Boeing (BA) 10-K risk factor changes: FY2020 vs FY2019

[removed: We] [added: We] are subject to a number of risks and uncertainties related to the 737 MAX.

These risks include uncertainties regarding the timing and conditions of 737 MAX regulatory approvals, [removed: delays] in [removed: the resumption of production,] [added: certain non-U.S. jurisdictions,] lower than planned production rates and/or delivery rates, increased considerations to customers, increased supplier costs and supply chain health, changes to the assumptions and estimates made in our financial statements regarding the 737 program, and potential outcomes of various 737 MAX-related legal proceedings and government investigations.

Non-U.S. civil aviation authorities [removed: have] issued directives to the same effect.

The grounding has reduced revenues, operating margins, and cash flows, and will continue to do so until production [removed: and deliveries resume and production] rates return to pre-grounding levels.

In connection with the effort to return the 737 MAX to service, we [removed: have] developed software updates for the 737 MAX, together with an associated pilot training and supplementary education program.

We continue to work with [removed: the FAA and other] [added: certain] non-U.S. civil aviation authorities to complete remaining steps toward certification and readiness for return to [removed: service, including addressing their questions on the software updates and how pilots will interact with the airplane controls and displays in different flight scenarios.][added: service worldwide.]

Any delays in certification [added: in one or more jurisdictions] and/or the [removed: resumption] [added: ramp-up] of deliveries or other liabilities associated with the accidents or grounding could have a material adverse effect on our financial position, results of operations, and/or cash flows.

We also are fully cooperating with U.S. government investigations related to the accidents and the 737 MAX, including investigations by the [removed: U.S. Department of Justice and the] Securities and Exchange Commission.

Any [added: further] adverse [removed: results with respect] [added: impacts related] to any such litigation or investigation could have a further material impact on our financial position, results of operations and/or cash flows.

Impacts related to [removed: the reduction in production rate followed by the production suspension have] [added: these actions] significantly increased costs to produce aircraft included in the current accounting quantity and [removed: will result] [added: have resulted] in reduced 737 program and overall BCA segment operating [removed: margins when deliveries resume.][added: margins.]

We have also made significant assumptions regarding estimated costs expected to be incurred in [removed: 2020 and] 2021 that should be included in program inventory and those estimated costs that will be expensed when incurred as abnormal production costs.

If we are unable to return the 737 MAX aircraft to service in one or more jurisdictions or [removed: begin deliveries] [added: deliver 737 aircraft] to customers on the schedule and/or at a pace consistent with our [removed: current] expectations, we will incur significant additional costs and/or delay the [removed: resumption and subsequent] [added: planned] ramp-up of 737 production.

These delays would also result in significant additional disruption to the 737 production system [removed: once production resumes] and [removed: would] further delay efforts to restore and/or implement previously planned increases in the 737 [removed: production rate.]

Any further delays in regulatory approval of the 737 [removed: MAX, the resumption of 737 production and/or deliveries,] [added: MAX in one or more jurisdictions,] further disruptions to suppliers and/or the long-term health of the production system, supplier claims or assertions, or changes to estimated concessions or other considerations we expect to provide to customers could have a material adverse effect on our financial position, results of operations, and/or cash flows.

In the event of unanticipated additional training requirements in one or more jurisdictions, delays in regulatory approval, and/or delays in our ability to resume [removed: deliveries,] [added: deliveries to one or more customers,] we may be required to take actions with longer-term impact, such as further changes to our production plans, employment reductions and/or the expenditure of significant resources to support our supply chain and/or customers.

For additional information, see our discussion under “Management’s Discussion and Analysis-Critical Accounting Policies and Estimates-737 MAX Grounding” on [removed: page 45.][added: pages 55 - 56.]

[removed: Our] [added: In addition to the impact of COVID-19 described above, our] Commercial Airplanes and Global Services businesses depend heavily on commercial airlines, and are subject to unique risks.

Demand for our commercial aircraft is further influenced by airline profitability, availability of aircraft financing, world trade policies, government-to-government relations, technological advances, price and other competitive factors, fuel prices, terrorism, epidemics [added: and environmental regulations.]

In order to help account for economic fluctuations between the contract date and delivery date, aircraft pricing generally consists of a fixed amount as modified by price escalation formulas [removed: derived from labor, commodity and other price indices.]

The commercial aircraft business is extremely complex, involving extensive coordination and integration with U.S and non-U.S. suppliers, highly-skilled labor from thousands of employees and other partners, and stringent regulatory [removed: requirements] [added: requirements, including the risk of evolving standards for commercial aircraft certification,] and performance and reliability standards.

The 737 program has also experienced significant disruption due to the grounding of the 737 MAX and associated suspension of 737 MAX [removed: production.][added: production for part of 2020.]

*We must minimize disruption caused by production changes and achieve productivity improvements in order to meet customer demand and maintain our profitability.* We have [added: previously announced] plans to adjust production rates on several of our commercial aircraft [removed: programs, as well as to resume 737 MAX production at low levels once timing and conditions of return to service are better understood.][added: programs.]

[removed: At the same time we are engaging] [added: We continue to engage] in significant ongoing development, testing and production of the 777X aircraft.

*Operational challenges impacting the production system for one or more of our commercial aircraft programs could result in production delays and/or failure to meet customer demand for new aircraft, [removed: either*][added: either of which would negatively impact our revenues and operating margins.* Our commercial aircraft production system is extremely complex.]

Operational issues, including delays or defects in supplier components, failure to meet internal performance plans, or delays or failures to achieve required regulatory approval, [removed: such as the with the 737 MAX,] could result in significant out-of-sequence work and increased production costs, as well as delayed deliveries to customers, impacts to aircraft performance and/or increased warranty or fleet support costs.

Levels of U.S. defense spending are very difficult to predict and may be impacted by numerous factors such as the evolving nature of the national security [removed: threat,] [added: threat environment,] U.S. [added: national security strategy, U.S.] foreign policy, the domestic political environment, macroeconomic conditions and the ability of the U.S. government to enact relevant legislation such as authorization and appropriations bills.

[removed: Although FY20 appropriations have been enacted and FY21 topline funding levels have been agreed to,] [added: In addition,] the timeliness of [removed: FY21 and] future appropriations for government departments and agencies remains a recurrent risk.

[removed: In addition,] [added: Although FY21 appropriations have been enacted,] long-term uncertainty remains with respect to overall levels of defense spending beyond [removed: FY21] [added: FY21,] and it is likely that [removed: the] U.S. government discretionary [removed: spending levels] [added: spending, including defense spending,] will continue to be subject to pressure.

[removed: In addition, there] [added: There] continues to be uncertainty with respect to future acquisition priorities and program-level appropriations for the U.S. DoD and other government agencies (including NASA), including tension between modernization [removed: and] [added: investments,] sustainment investments, [removed: within the overall budgetary framework described above.][added: and investments in new technologies or emergent capabilities.]

Future [removed: budget cuts or] investment priority [removed: changes,] [added: changes or budget cuts,] including changes associated with the authorizations and appropriations process could result in reductions, cancellations, and/or delays of existing contracts or [removed: programs.][added: programs, or future program opportunities.]

In addition, as a result of the significant ongoing uncertainty with respect to both U.S. defense spending [removed: levels] and the [added: evolving] nature of the [added: national security] threat environment, we also expect the U.S. DoD to continue to emphasize affordability, innovation, cybersecurity, and delivery of technical data and software in its procurement processes.

In [removed: 2019, 39%] [added: 2020, 51%] of our revenues were earned pursuant to U.S. government contracts, which include [removed: foreign military sales (FMS)] [added: FMS] through the U.S. government.

[removed: In addition, funding pursuant to our U.S. government contracts may be reduced or withheld as part of the U.S.] Congressional appropriations process due to fiscal constraints, changes in U.S. national security strategy and/or priorities or other reasons.

Our BDS and BGS defense businesses generated approximately [removed: 70%] [added: 69%] and [removed: 73%] [added: 72%] of their [removed: 2019] [added: 2020] revenues from fixed-price contracts.

[added: For example, in 2018, in connection with winning the T-7A Red] Hawk and MQ-25 competitions, we recorded a loss of $400 million associated with options for 346 T-7A Red Hawk aircraft and a loss of $291 million related to the MQ-25 Engineering, Manufacturing and Development (EMD) contract.

Our BDS and BGS defense businesses generated approximately [removed: 30%] [added: 31%] and [removed: 27%] [added: 28%] of their [removed: 2019] [added: 2020] revenues from cost-type contracting arrangements.

Any service disruption from one of these suppliers, either due to circumstances beyond the supplier’s control, such as [removed: geo-political] [added: geopolitical] developments, or as a result of performance problems or financial difficulties, could have a material adverse effect on our ability to meet commitments to our customers or increase our operating costs.

Estimates of [added: future] award fees are also [removed: used] [added: included] in sales and profit [removed: rates based on actual and anticipated awards.][added: rates.]

For additional information on our accounting policies for recognizing sales and profits, see our discussion under “Management’s Discussion and Analysis – Critical Accounting Policies – Contract Accounting/Program Accounting” on pages [removed: 44] [added: 53] – [removed: 45] [added: 55] and Note 1 to our Consolidated Financial Statements on pages [removed: 57] [added: 68] – [removed: 69] [added: 81] of this Form 10-K.

In our BDS business, we anticipate that the effects of defense industry consolidation, [removed: fewer large and new programs] [added: shifting acquisition] and [removed: new] [added: budget] priorities, [removed: including near] and [removed: long-term] [added: continued] cost [removed: competitiveness, of] [added: pressure at] our U.S. DoD and non-U.S. customers will intensify competition for many of our BDS products.

Risks Related to COVID-19

We face significant risks related to the spread of the COVID-19 virus and 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 resurgences 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 those of our customers and suppliers.

For example, during the second quarter of 2020, 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 all of our production sites we cannot predict whether or where further production disruptions could 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 continue to monitor federal, state, and municipal health authorities for new or modified guidance and requirements concerning the COVID-19 pandemic, and we may be required to impose additional operational restrictions and/or suspend operations at key production sites based on these requirements and recommendations and/or workplace disruptions caused by COVID-19.

Many of our suppliers also were required to suspend operations during the second quarter of 2020, and they may experience additional disruptions in 2021.

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 suspension of operations or delayed recovery at 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 year ended December 31, 2020, net cash used by operating activities was $18.4 billion.

At December 31, 2020, cash and short-term investments totaled $25.6 billion.

Our debt balance totaled $63.6 billion at December 31, 2020, up from $27.3 billion at December 31, 2019.

