Item 1.01. Entry Into a Material Definitive Agreement
On January 6, 2021, the Boeing Company (the "Company") entered into a Deferred
Prosecution Agreement ("DPA") with the U.S. Department of Justice ("DOJ") that,
subject to court proceedings, resolves the previously disclosed DOJ
investigation into the Company relating to the Company's conduct regarding the
evaluation of the Boeing 737 MAX airplane by the Federal Aviation
Administration. A copy of the DPA is filed as Exhibit 10.1 hereto and is
incorporated herein by reference.
Under the DPA, the Company has agreed to the filing of a criminal information
charging the Company with one count of conspiracy to defraud the United States
based on the conduct of two former 737 MAX program technical pilots. The DPA
contemplates that the Company will: (1) make payments totaling $2.51 billion,
which consist of (a) a $243.6 million criminal monetary penalty; (b) $500
million in additional compensation to the heirs and/or beneficiaries of those
who died in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents;
and (c) $1.77 billion to the Company's airline customers for harm incurred as a
result of the grounding of the 737 MAX, offset in part by payments already made
and the remainder satisfied through payments to be made prior to the termination
of the DPA; (2) review its compliance program for implementation of continuous
improvement efforts; and (3) implement enhanced compliance reporting and
internal controls mechanisms. Under the terms of the DPA, the criminal
information will be dismissed after three years, provided that the Company fully
complies with its obligations under the DPA.
Of the payments described above, $1.77 billion has been included in amounts
reserved in prior quarters for 737 MAX customer considerations. The Company
expects to incur earnings charges equal to the remaining $743.6 million in the
fourth quarter of 2020.
Item 8.01. Other Events
On January 7, 2021, the Company issued a press release with respect to the DPA.
A copy of this press release is furnished as Exhibit 99.1 hereto and
incorporated herein in by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit
Number Description
10.1 Deferred Prosecution Agreement dated January 6, 2021
99.1 Press Release dated January 7, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
104 document)
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