BOEING CO

The Boeing Company is one of the world’s major aerospace firms, operating in three reportable segments: Commercial Airplanes (BCA), Defense, Space & Security (BDS), and Global Services (BGS). The commercial jet aircraft market and the airline industry remain extremely competitive, with BCA facing aggressive international competitors such as Airbus and entrants from China. BDS faces strong competition primarily from General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, RTX Corporation and SpaceX, while BGS competes with many of the same strong U.S. and non-U.S. competitors. The company’s businesses are heavily regulated in most markets, including by the FAA, the U.S. Department of War, NASA, and similar non-U.S. authorities.

BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide, offering a family of commercial jetliners including the 737 narrow-body model and the 767, 777 and 787 wide-body models, with development continuing on the 777X program and the 737-7 and 737-10 derivatives. BDS engages in the research, development, production and modification of manned and unmanned military aircraft and weapons systems, as well as strategic defense and intelligence systems, satellite systems, and space exploration. BGS provides services to commercial and defense customers worldwide, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, training systems and services, and digital solutions and analytics.

The company generates revenue primarily through the sale of commercial jet aircraft under firm fixed-price contracts with indexed price escalation clauses, long-term contracts with the U.S. government and other customers, and commercial services and spare parts sales. Commercial aircraft sales are typically entered into years before delivery, with pricing consisting of a fixed amount modified by price escalation formulas. BCA predominantly uses program accounting, while BDS and certain BGS contracts use long-term contract accounting. The company’s customer base includes commercial airlines worldwide, the U.S. government (primarily the Department of War and NASA), and non-U.S. government customers.

In 2025, BCA delivered 447 737 aircraft, 30 767 aircraft, 35 777 aircraft, and 88 787 aircraft, compared to 265, 18, 14, and 51 deliveries respectively in 2024. The 737 production rate recovered from below 38 per month at the beginning of 2025 to 42 per month during the fourth quarter, with plans to increase to 47 per month in 2026. The 787 production rate increased from five to seven per month during 2025, reaching eight per month in the fourth quarter. BDS delivered 131 total units in 2025, including 14 F/A-18 models, 9 F-15 models, 14 KC-46 Tankers, and 4 commercial satellites, compared to 112 total units in 2024. BGS revenues increased to $20.923 billion in 2025 from $19.954 billion in 2024, driven by higher government and commercial services revenue.

Significant operational developments during 2025 included the completion of the Spirit AeroSystems acquisition on December 8, 2025, for total consideration of $8.371 billion, and the divestiture of portions of the Digital Aviation Solutions business on October 31, 2025, for proceeds of $10.550 billion, resulting in a gain of $9.566 billion. The 777X program recognized additional reach-forward losses of $4.899 billion in 2025 due to certification delays, production challenges, and higher estimated costs, with first delivery now expected in 2027. The 767 program recorded reach-forward losses of $384 million in 2025 primarily driven by higher production costs. The company also experienced a 101-day strike by IAM District 837 employees at St. Louis area sites during 2025, disrupting operations and impacting programs including F/A-18, F-15, T-7A, MQ-25 and Weapons.

Total revenues for 2025 were $89.463 billion, compared to $66.517 billion in 2024 and $77.794 billion in 2023. The company reported GAAP earnings from operations of $4.281 billion in 2025, compared to a loss from operations of $10.707 billion in 2024 and a loss of $773 million in 2023. Net earnings attributable to Boeing shareholders were $2.235 billion in 2025, compared to a net loss of $11.817 billion in 2024 and a net loss of $2.222 billion in 2023. Diluted earnings per share were $2.48 in 2025, compared to a diluted loss per share of $18.36 in 2024 and $3.67 in 2023. Core operating earnings (non-GAAP) were $3.236 billion in 2025, compared to a core operating loss of $11.811 billion in 2024 and $1.829 billion in 2023.

Management did not issue specific revenue, margin, or EPS guidance for the upcoming period in the filing. The company’s forward-looking statements are subject to risks, uncertainties, and changes in circumstances that are difficult to predict, and actual results could differ materially from any forward-looking statements.

The company identified several growth vectors explicitly described in the filing. BCA plans to increase the 737 production rate from 42 to 47 per month in 2026 with the concurrence of the FAA, and is also planning for additional production rate increases beyond 47 per month as well as adding a 737 production line. The 787 program began increasing the production rate to eight per month during the fourth quarter of 2025 and continues to work toward stabilizing production. The 777X program, which launched in 2013 and is currently expecting first delivery in 2027, saw cumulative firm orders increase from 358 units at December 31, 2024, to 560 units at December 31, 2025. The company continues to expect first delivery of the 777-8 Freighter to occur approximately two years after the first delivery of the 777-9, while first delivery of the 777-8 passenger aircraft is not expected to occur before 2030. The company continues to expect certification of the 737-7 and 737-10 models to occur in 2026.

