The Boeing Company

Company Overview

Business Model: The Boeing Company is one of the world’s major aerospace firms, organized into three reportable segments: Commercial Airplanes (BCA), Defense, Space & Security (BDS), and Global Services (BGS). BCA develops, produces, and markets commercial jet aircraft globally. BDS engages in the research, development, production, and modification of manned and unmanned military aircraft, weapons systems, strategic defense and intelligence systems, satellite systems, and space exploration. BGS provides a full spectrum of 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, technical documentation, and digital solutions. Revenue is generated through the sale of products (commercial aircraft, military aircraft, satellites) and services (maintenance, training, logistics, digital solutions).

Market Position: The Boeing Company is a global market leader in its core businesses. In commercial jet aircraft, it is one of two major manufacturers of 100+ seat airplanes, facing aggressive international competitors like Airbus SE and new entrants from China. In defense, it is one of the largest defense contractors in the U.S., competing primarily with General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, RTX Corporation, and SpaceX, with increasing presence from non-U.S. companies like BAE Systems and Airbus Group. The Global Services segment operates in a challenging and competitive market, leveraging an extensive services network across the lifecycle of defense and commercial aircraft programs. The Company aims to compete by providing superior design, safety, quality, efficiency, and value, and by growing market share through customer satisfaction and productivity.

Recent Strategic Developments:

• Spirit AeroSystems Holdings, Inc. Acquisition: On December 8, 2025, The Boeing Company completed the acquisition of Spirit AeroSystems Holdings, Inc. for a total consideration of $8,371 million, comprised of $4,704 million in Boeing common stock, $2,571 million in settlement of loans and advances, $948 million in debt repaid on Spirit AeroSystems Holdings, Inc.'s behalf, $109 million premium on assumed Spirit Exchangeable Notes, and $39 million for exchanged Spirit AeroSystems Holdings, Inc. share-based awards. This acquisition aims to align commercial production systems, including Safety and Quality Management Systems, and workforces.
• Digital Aviation Solutions Divestiture: On October 31, 2025, The Boeing Company completed the divestiture of portions of its Global Services segment’s Digital Aviation Solutions business to Thoma Bravo for proceeds of $10,550 million, resulting in a gain of $9,566 million.
• Production Rate Adjustments: Following the January 2024 737-9 door plug accident, The Boeing Company slowed 737 production rates and delayed planned increases to address quality and safety issues, reducing traveled work in its factories and at suppliers. The 737 production rate recovered to 42 aircraft per month during Q4 2025, with plans to increase to 47 per month in 2026, subject to Federal Aviation Administration concurrence.
• Labor Work Stoppages: In 2024, employees represented by International Association of Machinists and Aerospace Workers District 751 went on strike for 53 days, impacting commercial aircraft and certain Defense, Space & Security products. In 2025, International Association of Machinists and Aerospace Workers District 837 employees struck for 101 days, disrupting St. Louis operations and impacting programs including F/A-18, F-15, T-7A, MQ-25, and Weapons.
• 777X Program Delays: First delivery of the 777-9 was delayed to 2027 due to certification and production challenges, leading to a $4,899 million reach-forward loss in 2025.

Geographic Footprint: The Boeing Company's principal operations are in the U.S., with an expanding presence in numerous countries and an extensive network of U.S. and non-U.S. partners, suppliers, and subcontractors. As of December 31, 2025, approximately 86% of its 111 million square feet of floor space was located in the United States. Non-U.S. customers, including Foreign Military Sales through the U.S. government, accounted for 46% of total revenues in 2025, and 60% of Commercial Airplanes revenue from customer contracts. Key non-U.S. markets include Asia, Europe, and the Middle East.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 4.8%
• Operating Margin: 4.8%
• Net Margin: 2.5%

Investment in Growth (2025):

• R&D Expenditure: $3,615 million (4.0% of revenue)
• Capital Expenditures: $2,942 million
• Strategic Investments: The acquisition of Spirit AeroSystems Holdings, Inc. for $8,371 million in total consideration.

