Brief
Demo view — informational only.
Executive Takeaway
Boeing reported significant losses in 2024, with a total loss from operations increasing by $9,934 million compared to 2023, primarily due to reach-forward losses on major programs. [E4]
- The company recognized approximately $4.9 billion in reach-forward losses on the 777X program in 2025, indicating ongoing production challenges and certification delays. [E7]
What Happened
- Boeing's revenue and cost estimates for long-term contracts were reassessed, resulting in cumulative catch-up adjustments that decreased earnings from operations by $1,377 million in 2025. [E3]
- The company experienced increased losses on fixed-price development programs, including the KC-46A Tanker and VC-25B, contributing to a significant operational loss. [E3]
Why it Matters
- The ongoing losses and production challenges may impact Boeing's ability to meet future financial commitments and could affect investor confidence. [E4]
Risks / Uncertainties
Key Facts
| Ticker | BA |
| Form | 10-K |
| Filed | 2026-01-30 |
| Impact | High (88/100) |
| Accession No. | 0001628280-26-004357 |
| CIK | 0000012927 |
| Total Loss from Operations (2024) | $9,934 million |
| Reach-Forward Losses on 777X (2025) | $4.9 billion |
What to Read Next
- Review the detailed financial statements for insights on contract performance and operational challenges. [E3]
Evidence
Show evidence notes
E4
Highlights the scale of operational losses and their implications for future performance.
E7
Indicates specific programs facing significant financial challenges, which could affect overall company performance.
Show evidence blocks (E1..)
We enter into firm fixed-price aircraft sales contracts with indexed price escalation clauses, which subjects us to losses if we have cost overruns or if increases in our costs exceed the applicable escalation rate. Commercial aircraft sales contracts are typically entered into years before the aircraft are delivered. In order to help account for economic fluctuations between the contract date and delivery date, aircraft pricing generally consists of a fixed amount as modified by price escalation formulas derived from labor, commodity and other price indices. Our revenue estimates are based on current expectations with respect to these escalation formulas, but the actual escalation amounts are outside of our control. Escalation factors can fluctuate significantly from period to period. Changes in escalation amounts can significantly impact revenues and operating margins in our BCA business.
Due to the size, duration and nature of many of our long-term contracts, the estimation of total revenues and costs through completion is complicated and subject to many variables. Total revenue estimates are based on negotiated contract prices and quantities, modified by our assumptions regarding contract options, change orders, incentive and award fee provisions associated with technical performance, and price adjustment clauses (such as inflation or index-based clauses). The majority of these long-term contracts are with the U.S. government where the price is generally based on the estimated cost to produce the product or service plus profit. Federal Acquisition Regulations provide guidance on the types of cost that will be reimbursed in establishing contract price. Total cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance trends, business base and other economic projections. Factors that influence these estimates include inflationary trends, technical and schedule risk, internal and supplier performance trends, production qu
Revenue and cost estimates for all significant long-term contract performance obligations are reviewed and reassessed quarterly. Changes in these estimates could result in recognition of cumulative catch-up adjustments to the contract’s inception to date revenues, cost of sales and profit in the period in which such changes are made. Changes in revenue and cost estimates could also result in a reach-forward loss or an adjustment to a reach-forward loss which would be recorded immediately in earnings. Net cumulative catch-up adjustments for changes in estimated revenues and costs at completion across all long-term contracts, including the impact of estimated losses on unexercised options, decreased Earnings from operations by $1,377 million in 2025 and increased Loss from operations by $6,562 million and $2,943 million in 2024 and 2023, respectively, and were primarily due to losses recognized on the KC-46A Tanker, VC-25B, T-7A Red Hawk, MQ-25, and Commercial Crew programs. These are all fixed-price development programs, and there is ongoing risk that similar losses may have to be rec
Loss from operations increased by $9,934 million in 2024 compared with 2023. BCA loss from operations increased by $6,334 million primarily due to reach-forward losses on the 777X and 767 programs, 737-9 customer considerations related to the January 2024 grounding, lower deliveries, and lower margins driven by production disruption including the IAM 751 work stoppage and new agreement, and higher research and development expense, partially offset by lower abnormal production costs. BDS loss from operations increased by $3,649 million compared to the same period in 2023 primarily due to higher net unfavorable cumulative contract catch-up adjustments in 2024 on major fixed-price development programs. BGS earnings from operations increased by $289 million in 2024 compared with 2023 primarily due to higher commercial services revenue. Loss from operations
and progress billings ($0.7 billion). The growth in Inventories was primarily driven by lower deliveries on our commercial airplane programs during 2024 as compared to 2023. Changes in Accounts payable during 2024 compared to 2023 reflects slowed/paused production primarily in our commercial airplanes business. The increase in Unbilled receivables during 2024 was primarily driven by revenue recognized in excess of billings at BDS compared to higher billings at BDS and BGS during 2023. The increase in Accrued liabilities was primarily driven by higher accrued losses on BDS fixed-price development programs. Concessions paid to 737 MAX customers totaled $0.9 billion and $0.4 billion during 2024 and 2023. Cash provided by Advances and progress billings during 2024 was $4.1 billion compared to cash provided of $3.4 billion during 2023.
