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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 20202021
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                      
Commission file number 1-442
 THE BOEING COMPANY
(Exact name of registrant as specified in its charter)
Delaware91-0425694
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer Identification No.)
Delaware91-0425694
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
100 N. Riverside Plaza,Chicago,IL60606-1596
(Address of principal executive offices)(Zip Code)
(312)544-2000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405/ of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company ☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $5.00 Par ValueBANew York Stock Exchange
As of July 22, 2020,21, 2021, there were 564,448,738586,151,904 shares of common stock, $5.00 par value, issued and outstanding.



THE BOEING COMPANY
FORM 10-Q
For the Quarter Ended June 30, 20202021
INDEX
Part I. Financial Information (Unaudited)Page
Part I. Financial Information (Unaudited)Page
Item 1.
1
1
2
3
4
5
7
8
10
Note 3 - Earnings Per Share
10
11
12
12
13
13
1315
15
Note 10 - Commitments & Contingencies
1516
2122
22
2223
22
Note 14 - Share-Based Compensation and Other Comprehensive Arrangements
2324
2425
2426
2628
2830
2931
3435
3536
Item 2.
3738
3738
4346
4750
4953
5054
5155
5256
5256
5356
Item 3.
5458
Item 4.
5559
Part II. Other Information
Item 1.
5660
Item 1A.
5660
Item 2.
5860
Item 3.
5860
Item 4.
5860
Item 5.
5860
Item 6.
5961
6062


Table of Contents
Part I. Financial Information
Item 1. Financial Statements

The Boeing Company and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in millions, except per share data)Six months ended June 30 Three months ended June 30(Dollars in millions, except per share data)Six months ended June 30Three months ended June 30
2020
 2019
 2020
 2019
2021202020212020
Sales of products
$23,254
 
$33,319
 
$9,063
 
$13,094
Sales of products$26,672 $23,254 $14,154 $9,063 
Sales of services5,461
 5,349
 2,744
 2,657
Sales of services5,543 5,461 2,844 2,744 
Total revenues28,715
 38,668
 11,807
 15,751
Total revenues32,215 28,715 16,998 11,807 
  

 

 

Cost of products(25,091) (31,910) (10,378) (15,672)Cost of products(23,895)(25,091)(12,263)(10,378)
Cost of services(4,632) (4,511) (2,589) (2,122)Cost of services(4,483)(4,632)(2,316)(2,589)
Boeing Capital interest expense(23) (34) (11) (16)Boeing Capital interest expense(18)(23)(9)(11)
Total costs and expenses(29,746) (36,455) (12,978) (17,810)Total costs and expenses(28,396)(29,746)(14,588)(12,978)
(1,031) 2,213
 (1,171) (2,059)3,819 (1,031)2,410 (1,171)
(Loss)/income from operating investments, net(47) 5
 (45) (15)
Income/(loss) from operating investments, netIncome/(loss) from operating investments, net75 (47)38 (45)
General and administrative expense(2,034) (1,856) (1,161) (672)General and administrative expense(2,072)(2,034)(1,040)(1,161)
Research and development expense, net(1,297) (1,692) (625) (826)Research and development expense, net(996)(1,297)(497)(625)
Gain on dispositions, net92
 300
 38
 192
Gain on dispositions, net114 92 112 38 
Loss from operations(4,317) (1,030) (2,964) (3,380)
Earnings/(loss) from operationsEarnings/(loss) from operations940 (4,317)1,023 (2,964)
Other income, net206
 213
 94
 107
Other income, net389 206 199 94 
Interest and debt expense(815) (277) (553) (154)Interest and debt expense(1,352)(815)(673)(553)
Loss before income taxes(4,926) (1,094) (3,423) (3,427)
(Loss)/earnings before income taxes(Loss)/earnings before income taxes(23)(4,926)549 (3,423)
Income tax benefit1,890
 301
 1,028
 485
Income tax benefit29 1,890 18 1,028 
Net loss(3,036) (793) (2,395) (2,942)
Net earnings/(loss)Net earnings/(loss)6 (3,036)567 (2,395)
Less: net loss attributable to noncontrolling interest(32) 


 (19) 

Less: net loss attributable to noncontrolling interest(44)(32)(20)(19)
Net loss attributable to Boeing Shareholders
($3,004) 
($793) 
($2,376) 
($2,942)
Net earnings/(loss) attributable to Boeing ShareholdersNet earnings/(loss) attributable to Boeing Shareholders$50 ($3,004)$587 ($2,376)
       
Basic loss per share
($5.31) 
($1.40) 
($4.20) 
($5.21)
       
Diluted loss per share
($5.31) 
($1.40) 
($4.20) 
($5.21)
Basic earnings/(loss) per shareBasic earnings/(loss) per share$0.09 ($5.31)$1.00 ($4.20)
Diluted earnings/(loss) per shareDiluted earnings/(loss) per share$0.09 ($5.31)$1.00 ($4.20)
       
Weighted average diluted shares (millions)566.1
 566.6
 566.4
 565.3
Weighted average diluted shares (millions)588.6566.1590.2566.4
See Notes to the Condensed Consolidated Financial Statements.

1
Table of Contents
The Boeing Company and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(Dollars in millions)Six months ended June 30 Three months ended June 30
 2020
 2019
 2020
 2019
Net loss
($3,036) 
($793) 
($2,395) 
($2,942)
Other comprehensive (loss)/income, net of tax:       
Currency translation adjustments(33) (2) 44
 (3)
Unrealized gain on certain investments, net of tax of $0 in all periods
 1
 
 
Unrealized (loss)/gain on derivative instruments:       
Unrealized (loss)/gain arising during period, net of tax of $54, $5, ($23) and $8(186) (17) 89
 (28)
Reclassification adjustment for losses/(gains) included in net loss, net of tax of ($4), $1, ($3) and $012
 (3) 10
 (1)
Total unrealized (loss)/gain on derivative instruments, net of tax(174) (20) 99
 (29)
Defined benefit pension plans and other postretirement benefits:       
Amortization of prior service credits included in net periodic pension cost, net of tax of $12, $13, $6 and $7(45) (45) (22) (22)
Net actuarial loss arising during the period, net of tax of $3, $0, $3 and $0(12) 
 (12) 
Amortization of actuarial losses included in net periodic pension cost, net of tax of ($103), ($65), ($50) and ($33)390
 233
 197
 115
Settlements and curtailments included in net loss, net of tax of ($1), $0, ($1) and $02
 
 2
 
Pension and postretirement cost related to our equity method investments, net of tax of $0, ($2), $0, and $0

 8
 
 
Total defined benefit pension plans and other postretirement benefits, net of tax335
 196
 165
 93
Other comprehensive income, net of tax128
 175
 308
 61
Comprehensive loss related to noncontrolling interests

 (7) 
 (7)
Comprehensive loss, net of tax(2,908) (625) (2,087) (2,888)
Less: Comprehensive loss related to noncontrolling interest(32) (7) (19) (7)
Comprehensive loss attributable to Boeing Shareholders, net of tax
($2,876) 
($618) 
($2,068) 
($2,881)
(Dollars in millions)Six months ended June 30Three months ended June 30
2021 2020 2021 2020 
Net earnings/(loss)$6 ($3,036)$567 ($2,395)
Other comprehensive income/(loss), net of tax:
Currency translation adjustments(22)(33)14 44 
Unrealized gain/(loss) on derivative instruments:
Unrealized gain/(loss) arising during period, net of tax of ($17), $54, ($14) and ($23)65 (186)54 89 
Reclassification adjustment for (gains)/losses included in net earnings/(loss), net of tax of $0, ($4), $0 and ($3)(2)12 010 
Total unrealized gain/(loss) on derivative instruments, net of tax63 (174)54 99 
Defined benefit pension plans and other postretirement benefits:
Amortization of prior service credits included in net periodic pension cost, net of tax of $12, $12, $6 and $6(45)(45)(22)(22)
Net actuarial gain/(loss) arising during the period, net of tax of ($2), $3, ($2) and $37 (12)7 (12)
Amortization of actuarial losses included in net periodic pension cost, net of tax of ($122), ($103), ($57) and ($50)463 390 235 197 
Settlements and curtailments included in net earnings/(loss), net of tax of ($1), ($1), ($1) and ($1)3 2 2 2 
Pension and postretirement cost related to our equity method investments, net of tax of ($1), $0, $0 and $03 01 0
Total defined benefit pension plans and other postretirement benefits, net of tax431 335 223 165 
Other comprehensive income, net of tax472 128 291 308 
Comprehensive income/(loss), net of tax478 (2,908)858 (2,087)
Less: Comprehensive loss related to noncontrolling interest(44)(32)(20)(19)
Comprehensive income/(loss) attributable to Boeing Shareholders, net of tax$522 ($2,876)$878 ($2,068)
See Notes to the Condensed Consolidated Financial Statements.

2
Table of Contents
The Boeing Company and Subsidiaries
Condensed Consolidated Statements of Financial Position
(Unaudited)
(Dollars in millions, except per share data)June 30
2020
 December 31
2019
(Dollars in millions, except per share data)June 30
2021		December 31
2020
Assets   Assets
Cash and cash equivalents
$19,992
 
$9,485
Cash and cash equivalents$8,271 $7,752 
Short-term and other investments12,438
 545
Short-term and other investments13,071 17,838 
Accounts receivable, net2,793
 3,266
Accounts receivable, net2,490 1,955 
Unbilled receivables, net8,570
 9,043
Unbilled receivables, net9,203 7,995 
Current portion of customer financing, net115
 162
Current portion of customer financing, net74 101 
Inventories83,745
 76,622
Inventories81,799 81,715 
Other current assets, net2,624
 3,106
Other current assets, net4,187 4,286 
Total current assets130,277
 102,229
Total current assets119,095 121,642 
Customer financing, net2,054
 2,136
Customer financing, net1,865 1,936 
Property, plant and equipment, net of accumulated depreciation of $19,863 and $19,34212,182
 12,502
Property, plant and equipment, net of accumulated depreciation of $20,567 and $20,507Property, plant and equipment, net of accumulated depreciation of $20,567 and $20,50711,341 11,820 
Goodwill8,064
 8,060
Goodwill8,076 8,081 
Acquired intangible assets, net3,019
 3,338
Acquired intangible assets, net2,702 2,843 
Deferred income taxes729
 683
Deferred income taxes84 86 
Investments1,066
 1,092
Investments883 1,016 
Other assets, net of accumulated amortization of $617 and $5805,481
 3,585
Other assets, net of accumulated amortization of $863 and $729Other assets, net of accumulated amortization of $863 and $7294,889 4,712 
Total assets
$162,872
 
$133,625
Total assets$148,935 $152,136 
Liabilities and equity   Liabilities and equity
Accounts payable
$13,700
 
$15,553
Accounts payable$11,450 $12,928 
Accrued liabilities22,493
 22,868
Accrued liabilities19,502 22,171 
Advances and progress billings53,367
 51,551
Advances and progress billings50,738 50,488 
Short-term debt and current portion of long-term debt2,922
 7,340
Short-term debt and current portion of long-term debt6,534 1,693 
Total current liabilities92,482
 97,312
Total current liabilities88,224 87,280 
Deferred income taxes404
 413
Deferred income taxes1,064 1,010 
Accrued retiree health care4,427
 4,540
Accrued retiree health care4,017 4,137 
Accrued pension plan liability, net15,663
 16,276
Accrued pension plan liability, net13,519 14,408 
Other long-term liabilities2,821
 3,422
Other long-term liabilities1,571 1,486 
Long-term debt58,457
 19,962
Long-term debt57,025 61,890 
Total liabilities174,254
 141,925
Total liabilities165,420 170,211 
Shareholders’ equity:   Shareholders’ equity:
Common stock, par value $5.00 – 1,200,000,000 shares authorized; 1,012,261,159 shares issued5,061
 5,061
Common stock, par value $5.00 — 1,200,000,000 shares authorized; 1,012,261,159 shares issuedCommon stock, par value $5.00 — 1,200,000,000 shares authorized; 1,012,261,159 shares issued5,061 5,061 
Additional paid-in capital6,648
 6,745
Additional paid-in capital8,481 7,787 
Treasury stock, at cost - 447,840,938 and 449,352,405 shares(54,829) (54,914)
Treasury stock, at cost - 426,385,230 and 429,941,021 sharesTreasury stock, at cost - 426,385,230 and 429,941,021 shares(52,223)(52,641)
Retained earnings47,478
 50,644
Retained earnings38,660 38,610 
Accumulated other comprehensive loss(16,025) (16,153)Accumulated other comprehensive loss(16,661)(17,133)
Total shareholders’ equity(11,667) (8,617)
Total shareholders’ deficitTotal shareholders’ deficit(16,682)(18,316)
Noncontrolling interests285
 317
Noncontrolling interests197 241 
Total equity(11,382) (8,300)Total equity(16,485)(18,075)
Total liabilities and equity
$162,872
 
$133,625
Total liabilities and equity$148,935 $152,136 
See Notes to the Condensed Consolidated Financial Statements.

3
Table of Contents
The Boeing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in millions)Six months ended June 30(Dollars in millions)Six months ended June 30
2020

2019
20212020
Cash flows – operating activities: 
 Cash flows – operating activities:
Net loss
($3,036)

($793)
Adjustments to reconcile net loss to net cash (used)/provided by operating activities: 
 
Net earnings/(loss)Net earnings/(loss)$6 ($3,036)
Adjustments to reconcile net earnings/(loss) to net cash used by operating activities:Adjustments to reconcile net earnings/(loss) to net cash used by operating activities:
Non-cash items –  
 Non-cash items –
Share-based plans expense115

104
Share-based plans expense493 115 
Treasury shares issued for 401(k) contributionTreasury shares issued for 401(k) contribution628 
Depreciation and amortization1,103

1,067
Depreciation and amortization1,087 1,103 
Investment/asset impairment charges, net280

70
Investment/asset impairment charges, net38 280 
Customer financing valuation adjustments9

249
Customer financing valuation adjustments(1)9 
Gain on dispositions, net(92) (300)Gain on dispositions, net(114)(92)
Other charges and credits, net815

145
Other charges and credits, net(1)815 
Changes in assets and liabilities –  
 Changes in assets and liabilities –
Accounts receivable143

588
Accounts receivable(523)143 
Unbilled receivables285
 (222)Unbilled receivables(1,207)285 
Advances and progress billings1,822
 1,842
Advances and progress billings251 1,822 
Inventories(6,741)
(5,233)Inventories413 (6,741)
Other current assets433
 (887)Other current assets324 433 
Accounts payable(3,181)
2,002
Accounts payable(2,035)(3,181)
Accrued liabilities514

4,959
Accrued liabilities(2,613)514 
Income taxes receivable, payable and deferred(1,894)
(921)Income taxes receivable, payable and deferred(130)(1,894)
Other long-term liabilities(109)
(509)Other long-term liabilities(127)(109)
Pension and other postretirement plans(357)
(390)Pension and other postretirement plans(576)(357)
Customer financing, net62

347
Customer financing, net83 62 
Other247

80
Other134 247 
Net cash (used)/provided by operating activities(9,582)
2,198
Net cash used by operating activitiesNet cash used by operating activities(3,870)(9,582)
Cash flows – investing activities:   Cash flows – investing activities:
Property, plant and equipment additions(776) (922)Property, plant and equipment additions(513)(776)
Property, plant and equipment reductions96
 331
Property, plant and equipment reductions51 96 
Acquisitions, net of cash acquired


 (492)
Contributions to investments(12,557) (496)Contributions to investments(20,108)(12,557)
Proceeds from investments543
 758
Proceeds from investments24,989 543 
Purchase of distribution rights


 (20)
Other8
 (12)Other4 8 
Net cash used by investing activities(12,686) (853)
Net cash provided/(used) by investing activitiesNet cash provided/(used) by investing activities4,423 (12,686)
Cash flows – financing activities:   Cash flows – financing activities:
New borrowings42,302
 11,670
New borrowings9,826 42,302 
Debt repayments(8,265) (6,422)Debt repayments(9,882)(8,265)
Contributions from noncontrolling interests


 7
Stock options exercised27
 47
Stock options exercised29 27 
Employee taxes on certain share-based payment arrangements(164) (238)Employee taxes on certain share-based payment arrangements(40)(164)
Common shares repurchased


 (2,651)
Dividends paid(1,158) (2,317)Dividends paid(1,158)
Net cash provided by financing activities32,742
 96
Net cash (used)/provided by financing activitiesNet cash (used)/provided by financing activities(67)32,742 
Effect of exchange rate changes on cash and cash equivalents, including restricted(11) (2)Effect of exchange rate changes on cash and cash equivalents, including restricted(14)(11)
Net increase in cash & cash equivalents, including restricted10,463
 1,439
Net increase in cash & cash equivalents, including restricted472 10,463 
Cash & cash equivalents, including restricted, at beginning of year9,571
 7,813
Cash & cash equivalents, including restricted, at beginning of year7,835 9,571 
Cash & cash equivalents, including restricted, at end of period20,034
 9,252
Cash & cash equivalents, including restricted, at end of period8,307 20,034 
Less restricted cash & cash equivalents, included in Investments42
 85
Less restricted cash & cash equivalents, included in Investments36 42 
Cash and cash equivalents at end of period
$19,992
 
$9,167
Cash and cash equivalents at end of period$8,271 $19,992 
See Notes to the Condensed Consolidated Financial Statements.

4
Table of Contents
The Boeing Company and Subsidiaries
Condensed Consolidated Statements of Equity
For the six months ended June 30, 20202021 and 20192020
(Unaudited)
 Boeing shareholders  
(Dollars in millions, except per share data)
Common
Stock

Additional
Paid-In
Capital

Treasury Stock
Retained
Earnings

Accumulated Other Comprehensive Loss
Non-
controlling
Interests

Total
Balance at January 1, 2019
$5,061

$6,768

($52,348)
$55,941

($15,083)
$71

$410
Net loss   (793) (7)(800)
Other comprehensive income, net of tax of ($48)    175
 175
Share-based compensation and related dividend equivalents 120
 (16)  104
Treasury shares issued for stock options exercised, net (39)82
   43
Treasury shares issued for other share-based plans, net (211)(15)   (226)
Common shares repurchased  (2,651)   (2,651)
Cash dividends declared ($4.11 per share)   (2,313)  (2,313)
Changes in noncontrolling interests     315
315
Balance at June 30, 2019
$5,061

$6,638

($54,932)
$52,819

($14,908)
$379

($4,943)
        
Balance at December 31, 2019
$5,061

$6,745

($54,914)
$50,644

($16,153)
$317

($8,300)
Impact of ASU 2016-13   (162)  (162)
Balance at January 1, 2020
$5,061

$6,745

($54,914)
$50,482

($16,153)
$317

($8,462)
Net loss   (3,004) (32)(3,036)
Other comprehensive income, net of tax of ($39)    128
 128
Share-based compensation and related dividend equivalents 115
 

  115
Treasury shares issued for stock options exercised, net (20)47
   27
Treasury shares issued for other share-based plans, net (192)38
   (154)
Balance at June 30, 2020
$5,061

$6,648

($54,829)
$47,478

($16,025)
$285

($11,382)
 Boeing shareholders  
(Dollars in millions)Common
Stock		Additional
Paid-In
Capital		Treasury StockRetained
Earnings		Accumulated Other Comprehensive LossNon-
controlling
Interests		Total
Balance at January 1, 2020$5,061 $6,745 ($54,914)$50,482 ($16,153)$317 ($8,462)
Net loss(3,004)(32)(3,036)
Other comprehensive income, net of tax of ($39)128 128 
Share-based compensation115 115 
Treasury shares issued for stock options exercised, net(20)47 27 
Treasury shares issued for other share-based plans, net(192)38 (154)
Balance at June 30, 2020$5,061 $6,648 ($54,829)$47,478 ($16,025)$285 ($11,382)
Balance at January 1, 2021$5,061 $7,787 ($52,641)$38,610 ($17,133)$241 ($18,075)
Net earnings50 (44)6 
Other comprehensive income, net of tax of ($131)472 472 
Share-based compensation493 493 
Treasury shares issued for stock options exercised, net(19)48 29 
Treasury shares issued for other share-based plans, net(76)38 (38)
Treasury shares issued for 401(k) contribution296 332 628 
Balance at June 30, 2021$5,061 $8,481 ($52,223)$38,660 ($16,661)$197 ($16,485)
See Notes to the Condensed Consolidated Financial Statements.

5

Table of Contents
The Boeing Company and Subsidiaries
Condensed Consolidated Statements of Equity
For the three months ended June 30, 20202021 and 20192020
(Unaudited)
Boeing shareholders 
(Dollars in millions, except per share data)(Dollars in millions, except per share data)Common
Stock		Additional
Paid-In
Capital		Treasury StockRetained
Earnings		Accumulated Other Comprehensive LossNon-
controlling
Interests		Total
Balance at April 1, 2020Balance at April 1, 2020$5,061 $6,595 ($54,842)$49,854 ($16,333)$305 ($9,360)
Net lossNet loss(2,376)(19)(2,395)
Other comprehensive income, net of tax of ($68)Other comprehensive income, net of tax of ($68)308 308 
Share-based compensationShare-based compensation60 60 
Treasury shares issued for stock options exercised, netTreasury shares issued for stock options exercised, net(4)11 7 
Treasury shares issued for other share-based plans, netTreasury shares issued for other share-based plans, net(3)2 (1)
Boeing shareholders 
(Dollars in millions, except per share data)Common
Stock
Additional
Paid-In
Capital
Treasury Stock
Retained
Earnings
Accumulated Other Comprehensive Loss
Non-
controlling
Interests
Total
Balance at April 1, 2019
$5,061

$6,573

($54,630)
$58,090

($14,969)
$107

$232
Net loss (2,942) (7)(2,949)
Other comprehensive income, net of tax of ($18) 61
 61
Share-based compensation and related dividend equivalents 73
 (16) 57
Changes in noncontrolling interestsChanges in noncontrolling interests(1)(1)
Balance at June 30, 2020Balance at June 30, 2020$5,061 $6,648 ($54,829)$47,478 ($16,025)$285 ($11,382)
Balance at April 1, 2021Balance at April 1, 2021$5,061 $8,155 ($52,395)$38,073 ($16,952)$217 ($17,841)
Net earningsNet earnings587 (20)567 
Other comprehensive income, net of tax of ($68)Other comprehensive income, net of tax of ($68)291 291 
Share-based compensationShare-based compensation172 172 
Treasury shares issued for stock options exercised, net (3)5
 2
Treasury shares issued for stock options exercised, net(3)9 6 
Treasury shares issued for other share-based plans, net (5)3
 (2)Treasury shares issued for other share-based plans, net(3)1 (2)
Common shares repurchased (310) (310)
Cash dividends declared ($4.11 per share) (2,313) (2,313)
Changes in noncontrolling interests 279
279
Balance at June 30, 2019
$5,061

$6,638

($54,932)
$52,819

($14,908)
$379

($4,943)
 
Balance at April 1, 2020
$5,061

$6,595

($54,842)
$49,854

($16,333)
$305

($9,360)
Net loss (2,376) (19)(2,395)
Other comprehensive (loss)/income, net of tax of ($68) 308
 308
Share-based compensation and related dividend equivalents 60
 60
Treasury shares issued for stock options exercised, net (4)11
 7
Treasury shares issued for other share-based plans, net (3)2
 (1)
Changes in noncontrolling interests (1)(1)
Balance at June 30, 2020
$5,061

$6,648

($54,829)
$47,478

($16,025)
$285

($11,382)
Treasury shares issued for 401(k) contributionTreasury shares issued for 401(k) contribution160 162 322 
Balance at June 30, 2021Balance at June 30, 2021$5,061 $8,481 ($52,223)$38,660 ($16,661)$197 ($16,485)
See Notes to the Condensed Consolidated Financial Statements.




