Boeing Co. (NYSE:BA)

The income tax expense (benefit) exhibited significant fluctuations over the five-year period. A notable shift from a substantial benefit in earlier years to expenses in later years is observed. Current tax expense (benefit) demonstrates volatility, while deferred tax expense (benefit) appears to be the primary driver of the overall income tax expense (benefit) trend.

Current Tax Expense (Benefit)

Current tax expense (benefit) began at US$100 million in 2021, decreased substantially to US$42 million in 2022, and then increased to US$207 million in 2023. A significant reversal occurred in 2024, resulting in a benefit of US$79 million. This trend continued into 2025, with current tax expense rising to US$298 million. The volatility suggests changes in taxable income or applicable tax rates.

Deferred Tax Expense (Benefit)

Deferred tax expense (benefit) showed a large benefit of US$843 million in 2021, followed by a smaller benefit of US$11 million in 2022. The item shifted to an expense of US$30 million in 2023, then a substantial expense of US$302 million in 2024, and finally a benefit of US$99 million in 2025. This pattern indicates significant changes in temporary differences between book and tax bases of assets and liabilities, or changes in tax laws affecting deferred tax assets and liabilities.

Income Tax Expense (Benefit) – Overall Trend

The consolidated income tax expense (benefit) reflects the combined effect of current and deferred taxes. A large benefit of US$743 million was recorded in 2021, followed by a benefit of US$31 million in 2022. The item transitioned to an expense of US$237 million in 2023, then a significant expense of US$381 million in 2024, and finally an expense of US$397 million in 2025. The shift from substantial benefits to expenses suggests a change in the company’s overall tax position, potentially due to increased profitability, changes in tax legislation, or the utilization of tax loss carryforwards in earlier periods.

The substantial deferred tax fluctuations appear to have a dominant influence on the overall income tax expense (benefit). Further investigation into the specific temporary differences and tax planning strategies would be necessary to fully understand these movements.

The effective income tax rate exhibits significant fluctuations over the observed period. While the U.S. federal statutory tax rate remained constant at 21.00%, the effective income tax rate demonstrates considerable variance, moving from 14.70% in 2021 to negative values in subsequent years before returning to a level approaching the statutory rate.

Effective Income Tax Rate Trend

In 2022, the effective income tax rate decreased substantially to -0.60%. This decline continued in 2023, reaching -11.80%. A reversal is then observed in 2024, with the rate increasing to 3.10%. The trend culminates in 2025, where the effective income tax rate rises to 15.10%, nearing the statutory rate.

The negative effective income tax rates in 2022 and 2023 suggest the presence of substantial tax benefits or loss carryforwards being utilized, or potentially, significant non-taxable income. The subsequent increase in the effective income tax rate in 2024 and 2025 indicates a diminishing impact from these benefits or a shift towards more taxable income. The movement towards the statutory rate in 2025 suggests a normalization of the tax position.

Discrepancy between Statutory and Effective Rates

The consistent difference between the statutory and effective rates throughout the period highlights the influence of various factors beyond the standard corporate tax rate. These factors could include tax credits, deductions, international tax implications, and changes in the mix of taxable income.

Further investigation into the components of income and related tax provisions would be necessary to fully understand the drivers behind these fluctuations in the effective income tax rate.

The composition of deferred tax assets and liabilities exhibits significant fluctuations between 2021 and 2025. A notable pattern is the increasing reliance on valuation allowances to offset gross deferred tax assets, ultimately impacting the net deferred tax position.

Federal Net Operating Loss (NOL) Carryovers

Federal NOL carryovers demonstrate a consistent and substantial increase throughout the period, rising from US$1,522 million in 2021 to US$9,569 million in 2025. This suggests a growing ability to utilize past losses to offset future taxable income.

Inventory and Long-Term Contract Methods

The deferred tax liability associated with inventory and long-term contract methods of income recognition remains consistently negative, ranging between approximately US$4,369 million and US$5,584 million. While fluctuating slightly, it represents a significant ongoing deferred tax liability.