We expensed $ 53 of acquisition related costs in the Consolidated Statements of Operations as General and administrative expense during the year ended December 31, 2025. The results of Spirit’s operations between the acquisition date and December 31, 2025, were not material. We have determined disclosure of 2025 and 2024 proforma revenue and earnings of Boeing combined with the acquired Spirit business is impracticable. Historical financial results of the acquired portion of the Spirit business are not readily available. To prepare proforma revenue and earnings would require revising historical estimates used in our long-term contract and program accounting as if the Spirit Acquisition had occurred at January 1, 2024 which is impracticable.
The Company uses program accounting to compute the cost of sales and margin for each commercial airplane program. However, as the 777X is a developmental program that has not yet delivered any aircraft, there is no cost of sales recorded unless the program has determined that estimated program costs exceed estimated program revenue, resulting in a reach-forward loss. The Company has recognized approximately $4.9 billion in reach-forward losses on the 777X program in 2025. The introduction of new aircraft programs brings increased risk related to meeting development, production, and certification timing. The 777X program is currently experiencing production challenges and certification delays, leading to significant uncertainty in the production schedule. These uncertainties could potentially result in production disruptions and delays to the timing of entry into service which further increases the complexity and subjectivity involved in management’s cost and revenue estimates for the program. Production disruptions and delays to entry into service for the 777X program have also incre
We depend, in part, on our ability to successfully access the capital and financial markets to fund our operations and contractual commitments. As of December 31, 2025, our debt totaled $54.1 billion, of which approximately $15.5 billion of principal payments on outstanding debt are scheduled to become due over the next three years, and our airplane financing commitments totaled $15.2 billion. We also expect to require up to $345 million of cash per year for the payment of dividends on the outstanding shares of our 6.00% Series A Mandatory Convertible Preferred Stock (Mandatory convertible preferred stock), through the mandatory conversion date of October 15, 2027. Dividends accumulate at a rate per annum equal to 6.00% on the liquidation preference thereof, which is $1,000.00 per share, payable when, as and if declared by our Board of Directors. The dividends, if declared, can be paid in cash, or subject to certain limitations, in shares of our common stock, or a combination of both. Any unpaid dividends will continue to accumulate. If dividends have not been declared and paid for s
Changes in assets and liabilities for 2025 improved by $7.8 billion compared to 2024 primarily driven by favorable changes in Inventories ($10.9 billion) and Accounts payable ($1.5 billion), partially offset by unfavorable changes in Advances and progress billings ($4.8 billion). The change in Inventories was primarily driven by higher deliveries on our commercial airplane programs during 2025 as compared to 2024. The change in Accounts payable during 2025 compared to 2024 reflects increased production primarily in our commercial airplanes business. The change in Advances and progress billings during 2025 compared to 2024 was primarily driven by increased commercial airplane deliveries and revenue recognized at BDS, partially offset by higher advances on commercial airplane orders. Concessions paid to 737 MAX customers totaled $0.2 billion and $0.9 billion during 2025 and 2024.
Industrial Revenue Bonds (IRB) issued by St. Louis County, the city of St. Charles, Missouri, and the city of Wichita, Kansas, were used to finance the purchase and/or construction of real and personal property at our St. Louis, St. Charles and Wichita sites. Tax benefits associated with IRBs primarily include sales tax exemptions and five to 22-year property tax abatements. We record these properties on our Consolidated Statements of Financial Position. We have also purchased the IRBs, and therefore, are the bondholders as well as the borrower/lessee of the properties purchased with the IRB proceeds. The liabilities and IRB assets are equal and are reported net in the Consolidated Statements of Financial Position. As of December 31, 2025 and 2024, the assets and liabilities associated with the IRBs were $ 1,054 and $ 355 .
Research and development includes costs incurred for experimentation, design and testing, as well as bid and proposal efforts related to government products and services, which are expensed as incurred unless the costs are related to certain contractual arrangements with customers. Costs that are incurred pursuant to such contractual arrangements are recorded over the period that revenue is recognized, consistent with our long-term contract accounting policy. We have certain research and development arrangements with customers that meet the conditions for best efforts research and development accounting. Accordingly, the amounts funded by the customer are recognized as an offset to our research and development expense rather than as contract revenues. Research and development expense, net included bid and proposal costs of $ 161 , $ 179 and $ 188 in 2025, 2024 and 2023, respectively.
Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of December 31, 2025 and have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Informational only. Not investment advice.