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The Boeing Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Summary of Business Segment Data
(Unaudited)
(Dollars in millions)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Revenues:       
Commercial Airplanes
$7,838
 
$16,544
 
$1,633


$4,722
Defense, Space & Security12,630
 13,166
 6,588

6,579
Global Services8,116
 9,162
 3,488

4,543
Boeing Capital134
 141
 69

75
Unallocated items, eliminations and other(3) (345) 29
 (168)
Total revenues
$28,715
 
$38,668
 
$11,807


$15,751
Earnings/(loss) from operations:    


Commercial Airplanes
($4,830) 
($3,773) 
($2,762)

($4,946)
Defense, Space & Security409
 1,827
 600

975
Global Services36
 1,340
 (672)
687
Boeing Capital17
 57
 (7)
37
Segment operating loss(4,368) (549) (2,841) (3,247)
Unallocated items, eliminations and other(651) (1,210) (478) (498)
FAS/CAS service cost adjustment702
 729
 355
 365
Loss from operations(4,317) (1,030) (2,964)
(3,380)
Other income, net206
 213
 94

107
Interest and debt expense(815) (277) (553)
(154)
Loss before income taxes(4,926) (1,094) (3,423)
(3,427)
Income tax benefit1,890
 301
 1,028

485
Net loss(3,036) (793) (2,395)
(2,942)
Less: Net loss attributable to noncontrolling interest(32) 


 (19) 


Net loss attributable to Boeing Shareholders
($3,004) 
($793) 
($2,376) 
($2,942)

(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Revenues:
Commercial Airplanes$10,284 $7,838 $6,015 $1,633 
Defense, Space & Security14,061 12,630 6,876 6,588 
Global Services7,816 8,116 4,067 3,488 
Boeing Capital138 134 78 69 
Unallocated items, eliminations and other(84)(3)(38)29 
Total revenues$32,215 $28,715 $16,998 $11,807 
Earnings/(loss) from operations:
Commercial Airplanes($1,328)($4,830)($472)($2,762)
Defense, Space & Security1,363 409 958 600 
Global Services972 36 531 (672)
Boeing Capital57 17 36 (7)
Segment operating earnings/(loss)1,064 (4,368)1,053 (2,841)
Unallocated items, eliminations and other(662)(651)(298)(478)
FAS/CAS service cost adjustment538 702 268 355 
Earnings/(loss) from operations940 (4,317)1,023 (2,964)
Other income, net389 206 199 94 
Interest and debt expense(1,352)(815)(673)(553)
(Loss)/earnings before income taxes(23)(4,926)549 (3,423)
Income tax benefit29 1,890 18 1,028 
Net earnings/(loss)6 (3,036)567 (2,395)
Less: Net loss attributable to noncontrolling interest(44)(32)(20)(19)
Net earnings/(loss) attributable to Boeing Shareholders$50 ($3,004)$587 ($2,376)
This information is an integral part of the Notes to the Condensed Consolidated Financial Statements. See Note 1918 for further segment results.
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The Boeing Company and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Dollars in millions, except otherwise stated)
(Unaudited)
Note 1 – Basis of Presentation
The condensed consolidated interim financial statements included in this report have been prepared by management of The Boeing Company (herein referred to as “Boeing”, the “Company”, “we”, “us”, or “our”). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation are reflected in the interim financial statements. The results of operations for the period ended June 30, 20202021 are not necessarily indicative of the operating results for the full year. The interim financial statements should be read in conjunction with the audited Consolidated Financial Statements, including the notes thereto, included in our 20192020 Annual Report on Form 10-K. Certain amounts in prior periods have been adjusted to conform with the current year presentation.
Liquidity Matters
The global outbreak of COVID-19 coupled withand residual impacts from the ongoing grounding of the 737 MAX airplane isin 2019 are having a significant adverse impact on our business and isare expected to significantly reducecontinue to negatively impact revenue, earnings, and operating cash flow in future quarters. The aerospace industry is facingCOVID-19 pandemic has caused an unprecedented shock to demand for air travel, which createscreating a tremendous challenge for our customers, our business, and the entire aerospace manufacturing and services sector. We currentlycontinue to expect it will take approximately three years forcommercial air travel to return to 2019 levels andin 2023 to 2024. We expect it will take a few years beyond that for the industry to return to long-term trend growth. There is significant uncertainty with respect to when commercial air traffic levels will recover, and whether and at what point capacity will return to and/or exceed pre-COVID-19 levels.
During the first halfsix months of 2020,2021, net cash used by operating activities was $9.6 billion$3.9 billion. Our operating cash flows continue to be impacted by lower commercial airplane deliveries and weincreases in commercial airplane inventory. We expect negative operating cash flows in future quarters until commercial deliveries ramp up. In the first quarter of 2020, we entered into and fully drew on a $13.8 billion two-year delayed draw term loan credit agreement (delayed draw term loan facility). In the second quarter of 2020,2021, we issued $25$9.8 billion of fixed rate senior notes that mature between 2023 and 2060.2026. We used the net proceeds of these note issuances to repay $9.8 billion outstanding under our two-year delayed draw term loan credit agreement. The remaining $4.0 billion of our two-year delayed draw term loan matures in February 2022. As a result, our cash and short-term investment balance has increased to $32.4 billion and our debt balance has increased to $61.4was $21.3 billion at June 30, 2020.
The major credit rating agencies downgraded our short term and long term credit ratings during the first half of 2020, and there is risk for further downgrades. At June 30, 2020, debt includes $2.4 billion of commercial paper2021, down from $6.1$25.6 billion at December 31, 2019. Commercial paper2020, while our debt balance was $63.6 billion at June 30, 20202021, unchanged from December 31, 2020. Short-term debt and the current portion of long-term debt increased to $6.5 billion at June 30, 2021, up from $1.7 billion at December 31, 2020. The current portion of long term debt includes $0.5 billion and $1.9term notes of $1.5 billion maturing in the thirdsecond half of 2021 and fourth quartersthe remaining delayed draw term loan. Our short-term and long-term credit ratings remained unchanged during the second quarter of 2020. 2021.
In the current environment,first quarter of 2021, we may have limited future access to the commercial paper market. In addition,entered into a $5.3 billion two-year revolving credit agreement, which we have term notesnot drawn upon. As of $350 maturing in the fourth quarter ofJune 30, 2021, our unused borrowing capacity on revolving credit agreements is $14.8 billion, up from $9.5 billion at December 31, 2020. We anticipate that these credit lines will remain undrawn and primarily serve as back-up liquidity to support our general corporate borrowing needs. See Note 11.
At June 30, 2020,2021, trade payables included $4.4$3.4 billion payable to suppliers who have elected to participate in supply chain financing programs. While access to supply chain financing could be curtailed ifwas reduced in 2020 due to our credit ratings are downgraded,and debt levels, we do not believe that these or future changes in the availability of supply chain financing will have a significant impact on our liquidity.
At June 30, 2020 and December 31, 2019 we had $9.6 billion of unused borrowing capacity on revolving credit agreements. We anticipate that these credit lines will primarily serve as back-up liquidity to support our general corporate borrowing needs. We plan to negotiate extending these facilities in the fourth quarter of 2020 when $3.2 billion of the $9.6 billion comes up for renewal.
In addition to our debt issuances, we have taken a number of actions to improve liquidity. During the first quarter of 2020, our Board of Directors terminated its prior authorization to repurchase shares of the Company’s outstanding common stock and suspended the declaration and/or payment of dividends until further notice. We have also reduced production rates in our commercial business to reflect the impact of COVID-19 on the industry. We have furloughed certain employees and are executing on our plans to reduce our workforce through a combination of voluntary and involuntary layoffs and natural turnover. We have recorded severance costs for
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approximately 19,000 employees. In the secondfourth quarter of 2020, we recorded severance costs for approximately 19,000 employees,began using our common stock in lieu of which approximately

6,000cash to fund Company contributions to our 401(k) plans. In December 2020, in lieu of merit pay increases, we awarded most of our employees a one-time stock grant that will vest in three years. We have left the Company as of June 30, 2020, and the remainder are expected to leave in the second half of 2020.
We are reducingreduced discretionary spending, as well asincluding reducing or deferring research and development and capital expenditures. We expect these actions will further enable the Company to conserve cash.
We are also working with our customers and supply chain to accelerate receipts and conserve cash. For example, the United States Department of Defense (U.S. DoD) has taken steps to work with its industry partners to increase liquidity in the form of increased progress payment rates and reductions in withholds among other initiatives. We are also deferringdeferred certain tax payments pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In July 2020, we announced our business transformation efforts to assess our business across five key pillars: infrastructure, overhead and organization, portfolio and investments, supply chain health, and operational excellence. Within the infrastructure pillar we are assessing our overall facility requirements in light of reduced demand in our commercial businesses and remote and virtual work opportunities for large numbers of our workforce. We also anticipate a reduction in office space needs compared to our pre-COVID capacity. However, as we consolidate our footprint, terminate leases, and dispose of properties, we may incur near term adverse impacts to earnings. The overhead and organization pillar is focused on our cost structure and how we are organized so we can right size our workforce and simplify and reduce management layers and bureaucracy. The portfolio and investments pillar includes aligning our portfolio and investments to focus on our core business and the changes in market conditions. The supply chain pillar is focused on supply chain health and stability, reducing indirect procurement spend and streamlining our transportation, logistics, and warehousing approach. The operational excellence pillar is focused on improving performance, enhancing quality, and reducing rework. These activities are not intended to constrain our capacity, but rather to enable the Company to emerge stronger and be more resilient when the market recovers.
Based on our current best estimates of market demand, planned production rates, timing of cash receipts and expenditures, our ability to successfully implement further actions to improve liquidity, as well as our ability to access additional liquidity, if needed, we believe it is probable that we will be able to fund our operations for the foreseeable future.
Standards Issued and Implemented
In the first quarter of 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), using a modified retrospective method, which resulted in the recognition of allowances for credit losses on our Condensed Consolidated Statement of Financial Position as of January 1, 2020 and a $162 cumulative-effect adjustment to retained earnings to align our credit loss methodology with the new standard. The standard replaces the incurred loss impairment methodology under Topic 310 with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and certain other financial assets. See Note 5 and 8 for additional disclosures.
In the first quarter of 2020, we also adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). See Note 2 for additional disclosures.
Significant Accounting Policies - Update
Our significant accounting policies are described in "Note 1: Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2019. Our updated significant accounting policies described below reflect the impact of adopting Topic 326.
Allowances for losses on certain financial assets
We establish allowances for credit losses on accounts receivable, unbilled receivables, customer financing receivables, and certain other financial assets. The adequacy of these allowances are assessed quarterly through consideration of factors including, but not limited to, customer credit ratings, bankruptcy filings, published or estimated credit default rates, age of the receivable, expected loss rates and collateral exposures. We assign internal credit ratings for all customers and determine the creditworthiness of each customer based upon publicly available information and information obtained directly from our customers. Our rating categories are comparable to those used by major credit rating agencies.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the accounting estimates and assumptions included in these financial statements are appropriate given theand reflect increased uncertainties surrounding the severity and duration of the impacts of the COVID-19 pandemic, however actual results could differ from those estimates.
Long-term Contracts
Changes in estimated revenues, cost of sales, and the related effect on operating income are recognized using a cumulative catch-up adjustment which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a long-term contract’s percentage-of-completion. When the

current estimates of total sales and costs for a long-term contract indicate a loss, a provision for the entire reach-forward loss on the long-term contract is recognized.
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Net cumulative catch-up adjustments to prior periods' revenue and earnings, including certain reach-forward losses, across all long-term contracts were as follows:
(In millions - except per share amounts)Six months ended June 30 Three months ended June 30
 2020
 2019
 2020
 2019
(Decrease)/increase to Revenue
($290) 
$229
 
$144
 
$69
(Decrease)/increase to (Loss)/earnings from operations
($749) 
$175
 
$90
 
$28
(Decrease)/increase to Diluted EPS
($0.82) 
$0.22
 
$0.11
 
$0.04

(In millions - except per share amounts)Six months ended June 30Three months ended June 30
2021202020212020
Increase/(decrease) to Revenue$230 ($290)$223 $144 
Increase/(decrease) to Earnings/(loss) from operations$58 ($749)$234 $90 
(Decrease)/increase to Diluted EPS($0.03)($0.82)$0.41 $0.11 
Note 2 – Goodwill and Acquired Intangibles
In the first quarter of 2020, we adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The standard simplifies the quantitative impairment test from a two-step process to a one-step process. The quantitative test is performed by comparing the carrying value of net assets to the estimated fair value of the related operations. If the fair value is determined to be less than carrying value, the shortfall up to the carrying value of the goodwill represents the amount of goodwill impairment. The standard continues to permit a company to test goodwill for impairment by performing a qualitative assessment or using the quantitative test.
We completed our annual assessment of goodwill as of April 1, 2020 and determined that the fair value of each reporting unit exceeded its corresponding carrying value and that there is no impairment of goodwill.
The COVID-19 pandemic continues to impact our Commercial Airplanes and Commercial Services businesses. Therefore, we believe the COVID-19 pandemic is a triggering event in the second quarter of 2020 for testing whether goodwill recorded by our Commercial Airplanes and Commercial Services reporting units is impaired. At June 30, 2020, Commercial Airplanes has $1,315 of goodwill and Commercial Services has $3,056. We performed a qualitative assessment and determined it is not more likely than not that the fair values of our Commercial Airplane and Commercial Services reporting units were less than their carrying values as of June 30, 2020. We will continue to monitor the impacts of the COVID-19 pandemic in future quarters. Changes in our forecasts or further decreases in the value of our common stock could cause book values to exceed fair values which may result in goodwill impairment charges in future periods.
Note 3 – Earnings Per Share
Basic and diluted earnings per share are computed using the two-class method, which is an earnings allocation method that determines earnings per share for common shares and participating securities. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. Participating securities and common shares have equal rights to undistributed earnings.
Basic earnings per share is calculated by taking net earnings, less earnings available to participating securities, divided by the basic weighted average common shares outstanding.
Diluted earnings per share is calculated by taking net earnings, less earnings available to participating securities, divided by the diluted weighted average common shares outstanding.

The elements used in the computation of basic and diluted earnings per share were as follows:
(In millions - except per share amounts)Six months ended June 30Three months ended June 30
2021202020212020
Net earnings/(loss) attributable to Boeing Shareholders$50 ($3,004)$587 ($2,376)
Less: earnings available to participating securities0000
Net earnings/(loss) available to common shareholders$50 ($3,004)$587 ($2,376)
Basic
Basic weighted average shares outstanding586.4 566.1 587.5 566.4 
Less: participating securities0.4 0.5 0.4 0.5 
Basic weighted average common shares outstanding586.0 565.6 587.1 565.9 
Diluted
Basic weighted average shares outstanding586.4 566.1 587.5 566.4 
Dilutive potential common shares(1)
2.2 02.7 0
Diluted weighted average shares outstanding588.6 566.1 590.2 566.4 
Less: participating securities0.4 0.5 0.4 0.5 
Diluted weighted average common shares outstanding588.2 565.6 589.8 565.9 
Net earnings/(loss) per share:
Basic$0.09 ($5.31)$1.00 ($4.20)
Diluted0.09 (5.31)1.00 (4.20)
(In millions - except per share amounts)Six months ended June 30 Three months ended June 30

2020

2019

2020

2019
Net loss attributable to Boeing Shareholders
($3,004) 
($793) 
($2,376) 
($2,942)
Less: earnings available to participating securities


 


 


 


Net loss available to common shareholders
($3,004) 
($793) 
($2,376) 
($2,942)
Basic       
Basic weighted average shares outstanding566.1
 566.6
 566.4
 565.3
Less: participating securities0.5
 0.6
 0.5
 0.6
Basic weighted average common shares outstanding565.6
 566.0
 565.9
 564.7
Diluted       
Basic weighted average shares outstanding566.1
 566.6
 566.4
 565.3
Dilutive potential common shares(1)

 

 

 

Diluted weighted average shares outstanding566.1
 566.6
 566.4
 565.3
Less: participating securities0.5
 0.6
 0.5
 0.6
Diluted weighted average common shares outstanding565.6
 566.0
 565.9
 564.7
Net loss per share:       
Basic
($5.31) 
($1.40) 
($4.20) 
($5.21)
Diluted(5.31) (1.40) (4.20) (5.21)
(1)(1)Diluted earnings per share includes any dilutive impact of stock options, restricted stock units, performance-based restricted stock units and performance awards.
Diluted earnings per share includes any dilutive impact of stock options, restricted stock units, performance-based restricted stock units and performance awards.
As a result of incurring a net loss for the six and three months ended June 30, 2020 potential common shares of 1.8 million and 1.2 million were excluded from diluted loss per share because the effect would have been antidilutive. As a result of incurring a net loss for the six and three months ended June 30, 2019 potential common shares of 4.4 million and 4.0 million were excluded from diluted loss per share because the effect would have been antidilutive. In addition, the following table includes the number of shares that may be dilutive
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potential common shares in the future. These shares were not included in the computation of diluted lossearnings/(loss) per share because the effect was either antidilutive or the performance condition was not met.
(Shares in millions)Six months ended June 30 Three months ended June 30
 2020
 2019
 2020
 2019
Performance awards6.1
 2.7
 5.5
 2.7
Performance-based restricted stock units1.4
 0.6
 1.4
 0.6

(Shares in millions)Six months ended June 30Three months ended June 30
2021202020212020
Performance awards2.7 6.1 2.8 5.5 
Performance-based restricted stock units0.8 1.4 0.8 1.4 
Restricted stock units0.7 0
Stock options0.3 0.3 
Note 43 – Income Taxes
Our estimated annual effective tax rate as of June 30, 2021 reflects the current U.S. federal tax rate of 21%, research and development tax credits, and other miscellaneous permanent adjustments. After considering discrete adjustments primarily driven by reductions in the valuation allowance, the actual effective income tax rates were 38.4% and 30.0% for the six and three months ended June 30, 20202021 are 126.1% and 27.5%(3.3)%. The actual effective tax rates were 38.4% and 14.2%30.0% for the samecomparable periods in the prior year.
The actual effective income tax rate of 126.1% for the six months ended June 30, 2021 is significantly higher than the comparable period in the prior year due primarily to the near breakeven year-to-date pre-tax loss of $23 for the six months ended June 30, 2021 in relation to permanent tax adjustments and discrete items during the current period. In the three months ended June 30, 2021, discrete tax benefits primarily driven by reductions in the valuation allowance more than offset ongoing tax expense resulting in an actual effective income tax rate of (3.3)%.
The 2020 tax rate includesrates include tax benefits from the CARES Act enacted on March 27, 2020 due to the Act's five yearthat included a five-year net operating loss carry backcarryback provision while the 2019 tax rate reflects tax benefits associated with intangible income derived from serving non-U.S. markets. The carry back provisions enablewhich enabled us to benefit from certain 2020 losses and re-measureremeasure certain deferred tax assets and liabilities at the former federal tax rate of 35%. The 2020 tax rates in 2020 and 2019 also reflectinclude research and development tax credits and excess tax benefits related to share-based payments.

As of June 30, 2021 and December 31, 2020, the Company had recorded valuation allowances of $3,034 and $3,094 primarily for certain federal deferred tax assets, state net operating loss carryforwards, and state tax credits. To measure the valuation allowance, the Company estimated in what year each of its deferred tax assets and liabilities would reverse using systematic and logical methods to estimate the reversal patterns. Based on these methods, deferred tax liabilities were assumed to reverse and generate taxable income over the next 5 to 10 years while deferred tax assets related to pension and other postretirement benefit obligations were assumed to reverse and generate tax deductions over the next 15 to 20 years. The valuation allowance primarily resulted from not having sufficient income from deferred tax liability reversals in the appropriate future periods to support the realization of certain deferred tax assets.
As of June 30, 2021, based on the estimated reversal patterns of the Company’s deferred tax assets and liabilities, it is more likely than not that the Company will realize the federal deferred tax assets generated in 2021 as there is sufficient projected income from reversals of deferred tax liabilities in the next five years.
Federal income tax audits have been settled for all years prior to 2015.2018. The Internal Revenue Service (IRS) began the 2015-20172018-2019 federal tax audit in the first quarter of 2019.2021. We are also subject to examination in major state and international jurisdictions for the 2007-20182007-2019 tax years. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years.
Audit outcomes and the timing
11
Table of audit settlements are subject to significant uncertainty. It is reasonably possible that within the next 12 months unrecognized tax benefits related to federal matters under audit may decrease by up to $690 based on current estimates.Contents
Note 5 -4 – Allowances for Losses on Financial Assets
Upon adoption of ASU 2016-13, we recorded a $162 cumulative-effect adjustment to retained earnings to increase our allowances for credit losses, resulting in a balance of $337 as of January 1, 2020. The changechanges in allowances for expected credit losses for the six months ended June 30, 2021 and 2020 consisted of the following:
 Accounts receivable, net
Unbilled receivables, net
Other Current Assets, net
Customer financing, net
Other Assets, net
Total
Balance at January 1, 2020
($138)
($81)
($38)
($5)
($75)
($337)
Changes in estimates(246)(107)(10)(9)(34)(406)
Write-offs3








3
Balance at June 30, 2020
($381)
($188)
($48)
($14)
($109)
($740)

Accounts receivable, netUnbilled receivables, netOther current assets, netCustomer financing, netOther assets, netTotal
Balance at January 1, 2020($138)($81)($38)($5)($75)($337)
Changes in estimates(246)(107)(10)(9)(34)(406)
Write-offs3 3 
Balance at June 30, 2020($381)($188)($48)($14)($109)($740)
Balance at January 1, 2021($444)($129)($72)($17)($140)($802)
Changes in estimates16 (3)1 (36)(22)
Write-offs15 1 16 
Balance at June 30, 2021($413)($129)($74)($16)($176)($808)
Note 65 – Inventories
Inventories consisted of the following:
 June 30
2020
 December 31
2019
Long-term contracts in progress
$957
 
$1,187
Commercial aircraft programs71,945
 66,016
Commercial spare parts, used aircraft, general stock materials and other10,843
 9,419
Total
$83,745


$76,622

June 30
2021		December 31
2020
Long-term contracts in progress$708 $823 
Commercial aircraft programs70,672 70,153 
Commercial spare parts, used aircraft, general stock materials and other10,419 10,739 
Total$81,799 $81,715 
Long-Term Contracts in Progress
Long-term contracts in progressCommercial spare parts, used aircraft, general stock materials and other includes Delta launch program inventory that is being sold at cost to United Launch Alliance (ULA) under an inventory supply agreement that terminates on March 31, 2021. The inventory balance was $176 at June 30, 2020 and December 31, 2019. See indemnifications to ULA in Note 11.
Included in inventories are capitalized precontract costs of $794$605 at June 30, 20202021 and $711$733 at December 31, 20192020 primarily related to the KC-46A Tanker and Commercial Crew. See Note 10.9.
Commercial Aircraft Programs
The increase in commercial aircraft programs inventory during 2021 reflects a continued buildup of 787 aircraft caused by 787 production issues and associated rework, which resulted in a significant reduction in 787 deliveries. This was partially offset by a decrease in 737 inventory reflecting the resumption of deliveries. Commercial aircraft programs inventory includes approximately 390 737 MAX aircraft and 100 787 aircraft at June 30, 2021 as compared with 425 737 MAX aircraft and 80 787 aircraft at December 31, 2020.
We are currently remarketing certain aircraft and may have to remarket additional aircraft in future periods. If we are unable to successfully remarket the aircraft, determine further production rate reductions are necessary, and/or contract the program accounting quantities, future earnings may be reduced and/or additional reach-forward losses may have to be recorded.
At June 30, 20202021 and December 31, 2019,2020, commercial aircraft programs inventory included $1,209 and $1,313 ofthe following amounts related to the 737 program: deferred production costs of $1,965 and $506$2,159 and $521 of unamortized tooling and other non-recurring costs related to the 737 program.of $625 and $480. At June 30, 2020, $1,6782021, $2,386 of 737 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $37$204 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

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At June 30, 20202021 and December 31, 2019,2020, commercial aircraft programs inventory included the following amounts related to the 777X program: $6,854 and $5,628 of work in process and $3,141 and $2,914 of unamortized tooling and other non-recurring costs of $3,386 and $3,295. During the fourth quarter of 2020, we determined that estimated costs to complete the 777X program plus costs already included in 777X inventory exceed estimated revenues from the program. The resulting reach-forward loss of $6,493 was recorded as a reduction to deferred production costs. As a result, 777X deferred production costs were immaterial at June 30, 2021 and December 31, 2020. The level of profitability on the 777X program will be subject to a number of factors. These factors include continued market uncertainty, the impacts of COVID-19 on our production system as well as impacts on our supply chain and customers, further production rate adjustments for the 777X or other commercial aircraft programs, contraction of the accounting quantity and potential risks associated with the testing program and the timing of aircraft certification. One or more of these factors could result in additional reach-forward losses on the 777X program in future periods.
At June 30, 20202021 and December 31, 2019,2020, commercial aircraft programs inventory included the following amounts related to the 787 program: $27,515 and $24,772 of work in process (including deferred production costs of $16,035$14,927 and $18,716), $2,006$14,976, $1,732 and $2,202$1,865 of supplier advances, and $1,924$1,812 and $2,092$1,863 of unamortized tooling and other non-recurring costs. At June 30, 2020, $15,4962021, $12,131 of 787 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $2,463$4,608 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.
Commercial aircraft programs inventory included amounts credited in cash or other consideration (early issue sales consideration) to airline customers totaling $2,941$3,319 and $2,863$2,992 at June 30, 20202021 and December 31, 2019.2020.
Note 76 – Contracts with Customers
Unbilled receivables decreasedincreased from $9,043$7,995 at December 31, 20192020 to $8,570$9,203 at June 30, 2020,2021, primarily driven by an increase in billingsrevenue recognized at Defense, Space & Security (BDS) and Global Services (BGS), as well as an increase in allowances for expected credit losses at BGS.excess of billings.
Advances and progress billings increased from $51,551$50,488 at December 31, 20192020 to $53,367$50,738 at June 30, 2020,2021, primarily driven by advances on orders received in excess of revenue recognized at Commercial Airplanes (BCA), BDS, and BGS.BGS, partially offset by revenue recognized and the return of customer advances at BCA.
Revenues recognized during the six months ended June 30, 20202021 and 20192020 from amounts recorded as Advances and progress billings at the beginning of each year were $5,255$7,315 and $10,116.$5,255. Revenues recognized during the three months ended June 30, 20202021 and 20192020 from amounts recorded as Advances and progress billings at the beginning of each year were $1,465$2,597 and $4,219.$1,465.
Note 87 – Customer Financing
Customer financing primarily relates to the Boeing Capital (BCC) (BCC) segment and consisted of the following:
June 30
2021		December 31
2020
Financing receivables:
Investment in sales-type/finance leases$894 $919 
Notes415 420 
Total financing receivables1,309 1,339 
Operating lease equipment, at cost, less accumulated depreciation of $124 and $209646 715 
Gross customer financing1,955 2,054 
Less allowance for losses on receivables(16)(17)
Total$1,939 $2,037 
 June 30
2020
 December 31
2019
Financing receivables:   
Investment in sales-type/finance leases
$965
 
$1,029
Notes433
 443
Total financing receivables1,398
 1,472
Operating lease equipment, at cost, less accumulated depreciation of $248 and $235785
 834
Gross customer financing2,183
 2,306
Less allowance for losses on receivables(14) (8)
Total
$2,169
 
$2,298
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We acquire aircraft to be leased to customers through trades, lease returns, purchases in the secondary market, and new aircraft transferred from our BCA segment. Leasing arrangements typically range in terms from 1 to 12 years and may include options to extend or terminate the lease. Certain leases include provisions to allow the lessee to purchase the underlying aircraft at a specified price. A minority of leases contain variable lease payments based on actual aircraft usage and are paid in arrears.
We determine a receivable is impaired when, based on current information and events, it is probable that we will be unable to collect amounts due according to the original contractual terms. At June 30, 20202021 and December 31, 2019,2020, we individually evaluated for impairment customer financing receivables of $393$379 and

$400, $391, of which $381$379 and $388$380 were determined to be impaired. We recorded no allowance for losses on these impaired receivables as the collateral values exceeded the carrying values of the receivables.
We determine a receivable is past due when cash has not been received upon the due date specified in the contract. There were no past due customer financing receivables as of June 30, 2021. Customer financing receivables past due as of June 30, 2020 iswas $8.
We evaluate the collectability of customer financing receivables at commencement and on a recurring basis. If a customer financing receivable is deemed uncollectable,uncollectible, the customer is categorized as non-accrual status. When a customer is in non-accrual status at commencement, revenue is deferred until substantially all cash has been received or the customer is removed from non-accrual status. If a customer status changes to non-accrual after commencement and sufficient collateral is available, we recognize contractual interest income as payments are received to the extent payments exceed past due principal payments. If there is not sufficient collateral, then revenue is not recognized until payments exceed the principal balance. Receivables in non-accrual status as of June 30, 20202021 and December 31, 20192020 were $381$379 and $388.$380. Interest income received was $11 and $5 for the six and three months ended June 30, 2020 was2021 and $21 and $13.$13 for the six and three months ended June 30, 2020.
The adequacy of the allowance for losses is assessed quarterly. FourThe four primary factors influencing the level of our allowance for losses on customer financing receivables are customer credit ratings, default rates, expected loss rate and collateral values, each of which may be adversely affected by impacts that COVID-19 has on our customers. We assign internal credit ratings for all customers and determine the creditworthiness of each customer based upon publicly available information and information obtained directly from our customers. Our rating categories are comparable to those used by the major credit rating agencies.
Our financing receivable balances at June 30, 20202021 by internal credit rating category and year of origination consisted of the following:
Rating categoriesCurrent2019201820172016PriorTotal
BBB











$400

$400
BB
$69

$54

$17




152
292
B







$53


171
224
CCC


38


251

$180
13
482
Total carrying value of financing receivables
$69

$92

$17

$304

$180

$736

$1,398

Rating categoriesCurrent2020201920182017PriorTotal
BBB$196 $196 
BB$133 $127 $45 $14 135 454 
B$51 157 208 
CCC7 30 238 176 451 
Total carrying value of financing receivables$133 $134 $75 $14 $289 $664 $1,309 
At June 30, 2020,2021, our allowance related to receivables with ratings of CCC, B, BB, and BBB. We applied default rates that averaged 26%24.2%, 8.8%6.5%, 3.1%2.8%, and 0.2%, respectively, to the exposure associated with those receivables.
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Customer Financing Exposure
Customer financing is collateralized by security in the related asset. The value of the collateral is closely tied to commercial airline performance and overall market conditions and may be subject to reduced valuation with market decline. Certain collateral values are being adversely impacted by COVID-19.the changes in market conditions driven by the COVID-19 pandemic. Declines in collateral values could result in asset impairments, reduced finance lease income, and an increase in the allowance for losses. Our customer financing collateral is concentrated in out-of-production aircraft and 747-8 aircraft. Generally, out-of-production aircraft have experienced greater collateral value declines than in-production aircraft.

