
	2025	2024
Accrued compensation and employee benefit costs	$7,464	$6,110
Forward loss recognition	6,711	7,634
Product warranties	2,797	2,133
Other customer concessions and considerations	1,696	1,552
Off-market contracts	1,065
Environmental	877	834
Accrued interest payable	877	796
Current portion of retiree healthcare and pension liabilities	442	452
737 MAX customer concessions and other considerations	383	641




Current portion of lease liabilities	335	324
Other	4,494	3,627
Total	$27,141	$24,103

During 2024, we recorded an earnings charge of $443, net of insurance recoveries, in connection with estimated considerations to customers for disruption related to the January 2024 737-9 door plug accident and grounding. This charge is reflected in the financial statements as a reduction to Sales of products.

The liabilities recorded represent our best estimate or the low end of a range of reasonably possible costs expected to be incurred to remediate sites, including operation and maintenance over periods of up to 30 years. It is reasonably possible that we may incur costs that exceed these recorded amounts because of regulatory agency orders and directives, changes in laws and/or regulations, higher than expected costs and/or the discovery of new or additional contamination. As part of our estimating process, we develop a range of reasonably possible alternate scenarios that includes the high end of a range of reasonably possible cost estimates for all remediation sites for which we have sufficient information based on our experience and existing laws and regulations. There are some potential remediation obligations where the costs of remediation cannot be reasonably estimated. At December 31, 2025 and 2024, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $1,171 and $1,002.

In conjunction with signing definitive agreements for the sale of new aircraft, we have entered into trade-in commitments with certain customers that give them the right to trade in used aircraft at a specified price. The probability that trade-in commitments will be exercised is determined by using both quantitative information from valuation sources and qualitative information from other sources. The probability of exercise is assessed quarterly, or as events trigger a change, and takes into consideration the current economic and airline industry environments. Trade-in commitments, which can be terminated by mutual consent with the customer, may be exercised only during the period specified in the agreement and require advance notice by the customer.

Trade-in commitment agreements at December 31, 2025, have expiration dates from 2026 through 2033. At December 31, 2025 and 2024, total contractual trade-in commitments were $1,267 and $1,393. As of December 31, 2025 and 2024, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $67 and $275 and the fair value of the related trade-in aircraft was $61 and $270.

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $15,229 and $17,124 as of December 31, 2025 and 2024. The estimated earliest potential funding dates for these commitments as of December 31, 2025 are as follows:

As of December 31, 2025, $11,904 of these financing commitments relate to customers we believe have less than investment-grade credit. We have concluded that no reserve for future potential losses is required for these financing commitments based upon the terms, such as collateralization and interest rates, under which funding would be provided.

We have entered into standby letters of credit and surety bonds with financial institutions primarily relating to the guarantee of our future performance on certain contracts and security agreements. Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $3,295 and $2,991 as of December 31, 2025 and 2024.

McDonnell Douglas Corporation insured its executives with Company Owned Life Insurance (COLI), which are life insurance policies with a cash surrender value. Although we do not use COLI currently, these obligations from the merger with McDonnell Douglas are still a commitment at this time. We have loans in place to cover costs paid or incurred to carry the underlying life insurance policies. As of December 31, 2025 and 2024, the cash surrender value was $331 and $342 and the total loans were $303 and $314. As we have the right to offset the loans against the cash surrender value of the policies, we present the net asset in Other assets on the Consolidated Statements of Financial Position as of December 31, 2025 and 2024.

The Company has supply chain financing programs in place under which participating suppliers may elect to obtain payment from an intermediary. The Company confirms the validity of invoices from participating suppliers and agrees to pay the intermediary an amount based on invoice totals. The majority of amounts payable under these programs are due within 30 to 90 days. The following table summarizes changes in Accounts payable to suppliers participating in supply chain financing programs:

Certain states and localities in which we operate offer or have offered various business incentives related to investment and/or job creation. Between 2010 and 2016, we received cash grants totaling $346 related to our investment in operations in South Carolina. The grants were recorded in Accrued liabilities and are being amortized, primarily to inventory, over the useful life of the Property, plant and equipment extending through 2052. During 2025 and 2024, we amortized $8 and $9 to Inventories, and recorded a benefit of $10 and $7 in cost of sales. At December 31, 2025 and 2024, Inventories included a benefit of $62 and $64 and Accrued liabilities included a balance of $80 and $87.

We are eligible to claim tax refunds from the State of Missouri and City of Irving, Texas, primarily related to job creation and retention through 2031. During 2025, 2024 and 2023, we received $32, $26, and $22 in cash and recorded a benefit primarily in cost of sales of $27, $30, and $28, respectively. At December 31, 2025 and 2024, Other current assets includes receivables of $26 and $30. As of December 31, 2025, $59 of refunds, plus interest, is subject to clawback if we fail to meet certain conditions, including employment levels.

We are eligible to claim cash grants through 2032 related to operations in Queensland, Australia. During 2023, we received cash of $5, which was recorded as a benefit in cost of sales. During 2024, we received cash of $40 to apply against future eligible expenses, which was recorded in Other long-term liabilities and is subject to clawback if we fail to meet certain conditions, including employment levels. At December 31, 2025, our remaining liability is $23.

Industrial Revenue Bonds (IRB) issued by St. Louis County, the city of St. Charles, Missouri, and the city of Wichita, Kansas, were used to finance the purchase and/or construction of real and personal property at our St. Louis, St. Charles and Wichita sites. Tax benefits associated with IRBs primarily include sales tax exemptions and five to 22-year property tax abatements. We record these properties on our Consolidated Statements of Financial Position. We have also purchased the IRBs, and therefore, are the bondholders as well as the borrower/lessee of the properties purchased with the IRB proceeds. The liabilities and IRB assets are equal and are reported net in the Consolidated Statements of Financial Position. As of December 31, 2025 and 2024, the assets and liabilities associated with the IRBs were $1,054 and $355.