Business Segment Analysis

Commercial Airplanes (BCA)

Financial Performance:

• Revenue: $41,494 million (+81.5% YoY)
• Operating Margin: (17.1)%
• Key Growth Drivers: Higher deliveries across all programs and the absence of 737-9 customer considerations related to the January 2024 grounding. The segment is experiencing strong demand from airline customers globally.

Product Portfolio:

• Major product lines: 737 narrow-body model, and 767, 777, and 787 wide-body models.
• New product launches or major updates: Development continues on the 777X program and the 737-7 and 737-10 derivatives.
• Deliveries (2025): 737 (447 units), 767 (30 units), 777 (35 units), 787 (88 units).

Market Dynamics:

• Competitive positioning: The commercial jet aircraft market is extremely competitive, with aggressive international competitors such as Airbus SE and entrants from China. The Boeing Company focuses on improving products and processes and continuing cost reduction efforts.
• Key customer types and market trends: Predominantly serves the commercial airline industry worldwide. Market is driven by long-term trends in airline passenger and cargo traffic, with international demand outpacing domestic demand in 2025. Approximately 85% of BCA’s total backlog, in dollar terms, is with non-U.S. airlines.

Program Highlights:

• 737 Program: Production rate recovered to 42 per month in Q4 2025, with plans to increase to 47 per month in 2026, subject to Federal Aviation Administration concurrence. The accounting quantity increased by 800 units in 2025. Certification for 737-7 and 737-10 models is expected in 2026, with approximately 35 aircraft in inventory as of December 31, 2025.
• 767 Program: Targeting a production rate of approximately three aircraft per month. Production of the commercial program is expected to complete by 2027. Recorded reach-forward losses of $384 million in 2025 due to higher production costs.
• 777 and 777X Programs: The 777 accounting quantity increased by six units in 2025. The 777X accounting quantity increased by 150 units in Q3 and Q4 2025. First delivery of the 777-9 is delayed to 2027, resulting in a $4,899 million reach-forward loss in 2025. First delivery of the 777-8 Freighter is anticipated approximately two years after the 777-9, and the 777-8 passenger aircraft not before 2030.
• 787 Program: Production rate increased from five to seven per month in 2025, and to eight per month in Q4 2025. Rework on aircraft produced prior to 2023 was completed in February 2025, with approximately five aircraft remaining in inventory at year-end 2025, expected to be delivered in 2026. Expensed abnormal production costs of $30 million in 2025.

Defense, Space & Security (BDS)

Financial Performance:

• Revenue: $27,234 million (+13.9% YoY)
• Operating Margin: (0.5)%
• Key Growth Drivers: Lower net unfavorable cumulative contract catch-up adjustments and higher volume compared to the prior year. Strong demand reflects the important role of products and services in national security, with solid demand from non-U.S. governments prioritizing security and defense technology.

Product Portfolio:

• Major product lines: Manned and unmanned military aircraft (e.g., F/A-18, F-15, T-7A Red Hawk), vertical lift (e.g., CH-47 Chinook, AH-64 Apache, MH-139 Grey Wolf), commercial derivative aircraft (e.g., KC-46A Tanker, P-8 Models), strategic defense and intelligence systems, satellite systems, and space exploration (e.g., Commercial Crew, Ground-based Midcourse Defense, Space Launch System).
• Deliveries (2025): F/A-18 Models (14 units), F-15 Models (9 units), CH-47 Chinook (New) (3 units), CH-47 Chinook (Renewed) (11 units), AH-64 Apache (New) (19 units), AH-64 Apache (Remanufactured) (42 units), MH-139 Grey Wolf (9 units), KC-46 Tanker (14 units), P-8 Models (6 units), Commercial Satellites (4 units).

