Segment and Revenue Information | Note 19 – Segment and Revenue Information Our primary profitability measurement to review segment operating results is Loss from operations. We operate in three reportable segments: BCA, BDS, and BGS. All other activities fall within Unallocated items, eliminations and other. See page F-70 for the Summary of Business Segment Data, which is an integral part of this note. BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide. Revenue on commercial aircraft contracts is recognized at the point in time when an aircraft is completed and accepted by the customer. BDS engages in the research, development, production and modification of the following products and related services: manned and unmanned military aircraft and weapons systems, surveillance and engagement, strategic defense and intelligence systems, satellite systems and space exploration. BDS revenue is generally recognized over the contract term (over time) as costs are incurred BGS provides parts, maintenance, modifications, logistics support, training, data analytics and information-based services to commercial and government customers worldwide. BGS segment revenue and costs include certain products and services The following tables present BCA, BDS and BGS revenues from contracts with customers disaggregated in a number of ways, such as geographic location, contract type and the method of revenue recognition. We believe these best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. BCA revenues by customer location consisted of the following: (Dollars in millions) Six months ended Three months ended 2024 2023 2024 2023 Revenue from contracts with customers: Europe $ 1,547 $ 3,393 $ 777 $ 2,038 Asia 4,393 2,355 2,280 1,549 Middle East 1,174 1,466 406 750 Other non-U.S. 754 1,082 344 729 Total non-U.S. 7,868 8,296 3,807 5,066 United States 3,158 7,175 2,173 3,740 Estimated potential concessions and other considerations to 737 MAX customers, net of insurance recoveries (443 ) 26 26 Total revenues from contracts with customers 10,583 15,497 5,980 8,832 Intersegment revenues eliminated on consolidation 73 47 23 8 Total segment revenues $ 10,656 $ 15,544 $ 6,003 $ 8,840 Revenue recognized on fixed-price contracts 100 % 100 % 100 % 100 % Revenue recognized at a point in time 99 % 99 % 99 % 99 % BDS revenues on contracts with customers, based on the customer’s location, consisted of the following: (Dollars in millions) Six months ended Three months ended 2024 2023 2024 2023 Revenue from contracts with customers: U.S. customers $ 9,963 $ 10,338 $ 4,519 $ 5,028 Non-U.S. 3,008 2,368 1,502 1,139 Total segment revenue from contracts with customers $ 12,971 $ 12,706 $ 6,021 $ 6,167 Revenue recognized over time 99 % 99 % 99 % 99 % Revenue recognized on fixed-price contracts 55 % 59 % 52 % 57 % Revenue from the U.S. government (1) 90 % 90 % 89 % 90 % (1) Includes revenues earned from foreign military sales through the U.S. government. BGS revenues consisted of the following: (Dollars in millions) Six months ended Three months ended 2024 2023 2024 2023 Revenue from contracts with customers: Commercial $ 5,900 $ 5,419 $ 2,900 $ 2,703 Government 3,829 3,874 1,895 1,948 Total revenues from contracts with customers 9,729 9,293 4,795 4,651 Intersegment revenues eliminated on consolidation 205 173 94 95 Total segment revenues $ 9,934 $ 9,466 $ 4,889 $ 4,746 Revenue recognized at a point in time 53 % 51 % 53 % 51 % Revenue recognized on fixed-price contracts 87 % 87 % 87 % 87 % Revenue from the U.S. government(1) 28 % 31 % 27 % 31 % (1) Includes revenues earned from foreign military sales through the U.S. government. Backlog Our total backlog includes contracts that we and our customers are committed to perform. The value in backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. Backlog is converted into revenue, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable revenue recognition model. Our backlog at June 30, 2024 was $515,874. We expect approximately 24% to be converted to revenue through 2025 and approximately 69% through 2028, with the remainder thereafter. There is significant uncertainty regarding the timing of when backlog will convert into revenue. We may experience reductions to backlog and/or significant order cancellations due to production disruptions, and/or further delays to entry into service of the 777X, 737-7 737-10. Unallocated Items, Eliminations and Other Unallocated items, eliminations and other include common internal services that support Boeing’s global business operations and eliminations of certain sales between segments. We generally allocate costs to business segments based on the U.S. Government Cost Accounting Standards (CAS). Components of Unallocated items, eliminations and other (expense)/income are shown in the following table. Six months ended Three months ended 2024 2023 2024 2023 Share-based plans $ 53 ($ 38 ) $ 43 $ 14 Deferred compensation (49 ) (96 ) (19 ) (42 ) Amortization of previously capitalized interest (46 ) (47 ) (23 ) (24 ) Research and development expense, net (188 ) (149 ) (99 ) (73 ) Eliminations and other unallocated items (716 ) (466 ) (536 ) (211 ) Unallocated items, eliminations and other ($ 946 ) ($ 796 ) ($ 634 ) ($ 336 ) Eliminations and other unallocated items for the six and three months ended June 30, 2024 includes an earnings charge of $244 that reflects a fine that would be paid if an agreement with the U.S. Department of Justice is approved by the federal district court. For additional