State and International NOL Carryovers

State NOL carryovers also show a steady increase, though less dramatic than the federal amounts, moving from US$929 million to US$2,035 million. International NOL and capital loss carryovers are initially absent but grow to US$598 million by 2025, indicating increasing international operations or changes in international tax planning.

Fixed Assets, Intangibles, and Goodwill

The deferred tax liability related to fixed assets, intangibles, and goodwill remains relatively stable, decreasing slightly from US$1,657 million in 2021 to US$1,847 million in 2025. This suggests consistent tax implications related to these assets.

Accrued Expenses and Reserves

Deferred tax assets from accrued expenses and reserves exhibit a positive trend, increasing from US$763 million in 2021 to US$1,512 million in 2025. This indicates a growing recognition of future tax benefits from current liabilities.

Employee Benefits and Pension Obligations

Deferred tax assets related to other employee benefits and pension benefits show varying trends. Other employee benefits increase from US$991 million to US$1,313 million, while pension benefits decrease from US$1,739 million to US$880 million. The decline in pension benefits may reflect changes in pension plan funding or accounting.

Research Expenditures

Research expenditures generate a deferred tax asset that is initially absent but grows substantially, reaching US$3,936 million in 2024 before decreasing to US$278 million in 2025. This suggests significant research and development activity, potentially influenced by changes in tax incentives or accounting treatment.

Valuation Allowance

The valuation allowance against gross deferred tax assets increases significantly throughout the period, rising from US$2,423 million in 2021 to US$9,754 million in 2025. This substantial increase indicates a growing uncertainty regarding the realization of deferred tax assets. The valuation allowance consistently exceeds the gross deferred tax assets.

Net Deferred Tax Position

The net deferred tax position transitions from a liability of US$141 million in 2021 to a liability of US$109 million in 2025, with a brief positive position of US$63 million in 2024. This is primarily driven by the increasing valuation allowance, which outweighs the growth in gross deferred tax assets.

Overall, the data suggests a growing reliance on deferred tax assets, particularly those related to NOLs and research expenditures, but accompanied by increasing concerns about their realizability, as evidenced by the substantial growth in the valuation allowance. The net effect is a continued, though fluctuating, net deferred tax liability position.

The deferred tax asset and liability positions exhibited distinct trends over the five-year period. A notable fluctuation is observed in deferred tax assets, while deferred tax liabilities demonstrate a more moderate, albeit decreasing, pattern in the latter part of the period.

Deferred Tax Assets

Deferred tax assets decreased from US$77 million in 2021 to US$63 million in 2022, and further to US$59 million in 2023. A significant increase occurred in 2024, reaching US$185 million, before declining to US$107 million in 2025. This suggests potential changes in the realizability of temporary differences or the utilization of tax loss carryforwards, or accounting adjustments impacting these assets.

Deferred Tax Liabilities

Deferred tax liabilities remained relatively stable between 2021 and 2023, fluctuating between US$218 million and US$230 million. A substantial decrease was recorded in 2024, falling to US$122 million, followed by an increase to US$216 million in 2025. This movement could be attributed to changes in taxable temporary differences or adjustments to applicable tax rates.

The contrasting trends in deferred tax assets and liabilities indicate a dynamic tax position. The large increase in deferred tax assets in 2024, followed by a decrease, warrants further investigation to understand the underlying causes. Similarly, the decrease in deferred tax liabilities in 2024, and subsequent increase in 2025, should be examined in the context of the company’s taxable income and future tax obligations.

Net Deferred Tax Position

The net deferred tax liability (liabilities less assets) decreased from US$141 million in 2021 to US$167 million in 2022 and US$170 million in 2023. In 2024, this shifted to a net deferred tax asset of US$63 million, but reverted to a net deferred tax liability of US$109 million in 2025. This significant swing highlights the interplay between the asset and liability components and the overall impact on the company’s future tax payments.

The financial information reveals adjustments made to reported figures, primarily concerning the removal of deferred tax assets and liabilities. These adjustments impact total assets, total liabilities, shareholders’ equity, and net earnings over the five-year period from 2021 to 2025. The magnitude of these adjustments remains relatively consistent year-over-year, suggesting a systematic approach to their application.