The majority of customer financing carrying values are concentrated in the following aircraft models:
 June 30
2020
 December 31
2019
717 Aircraft ($113 and $124 accounted for as operating leases)
$689
 
$736
747-8 Aircraft ($124 and $130 accounted for as operating leases)483
 475
737 Aircraft ($231 and $240 accounted for as operating leases)253
 263
777 Aircraft ($230 and $236 accounted for as operating leases)232
 240
MD-80 Aircraft (accounted for as sales-type finance leases)171
 186
757 Aircraft ($14 and $22 accounted for as operating leases)166
 182
747-400 Aircraft ($28 and $31 accounted for as operating leases)81
 90

June 30
2021		December 31
2020
717 Aircraft ($69 and $98 accounted for as operating leases)$611 $637 
747-8 Aircraft ($119 and $121 accounted for as operating leases)478 480 
737 Aircraft ($187 and $214 accounted for as operating leases)207 235 
777 Aircraft ($221 and $216 accounted for as operating leases)228 225 
MD-80 Aircraft (accounted for as sales-type finance leases)156 167 
757 Aircraft ($0 and $4 accounted for as operating leases)135 147 
747-400 Aircraft ($11 and $19 accounted for as operating leases)65 71 
Lease income recorded in Revenue on the Condensed Consolidated Statements of Operations for the six months ended June 30, 2021 and 2020 included $25 and 2019 included $29 and $32 from sales-type/finance leases, and $62$37 and $71$62 from operating leases, of which $4$5 and $5$4 related to variable operating lease payments. Lease income recorded in Revenue on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2021 and 2020 included $12 and 2019 included $14 and $16 from sales-type/finance leases, and $31$19 and $35$31 from operating leases, of which $3 and $2$3 related to variable operating lease payments.
Profit at the commencement of sales-type leases was recorded in revenue for the six months ended June 30, 2021 and 2020 in the amount of $36 and $10. Profit at the commencement of sales-type leases was recorded in revenue for the three months ended June 30, 2021 and 2020 in the amount of $20 and $6.

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Note 98 – Investments
Our investments, which are recorded in Short-term and other investments or Investments, consisted of the following:
June 30
2021		December 31
2020
Equity method investments (1)
$846 $936 
Time deposits12,530 17,154 
Available for sale debt instruments500 596 
Equity and other investments42 85 
Restricted cash & cash equivalents(2)
36 83 
Total$13,954 $18,854 
 June 30
2020
 December 31
2019
Equity method investments (1)

$998
 
$1,031
Time deposits11,981
 50
Available for sale debt instruments411
 405
Equity and other investments72
 65
Restricted cash & cash equivalents(2)
42
 86
Total
$13,504
 
$1,637

(1)Dividends received were $43 and $38 for the six and three months ended June 30, 2021 and $53 and $20 during the same periods in the prior year.
(1)
(2)Reflects amounts restricted in support of our workers’ compensation programs, employee benefit programs, and insurance premiums.
Dividends received were $53 and $20 for the six and three months ended June 30, 2020 and $93 and $30 during the same periods in the prior year.
(2)
Reflects amounts restricted in support of our workers’ compensation programs, employee benefit programs, and insurance premiums.
Allowance for losses on available for sale debt instruments are assessed quarterly. All instruments are considered investment grade and, as such, we have not recognized an allowance for credit losses as of June 30, 2020.2021.
Note 109 – Commitments and Contingencies
737 MAX Grounding and COVID-19 Impacts
On March 13,In 2019, following two fatal 737 MAX accidents, the Federal Aviation Administration (FAA) issued an order to suspend operations of all 737 MAX aircraft in the U.S. and by U.S. aircraft operators following two fatal 737 MAX accidents. Non-U.S.non-U.S. civil aviation authorities have issued directives to the same effect.orders suspending commercial operations of 737 MAX aircraft. Deliveries of the 737 MAX have beenwere suspended until clearance is grantedfollowing these orders. Deliveries in the U.S. resumed in late 2020 following rescission by the appropriate regulatory authorities.FAA of its grounding order. In addition, multipleseveral other non-U.S. civil aviation authorities, including the Brazilian National Civil Aviation Agency, Transport Canada, and the European Union Aviation Safety Agency (EASA) have subsequently approved return of operations, allowing us to resume deliveries in those jurisdictions. About 175 countries have approved the resumption of 737 MAX operations. The 737 MAX remains grounded in certain non-U.S. jurisdictions, including China.
Multiple legal actions have been filed against us as a result of the accidents. We alsoIn addition, we are fully cooperating with U.S. government investigations related to the accidents and the 737 MAX program, including investigationsan investigation by the U.S. Department of Justice and the Securities and Exchange Commission, the outcome of which may

be material. WeOther than as described in Note 17 with respect to our entry during the first quarter into a Deferred Prosecution Agreement with the U.S. Department of Justice, we cannot reasonably estimate a range of loss, if any, not covered by available insurance that may result given the current status of the lawsuits, investigations and inquiries related to the 737 MAX.
We have developed software and pilot training updates for the 737 MAX. During the week of June 29, 2020,In early April 2021, we notified the FAA completed a series of flight teststhat we recommended to assess whether theoperators that certain 737 MAX meets certification safety standards. The FAA has statedairplanes be temporarily removed from service to address issues that while this is an important milestone, a numbercould affect the operation of key tasks remain including evaluating data gathered during the flight tests. On July 21, 2020 the FAA announced a 45 day public comment period for their notice of proposed rulemaking relative to 737 MAX certification. The impact this will have on timing and conditions of return to service, if any, is uncertain. We continue to work with the FAA and non-U.S. civil aviation authorities to complete remaining steps toward certification and readiness for return to service including addressing their questions on the software updates and how pilots will interact with the airplane controls and displays in different flight scenarios. We have assumed that computer and simulator training will be required and as a result, we have provisioned for certain training costs.
Prior to the grounding, the 737 production rate was 52 per month, and we had planned to increase the rate to 57 per month during 2019. Beginning inelectrical power system. During the second quarter of 2019,2021, we reducedworked with the production rateFAA to 42 per month.finalize the required actions to address the issues and resumed deliveries in May. We continueddo not expect this matter to produce athave a rate of 42 per month through December 2019. We temporarily suspendedmaterial financial impact on the 737 MAX production beginning in January 2020. Duringprogram.
In the first quarterhalf of 2020,2021, we completed airplanesdelivered 105 aircraft, and we have assumed that were alreadythe remaining non-U.S. regulatory approvals will occur and enable deliveries in process at the end of the fourth quarter of 2019. In March 2020, we announced a temporary suspension of production operations in the Puget Sound area as a result of the COVID-19 pandemic. Production operations in Puget Sound resumedall jurisdictions during the week of April 20, 2020, at which point the 737 team resumed preparations for restarting 737 MAX production. We resumed early stages of 737 MAX production in May 2020 and expect to continue to produce at low rates for the remainder of 2020.2021. We have approximately 450390 airplanes in inventory as of June 30, 2020.
The COVID-19 pandemic has significantly impacted air travel and reduced near-term demand, resulting in lower production and delivery rate assumptions. During the first quarter of 2020, we lowered our production rate assumptions in response to COVID-19 impacts to expected demand. During the second quarter of 2020, we further delayed our production rate ramp assumptions and now expect to gradually increase the production rate to 31 by the beginning of 2022. We expect further gradual production rate increases in subsequent periods based on market demand. We have assumed that the timing of regulatory approvals will enable 737 MAX deliveries to resume during the fourth quarter of 2020.2021. A number of customers have requested to defer deliveries or to cancel orders for 737 MAX aircraft, which may require us to remarketand we are remarketing and/or delaydelaying deliveries of certain aircraft included within inventory. We continue to expect that the majorityto deliver about half of the approximately 450 737 MAX airplanesaircraft in inventory willas of December 31, 2020 by the end of 2021. In the event that we are
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unable to resume aircraft deliveries in certain non-U.S. jurisdictions consistent with our assumptions of regulatory approval timing, our expectation of delivery timing could be delivered during the first year after the resumption of deliveries.impacted.
During 2019, the cumulative impacts of changes to assumptions regarding timing of return to service and timing of planned production rates and deliveries increased the estimated costs to produce and deliver the 3,100 undelivered aircraft then included in the accounting quantity by approximately $6.3 billion. During 2020, additional reductions in planned production rates further increased the estimated costs to produce and deliver aircraft included in the accounting quantity, but were partially offset by headcount and other cost reductions. These costs will result in lower 737 margins in future periods after deliveries resume.
During the first quarter of 2020, we reduced the number of aircraft included in the accounting quantity by 400 units as a result of reductions to planned production rates due to COVID-19 driven market uncertainties. The accounting quantity was unchanged during the second quarter. As we continue to produceWe produced at abnormally low production rates in 2020 and 2021,expect to continue to do so through 2021. As a result, we expect to incur approximately $5 billion of abnormal production costs thaton a cumulative basis, which are being expensed as incurred. The slowdown in the planned production rate ramp-up increased expected abnormal costs however this increase was offset by adjustments to the determination of the normal production level due to COVID-19 impacts on customer demand, as well as cost reduction activities, including significant reductions in employment levels. We expensed $712 and $1,509 of abnormal production costs of $2,567 during 2020, $1,083 during the three and six months ended June 30, 2020.2021 and $515 during the three months ended June 30, 2021.
In addition to impacts related to the 737 MAX accidents and subsequent grounding, the 737 program continues to be significantly impacted by the COVID-19 pandemic and its effect on aircraft demand. These impacts have contributed to the lower production and delivery rate assumptions described above. We have gradually increased production rates in 2020 and 2021 and continue to expect to increase the production rate to 31 per month in early 2022, as well as implement further gradual production rate increases in subsequent periods based on market demand and supply chain capacity. The ongoing impacts of COVID-19 on market demand and timing of regulatory approvals in certain non-U.S. jurisdictions have also created significant uncertainty around the timing of deliveries of 737 MAX aircraft in inventory. We may need to recognize additional costs associated with remarketing and/or reconfiguring aircraft in inventory, which may reduce revenue and/or earnings in future periods.
We have also recorded additional expenses of $121 as a result of$103 and $50 due to the 737 MAX grounding induring the first half ofsix and three months ended June 30, 2021, and $121 and $60 during the six and three months ended June 30, 2020. These expenses include costs related to storage, inventory impairment, pilot training, and software updates.

The following table summarizes changes in the 737 MAX customer concessions and other considerations liability during the six months ended June 30, 2021 and 2020.
2020
Beginning balance – January 1
$7,389
Reductions for payments made(1,211)
Reductions for concessions and other in-kind considerations(35)
Changes in estimates521
Ending balance – June 30
$6,664

20212020
Beginning balance – January 1$5,537 $7,389 
Reductions for payments made(1,538)(1,211)
Reductions for concessions and other in-kind considerations(27)(35)
Changes in estimates(8)521 
Ending balance – June 30$3,964 $6,664 
We are working with our customers to minimize the impact to their operations from grounded and undelivered aircraft. We continue to reassess the liability for estimated potential concessions and other considerations to customers on a quarterly basis. This reassessment includes updating estimates to reflect revisions to return to service, delivery and production rate assumptions driven by timing of regulatory approvals, as well as latest information based on engagements with 737 MAX customers. The liability represents our current best estimate of future concessions and other considerations to customers, and is necessarily based on a series of assumptions. It is subject to change in future quarters as negotiations with customers mature and timing and conditions of return to service are better understood. The liability balance of $6.7$4.0 billion at June 30, 20202021 includes $1.9$1.5 billion expected to be liquidated by lower customer delivery payments, $1.1$0.8 billion expected to be paid in cash and $0.1$0.2 billion in other concessions. Of the cash payments to customers, we expect to pay $0.4$0.3 billion in 20202021 and $0.5 billion in 2021.2022. The type of consideration to be provided for the remaining $3.6$1.5 billion will depend on the outcomes of negotiations with customers.
The FAA and other737 MAX remains grounded in certain non-U.S. jurisdictions. The civil aviation authorities in those jurisdictions will determine the timing and conditions of return to service. Our assumptions reflect our current best estimate, but actual timing and conditions of return to service and resumption of deliveries could differ from this estimate, the effect of which could be material. We are unable at this time to reasonably estimate potential future additional financial impacts or a range of loss, if any, due to continued uncertainties related to the timing and conditions of return to service in certain jurisdictions. For example, a significant portion of our 737 MAX inventory consists of aircraft scheduled to be delivered to
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customers based in China. If we are unable to resume deliveries to China consistent with our assumptions, or if further deterioration in trade relations between the U.S. and China results in unanticipated delivery delays, the continued absence in revenue, earnings, and cash flows associated with 737 MAX deliveries would materially and adversely impact our operating results. In addition, uncertainties related to the impacts of COVID-19 on our operations, supply chain and customers, future changes to the production rate, supply chain impacts, and/or the results of negotiations with particular customers. Any such impacts, includingcustomers, as well as any changes in our program estimates, could have a material adverse effect on our financial position, results of operations, and/or cash flows. For example, we expect that, in the event that we are unable to resume aircraft deliveries consistent with our assumptions, the continued absence of revenue, earnings, and cash flows associated with 737 MAX deliveries would continue to have a material impact on our operating results. In the event that future production rate increases occur at a slower rate or take longer than we are currently assuming, we expect that the growth in inventory and other cash flow impacts associated with production would decrease. However, while any prolonged production suspension or delays in planned production rate increases could mitigate the impact on our liquidity, it could significantly increase the overall expected costs to produce aircraft included in the accounting quantity, which would reduce 737 program margins and/or increase abnormal production costs in the future.
Commercial air traffic hasand capacity have fallen dramatically due to the COVID-19 pandemic. While thisThis trend has impacted passenger traffic most severely, near-termseverely. While recovery is accelerating, we continue to expect that it will remain uneven as travel restrictions and varying regional travel protocols continue to impact air travel. While the pandemic caused a temporary shift in air cargo dynamics, we have seen air cargo traffic has also fallen significantly duereturn to the globalpositive growth in 2021 on economic downturnrecovery and the reduction in cargo capacity on passenger airplanes. Airlines have significantly reduced their capacity, and many could implement further reductions in the near future. Many airlines are also implementing significant reductions in staffing.strengthening trade. These capacity changes are causing, and are expected to continue to cause, negative impacts to our customers’ revenue, earnings, and cash flow, and in some cases may threaten the future viability of some of our customers, potentially causing defaults within our customer financing portfolio and/or requiring us to remarket aircraft that have already been produced and/or are currently in backlog. If 737 MAX aircraft remain grounded for an extended period of time in certain non-U.S. jurisdictions, we may experience additional reductions to backlog and/or significant order cancellations. Additionally, we may experience fewer new orders and increased cancellations across all of our commercial airplane programs as a result of the COVID-19 pandemic and associated impacts on demand. Our customers may also lack sufficient liquidity to purchase new aircraft due to impacts from the pandemic. We are also observing a significant increase in the number of requests for payment deferrals, contract modifications, lease restructurings and similar actions,

and these trends may lead to additional earnings charges, impairments and other adverse financial impacts in our business over time. In addition, to the extent that customers have valid rights to cancel undelivered aircraft, we may be required to refund pre-delivery payments, putting additional constraints on our liquidity. In addition to the near-term impact, thereThere is risk that the industry implements longer-term strategies involving reduced capacity, shifting route patterns, and mitigation strategies related to impacts from COVID-19 and the risk of future public health crises. In addition, airlines may experience reduced demand due to reluctance by the flying public to travel.
We continue to expect commercial air travel due to travel restrictions and/or social distancing requirements.
Asreturn to 2019 levels in 2023 to 2024. We expect it will take a result, therefew years beyond that for the industry to return to long-term trend growth. There is significant uncertainty with respect to when commercial air traffic levels will begin to recover, and whether and at what point capacity will return to and/or exceed pre-COVID-19 levels. The COVID-19 pandemic also has increased, and its aftermath is also expected to continue to increase, uncertainty with respect to global trade volumes, puttingwhich could put significant negative pressure on cargo traffic. Any of these factors would have a significant impact on the demand for both single-aisle and wide-body commercial aircraft, as well as for the services we provide to commercial airlines. In addition, a lengthy period of reduced industry-wide demand for commercial aircraft would put additional pressure on our suppliers, resulting in increased procurement costs and/or additional supply chain disruption. To the extent that the COVID-19 pandemic or its aftermath further impacts demand for our products and services or impairs the viability of some of our customers and/or suppliers, our financial condition, results of operations, and cash flows could be adversely affected, and those impacts could be material.
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Environmental
The following table summarizes environmental remediation activity during the six months ended June 30, 20202021 and 2019.2020.
 2020
 2019
Beginning balance – January 1
$570
 
$555
Reductions for payments made(21) (24)
Changes in estimates11
 17
Ending balance – June 30
$560
 
$548

20212020
Beginning balance – January 1$565 $570 
Reductions for payments made(24)(21)
Changes in estimates41 11 
Ending balance – June 30$582 $560 
The liabilities recorded represent our best estimate or the low end of a range of reasonably possible costs expected to be incurred to remediate sites, including operation and maintenance over periods of up to 30 years. It is reasonably possible that we may incur charges that exceed these recorded amounts because of regulatory agency orders and directives, changes in laws and/or regulations, higher than expected costs and/or the discovery of new or additional contamination. As part of our estimating process, we develop a range of reasonably possible alternate scenarios that includes the high end of a range of reasonably possible cost estimates for all remediation sites for which we have sufficient information based on our experience and existing laws and regulations. There are some potential remediation obligations where the costs of remediation cannot be reasonably estimated. At June 30, 20202021 and December 31, 2019,2020, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $1,088$1,055 and $1,077.$1,095.
Product Warranties
The following table summarizes product warranty activity recorded during the six months ended June 30, 20202021 and 2019.2020.
 2020
 2019
Beginning balance – January 1
$1,267
 
$1,127
Additions for current year deliveries34
 83
Reductions for payments made(149) (64)
Changes in estimates395
 (83)
Ending balance – June 30
$1,547
 
$1,063


The increase in the product warranty reserve during the six months ended June 30, 2020 is primarily driven by charges related to “pickle forks” on 737NG aircraft. During 2019, we detected cracks in the "pickle forks", a frame fitting component of the structure connecting the wings to the fuselages of 737NG aircraft. We notified the FAA, which issued a directive requiring that certain 737NG airplanes be inspected. We have estimated the number of aircraft that will have to be repaired in the future and provisioned for the estimated costs of completing the repairs. We recognized charges of $135 in 2019 for current and projected future aircraft repairs. During the first quarter of 2020, we recognized additional charges of $336 based on revised engineering and fleet utilization estimates as well as updated repair cost estimates. We cannot estimate a range of reasonably possible losses, if any, in excess of amounts recognized due to the ongoing nature of the inspections and repairs and pending the completion of investigations into the cause of the condition.
20212020
Beginning balance – January 1$1,527 $1,267 
Additions for current year deliveries48 34 
Reductions for payments made(100)(149)
Changes in estimates293 395 
Ending balance – June 30$1,768 $1,547 
Commercial Aircraft Commitments
In conjunction with signing definitive agreements for the sale of new aircraft (Sale Aircraft), we have entered into trade-in commitments with certain customers that give them the right to trade in used aircraft at a specified price upon the purchase of Sale Aircraft. The probability that trade-in commitments will be exercised is determined by using both quantitative information from valuation sources and qualitative information from other sources. The probability of exercise is assessed quarterly, or as events trigger a change, and takes into consideration the current economic and airline industry environments. Trade-in commitments, which can be terminated by mutual consent with the customer, may be exercised only during the period specified in the agreement, and require advance notice by the customer.
Trade-in commitment agreements at June 30, 20202021 have expiration dates from 20202021 through 2026.2028. At June 30, 20202021 and December 31, 20192020 total contractual trade-in commitments were $1,165$623 and $1,407.$950. As of June 30, 20202021 and December 31, 2019,2020, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $621$335 and $711$599 and the fair value of the related trade-in aircraft was $602$335 and $678.$580.
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Financing Commitments
Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $12,784$13,475 and $13,377$11,512 as of June 30, 20202021 and December 31, 2019.2020. The estimated earliest potential funding dates for these commitments as of June 30, 20202021 are as follows:
  
Total
July through December 2020
$2,462
20212,472
20221,368
20231,755
20241,373
Thereafter3,354
 
$12,784


Total
July through December 2021$1,519 
20222,065 
20234,141 
20242,365 
20251,934 
Thereafter1,451 
$13,475 
As of June 30, 2020,2021, all of these financing commitments relate to customers we believe have less than investment-grade credit. We have concluded that no reserve for future potential losses is required for these financing commitments based upon the terms, such as collateralization and interest rates, under which funding would be provided.
Funding Commitments
We have commitments to make additional capital contributions of $243 to joint ventures over the next sevensix years.

Standby Letters of Credit and Surety Bonds
We have entered into standby letters of credit and surety bonds with financial institutions primarily relating to the guarantee of our future performance on certain contracts. Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $3,761$3,917 and $3,769$4,238 as of June 30, 20202021 and December 31, 2019.2020.
United States Government Defense Environment Overview
The Bipartisan Budget Act of 2019 raised the Budget Control Act limits on federal discretionary defense and non-defense spending for fiscal years 2020 and 2021 (FY20 and FY21), reducing budget uncertainty and the risk of sequestration. The consolidatedOmnibus appropriations acts for FY20,fiscal year 2021 (FY21), enacted in December 2019,2020, provided FY20FY21 appropriations for government departments and agencies, including $704 billion for the U.S. DoD, $23 billion for the National Aeronautics and Space Administration (NASA) and $18 billion for the FAA. In February 2020, the U.S. administration submitted its request for $740.5 billion in base national defense spending forFederal Aviation Administration (FAA). FY21 congruent with the amended spending limit.
The enacted FY20 appropriations included funding for Boeing’s major programs, such as the F/A-18 Super Hornet, F-15EX, CH-47 Chinook, AH-64 Apache, V-22 Osprey, KC-46A Tanker, P-8 Poseidon and Space Launch System. However,
In May 2021, the U.S. government released the President’s budget request for fiscal year 2022 (FY22), which included $715 billion in funding for the U.S. DoD, $25 billion in funding for NASA and $19 billion for the FAA. While the President’s Budget request for FY22 includes funding for a majority of Boeing’s programs, it did not include funding for F/A-18 Super Hornet, P-8 Poseidon and H-47F Block II production aircraft. While there continues to beis some continued congressional support for F/A-18 and H-47F Block II production aircraft for FY22, there is ongoing uncertainty with respect to futurethese and other program-level appropriations for the U.S. DoDFY22 and other government agencies, including NASA.future fiscal years. 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 results of operations, financial position, and/or cash flows. These programs also continue to pursue non-U.S. sales opportunities.
20
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BDS Fixed-Price Development Contracts
Fixed-price development work is inherently uncertain and subject to significant variability in estimates of the cost and time required to complete the work. BDS fixed-price contracts with significant development work include Commercial Crew, KC-46A Tanker, MQ-25, T-7A Red Hawk, VC-25B, and commercial and military satellites. The operational and technical complexities of these contracts create financial risk, which could trigger termination provisions, order cancellations, or other financially significant exposure. Changes to cost and revenue estimates could result in lower margins or material charges for reach-forward losses. For example, we have recorded a reach-forward loss of $978 on KC-46A Tanker in the first half of 2020. The KC-46A Tanker reach-forward loss in the first quarter of 2020 reflects $551 of costs associated with the agreement signed in April 2020 with the U.S. Air Force (USAF) to develop and integrate a new Remote Vision System, and the remaining costs reflect productivity inefficiencies and COVID-19 related factory disruption. Moreover, our fixed-price development programs remain subject to additional reach-forward losses if we experience further production, technical or quality issues, schedule delays, or increased costs.
KC-46A Tanker
In 2011, we were awarded a contract from the U.S. Air Force (USAF) to design, develop, manufacture, and deliver four next generation aerial refueling tankers. This Engineering, Manufacturing and Development (EMD)(EMD) contract is a fixed-price incentive fee contract and involves highly complex designs and systems integration. Since 2016, the USAF has authorized fiveseven low rate initial production (LRIP) lots for a total of 6794 aircraft. The EMD contract and authorized LRIP lots are valued attotal approximately $15 billion.$19 billion as of June 30, 2021.
At June 30, 2020,2021, we had approximately $374$254 of capitalized precontract costs and $548$280 of potential termination liabilities to suppliers.
Recoverable Costs on Government Contracts
Our final incurred costs for each year are subject to audit and review for allowability by the U.S. government, which can result in payment demands related to costs they believe should be disallowed. We work with the U.S. government to assess the merits of claims and where appropriate reserve for amounts disputed. If we are unable to satisfactorily resolve disputed costs, we could be required to record an earnings charge and/or provide refunds to the U.S. government.