Market Dynamics:

• Competitive positioning: Faces strong competition from General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, RTX Corporation, and SpaceX, with non-U.S. companies like BAE Systems and Airbus Group strengthening their presence. Competition is intensifying due to defense industry consolidation, shifting acquisition priorities, and cost pressure from customers.
• Key customer types and market trends: Primarily the U.S. government (United States Department of War, National Aeronautics and Space Administration) and non-U.S. governments. The non-U.S. market is driven by evolving security challenges and the need to modernize aging equipment across Asia, Europe, and the Middle East.

Program Highlights:

• VC-25B Presidential Aircraft: Increased reach-forward loss by $60 million in 2025 due to increases in supplier costs. Expects finalization of contract terms in early 2026.
• KC-46A Tanker: Increased reach-forward loss by $714 million in 2025, primarily due to higher estimated manufacturing and engineering costs for production support.
• MQ-25: Immaterial reach-forward loss in 2025. Initiated final assembly and ground-based flight testing in H1 2025.
• T-7A Red Hawk: Immaterial reach-forward loss in 2025. Customer ordered four production representative test vehicles in June 2025.
• Commercial Crew: Immaterial reach-forward loss in 2025. Planning uncrewed and crewed missions in 2026, continuing to work toward crew certification and resolving propulsion system anomalies.

Global Services (BGS)

Financial Performance:

• Revenue: $20,923 million (+4.9% YoY)
• Operating Margin: 64.4%
• Key Growth Drivers: Higher government and commercial services revenue, and a significant gain on the Digital Aviation Solutions Divestiture. Commercial revenues are expected to remain strong as the commercial airline industry recovers and transitions to growth.

Product Portfolio:

• Major product lines: Parts distribution, logistics and other inventory services; maintenance, engineering and upgrades; training and professional services; and digital solutions and analytics.
• New product launches or major updates: Focus on data analytics for flight operations and predictive maintenance.

Market Dynamics:

• Competitive positioning: A competitive market with many domestic and international competitors, leading to intense pricing pressures. The Boeing Company aims to leverage its extensive services network.
• Key customer types and market trends: Serves commercial and defense customers worldwide. Demand for after-market services is growing with the worldwide commercial airline fleet. Government services demand remains stable, with growth in non-U.S. fleets.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: No open market common stock repurchases in 2025; the program was terminated in March 2020. 33,665 shares were transferred from employees in satisfaction of minimum tax withholding obligations in 2025.
• Dividend Payments: $345 million in dividends paid on Mandatory convertible preferred stock in 2025.
• Dividend Yield: Not applicable for common stock (suspended since 2020).
• Future Capital Return Commitments: Mandatory convertible preferred stock will automatically convert on October 15, 2027, into common stock.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $10,921 million
• Total Debt: $54,098 million
• Net Cash Position: ($43,177) million (Net Debt)
• Credit Rating: Fitch affirmed BBB- (outlook stable), S&P affirmed BBB- (outlook stable), Moody’s affirmed Baa3 (outlook stable).
• Debt Maturity Profile: $8,351 million due in 2026, $4,403 million in 2027, $2,739 million in 2028, $2,508 million in 2029, and $5,274 million in 2030.

Cash Flow Generation (2025):

• Operating Cash Flow: $1,065 million
• Free Cash Flow: ($1,877) million (Operating Cash Flow less Capital Expenditures)
• Cash Conversion Metrics: Net cash provided by operating activities increased by $13.1 billion in 2025 compared to 2024, primarily driven by higher commercial airplane deliveries, lower customer considerations, and working capital improvements.

Operational Excellence

Production & Service Model: The Boeing Company's production system is highly complex, involving extensive coordination with suppliers, highly-skilled labor, and stringent regulatory requirements. The Company is committed to improving safety and quality, investing in workforce training, simplifying plans and processes, eliminating defects, and enhancing its safety and quality culture. Production rates are subject to internal key performance indicators, rate readiness processes guided by its Safety Management System, and Federal Aviation Administration concurrence. Service delivery methods for Global Services span the life cycle of defense and commercial aircraft programs, including training, fleet services, logistics, maintenance, engineering, modifications, upgrades, and daily gate-to-gate operations.