discussion, see Note 18 to our Condensed Consolidated Financial Statements. Pension and Other Postretirement Benefit Expense Pension costs are allocated to BDS and BGS businesses supporting government customers using CAS, which employ different actuarial assumptions and accounting conventions than GAAP. These costs are allocable to government contracts. Other postretirement benefit costs are allocated to business segments based on CAS, which is generally based on benefits paid. FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Non-operating Six months ended Three months ended 2024 2023 2024 2023 Pension FAS/CAS service cost adjustment $ 460 $ 445 $ 230 $ 222 Postretirement FAS/CAS service cost adjustment 144 137 72 69 FAS/CAS service cost adjustment $ 604 $ 582 $ 302 $ 291 Assets Segment assets are summarized in the table below: June 30 December 31 Commercial Airplanes $ 83,478 $ 77,047 Defense, Space & Security 16,239 14,921 Global Services 16,473 16,193 Unallocated items, eliminations and other 26,530 28,851 Total $ 142,720 $ 137,012 Assets included in Unallocated items, eliminations and other primarily consist of Cash and cash equivalents, Short-term and other investments, tax assets, capitalized interest and assets managed centrally on behalf of the three principal business segments and intercompany eliminations. | Note 22 – Segment and Revenue Information Segment results reflect the realignment of the Boeing Customer Financing team and portfolio into the BCA segment during the first quarter of 2023. Interest and debt expense now includes interest and debt expense previously attributable to Boeing Cost of Sales Our primary profitability measurement to review segment operating results is Loss from operations. We operate in three reportable segments: BCA, BDS, and BGS. All other activities fall within Unallocated items, eliminations and other. See page F-6 for the Summary of Business Segment Data, which is an integral part of this note. BCA develops, produces and markets commercial jet aircraft principally to the commercial airline industry worldwide. Revenue on commercial aircraft contracts is recognized at the point in time when an aircraft is completed and accepted by the customer. BDS engages in the research, development, production and modification of the following products and related services: manned and unmanned military aircraft and weapons systems, surveillance and engagement, strategic defense and intelligence systems, satellite systems and space exploration. BDS revenue is generally recognized over the contract term (over time) as costs are incurred. BGS provides parts, maintenance, modifications, logistics support, training, data analytics and information-based services to commercial and government customers worldwide. BGS segment revenue and costs include certain products and services provided to other segments. Revenue on commercial spare parts contracts is recognized at the point in time when a spare part is delivered to the customer. Revenue on other contracts is generally recognized over the contract term (over time) as costs are incurred. While our principal operations are in the United States, Canada and Australia, some key suppliers and subcontractors are located in Europe and Japan. Revenues, including foreign military sales, are reported by customer location and consisted of the following: Years ended December 31, 2023 2022 2021 Europe $ 10,520 $ 7,916 $ 8,967 Asia 10,013 8,393 5,845 Middle East 6,594 5,047 4,653 Oceania 1,655 1,576 1,147 Canada 1,256 1,612 969 Africa 825 418 239 Latin America, Caribbean and other 1,524 2,412 1,376 Total non-U.S. 32,387 27,374 23,196 United States 45,380 39,218 39,076 Estimated potential concessions and other considerations to 737 MAX customers 27 16 14 Total revenues $ 77,794 $ 66,608 $ 62,286 Revenues from the U.S. government (including foreign military sales through the U.S. government), primarily recorded at BDS and BGS, represented 37%, 40% and 49% of consolidated revenues for 2023, 2022 and 2021, respectively. Approximately 4% of operating assets were located outside the United States as of December 31, 2023 and 2022. The following tables present BCA, BDS and BGS revenues from contracts with customers disaggregated in a number of ways, such as geographic location, contract type and the method of revenue recognition. We believe these best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. BCA revenues by customer location consisted of the following: Years ended December 31, 2023 2022 2021 Revenue from contracts with customers: Asia $ 6,328 $ 4,488 $ 2,816 Europe 6,172 4,085 4,387 Middle East 4,311 2,003 1,098 Other non-U.S. 2,431 3,042 1,683 Total non-U.S. 19,242 13,618 9,984 United States 14,501 12,275 9,614 Estimated potential concessions and other considerations to 737 MAX customers 27 16 14 Total revenues from contracts with customers 33,770 25,909 19,612 Intersegment revenues, eliminated on consolidation 131 117 102 Total segment revenues $ 33,901 $ 26,026 $ 19,714 Revenue recognized on fixed-price contracts 100 % 100 % 100 % Revenue recognized at a point in time 99 % 99 % 99 % BDS revenues on contracts with customers, based on the customer’s location, consisted of the following: Years ended December 31, 2023 2022 2021 Revenue from contracts with customers: U.S. customers $ 20,051 $ 17,144 $ 19,869 Non-U.S. 4,882 6,018 6,671 Total segment revenue from contracts with customers $ 24,933 $ 23,162 $ 26,540 Revenue recognized over time 99 % 99 % 99 % Revenue recognized