Severance
DuringThe following table summarizes changes in the second quarter ofseverance liability during the six months ended June 30, 2021 and 2020.
20212020
Beginning balance – January 1$283 
Initial liability recorded in the second quarter of 2020$652 
Reductions for payments made(69)(247)
Changes in estimates(184)
Ending balance - June 30$30 $405 
During 2020, the Company recorded severance costs of $652 that are expected to be paid during 2020 tofor approximately 19,00026,000 employees expected to leave the Company through a combination of voluntary and involuntary terminations. The severance packages are consistent with the Company’s ongoing compensation and benefits plans. During the first quarter of 2021, we reduced the estimated number of employees expected to leave the Company through voluntary and involuntary terminations to approximately 23,000. During the second quarter of 2021, we further reduced the estimated number of employees expected to leave the Company through voluntary and involuntary terminations to approximately 19,000. As of June 30, 2020 approximately 6,000 employees had left the Company and the2021, our severance liability primarily relates to remaining 13,000 employees are expectedseverance payments to leave in the third and fourth quarterterminated employees.
21
Table of 2020. The remaining liability at June 30, 2020 was $405. In July 2020, the Company announced that the prolonged impact of COVID-19, further reductions in production rates and lower demand for commercial services will result in further assessments of the size of the Company’s workforce to align with a smaller market.Contents
Note 1110 – Arrangements with Off-Balance Sheet Risk
We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in the form of guarantees.
The following table provides quantitative data regarding our third party guarantees. The maximum potential payments represent a “worst-case scenario,” and do not necessarily reflect amounts that we expect to pay. Estimated proceeds from collateral and recourse represent the anticipated values of assets we could liquidate or receive from other parties to offset our payments under guarantees. The carrying amount of liabilities represents the amount included in Accrued liabilities.
  
Maximum
Potential Payments
 
Estimated Proceeds from
Collateral/Recourse
 
Carrying Amount of
 Liabilities
 June 30
2020
December 31
2019
 June 30
2020
December 31
2019
 June 30
2020
December 31
2019
Contingent repurchase commitments
$1,480

$1,570
 
$1,480

$1,570
 




Indemnifications to ULA:        
Contributed Delta inventory30
30
      
Inventory supply agreement34
34
    




Questioned costs


317
    



$48
Credit guarantees92
92
 35
36
 
$24
16

Maximum
Potential Payments		Estimated Proceeds from
Collateral/Recourse		Carrying Amount of
 Liabilities
June 30
2021		December 31
2020		June 30
2021		December 31
2020		June 30
2021		December 31
2020
Contingent repurchase commitments$657 $1,452 $657 $1,452 00
Credit guarantees90 90 33 28 $24 $24 
Contingent Repurchase Commitments The repurchase price specified in contingent repurchase commitments is generally lower than the expected fair value at the specified repurchase date. Estimated proceeds from collateral/recourse in the table above represent the lower of the contracted repurchase price or the expected fair value of each aircraft at the specified repurchase date.
Indemnifications to ULA During the first quarter of 2020, the USAF and ULA reached a settlement regarding previously questioned deferred support and deferred production costs. As part of the settlement the USAF agreed to reimburse ULA for $307 of those costs, which was received by ULA in the second quarter. The settlement substantially retires our indemnification risks to ULA.
Other Indemnifications In conjunction with our sales of Electron Dynamic Devices, Inc. and Rocketdyne Propulsion and Power businesses and our BCA facilities in Wichita, Kansas and Tulsa and McAlester, Oklahoma, we agreed to indemnify, for an indefinite period, the buyers for costs relating to pre-closing environmental conditions and certain other items. We are unable to assess the potential number of future claims that may be asserted under these indemnifications, nor the amounts thereof (if any). As a result, we cannot estimate the maximum potential amount of future payments under these indemnities and therefore, no liability has been recorded. To the extent that claims have been made under these indemnities and/or are probable and reasonably estimable, liabilities associated with these indemnities are included in the environmental liability disclosure in Note 10.9.

Credit Guarantees We have issued credit guarantees where we are obligated to make payments to a guaranteed party in the event that the original lessee or debtor does not make payments or perform certain specified services. Generally, these guarantees have been extended on behalf of guaranteed parties with less than investment-grade credit and are collateralized by certain assets. We record a liability for the fair value of guarantees and the expected contingent loss amount, which is reviewed quarterly. Current outstanding credit guarantees expire through 2036.
Note 1211 – Debt
In the first quarter of 2020, we entered into a $13,825, two-year delayed draw term loan facility, which includes additional commitments made subsequent to the initial closing date. As of June 30, 2020, we have fully drawn on the $13,825 delayed draw term loan facility, with February 6, 2022 as the final maturity date. Borrowings outstanding bear interest at the Eurodollar rate (determined in accordance with the delayed draw term loan facility agreement) plus between 0.75% and 1.25%, depending on our credit rating.
In the second quarter of 2020,2021, we issued $25,000$9,825 of fixed rate senior notes consisting of $3,000$1,325 due May 1,February 4, 2023 that bear an annual interest rate of 4.508%1.167%, $3,500$3,000 due May 1, 2025February 4, 2024 that bear an annual interest rate of 4.875%1.433%, $2,000and $5,500 due May 1, 2027February 4, 2026 that bear an annual interest rate of 5.04%, $4,500 due May 1, 2030 that bear an annual interest rate of 5.15%, $3,000 due May 1, 2040 that bear an annual interest rate of 5.705%, $5,500 due May 1, 2050 that bear an annual interest rate of 5.805%, and $3,500 due May 1, 2060 that bear an annual interest rate of 5.93%2.196%. The notes are unsecured senior obligations and rank equally in right of payment with our existing and future unsecured and unsubordinated indebtedness. The net proceeds of the issuance totaled $24,802,$9,780, after deducting underwriting discounts, commissions, and offering expenses. We used the net proceeds of these note issuances to repay $9,825 outstanding under our two-year delayed draw term loan credit agreement. The remaining $4,000 of our two-year delayed draw term loan matures in February 2022.
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In the first quarter of 2021, we entered into a $5,280 two-year revolving credit agreement. As of June 30, 2021, we have $14,753 currently available under credit line agreements, of which $3,073 expires in October 2021, $3,200 expires in October 2022, $5,280 expires in March 2023, and $3,200 expires in October 2024. The facility scheduled to expire in October 2021 has a one-year term out option that allows us to extend the maturity of any borrowings one additional year. We continue to be in full compliance with all covenants contained in our debt or credit facility agreements.
Note 1312 – Postretirement Plans
The components of net periodic benefit (income)/cost were as follows:

Six months ended June 30 Three months ended June 30
Pension Plans2020
 2019
 2020
 2019
Service cost
$1
 
$2
 
$1
 
$1
Interest cost1,228
 1,462
 614
 731
Expected return on plan assets(1,878) (1,930) (939) (965)
Amortization of prior service credits(40) (40) (20) (20)
Recognized net actuarial loss516
 321
 258
 160
Settlement/curtailment/other losses3
 

 3
 

Net periodic benefit income
($170) 
($185) 
($83) 
($93)
        
Net periodic benefit cost included in Loss from operations
$1
 
$158
 
$1
 
$80
Net periodic benefit income included in Other income, net(171) (187) (84) (94)
Net periodic benefit income included in Loss before income taxes
($170)

($29) 
($83) 
($14)


Six months ended June 30Three months ended June 30
Pension Plans2021202020212020
Service cost$2 $1 $1 $1 
Interest cost995 1,228 497 614 
Expected return on plan assets(1,931)(1,878)(965)(939)
Amortization of prior service credits(40)(40)(20)(20)
Recognized net actuarial loss620 516 310 258 
Settlement loss4 3 3 3 
Net periodic benefit income($350)($170)($174)($83)
Net periodic benefit cost included in Earnings/(loss) from operations$2 $1 $1 $1 
Net periodic benefit income included in Other income, net(352)(171)(175)(84)
Net periodic benefit income included in (Loss)/earnings before income taxes($350)($170)($174)($83)
Six months ended June 30Three months ended June 30
Other Postretirement Plans2021202020212020
Service cost$44 $43 $22 $22 
Interest cost45 72 22 36 
Expected return on plan assets(3)(5)(1)(3)
Amortization of prior service credits(17)(17)(8)(8)
Recognized net actuarial gain(35)(23)(18)(11)
Net periodic benefit cost$34 $70 $17 $36 
Net periodic benefit cost included in Earnings/(loss) from operations$44 $44 $22 $23 
Net periodic benefit (income)/cost included in Other income, net(10)27 (5)14 
Net periodic benefit cost included in (Loss)/earnings before income taxes$34 $71 $17 $37 

Six months ended June 30 Three months ended June 30
Other Postretirement Plans2020
 2019
 2020
 2019
Service cost
$43
 
$39
 
$22
 
$20
Interest cost72
 98
 36
 49
Expected return on plan assets(5) (4) (3) (2)
Amortization of prior service credits(17) (18) (8) (9)
Recognized net actuarial gain(23) (23) (11) (12)
Net periodic benefit cost
$70
 
$92
 
$36
 
$46
        
Net periodic benefit cost included in Loss from operations
$44
 
$45
 
$23
 
$23
Net periodic benefit cost included in Other income, net27
 53
 14
 26
Net periodic benefit cost included in Loss before income taxes
$71
 
$98
 
$37
 
$49
23

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Note 1413 – Share-Based Compensation and Other Compensation Arrangements
Restricted Stock UnitsOptions
On February 24, 2020,17, 2021, we granted 342,986 premium-priced stock options to our executives 325,108 restricted stock units (RSUs)executive officers as part of our long-term incentive program. These stock options have an exercise price equal to 120% of the fair market value of our stock on the date of grant. The stock options are scheduled to vest and become exercisable three years after the grant date and expire ten years after the grant date. If an executive terminates employment because of retirement, layoff, disability, or death, the executive (or beneficiary) may receive some or all of their stock options depending on certain age and service conditions. The fair value of the stock options granted was $74.63 per unit and was estimated using a Monte-Carlo simulation model using the following assumptions: expected life 6.6 years, expected volatility 37.8%, risk free interest rate 1.3% and no expected dividend yield.
Restricted Stock Units
On February 17, 2021, we granted 980,077 restricted stock units (RSU) to our executives as part of our long-term incentive program. The RSUs granted under this program withhave a grant date fair value of $319.04$215.70 per unit. The RSUs granted under this program willunit and are generally scheduled to vest and settle in common stock (on a one-for-one basis) on the third anniversary ofthree years after the grant date.
Performance-Based Restricted Stock Units
On February 24, 2020, we granted to our executives 290,202 performance-based restricted If an executive terminates employment because of retirement, layoff, disability, or death, the executive (or beneficiary) may receive some or all of their stock units (PBRSUs) as partdepending on certain age and service conditions.
24
Table of our long-term incentive program with a grant date fair value of $357.38 per unit. Compensation expense for the award is recognized over the three-year performance period based upon the grant date fair value estimated using a Monte-Carlo simulation model. The model used the following assumptions: expected volatility of 27.04% based upon historical stock volatility, a risk-free interest rate of 1.21%, and no expected dividend yield because the units earn dividend equivalents.
Performance Awards
On February 28, 2020, we granted to our executives performance awards as part of our long-term incentive program with a payout based on the achievement of financial goals for the three-year period ending December 31, 2022. At June 30, 2020, the minimum payout amount is $0 and the maximum amount we could be required to pay out is $305.Contents

Note 1514 – Shareholders' Equity
Accumulated Other Comprehensive Loss
Changes in Accumulated other comprehensive loss (AOCI) by component for the six and three months ended June 30, 20202021 and 20192020 were as follows:
Currency Translation AdjustmentsUnrealized Gains and Losses on Certain InvestmentsUnrealized Gains and Losses on Derivative InstrumentsDefined Benefit Pension Plans & Other Postretirement Benefits
Total (1)
Balance at January 1, 2020($128)$1 ($84)($15,942)($16,153)
Other comprehensive loss before reclassifications(33)(186)(12)(231)
Amounts reclassified from AOCI12 347 (2)359 
Net current period Other comprehensive (loss)/income(33)(174)335 128 
Balance at June 30, 2020($161)$1 ($258)($15,607)($16,025)
Balance at January 1, 2021($30)$1 ($43)($17,061)($17,133)
Other comprehensive (loss)/income before reclassifications(22)65 10 53 
Amounts reclassified from AOCI(2)421 (2)419 
Net current period Other comprehensive (loss)/income(22)63 431 472 
Balance at June 30, 2021($52)$1 $20 ($16,630)($16,661)
Balance at March 31, 2020($205)$1 ($357)($15,772)($16,333)
Other comprehensive income/(loss) before reclassifications44 89 (12)121 
Amounts reclassified from AOCI10 177 (2)187 
Net current period Other comprehensive income44 99 165 308 
Balance at June 30, 2020($161)$1 ($258)($15,607)($16,025)
Balance at March 31, 2021($66)$1 ($34)($16,853)($16,952)
Other comprehensive income before reclassifications14 54 8 76 
Amounts reclassified from AOCI0215 (2)215 
Net current period Other comprehensive income14 54 223 291 
Balance at June 30, 2021($52)$1 $20 ($16,630)($16,661)
(1)     Net of tax.
(2)    Primarily relates to amortization of actuarial losses for the six and three months ended June 30, 2020 $390 and $197 (net of tax of ($103) and ($50)) and six and three months ended June 30, 2021 totaling $463 and $235 (net of tax of ($122) and ($57)). These are included in the net periodic pension cost.
25
 Currency Translation Adjustments
 Unrealized Gains and Losses on Certain Investments
 Unrealized Gains and Losses on Derivative Instruments
 Defined Benefit Pension Plans & Other Postretirement Benefits
 
Total (1)

Balance at January 1, 2019
($101) 

 
($62) 
($14,920) 
($15,083)
Other comprehensive (loss)/income before reclassifications(2) 1
 (17) 8
 (10)
Amounts reclassified from AOCI
 
 (3) 188
(2) 
185
Net current period Other comprehensive (loss)/income(2) 1
 (20) 196
 175
Balance at June 30, 2019
($103) 
$1
 
($82) 
($14,724) 
($14,908)
          
Balance at January 1, 2020
($128) $1
 
($84) 
($15,942) 
($16,153)
Other comprehensive (loss)/income before reclassifications(33) 

 (186) (12) (231)
Amounts reclassified from AOCI

 

 12
 347
(2) 
359
Net current period Other comprehensive (loss)/income(33) 
 (174) 335
 128
Balance at June 30, 2020
($161) 
$1
 
($258) 
($15,607) 
($16,025)
          
Balance at March 31, 2019
($100) 
$1
 
($53) 
($14,817) 
($14,969)
Other comprehensive (loss)/income before reclassifications(3) 
 (28) 

 (31)
Amounts reclassified from AOCI
 
 (1) 93
(2) 
92
Net current period Other comprehensive (loss)/income(3) 
 (29) 93
 61
Balance at June 30, 2019
($103) 
$1
 
($82) 
($14,724) 
($14,908)
          
Balance at March 31, 2020
($205) 
$1
 
($357) 
($15,772) 
($16,333)
Other comprehensive (loss)/income before reclassifications44
 
 89
 (12) 121
Amounts reclassified from AOCI
 
 10
 177
(2) 
187
Net current period Other comprehensive (loss)/income44
 
 99
 165
 308
Balance at June 30, 2020
($161) 
$1
 
($258) 
($15,607) 
($16,025)
(1)
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Net of tax.
(2)
Primarily relates to amortization of actuarial losses for the six and three months ended June 30, 2019 totaling $233 and $115 (net of tax of ($65) and ($33)) and for the six and three months ended June 30, 2020 totaling $390 and $197 (net of tax of ($103) and ($50)). These are included in the net periodic pension cost.
Note 1615 – Derivative Financial Instruments
Cash Flow Hedges
Our cash flow hedges include foreign currency forward contracts, commodity swaps and commodity purchase contracts. We use foreign currency forward contracts to manage currency risk associated with certain transactions, specifically forecasted sales and purchases made in foreign currencies. Our foreign currency contracts hedge forecasted transactions through 2025. We use commodity derivatives, such as fixed-price purchase commitments and swaps to hedge against potentially unfavorable price changes for items used in production. Our commodity contracts hedge forecasted transactions through 2023.

We continue to monitor the effects of the COVID-19 pandemic on our commodity cash flow hedges, including reductions in our forecasted purchases of certain commodities. As of June 30, 2020, the impact of the COVID-19 pandemic on our cash flow hedges was not significant.2029.
Derivative Instruments Not Receiving Hedge Accounting Treatment
We have entered into agreements to purchase and sell aluminum to address long-term strategic sourcing objectives and non-U.S. business requirements. These agreements are derivative instruments for accounting purposes. The quantities of aluminum in these agreements offset and are priced at prevailing market prices. We also hold certain foreign currency forward contracts and commodity swaps which do not qualify for hedge accounting treatment.
Notional Amounts and Fair Values
The notional amounts and fair values of derivative instruments in the Condensed Consolidated Statements of Financial Position were as follows:
Notional amounts (1)
Other assetsAccrued liabilities
June 30
2021		December 31
2020		June 30
2021		December 31
2020		June 30
2021		December 31
2020
Derivatives designated as hedging instruments:
Foreign exchange contracts$2,833 $2,594 $60 $81 ($27)($24)
Commodity contracts474 404 63 4 (2)(43)
Derivatives not receiving hedge accounting treatment:
Foreign exchange contracts540 769 8 22 (4)(16)
Commodity contracts975 904 3 (26)(17)
Total derivatives$4,822 $4,671 $134 $107 ($59)($100)
Netting arrangements(48)(31)48 31 
Net recorded balance$86 $76 ($11)($69)
  
Notional amounts (1)
Other assetsAccrued liabilities
  June 30
2020
December 31
2019
June 30
2020
December 31
2019
June 30
2020
December 31
2019
Derivatives designated as hedging instruments:      
Foreign exchange contracts
$3,233

$2,590

$7

$29

($165)
($60)
Commodity contracts366
645
2
4
(119)(72)
Derivatives not receiving hedge accounting treatment:      
Foreign exchange contracts399
285
7
1
(6)(6)
Commodity contracts796
1,644




(25) 
Total derivatives
$4,794

$5,164

$16

$34

($315)
($138)
Netting arrangements  (14)(20)14
20
Net recorded balance  
$2

$14

($301)
($118)
(1)Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
(1)
Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
Gains/(losses) associated with our hedging transactions and forward points recognized in Other comprehensive income are presented in the following table:
Six months ended June 30Three months ended June 30

2021202020212020
Recognized in Other comprehensive income, net of taxes:
Foreign exchange contracts($6)($112)$13 $85 
Commodity contracts71 (74)41 4 
 Six months ended June 30Three months ended June 30
  
2020
 2019
2020
 2019
Recognized in Other comprehensive income, net of taxes:      
Foreign exchange contracts
($112) 
$31

$85
 
$9
Commodity contracts(74) (48)4
 (37)
26

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Gains/(losses) associated with our hedging transactions and forward points reclassified from AOCI to earnings are presented in the following table:

Six months ended June 30Three months ended June 30
2021202020212020
Foreign exchange contracts
Revenues0($1)00
Costs and expenses$3 (6)$3 ($5)
General and administrative9 (5)6 (5)
Commodity contracts
Costs and expenses(13)(3)(10)(2)
General and administrative expense3 (1)1 (1)
 Six months ended June 30 Three months ended June 30
 2020
 2019
 2020
 2019
Foreign exchange contracts       
Revenues
($1) 
$6
 


 
$1
Costs and expenses(6) (12) 
($5) (7)
General and administrative(5) 9
 (5) 8
Commodity contracts       
Costs and expenses(3) 1
 (2) 

General and administrative expense(1) 

 (1) (1)

Gains related to undesignated derivatives on foreign exchange and commodity cash flow hedging transactions recognized in Other income, net were $6 and $1insignificant for the six and three months ended June 30, 20202021 and $2 and $0 for the six and three months ended June 30, 2019.2020.
Based on our portfolio of cash flow hedges, we expect to reclassify lossesgains of $33$23 (pre-tax) out of Accumulated other comprehensive loss into earnings during the next 12 months.
We have derivative instruments with credit-risk-related contingent features. For foreign exchange and commodity contracts with original maturities of at least five years, our derivative counterparties could require settlement if we default on our five-year credit facility. For certain commodity contracts, our counterparties could require collateral posted in an amount determined by our credit ratings. The fair value of foreign exchange and commodity contracts that have credit-risk-related contingent features that are in a net liability position at June 30, 20202021 was $54.$1. At June 30, 2020,2021, there was no collateral posted related to our derivatives.
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Note 1716 – Fair Value Measurements
The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs. The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.
 June 30, 2020December 31, 2019
 Total
 Level 1
 Level 2
 Total
 Level 1
 Level 2
Assets           
Money market funds
$8,877
 
$8,877
   
$2,562
 
$2,562
  
Available-for-sale debt investments:

          
Commercial paper93
   
$93
 108
   
$108
Corporate notes321
   321
 242
   242
U.S. government agencies


 


   55
 55
  
Other equity investments40
 40
   33
 33
  
Derivatives2
   2
 14
   14
Total assets
$9,333
 
$8,917
 
$416


$3,014
 
$2,650
 
$364
Liabilities           
Derivatives
($301)   
($301) 
($118)   
($118)
Total liabilities
($301) 
 
($301) 
($118) 
 
($118)

June 30, 2021December 31, 2020
TotalLevel 1Level 2TotalLevel 1Level 2
Assets
Money market funds$2,007 $2,007 $2,230 $2,230 
Available-for-sale debt investments:
Commercial paper297 $297 149 $149 
Corporate notes187 187 333 333 
U.S. government agencies32 32114 114 
Other equity investments12 12 54 54 
Derivatives86 86 76 76 
Total assets$2,621 $2,019 $602 $2,956 $2,284 $672 
Liabilities
Derivatives($11)($11)($69)($69)
Total liabilities($11)($11)($69)($69)
Money market funds, available-for-sale debt investments and equity securities are valued using a market approach based on the quoted market prices or broker/dealer quotes of identical or comparable instruments.

Derivatives include foreign currency and commodity contracts. Our foreign currency forward contracts are valued using an income approach based on the present value of the forward rate less the contract rate multiplied by the notional amount. Commodity derivatives are valued using an income approach based on the present value of the commodity index prices less the contract rate multiplied by the notional amount.
Certain assets have been measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3).basis. The following table presents the nonrecurring losses recognized for the six months ended June 30 due to long-lived asset impairment and the fair value and asset classification of the related assets as of the impairment date:
  2020 2019
 
Fair
Value

 
Total
Losses

 
Fair
Value

 
Total
Losses

Customer financing assets
$71
 
($17) 
$10
 
($1)
Investments64
 (49) 72
 (51)
Property, plant and equipment82
 (59) 41
 (1)
Other Assets and Acquired intangible assets201
 (155) 3
 (17)
Total
$418
 
($280) 
$126
 
($70)

20212020
TotalLevel 2 Level 3Total
Losses		TotalLevel 2Level 3Total
Losses
Customer financing assets$15 $15 ($12)$71 $71 ($17)
Investments— (7)64 64 (49)
Property, plant and equipment160 $132 28 (19)82 82 (59)
Other Assets and Acquired intangible assets— 201 201 (155)
Total$175 $132 $43 ($38)$418 — $418 ($280)
Level 3 Investments, Property, plant and equipment, Other assetsAssets and Acquired intangible assetsIntangibles were primarily valued using an income approach based on the discounted cash flows associated with the underlying assets. Level 2 Property, plant and equipment were valued based on a third party appraisal using a combination of income and market approaches that considered estimates of net operating income,
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capitalization rates, comparable property sales and adjusted for as-is condition. The fair value of the impaired customer financing assets is derived by calculating a median collateral value from a consistent group of third party aircraft value publications. The values provided by the third party aircraft publications are derived from their knowledge of market trades and other market factors. Management reviews the publications quarterly to assess the continued appropriateness and consistency with market trends. Under certain circumstances, we adjust values based on the attributes and condition of the specific aircraft or equipment, usually when the features or use of the aircraft vary significantly from the more generic aircraft attributes covered by third party publications, or on the expected net sales price for the aircraft.
For Level 3 assets that were measured at fair value on a nonrecurring basis during the year ended June 30, 2020,2021, the following table presents the fair value of those assets as of the measurement date, valuation techniques and related unobservable inputs of those assets.
Fair

Value
Valuation

Technique(s)
Unobservable Input
Range

Median or Average
Customer financing assets$15Market approachAircraft value publications
$16 - $24(1)
Median $19
Customer financing assets$71Market approachAircraft value publications
$57 - $118(1)
Median $79
Aircraft condition adjustments
($8)5) - $0$1(2)
Net ($8)4)
(1)
(1)The range represents the sum of the highest and lowest values for all aircraft subject to fair value measurement, according to the third party aircraft valuation publications that we use in our valuation process.
(2)The negative amount represents the sum, for all aircraft subject to fair value measurement, of all downward adjustments based on consideration of individual aircraft attributes and condition. The positive amount represents the sum of all such upward adjustments.
The range represents the sum of the highest and lowest values for all aircraft subject to fair value measurement, according to the third party aircraft valuation publications that we use in our valuation process.
(2)
The negative amount represents the sum, for all aircraft subject to fair value measurement, of all downward adjustments based on consideration of individual aircraft attributes and condition. The positive amount represents the sum of all such upward adjustments.