Supply Chain Architecture: The Boeing Company is highly dependent on the availability and quality of essential materials, parts, and subassemblies from a large number of U.S. and non-U.S. suppliers and subcontractors. Key raw materials include aluminum, titanium, and composites. Many major components are procured on a sole-source basis. The Company maintains an extensive qualification and performance surveillance system to control supply chain risk.

Key Suppliers & Partners:

• Raw Materials: Suppliers of aluminum, titanium, and composites.
• Major Components/Subassemblies: A small number of sole-source suppliers for certain items.
• Manufacturing Partners: Spirit AeroSystems Holdings, Inc. (now acquired) for 737 fuselages, P-8 and KC-46A Tanker programs, and major structures for 767, 777, and 787 programs.
• Technology Partners: Collaborations for specific programs (e.g., engine supplier for 777X).

Facility Network:

• Manufacturing: Major locations include Greater Seattle, Washington; Wichita, Kansas; Greater Charleston, South Carolina; Greater Los Angeles, California; Tulsa, Oklahoma; Greater Portland, Oregon; Greater Salt Lake City, Utah; St. Louis, Missouri (for Defense, Space & Security programs); Philadelphia, Pennsylvania; Mesa, Arizona; Huntsville, Alabama; Oklahoma City, Oklahoma; Heath, Ohio. International manufacturing sites in China, Australia, Canada, Malaysia, and Mexico.
• Research & Development: R&D centers are located across various manufacturing sites and dedicated facilities, including those for corporate offices and enterprise R&D.
• Distribution: Key locations include San Antonio, Texas; Greater Dallas, Texas; Greater Miami, Florida; Jacksonville, Florida; and international sites in Great Britain, China, and Germany.

Operational Metrics:

• 737 Production Rate: Recovered from below 38 aircraft per month at the beginning of 2025 to 42 per month during Q4 2025. Plans to increase to 47 per month in 2026.
• 787 Production Rate: Increased from five to seven per month in 2025, and to eight per month during Q4 2025.
• 767 Production Rate: Currently targeting approximately three aircraft per month.
• Abnormal Production Costs: 787 program expensed $30 million in 2025. 777X program had no abnormal production costs in 2025.

Market Access & Customer Relationships

Go-to-Market Strategy:

• Direct Sales: Utilizes direct sales forces for commercial aircraft and defense contracts, maintaining direct relationships with commercial airlines and government agencies.
• Channel Partners: Engages with channel partners for certain services and international defense sales.
• Digital Platforms: Leverages digital solutions and analytics within its Global Services segment.

Customer Portfolio:

• Enterprise Customers: Serves major commercial airlines globally and various U.S. government agencies, including all branches of the U.S. military, National Aeronautics and Space Administration, Federal Aviation Administration, and Department of Homeland Security.
• Strategic Partnerships: Engages in strategic partnerships with key customers and suppliers.
• Customer Concentration: Derives a significant portion of revenues from a limited number of commercial airlines. The U.S. government accounted for 35% of consolidated revenues in 2025.

Geographic Revenue Distribution (2025):

• United States: 53.7% of total revenue ($48,083 million)
• Asia: 18.4% of total revenue ($16,466 million)
• Europe: 12.8% of total revenue ($11,419 million)
• Middle East: 7.9% of total revenue ($7,023 million)
• Oceania: 1.8% of total revenue ($1,587 million)
• Canada: 2.0% of total revenue ($1,781 million)
• Africa: 1.8% of total revenue ($1,625 million)
• Latin America, Caribbean and other: 1.7% of total revenue ($1,479 million)

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The commercial aircraft market is characterized by long-term trends in airline passenger and cargo traffic, influenced by economic growth, political stability, airline profitability, financing availability, trade policies, geopolitics, technological advances, fuel prices, and environmental regulations. The airline industry is cyclical and highly competitive. The defense market is driven by evolving national security threats, U.S. national security strategy, foreign policy, and macroeconomic conditions, with an emphasis on affordability, innovation, cybersecurity, and technical data/software delivery. The aviation services market is competitive, with demand for after-market services growing with the worldwide commercial airline fleet.

