments in the period.** The Spirit purchase price allocation remains preliminary, with
total consideration of $8,389 million and provisional goodwill of $10,278 million assigned to BCA;
accrued liabilities include $1,520 million for the fair value of off-market customer contracts. In the
first quarter of 2026 United Launch Alliance's Vulcan rocket experienced a launch anomaly that paused
further Vulcan launches pending root cause analysis and corrective action; in May 2026 Boeing and
Lockheed Martin each agreed to guarantee $500 million of certain ULA credit facilities maturing
July 30, 2027, and both expect to provide additional financial support. Environmental remediation
liabilities rose to $971 million and product warranty liabilities to $3,273 million. Financing
commitments totaled $16,836 million, of which $11,698 million relate to customers believed to have
less than investment-grade credit. On March 31, 2026 the U.S. Court of Appeals for the Fifth Circuit
denied a petition by representatives of certain family members to overturn approval of the Department
of Justice's motion to dismiss; those representatives had until late August 2026 to decide whether to
pursue a further appeal. Following a February 20, 2026 Supreme Court ruling on tariffs imposed under
the International Emergency Economic Powers Act, U.S. Customs and Border Protection defined processes
for claiming refunds of tariffs previously paid, and tariffs did not have a material impact on results
in the first half of 2026. Two SPEEA contracts expire October 6, 2026 and negotiations toward new
agreements were underway, targeted for the third quarter of 2026.

## Subsequent events

*Boeing's quarterly report for the period ended June 30, 2026 contains no subsequent-events note. The
following post-period developments are drawn from the current reports on Form 8-K filed after that
quarterly report.*

**Credit facilities refinanced and extended (Form 8-K dated August 24, 2026, accession
0001628280-26-059427).** On August 24, 2026 Boeing entered a $3.0 billion, 364-day revolving credit
agreement terminating August 23, 2027, replacing the previous $3.0 billion, 364-day facility scheduled
to terminate the same day. On the same date the two five-year agreements were each extended by 365
days: the 2024 agreement, at $4.0 billion of commitments, now terminates May 15, 2030, and the 2023
agreement, at $3.0 billion, now terminates August 24, 2029. The two five-year agreements were also
amended to add a covenant requiring Boeing to maintain liquidity of at least $5.0 billion, matching
the covenant carried in the 364-day facility. Total committed revolving capacity is unchanged at
$10.0 billion, the amount the company reported as undrawn at June 30, 2026.

**Principal accounting officer transition (Form 8-K dated August 19, 2026, accession
0001628280-26-058481).** On August 19, 2026 the Board appointed Ryan L. Shedd as Senior Vice President
and Controller, and principal accounting officer, effective the first business day after Boeing files
its Form 10-K for the year ending December 31, 2026. He succeeds Michael J. Cleary, Senior Vice
President and Controller since March 2023, who plans to retire in 2027.