Fair Value Disclosures
The fair values and related carrying values of financial instruments that are not required to be remeasured at fair value on the Condensed Consolidated Statements of Financial Position were as follows:
June 30, 2021
Carrying
Amount		Total Fair
Value		Level 1Level 2Level 3
Assets
Notes receivable, net$415 $487 $487 
Liabilities
Debt, excluding finance lease obligations(63,377)(71,781)(71,781)
 June 30, 2020
 
Carrying
Amount

Total Fair
Value

Level 1Level 2
Level 3
Assets     
Notes receivable, net
$433

$429
 
$429
 
Liabilities     
Debt, excluding commercial paper and capital lease obligations(58,788)(61,367) (61,350)
($17)
 December 31, 2019
 
Carrying
Amount

Total Fair
Value

Level 1Level 2
Level 3
Assets     
Notes receivable, net
$443

$444
 
$444
 
Liabilities     
Debt, excluding capital lease obligations and commercial paper(20,964)(23,119) (23,081)
($38)

December 31, 2020
Carrying
Amount		Total Fair
Value		Level 1Level 2Level 3
Assets
Notes receivable, net$420 $488 $488 
Liabilities
Debt, excluding finance lease obligations(63,380)(72,357)(72,342)($15)
The fair values of notes receivable are estimated with discounted cash flow analysis using interest rates currently offered on loans with similar terms to borrowers of similar credit quality. The fair value of our debt that is traded in the secondary market is classified as Level 2 and is based on current market yields. For our debt that is not traded in the secondary market, the fair value is classified as Level 2 and is based on our indicative borrowing cost derived from dealer quotes or discounted cash flows. The fair values of
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our debt classified as Level 3 are based on discounted cash flow models using the implied yield from similar securities. With regard to other financial instruments with off-balance sheet risk, it is not practicable to estimate the fair value of our indemnifications and financing commitments because the amount and timing of those arrangements are uncertain. Items not included in the above disclosures include cash, restricted cash, time deposits and other deposits, commercial paper, money market funds, Accounts receivable, Unbilled receivables, Other current assets, Accounts payable and long-term payables. The carrying values of those items, as reflected in the Condensed Consolidated Statements of Financial Position, approximate their fair value at June 30, 20202021 and December 31, 2019.2020. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash (Level 1).
Note 1817 – Legal Proceedings
Various legal proceedings, claims and investigations related to products, contracts, employment and other matters are pending against us.
In addition, we are subject to various U.S. government inquiries and investigations from which civil, criminal or administrative proceedings could result or have resulted in the past. Such proceedings involve or could involve claims by the government for fines, penalties, compensatory and treble damages, restitution and/or forfeitures. Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations. Except as described below, we believe, based upon current information, that the outcome of any such legal proceeding, claim, or government dispute and investigation will not have a material effect on our financial position, results of operations, or cash flows. Where it is reasonably possible that we will incur losses in excess of recorded amounts in connection with any of the matters set forth below, we will disclose either the amount or range of reasonably possible losses in excess of such amounts or,

where no such amount or range can be reasonably estimated, the reasons why no such estimate can be made.
Multiple legal actions have been filed against us as a result of the October 29, 2018 accident of Lion Air Flight 610 and the March 10, 2019 accident of Ethiopian Airlines Flight 302. Further, we are subject to, and cooperating with ongoing governmental and regulatory investigations and inquiries relating to the accidents and the 737 MAX, including investigationsan investigation by the U.S. Department of Justice and the Securities and Exchange Commission, the outcome of which may be material. WeOther than with respect to the agreement described below with the U.S. Department of Justice, we cannot reasonably estimate a range of loss, if any, not covered by available insurance that may result given the current status of the pending lawsuits, investigations, and inquiries related to the 737 MAX.
On January 6, 2021, we entered into a Deferred Prosecution Agreement with the U.S. Department of Justice that resolves the Department of Justice’s previously disclosed investigation into us regarding the evaluation of the 737 MAX airplane by the Federal Aviation Administration. Under the terms of the Deferred Prosecution Agreement, we agreed to the filing of a criminal information charging the Company with one count of conspiracy to defraud the United States, based on the conduct of two former 737 MAX program technical pilots; the criminal information will be dismissed after three years, provided that we comply with our obligations under the agreement. The Deferred Prosecution Agreement requires that we make payments totaling $2.51 billion, which consist of (a) a $243.6 million criminal monetary penalty; (b) $500 million in additional compensation to the heirs and/or beneficiaries of those who died in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents; and (c) $1.77 billion to the Company’s airline customers for harm incurred as a result of the grounding of the 737 MAX, offset in part by payments already made and the remainder satisfied through payments to be made prior to the termination of the Deferred Prosecution Agreement. The agreement also requires that we review our compliance program and undertake continuous improvement efforts with respect to it, and implement enhanced compliance reporting and internal controls mechanisms. We expensed $743.6 million in the fourth quarter of 2020 related to this agreement. During the first quarter, consistent with the terms of the Deferred Prosecution Agreement, the monetary penalty was paid, and the $500 million compensation amount was transferred to a fund established to benefit the heirs and/or beneficiaries of the victims of the 737 MAX accidents. In
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addition, the $1.77 billion amount related to the Company’s airline customers was included in amounts reserved in prior quarters for 737 MAX customer considerations.
During 2019, we entered into definitive transaction documents with respect to a strategic partnershipagreements with Embraer S.A. (Embraer). The partnership contemplated the establishment of to establish joint ventures that included the commercial aircraft and services operations of Embraer, of which we were expected to acquire an 80 percent ownership stake for $4,200, as well as a joint venture to promote and develop new markets for the C-390 Millennium.
The transaction documents permitted either party In 2020, we exercised our contractual right to terminate the proposed partnership beginning on April 24, 2020, provided that certain closing conditions were not met. Basedthese agreements based on Embraer’s failure to satisfymeet certain required closing conditions, we exercised our contractual termination right during the second quarter of 2020, whichconditions. Embraer has disputed. We would have been requireddisputed our right to pay a termination fee of $100 hadterminate the transaction been terminated due to a failure to obtain antitrust approvals. Becauseagreements, and the transaction was terminated due to a failure by Embraer to meet other closing conditions, we do not expect to be required to pay a termination feedispute is currently in connection with the termination of the transaction. Boeing and Embraer are arbitrating their dispute over Boeing’s termination of the agreement.arbitration. We cannot reasonably estimate a range of loss, if any, that may result from the arbitration.
Note 1918 – Segment and Revenue Information
Effective at the beginning of 2020, certain programs were realigned between our BDS segment and Unallocated items, eliminations and other. Business segment data for 2019 has been adjusted to reflect the realignment.
Our primary profitability measurements to review a segment’s operating results are EarningsEarnings/(loss) from operations and operating margins. We operate in 4 reportable segments: BCA, BDS, BGS, and BCC. All other activities fall within Unallocated items, eliminations and other. See page 7 for the Summary of Business Segment Data, which is an integral part of this note.
BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide. Revenue on commercial aircraft contracts is recognized at the point in time when an aircraft is completed and accepted by the customer.
BDS engages in the research, development, production and modification of the following products and related services: manned and unmanned military aircraft and weapons systems, surveillance and engagement, strategic defense and intelligence systems, satellite systems and space exploration. BDS revenue is generally recognized over the contract term (over time) as costs are incurred.
BGS provides parts, maintenance, modifications, logistics support, training, data analytics and information-based services to commercial and government customers worldwide. BGS segment revenue and costs include certain services provided to other segments. Revenue on commercial spare parts contracts is recognized at the point in time when a spare part is delivered to the customer. Revenue on other contracts is generally recognized over the contract term (over time) as costs are incurred.
BCC facilitates, arranges, structures and provides selective financing solutions for our Boeing customers.

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The following tables present BCA, BDS and BGS revenues from contracts with customers disaggregated in a number of ways, such as geographic location, contract type and the method of revenue recognition. We believe these best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors.
BCA revenues by customer location consist of the following:
(Dollars in millions)Six months ended June 30 Three months ended June 30
 2020 2019 2020 2019
Revenue from contracts with customers:       
Europe
$2,302
 
$2,684
 
$332
 
$1,023
Asia1,464
 7,534
 305
 4,360
Middle East556
 1,805
 7
 695
Other453
 2,367
 142
 829
Total non-U.S. revenues4,775
 14,390
 786
 6,907
United States3,557
 7,587
 1,383
 3,417
Estimated potential concessions and other considerations to 737 MAX customers, net(521) (5,610) (551) (5,610)
Total revenues from contracts with customers7,811
 16,367
 1,618
 4,714
Intersegment revenues eliminated on consolidation27
 177
 15
 8
Total segment revenues
$7,838
 
$16,544
 
$1,633
 
$4,722
        
Revenue recognized on fixed-price contracts100% 100% 100% 100%
        
Revenue recognized at a point in time99% 99% 99% 99%

(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Revenue from contracts with customers:
Europe$1,553 $2,302 $680 $332 
Asia1,772 1,464 1,409 305 
Middle East513 556 384 7 
Other999 453 423 142 
Total non-U.S. revenues4,837 4,775 2,896 786 
United States5,418 3,557 3,065 1,383 
Estimated potential concessions and other considerations to 737 MAX customers, net8 (521)38 (551)
Total revenues from contracts with customers10,263 7,811 5,999 1,618 
Intersegment revenues eliminated on consolidation21 27 16 15 
Total segment revenues$10,284 $7,838 $6,015 $1,633 
Revenue recognized on fixed-price contracts100 %100 %100 %100 %
Revenue recognized at a point in time100 %99 %100 %99 %
BDS revenues on contracts with customers, based on the customer's location, consist of the following:
(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Revenue from contracts with customers:
U.S. customers$10,631 $9,153 $5,111 $4,837 
Non U.S. customers(1)
3,430 3,477 1,765 1,751 
Total segment revenue from contracts with customers$14,061 $12,630 $6,876 $6,588 
Revenue recognized over time99 %99 %99 %99 %
Revenue recognized on fixed-price contracts69 %68 %68 %69 %
Revenue from the U.S. government(1)
89 %89 %89 %89 %
(1)Includes revenues earned from foreign military sales through the U.S. government.
32
(Dollars in millions)Six months ended June 30 Three months ended June 30
 2020 2019 2020 2019
Revenue from contracts with customers:       
U.S. customers
$9,153
 
$9,719
 
$4,837
 
$4,836
Non U.S. customers(1)
3,477
 3,447
 1,751
 1,743
Total segment revenue from contracts with customers
$12,630
 
$13,166
 
$6,588
 
$6,579
        
Revenue recognized over time99% 99% 99% 99%
        
Revenue recognized on fixed-price contracts68% 69% 69% 69%
        
Revenue from the U.S. government(1)
89% 88% 89% 89%
(1)
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Includes revenues earned from foreign military sales through the U.S. government.

BGS revenues consist of the following:
(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Revenue from contracts with customers:
Commercial$3,431 $3,894 $1,806 $1,371 
Government4,272 4,099 2,202 2,066 
Total revenues from contracts with customers7,703 7,993 4,008 3,437 
Intersegment revenues eliminated on consolidation113 123 59 51 
Total segment revenues$7,816 $8,116 $4,067 $3,488 
Revenue recognized at a point in time44 %49 %45 %41 %
Revenue recognized on fixed-price contracts87 %88 %86 %86 %
Revenue from the U.S. government(1)
42 %40 %41 %46 %
(Dollars in millions)Six months ended June 30 Three months ended June 30
 2020 2019 2020 2019
Revenue from contracts with customers:       
Commercial
$3,894
 
$5,111
 
$1,371
 
$2,526
Government4,099
 3,974
 2,066
 1,977
Total revenues from contracts with customers7,993
 9,085
 3,437
 4,503
Intersegment revenues eliminated on consolidation123
 77
 51
 40
Total segment revenues
$8,116
 
$9,162
 
$3,488
 
$4,543
        
Revenue recognized at a point in time49% 57% 41% 57%
        
Revenue recognized on fixed-price contracts88% 89% 86% 90%
        
Revenue from the U.S. government(1)
40% 32% 46% 32%
(1)(1)Includes revenues earned from foreign military sales through the U.S. government.
Includes revenues earned from foreign military sales through the U.S. government.
Backlog
Our total backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. Backlog is converted into revenue in future periods as work is performed, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable accounting method.
Our backlog at June 30, 20202021 was $408,650.$363,466. We expect approximately 27%30% to be converted to revenue through 20212022 and approximately 70%79% through 2024,2025, with the remainder thereafter. The future periods when backlogThere is expected to convert to revenue could be impacted ifsignificant uncertainty regarding the timing of aircraft deliveries is adjustedwhen backlog will convert into revenue due to the 737 MAX grounding in non-U.S. jurisdictions, entry into service of the 777X, 737 MAX 7 and/or 737 MAX 10, and COVID-19 impacts.

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Unallocated Items, Eliminations and other
Unallocated items, eliminations and other include common internal services that support Boeing’s global business operations, intercompany guarantees provided to BCC and eliminations of certain sales between segments. Such sales include airplanes accounted for as operating leases and considered transferred to the BCC segment. We generally allocate costs to business segments based on the U.S. federal cost accounting standards.standards (CAS). Components of Unallocated items, eliminations and other are shown in the following table.
 Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Share-based plans
($43) 
($36) 
($25) 
($22)
Deferred compensation73
 (129) (120) (27)
Amortization of previously capitalized interest(50) (45) (27) (21)
Research and development expense, net(116) (183) (62) (105)
Customer financing impairment

 (250) 

 

Litigation

 (109) 

 (109)
Eliminations and other unallocated items(515) (458) (244) (214)
Unallocated items, eliminations and other
($651) 
($1,210) 
($478) 
($498)
        
Pension FAS/CAS service cost adjustment
$513
 
$549
 
$258
 
$275
Postretirement FAS/CAS service cost adjustment189
 180
 97
 90
FAS/CAS service cost adjustment
$702
 
$729
 
$355
 
$365

Six months ended June 30Three months ended June 30
2021202020212020
Share-based plans($142)($43)($14)($25)
Deferred compensation(94)73 (42)(120)
Amortization of previously capitalized interest(44)(50)(22)(27)
Research and development expense, net(85)(116)(43)(62)
Eliminations and other unallocated items(297)(515)(177)(244)
Unallocated items, eliminations and other($662)($651)($298)($478)
Pension FAS/CAS service cost adjustment$384 $513 $191 $258 
Postretirement FAS/CAS service cost adjustment154 189 77 97 
FAS/CAS service cost adjustment$538 $702 $268 $355 
Pension and Other Postretirement Benefit Expense
Pension costs, comprising GAAP service and prior service costs, are allocated to BCA and the commercial operations at BGS. Pension costs are allocated to BDS and BGS businesses supporting government customers using U.S. Government Cost Accounting Standards (CAS,), which employ different actuarial assumptions and accounting conventions than GAAP.GAAP. These costs are allocable to government contracts. Other postretirement benefit costs are allocated to business segments based on CAS,, which is generally based on benefits paid. FAS/CAS service cost adjustment represents the difference between the FASFinancial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income, net.

net.
Assets
Segment assets are summarized in the table below:
 June 30
2020
 December 31
2019
Commercial Airplanes
$80,160
 
$73,995
Defense, Space & Security15,407
 15,757
Global Services18,438
 18,605
Boeing Capital2,116
 2,269
Unallocated items, eliminations and other46,751
 22,999
Total
$162,872
 
$133,625

June 30
2021		December 31
2020
Commercial Airplanes$78,523 $77,973 
Defense, Space & Security15,479 14,256 
Global Services16,974 17,399 
Boeing Capital1,878 1,978 
Unallocated items, eliminations and other36,081 40,530 
Total$148,935 $152,136 
Assets included in Unallocated items, eliminations and other primarily consist of Cash and cash equivalents, Short-term and other investments, Deferred tax assets, capitalized interest and assets managed centrally on behalf of the 4 principal business segments and intercompany eliminations. From December 31, 2019 to June 30, 2020, assets in BCA increased primarily due to higher inventory balances and assets in Unallocated items, eliminations, and other increased due to higher cash and short-term investment balances from debt issued during the first half
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
The Boeing Company
Chicago, Illinois
Results of Review of Interim Financial Information
We have reviewed the accompanying condensed consolidated statement of financial position of The Boeing Company and subsidiaries (the “Company”) as of June 30, 2020,2021, the related condensed consolidated statements of operations, comprehensive income, and equity for the three-month and six-month periods ended June 30, 20202021 and 2019,2020, and of cash flows for the six-month periods ended June 30, 20202021 and 2019,2020, and the related notes (collectively referred to as the "condensed consolidated interim financial information"). Based on our reviews,review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB)(the "PCAOB"), the consolidated statement of financial position of the Company as of December 31, 2019,2020, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for the year then ended (not presented herein); and in our report dated January 31, 2020,February 1, 2021, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2019,2020, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.
Basis for Review Results
This condensed consolidated interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviewsreview in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.



/s/ Deloitte & Touche LLP

Chicago, Illinois
July 29, 2020

28, 2021
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FORWARD-LOOKING STATEMENTS
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact.
Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to:
(1)the COVID-19 pandemic and related government actions,industry impacts, including with respect to our operations and access to suppliers, our liquidity, the health of our customers and suppliers, and future demand for our products and services;
(2)the 737 MAX, including the timing and conditions of remaining 737 MAX regulatory approvals, lower than planned production rates and/or delivery rates, and increased considerations to customers and suppliers;
(3)general conditions in the economy and our industry, including those due to regulatory changes;
(4)our reliance on our commercial airline customers;
(5)the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards;
(6)changing budget and appropriation levels and acquisition priorities of the U.S. government;
(7)our dependence on U.S. government contracts;
(8)our reliance on fixed-price contracts;
(9)our reliance on cost-type contracts;
(10)uncertainties concerning contracts that include in-orbit incentive payments;
(11)our dependence on our subcontractors and suppliers as well as the availability of raw materials;
(12)changes in accounting estimates;
(13)changes in the competitive landscape in our markets;
(14)our non-U.S. operations, including sales to non-U.S. customers;
(15)threats to the security of our or our customers' information;
(16)potential adverse developments in new or pending litigation and/or government investigations;
(17)customer and aircraft concentration in our customer financing portfolio;
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(18)changes in our ability to obtain debt financing on commercially reasonable terms and at competitive rates;

(19)realizing the anticipated benefits of mergers, acquisitions, joint ventures, strategic alliances or divestitures;
(20)the adequacy of our insurance coverage to cover significant risk exposures;
(21)potential business disruptions, including those related to physical security threats, information technology or cyber attacks, epidemics, sanctions or natural disasters;
(22)work stoppages or other labor disruptions;
(23)substantial pension and other postretirement benefit obligations; and
(24)potential environmental liabilities.
Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking information speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Consolidated Results of Operations and Financial Condition
Overview
The global outbreak of COVID-19 coupled withand the ongoing groundingresidual impacts of the 737 MAX airplane is having agrounding in 2019 continue to have significant adverse impactimpacts on our business and isare expected to significantly reducecontinue to negatively impact revenue, earnings and operating cash flow in future quarters. It isThey are also having a significant impact on our liquidity - see Liquidity Matters in Note 1 to our Condensed Consolidated Financial Statements.Statements for a further discussion of liquidity and additional actions we are taking in response to these challenges.
The aerospace industry is facingCOVID-19 pandemic has caused an unprecedented shock to demand for commercial air travel, which createscreating a tremendous challenge for our customers, our business and the entire commercial aerospace manufacturing and services sector.sectors. The latest IATAInternational Air Transport Association (IATA) forecast projects full-yearrecovery of passenger traffic in 2021 to be down 55% this year compared toapproximately 43% of 2019 levels, as international markets see continued reopening challenges. Additionally, global economic activity slows downremains slow due to COVID-19, and governments continue to severely restrict travel to contain the spread of the virus. While recovery is accelerating, we continue to expect that that it will remain uneven as travel restrictions and varying regional travel protocols continue to impact air travel.
Generally, we expect domestic travel to recover faster than international travel. As a result, we expect the narrow-body market to recover faster than the wide-body market. Also, the pace of the commercial market recovery will be heavily dependent on COVID-19 infection rates, progress on vaccine distribution, and government travel and other restrictions on trade and commercial activity. Demand for dedicated freighters continues to be strong, underpinned by a strong recovery in global trade and overall air cargo growth. Overall cargo capacity remains challenged given the large impact that COVID-19 has had on international passenger operations, which also carry cargo.
Airline financial performance, which also plays a role in the demand for new capacity, has been adversely impacted by the COVID-19 pandemic. According to IATA, net losses for the airline industry are expected to be approximately $126 billion in 2020 and approximately $48 billion in 2021. Our customers are taking actions to adjust to these newcombat the effects of the COVID-19 pandemic on the market realities and preserveby preserving liquidity. This comes in many forms such as deferrals of advanceadvances and other payments to suppliers, deferrals of deliveries, reduced spending on services, and, in some cases, cancellations. Wecancellation of orders. While the outlook is improving and we have seen an increase in new orders in 2021, we continue to face a challenging environment in the near to medium term as airlines adjusthave adjusted to reduced traffic which in turn willhas resulted in lower demand for commercial aerospace products and services. It couldThe current environment is also affectaffecting the financial viability of some airlines.
We currentlycontinue to expect it will take approximately three years forcommercial air travel to return to 2019 levels andin 2023 to 2024. We expect it will take a few years beyond that for the industry to return to long-term trend growth. To balance the supply and demand given the COVID-19 shock and to preserve our long-term potential and competitiveness, we are reducinghave reduced the production rates of several of our Commercial Airplanes (BCA) programs. These rate decisions are based on our ongoing assessments of the demand environment.environment and availability of aircraft financing. There is significant uncertainty with respect to when commercial air traffic levels will recover, and whether, and at what point, capacity will return to and/or exceed pre-COVID-19 levels. During the fourth quarter of 2020, we made adjustments to our estimates regarding timing of 777X entry into service. We now anticipate that the first 777X delivery will occur in late 2023. We will closely monitor the key factors that affect backlog and future demand for each of our commercial aircraft programs, including customers’ evolving fleet plans, the wide-body replacement cycle and the cargo market. We will maintain a disciplined rate management process, and make adjustments as appropriate in the future. Notwithstanding the changes we have made to production rates, risk remains that further reductions will be required. Additionally, if we are unable to make timely deliveries of the large number of aircraft in inventory as of June 30, 2021, future revenues, earnings and cash flows will be adversely impacted.
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Table of Contents
Deliveries and production have also been impacted by production issues and associated rework. For example, in early April 2021, we notified the FAA that we recommended to operators that certain 737 MAX airplanes be temporarily removed from service to address issues that could affect the operation of the electrical power system. During the second quarter of 2021, we worked with the FAA to finalize the required actions to address the issues and resumed deliveries in May. Deliveries of the 787 are currently paused and the production rate has been temporarily reduced while we focus on inspections and rework and continue to engage in detailed discussions with the FAA on verification methodology.Risk remains that these issues may impact the timing of delivery of airplanes in inventory and/or our ability to achieve planned production rates.
The long-term outlook for the industry remains positive due to the fundamental drivers of air travel demand: economic growth, increasing propensity to travel due to increased trade, globalization, and improved airline services driven by liberalization of air traffic rights between countries. The shock from COVID-19 has reduced the near to medium term demand, but our Commercial Market Outlook forecast projects a 4% growth rate for passenger and cargo traffic over a 20 year period. Based on long-term global economic growth projections of 2.5% average annual GDP growth, we project demand for approximately 43,000 new airplanes over the next 20 years. The industry remains vulnerable to exogenous developments including fuel price spikes, credit market shocks, acts of terrorism, natural disasters, conflicts, epidemics, pandemics and increased global environmental regulations.
Deliveries of the 737 MAX resumed in the fourth quarter of 2020, when the Federal Aviation Administration (FAA) rescinded the order that grounded 737 MAX aircraft in the U.S. In addition, other non-U.S. civil aviation authorities, including the Brazilian National Civil Aviation Agency, Transport Canada, and the European Union Aviation Safety Agency (EASA) have subsequently approved return of operations, allowing us to resume deliveries in those jurisdictions. About 175 countries have approved the resumption of 737 MAX operations. Orders to suspend operations of 737 MAX aircraft from certain non-U.S. civil aviation authorities, including the Civil Aviation Administration of China, are still in effect. The grounding has had a significant adverse impact on our operations and creates significant uncertainty. We are focused on safely returning the 737 MAX to service for all of our customers.
At Global Services (BGS)(BGS), while the outlook is improving, we are seeingcontinuing to see a direct impact on our commercial supply chain business as fewer flights and more aircraft retirementsparked and/or retired result in a decreased demand for our parts and logistics offerings. Additionally, our commercial customers are curtailing discretionary spending, such as modifications and upgrades and focusing on required maintenance. Similar to BCA, we expect a multi-year recovery period for the commercial services business. The demand outlook for our government services business, which in 2019 accounted for just under half of BGS revenue, remains stable.
At Defense, Space & Security (BDS), we continue to see a healthy market with solid demand for our major platforms and programs both domestically and internationally. Despite someHowever, while we continue to experience near-term production disruptions and inefficiencies due to COVID-19 impacts, associated with our temporary suspension of operations at various locations, we believe that our portfolio of programs and technologies remains well aligned to our customers’ missions and well positioned to address their current needs.are seeing improvements in 2021.
In March and April of 2020, we temporarily suspended operations at multiple locations including the Puget Sound area, South Carolina and Philadelphia. Operations in Puget Sound and Philadelphia resumed during the week of April 20, while operations in South Carolina resumed beginning on May 3. We have implemented procedures to promote employee safety in our facilities, including more frequent and enhanced cleaning and adjusted schedules and work flows to support physical distancing. These actions have resulted, and will continue to result, in increased operating costs. In addition, a number of our suppliers have suspended or otherwise reduced their operations, and we are experiencing some supply chain shortages. Our suppliers are also experiencing liquidity pressures and disruptions to their operations as a result of COVID-19. We also continue to have large numbers of employees working from home. These measures and disruptions have reduced overall productivity and adversely impacted our financial position, results of operations, and cash flows in the first half of 2020.flows. We expect further adverse impacts in future quarters.