Competitive Positioning Matrix (The Boeing Company):

Direct Competitors

Primary Competitors:

• Commercial Airplanes: Airbus SE, and entrants from China.
• Defense, Space & Security: General Dynamics Corporation, Lockheed Martin Corporation, Northrop Grumman Corporation, RTX Corporation, and SpaceX.
• Global Services: Many of the same strong U.S. and non-U.S. competitors facing Commercial Airplanes and Defense, Space & Security, along with other specialized service providers.

Emerging Competitive Threats: New entrants from China in commercial aircraft. Private capital-backed and other non-traditional defense companies. Disruptive technologies and alternative solutions in services markets.

Competitive Response Strategy: The Boeing Company intends to compete by providing customers with airplanes and services that deliver superior design, safety, quality, efficiency, and value. It aims to grow market share in Global Services by leveraging customer satisfaction and productivity. In Defense, Space & Security, the strategy is to leverage core businesses to capture key next-generation programs and expand in adjacent and international markets.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: Demand for commercial aircraft is highly sensitive to global economic growth, airline profitability, fuel prices, and geopolitical stability. The airline industry is cyclical. U.S. government defense spending levels and acquisition priorities are difficult to predict and can be impacted by national security strategy, foreign policy, and macroeconomic conditions.
• Technology Disruption: Challenges in developing and manufacturing aircraft that meet performance, reliability, and sustainability standards, particularly with newer programs. Delays in certification of new or derivative aircraft (e.g., 777X, 737-7, 737-10) pose significant risks.
• Customer Concentration: A significant portion of revenues is derived from a limited number of commercial airlines, making the Company vulnerable to fleet decisions, consolidations, or financial challenges of major customers.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Heavy dependence on the performance and financial stability of a large number of U.S. and non-U.S. subcontractors and suppliers. Risks include inflationary pressures, resource constraints, production quality issues, global supply chain constraints, and labor instability. Sole-source suppliers pose particular risk.
• Geographic Concentration: Operations are primarily in the U.S., but reliance on non-U.S. suppliers and markets exposes the Company to international risks.
• Capacity Constraints: Risks associated with achieving planned production rate increases (e.g., 737 program) due to production health, regulatory concurrence, or supplier capabilities. Operational issues can lead to out-of-sequence work and increased costs.
• Labor Instability: Approximately 40% of the workforce is union-represented. Past work stoppages (e.g., IAM District 751 in 2024, IAM District 837 in 2025) have materially impacted business and financial position. Future work stoppages (e.g., SPEEA contracts expiring in October 2026) could have similar adverse effects.

Financial & Regulatory Risks

• Market & Financial Risks: Fixed-price contracts (60% of BDS and BGS revenues in 2025) subject the Company to losses from cost overruns if estimated costs are not achieved. In-orbit incentive payments on satellite contracts are at risk if performance specifications are not met.
• Foreign Exchange: Subject to foreign currency exchange rate risk relating to receipts from customers and payments to suppliers in foreign currencies.
• Credit & Liquidity: Dependence on access to capital and financial markets. Total debt of $54.1 billion at December 31, 2025, with $15.5 billion of principal payments due over the next three years. Downgrades in credit ratings could increase borrowing costs and impact access to capital. Substantial pension and other postretirement benefit obligations can materially impact earnings, shareholders’ equity, and cash flows.
• Regulatory & Compliance Risks: Heavily regulated in most markets by numerous U.S. and non-U.S. government agencies (e.g., FAA, United States Department of War, National Aeronautics and Space Administration). Government contracts are subject to termination for convenience or default. Compliance with environmental protection laws and regulations, including those related to climate change, could lead to increased expenditures.
• Legal Proceedings: Involved in various litigation matters and government inquiries/investigations (e.g., 737 MAX accidents, 737-9 door plug accident, U.S. Department of Justice non-prosecution agreement). Adverse decisions could have a material impact on financial position, results of operations, and cash flows, or cause reputational harm.