on fixed-price contracts 58 % 60 % 68 % Revenue from the U.S. government(1) 91 % 89 % 89 % (1) Includes revenues earned from foreign military sales through the U.S. government. BGS revenues consisted of the following: Years ended December 31, 2023 2022 2021 Revenue from contracts with customers: Commercial $ 11,020 $ 9,560 $ 7,527 Government 7,751 7,681 8,553 Total revenues from contracts with customers 18,771 17,241 16,080 Intersegment revenues eliminated on consolidation 356 370 248 Total segment revenues $ 19,127 $ 17,611 $ 16,328 Revenue recognized at a point in time 51 % 50 % 45 % Revenue recognized on fixed-price contracts 87 % 88 % 86 % Revenue from the U.S. government(1) 30 % 33 % 40 % (1) Includes revenues earned from foreign military sales through the U.S. government. Earnings in Equity Method Investments During the years ended December 31, 2023, 2022, and 2021, our share of income from equity method investments was $70, $56, and $40, respectively. In 2023 and 2021, earnings in equity method investments were primarily driven by investments held at our BDS segment. In 2022, earnings in equity method investments were primarily driven by investments held in Unallocated items, eliminations and other. Backlog Our total backlog includes contracts that we and our customers are committed to perform. The value in backlog represents the estimated transaction prices on performance obligations to our customers for which work remains to be performed. Backlog is converted into revenue, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable revenue recognition model. Our backlog at December 31, 2023 was $520,195. We expect approximately 16% to be converted to revenue through 2024 and approximately 62% through 2027, with the remainder thereafter. There is significant uncertainty regarding the timing of when backlog will convert into revenue due to timing of 737 and 787 deliveries from inventory and timing of entry into service of the 777X, 737-7 737-10. Unallocated Items, Eliminations and other Unallocated items, eliminations and other include common internal services that support Boeing’s global business operations and eliminations of certain sales between segments. We generally allocate costs to business segments based on the U.S. Government Cost Accounting Standards (CAS). Components of Unallocated items, eliminations and other (expense)/income are shown in the following table. Years ended December 31, 2023 2022 2021 Share-based plans $ 62 ($ 114 ) ($ 174 ) Deferred compensation (188 ) 117 (126 ) Amortization of previously capitalized interest (95 ) (95 ) (107 ) Research and development expense, net (315 ) (278 ) (184 ) Eliminations and other unallocated items (1,223 ) (1,134 ) (636 ) Unallocated items, eliminations and other ($ 1,759 ) ($ 1,504 ) ($ 1,227 ) Pension and Other Postretirement Benefit Expense Pension costs are allocated to BDS and BGS businesses supporting government customers using CAS, which employ different actuarial assumptions and accounting conventions than GAAP. These costs are allocable to government contracts. Other postretirement benefit costs are allocated to business segments based on CAS, which is generally based on benefits paid. FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Non-operating costs other than service cost. These expenses are included in Other income, net. Components of FAS/CAS service cost adjustment are shown in the following table: Years ended December 31, 2023 2022 2021 Pension FAS/CAS service cost adjustment $ 799 $ 849 $ 882 Postretirement FAS/CAS service cost adjustment 257 294 291 FAS/CAS service cost adjustment $ 1,056 $ 1,143 $ 1,173 Assets Segment assets are summarized in the table below. December 31, 2023 2022 Commercial Airplanes $ 77,047 $ 76,825 Defense, Space & Security 14,921 14,426 Global Services 16,193 16,149 Unallocated items, eliminations and other 28,851 29,700 Total $ 137,012 $ 137,100 Assets included in Unallocated items, eliminations and other primarily consist of Cash and cash equivalents, Short-term and other investments, tax assets, capitalized interest and assets managed centrally on behalf of the three principal business segments and intercompany eliminations. Capital Expenditures Years ended December 31, 2023 2022 2021 Commercial Airplanes $ 420 $ 218 $ 177 Defense, Space & Security 192 202 199 Global Services 127 130 94 Unallocated items, eliminations and other 788 672 510 Total $ 1,527 $ 1,222 $ 980 Capital expenditures for Unallocated items, eliminations and other relate primarily to assets managed centrally on behalf of the three principal business segments. Depreciation and Amortization Years ended December 31, 2023 2022 2021 Commercial Airplanes $ 464 $ 554 $ 594 Defense, Space & Security 219 238 233 Global Services 320 346 414 Centrally Managed Assets (1) 858 841 903 Total $ 1,861 $ 1,979 $ 2,144 (1) Amounts shown in the table represent depreciation and amortization expense recorded by the individual business segments. Depreciation and amortization for centrally managed assets are included in segment operating earnings based on usage and occupancy. In 2023, $650 was included in the primary business segments, of which $311, $264 and $75 was included in BCA, BDS and BGS, respectively. In 2022, $644 was included in the primary business segments, of which $361, $230 and $53 was included in BCA, BDS and BGS, respectively. In 2021, $669 was included in the primary business segments, of which $387, $222 and $60 was included in BCA, BDS and BGS, respectively. |