Regarding the operational outlook for margins and costs, the company noted that BDS’s fixed-price development programs are maturing, but 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, but prior period performance has adversely affected margins and cash flows. The company expects commercial revenues at BGS to remain strong in future quarters as the commercial airline industry has largely recovered and transitions to growth, while the demand outlook for the government services business remains stable. The company expects capital expenditures to grow in 2026 compared with 2025.

On supply chain and manufacturing posture, the company stated that it and its suppliers are experiencing improving supply chain performance with fewer disruptions from production quality issues, global supply chain constraints and labor instability, though inflationary pressures continue. The company continues to monitor the health and stability of the supply chain. The company’s 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 have a material impact on financial position, results of operations and cash flows.

Regarding capital allocation, the company stated that it expects to pay $8.5 billion in short-term and long-term debt due within the next 12 months from its available cash balance. The company’s dividend to common shareholders has been suspended since 2020. The company expects to require up to $345 million of cash per year for the payment of dividends on the outstanding shares of its 6.00% Series A Mandatory Convertible Preferred Stock through the mandatory conversion date of October 15, 2027. The company does not expect to make significant contributions to its pension plans in 2026. For the foreseeable future, the company expects to continue to use common stock in lieu of cash to fund Company contributions to its 401(k) plans.

Management explicitly flagged several structural headwinds and execution risks to the growth plan. The 737 program may only increase production rates and/or implement new production lines with the concurrence of the FAA, and there is risk that planned production rate increases may be delayed or not occur at all if production health key performance indicators and the rate readiness process do not support increasing rates or FAA concurrence is not obtained. Similarly, there is risk that planned 787 production rate increases may be delayed or not occur at all. The company noted that the level of profitability on the 777X program will be subject to several factors including aircraft certification requirements and timing, flight test discoveries, design changes, production disruption, supply chain disruption, customer considerations, and any change in the accounting quantity, and that one or more of these factors could result in additional reach-forward losses in future periods. The company also noted that risk remains that it may be required to record additional reach-forward losses on BDS fixed-price development programs in future periods.

The company faces significant risks including dependence on commercial airlines and the cyclical nature of the airline industry, which could result in fewer orders or customer postponements. The company’s commercial aircraft business depends on maintaining a healthy production system, achieving planned production rate targets, and successfully developing and certifying new aircraft such as the 777X, 737-7 and 737-10, with significant risks including certification delays and production disruptions. The company derives a substantial portion of revenue from U.S. government contracts, with 35% of 2025 revenues earned pursuant to such contracts, and faces risks from changes in defense spending levels, acquisition priorities, and government appropriations. The company’s fixed-price contracts subject it to losses when cost overruns occur, with BDS and BGS defense businesses each generating approximately 60% of their 2025 revenues from fixed-price contracts. The company is subject to risks from labor union work stoppages, having experienced a 53-day strike by IAM District 751 in 2024 and a 101-day strike by IAM District 837 in 2025. Non-U.S. customers accounted for 46% of total revenues and 60% of Commercial Airplanes revenue in 2025, exposing the company to risks including tariffs, trade restrictions, and geopolitical tensions, particularly with China where certain customers paused accepting deliveries in the second quarter of 2025 in response to tariff negotiations. The company faces cybersecurity threats from various actors including nation-state actors and criminal enterprises. As of December 31, 2025, debt totaled $54.1 billion, with approximately $15.5 billion of principal payments on outstanding debt scheduled to become due over the next three years, and airplane financing commitments totaled $15.2 billion.

Management’s message emphasized that the company’s strategy is centered on successful execution in healthy core businesses – Commercial Airplanes, Defense, Space & Security, and Global Services. Key themes included improving safety and quality following the 737-9 door plug accident, stabilizing production systems, and integrating the Spirit AeroSystems acquisition. Management highlighted that the company is focused on improving products and processes and continuing cost reduction efforts, and that BGS intends to grow market share by leveraging a high level of customer satisfaction and productivity. The company stated that it continues to expect certification of the 737-7 and 737-10 to occur in 2026, and continues to expect first delivery of the 777-9 to occur in 2027.