Total Assets

Reported total assets experienced a slight decrease from 2021 to 2022, followed by relative stability in 2022 and 2023. A significant increase is then observed in 2024 and 2025. The adjusted total assets follow a similar pattern, consistently lower than the reported figures by approximately $77 million to $187 million annually. This indicates a reduction in asset values upon removing deferred tax items.

Total Liabilities

Reported total liabilities remained relatively stable between 2021 and 2023, with a moderate increase in 2024 and a smaller increase in 2025. Adjusted total liabilities mirror this trend, consistently lower than reported liabilities by a similar range as the asset adjustments, between $78 million and $122 million annually. This suggests a corresponding decrease in liability values following the removal of deferred tax items.

Shareholders’ Equity (Deficit)

Reported shareholders’ equity remained in a deficit position from 2021 to 2023, improving to a positive value in 2024 and increasing further in 2025. The adjusted shareholders’ equity also reflects this pattern, consistently lower than the reported equity by approximately $41 million to $111 million annually. The adjustments consistently deepen the deficit or reduce the positive equity position.

Net Earnings (Loss)

Reported net earnings were negative for the years 2021, 2022, 2023, and 2024, becoming positive in 2025. The adjusted net earnings show a similar trend, but with larger negative values in 2021, 2024, and a slightly higher positive value in 2025. The adjustments consistently decrease reported net earnings, increasing the magnitude of losses and modestly reducing reported profits. The largest impact of the adjustment is observed in 2024, where the reported loss of $11,817 million is adjusted to a loss of $12,119 million.

In summary, the adjustments consistently reduce reported asset values, liability values, shareholders’ equity, and net earnings. The consistent nature of these adjustments suggests they relate to a specific accounting treatment, likely the removal of deferred tax assets and liabilities, and have a material impact on the reported financial position and performance of the entity.

The financial performance, as indicated by the presented metrics, exhibits notable fluctuations across the observed period. While reported and adjusted values generally align, subtle differences emerge, particularly concerning profitability. A consistent pattern is observed in asset turnover, while leverage and return metrics show values only for the final year. The impact of removing deferred tax effects appears to modestly influence profitability and asset-based returns.

Profitability

Reported net profit margin demonstrates volatility, moving from -6.75% in 2021 to -7.41% in 2022, improving to -2.86% in 2023, then declining sharply to -17.77% in 2024 before a substantial recovery to 2.50% in 2025. The adjusted net profit margin mirrors this trend, with values of -8.10%, -7.43%, -2.82%, -18.22%, and 2.61% respectively. The adjusted margin consistently presents a slightly more negative picture than the reported margin, suggesting that the removal of deferred tax benefits increases reported profitability. The difference between reported and adjusted margins is minimal, however.

Asset Turnover

Reported total asset turnover shows an increasing trend from 0.45 in 2021 to 0.49 in 2022 and 0.57 in 2023, followed by a decrease to 0.43 in 2024 and a recovery to 0.53 in 2025. The adjusted total asset turnover precisely matches the reported values throughout the period, indicating that deferred taxes do not materially affect the efficiency with which assets are utilized to generate revenue.

Leverage and Returns (2025)

In 2025, reported financial leverage is 30.85, while the adjusted financial leverage is slightly lower at 30.22. This suggests that the inclusion of deferred tax liabilities increases the reported level of financial leverage. Reported Return on Equity (ROE) is 40.98%, and the adjusted ROE is 41.96%, indicating that removing deferred tax effects slightly improves the reported return to shareholders. Similarly, reported Return on Assets (ROA) is 1.33%, and the adjusted ROA is 1.39%, demonstrating a minor positive impact from the adjustment on asset-based returns.

Overall, the adjustments related to deferred taxes have a limited impact on the observed financial ratios. The most noticeable effect is a slight reduction in reported profitability when deferred tax benefits are excluded. The consistency between reported and adjusted asset turnover suggests that deferred taxes do not influence the company’s efficiency in utilizing its assets. The available data for 2025 indicates a small increase in both ROE and ROA when deferred taxes are removed, alongside a slight decrease in financial leverage.

The period under review demonstrates significant volatility in profitability metrics. Reported and adjusted net earnings fluctuate considerably, transitioning from losses to a profit by the final year. The adjusted net profit margin exhibits a similar pattern, with notable divergence from the reported margin in certain periods.