We expect negative operating cash flows in future quarters until deliveries begin to return to historical levels, 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, as well as continued uncertainty with respect to our credit rating 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 further 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 could adversely affect our ability to fund our operations and/or meet outstanding debt obligations and contractual commitments.

In addition, further 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.

This trend has impacted passenger traffic most severely.

Near-term cargo traffic has also fallen, but to a lesser extent as global trade has begun to recover.

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 $2.0 billion as of December 31, 2020 and/or requiring us to remarket aircraft that have already been produced and/or are currently in backlog.

If we are unable to successfully remarket these aircraft and/or the narrow-body and wide-body markets do not recover as soon as we are currently assuming, or if we are required to further reduce production rates and/or contract the accounting quantity on any of our commercial programs, we could experience material reductions in earnings and/or be required to recognize a reach-forward loss on one or more of our programs.

For example, in the fourth quarter of 2020, we recognized a reach-forward loss on the 777X program in part due to impacts related to the COVID-19 pandemic.

In addition, if 737 MAX aircraft in one or more jurisdictions 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.

The 737 MAX fleet is currently grounded, and we have temporarily suspended production of the 737 MAX.

Deliveries of the 737 MAX have been suspended until clearance is granted by the appropriate regulatory authorities.

During the second quarter of 2019, we announced plans to reduce the 737 production rate from 52 aircraft per month to 42 per month.

During the fourth quarter of 2019, we announced plans to temporarily suspend 737 MAX production beginning in January 2020.

The FAA and other non-U.S. civil aviation authorities will determine the timing and conditions of return to service in each relevant jurisdiction.

We have assumed that regulatory approval will enable 737 MAX deliveries to resume during mid-2020.

This assumption reflects our best estimate at this time based on factors such as the estimated duration of regulatory approval and final pilot training requirements.

and environmental regulations.

*of which would negatively impact our revenues and operating margins.* Our commercial aircraft production system is extremely complex.

The Bipartisan Budget Act of 2019 raised preexisting spending 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.

For example, in 2019, we recorded reach-forward losses of $489 million on the Commercial Crew contract primarily reflecting higher estimated costs associated with spacecraft completion, certification and testing, and additional reach-forward losses of $148 million on the KC-46A Tanker contract reflecting higher manufacturing costs.

For example, in 2018, in connection with winning the T-7A Red

| | |

| --- | --- |

In addition, we

As of December 31, 2019 and 2018, our airplane financing commitments totaled $13,377 and $19,462.

For example, in 2018 we completed the acquisition of KLX Inc., a provider of aviation parts and services.

following the transaction.

which can also affect contract profitability.

[removed: On March 13,] [added: In] 2019, [added: following two fatal 737 MAX accidents,] the Federal Aviation Administration (FAA) [added: and non-U.S. civil aviation authorities] issued [removed: an order to suspend] [added: orders suspending commercial] operations of [removed: all] 737 MAX [removed: aircraft in the U.S. and by U.S. aircraft operators following two fatal 737 MAX accidents.][added: aircraft.]

The grounding [removed: is having] [added: has had] a significant adverse impact on our operations and creates significant uncertainty.

We are focused on safely returning the 737 MAX to [removed: service.][added: service for all of our customers.]

| *(Dollars in millions, except per share data)* | | | | | | | | | | | | [added: | | | | | |]

| Years ended December 31, | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Revenues | | [removed: $76,559] | [added: $58,158] | | | [removed: $101,127] | | | [added: $76,559] | [removed: $94,005] | | [added: | | | $101,127 | | |]

| GAAP | | | | | | | | | | | | [added: | | | | | |]

| (Loss)/earnings from operations | | [removed: ($1,975] | [removed: )] [added: ($12,767)] | | | [removed: $11,987] | | | [added: ($1,975)] | [removed: $10,344] | | [added: | | | $11,987 | | |]

| Operating margins | [removed: (2.6] | | [removed: )%] [added: (22.0)] | | [removed: 11.9] [added: %] | | [added: | | (2.6) | |] % | | [removed: 11.0] | | [added: 11.9 | |] % |

| Effective income tax rate | [removed: 71.8] | | [added: 17.5 | |] % | | [removed: 9.9] | | [added: 71.8 | |] % | | [removed: 16.3] | | [added: 9.9 | |] % |

| Net (loss)/earnings | | [removed: ($636] | [removed: )] [added: ($11,941)] | | | [removed: $10,460] | | | [added: ($636)] | [removed: $8,458] | | [added: | | | $10,460 | | |]

| Diluted (loss)/earnings per share | | [removed: ($1.12] | [removed: )] [added: ($20.88)] | | | [removed: $17.85] | | | [added: ($1.12)] | [removed: $13.85] | | [added: | | | $17.85 | | |]

| Non-GAAP (1) | | | | | | | | | | | | [added: | | | | | |]

| Core operating (loss)/earnings | | [removed: ($3,390] | [removed: )] [added: ($14,150)] | | | [removed: $10,660] | | | [added: ($3,390)] | [removed: $8,906] | | [added: | | | $10,660 | | |]

| Core operating margins | [removed: (4.4] | | [added: (24.3 | |] %) | | [removed: 10.5] | | [removed: %] [added: (4.4] | | [removed: 9.5] [added: %)] | | [added: | | 10.5 | |] % |

| Core (loss)/earnings per share | | [removed: ($3.47] | [removed: )] [added: ($23.25)] | | | [removed: $16.01] | | | [added: ($3.47)] | [removed: $12.33] | | [added: | | | $16.01 | | |]

[removed: | (1) | These measures exclude certain components of pension and other postretirement benefit expense.] See [removed: page 42] [added: pages 51] - [removed: 43] [added: 52] for important information about these non-GAAP measures and reconciliations to the most comparable GAAP measures. [removed: |]

| *(Dollars in millions)* | | | | | | | | | | | | [added: | | | | | |]

| Commercial Airplanes | | [removed: $32,255] | [added: $16,162] | | | [removed: $57,499] | | | [added: $32,255] | [removed: $54,612] | | [added: | | | $57,499 | | |]

| Global Services | [removed: 18,468] | | [added: 15,543] | | [removed: 17,056] | | | | [removed: 14,611] [added: 18,468] | | | [added: | | | 17,056 | | |]

| Boeing Capital | [removed: 244] | | [added: 261] | | [removed: 274] | | | | [removed: 307] [added: 244] | | | [added: | | | 274 | | |]

| Unallocated items, eliminations and other | [removed: (635] | | [removed: )] [added: (65)] | | [removed: (94] | | [removed: )] | | [removed: 537] [added: (503)] | | | [added: | | | (2) | | |]

| Total | | [removed: $76,559] | [added: $58,158] | | | [removed: $101,127] | | | [added: $76,559] | [removed: $94,005] | | [added: | | | $101,127 | | |]

The changes in Unallocated items, eliminations and other [removed: in 2019, 2018 and 2017] primarily reflect the timing of eliminations for intercompany aircraft deliveries and the sale of aircraft previously leased to customers.

[removed: Earnings] [added: Loss/Earnings] From Operations

The following table summarizes [removed: Earnings] [added: (Loss)/earnings] from operations:

| Commercial Airplanes | | [removed: ($6,657] | [removed: )] [added: ($13,847)] | | | [removed: $7,830] | | | [added: ($6,657)] | [removed: $5,285] | | [added: | | | $7,830 | | |]

| Global Services | [removed: 2,697] | | [added: 450] | | [removed: 2,536] | | | | [removed: 2,251] [added: 2,697] | | | [added: | | | 2,536 | | |]

| Boeing Capital | [removed: 28] | | [added: 63] | | [removed: 79] | | | | [removed: 114] [added: 28] | | | [added: | | | 79 | | |]

| Segment operating (loss)/profit | [removed: (1,324] | | [removed: )] [added: (11,795)] | | [removed: 12,102] | | | | [removed: 10,033] [added: (1,317)] | | | [added: | | | 12,137 | | |]

| Pension FAS/CAS service cost adjustment | [removed: 1,071] | | [added: 1,024] | | [removed: 1,005] | | | | [removed: 1,127] [added: 1,071] | | | [added: | | | 1,005 | | |]

| Postretirement FAS/CAS service cost adjustment | [removed: 344] | | [added: 359] | | [removed: 322] | | | | [removed: 311] [added: 344] | | | [added: | | | 322 | | |]

| Unallocated items, eliminations and other | [removed: (2,066] | | [removed: )] [added: 337] | | [removed: (1,442] | | [removed: )] | | [removed: (1,127] [added: 217] | | [removed: )] |

| (Loss)/earnings from operations (GAAP) | | [removed: ($1,975] | [removed: )] [added: ($12,767)] | | | [removed: $11,987] | | | [added: ($1,975)] | [removed: $10,344] | | [added: | | | $11,987 | | |]

| FAS/CAS service cost adjustment * | [removed: (1,415] | | [removed: )] [added: (1,383)] | | [removed: (1,327] | | [removed: )] | | [removed: (1,438] [added: (1,415)] | | [removed: )] | [added: | | | (1,327) | | |]

| Core operating (loss)/earnings (Non-GAAP) | | [removed: ($3,390] | [removed: )] [added: ($14,150)] | | | [removed: $10,660] | | | [added: ($3,390)] | [removed: $8,906] | | [added: | | | $10,660 | | |]

[removed: |] * [removed: |] 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. [removed: |]

[removed: |] [removed: |] Core operating earnings is a Non-GAAP measure that excludes the FAS/CAS service cost adjustment. [removed: See page 42. |]

BCA [added: results] decreased by $14,487 million due to lower 737 deliveries and the earnings [removed: charge] [added: charges] for [removed: the] [added: estimated] 737 MAX grounding [added: customer considerations] of $8,259 million, net of insurance recoveries.

BDS earnings from operations increased by [removed: $951] [added: $923] million primarily due to lower charges in 2019 for development programs.

The global outbreak of COVID-19 and the residual impacts of the 737 MAX grounding continue to have significant adverse impacts on our business and are expected to continue to negatively impact revenue, earnings and operating cash flow in future quarters.

They are also having a significant impact on our liquidity - see Liquidity Matters in Note 1 to our Consolidated Financial Statements for a further discussion of liquidity and additional actions we are taking in response to these challenges.

The COVID-19 pandemic has caused an unprecedented shock to demand for air travel, creating a tremendous challenge for our customers, our business and the entire commercial aerospace manufacturing and services sector.

Global economic growth, a primary driver for air travel, is expected to have declined to between -4% and -5% in 2020.

The latest International Air Transport Association (IATA) forecast projected full-year 2020 passenger traffic to be down more than 60% compared to 2019 as global economic activity slows due to COVID-19, and governments severely restricted travel to contain the spread of the virus.