Our final incurred costs for each year are subject to audit and review for allowability by the U.S. government, which can result in payment demands related to costs they believe should be disallowed. We work with the U.S. government to assess the merits of claims and where appropriate reserve for amounts disputed. If we are unable to satisfactorily resolve disputed costs, we could be required to record an earnings charge and/or provide refunds to the U.S. government.

Long-term contracts that are contracted on a fixed-price basis or have fixed-price options could result in losses in future periods. Certain of the fixed-price contracts are for the development of new products, services and related technologies. Estimating the cost and time for us and our suppliers to complete these contracts is inherently uncertain due to operational and technical complexities. This uncertainty requires us to make significant judgments and assumptions about future operational and technical performance, and the outcome of customer and/or supplier contractual negotiations. The risk that actual performance, technical or contractual outcomes could be different than those previously assumed creates financial risk that could trigger additional material earnings charges, termination provisions, order cancellations, or other financially significant exposure.

The Company’s firm fixed-price contract for the Engineering and Manufacturing Development (EMD) effort on the U.S. Air Force’s (USAF) VC-25B Presidential Aircraft, commonly known as Air Force One, is a $4 billion program to develop and modify two 747-8 commercial aircraft. During 2025 and 2024, we increased the reach-forward loss on the contract by $60 and $379. The increased reach-forward loss in 2024 was primarily driven by higher than anticipated costs due to engineering design changes related to wiring and other structural requirements. The increased reach-forward loss in 2025 was due to increases in supplier costs. We expect finalization of the contract terms to reset the schedule and adjust the requirements in early 2026. Risk remains that we may record additional losses in future periods.

In 2011, we were awarded a contract from the USAF to design, develop, manufacture, and deliver four next-generation aerial refueling tankers as well as priced options for 13 annual production lots totaling 179 aircraft. Since 2016, the USAF has authorized 12 low rate initial production (LRIP) lots for a total of 169 aircraft. The EMD contract and authorized LRIP lots total approximately $32 billion as of December 31, 2025. The KC-46A Tanker is a derivative of the 767 commercial airplane program with the majority of the manufacturing costs being incurred in the 767 factory and the remaining costs being incurred in the military finishing and delivery centers. During 2025 and 2024, we increased the reach-forward loss on the KC-46A Tanker program by $714 and $2,002. The additional reach-forward loss during 2025 was primarily driven by higher estimated manufacturing and engineering costs for production support. As of December 31, 2025, we had approximately $64 of capitalized precontract

In the third quarter of 2018, we were awarded the MQ-25 EMD contract by the U.S. Navy. The contract is a fixed-price contract that now includes development and delivery of seven aircraft and test articles at a contract price of $890. In connection with winning the competition, we recognized a reach-forward loss of $291 in the third quarter of 2018. In the first quarter of 2024, we were awarded a cost-type contract modification totaling $657 for two additional test aircraft plus other scope increases. During 2024, we increased the reach-forward loss by $339 reflecting higher than anticipated production costs and higher costs associated with ongoing design and software development challenges. We recorded an immaterial reach-forward loss in 2025. During the first half of 2025, we initiated final assembly operations at our new facility at Mid-America St. Louis Airport in Mascoutah, Illinois, and began ground-based flight testing. Flight test and assembly of the remaining EMD units will continue in 2026. Risk remains that we may record additional losses in future periods.

In 2018, we were awarded the T-7A Red Hawk program. The EMD portion of the contract was a $860 fixed-price contract and included five aircraft and seven simulators. The five EMD aircraft have been delivered as of December 31, 2024, and the flight testing is ongoing. In January 2025, the USAF announced an updated acquisition approach for the T-7A Red Hawk that allows the Company to provide a production-ready configuration to the customer prior to low-rate initial production, which better supports the operational needs of the customer and reduces future production risk. In June 2025, the customer ordered four production representative test vehicles. The production portion of the contract now includes production lots for 342 T-7A Red Hawk aircraft and related services that we believe are probable of being exercised. During 2024, we increased the reach-forward loss on the T-7A Red Hawk program by $1,770 primarily reflecting higher estimated supplier costs related to future production lots. We recorded an immaterial reach-forward loss in 2025. At December 31, 2025, we had approximately $377 of capitalized precontract costs and $869 of potential termination liabilities to suppliers related to certain long-lead items for future production lots. Risk remains that we may record additional losses in future periods.

The National Aeronautics and Space Administration has contracted us to design and build the CST-100 Starliner spacecraft to transport crews to the International Space Station (ISS) and in the second quarter of 2022, we successfully completed the uncrewed Orbital Flight Test. The Crewed Flight Test launched on June 5, 2024, and docked with the ISS. Its return to Earth was delayed to allow time to perform further testing of propulsion system anomalies and returned to Earth uncrewed in September 2024. During 2024, we increased the reach-forward loss by $523 primarily to reflect schedule delays and higher testing and certification costs as well as higher costs for post certification missions. We recorded an immaterial reach-forward loss in 2025. We and the customer are planning to launch an uncrewed mission during the first half of 2026 and a crewed mission later in 2026. We are continuing to work toward crew certification and resolve the propulsion system anomalies. At December 31, 2025, we had approximately $544 of capitalized precontract costs and $4 of potential termination liabilities to suppliers related to unauthorized future missions. Risk remains that we may record additional losses in future periods.