Adjusted Net Profit Margin Trend

The adjusted net profit margin begins at -8.10% in 2021 and remains relatively stable at -7.43% in 2022. A slight improvement is observed in 2023, reaching -2.82%. However, the margin declines sharply to -18.22% in 2024 before recovering to 2.61% in 2025. This indicates substantial underlying business performance swings, potentially due to non-recurring items impacting the adjusted figures.

Relationship between Reported and Adjusted Margins

The reported net profit margin generally tracks the adjusted net profit margin, but with less extreme fluctuations. The difference between the two margins is relatively small in 2021, 2022, and 2023. However, in 2024, the adjusted margin is 0.55 percentage points lower than the reported margin, suggesting a larger impact from adjustments in that year. The difference narrows again in 2025, with the adjusted margin exceeding the reported margin by 0.11 percentage points.

Volatility and Profitability

The substantial movement from negative to positive adjusted net profit margins highlights significant operational or financial shifts. The large loss reported in 2024, coupled with the corresponding margin of -18.22%, warrants further investigation into the factors contributing to this outcome. The subsequent recovery to a positive margin in 2025 suggests corrective actions or favorable market conditions may have taken effect.

Overall, the adjusted net profit margin provides a more nuanced view of the company’s underlying profitability than the reported net profit margin, particularly in years with significant adjustments. The observed trends suggest a period of instability followed by a return to profitability, but continued monitoring is necessary to assess the sustainability of this improvement.

The reported and adjusted total asset turnover ratios exhibit a fluctuating pattern over the five-year period. Both metrics demonstrate identical values throughout the observed timeframe, indicating no material difference between reported and adjusted asset figures in influencing this ratio.

Total Asset Turnover Trend

The ratio increased from 0.45 in 2021 to 0.49 in 2022, and continued to rise, reaching a peak of 0.57 in 2023. A subsequent decline to 0.43 was observed in 2024. The ratio then recovered somewhat in 2025, returning to 0.53.

The initial increase in the asset turnover ratio from 2021 to 2023 suggests improving efficiency in asset utilization, meaning more revenue was generated for each dollar of assets. However, the decrease in 2024 indicates a potential decline in this efficiency. The partial recovery in 2025 suggests a stabilization, but further monitoring is needed to determine if this represents a sustained trend.

Asset Base Stability

Reported total assets remained relatively stable between 2021 and 2023, fluctuating around US$137-138 billion. A significant increase in total assets occurred in 2024 and 2025, reaching US$156.363 billion and US$168.235 billion respectively. This asset growth did not consistently translate into a higher asset turnover ratio, as evidenced by the 2024 decline.

The consistency between the reported and adjusted total asset turnover ratios implies that adjustments to total assets do not significantly impact the assessment of asset utilization efficiency. The fluctuations in the ratio appear more closely tied to changes in revenue generation relative to the asset base.

Ratio Volatility

The observed volatility in the asset turnover ratio warrants further investigation. Understanding the drivers behind the 2024 decline, despite asset growth, is crucial. Factors such as changes in sales volume, pricing strategies, or the composition of assets could contribute to these fluctuations.

The information presents a five-year trend of total assets and shareholders’ equity, alongside calculated financial leverage ratios. Both reported and adjusted total assets demonstrate relative stability between 2021 and 2023, followed by increases in 2024 and 2025. Shareholders’ equity, however, exhibits a consistent deficit throughout the period, transitioning to a positive value in 2025.

Total Assets

Reported total assets decreased slightly from US$138,552 million in 2021 to US$137,100 million in 2022, and remained relatively flat at US$137,012 million in 2023. A notable increase is observed in 2024, reaching US$156,363 million, and continues to rise to US$168,235 million in 2025. Adjusted total assets follow a similar pattern, remaining closely aligned with reported figures.

Shareholders’ Equity

Reported shareholders’ equity consistently reflects a deficit from 2021 to 2024, deepening from -US$14,999 million to -US$17,233 million. A significant shift occurs in 2025, with the deficit substantially reduced to -US$3,908 million, ultimately becoming a positive equity of US$5,454 million. The adjusted shareholders’ equity mirrors this trend, showing a similar progression from deficit to positive equity.