The recovery remains slow and 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 testing, government travel restrictions, and timing and availability of a vaccine.

Air cargo traffic levels contracted this year due to weak global trade growth and capacity limitations given the large impact that COVID-19 has had on international passenger operations, which also carry cargo.

Demand for dedicated freighters is developing better relative to cargo traffic trends.

According to IATA, net losses in 2020 for the airline industry are expected to be approximately $118 billion, compared to net profits of $26 billion in 2019.

Our customers are taking actions to combat the effects of the COVID-19 pandemic on the market by preserving liquidity.

This comes in many forms such as deferrals of advances and other payments to suppliers, deferrals of deliveries, reduced spending on services, and, in some cases, cancellation of orders.

We face a challenging environment in the near to medium term as airlines adjust to reduced traffic which in turn will lower demand for commercial aerospace products and services.

The current environment is also affecting the financial viability of some airlines.

We currently expect it will take approximately three years for world-wide travel to return to 2019 levels and a few years beyond that for the industry to return to long-term trend growth of approximately 5%.

To balance the supply and demand given the COVID-19 shock and to preserve our long-term potential and competitiveness, we have reduced the production rates of several of our BCA programs.

These rate decisions are based on our ongoing assessments of the demand 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 and market demand.

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 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 December 31, 2020, future revenues, earnings and cash flows will be adversely impacted.

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.

Deliveries of the 737 MAX resumed in the fourth quarter of 2020, when the FAA rescinded the order that grounded 737 MAX aircraft in the U.S. 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.

At BGS, we are seeing a direct impact on our commercial supply chain business as fewer flights and more aircraft retirements 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 BDS, we continue to see a healthy market with solid demand for our major platforms and programs both domestically and internationally.

However, we experienced near-term production impacts associated with our temporary suspension of operations at various locations in 2020 .

In March and April of 2020, as a result of COVID-19, 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.

Non-U.S. civil aviation authorities have issued directives to the same effect.

Deliveries of the 737 MAX have been suspended until clearance is granted by the appropriate regulatory authorities.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | |

| --- | --- |

| Defense, Space & Security | 26,227 | | | | 26,392 | | | | 23,938 | | |

Revenues increased by $7,122 million in 2018 compared with 2017 due to higher revenues at BCA, BDS, and BGS.

BCA revenues increased by $2,887 million due to higher 737 and 787 deliveries and favorable 737 and 787 model mix, which more than offset lower 777 and 747 deliveries.

BDS revenues increased by $2,454 million primarily due to non-US contract awards for fighters, higher weapons revenue, the final C-17 aircraft sale and higher satellites revenue.

BGS revenues increased by $2,445 million due to higher parts revenue, including the acquisition of KLX, Inc. (KLX) in the fourth quarter of 2018.

| Defense, Space & Security | 2,608 | | | | 1,657 | | | | 2,383 | | |

Earnings from operations increased by $1,643 million in 2018 compared with 2017 primarily due to higher earnings at BCA and BGS, which more than offset the decrease at BDS and the change in Unallocated items, eliminations and other.

BCA earnings from operations increased by $2,545 million due to higher revenues and improved operating margins.

The increase in operating margins is primarily due to higher 787 margins, improved cost performance and favorable delivery mix.

BDS earnings from operations decreased by $726 million as earnings growth from higher revenues was more than offset by charges of $691 million related to winning the T-7A Red Hawk and MQ-25 competitions, as well as higher KC-46A Tanker reach-forward losses.

The increase in 2018 compared to 2017 was due to decreases in interest cost and increases in estimated return on assets, partially offset by higher amortization of actuarial losses.

Costs on these contracts are recorded as incurred.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Cost of sales increased by $4,878 million in 2018 compared with 2017, primarily due to higher revenue and higher reach-forward losses.

| Defense, Space & Security | 758 | | | | 788 | | | | 834 | | |

| Other | 384 | | | | 132 | | | | (42 | | ) |

Research and development expense increased by $90 million in 2018 compared with 2017 due to investment in product development, partially offset by lower spending on 777X and 787-10.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

The decrease in contractual backlog during 2019 was primarily due to BCA deliveries in excess of new orders and a reduction in backlog related to orders from a customer that experienced liquidity issues, partially offset by BDS current year contract awards in excess of revenue recognized on contracts awarded in prior years

Export-Import Bank of the United States Many of our non-U.S. customers finance purchases through the Export-Import Bank of the United States.

The bank is authorized through December 31, 2026.

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.

Airline Industry Environment Global economic growth, a primary driver for air travel, was 2.6% in 2019, slightly below the long-term average of approximately 3%.

Passenger traffic is estimated to grow by 4% to 5% in 2019, close to the long-term average of approximately 5%.

The grounding of the 737 MAX and suspension of 737 MAX deliveries has slowed growth at certain airlines.

While growth was solid across most major world regions, there continues to be variation between regions and airline business models.

Despite some moderation in the growth rates, airlines operating in Asia Pacific and Europe, as well as low-cost-carriers globally, are leading the 2019 growth in passenger traffic.

Air cargo traffic growth is expected to contract this year due to weak global trade growth.

Airlines continue to focus on increasing revenue through alliances, partnerships, new marketing initiatives, and effective leveraging of ancillary services and related revenues.

Airlines are also focusing on reducing costs and renewing fleets to leverage more efficient airplanes.

We have financial instruments that are subject to interest rate risk, principally [removed: fixed-rate] [added: fixed- and floating-rate] debt obligations, and customer financing assets and liabilities.

[removed: As of December 31, 2019, the impact over the next 12 months] [added: An increase or decrease] of [removed: a] 100 basis [removed: point rise] [added: points] in interest rates [removed: to] [added: on this floating-rate debt would increase or decrease] our pre-tax earnings [removed: would not be significant.][added: by $138 million over the next 12 months.]

At December 31, [removed: 2019,] [added: 2020,] a 10% increase or decrease in the exchange rate in our portfolio of foreign currency contracts would have increased or decreased our unrealized losses by [removed: $226] [added: $245] million.

We use commodity swaps [added: and commodity purchase contracts] to hedge against these potentially unfavorable price changes.

At December 31, [removed: 2019,] [added: 2020,] a 10% increase or decrease in the market price in our commodity derivatives would have increased or decreased our unrealized losses by [removed: $63] [added: $38] million.

[removed: Consistent with the use of these contracts] to neutralize the effect of market price fluctuations, such unrealized losses or gains would be offset by corresponding gains or losses, respectively, in the remeasurement of the underlying transactions being hedged.

In the first quarter of 2020, we entered into a $13.8 billion two-year delayed draw floating-rate term loan credit agreement.

Consistent with the use of these contracts

[removed: | • |] [added: -] Commercial Airplanes (BCA); [removed: |]

[removed: | • |] [added: -] Defense, Space & Security (BDS); [removed: |]

[removed: | • |] [added: -] Global Services (BGS); [removed: |]

[removed: | • |] [added: -] Boeing Capital (BCC). [removed: |]

Revenues from the U.S. DoD, including foreign military sales through the U.S. government, accounted for approximately [removed: 84%] [added: 83%] of its [removed: 2019] [added: 2020] revenues.

Global [removed: Services Segment][added: Services Segment]

BGS sustains aerospace platforms and systems with a full spectrum of products and services, including supply chain [added: and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services.]

Boeing [removed: Capital Segment][added: Capital Segment]

BCC seeks to ensure that Boeing customers have the financing they need to buy and take delivery of their Boeing [removed: product and manages] [added: product, while managing] overall financing exposure.

[removed: As of December 31, 2019, our] [added: Our] principal collective bargaining agreements were with the following unions:

| Union | [added: | |] Percent of our Employees Represented | [added: | |] Status of the Agreements with Major Union | [added: | |]

| The International Association of Machinists and Aerospace Workers (IAM) | [removed: 22%] | [added: | 20% | | |] We have two major agreements; one expiring in [removed: June] [added: July] 2022 and one in September 2024. | [added: | |]

| The Society of Professional Engineering Employees in Aerospace (SPEEA) | [removed: 11%] | [added: | 10% | | |] We have two major agreements expiring in October [removed: 2022.] [added: 2026.] | [added: | |]

| The United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) | [added: | |] 1% | [added: | |] We have one major agreement expiring in October 2022. | [added: | |]

BDS faces strong competition in all market segments, primarily from Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon [removed: Company,] [added: Technologies Corporation,] General Dynamics Corporation and SpaceX.

[added: Non-U.S.] companies such as BAE Systems and Airbus Group continue to build a strategic presence in the U.S. market by strengthening their North American operations and partnering with U.S. defense companies.

BDS expects the trend of strong competition to continue into [removed: 2020.][added: 2021.]

The commercial and defense services [removed: market is an] [added: markets are] extremely challenging [removed: landscape] [added: and are] made up of many of the same strong U.S. and non-U.S. competitors facing BCA and BDS along with other competitors in those markets.

BGS expects the market to remain highly competitive in [removed: 2020,] [added: 2021,] and intends to grow market share by leveraging a high level of customer satisfaction and productivity.

These requirements are generally administered by the national aviation authorities of each country and, in the case of Europe, coordinated by the European [removed: Joint] [added: Union] Aviation [removed: Authorities.][added: Safety Agency.]

*Environmental.* We are subject to various federal, state, local and non-U.S. laws and regulations relating to environmental protection, including the discharge, treatment, storage, disposal and [removed: remediation of hazardous substances and wastes.]

If we were required to fully fund the remediation of a site for which we were originally assigned a partial share, the statutory [added: framework would allow us to pursue rights to contribution from other PRPs.]

For additional information relating to environmental contingencies, see Note [removed: 14] [added: 13] to our Consolidated Financial Statements.

Human Capital

The COVID-19 pandemic continues to impact lives and businesses around the world.

We have taken proactive steps to help protect the health and safety of our employees and maintain business continuity.

A vast majority of our office workers continue to telecommute.

Within our production and office areas we have established a number of safety protocols, including face covering and physical distance requirements, enhanced cleaning, encouraging daily self-health checks, voluntary temperature screening stations, and access to virtual primary care physicians at no cost.

We have also implemented a coronavirus hotline with direct access to our Health Services group to report COVID-19 tests due to illness or exposure and positive COVID-19 tests.

As part of that reporting process, we have developed a robust contact tracing program to identify employees who were in close contact with the ill employee in the workplace.

We are also actively planning for the time when COVID-19 vaccines will be available for our employees, including reaching out to county public health departments to learn more about their plans to distribute vaccines and monitoring information from vaccine manufacturers about when vaccines will be available.