In July 2020, we announced business transformation efforts to assess our business across five key pillars: infrastructure, overhead and organization, portfolio and investments, supply chain health and operational excellence. We continue to make progress across all five key pillars as we utilize a lower production rate environment to transform and improve our business processes. Within the infrastructure
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Loss From OperationsTable of Contents
pillar we are assessing our overall facility requirements in light of reduced demand in our commercial businesses and Core Operating Loss (Non-GAAP)remote and virtual work opportunities for large numbers of our workforce. The consolidation of the 787 production in South Carolina during the first quarter of 2021 is an example of this. We also anticipate a reduction of approximately 30% in office space needs compared to our pre-COVID capacity. During 2020 and 2021, we have made certain reductions to our footprint and are planning to implement further reductions in 2021 and over the next few years. However, as we consolidate our footprint, terminate leases and dispose of properties, we may incur near term adverse impacts to earnings. The overhead and organization pillar is focused on our cost structure and how we are organized so we can right size our workforce and simplify and reduce management layers and bureaucracy. We have recorded severance costs for approximately 19,000 employees. The portfolio and investments pillar includes aligning our portfolio and investments to focus on our core business and the changes in market conditions. Through our portfolio and investment prioritization, we are reducing research and development and capital expenditures. The supply chain pillar is focused on supply chain health and stability, reducing indirect procurement spend and streamlining our transportation, logistics and warehousing approach. We are reducing indirect spend, by reducing expenditures in areas such as freight and logistics, purchased services and others. The operational excellence pillar is focused on improving performance, enhancing quality and reducing rework. For example, our information technology teams are evaluating opportunities to form or expand strategic partnerships with vendors that allow us to simplify and optimize our operations, and reduce overall costs. These activities are not intended to constrain our capacity, but rather to enable the Company to emerge stronger and be more resilient when the market recovers. We expect that successful execution of these measures will improve near term liquidity and long term cost competitiveness.
Consolidated Results of Operations
The following table summarizes key indicators of consolidated results of operations:
(Dollars in millions, except per share data)Six months ended June 30Three months ended June 30
2021202020212020
Revenues$32,215 $28,715 $16,998 $11,807 
GAAP
Earnings/(loss) from operations$940 ($4,317)$1,023 ($2,964)
Operating margins2.9 %(15.0)%6.0 %(25.1)%
Effective income tax rate126.1 %38.4 %(3.3)%30.0 %
Net earnings/(loss) attributable to Boeing Shareholders$50 ($3,004)$587 ($2,376)
Diluted earnings/(loss) per share$0.09 ($5.31)$1.00 ($4.20)
Non-GAAP (1)
Core operating earnings/(loss)$402 ($5,019)$755 ($3,319)
Core operating margins1.2 %(17.5)%4.4 %(28.1)%
Core (loss)/earnings per share($1.12)($6.49)$0.40 ($4.79)
(1)These measures exclude certain components of pension and other postretirement benefit expense. See pages 57-58 for important information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.
40
(Dollars in millions, except per share data)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Revenues
$28,715
 
$38,668
 
$11,807
 
$15,751
        
GAAP       
Loss from operations
($4,317) 
($1,030) 
($2,964) 
($3,380)
Operating margins(15.0)% (2.7)% (25.1)% (21.5)%
Effective income tax rate38.4 % 27.5 % 30.0 % 14.2 %
Net loss attributable to Boeing Shareholders
($3,004)

($793) 
($2,376) 
($2,942)
Diluted loss per share
($5.31) 
($1.40) 
($4.20) 
($5.21)
        
Non-GAAP (1)
       
Core operating loss
($5,019) 
($1,759) 
($3,319) 
($3,745)
Core operating margins(17.5%) (4.5%) (28.1%) (23.8%)
Core loss per share
($6.49) 
($2.60) 
($4.79) 
($5.82)
Table of Contents
(1)
These measures exclude certain components of pension and other postretirement benefit expense. See page 53 for important information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.
Revenues
The following table summarizes Revenues:
(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Commercial Airplanes$10,284 $7,838 $6,015 $1,633 
Defense, Space & Security14,061 12,630 6,876 6,588 
Global Services7,816 8,116 4,067 3,488 
Boeing Capital138 134 78 69 
Unallocated items, eliminations and other(84)(3)(38)29 
Total$32,215 $28,715 $16,998 $11,807 
(Dollars in millions)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Commercial Airplanes
$7,838
 
$16,544
 
$1,633
 
$4,722
Defense, Space & Security12,630
 13,166
 6,588
 6,579
Global Services8,116
 9,162
 3,488
 4,543
Boeing Capital134
 141
 69
 75
Unallocated items, eliminations and other(3) (345) 29
 (168)
Total
$28,715
 
$38,668
 
$11,807
 
$15,751
Revenues for the six months ended June 30, 2020 decreased2021 increased by $9,953$3,500 million compared with the same period in 2019 due to lower revenues across all four of our segments. Revenues for each of our segments have been adversely impacted by COVID-19. BCA revenues decreased by $8,706 million due to lower deliveries2020 driven by the impacts of the COVID-19 pandemichigher revenues at BCA and the 737 MAX grounding,BDS, partially offset by lower revenues at BGS. BCA revenues increased by $2,446 million primarily driven by higher 737 MAX deliveries due to recertification and return to service in many jurisdictions and $521 million of charges for 737 MAX customer considerations in 2020, partially offset by lower 787 deliveries. BDS revenues increased by $1,431 million primarily from higher revenue on the KC-46A Tanker program and the absence of charges related to estimated potential concessions and other considerations to 737 MAX customers. BDS revenues decreased by $536 million primarily due to the unfavorable impact of cumulative contract catch-up adjustments for the KC-46A Tanker program.program in 2021. BGS revenues decreased by $1,046$300 million primarily due to lower commercial services revenue, drivenpartially offset by impacts of the COVID-19 pandemic. The changeshigher government volume. Commercial services revenue is lower in Unallocated items, eliminations and other primarily reflect the timing of eliminations for intercompany aircraft deliveries,2021 as well as reserves related to cost accounting litigation recorded in 2019. We expect the impacts of the COVID-19 pandemic tohad minimal impact on commercial services revenue in the first quarter of 2020. Revenues will continue to be significantly impact revenues in future quartersimpacted until deliveries ramp up and the commercial airline industry recovers.recovers from the impacts of COVID-19.
Revenues for the three months ended June 30, 2020 decreased2021 increased by $3,944$5,191 million compared with the same period in 2019.driven by higher revenues at BCA, BDS, and BGS. BCA revenues decreasedincreased by $3,089$4,382 million due to lowerprimarily driven by higher narrow-body and wide-body and narrow-body

deliveries. Revenues in both periods were adversely impacted by the 737 MAX grounding. This decrease was partially offset by lower charges related to estimated potential concessions and other considerationsdeliveries due to 737 MAX customers.recertification and return to service in many jurisdictions and COVID-19 recovery, as well as $551 million of charges for 737 MAX customer considerations in 2020. BDS revenues increased by $288 million primarily due to higher military derivative aircraft revenues. BGS revenues decreasedincreased by $1,055$579 million primarily due to lowerhigher commercial services revenue driven byvolume. Revenues will continue to be significantly impacted until deliveries ramp up and the commercial airline industry recovers from the impacts of the COVID-19 pandemic. The changes in Unallocated items, eliminations and other primarily reflect reserves related to cost accounting litigation recorded in 2019.COVID-19.
Loss/Earnings
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Earnings/(Loss) From Operations
The following table summarizes (Loss)/earningsEarnings/(loss) from operations:
(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Commercial Airplanes($1,328)($4,830)($472)($2,762)
Defense, Space & Security1,363 409 958 600 
Global Services972 36 531 (672)
Boeing Capital57 17 36 (7)
Segment operating earnings/(loss)1,064 (4,368)1,053 (2,841)
Pension FAS/CAS service cost adjustment384 513 191 258 
Postretirement FAS/CAS service cost adjustment154 189 77 97 
Unallocated items, eliminations and other(662)(651)(298)(478)
Earnings/(loss) from operations (GAAP)$940 ($4,317)$1,023 ($2,964)
FAS/CAS service cost adjustment *(538)(702)(268)(355)
Core operating earnings/(loss) (Non-GAAP) **$402 ($5,019)$755 ($3,319)
(Dollars in millions)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Commercial Airplanes
($4,830) 
($3,773) 
($2,762) 
($4,946)
Defense, Space & Security409
 1,827
 600
 975
Global Services36
 1,340
 (672) 687
Boeing Capital17
 57
 (7) 37
Segment operating loss(4,368) (549) (2,841) (3,247)
Pension FAS/CAS service cost adjustment513
 549
 258
 275
Postretirement FAS/CAS service cost adjustment189
 180
 97
 90
Unallocated items, eliminations and other(651) (1,210) (478) (498)
Loss from operations (GAAP)
($4,317) 
($1,030) 
($2,964) 
($3,380)
FAS/CAS service cost adjustment *(702) (729) (355) (365)
Core operating loss (Non-GAAP) **
($5,019) 
($1,759) 
($3,319) 
($3,745)
*    The 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.
*The 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.
**Core operating loss is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See page 53.
Loss**    Core operating earnings/(loss) is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. See pages 57-58.
Earnings from operations for the six months ended June 30, 2020 increased by $3,2872021 were $940 million, compared with a loss of $4,317 million during the same period in 2019 primarily driven by our BCA, BDS and BGS segments. Earnings/loss from operations for each of our segments were adversely impacted by COVID-19.2020. BCA loss from operations of $4,830decreased by $3,502 million for the six months ended June 30, 2020 primarily reflects the continued absence of MAXdue to lower period expense, higher 737 deliveries and lower wide-body marginsresearch and deliveries resulting from COVID-19, abnormal production costs, severance costs and 737NG frame fitting component repair costs. BCA lossdevelopment spending. BDS earnings from operations of $3,773increased by $954 million for the six months ended June 30, 2019 primarily reflectslargely due to the absence of 737 MAX deliveries and charges of $5,610 million for estimated 737 MAX customer considerations. BDSrelated to the KC-46A Tanker program in 2021. BGS earnings decreasedfrom operations increased by $1,418$936 million primarily due to charges of $978 million on KC-46A Tanker, a $168 million chargeincurred in the firstsecond quarter of 2020 on VC-25B, as well as gains on property sales in 2019. For discussion regarding BDS Fixed-Price Development Contracts see Note 10 to our Condensed Consolidated Financial Statements. BGS earnings from operations decreased by $1,304 million primarily due to lower commercial services revenue, and $923 million of charges related to asset impairments and severance costs as a result of the COVID-19 market environment. We expectpandemic. Charges in the impactssecond quarter of 2020 included $370 million for higher expected credit losses primarily driven by customer liquidity issues, $237 million of inventory write-downs and $153 million of related impairments of distribution rights primarily driven by airlines' decisions to retire certain aircraft, $99 million of contract termination and facility impairments charges, and $64 million for severance costs. Lower commercial airplane deliveries and the COVID-19 pandemic towill continue to reducehave a significant adverse impact on future earnings in future quartersand margins until the commercial airline industry recovers.deliveries ramp up and return to historical levels.
LossEarnings from operations for the three months ended June 30, 2020 decreased by $4162021 were $1,023 million, compared with a loss of $2,964 million during the same period in 2019 primarily due to lower losses at BCA, partially offset by decreases in earnings from operations at BDS and BGS.2020. BCA loss from operations decreased $2,184by $2,290 million due to lower period expense, higher narrow-body and wide-body deliveries and lower research and development spending. BDS earnings from operations increased by $358 million, primarily due to lowerhigher favorable net contract cumulative catch-up adjustments, largely due to a favorable adjustment in 2021 on a non-U.S. contract and the absence of charges in 2021 related to estimated potential concessions and other considerations to 737 MAX customers, partially offset byKC-46A Tanker. BGS earnings from operations for the continued absencethree months ended June 30, 2021 were $531 million compared with a loss of 737 MAX deliveries, lower wide-body margins and deliveries resulting from COVID-19, abnormal production costs, and severance costs. BDS earnings decreased $375$672 million for the same period in 2020, primarily due to a gain on property salecharges incurred in 2019the second quarter of 2020 and a charge on the KC-46A Tanker program in 2020. BGS

earnings decreased $1,359 million primarily due to lowerhigher commercial services revenue, and $923 million of charges related to asset impairments and severance costs as a result of the COVID-19 market environment.volume.
Core operating lossearnings for the six and three months ended June 30, 2020 increased by $3,2602021 were $402 million and decreased by $426$755 million, compared with core operating losses of $5,019 million and $3,319 million during the same periods in 20192020, primarily due to lossesearnings and earningslosses from operations at BCA, BDS and BGS as described above.
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Table of Contents
Unallocated Items, Eliminations and Other
The most significant items included in Unallocated items, eliminations and other are shown in the following table:
(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Share-based plans($142)($43)($14)($25)
Deferred compensation(94)73 (42)(120)
Amortization of previously capitalized interest(44)(50)(22)(27)
Research and development expense, net(85)(116)(43)(62)
Eliminations and other unallocated items(297)(515)(177)(244)
Unallocated items, eliminations and other($662)($651)($298)($478)
(Dollars in millions)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Share-based plans
($43) 
($36) 
($25) 
($22)
Deferred compensation73
 (129) (120) (27)
Amortization of previously capitalized interest(50) (45) (27) (21)
Research and development expense, net(116) (183) (62) (105)
Customer financing impairment

 (250) 

 

Litigation

 (109) 

 (109)
Eliminations and other unallocated items(515) (458) (244) (214)
Unallocated items, eliminations and other
($651) 
($1,210) 
($478) 
($498)
Deferred compensationShare-based plans expense decreased by $202 million and increased by $93 million for the six and three months ended June 30, 20202021 increased by $99 million and decreased by $11 million compared with the same periods in 20192020. The higher expense during the first half of 2021 was primarily driven by changesrelated to a one-time stock grant of Restricted Stock Units to most employees in our stock price and broad market conditions.December 2020. This grant was in lieu of a 2021 salary merit increase.
Research and developmentDeferred compensation expense decreased by $67 million and $43 million for the six and three months ended June 30, 2021 increased by $167 million and decreased by $78 million compared with income in the same periods in 2020 primarily driven by broad market conditions and changes in our stock price.
Unallocated research and development expense for the six and three months ended June 30, 2021 decreased by $31 million and $19 million compared with the same periods in 20192020 primarily due to decreasedlower spending by Boeing NeXt on enterprise investments in product development.
DuringEliminations and other unallocated items for the first quarter of 2019, we recorded a $250six and three months ended June 30, 2021 decreased by $218 million charge relatedand $67 million compared with the same periods in 2020 primarily due to the impairmenttiming of lease incentives with one customer that experienced liquidity issues.
During the second quarter of 2019, we recorded a charge of $109 million related to ongoing litigation associated with recoverable costsexpense allocations, as well as higher income on U.S. government contracts.
A portion of service cost is recognizedoperating investments in Earnings from operations in the period incurred and the remainder is included in inventory at the end of the reporting period and recorded in Earnings from operations in subsequent periods.2021.
Net periodic pension benefit costs included in LossEarnings/(loss) from operations were as follows:
(Dollars in millions)Six months ended June 30 Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30
Pension Plans2020
 2019
 2020
 2019
Pension Plans2021202020212020
Allocated to business segments
($514) 
($707) 
($259) 
($355)Allocated to business segments($386)($514)($192)($259)
Pension FAS/CAS service cost adjustment513
 549
 258
 275
Pension FAS/CAS service cost adjustment384 513 191 258 
Net periodic benefit cost included in Loss from operations
($1) 
($158) 
($1) 
($80)
Net periodic benefit cost included in Earnings/(loss) from operationsNet periodic benefit cost included in Earnings/(loss) from operations($2)($1)($1)($1)
The pension FAS/CAS service cost adjustment recognized in earnings/loss in 2020 is largely consistentEarnings/(loss) from operations during the six and three months ended June 30, 2021 decreased by $129 million and $67 million compared with the same periods in the prior year, primarily due to reductions in allocated pension cost year over year. The decrease in net periodic benefit costscost included in LossEarnings/(loss) from operations

in during 2021 and 2020 was primarily duereflects the fact that nonunion and the majority of union employees have transitioned to lower service costs reflecting the transition of employees tocompany funded defined contribution retirement savings plans.plans and do not generate ongoing Financial Accounting Standards (FAS) service costs.
For discussion related to Postretirement Plans, see Note 1312 to our Condensed Consolidated Financial Statements.
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Other Earnings Items 
(Dollars in millions)Six months ended June 30Three months ended June 30
2021202020212020
Earnings/(loss) from operations$940 ($4,317)$1,023 ($2,964)
Other income, net389 206 199 94 
Interest and debt expense(1,352)(815)(673)(553)
(Loss)/earnings before income taxes(23)(4,926)549 (3,423)
Income tax benefit29 1,890 18 1,028 
Net earnings/(loss) from continuing operations6 (3,036)567 (2,395)
Less: Net loss attributable to noncontrolling interest(44)(32)(20)(19)
Net earnings/(loss) attributable to Boeing Shareholders$50 ($3,004)$587 ($2,376)
(Dollars in millions)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Loss from operations
($4,317) 
($1,030) 
($2,964) 
($3,380)
Other income, net206
 213
 94
 107
Interest and debt expense(815) (277) (553) (154)
Loss before income taxes(4,926) (1,094) (3,423) (3,427)
Income tax benefit1,890
 301
 1,028
 485
Net loss from continuing operations(3,036) (793) (2,395) (2,942)
Less: Net loss attributable to noncontrolling interest(32) 

 (19)  
Net loss attributable to Boeing Shareholders
($3,004) 
($793) 
($2,376) 
($2,942)
Other income, net decreased increased by $7$183 million and $13$105 million during the six and three months ended June 30, 2020,2021, primarily due to higher foreign exchange losses and lower non-operating pension income. Non-operating pension income partially offset by lower non-operating postretirement expense. Non-operating postretirement expense was $27$352 million and $14$175 million during the six and three months ended June 30, 20202021 compared with $53$171 million and $26$84 million during the same periods in 2019.2020, primarily due to higher expected return on plan assets and lower interest cost, partially offset by higher amortization of actuarial losses. Non-operating postretirement income was $10 million and $5 million during the six and three months ended June 30, 2021 compared with $27 million and $14 million of expense during the same periods in 2020.
Higher Interest and debt expense for the six and three months ended June 30, 20202021 is primarily a result of higher debt balances.
For discussion related to Income Taxes, see Note 43 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 airplane 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 BGS segment are long-term contracts with the U.S. government and other customers that generally extend over several years. Costs on these contracts are recorded as incurred. Cost of sales for commercial spare parts is recorded at average cost.
The following table summarizes cost of sales:
(Dollars in millions)Six months ended June 30Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30

2020
 2019
Change
2020
 2019
Change
20212020Change20212020Change
Cost of sales
$29,746
 
$36,455

($6,709)
$12,978
 
$17,810

($4,832)Cost of sales$28,396 $29,746 ($1,350)$14,588 $12,978 $1,610 
Cost of sales as a % of Revenues103.6% 94.3%9.3%109.9% 113.1%(3.2)%Cost of sales as a % of Revenues88.1 %103.6 %(15.5)%85.8 %109.9 %(24.1)%
Cost of sales for the six and three months ended June 30, 20202021 decreased by $6,709$1,350 million, or 18% and by $4,832 million, or 27% compared with the same periods in 2019, primarily due to lower revenue, partially offset by COVID-19 related charges at BCA, BDS, and BGS and abnormal production costs related to 737

MAX in 2020. Cost of sales as a percentage of Revenues increased during the six months ended June 30, 20205% compared with the same period in 20192020, primarily due to lower period expense at BCA and BGS, and charges recorded at BDS in 2020 on the impactsKC-46A Tanker program, partially offset by higher revenues at BCA and BDS. Cost of sales for the 737 MAX groundingthree months ended June 30, 2021 increased by $1,610 million, or 12% compared with the same period in 2020, primarily due to higher revenues, partially offset by lower period expenses at BCA and COVID-19.BGS. Cost of sales as a percentage of Revenues decreased during the six and three months
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ended June 30, 20202021 compared with the same periodperiods in 20192020 primarily due to the second quarter 2019 charge for the 737 MAX grounding, partially offset by the second quarter 2020 impacts of the 737 MAX groundinglower period expense at BCA and COVID-19.BGS and KC-46A Tanker charges recorded at BDS in 2020.
Research and Development
The following table summarizes our Research and development expense:
(Dollars in millions)Six months ended June 30 Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30

2020
 2019
 2020
 2019
2021202020212020
Commercial Airplanes
$786
 
$1,062
 
$361
 
$498
Commercial Airplanes$524 $786 $255 $361 
Defense, Space & Security330
 374
 167
 190
Defense, Space & Security337 330 174 167 
Global Services65
 73
 35
 33
Global Services50 65 25 35 
Other116
 183
 62
 105
Other85 116 43 62 
Total
$1,297
 
$1,692
 
$625
 
$826
Total$996 $1,297 $497 $625 
Research and development expense decreased by $395$301 million and $201$128 million during the six and three months ended June 30, 20202021 compared to the same periods in 2019,2020, primarily due to lower spending on the 777X program and lower BCA and enterprise investments in product development.
Backlog
(Dollars in millions)June 30
2020
 December 31
2019
(Dollars in millions)June 30
2021		December 31
2020
Commercial Airplanes
$325,674
 
$376,593
Commercial Airplanes$285,332 $281,588 
Defense, Space & Security64,286
 63,691
Defense, Space & Security58,705 60,847 
Global Services18,168
 22,902
Global Services19,029 20,632 
Unallocated items, eliminations and other522
 217
Unallocated items, eliminations and other400 337 
Total Backlog
$408,650
 
$463,403
Total Backlog$363,466 $363,404 
   
Contractual backlog
$385,389
 
$436,473
Contractual backlog$342,261 $339,309 
Unobligated backlog23,261
 26,930
Unobligated backlog21,205 24,095 
Total Backlog
$408,650
 
$463,403
Total Backlog$363,466 $363,404 
Contractual backlog of unfilled orders excludes purchase options, announced orders for which definitive contracts have not been executed, and unobligated U.S. and non-U.S. government contract funding. The decreaseincrease during the six months ended June 30, 20202021 was primarily due to aircraft order cancellations, a reduction fororders in excess of deliveries, changes in price escalation, and changes in orders that in our assessment no longerdo not meet the accounting requirements of ASCAccounting Standards Codification (ASC) 606 for inclusion in backlog, changes in projected price escalation and deliveries in excess of new orders. We are experiencingpartially offset by cancellations. During 2020, we received fewer new 737 MAX orders than we were receiving prior to the grounding. If 737 MAX aircraft remain grounded in certain jurisdictions for an extended period of time and/or if entry into service of the 777X, 737 MAX 7 and/or 737 MAX 10 is further delayed, we may experience additional reductions to backlog and/or significant order cancellations. Additionally, we may continue to experience fewer new orders and increased cancellations across all of our commercial airplane programs as a result of the COVID-19 pandemic and associated impacts on demand.
Unobligated backlog includes U.S. and non-U.S. government definitive contracts for which funding has not been authorized. The decrease during the six months ended June 30, 20202021 was primarily due to reclassifications to contractual backlog related to BDS and BGS and BDS contracts.contracts, partially offset by contract awards.
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Additional Considerations
Global Trade We continually monitor the global trade environment in response to geopolitical economic developments, as well as changes in tariffs, trade agreements, or sanctions that may impact the Company.
The global economy is currently experiencingcontinues to experience significant adverse impacts due to the COVID-19 pandemic, including a decline in overall trade.trade in general and in aerospace in particular. There is a great deal of uncertainty regarding the duration, scale, and localization of these impacts to the global economy and governments are enacting a wide range

of responses to mitigate the unfolding economic impacts. We are closely monitoring the current impact and potential future economic consequences of COVID-19 to the global economy, the aerospace sector, and our Company. These adverse economic impacts have resulted in fewer orders than previously anticipated for our commercial aircraft.
In addition, we continually monitorChina is a significant market for commercial airplanes and represents a significant component of our commercial airplanes backlog. Since 2018, the global trade environmentU.S. and China imposed an escalating series of tariffs on each other’s imports. Certain aircraft parts and components that Boeing procures are subject to these tariffs. The U.S. and China entered into a Phase I agreement in January 2020. However, implementation of this agreement is incomplete and overall diplomatic relations between the U.S. and China have deteriorated. We continue monitoring developments for changes in tariffs, trade agreements, sanctions or other potential geopolitical economic developments that may impactadverse impacts to the Company.
Beginning in June 2018, the U.S. Government has imposed tariffs on steel and aluminum imports. In response to these tariffs, several major U.S. trading partners have imposed, or announced their intention to impose, tariffs on U.S. goods. In May 2019, the U.S. Government, Mexico and Canada reached an agreement to end the steel and aluminum tariffs between these countries. Implementation of the U.S./Mexico/Canada Free Trade Agreement (USMCA) will also result in lower tariffs. We continue to monitor the potential for any extra costs that may result from the remaining global tariffs.
Since 2018, the U.S. and China imposed tariffs on approximately $34 billion of each other's exports. Certain aircraft parts and components that Boeing procures are subject to these tariffs. Subsequently, the U.S. imposed tariffs on an additional $216 billion in Chinese goods, and China imposed tariffs on an additional $76 billion worth of U.S goods. The U.S. and China Phase I agreement in January 2020 is a positive development for overall trade with China. Negotiations to resolve remaining trade issues continue. Recently, the U.S.-China relationship has become more strained. We are closely monitoring developments for potential adverse impacts to the Company.
The U.S. Government continues to impose and/or consider imposing sanctions on certain businesses and individuals in Russia. Although our operations or sales in Russia have not been impacted to date, we continue to monitor additional sanctions that may be imposed by the U.S. Government and any responses from Russia that could affect our supply chain, business partners or customers.
The U.S. and European Union (EU) have been engaged in two long-running disputes at the World Trade Organization (WTO) relating to large civil aircraft. As part of those disputes, in October 2019, the WTO authorized the U.S. to impose approximately $7.50 billion in annual tariffs on EU products in connection with the EU’s provision of eight instances of launch aid subsidies to Airbus. Following this authorization, the U.S. began to impose 15% tariffs on new Airbus airplanes imported into the U.S. as well as fuselages that Airbus manufactures in Europe and imports into the U.S. In October 2020, the WTO authorized the EU to impose approximately $3.99 billion in annual tariffs on U.S. products in connection with a tax incentive used by Boeing in Washington state that has since been repealed. Shortly thereafter, the EU began to impose 15% tariffs on Boeing airplanes imported into the EU. On June 15, 2021, the U.S. and EU announced that they had reached a cooperative framework to address the large civil aircraft disputes. As part of the framework, among other items, both sides announced an intent to continue to suspend tariffs related to the disputes for five years. The U.S. and U.K. announced a similar agreement on June 17, 2021.
Segment Results of Operations and Financial Condition
Commercial Airplanes
Business Environment and Trends
See Overview to Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the impacts of COVID-19 on the airline industry environment.
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Results of Operations
(Dollars in millions)Six months ended June 30 Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30

2020 2019 2020 20192021202020212020
Revenues
$7,838
 
$16,544
 
$1,633


$4,722
Revenues$10,284 $7,838 $6,015 $1,633 
Loss from operations
($4,830) 
($3,773) 
($2,762)

($4,946)Loss from operations($1,328)($4,830)($472)($2,762)
Operating margins(61.6)% (22.8)% (169.1)% (104.7)%Operating margins(12.9)%(61.6)%(7.8)%(169.1)%
Revenues
RevenuesBCA revenues increased by $2,446 million for the six months ended June 30, 2020 decreased by $8,706 million2021 compared with the same period in 20192020 primarily driven by higher 737 MAX deliveries due to lower deliveries driven by the impacts of COVID-19recertification and the 737 MAX grounding. This wasreturn to service in many jurisdictions, partially offset by lower charges related787 deliveries. Revenue was also lower in the prior year period due to estimated potential concessions and other considerations to$521 million of 737 MAX customers of $521customer considerations.
BCA revenues increased by $4,382 million in 2020 as compared with $5,610 million for the same period in 2019.