Financial Leverage

Financial leverage is only reported for 2025. The reported financial leverage for 2025 is 30.85, while the adjusted financial leverage is 30.22. The slight difference between the reported and adjusted leverage suggests minor impacts from adjustments made to the equity calculation. The high leverage ratio indicates a substantial proportion of assets are financed by equity, potentially increasing financial risk.

The transition from a shareholders’ deficit to positive equity in 2025 is a significant development. This change, coupled with the increasing asset base, suggests improved financial health. However, the high financial leverage ratio warrants continued monitoring to assess the company’s ability to meet its obligations.

The period under review demonstrates significant volatility in reported and adjusted financial performance. Both net earnings and shareholders’ equity experienced substantial fluctuations, impacting return on equity calculations. A notable shift towards profitability and equity recovery is evident in the most recent year presented.

Net Earnings

Reported net earnings attributable to Boeing shareholders were negative for the first four years, culminating in a substantial loss of US$11,817 million in 2024. A positive turnaround occurred in 2025, with reported net earnings reaching US$2,235 million. Adjusted net earnings followed a similar pattern, remaining negative through 2024 and turning positive in 2025 at US$2,334 million. The difference between reported and adjusted net earnings remained relatively consistent across the years, suggesting similar adjustments were made annually.

Shareholders’ Equity

Shareholders’ equity exhibited a consistent deficit throughout the initial four years, deepening to US$17,233 million in 2023 before a dramatic recovery to US$5,454 million in 2025. Adjusted shareholders’ equity mirrored this trend, with a similar magnitude of deficit and subsequent recovery. The difference between reported and adjusted shareholders’ equity remained relatively small throughout the period.

Return on Equity (ROE)

Reported and adjusted ROE values are only available for 2025. Both reported ROE (40.98%) and adjusted ROE (41.96%) indicate a strong return in that year. The slight difference between the two suggests the adjustments made to net earnings and shareholders’ equity had a minimal impact on the overall ROE calculation in 2025. The absence of ROE figures for prior years limits the ability to assess trends in profitability relative to equity over the entire period.

The substantial losses experienced in the earlier years, followed by a significant recovery in 2025, suggest a period of considerable challenges and subsequent improvement. The positive ROE figures in 2025 indicate a successful turnaround in generating profits from shareholders’ investments, although the lack of historical ROE values prevents a comprehensive assessment of long-term performance.

The period under review demonstrates significant fluctuations in reported and adjusted net earnings, impacting return on assets (ROA). Reported net earnings attributable to Boeing shareholders were negative for the first four years, transitioning to positive earnings in the final year. Adjusted net earnings followed a similar pattern, remaining negative for the initial four years before becoming positive in the last year reported.

Total assets, both reported and adjusted, exhibited a generally increasing trend over the five-year period. However, the rate of increase accelerated notably between 2022 and 2024. The difference between reported and adjusted total assets remained relatively small throughout the period.

Reported Return on Assets (ROA)

Reported ROA mirrored the trend in net earnings, beginning at -3.03% in 2021 and declining to a low of -7.56% in 2024. A substantial improvement was observed in 2025, with ROA reaching 1.33%. This indicates a strengthening of profitability relative to the asset base in the final year.

Adjusted Return on Assets (ROA)

Adjusted ROA exhibited a similar trajectory to the reported ROA, starting at -3.64% in 2021 and reaching -7.76% in 2024. The adjusted ROA also improved significantly in 2025, reaching 1.39%. The adjusted ROA values were consistently more negative than the reported ROA values for the first four years, suggesting that adjustments to net earnings and/or total assets had a dampening effect on profitability during those periods.

The convergence of reported and adjusted ROA in 2025 suggests that the impact of adjustments diminished as the company returned to profitability. The substantial negative ROA values in 2024, followed by a positive shift in 2025, highlight a period of significant financial challenge and subsequent recovery. The consistent, albeit small, difference between reported and adjusted asset values suggests that the adjustments made were not materially altering the overall asset base.