All of the actions above are overseen by Boeing’s Crisis Management Working Group, a multi-functional, multi-discipline team tasked with integrating all aspects of Boeing’s COVID-19 response.

Additionally, we are adapting to the market impacts of COVID-19 and positioning the company for the future.

One of these measures includes reducing the size of our workforce.

As of December 31, 2020, Boeing’s total workforce was approximately 141,000, with 11% located outside of the U.S. We expect to reduce the size of our workforce in 2021 through additional workforce actions as well as natural attrition.

As of December 31, 2020, our workforce is composed of approximately 47,000 union members.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

We aspire to be the most equitable, diverse and inclusive company.

Guided by our values, we are committed to creating a company where everyone is included and respected, and where we support each other in reaching our full potential.

We are committed to diverse representation across all levels of our workforce to reflect the vibrant and thriving diversity of the communities in which we live and work.

We also support Business Resource Groups open to all employees that focus on gender, race & ethnicity, generations, gender identity, sexual orientation, disability or veteran status.

These groups help foster inclusion among all teammates, build awareness, recruit and retain a diverse workforce and support the company in successfully operating in a global, multicultural business environment.

We are committed to increased transparency and will publicly share our diversity metrics annually, beginning in 2021.

To attract and retain the best-qualified talent, we offer competitive benefits, including market-competitive compensation, healthcare, paid time off, parental leave, retirement benefits, tuition assistance, employee skills development, leadership development, and rotation programs.

In 2020, our voluntary resignation rate was approximately 3%.

Additionally, we hired approximately 8,000 new employees in 2020 for critical skills and had an offer acceptance rate of 82%.

Employees are encouraged to provide feedback about their experience through ongoing employee engagement activities.

Boeing actively listens to its employees via surveys ranging from pre-hire to exiting the company.

These voluntary surveys provide aggregate trend reports for the company to address in real time and ensure Boeing maintains an employee-focused experience and culture.

We also invest in rewarding performance and have established a multi-level recognition program for the purpose of acknowledging the achievements of excellent individual or team performance.

We are committed to supporting our employees continuous development of professional, technical and leadership skills through access to digital learning resources and through partnerships with leading professional/technical societies and organizations around the world.

For 2020, Boeing employees consumed approximately 4 million hours of learning.

We offer the ability for our people to pursue degree programs, professional certificates and individual courses in strategic fields of study from more than 300 accredited colleges and universities, online and across the globe through our tuition assistance program.

Over 12,000 Boeing employees leverage these programs every year.

Safety, quality and integrity are at the core of how Boeing operates.

We aspire to achieve zero workplace injuries and provide a safe, open and accountable work environment for our employees.

We provide several channels for all employees to speak up, ask for guidance, and report concerns related

to ethics or safety violations.

We address employee concerns and take appropriate actions that uphold our Boeing values.

remediation of hazardous substances and wastes.

| | |

| --- | --- |

and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services.

Employees

Total workforce level at December 31, 2019 was approximately 161,100.

| | | |

| --- | --- | --- |

Non-U.S.

framework would allow us to pursue rights to contribution from other PRPs.

For a discussion of contingencies related to legal proceedings, see Note [removed: 22] [added: 21] to our Consolidated Financial Statements, which is hereby incorporated by reference.

[removed: ][added: ]

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission file number [removed: 1-442][added: 1-442]

| | [added: | |] THE BOEING COMPANY | | [added: | | | |]

| Delaware | | | | [added: | | | | | | | |] 91-0425694 | [added: | |]

| (State or other jurisdiction [removed: of incorporation] [added: of incorporation] or organization) | | | | [added: | | | | | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| 100 N. Riverside Plaza, | [added: | |] Chicago, | [added: | |] IL | | [added: | | | |] 60606-1596 | [added: | |]

| (Address of principal executive offices) | | | | [added: | | | | | | | |] (Zip Code) | [added: | |]

Registrant’s telephone number, including area [removed: code (312)\-544-2000][added: code (312)-544-2000]

| Common Stock, $5.00 Par Value | | [added: | | | |] BA | | [added: | | | |] New York Stock Exchange | [added: | |]

| [removed: (Title] [added: (Title] of each [removed: class)] [added: class)] | | [removed: (Trading Symbol)] | | [removed: (Name] [added: | | (Trading Symbol) | | | | | | (Name] of each exchange on which [removed: registered)] [added: registered)] | [added: | |]

| Large Accelerated Filer | [added: | |] ☒ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| Emerging growth company | [added: | |] ☐ | | | | [added: | | | | | | | |]

As of June 30, [removed: 2019,] [added: 2020,] there were [removed: 562,702,606] [added: 564,420,221] common shares outstanding held by nonaffiliates of the registrant, and the aggregate market value of the common shares (based upon the closing price of these shares on the New York Stock Exchange) was approximately [removed: $204.8] [added: $103.5] billion.

The number of shares of the registrant’s common stock outstanding as of January [removed: 24, 2020] [added: 25, 2021] was [removed: 563,152,208.][added: 582,996,860.]

Part III incorporates information by reference to the registrant’s definitive proxy statement, to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended December 31, [removed: 2019.][added: 2020.]

For the Fiscal Year [removed: Ended December] [added: Ended December] 31, [removed: 2019][added: 2020]

| [removed: [PART I](#s43F770707153570AA4E455853E6314FE)] [added: [PART I](#i96590b8c6e314800be0151fa0daac962_13)] | | | [added: | | | | | |] Page | [added: | |]

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| | [added: | |] [Item [removed: 3.](#sA417A83CBECE525C8CA9842C96E447E4)] [added: 3.](#i96590b8c6e314800be0151fa0daac962_70)] | [added: | |] [Legal [removed: Proceedings](#sA417A83CBECE525C8CA9842C96E447E4)] [added: Proceedings](#i96590b8c6e314800be0151fa0daac962_70)] | [removed: [16](#sA417A83CBECE525C8CA9842C96E447E4)] | [added: | [21](#i96590b8c6e314800be0151fa0daac962_70) | | |]

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| [removed: [PART III](#s9039F01B84B05223ABE121FD6EDAD134)] [added: [PART III](#i96590b8c6e314800be0151fa0daac962_355)] | | | | [added: | | | | | | | |]

| | [added: | |] [Item [removed: 10.](#s33AC482B06345E10AA92D4932C226FA1)] [added: 10.](#i96590b8c6e314800be0151fa0daac962_358)] | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s33AC482B06345E10AA92D4932C226FA1)] [added: Governance](#i96590b8c6e314800be0151fa0daac962_358)] | [removed: [124](#s33AC482B06345E10AA92D4932C226FA1)] | [added: | [141](#i96590b8c6e314800be0151fa0daac962_358) | | |]

| | [added: | |] [Item [removed: 11.](#sD0AC01A26D5C5D51A5508DBAE694D218)] [added: 11.](#i96590b8c6e314800be0151fa0daac962_361)] | [added: | |] [Executive [removed: Compensation](#sD0AC01A26D5C5D51A5508DBAE694D218)] [added: Compensation](#i96590b8c6e314800be0151fa0daac962_361)] | [removed: [127](#sD0AC01A26D5C5D51A5508DBAE694D218)] | [added: | [144](#i96590b8c6e314800be0151fa0daac962_361) | | |]

| | [added: | |] [Item [removed: 12.](#s45B7BC2BAD5854C481D5FBFC21C00B81)] [added: 12.](#i96590b8c6e314800be0151fa0daac962_364)] | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s45B7BC2BAD5854C481D5FBFC21C00B81)] [added: Matters](#i96590b8c6e314800be0151fa0daac962_364)] | [removed: [128](#s45B7BC2BAD5854C481D5FBFC21C00B81)] | [added: | [145](#i96590b8c6e314800be0151fa0daac962_364) | | |]

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| [PART II](#i96590b8c6e314800be0151fa0daac962_76) | | | | | | | | | | | |

| [PART IV](#i96590b8c6e314800be0151fa0daac962_373) | | | | | | | | | | | |

| | | | [Signatures](#i96590b8c6e314800be0151fa0daac962_382) | | | | | | [150](#i96590b8c6e314800be0151fa0daac962_382) | | |

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| [PART II](#s44C6C5FE5F2C581C8CDD4E631B369917) | | | |

| [PART IV](#s9410B3BC95F7567DA15DFCA853756462) | | | |

| | [Signatures](#s55B853FA7E6453309192630413F8F908) | | [132](#s55B853FA7E6453309192630413F8F908) |

We occupied approximately 86 million square feet of floor space on December 31, [removed: 2019] [added: 2020] for manufacturing, warehousing, engineering, administration and other productive uses, of which approximately 93% was located in the United States.

The following table provides a summary of the floor space by business as of December 31, [removed: 2019:][added: 2020:]

| *(Square feet in thousands)* | [added: | |] Owned | | | [added: | | |] Leased | | | [added: | | |] Government Owned(1) | | | [added: | | |] Total | | [added: |]

(2) Other includes [removed: BCC,] sites used for [added: BCC,] common internal [removed: services,] [added: services] and our Corporate Headquarters.

At December 31, [removed: 2019,] [added: 2020,] we occupied in excess of [removed: 78.9] [added: 77.4] million square feet of floor space at the following major locations:

[removed: | • |] [added: -] Commercial Airplanes – Greater Seattle, WA; [removed: Greater] Charleston, SC; Portland, OR; Greater Los Angeles, CA; [removed: Greater] Salt Lake City, UT; Canada; and Australia [removed: |]

[removed: | • |] [added: -] Defense, Space & Security – Greater St. Louis, MO; Greater [added: Seattle, WA; Greater] Los Angeles, CA; [removed: Greater Seattle, WA;] Philadelphia, PA; Mesa, AZ; Huntsville, AL; Oklahoma City, OK; Heath, OH; Greater Washington, DC; Australia; and Houston, TX [removed: |]

[removed: | • |] [added: -] Global Services – San Antonio, TX; Greater Miami, FL; Dallas, TX; Jacksonville, FL; Germany; [removed: Greater Los Angeles, CA;] Mesa, AZ; and Greater Denver, CO [removed: |]

[removed: | • |] [added: -] Other – Chicago, IL; Greater Seattle, WA; Greater Los Angeles, CA ; Greater [removed: Washington, DC; India; and Greater] St. Louis, [removed: MO |][added: MO; and Greater Washington, DC.]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Commercial Airplanes | | | 40,444 | | | | | | 2,303 | | | | | | | | | | | | 42,747 | | |

| Defense, Space & Security | | | 23,109 | | | | | | 6,335 | | | | | | | | | | | | 29,444 | | |

| Global Services | | | 683 | | | | | | 7,303 | | | | | | 348 | | | | | | 8,334 | | |

| Other(2) | | | 2,385 | | | | | | 2,343 | | | | | | 318 | | | | | | 5,046 | | |

| Total | | | 66,621 | | | | | | 18,284 | | | | | | 666 | | | | | | 85,571 | | |

To support business needs, property requirements are being evaluated to align with previously announced staffing reductions, utilization studies, and strategic growth investments to optimize footprint.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Commercial Airplanes | 41,098 | | | 2,471 | | | | | | 43,569 | |

| Defense, Space & Security | 23,401 | | | 5,651 | | | | | | 29,052 | |

| Global Services | 686 | | | 7,596 | | | | | | 8,282 | |

| Other(2) | 2,504 | | | 2,214 | | | 318 | | | 5,036 | |

| Total | 67,689 | | | 17,932 | | | 318 | | | 85,939 | |

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| --- | --- |

We believe that our major properties are adequate for our present needs and, as supplemented by planned improvements and construction, expect them to remain adequate for the foreseeable future.