Geopolitical & External Risks

• Geographic Dependencies: Significant portion of revenues from non-U.S. sales (46% in 2025) exposes the Company to risks of doing business in other countries, including changes in regulatory requirements, global trade environment, political and economic volatility, and international tensions.
• Trade Relations: Highly dynamic global trade environment, including tariffs, trade restrictions, and sanctions. U.S.-China trade relationship is challenged, leading to temporary pauses in aircraft deliveries to China in 2025.
• Sanctions & Export Controls: Non-U.S. sales are subject to U.S. and non-U.S. governmental regulations, including import-export control, tariffs, and sanctions.
• External Disruptions: Business may be impacted by threats to physical security, IT systems, extreme weather, acts of nature, pandemics, or public health crises.

Innovation & Technology Leadership

Research & Development Focus:

• Core Technology Areas: Investment in experimentation, design, and testing for commercial jet aircraft, military aircraft, weapons systems, strategic defense and intelligence systems, satellite systems, and space exploration.
• Innovation Pipeline: Ongoing development of new aircraft models and derivatives (e.g., 777X, 737-7, 737-10). Increased spending on enterprise product development.

Intellectual Property Portfolio: The Boeing Company owns numerous patents and licenses for the use of patents owned by others, which relate to its products and their manufacture. It also licenses intellectual property to and from third parties. Unpatented research, development, engineering skills, trademarks, trade secrets, and other intellectual property rights contribute significantly to the business.

Technology Partnerships: Engages in collaborations with suppliers and other entities for specific programs (e.g., engine supplier for 777X).

Leadership & Governance

Executive Leadership Team (as of January 30, 2026)

Board Composition: The Board of Directors has overall responsibility for risk oversight, with the Audit Committee and Aerospace Safety Committee assisting in cybersecurity risk oversight. The Audit Committee reviews cybersecurity processes for assessing key strategic, operational, and compliance risks, receiving bimonthly presentations from the Chief Information Digital Officer and Chief Security Officer. The Aerospace Safety Committee oversees risks from cybersecurity threats related to aerospace products and services.

Human Capital Strategy

Workforce Composition (as of December 31, 2025):

• Total Employees: Approximately 182,000
• Geographic Distribution: 14% located outside of the U.S.
• Skill Mix: Workforce includes approximately 72,000 union members (40% of total workforce).

Talent Management:

• Acquisition & Retention: Compensation program designed to attract, reward, and retain talent with competitive compensation and benefits, including healthcare, paid time off, parental leave, retirement benefits, tuition assistance, employee skills and leadership development programs, and mental and physical well-being programs. Multi-level recognition program for achievements.
• Hiring Strategy: Not explicitly detailed beyond competitive compensation.
• Retention Metrics: Not explicitly detailed, but retention strategies include comprehensive benefits and development programs.

Diversity & Development:

• Development Programs: Supports continuous development of professional, technical, and leadership skills through digital learning resources and partnerships with professional/technical societies. In 2025, employees completed approximately 5.8 million hours of learning, and approximately 12,000 employees leveraged tuition assistance.
• Culture & Engagement: Committed to creating a work environment where every teammate can perform at their best and grow careers. Culture transformation includes new Values and Behaviors, revised performance management, and enhanced training and leadership development. Focus on safety, quality, integrity, and sustainability, with annual Code of Conduct reaffirmation and multiple channels for reporting concerns.

Environmental & Social Impact

Environmental Commitments:

• Climate Strategy: Subject to various federal, state, local, and non-U.S. laws and regulations relating to environmental protection, including hazardous substances and wastes, and climate change (e.g., greenhouse gas emissions). Compliance could lead to increased expenditures, energy/raw materials costs, and investment in designs/technologies.
• Supply Chain Sustainability: Not explicitly detailed in the filing.