Revenues for the three months ended June 30, 2020 decreased by $3,089 million2021 compared with the same period in 20192020 primarily driven by higher narrow-body and wide-body deliveries due to 737 MAX recertification and return to service in many jurisdictions and COVID-19 recovery. Revenue was also lower wide-body and narrow-body deliveries. Revenues in both periods were adversely impacted bythe prior year period due to $551 million of 737 MAX customer considerations.
While we resumed deliveries of 737 MAX aircraft in December 2020, the 737 MAX grounding. This revenue decrease from lower deliveries was partially offset by lower charges related to estimated potential concessions and other considerations to 737 MAX customers of $551 milliongrounding is still in the second quarter of 2020 compared to $5,610 millioneffect in the second quarter of 2019.
The 737 MAX groundingcertain non-U.S. jurisdictions. Revenues will continue to have a significant impact on future revenuesbe significantly impacted until deliveries resume,ramp up and COVID-19 will continue to have a significant impact on future revenues until the commercial airline industry recovers.recovers from the impacts of COVID-19.
Commercial airplane deliveries, including intercompany deliveries, were as follows:

737
*747
 767
*777
†787
 Total
Deliveries during the first six months of 20209
(7)1

14
(6)10

36
 70
Deliveries during the first six months of 2019113
(10)4

22
(14)22
(1)78
 239
Deliveries during the second quarter of 20204
(4)1

4
(1)4
 7
 20
Deliveries during the second quarter of 201924
(6)2

10
(6)12
 42
 90
Cumulative deliveries as of 6/30/20207,448
 1,556
 1,190
 1,637
 975
 
Cumulative deliveries as of 12/31/20197,439
 1,555
 1,176
 1,627
 939
 
737 *747 767 *777 787 Total
Deliveries during the first six months of 2021113 (8)2 13 (4)14 14 156 
Deliveries during the first six months of 20209 (7)1 14 (6)10 36 70 
Deliveries during the second quarter of 202150 (3)1 8 (3)8 12 79 
Deliveries during the second quarter of 20204 (4)1 4 (1)4 7 20 
Cumulative deliveries as of 6/30/20217,595 1,562 1,219 1,667 1,006 
Cumulative deliveries as of 12/31/20207,482 1,560 1,206 1,653 992 
* Intercompany deliveries identified by parentheses.
† Aircraft accounted for as revenues by BCA and as operating leases in consolidation identified by parentheses.
Loss From Operations
TheBCA loss from operations was $1,328 million for six months ended June 30, 2021 compared with $4,830 million in the same period in 2020 reflecting lower period expense, higher 737 deliveries and lower research and development spending. Period expense for the six months ended June 30, 2021 included $1,083 million of abnormal production costs related to 737 MAX. Period expense for the six months ended June 30, 2020, of $4,830 million increased $1,057 million compared with the same period in 2019. The 2020 loss reflects the continued absence of 737 MAX deliveries, lower wide-body deliveries and margins resulting from COVID-19,included $1,509 million of abnormal production costs related to 737 MAX, $521 million of charges for 737 MAX customer considerations, $468 million of severance costs, $270 million of abnormal production costs from the temporary suspension of Puget Sound operations in response to COVID-19, and a $336 million charge related to 737NG frame fitting component repair costs, and $468 million of severance costs. Lower 787 margins reflecting a reduction in the accounting quantity in the first quarter of 2020 and lower production rates also contributed to lower earnings. The 2019 loss primarily reflects the absence of 737 MAX deliveries in the second quarter of 2019 and charges of $5,610 million for estimated 737 MAX customer considerations.
TheBCA loss from operations ofwas $472 million for three months ended June 30, 2021 compared with $2,762 million in the same period in 2020 reflecting lower period expense, higher narrow-body and wide-body deliveries and lower research and development spending. Period expense for the three months ended June 30, 2021 included $515 million of abnormal production costs related to 737 MAX. Period expense for the three months ended June 30, 2020, is $2,184 million lower compared with the same period in 2019. The losses in both periods reflect the continued absence of MAX deliveries. The 2019 loss was also driven by charges of $5,610 million for estimated 737 MAX customer considerations. The 2020 loss was driven by lower wide-body deliveries and lower program margins due to COVID-19 impacts,included $712 million of abnormal production costs related to 737 MAX, $551 million of charges for 737 MAX customer considerations, $468 million of severance costs and $133 million of abnormal production costs from the temporary suspension of Puget Sound operations in response to COVID-19.
The 737 MAX grounding
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Lower commercial airplane deliveries and the COVID-19 pandemic will continue to have a significant adverse impact on future earnings and margins until 737 MAXdeliveries ramp up and wide-body deliveries return to historichistorical levels.
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 certain. Backlog excludes options and Boeing Capital (BCC)

orders. 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 Topic 606.
BCA total backlog decreasedincreased from $376,593$281,588 million as of December 31, 20192020 to $325,674$285,332 million at June 30, 20202021 reflecting aircraft order cancellations, a reduction fornew orders in excess of deliveries, changes in projected price escalation and changes in orders that in our assessment no longerdo not meet the accounting requirements of ASC 606 for inclusion in backlog, changes in projected price escalation and deliveries in excess of new orders.partially offset by aircraft order cancellations. Aircraft order cancellations during the six months ended June 30, 20202021 totaled $19,755$21,626 million and primarily relate to 737 MAX and 787 aircraft. The ASC 606 adjustments totaled $23,906for the six months ended June 30, 2021 resulted in an increase to backlog of $2,737 million and primarily relatedue to 777X aircraft, partially offset by 737 MAX and 787 aircraft. The ASC 606 adjustments include aircraft orders where a customer controlled contingency now exists, as well as orders where we can no longer assert that the customer is committed to perform or that it is probable that the customer will pay the full amount of consideration when it is due. If 737 MAX aircraft remain grounded in certain jurisdictions for an extended period of time and/or if entry into service of the 777X, 737 MAX 7 and/or 737 MAX 10 is further delayed, we may experience additional reductions to backlog and/or significant order cancellations. Additionally, we may continue to experience fewer new orders and increased cancellations across all of our commercial airplane programs as a result the COVID-19 pandemic.pandemic and associated impacts on demand.
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 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 6/30/2021737 747 767 777 777X787 †
Program accounting quantities10,400 1,574 1,231 1,700 350 1,500 
Undelivered units under firm orders3,334 11 107 40 246 417 (21)
Cumulative firm orders10,929 1,573 1,326 1,707 246 1,423 
As of 12/31/2020737 747 767 777 777X787 †
Program accounting quantities10,000 1,574 1,207 1,700 350 1,500 
Undelivered units under firm orders3,282 8 75 41 191 458 (22)
Cumulative firm orders10,764 1,568 1,281 1,694 191 1,450 
†    Aircraft ordered by BCC are identified in parentheses.
48
 Program 
As of 6/30/2020737

747*
 767
 777
 777X
 787
†
Program accounting quantities10,000
 1,574
 1,207
 1,690
 **
 1,500
 
Undelivered units under firm orders3,595

12

89
 46

309
 501
(27)
Cumulative firm orders11,043

1,568
 1,279
 1,683
 309
 1,476
 
             
As of 12/31/2019737
 747
 767
 777
 777X
 787
†
Program accounting quantities10,400
 1,574
 1,195
 1,690
 **
 1,600
 
Undelivered units under firm orders4,398

17
 94
 68

309
 520
(29)
Cumulative firm orders11,837
 1,572
 1,270
 1,695
 309
 1,459
 
†Aircraft ordered by BCC are identified in parentheses.
*At June 30, 2020, the 747 accounting quantity includes one already completed aircraft that has not been sold and is being remarketed.
**The accounting quantity for the 777X will be determined in the year of first airplane delivery.
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Program Highlights
737 Program We reduced the programThe accounting quantity from 10,400 at December 31, 2019 to 10,000 at March 31, 2020. This reflects a slower than previously planned production rate ramp-up causedfor the 737 program increased by commercial airline industry uncertainty400 and 200 units during the six and three months ended June 30, 2021 due to the impactprogram's normal progress of COVID-19.obtaining additional orders and delivering airplanes. See further discussion of the 737 MAX Grounding and COVID-19 Impacts and Product Warranties in Note 109 to our Condensed Consolidated Financial Statements.
747 Program We are currently producing at a rate of 0.5 aircraft per month. We will complete production of the 747 in 2022. We believe that ending production of the 747 will not have a material impact on our financial position, results of operations or cash flows.

767 Program The accounting quantity for the 767 program increased by 1224 units during the second quarter of 2020three months ended June 30, 2021 due to the program's normal progress of obtaining additional orders and delivering airplanes. The 767 assembly line includes the commercial program and a derivative to support the KC-46A tanker program. The commercial program has near breakeven gross margins. We are currently producing at a rate of 3 aircraft per month.
777 Programand 777X Programs There were no changes to the accounting quantities for the 777 and 777X programs during the first or second quarter of 2021. The production rate expectation for the combined 777/777X program remains at 2 per month in 2021.
In 2013, we launched the 777X,777X-8 and 777X-9, which features afeature new composite wing,wings, new engines and folding wing-tips. We have experienced issues in engine design and development on the 777X. The first flight of the 777X was completed during the first quarter of 2020. We continue to anticipate that the first 777X delivery will occur in late 2023. We recorded a $6.5 billion reach-forward loss on January 25,the 777X program in the fourth quarter of 2020. We did not record an increase to the reach-forward loss in the first or second quarter of 2021.
The 777X fourth quarter revised schedule and reach-forward loss reflected a number of factors, including an updated assessment of global certification requirements informed by continued discussions with regulators and a management decision in the fourth quarter of 2020 and first delivery is now targeted for 2022. The 777 and 777X programs have a combined production rate of approximately 5 per month gradually reducing to 2 per month in 2021. We expectmake modifications to deliver atthe aircraft’s design, an average rate of approximately 2.5 per month in 2020.
Market uncertainties driven primarily by the impactsupdated assessment of COVID-19 are resultingimpacts on market demand, and discussions with our customers with respect to aircraft delivery timing. These factors resulted in lower plannedadjustments to production rates and creating significant pressure on the 777X program's revenueprogram accounting quantity, increased change incorporation costs, and cost estimates. Based on our assessmentassociated customer and supply chain impacts.
The timing of the probable range of initial accounting quantities,certification will ultimately be determined by the 777X does not have a reach-forward loss at June 30, 2020. regulators, and further determinations with respect to anticipated certification requirements could result in additional delays in entry into service and/or additional cost increases.
The level of profitability on the 777X program will be subject to a number of factors. These factors include continued market uncertainty, the impacts of COVID-19 on our productivityproduction system as well as impacts on our supply chain and customers, customer negotiations, further production rate adjustments for the 777X or other commercial aircraft programs, contraction of the accounting quantity and potential risks associated with the testing program and the timing of aircraft certification. One or more of these factors could result in aadditional reach-forward losslosses on the 777X program in future periods.
787 Program
During the second quarter of 2020, we experienced significant reductions in deliveries due to the impacts of COVID-19 on our customers as well as travel restrictionsproduction issues and the temporary suspension of production operationsassociated rework. At December 31, 2020, we had approximately 80 787 aircraft in the Puget Sound areainventory. Deliveries resumed in March 2021 and South Carolina. Pre-COVID-19, wetwo aircraft were producing at a rate of 14 per month and had planned to adjust the 787 production rate to 12 per monthdelivered in late 2020 and to 10 per month in early 2021. Due to the impacts of COVID-19 on customer demand, we are currently producing at a rate of 10 per month and plan to reduce to 6 per month in 2021. As a result of the planned production rate changes, we reduced the accounting quantity for the 787 program by 100 units during the first quarter of 2020.2021. We delivered 12 aircraft in the second quarter prior to deliveries being paused in May 2021. At June 30, 2021 we have approximately 100 aircraft in inventory. We are conducting inspections and rework and continue to engage in detailed discussions with the FAA on verification methodology for 787. In July 2021, we reprioritized production resources to support inspections and rework. While production resources focus on inspections and rework, the production rate will be temporarily below 5 per month. We expect the production rate to gradually return to 5 per month. We expect fewer than half of the 100 aircraft in inventory at June 30, 2021 to be delivered by the end of 2021. We continue to work with customers and implement changes in the production process designed to
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ensure that newly-built airplanes meet our specifications and do not require further inspections. During the first quarter of 2021, we consolidated 787 production in South Carolina, in line with our previous assumptions, which did not have a significant financial impact on the program. The 787 program has near breakeven gross margins due tomargins. The production issues and associated rework, as well as the reductions intemporary rate reduction and delivery pause, are pressuring gross margins. China is a significant market for the production rates787 program, and the reduction inif the program accounting quantity.is unable to obtain orders from China in future quarters, we may be required to adjust production rate assumptions. If we are required to further reduce the accounting quantity and/or production rates, experience further delivery delays, or experience other factors that could result in lower margins, the program could record a reach-forward loss in future periods.
Additional Considerations
The development and ongoing production of commercial aircraft is extremely complex, involving extensive coordination and integration with suppliers and highly-skilled labor from employees and other partners. Meeting or exceeding our performance and reliability standards, as well as those of customers and regulators, can be costly and technologically challenging. In addition, the introduction of new aircraft and derivatives, such as the 777X and 737 MAX derivatives, involves increased risks associated with meeting development, production and certification schedules. These challenges include increased global regulatory scrutiny of all development aircraft in the wake of the 737 MAX accidents. As a result, our ability to deliver aircraft on time, satisfy performance and reliability standards and achieve or maintain, as applicable, program profitability is subject to significant risks. Factors that could result in lower margins (or a material charge if an airplane program has or is determined to have reach-forward losses) include the following: changes to the program accounting quantity, customer and model mix, production costs and rates, changes to price escalation factors due to changes in the inflation rate or other economic indicators, performance or reliability issues involving completed aircraft, capital expenditures and other costs associated with increasing or adding new production capacity, learning curve, additional change incorporation, achieving anticipated cost reductions, the addition of regulatory requirements in connection with certification in one or more jurisdictions, flight test and certification schedules, costs, schedule and demand for new airplanes and derivatives and status of customer claims, supplier claims or assertions and other contractual negotiations. While we believe the cost and revenue estimates incorporated in the consolidated financial statements are appropriate, the technical complexity of our airplane programs creates financial risk as additional completion costs may become necessary or scheduled delivery dates could be extended, which could trigger termination provisions, order cancellations or other financially significant exposure.

Defense, Space & Security
Business Environment and Trends
United States Government Defense Environment Overview
The Bipartisan Budget Act of 2019 raised the Budget Control Act limits on federal discretionary defense and non-defense spending for fiscal years 2020 and 2021 (FY20 and FY21), reducing budget uncertainty and the risk of sequestration. The consolidatedOmnibus appropriations acts for FY20,fiscal year 2021 (FY21), enacted in December 2019,2020, provided FY20FY21 appropriations for government departments and agencies, including $704 billion for the United States Department of Defense (U.S. DoD), $23 billion for the National Aeronautics and Space Administration (NASA) and $18 billion for the Federal Aviation Administration. In February 2020, the U.S. administration submitted its request for $740.5 billion in base national defense spending forAdministration (FAA). FY21 congruent with the amended spending limit.
The enacted FY20 appropriations included funding for Boeing’s major programs, such as the F/A-18 Super Hornet, F-15EX, CH-47 Chinook, AH-64 Apache, V-22 Osprey, KC-46A Tanker, P-8 Poseidon and Space Launch System. However,
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In May 2021, the U.S. government released the President’s budget request for fiscal year 2022 (FY22), which included $715 billion in funding for the U.S. DoD, $25 billion in funding for NASA and $19 billion for the FAA. While the President’s Budget request for FY22 includes funding for a majority of Boeing’s programs, it did not include funding for F/A-18 Super Hornet, P-8 Poseidon and H-47F Block II production aircraft. While there continues to beis some continued congressional support for F/A-18 and H-47F Block II production aircraft for FY22, there is ongoing uncertainty with respect to futurethese and other program-level appropriations for the U.S. DoDFY22 and other government agencies, including NASA.future fiscal years. 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 results of operations, financial position, and/or cash flows. These programs also continue to pursue non-U.S. sales opportunities.
Results of Operations
(Dollars in millions)Six months ended June 30 Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30

2020
 2019
 2020
 2019
2021202020212020
Revenues
$12,630
 
$13,166
 
$6,588
 
$6,579
Revenues$14,061 $12,630 $6,876 $6,588 
Earnings from operations
$409
 
$1,827
 
$600
 
$975
Earnings from operations$1,363 $409 $958 $600 
Operating margins3.2% 13.9% 9.1% 14.8%Operating margins9.7 %3.2 %13.9 %9.1 %
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 units for new-build production aircraft, including remanufactures and modifications, were as follows:
Six months ended June 30Three months ended June 30
2021202020212020
F/A-18 Models11974
F-15 Models8353
CH-47 Chinook (New)61536
CH-47 Chinook (Renewed)411
AH-64 Apache (New)151169
AH-64 Apache (Remanufactured)31321618
P-8 Models6633
KC-46A Tanker4621
Total85834344
51
 Six months ended June 30 Three months ended June 30

2020 2019 2020 2019
F/A-18 Models9 10 4 3
F-15 Models3 5 3 1
CH-47 Chinook (New)15 7 6 
CH-47 Chinook (Renewed)1 9 
 5
AH-64 Apache (New)11 10 9 4
AH-64 Apache (Remanufactured)32 35 18 13
P-8 Models6 8 3 5
KC-46 Tanker6 12 1 5
Total83 96 44 36
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Revenues
BDS revenues for the six months ended June 30, 2020 decreased2021 increased by $536$1,431 million compared with the same period in 2019,2020, primarily due to higher revenue on the unfavorable impactKC-46A Tanker program due to new orders for 27 aircraft received during the first quarter of 2021, and the absence of charges related to the KC-46A Tanker program in 2021, which reduced revenue in 2020. Favorable cumulative contract catch-up adjustments for the six months ended June 30, 2020, which was $4452021 were $466 million higher than the comparable period in the prior year. The decrease was also driven by lower volume in KC-46A Tanker and P-8 commercial derivative programsyear due to COVID-19 disruptions, which were largely offset by higher volume in fighter and surveillance aircraft.the absence of Tanker charges.
BDS revenues for the three months ended June 30, 20202021 increased by $9$288 million compared with the same period in 2019. Lower volume from COVID-19 disruption in KC-46A Tanker and P-8 commercial2020, primarily due to higher military derivative programs was more than offset by higher F/A-18 and Space Launch System volume and the impact from cumulative contract catch-up adjustments to revenue. Theaircraft revenues. Additionally, favorable cumulative contract catch-up adjustments for the three months ended June 30, 2021 compared with the same period in 2020 was $85were $80 million more favorablehigher than the comparable period in the prior year reflecting less unfavorable adjustments comparedlargely due to the prior period.a favorable non-U.S. contract adjustment.
Earnings From Operations
BDS earnings from operations for the six months ended June 30, 2020 decreased2021 increased by $1,418$954 million compared with the same period in 2019, primarilylargely due to the absence of charges related to the KC-46A Tanker program. The first quarter of 2020 included charges of $827 million and $168 million related to KC-46A Tanker and VC-25B. The first quarter of 2021 included an increase to the reach-forward loss on VC-25B of $318 million, which is largely due to COVID-19 impacts and performance issues at a key supplier. As a result, the net unfavorable impact of cumulative contract catch-up adjustments for the six months ended June 30, 2020 which2021 were $860$744 million higherlower than the prior year primarily due to charges of $978 million on KC-46A Tanker, a $168 million chargecomparable period in the first quarter of 2020 on VC-25B, as well as gains on property sales in 2019. The KC-46A Tanker reach-forward loss in the first quarter of 2020 reflects $551 million of costs associated with the agreement signed in April 2020 with the U.S. Air Force to develop and integrate a new Remote Vision System, and the remaining costs reflect productivity inefficiencies and COVID-19 related factory disruption. The reach-forward loss on VC-25B was associated with engineering inefficiencies from the COVID-19 environment. We believe these inefficiencies will result in staffing challenges, schedule inefficiencies, and higher costs in the upcoming phases of the program.prior year.
BDS earnings from operations for the three months ended June 30, 2020 decreased by $3752021 increased $358 million compared with the same period in 2019,2020 largely due to higher favorable net contract cumulative catch-up adjustments which were $130 million more favorable than the prior year period largely due to a gainfavorable adjustment in 2021 on property salea non-U.S. contract and the absence of charges in 2019, an increase2021 related to the reach-forward loss on KC-46A TankerTanker.
BDS earnings from operations includes equity earnings of $151$37 million in 2020 primarily driven by additional fixed cost allocation resulting from lower commercial airplane production volume due to COVID-19, and revenue mix changes. These were partially offset by $84$30 million of favorable cumulative contract catch-up adjustments for the six and three months ended June 30, 20202021 compared to the prior period due to improved performance.
BDS earnings from operations includeswith equity earnings of $35 million and equity loss of $2 million for the six and three months ended June 30, 2020 compared to $65 million and $12 million for the same periods in 2019.2020. The year over year variance reflect lowerhigher earnings from our United Launch Alliance joint venture.
Backlog
TotalBDS backlog decreased from $60,847 million as of $64,286December 31, 2020 to $58,705 million at June 30, 2020 was largely unchanged from December 31, 2019.2021, primarily due to 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. Many of these programs have cost-type contracting arrangements. In these cases, the associated financial risks are primarily in reduced 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 and BDS customers are increasingly seeking fixed-price proposals for new programs. 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. 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
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creates financial risk as additional completion costs may become necessary or scheduled delivery dates could be extended, which could trigger termination provisions, the loss of satellite in-orbit incentive payments, or other financially significant exposure. These programs have risk for reach-forward losses if our estimated costs exceed our estimated contract revenues.
Global Services
Results of Operations
(Dollars in millions)Six months ended June 30Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30

2020
 2019
 2020
 2019
2021202020212020
Revenues
$8,116
 
$9,162
 
$3,488
 
$4,543
Revenues$7,816 $8,116 $4,067 $3,488 
Earnings/(loss) from operations
$36
 
$1,340
 
($672) 
$687
Earnings/(loss) from operations$972 $36 $531 ($672)
Operating margins0.4% 14.6% (19.3)% 15.1%Operating margins12.4 %0.4 %13.1 %(19.3)%
Revenues
BGS revenues for the six and three months ended June 30, 20202021 decreased by $1,046 million and $1,055$300 million compared with the same periodsperiod in 20192020 primarily due to lower commercial services revenue, driven by impacts of the COVID-19 pandemic. These were partially offset by growthhigher government volume. Commercial services revenue is lower in government2021 as the COVID-19 pandemic had minimal impact on commercial services revenue.revenue in the first quarter of 2020. The net favorable impact of cumulative contract catch-up adjustments for the six and three months ended June 30, 20202021 were $74$54 million lower and $10 million lowerhigher than the comparable periodsperiod in the prior year. We expect the impacts of the COVID-19 pandemic to continue to reducehave an adverse impact on BGS commercial revenues in future quarters until the commercial airline industry environment recovers.
Earnings/LossBGS revenues for the three months ended June 30, 2021 increased by $579 million compared with the same period in 2020 primarily due to higher commercial services volume. While commercial services volume is beginning to recover in the second quarter of 2021, it remains below pre-pandemic levels. The net favorable impact of cumulative contract catch-up adjustments for the three months ended June 30, 2021 were $1 million lower than the comparable period in the prior year. We expect the impacts of the COVID-19 pandemic to continue to have an adverse impact on BGS commercial revenues in future quarters until the commercial airline industry environment recovers.
Earnings From Operations
BGS earnings from operations of $36 million for the six months ended June 30, 2020 was $1,3042021 increased by $936 million lower thancompared with the same period in 2019. Loss from operations for the three months ended June 30, 2020, was $672 million compared with earnings from operations of $687 million in the same period in 2019. The decreases compared with the same periods in 2019 reflect earningsprimarily due to lower commercial services revenue, as well as earnings charges incurred in the second quarter of 2020. Second2020 due to the COVID-19 pandemic. Charges in the second quarter earnings chargesof 2020 included $370 million for higher expected credit losses primarily driven by customer liquidity issues, $237 million of inventory write-downs and $153 million of related impairments of distribution rights primarily driven by airlines' decisions to retire certain aircraft, $99 million of contract termination and facility impairments charges, and $64 million for severance costs. These charges reflect the significant impacts of COVID-19 on commercial airline customers’ liquidity and demand for certain products as customers' fleet plans evolve to adapt to the sharp reduction in demand for air travel. While the operating losses incurred in the second quarter of 2020 are not necessarily indicative of future quarters, we expect the impacts of the COVID-19 pandemic to continue to reduce future earnings until the commercial airline industry environment recovers.
The net favorable impact of cumulative contract catch-up adjustments for the six andmonths ended June 30, 2021 were $63 million higher than the comparable period in the prior year.
BGS earnings from operations for the three months ended June 30, 2021 was $531 million compared with a loss of $672 million during the same period in 2020, primarily due to charges incurred in the second quarter of 2020 due to the COVID-19 pandemic and higher commercial services revenue. The net favorable impact of cumulative contract catch-up adjustments for the three months ended June 30, 2021 were $64$14 million lower and $22 million lowerhigher than the comparable periodsperiod in the prior year.
Backlog
BGS backlog decreased from $22,902$20,632 million as of December 31, 20192020 to $18,168$19,029 million at June 30, 2020,2021, primarily due to a reduction for commercial orders thatrevenue recognized on contracts awarded in our assessment no longer meet the accounting requirementsprior years.
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Table of ASC 606 for inclusion in backlog.Contents

Boeing Capital
Results of Operations
(Dollars in millions)Six months ended June 30 Three months ended June 30(Dollars in millions)Six months ended June 30Three months ended June 30

2020
 2019
 2020
 2019
2021202020212020
Revenues
$134
 
$141
 
$69
 
$75
Revenues$138 $134 $78 $69 
Earnings/(loss) from operations
$17
 
$57
 
($7) 
$37
Earnings/(loss) from operations$57 $17 $36 ($7)
Operating margins13% 40% (10)% 49%Operating margins41.3 %12.7 %46.2 %(10.1)%
Revenues
BCC segment revenues consist principally of lease income from equipment under operating lease, interest income from financing receivables and notes, and other income. BCC’sBCC’s revenues increased by $4 million and $9 million for the six and three months ended June 30, 2020 decreased2021 compared with the same periods in 20192020 primarily due to net gains on re-lease of assets, partially offset lower operating lease income and lower interest income.income on notes receivable.
Earnings From Operations
BCC’sBCC’s earnings from operations are presented net of interest expense, provision for (recovery of) losses, asset impairment expense, depreciation on leased equipment and other operating expenses. Earnings/lossEarnings from operations for the six and three months ended June 30, 2020 decreased2021 increased by $40 million and $43 million compared with the same periods in 20192020 primarily due to lower interest income and higher asset impairment expense along with higher provision expense.
Financial Position
The following table presents selected financial data for BCC:BCC:
(Dollars in millions)June 30
2020
 December 31
2019
(Dollars in millions)June 30
2021		December 31
2020
Customer financing and investment portfolio, net
$2,099
 
$2,251
Customer financing and investment portfolio, net$1,863 $1,961 
Other assets, primarily cash and short-term investments642
 535
Other assets, primarily cash and short-term investments334 402 
Total assets
$2,741
 
$2,786
Total assets$2,197 $2,363 
   
Other liabilities, primarily deferred income taxes
$390
 
$432
Other liabilities, primarily deferred income taxes$351 $392 
Debt, including intercompany loans1,942
 1,960
Debt, including intercompany loans1,525 1,640 
Equity409
 394
Equity321 331 
Total liabilities and equity
$2,741
 
$2,786
Total liabilities and equity$2,197 $2,363 
   
Debt-to-equity ratio4.7-to-1
 5.0-to-1
Debt-to-equity ratio4.8-to-15-to-1
BCC’s customer financing and investment portfolio at June 30, 20202021 decreased $98 million from December 31, 20192020 primarily due to $171 million of note payoffs and portfolio run-off, partially offset by new volume.run-off.
BCC enters into certain intercompany transactions with Boeing, reflected in Unallocated items, eliminations and other, in the form of intercompany guarantees and other subsidies that mitigate the effects of certain credit quality or asset impairment issues on the BCC segment.
Aircraft subject to leases with a carrying value of approximately $65$11 million are scheduled to be returned off lease in the next 12 months. We are seeking to remarket these aircraft or have the leases extended.