As of January [removed: 24, 2020,] [added: 25, 2021,] there were [removed: 100,750] [added: 99,383] shareholders of record.

The following table provides information about purchases we made during the quarter ended December 31, [removed: 2019] [added: 2020] of equity securities that are registered by us pursuant to Section 12 of the Exchange Act:

| | [added: | |] Total Number of Shares Purchased(1) | | [added: | | | |] Average Price Paid per Share | | | | [added: | |] Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | [added: | | |] Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs(2) | | |

[removed: | (1) | A] [added: (1)A] total of [removed: 19,719] [added: 24,385] 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. [removed: We did not purchase any shares of our common stock in the open market pursuant to our repurchase program or in swap transactions. |]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | (a) | | | | | | (b) | | | | | | (c) | | | | | | (d) | | |

| 10/1/2020 thru 10/31/2020 | | | 4,707 | | | | | | $168.15 | | | | | | | | | | | | | | |

| 11/1/2020 thru 11/30/2020 | | | 3,072 | | | | | | 152.35 | | | | | | | | | | | | | | |

| 12/1/2020 thru 12/31/2020 | | | 16,683 | | | | | | 212.42 | | | | | | | | | | | | | | |

| Total | | | 24,462 | | | | | | $196.36 | | | | | | | | | | | | | | |

We did not purchase any shares of our common stock in the open market pursuant to our repurchase program.

We purchased 77 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.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | (a) | | (b) | | | | (c) | | | (d) | | |

| 10/1/2019 thru 10/31/2019 | 3,521 | | | $365.32 | | | | | | | $17,349 | |

| 11/1/2019 thru 11/30/2019 | 10,739 | | 347.54 | | | | | | | 17,349 | | |

| 12/1/2019 thru 12/31/2019 | 5,459 | | 346.06 | | | | | | | 17,349 | | |

| Total | 19,719 | | | $350.31 | | | — | | | | | |

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| --- | --- |

| (2) | On December 17, 2018, the Board approved a repurchase plan for up to $20 billion of common stock. Share repurchases under this plan are currently suspended. |

[removed: |] Five-Year Summary (Unaudited) [removed: | | | | | | | | | | | | | | | | | | | | |]

| *(Dollars in millions, except per share data)* | [removed: 2019] | | [added: 2020] | | [added: | | | | 2019 | | | | | |] 2018 | | | | [added: | |] 2017 | | | | [removed: 2016] | | [added: 2016] | | [removed: 2015] | | | [removed: (2)] |

| Revenues | | [removed: $76,559] | [added: $58,158] | | | [added: | | | $76,559 | | | | | |] $101,127 | | | | [added: | |] $94,005 | | | | [removed: $93,496] | | [added: $93,496] | | [removed: $96,114] | | | [added: |]

| Net (loss)/earnings | | [removed: ($636] | [removed: )] [added: ($11,941)] | | | [added: | | | ($636) | | | | | |] $10,460 | | | | [added: | |] $8,458 | | | | [removed: $5,034] | | [added: $5,034] | | [removed: $5,176] | | | [added: |]

| Basic (loss)/earnings per share | | [removed: ($1.12] | [removed: )] [added: ($20.88)] | | | [added: | | | ($1.12) | | | | | |] $18.05 | | | | [added: | |] $14.03 | | | | [removed: $7.92] | | [added: $7.92] | | [removed: $7.52] | | | [added: |]

| Diluted (loss)/earnings per share | [removed: (1.12] | | [removed: )] [added: (20.88)] | | [added: | | | | (1.12) | | | | | |] 17.85 | | | | [added: | |] 13.85 | | | | [removed: 7.83] | | [added: 7.83] | | [removed: 7.44] | | | |

| Dividends declared per [removed: share(1)] [added: share (1)] | [removed: 8.22] | | [added: —] | | [added: | | | | 8.22 | | | | | |] 7.19 | | | | [added: | |] 5.97 | | | | [removed: 4.69] | | [added: 4.69] | | [removed: 3.82] | | | |

| Cash and cash equivalents | | [removed: $9,485] | [added: $7,752] | | | [added: | | | $9,485 | | | | | |] $7,637 | | | | [added: | |] $8,813 | | | | [removed: $8,801] | | [added: $8,801] | | [removed: $11,302] | | | [added: |]

| Short-term and other investments | [removed: 545] | | [added: 17,838] | | [added: | | | | 545 | | | | | |] 927 | | | | [added: | |] 1,179 | | | | [removed: 1,228] | | [added: 1,228] | | [removed: 750] | | | |

| Total assets | [removed: 133,625] | | [added: 152,136] | | [added: | | | | 133,625 | | | | | |] 117,359 | | | | [added: | |] 112,362 | | | | [removed: 109,076] | | [added: 109,076] | | [removed: 94,408] | | | |

| Total debt | [removed: 27,302] | | [added: 63,583] | | [added: | | | | 27,302 | | | | | |] 13,847 | | | | [added: | |] 11,117 | | | | [removed: 9,952] | | [added: 9,952] | | [removed: 9,964] | | | |

| Operating cash flow | | [removed: ($2,446] | [removed: )] [added: ($18,410)] | | | [added: | | | ($2,446) | | | | | |] $15,322 | | | | [added: | |] $13,346 | | | | [removed: $10,496] | | [added: $10,496] | | [removed: $9,363] | | | [added: |]

| Total backlog | | [removed: $463,403] | [added: $363,404] | | | [added: | | | $463,403 | | | | | |] $490,481 | | | | [added: | |] $474,640 | | | | [removed: $473,492] | | [removed: (2)] [added: $473,492] | | [removed: $489,299] | [added: (2)] | | [added: |]

| Year-end workforce | [removed: 161,100] | | [added: 141,000] | | [added: | | | | 161,100 | | | | | |] 153,000 | | | | [added: | |] 140,800 | | | | [removed: 150,500] | | [added: 150,500] | | [removed: 161,400] | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| Investing cash flow | | | ($18,366) | | | | | | ($1,530) | | | | | | ($4,621) | | | | | | ($2,058) | | | | | | ($3,378) | | | | | |

| Financing cash flow | | | $34,955 | | | | | | $5,739 | | | | | | ($11,722) | | | | | | ($11,350) | | | | | | ($9,587) | | | | | |

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(1) In March 2020, the Board of Directors suspended the declaration and/or payment of cash dividends until further notice.

(2) 2016 Backlog does not reflect impact of the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).

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(1) Cash dividends have been paid on common stock every year since 1942.

(2) Amounts prior to 2016, along with 2016 Backlog, do not reflect impact of the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost; ASU 2016-18 Statement of Cash Flows (Topic 230) Restricted Cash; in the first quarter of 2018.

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| [Consolidated Statements of [removed: Operations](#s0139E18066BB5529B99F926C01099091)] [added: Operations](#i96590b8c6e314800be0151fa0daac962_190)] | [removed: [51](#s0139E18066BB5529B99F926C01099091)] | [added: | [62](#i96590b8c6e314800be0151fa0daac962_190) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#sBDE24D81B1E555349349350145331269)] [added: Income](#i96590b8c6e314800be0151fa0daac962_193)] | [removed: [52](#sBDE24D81B1E555349349350145331269)] | [added: | [63](#i96590b8c6e314800be0151fa0daac962_193) | | |]

| [Consolidated Statements of Financial [removed: Position](#sBC1306F9473F5F0C840196C8376BD836)] [added: Position](#i96590b8c6e314800be0151fa0daac962_199)] | [removed: [53](#sBC1306F9473F5F0C840196C8376BD836)] | [added: | [64](#i96590b8c6e314800be0151fa0daac962_199) | | |]

| [Consolidated Statements of Cash [removed: Flows](#s9BDE6DCD81C4587782A41DB4DB9EA1ED)] [added: Flows](#i96590b8c6e314800be0151fa0daac962_205)] | [removed: [54](#s9BDE6DCD81C4587782A41DB4DB9EA1ED)] | [added: | [65](#i96590b8c6e314800be0151fa0daac962_205) | | |]

| [Consolidated Statements of [removed: Equity](#s7E767AE388B85C3D98AF6289FEAF7BD4)] [added: Equity](#i96590b8c6e314800be0151fa0daac962_208)] | [removed: [55](#s7E767AE388B85C3D98AF6289FEAF7BD4)] | [added: | [66](#i96590b8c6e314800be0151fa0daac962_208) | | |]

| [Summary of Business Segment [removed: Data](#s026110024A6A558CBE644E4317AAAB83)] [added: Data](#i96590b8c6e314800be0151fa0daac962_214)] | [removed: [56](#s026110024A6A558CBE644E4317AAAB83)] | [added: | [67](#i96590b8c6e314800be0151fa0daac962_214) | | |]

[removed: | [Note] [added: Note] 1 [removed: -] [added: –] Summary of Significant Accounting [removed: Policies](#s4A05DF1BD18A597AAD6DAFD74063D802) | [57](#s4A05DF1BD18A597AAD6DAFD74063D802) |][added: Policies]

[removed: | [Note 3 -] [added: Note 2 –] Goodwill and Acquired [removed: Intangibles](#s7A389F7F4F8450EC8F3A8D7414EE267E) | [71](#s7A389F7F4F8450EC8F3A8D7414EE267E) |][added: Intangibles]

[removed: | [Note 4 -] [added: Note 3 –] Earnings Per [removed: Share](#sA17C755299C65D719CDB7F49B717DCF4) | [72](#sA17C755299C65D719CDB7F49B717DCF4) |][added: Share]

[removed: | [Note 5 -] [added: Note 4 –] Income [removed: Taxes](#s20FED38696A752FF987DF157F16D449D) | [73](#s20FED38696A752FF987DF157F16D449D) |][added: Taxes]