Social Impact Initiatives:

• Community Investment: Not explicitly detailed in the filing.
• Product Impact: Not explicitly detailed in the filing.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: No material portion of the business is considered seasonal.
• Economic Sensitivity: The commercial aircraft market is predominantly driven by long-term trends in airline passenger and cargo traffic, which are influenced by sustained economic growth and political stability. The airline industry is historically cyclical. The global economy is expecting a continued easing of inflation and interest rates, with regional economic and geopolitical difficulties adding uncertainty.
• Industry Cycles: The long-term airline industry outlook remains positive due to fundamental drivers like economic growth, increasing propensity to travel, and globalization. The industry remains vulnerable to exogenous developments such as fuel price spikes, tariffs, credit market shocks, terrorism, natural disasters, conflicts, epidemics, pandemics, and increased global environmental regulations.

Planning & Forecasting: Demand forecasting and capacity planning are integral to managing production and delivery schedules, especially given the long-term nature of commercial aircraft contracts.

Regulatory Environment & Compliance

Regulatory Framework:

• Industry-Specific Regulations: Heavily regulated in most markets. Works with numerous U.S. government agencies (e.g., U.S. military, National Aeronautics and Space Administration, Federal Aviation Administration, Department of Homeland Security) and similar non-U.S. authorities. Commercial aircraft products must comply with Federal Aviation Administration regulations governing production, quality systems, airworthiness, and operational safety. New aircraft models require Federal Aviation Administration certification.
• International Compliance: Non-U.S. sales are subject to U.S. and non-U.S. governmental regulations and procurement policies, including import-export control, tariffs, investment, exchange controls, anti-corruption, and repatriation of earnings.

Trade & Export Controls:

• Export Restrictions: Non-U.S. sales are subject to U.S. and non-U.S. governmental regulations, including those relating to import-export control, tariffs, investment, exchange controls, anti-corruption, and repatriation of earnings.
• Sanctions Compliance: The global trade environment is highly dynamic, with potential for new or modified tariffs, retaliatory actions, trade restrictions, and sanctions. The U.S.-China trade relationship is challenged due to tariffs, sanctions, and export restrictions.

Legal Proceedings: The Boeing Company is involved in various legal proceedings and claims related to products, contracts, labor, employment, securities, antitrust, trade regulations, intellectual property, and government inquiries/investigations. Material litigation includes civil lawsuits and securities lawsuits arising from the 737 MAX accidents and the January 2024 737-9 door plug accident. A non-prosecution agreement with the U.S. Department of Justice was entered into on May 29, 2025, requiring a $244 million fine and $445 million in compensation for family members of MAX accident victims.

Tax Strategy & Considerations

Tax Profile (2025):

• Effective Tax Rate: 15.1%
• Geographic Tax Planning: The Company’s deferred income tax assets and liabilities relate primarily to U.S. federal and state tax jurisdictions. Beginning in 2024, earnings from non-U.S. subsidiaries are no longer considered indefinitely reinvested.
• Tax Reform Impact: The One Big Beautiful Bill Act, signed July 4, 2025, maintains the 21% corporate tax rate and makes permanent beneficial expired/expiring tax provisions from the Tax Cuts and Jobs Act of 2017, including immediate expensing of domestic R&D expenditures, more favorable interest deductibility, and 100% bonus depreciation. Revisions to the international tax framework are effective in 2026. The Company elected to accelerate the deduction of domestic R&D expenditures into 2025.

Insurance & Risk Transfer

Risk Management Framework: The Boeing Company maintains insurance for certain risks and, in some circumstances, may receive indemnification from the U.S. government. However, the amount of insurance coverage may not cover all claims or liabilities, particularly for unique products and services like aircraft technologies, space systems, and missile systems, which may not be insurable on commercially reasonable terms. The Company also participates in a reinsurance pool for workers’ compensation through its wholly-owned insurance subsidiary, Astro Ltd.

Risk Transfer Mechanisms: Uses foreign currency forward contracts to hedge price risk associated with foreign denominated payments and receipts. Employs commodity swaps and commodity purchase contracts to hedge against unfavorable price changes for commodities used in production.