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Liquidity and Capital Resources
Cash Flow Summary
(Dollars in millions)Six months ended June 30(Dollars in millions)Six months ended June 30
2020
 2019
20212020
Net loss
($3,036) 
($793)
Net earnings/(loss)Net earnings/(loss)$6 ($3,036)
Non-cash items2,230
 1,335
Non-cash items2,130 2,230 
Changes in working capital(8,776) 1,656
Changes in working capital(6,006)(8,776)
Net cash (used)/provided by operating activities(9,582) 2,198
Net cash used by investing activities(12,686) (853)
Net cash provided by financing activities32,742
 96
Net cash used by operating activitiesNet cash used by operating activities(3,870)(9,582)
Net cash provided/(used) by investing activitiesNet cash provided/(used) by investing activities4,423 (12,686)
Net cash (used)/provided by financing activitiesNet cash (used)/provided by financing activities(67)32,742 
Effect of exchange rate changes on cash and cash equivalents(11) (2)Effect of exchange rate changes on cash and cash equivalents(14)(11)
Net increase in cash & cash equivalents, including restricted10,463
 1,439
Net increase in cash & cash equivalents, including restricted472 10,463 
Cash & cash equivalents, including restricted, at beginning of year9,571
 7,813
Cash & cash equivalents, including restricted, at beginning of year7,835 9,571 
Cash & cash equivalents, including restricted, at end of period
$20,034
 
$9,252
Cash & cash equivalents, including restricted, at end of period$8,307 $20,034 
Operating Activities Net cash used by operating activities was $9.6$3.9 billion during the six months ended June 30, 2020,2021, compared with cash provided of $2.2$9.6 billion during the same period in 2019 primarily2020 driven by changesearnings in 2021 primarily due to 737 deliveries and recovery from impacts of COVID-19 across the business, as well as improved working capital.capital and use of common stock in lieu of cash to fund Company contributions to our 401(k) plans in 2021 as compared to the prior year. The changes in working capital in 2020 are primarily driven by increasesreflect the significant increase in commercial airplane inventory largely reflectingin 2020 driven by lower deliveries of wide-body aircraftdue to the COVID-19 pandemic and the continued 737 MAX grounding. The changesWhile 787 inventory increased in working capital in 2020 also reflect lower accounts payable in 20202021 due to reductionsthe continued buildup of more aircraft caused by production issues, the increase was largely offset by a decrease in commercial purchases from suppliers.737 MAX inventory reflecting the resumption of deliveries. Cash provided by Advances and progress billings was $0.3 billion in 2021, as compared with $1.8 billion in 2020. Compensation payments to 737 MAX customers totaled $1.5 billion and $1.2 billion during the first half ofsix months ended June 30, 2021 and 2020. InAdditionally, in the secondfirst quarter of 20192021, we recorded an earnings charge and recognized a liability of $5.6paid $0.7 billion for customer considerations but did not make any compensation payments. The impactsconsistent with the terms of the COVID-19 pandemicDeferred Prosecution Agreement between Boeing and the U.S. Department of Justice. The reduction in 787 deliveries and the residual impacts of the 737 MAX grounding are expected to continue to have a significant negative impact on our operating cash flows during 2020.2021.
Payables to suppliers who elected to participate in supply chain financing programs declineddecreased by $1.3$0.4 billion forduring the six months ended June 30, 2020 and increased by $1.82021 compared with $1.3 billion for the same period in the prior year.2020. The decrease for both periods is primarily due to reductions in commercial purchases from suppliers. Supply chain financing is not material to our overall liquidity. The decline for the six months ended June 30, 2020 was primarily due to reductions in commercial purchases from suppliers and not due to any changes in the availability of supply chain financing. The increase for the six months ended June 30, 2019 reflects a combination of higher purchases, an extension of payment terms with certain suppliers and increased utilization of our supply chain financing programs.
Investing Activities Cash usedprovided by investing activities was $12.7$4.4 billion during the six months ended June 30, 2020,2021, compared with $0.9cash used of $12.7 billion during the same period in 2019, primarily2020, due to $12.3net proceeds from investments of $4.9 billion of higherin 2021 compared to net contributions to investments.investments of $12.0 billion in 2020. In the six months ended June 30, 20202021 and 2019,2020, capital expenditures totaled $0.8$0.5 billion and $0.9$0.8 billion. We now expect capital expenditures in 20202021 to be lower than 2019.relatively consistent with 2020.
Financing Activities Cash providedused by financing activities was $32.7 billion$67 million during the six months ended June 30, 20202021 compared with cash usedprovided of $0.1$32.7 billion during the same period in 2019, primarily reflecting higher net borrowings and lower share repurchases.2020. During the six months ended June 30, 2020, new borrowings2021, net of repayments were $34 billion$56 million compared with $5.2net borrowings of $34.0 billion in the same period in 2019, primarily due2020. The absence of dividends in 2021 reflects the Company’s decision in March 2020 to $25 billionsuspend the declaration or payment of fixed rate senior notes issued in the second quarter of 2020 and $13.8 billion of new borrowings under a two-year delayed draw term loan agreement entered into in the first quarter of 2020.dividends until further notice. For further discussion see Liquidity Matters in Note 1 to our Condensed Consolidated Financial Statements.
As of June 30, 2021 and December 31, 2020, the total debt balance was $61.4 billion up from $27.3 billion at December 31, 2019.$63.6 billion. At June 30, 2020, $2.92021, $6.5 billion of debt was classified as short-term. Debt, including intercompany loans, attributable to BCC totaled $1.9$1.5 billion, $0.5 billion of which $0.7 billion was classified as short-term.

55
During the six months ended June 30, 2020 we did not repurchase any shares through our open market share repurchase program compared to share repurchases
Table of $2.7 billion in the same period in 2019. Share repurchases under this plan had been suspended since April 2019. In March 2020, the Board of Directors terminated its prior authorization to repurchase shares of the Company's outstanding common stock.Contents
During the six months ended June 30, 2020 we paid dividends of $1.2 billion compared with $2.3 billion in the same period in 2019. In March 2020, the Company announced that our dividend will be suspended until further notice.
Capital Resources The impacts of the COVID-19 pandemic, and 737 MAX grounding, and reduction in 787 deliveries are having a significant negative impact on our liquidity and ongoing operations and creating significant uncertainty. We have and are continuing to take significant actions to manage and preserve our liquidity. For further discussion see Liquidity Matters in Note 1 to our Condensed Consolidated Financial Statements.
Currently,At June 30, 2021, we have $9.6had $8.3 billion of cash and $13.1 billion of short term investments. At June 30, 2021, we had $14.8 billion of unused borrowing capacity on revolving credit line agreements.agreements, of which $3.1 billion expires in October 2021, $3.2 billion expires in October 2022, $5.3 billion expires in March 2023, and $3.2 billion expires in October 2024. The facility scheduled to expire in October 2021 has a one-year term out option that allows us to extend the maturity of any borrowings one additional year. We anticipate that these credit lines will remain undrawn and primarily serve as backupback-up liquidity to support our general corporate borrowing needs.
Any future borrowings may affect our credit ratings and are subject to various debt covenants. At June 30, 2020,2021, we were in compliance with the covenants for our debt and credit facilities. 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). When considering debt covenants, we continue to have substantial borrowing capacity.
Customer Financing commitments totaled $12.8$13.5 billion and $13.4$11.5 billion at June 30, 20202021 and December 31, 2019.2020. The decrease primarilyincrease relates to new financing commitment expirations.commitments. We anticipate that we will not be required to fund a significant portion of our financing commitments as we continue to work with third party financiers to provide alternative financing to customers. Historically, we have not been required to fund significant amounts of outstanding commitments. However, there can be no assurances that we will not be required to fund greater amounts than historically required.
For discussion regarding Embraer see Note 18 to our Condensed Consolidated Financial Statements.
Off-Balance Sheet Arrangements
We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion of these arrangements, see Note 1110 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:
Legal Various legal proceedings, claims and investigations are pending against us. Legal contingencies are discussed in Note 1817 to our Condensed Consolidated Financial Statements.
Environmental Remediation We are involved with various environmental remediation activities and have recorded a liability of $560$582 million at June 30, 2020.2021. For additional information, see Note 109 to our Condensed Consolidated Financial Statements.

Non-GAAP Measures
Core Operating Earnings, Core Operating Margin and Core Earnings 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, core operating margin and core earnings per share exclude the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the FASFinancial Accounting Standards (FAS) pension
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and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core earnings per share excludes both the FAS/CAS service cost adjustment and non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent 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 LossEarnings/(loss) from operations were benefits of $384 million and $191 million for the six and three months ended June 30, 2021, compared with benefits of $513 million and $258 million for the six and three months ended June 30, 2020, compared with benefits of $549 million and $275 million during the same periods in 2019.2020. The non-operating pension expenses included in Other income, net were benefits of $352 million and $175 million for the six and three months ended June 30, 2021, compared with benefits of $171 million and $84 million for the six and three months ended June 30, 2020, compared with benefits of $187 million and $94 million for the same periods in 2019.2020. The benefits in 20202021 reflect expected returns in excess of interest cost and amortization of actuarial losses.
For further discussion of pension and other postretirement costs see the Management’s Discussion and Analysis on page 4043 of this Form 10-Q and on page 4857 of our 20192020 Annual Report on Form 10-K. Management uses core operating earnings, core operating margin and core earnings 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.

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Reconciliation of GAAP Measures to Non-GAAP Measures
The table below reconciles the non-GAAP financial measures of core operating loss,earnings/(loss), core operating margin and core lossearnings/(loss) per share with the most directly comparable GAAP financial measures of lossearnings/(loss) from operations, operating margins and diluted lossearnings/(loss) per share.
(Dollars in millions, except per share data)Six months ended June 30Three months ended June 30
2021202020212020
Revenues$32,215 $28,715 $16,998 $11,807 
Earnings/(loss) from operations, as reported$940 ($4,317)$1,023 ($2,964)
Operating margins2.9 %(15.0)%6.0 %(25.1)%
Pension FAS/CAS service cost adjustment (1)
($384)($513)($191)($258)
Postretirement FAS/CAS service cost adjustment (1)
(154)(189)(77)(97)
FAS/CAS service cost adjustment (1)
($538)($702)($268)($355)
Core operating earnings/(loss) (non-GAAP)$402 ($5,019)$755 ($3,319)
Core operating margins (non-GAAP)1.2 %(17.5)%4.4 %(28.1)%
Diluted earnings/(loss) per share, as reported$0.09 ($5.31)$1.00 ($4.20)
Pension FAS/CAS service cost adjustment (1)
(0.65)(0.91)(0.32)(0.46)
Postretirement FAS/CAS service cost adjustment (1)
(0.26)(0.33)(0.13)(0.17)
Non-operating pension expense (2)
(0.60)(0.30)(0.30)(0.14)
Non-operating postretirement expense (2)
(0.02)0.05 (0.01)0.02 
Provision for deferred income taxes on adjustments (3)
0.32 0.31 0.16 0.16 
Core (loss)/earnings per share (non-GAAP)($1.12)($6.49)$0.40 ($4.79)
Weighted average diluted shares (in millions)588.6 566.1 590.2 566.4 
(Dollars in millions, except per share data)Six months ended June 30 Three months ended June 30

2020
 2019
 2020
 2019
Revenues
$28,715
 
$38,668
 
$11,807
 
$15,751
Loss from operations, as reported
($4,317) 
($1,030) 
($2,964) 
($3,380)
Operating margins(15.0)% (2.7)% (25.1)% (21.5)%
        
Pension FAS/CAS service cost adjustment (1)

($513) 
($549) 
($258) 
($275)
Postretirement FAS/CAS service cost adjustment (1)
(189) (180) (97) (90)
FAS/CAS service cost adjustment (1)

($702) 
($729) 
($355) 
($365)
Core operating loss (non-GAAP)
($5,019) 
($1,759) 
($3,319) 
($3,745)
Core operating margins (non-GAAP)(17.5)% (4.5)% (28.1)% (23.8)%
        
Diluted loss per share, as reported
($5.31) 
($1.40) 
($4.20) 
($5.21)
Pension FAS/CAS service cost adjustment (1)
(0.91) (0.97) (0.46) (0.49)
Postretirement FAS/CAS service cost adjustment (1)
(0.33) (0.32) (0.17) (0.16)
Non-operating pension expense (2)
(0.30) (0.32) (0.14) (0.17)
Non-operating postretirement expense (2)
0.05
 0.09
 0.02
 0.05
Provision for deferred income taxes on adjustments (3)
0.31
 0.32
 0.16
 0.16
Core loss per share (non-GAAP)
($6.49) 
($2.60) 
($4.79) 
($5.82)
        
Weighted average diluted shares (in millions)566.1
 566.6
 566.4
 565.3
(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 earnings/(loss) (non-GAAP).
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 expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income, net and are excluded from Core loss per share (non-GAAP).
(2) Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. These expenses are included in Other income, net and are excluded from Core earnings/(loss) per share (non-GAAP).
(3) The income tax impact is calculated using the U.S. corporate statutory tax rate.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have financial instruments that are subject to interest rate risk, principally fixed- and floating-rate debt obligations, and customer financing assets and liabilities. The investors in our fixed-rate debt obligations do not generally have the right to demand we pay off these obligations prior to maturity. Therefore, exposure to interest rate risk is not believed to be material for our fixed-rate debt. In the first quarterAs of 2020,June 30, 2021, we entered into a $13.8have $4 billion remaining on our two-year delayed draw floating-rate term loan credit agreement. An increase or decrease of 100 basis points in interest rates on this floating-rate debt would increase or decrease our pre-tax earningsloss by $138$26 million over the next 12 months. Historically, we have not experienced material gains or losses on our customer financing assets and liabilities due to interest rate changes.
There have been no significant changes to our foreign currency exchange rate or commodity price risk since December 31, 2019.2020.

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Item 4. Controls and Procedures
(a)Evaluation of Disclosure Controls and Procedures.
Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of June 30, 20202021 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.
(b)Changes in Internal Control Over Financial Reporting.
There were no changes that occurred during the second quarter of 20202021 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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Part II. Other Information
Item 1. Legal Proceedings
Currently, we are involved in a number of legal proceedings. For a discussion of contingencies related to legal proceedings, see Note 1817 to our Condensed Consolidated Financial Statements, which is hereby incorporated by reference.
Item 1A. Risk Factors
Certain risks described below update theThere have been no material changes in our risk factors from those disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2019.2020.
We face significant risks related to the spread of the novel coronavirus (“COVID-19”) and the recent developments surrounding the global pandemic have had, and will continue to have, significant effects on our business, financial condition, results of operations, and cash flows. We also face significant risks related to the global economic downturn and severe reduction in commercial air traffic caused by the pandemic. These risks include materially reduced demand for our products and services, increased instability in our supply chain, and challenges to the ongoing viability of some of our customers. We may face similar risks in connection with any future public health crises, including any resurgence in the spread of COVID-19.
The COVID-19 pandemic has subjected our business, operations, financial performance, cash flows and financial condition to a number of risks, including, but not limited to those discussed below.
Operations-related risks: As a result of the COVID-19 pandemic, we are facing increased operational challenges from the need to protect employee health and safety. These challenges have included, and may in the future include production site shutdowns, and workplace disruptions and restrictions on the movement of people, raw materials and goods, both at our own facilities and at our customers and suppliers.
For example, during the second quarter, we temporarily suspended operations in Puget Sound, South Carolina, and Philadelphia, as well as at several other key production sites. We had not previously experienced a complete suspension of our operations at these production sites. While we have resumed operations at each of our key production sites we cannot predict where further production disruptions will be required or what the ongoing impact of COVID-19-related operating restrictions will be. For example, we continue to experience additional operating costs due to social distancing requirements and other factors related to COVID-19 restrictions. We cannot predict the impact that future production disruptions may have on our business, operations, financial performance and financial condition. We consult regularly with relevant federal, state, and municipal health authorities regarding the COVID-19 pandemic, and we may be required to impose additional operational restrictions and/or suspend operations at key production sites based on their recommendations and/or workplace disruptions caused by COVID-19.
Many of our suppliers also were required to suspend operations during the second quarter, and they may experience additional disruptions in the coming months. Any such disruptions could have severe adverse impacts on our production costs delivery schedule and/or ability to meet customer commitments.
Any prolonged suspension of operations or delayed recovery in our operations, and/or any similar delay with respect to resumption of operations by one or more of our key suppliers, or the failure of any of our key suppliers, would result in further challenges to our business, leading to a further material adverse effect on our business, financial condition, results of operations, and cash flows.
Liquidity risks:The COVID-19 pandemic has also had a significant impact on our liquidity and overall debt levels. During the six months ended June 30, 2020, net cash used by operating activities was $9.6 billion. At June 30, 2020, cash and short-term investments totaled $32.4 billion. Our debt balance totaled $61.4 billion at June 30, 2020, up from $27.3 billion at December 31, 2019. We expect negative operating cash flows in future quarters until deliveries resume and ramp up, and if the pace and scope of the recovery are worse than we currently contemplate, we may need to obtain additional financing in order to fund our operations and obligations. If we were to need to obtain additional financing, uncertainty related to COVID-19

and its impact on us and the aerospace industry could limit our access to credit markets and we may have difficulty obtaining financing on terms acceptable to us or at all. In addition, certain of our customers may also be unable to make timely payments to us. Factors that could limit our access to additional liquidity include disruptions in the global capital markets and/or additional declines in our financial performance, outlook or credit ratings. The occurrence of any or all of these events would be expected to adversely affect our ability to fund our operations and contractual commitments. In addition, downgrades in our credit ratings could adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets, and a significant downgrade could have an adverse impact on our businesses.
Customer-related risks: Commercial air traffic has fallen dramatically due to the COVID-19 pandemic. While this trend has impacted passenger traffic most severely, near-term cargo traffic has also fallen significantly due to the global economic downturn and the reduction in cargo capacity on passenger airplanes. Most airlines have significantly reduced their capacity, and many could implement further reductions in the near future. Many airlines are also implementing significant reductions in staffing. These capacity changes are causing, and are expected to continue to cause, negative impacts to our customers’ revenue, earnings, and cash flow, and in some cases may threaten the future viability of some of our customers, potentially causing defaults within our customer financing portfolio, which was $2.2 billion as of June 30, 2020 and/or requiring us to remarket aircraft that have already been produced and/or are currently in backlog. If 737 MAX aircraft remain grounded for an extended period of time, we may experience additional reductions to backlog and/or significant order cancellations. Additionally, we may experience fewer new orders and increased cancellations across all of our commercial airplane programs as a result of the COVID-19 pandemic and associated impacts on demand. Our customers may also lack sufficient liquidity to purchase new aircraft due to impacts from the pandemic. We are also observing a significant increase in the number of requests for payment deferrals, contract modifications, lease restructurings and similar actions, and these trends may lead to additional charges, impairments and other adverse financial impacts in our business over time. In addition, to the extent that customers have valid rights to cancel undelivered aircraft, we may be required to refund pre-delivery payments, putting additional constraints on our liquidity.
In addition to the near-term impact, there is risk that the industry implements longer-term strategies involving reduced capacity, shifting route patterns, and mitigation strategies related to impacts from COVID-19 and the risk of future public health crises. In addition, airlines may experience reduced demand due to reluctance by the flying public to travel due to travel restrictions and/or social distancing requirements.
As a result, there is significant uncertainty with respect to when commercial air traffic levels will begin to recover, and whether and at what point capacity will return to and/or exceed pre-COVID-19 levels. The COVID-19 pandemic also has increased, and its aftermath is also expected to continue to increase, uncertainty with respect to global trade volumes, putting significant negative pressure on cargo traffic. Any of these factors would have a significant impact on the demand for both single-aisle and wide-body commercial aircraft, as well as for the services we provide to commercial airlines. In addition, a lengthy period of reduced industry-wide demand for commercial aircraft would put additional pressure on our suppliers, resulting in increased procurement costs and/or additional supply chain disruption. To the extent that the COVID-19 pandemic or its aftermath further impacts demand for our products and services or impairs the viability of some of our customers and/or suppliers, our financial condition, results of operations, and cash flows could be adversely affected, and those impacts could be material.
Other risks: The magnitude and duration of the global COVID-19 pandemic is uncertain. As the pandemic continues to adversely affect our business and operating and financial results, it also is expected to have the effect of heightening many of the other risks described in the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2019. Further, the COVID-19 pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks to our operations or financial results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information about purchases we made during the quarter ended June 30, 20202021 of equity securities that are registered by us pursuant to Section 12 of the Exchange Act:
 (a)(b)(c)(d)
Total Number
of Shares
Purchased (1)
Average
Price
Paid per
Share		Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
Approximate Dollar
Value of Shares That
May Yet be Purchased
Under the Plans or
Programs (2)
4/1/2021 thru 4/30/20212,138 $300.44 
5/1/2021 thru 5/31/20215,103 246.14 
6/1/2021 thru 6/30/20211,083 246.86 
Total8,324 $260.18 
(1)A total of 8,324 shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period. We did not purchase any shares of our common stock in the open market pursuant to a repurchase program or in swap transactions.
(2)On March 21, 2020, the Board of Directors terminated its prior authorization to repurchase shares of the Company's outstanding common stock.
(Dollars in millions, except per share data)
 (a) (b) (c) (d)
 
Total Number
of Shares
Purchased (1)

 
Average
Price
Paid per
Share

 
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
 
Approximate Dollar
Value of Shares That
May Yet be Purchased
Under the Plans or
Programs (2)
4/1/2020 thru 4/30/20205,381
 
$138.98
 
 
5/1/2020 thru 5/31/20204,201
 140.49
 
 
6/1/2020 thru 6/30/20201,761
 165.29
 
 
Total11,343
 
$143.62
 
  
(1)
A total of 9,175 shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted stock units during the period. We did not purchase any shares of our common stock in the open market pursuant to our repurchase program. We purchased 2,168 shares in swap transactions.
(2)
On March 21, 2020, the Board of Directors terminated its prior authorization to repurchase shares of the Company's outstanding common stock. Share repurchases under this plan had been suspended since April 2019.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Not applicable.

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Item 6. Exhibits
3.2
By-Laws of The Boeing Company, as amended and restated effective June 29, 2021 (Exhibit 3.2 to the Company's Current Report on Form 8-K dated June 29, 2021)
10.1*10.1
Employment Agreement between Boeing Canada Operations LTD and Susan DonizNotice of Terms Supplemental Cash-Based Award (Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 29, 2021)*
10.2*10.2
Form of International Notice of Terms of Supplemental Restricted Stock Units (Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 29, 2021)*
1510.3
Notice of Terms of Supplemental Non-Qualified Stock Option (Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 29, 2021)*
10.4
Credit Agreement (Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 19, 2021)
15
Letter from Independent Registered Public Accounting Firm regarding unaudited interim financial information
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020,2021, has been formatted in Inline XBRL.
* Management contract or compensatory plan

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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
THE BOEING COMPANY
(Registrant)
THE BOEING COMPANY
(Registrant)
July 28, 2021/s/ Carol J. Hibbard
(Date)Carol J. Hibbard
July 29, 2020/s/ Robert E. Verbeck
(Date)Robert E. Verbeck
Senior Vice President and Controller

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