[removed: | [Note 6 -] [added: Note 5 –] Accounts [removed: Receivable](#sFB458717C9A853DA9DE38AE43477E5DB) | [76](#sFB458717C9A853DA9DE38AE43477E5DB) |][added: Receivable, net]

[removed: | [Note] [added: Note] 7 [removed: - Inventories](#sAABB4F1E1B2150448EAD2D7CDA5C5EFB) | [77](#sAABB4F1E1B2150448EAD2D7CDA5C5EFB) |][added: – Inventories]

[removed: | [Note] [added: Note] 8 [removed: -] [added: –] Contracts with [removed: Customers](#s8052931D556C50F29819A772BCFE83E6) | [78](#s8052931D556C50F29819A772BCFE83E6) |][added: Customers]

[removed: | [Note] [added: Note] 9 [removed: -] [added: –] Customer [removed: Financing](#s117D67DF4B765834AC71D9576E299138) | [78](#s117D67DF4B765834AC71D9576E299138) |][added: Financing]

[removed: | [Note] [added: Note] 10 [removed: -] [added: –] Property, Plant and [removed: Equipment](#sF0D97DF9E06754D590B4F8D310D70AB7) | [81](#sF0D97DF9E06754D590B4F8D310D70AB7) |][added: Equipment]

[removed: | [Note] [added: Note] 11 [removed: - Investments](#sE2740630EC48520F933736456B4A78D8) | [82](#sE2740630EC48520F933736456B4A78D8) |][added: – Investments]

[removed: | [Note 13 - Leases](#s5fc09d06fb2542e8a452ae5b8d185004) | [83](#s5fc09d06fb2542e8a452ae5b8d185004) |][added: Note 12 – Leases]

[removed: | [Note 14 -] [added: Note 13 –] Liabilities, Commitments and [removed: Contingencies](#s84C60B9A28A252D0855F57B0D0817BA0) | [84](#s84C60B9A28A252D0855F57B0D0817BA0) |][added: Contingencies]

[removed: | [Note 15 -] [added: Note 14 –] Arrangements with Off-Balance Sheet [removed: Risk](#s2214C39DB6355E41AA9A5BBC2CED74AA) | [89](#s2214C39DB6355E41AA9A5BBC2CED74AA) |][added: Risk]

[removed: | [Note 16 - Debt](#s1D427C5AD13A58469D680206E8AC00A7) | [90](#s1D427C5AD13A58469D680206E8AC00A7) |][added: Note 15 – Debt]

[removed: | [Note 17 -] [added: Note 16 –] Postretirement [removed: Plans](#s1728FEA564855D0B847468E8B9B33799) | [92](#s1728FEA564855D0B847468E8B9B33799) |][added: Plans]

[removed: | [Note 18 -] [added: Note 17 –] Share-Based Compensation and Other Compensation [removed: Arrangements](#sBC607E2EC68758C5A5E483219ACE861D) | [101](#sBC607E2EC68758C5A5E483219ACE861D) |][added: Arrangements]

[removed: | [Note 19 -] [added: Note 18 –] Shareholders’ [removed: Equity](#s79FA32AC206B5F0AAC492F5EFFA2B5E0) | [105](#s79FA32AC206B5F0AAC492F5EFFA2B5E0) |][added: Equity]

[removed: | [Note 20 -] [added: Note 19 –] Derivative Financial [removed: Instruments](#sCA93917838A754F6AFF87680E62148C4) | [106](#sCA93917838A754F6AFF87680E62148C4) |][added: Instruments]

[removed: | [Note 21 -] [added: Note 20 –] Fair Value [removed: Measurements](#s0AB3BC73BB525BEBBDF25BF7C59C6183) | [109](#s0AB3BC73BB525BEBBDF25BF7C59C6183) |][added: Measurements]

[removed: | [Note 22 -] [added: Note 21 –] Legal [removed: Proceedings](#sF1B954BEA5B054A0A99FB08013CDA1F7) | [111](#sF1B954BEA5B054A0A99FB08013CDA1F7) |][added: Proceedings]

[removed: | [Note 23 -] [added: Note 22 –] Segment and Revenue [removed: Information](#sEBB1CB693ED85556B82DF0047520BC7E) | [111](#sEBB1CB693ED85556B82DF0047520BC7E) |][added: Information]

[removed: | [Note 24 -] [added: Note 23 –] Quarterly Financial [removed: Data](#s3F503887D387530DBCC3ADE0CD721CEE) | [117](#s3F503887D387530DBCC3ADE0CD721CEE) |][added: Data (Unaudited)]

| [Reports of Independent Registered Public Accounting [removed: Firm](#s3C6242A68DAC57AAA8FC07A32A155116)] [added: Firm](#i96590b8c6e314800be0151fa0daac962_343)] | [removed: [118](#s3C6242A68DAC57AAA8FC07A32A155116)] | [added: | [132](#i96590b8c6e314800be0151fa0daac962_343) | | |]

| Years ended December 31, | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Sales of products | | [removed: $66,094] | [added: $47,142] | | | [removed: $90,229] | | | [added: $66,094] | [removed: $83,740] | | [added: | | | $90,229 | | |]

| Sales of services | [removed: 10,465] | | [added: 11,016] | | [removed: 10,898] | | | | [removed: 10,265] [added: 10,465] | | | [added: | | | 10,898 | | |]

| Total revenues | [removed: 76,559] | | [added: 58,158] | | [removed: 101,127] | | | | [removed: 94,005] [added: 76,559] | | | [added: | | | 101,127 | | |]

| Cost of products | [removed: (62,877] | | [removed: )] [added: (54,568)] | | [removed: (72,922] | | [removed: )] | | [removed: (68,879] [added: (62,877)] | | [removed: )] | [added: | | | (72,922) | | |]

| Cost of services | [removed: (9,154] | | [removed: )] [added: (9,232)] | | [removed: (8,499] | | [removed: )] | | [removed: (7,663] [added: (9,154)] | | [removed: )] | [added: | | | (8,499) | | |]

| Boeing Capital interest expense | [removed: (62] | | [removed: )] [added: (43)] | | [removed: (69] | | [removed: )] | | [removed: (70] [added: (62)] | | [removed: )] | [added: | | | (69) | | |]

| Total costs and expenses | [removed: (72,093] | | [removed: )] [added: (63,843)] | | [removed: (81,490] | | [removed: )] | | [removed: (76,612] [added: (72,093)] | | [removed: )] | [added: | | | (81,490) | | |]

| | [removed: 4,466] | | [added: (5,685)] | | [removed: 19,637] | | | | [removed: 17,393] [added: 4,466] | | | [added: | | | 19,637 | | |]

| [removed: (Loss)/income] [added: Income/(loss)] from operating investments, net | [removed: (4] | | [removed: )] [added: 9] | | [removed: 111] | | | | [removed: 204] [added: (4)] | | | [added: | | | 111 | | |]

| [Note 6 - Allowance for Losses on Financial Assets](#i96590b8c6e314800be0151fa0daac962_3235) | | | [88](#i96590b8c6e314800be0151fa0daac962_3235) | | |

| Less: net loss attributable to noncontrolling interest | | | (68) | | | | | | | | | | | | | | |

| Net (loss)/earnings attributable to Boeing Shareholders | | | ($11,873) | | | | | | ($636) | | | | | | $10,460 | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| Less: Comprehensive loss related to noncontrolling interest | | | (68) | | | | | | (41) | | | | | | (21) | | |

| Comprehensive (loss)/income attributable to Boeing Shareholders, net of tax | | | ($12,853) | | | | | | ($1,706) | | | | | | $11,750 | | |

See Notes to the Consolidated Financial Statements on pages 67 – 131.

| Total liabilities | | | 170,211 | | | | | | 141,925 | | |

See Notes to the Consolidated Financial Statements on pages 67 – 131.

| | | | | | | | | | | | | | | | | | |

| *(Dollars in millions)* | | | | | | | | | | | | | | | | | |

| Treasury shares issued for 401(k) contribution | | | 195 | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| 777X reach-forward loss | | | 6,493 | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

See Notes to the Consolidated Financial Statements on pages 67 – 131.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 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 | | | | | | | | | | | | | | | (11,873) | | | | | | (68) | | | (11,941) | | |

| Other comprehensive loss, net of tax of $52 | | | | | | | | | | | | | | | | | | (980) | | | | | | (980) | | |

| Share-based compensation | | | | | | 250 | | | | | | | | | | | | | | | | | | 250 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Treasury shares issued for 401(k) contribution | | | | | | 80 | | | 115 | | | | | | | | | | | | | | | 195 | | |

| Balance at December 31, 2020 | | | $5,061 | | | $7,787 | | | ($52,641) | | | | | | $38,610 | | | ($17,133) | | | $241 | | | ($18,075) | | |

| | |

| --- | --- |

| [Note 2 - Acquisitions and Joint Ventures](#sFFCBCECE23F952A09E43FC7A8363BAD7) | [69](#sFFCBCECE23F952A09E43FC7A8363BAD7) |

| [Note 12 - Other Assets](#s8F6BA252ADB55903992DA8B34D59C119) | [82](#s8F6BA252ADB55903992DA8B34D59C119) |

| | | | | | | | | | | | |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at January 1, 2017 | | $5,061 | | | $4,762 | | | ($36,097 | ) | | $41,754 | | | ($13,623 | ) | | $60 | | | $1,917 | |

| Impact of ASU 2018-02 | | | | | | | | | | 2,997 | | | (2,997 | | ) | | | | — | | |

| Share-based compensation and related dividend equivalents | | | | 245 | | | | | | (33 | | ) | | | | | | | 212 | | |

| Common shares repurchased | | | | | | | (2,651 | | ) | | | | | | | | | | (2,651 | | ) |

| Cash dividends declared ($8.22 per share) | | | | | | | | | | (4,628 | | ) | | | | | | | (4,628 | | ) |

| Defense, Space & Security | 26,227 | | | | 26,392 | | | | 23,938 | | |

| Defense, Space & Security | 2,608 | | | | 1,657 | | | | 2,383 | | |

| Segment operating (loss)/profit | (1,324 | | ) | | 12,102 | | | | 10,033 | | |

Effective at the beginning of 2019, all revenues and costs associated with military derivative aircraft production are reported in the BDS segment.

Actual results could differ from those estimates.

In the first quarter of 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) and recognized on our Consolidated Statement of Financial Position $1,064 of lease liabilities with corresponding right-of-use assets for operating leases.

Our accounting for finance leases and lessor contracts remains substantially unchanged.

The standard has no impact to cash provided or used by operating, investing, or financing activities on our Consolidated Statements of Cash Flows.

As permitted under the standard, we elected prospective application of the new guidance and prior periods continue to be presented in accordance with Topic 840.

We also elected the package of practical expedients, which among other things, does not require reassessment of lease classification.

In the first quarter of 2019, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815), using the modified retrospective method.

The standard refines and simplifies hedge accounting requirements for both financial and commodity risks.

The impact of the adoption was not material.

clauses or by our rights to payment of the transaction price associated with work performed to date on products or services that do not have an alternative use to the Company.

Income recognition is generally suspended for financing receivables at the date full recovery of income and principal becomes not probable.

Income is recognized when financing receivables become contractually current and performance is demonstrated by the customer.

include flight and maintenance training, field service support, engineering support, and technical data and documents.

We also provide postretirement

year.

declining balance; and machinery and equipment, sum-of-the-years’ digits.

In this process, a fair value for goodwill is estimated, based in part on the fair value of the operations, and is compared to its carrying value.

For derivatives designated as hedges of the exposure to changes in fair value of the recognized asset or liability or a firm commitment (referred to as fair value hedges), the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged.

The effect of that accounting is to include in earnings the extent to which the hedge is not effective in achieving offsetting changes in fair value.

each customer in the portfolio.

If at inception of a guarantee, we determine there is a probable related contingent loss, we will recognize a liability for the greater of (a) the fair value of the guarantee as described above or (b) the probable contingent loss amount.

Standards Issued and Not Yet Implemented

[removed: | (a) | Evaluation] [added: (a)Evaluation] of Disclosure Controls and Procedures. [removed: |]

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of December 31, [removed: 2019] [added: 2020] 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.

[removed: | (b) | Management’s] [added: (b)Management’s] Report on Internal Control Over Financial Reporting. [removed: |]

Based on this evaluation under the framework in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2019.][added: 2020.]

Our internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included in Item 8 of this report and is incorporated by reference herein.

[removed: | (c) | Changes] [added: (c)Changes] in Internal Controls Over Financial Reporting. [removed: |]

There were no changes in our internal control over financial reporting that occurred during the fourth quarter of [removed: 2019] [added: 2020] that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

| | |

| --- | --- |

Our executive officers and their ages as of [removed: January 31, 2020,] [added: February 1, 2021,] are as follows:

| Name | [added: | |] Age | [added: | |] Principal Occupation or Employment/Other Business Affiliations | [added: | |]

| Bertrand-Marc Allen | [removed: 46] | [added: | 47 | | | Chief Strategy Officer and] Senior Vice [added: President, Strategy and Corporate Development since October 2020. Mr. Allen previously served as Senior Vice] President and President, Embraer Partnership and Group Operations [removed: since] [added: from] April [removed: 2019. Mr. Allen previously served as] [added: 2019 to October 2020,] Senior Vice President and President, Boeing International from February 2015 to April 2019; President of Boeing Capital Corporation from March 2014 to February 2015; Corporate Vice President, Boeing International and Chairman and President of Boeing (China) Co., Ltd. from March 2011 to March 2014; and Vice President, Global Law Affairs from May 2007 to March 2011. | [added: | |]

| Michael A. Arthur | [removed: 69] | [added: | 70 | | |] Senior Vice President and President, Boeing International since April 2019. Mr. Arthur previously served as President of Boeing Europe from March 2016 to April 2019 and as Managing Director of Boeing United Kingdom and Ireland from September 2014 to April 2019. | [added: | |]

| David L. Calhoun | [removed: 62] | [added: | 63 | | |] President and Chief Executive Officer since January 2020 and a member of the Board of Directors since June 2009. Previously, Mr. Calhoun served as Senior Managing Director & Head of Private Equity Portfolio Operations at The Blackstone Group from January 2014 to January 2020. Prior to that, Mr. Calhoun served as Chairman of the Board of Nielsen Holdings plc from January 2014 to January 2016, as Chief Executive Officer of Nielsen Holdings plc from May 2010 to January 2014, and as Chairman of the Executive Board and Chief Executive Officer of The Nielsen Company B.V. from August 2006 to January 2014. Prior to joining Nielsen, he served as Vice Chairman of General Electric Company and President and Chief Executive Officer of GE Infrastructure. During his 26-year tenure at GE, he ran multiple business units including GE Transportation, GE Aircraft Engines, GE Employers Reinsurance Corporation, GE Lighting and GE Transportation Systems. Mr. Calhoun also serves on the board of Caterpillar Inc. | [added: | |]

| Leanne G. Caret | [removed: 53] | [added: | 54 | | |] Executive Vice President, President and Chief Executive Officer, Boeing Defense, Space & Security since March 2016. Ms. Caret joined Boeing in 1988, and her previous positions include President of Global Services & Support from February 2015 to March 2016; Chief Financial Officer and Vice President, Finance, for BDS from March 2014 to February 2015; Vice President and General Manager, Vertical Lift from November 2012 to February 2014; and Vice President and Program Manager, Chinook from November 2009 to October 2012. | [added: | |]

| Theodore Colbert III | [removed: 46] | [added: | 47 | | |] Executive Vice President, President and Chief Executive Officer, Boeing Global Services since October 2019. Mr. Colbert previously served as Chief Information Officer and Senior Vice President, Information Technology & Data Analytics from April 2016 to October 2019; Chief Information Officer and Vice President of Information Technology from November 2013 to April 2016; Vice President of Information Technology Infrastructure from December 2011 to November 2013; and Vice President of IT Business Systems from September 2010 to December 2011. | [added: | |]

| Stanley A. Deal | [removed: 55] | [added: | 56 | | |] Executive Vice President, President and Chief Executive Officer, Boeing Commercial Airplanes since October 2019. Mr. Deal joined Boeing in 1986, and his previous positions include Executive Vice President, President and Chief Executive Officer, Boeing Global Services from November 2016 to October 2019; Senior Vice President of Commercial Aviation Services from March 2014 to November 2016; Vice President and General Manager of Supply Chain Management and Operations for Commercial Airplanes from September 2011 to February 2014; Vice President of Supplier Management from February 2010 to August 2011; and Vice President of Asia Pacific Sales from December 2006 to January 2010. | [added: | |]

| Brett C. Gerry | [removed: 48] | [removed: Senior Vice President] [added: | 49 | | | Chief Legal Officer] and [removed: General Counsel] [added: Executive Vice President, Global Compliance] since May [removed: 2019.] [added: 2020.] Mr. Gerry previously served as [added: Senior Vice] President [added: and General Counsel from May 2019 to May 2020 President] of Boeing Japan from February 2016 to May 2019; Vice President and General Counsel, Boeing Commercial Airplanes from March 2009 to March 2016; and Chief Counsel, Network and Space Systems from September 2008 to March 2009. | [added: | |]

| Gregory L. Hyslop | [removed: 61] | [added: | 62 | | |] Chief Engineer and [removed: Senior] [added: Executive] Vice President, [removed: Engineering,] [added: Engineering] Test and Technology since [removed: August 2019. Mr. Hyslop’s] [added: December 2020. Dr. Hyslop's] previous positions include Chief [removed: Technology Officer] [added: Engineer] and Senior Vice President, [removed: Boeing Engineering,] [added: Engineering] Test [removed: &] [added: and] Technology from [removed: July 2016 to] August [removed: 2019;] [added: 2019 to December 2020;Chief Technology Officer and] Senior Vice [removed: President Boeing Engineering,] [added: President, Engineering] Test [removed: & Technology,] [added: and Technology] from March 2016 to August [removed: 2016;] [added: 2019;] Vice [removed: President] [added: president] and General Manager of Boeing Research [removed: &] [added: and] Technology from February 2013 to March 2016 and Vice President and General Manager of Boeing Strategic Missile & Defense Systems from March 2009 to February 2013. | [added: | |]

| Timothy J. Keating | [removed: 58] | [added: | 59 | | |] Executive Vice President, Government Operations since February 2018. Mr. Keating joined Boeing in June 2008 as Senior Vice President, Government Operations. From October 2002 to May 2008 he served as Senior Vice President, Global Government Relations at Honeywell International Inc. Prior thereto, Mr. Keating was Chairman of the Board and Managing Partner of Timmons and Company (a Washington, D.C. lobbying firm). | [added: | |]

| Gregory D. Smith | [added: | |] 53 | [added: | | Executive Vice President, Enterprise Operations and] Chief Financial Officer [added: since May 2020. He previously served as Chief Financial Officer] and Executive Vice President, Enterprise Performance and Strategy [removed: since February 2015. Mr. Smith also served as] [added: from July 2017 to May 2020;] Interim President and Chief Executive Officer from December 2019 to January [removed: 2020. He previously served as] [added: 2020; Chief Financial Officer and] Executive Vice President, [added: Corporate Development and Strategy from February 2015 to June 2017; Executive Vice President,] Chief Financial Officer from February 2012 to February 2015; Vice President of Finance and Corporate Controller from February 2010 to February 2012; and Vice President of Financial Planning & Analysis from June 2008 to February 2010. From August 2004 until June 2008, he served as Vice President of Global Investor Relations at Raytheon Company. Prior to that, he held a number of positions at Boeing including CFO, Shared Services Group; Controller, Shared Services Group; Senior Director, Internal Audit; and leadership roles in supply chain, factory operations and program management. Mr. Smith serves on the board of Intel Corporation. | [added: | |]

Information relating to our directors and nominees will be included under the caption “Election of Directors” in our proxy statement involving the election of directors, which will be filed with the SEC no later than 120 days after December 31, [removed: 2019] [added: 2020] and is incorporated by reference herein.

Information required by Items 405, 407(d)(4) and 407(d)(5) of Regulation S-K will be included under the captions “Stock Ownership Information” and “Board Committees” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

*Codes of Ethics.* We have adopted (1) The Boeing Company Code of Ethical Business Conduct for the Board of Directors; (2) The Boeing Company Code of Conduct for Finance Employees which is applicable to our Chief Executive Officer (CEO), Chief Financial Officer (CFO), Controller and all finance employees; and (3) The Boeing Code of Conduct that applies to all employees, including our CEO (collectively, the [added: Codes of Conduct).]

The Codes of Conduct are posted on our website, www.boeing.com/company/general-info/corporate-governance.page, and printed copies may be obtained, without charge, by contacting the Office of Internal Governance, The Boeing Company, 100 [removed: N.]

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | | Age | | | Principal Occupation or Employment/Other Business Affiliations | | |

| Michael D’Ambrose | | | 63 | | | Executive Vice President, Human Resources since July 2020. Prior to joining Boeing, Mr. D'Ambrose served as Senior Vice President and Chief Human Resources Officer for Archer-Daniels-Midland Company from October 2006 to June 2020. Previously, he served in a series of executive-level business and human resources positions, including chief human resources officer at Citigroup, First Data Corporation and Toys 'R' Us, Inc. | | |

| Edward L. Dandridge | | | 56 | | | Senior Vice President, Communications since September 2020. Mr. Dandridge’s prior experience includes serving as Global Chief Marketing and Communications Officer of AIG General Insurance from April 2018 to September 2020; Chief Marketing and Communications Officer of Marsh & McLennan Companies from March 2014 to April 2018; and Chief Marketing Officer of Collective from February 2013 to February 2014. | | |

| Susan Doniz | | | 51 | | | Chief Information Officer and Senior Vice President, Information Technology & Data Analytics since May 2020. Prior to joining Boeing, Ms. Doniz served as Global Chief Information Officer of Qantas Airways Limited from January 2017 to April 2020; as strategic advisor to the Global CEO of SAP SE on transformation and technology issues in support of customers from September 2015 to December 2017; and Global Product, Digital Strategy and Chief Information Officer of AIMIA Inc. from June 2011 to January 2015. | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | | Age | | | Principal Occupation or Employment/Other Business Affiliations | | |

N.

| | | |

| --- | --- | --- |

| Heidi B. Capozzi | 50 | Senior Vice President, Human Resources since March 2016. Ms. Capozzi previously served as Vice President of Leadership Development, Talent Management and Organization Effectiveness from April 2013 to March 2016; Director of Human Resources for the Airplane Programs division of Commercial Airplanes from April 2011 to April 2013; and Director of Human Resources for the Surveillance and Engagement division of Boeing Military Aircraft from May 2009 to April 2011. |

| Niel L. Golightly | 61 | Senior Vice President, Communications since January 2020. Prior to joining Boeing, Mr. Golightly served as Chief Communications Officer and a member of the Global Executive Council for Fiat Chrysler Automobiles from December 2018 until December 2019. Prior to that, he held a number of positions at Royal Dutch Shell plc, including Vice President, Energy Transition Strategy, Shell Oil Company from December 2016 to December 2018, Vice President, External Relations, Americas from November 2011 to December 2016 and Vice President, Global Downstream Communications and Sustainability from July 2006 to November 2011. From 1994 to 2006, Mr. Golightly held a number of positions at Ford Motor Company, including Director of Sustainable Business Strategies. He began his career in the U.S. Navy as a fighter pilot and later as a Pentagon speechwriter for the Secretary of the Navy and the Chairman of the Joint Chiefs of Staff. |

| Jenette E. Ramos | 54 | Senior Vice President, Manufacturing, Supply Chain & Operations since April 2018. Ms. Ramos joined Boeing in 1988, and her previous positions include Senior Vice President, Supply Chain and Operations from June 2017 to April 2018; Vice President and General Manager, BCA Fabrication from April 2014 to May 2017; Vice President, Supply Chain Management from January 2012 to April 2014; Vice President, Operations Supply Chain Rate, Supplier Management Capability for Boeing Commercial Airplanes from June 2011 to January 2012; director of Business Operations for Boeing Fabrication from June 2009 to May 2011; and General Manager of Boeing Portland from February 2005 to May 2009. |

| Diana L. Sands | 54 | Senior Vice President, Office of Internal Governance and Administration since March 2016. Ms. Sands previously served as Senior Vice President, Office of Internal Governance from April 2014 to March 2016; Vice President of Finance and Corporate Controller from February 2012 to April 2014 and Vice President of Investor Relations, Financial Planning & Analysis from February 2010 to February 2012. Prior to that, she held positions in Investor Relations, Financial Planning and in Corporate Treasury. |

Codes of Conduct).

The information required by Item 402 of Regulation S-K will be included under the captions “Compensation Discussion and Analysis,” “Compensation of Executive Officers,” and “Compensation of Directors” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

The information required by Item 407(e)(4) and 407(e)(5) of Regulation S-K will be included under the captions “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

The information required by Item 403 of Regulation S-K will be included under the caption “Stock Ownership Information” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

The following table sets forth information regarding outstanding options and shares available for future issuance under these plans as of December 31, [removed: 2019:][added: 2020:]

| Plan Category | [added: | |] Number of shares to be issued upon exercise of outstanding options, warrants and rights | | | [added: | | |] Weighted-average exercise price of outstanding options, warrants and rights | | | | [added: | |] Number of securities remaining available for future issuance under equity compensation plans (excluding shares reflected in column (a)) | | [added: |]

| Equity compensation plans approved by shareholders | | | | | | | | | | [added: | | | | | | | |]

| Other stock units(1) | [removed: 3,465,598] | | [added: 8,579,463] | | | | | | | [added: | | | | | | | |]

| Equity compensation plans not approved by shareholders | [added: | |] None | | | [added: | | |] None | | | | [added: | |] None | | [added: |]

[removed: |] (1) [removed: |] Includes [removed: 1,652,252] [added: 1,243,118] shares issuable in respect of PBRSUs subject to the satisfaction of performance criteria and assumes payout at maximum levels. [removed: |]

[removed: |] (2) [removed: |] Excludes the potential performance awards which the Compensation Committee has the discretion to pay in cash, stock or a combination of both after the three-year performance periods which end in [removed: 2019, 2020] [added: 2020, 2021] and [removed: 2021. |][added: 2022.]

For further information, see Note [removed: 18] [added: 17] to our Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | (a) | | | | | | (b) | | | | | | (c) | | |

| Stock options | | | 1,860,520 | | | | | | $75.71 | | | | | | | | |

| Deferred compensation | | | 1,365,292 | | | | | | | | | | | | | | |

| Total(2) | | | 11,805,275 | | | | | | $75.71 | | | | | | 8,367,025 | | |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | (a) | | | (b) | | | | (c) | |

| Stock options | 2,375,583 | | | | $74.79 | | | | |

| Deferred compensation | 1,598,089 | | | | | | | | |

| Total(2) | 7,439,270 | | | | $74.79 | | | 14,332,839 | |

| | |

| --- | --- |

The information required by Item 404 of Regulation S-K will be included under the caption “Related Person Transactions” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

The information required by Item 407(a) of Regulation S-K will be included under the caption “Director Independence” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

The information required by this Item will be included under the caption “Independent Auditor Fees” in the [removed: 2020] [added: 2021] Proxy Statement, and that information is incorporated by reference herein.

[removed: | (a) | List] [added: (a)List] of documents filed as part of this report: [removed: |]

[removed: | 1. | Financial] [added: 1.Financial] Statements [removed: |]

[removed: | 2. | Financial] [added: 2.Financial] Statement Schedules [removed: |]

[removed: | 3. | Exhibits |][added: 3.Exhibits]

| 3.1 | [added: | |] [Amended and Restated Certificate of Incorporation of The Boeing Company dated May 5, 2006 (Exhibit 3.1 to the Company’s Current Report on Form 8-K dated May 1, [removed: 2006).](http://www.sec.gov/Archives/edgar/data/12927/000119312506102223/dex31.htm)] [added: 2006)](http://www.sec.gov/Archives/edgar/data/12927/000119312506102223/dex31.htm)] | [added: | |]

| 3.2 | [added: | |] [By-Laws of The Boeing Company, as amended and restated effective [removed: October 25, 2019] [added: March 19, 2020] (Exhibit 3.2 to the [removed: Company’s] [added: Company's] Current Report on Form 8-K dated [removed: October 25, 2019).](http://www.sec.gov/Archives/edgar/data/12927/000119312519274928/d813815dex32.htm)] [added: March 16, 2020)](http://www.sec.gov/Archives/edgar/data/12927/000001292720000027/exhibit32.htm)] | [added: | |]

| 4.1 | [added: | |] [Description of The Boeing Company Securities Registered under Section 12 of the Exchange [removed: Act.](https://www.sec.gov/Archives/edgar/data/12927/000001292720000014/a201912dec3110kexhibit41.htm)] [added: Act (Exhibit 4.1 to the Company’s Form 10-K for the year ended December 31, 2019)](http://www.sec.gov/Archives/edgar/data/12927/000001292720000014/a201912dec3110kexhibit41.htm)] | [added: | |]

| 10.1 | [added: | |] [364-Day Credit Agreement, dated as of October [removed: 30, 2019,] [added: 26, 2020,] among The Boeing Company, for itself and on behalf of its Subsidiaries, as a Borrower, the Lenders party hereto, Citibank, N.A., as administrative agent, JPMorgan Chase Bank, N.A. as syndication agent and Citibank, N.A. and JPMorgan Chase Bank N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October [removed: 30, 2019).](http://www.sec.gov/Archives/edgar/data/12927/000119312519282034/d824547dex101.htm)] [added: 26, 2020)](http://www.sec.gov/Archives/edgar/data/12927/000001292720000071/a202010oct268kex101.htm)] | [added: | |]

| 10.2 | [added: | |] [Five-Year Credit Agreement, dated as of October 30, 2019, among The Boeing Company, for itself and on behalf of its Subsidiaries, as a Borrower, the Lenders party hereto, Citibank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent and Citibank N.A. and JPMorgan Chase Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.2 to the Company’s Current Report on Form 8-K dated October 30, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/12927/000119312519282034/d824547dex102.htm)] [added: 2019](http://www.sec.gov/Archives/edgar/data/12927/000119312519282034/d824547dex102.htm)] | [added: | |]

| 10.3 | [added: | |] [Three-Year Credit Agreement, dated as of October 30, 2019, among The Boeing Company, for itself and on behalf of its Subsidiaries, as a Borrower, the Lenders party hereto, Citibank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent and Citibank N.A. and JPMorgan Chase Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.3 to the Company’s Current Report on Form 8-K dated October 30, [removed: 2019).](http://www.sec.gov/Archives/edgar/data/12927/000119312519282034/d824547dex103.htm)] [added: 2019)](http://www.sec.gov/Archives/edgar/data/12927/000119312519282034/d824547dex103.htm)] | [added: | |]

| [removed: 10.4] [added: 10.5] | [added: | |] [Joint Venture Master Agreement, dated as of May 2, 2005, by and among Lockheed Martin Corporation, The Boeing Company and United Launch Alliance, L.L.C. (Exhibit (10)(i) to the Company’s Form 10-Q for the quarter ended June 30, [removed: 2005).](http://www.sec.gov/Archives/edgar/data/12927/000119312505149899/dex10i.htm)] [added: 2005)](http://www.sec.gov/Archives/edgar/data/12927/000119312505149899/dex10i.htm)] | [added: | |]