Thank you and good morning. Welcome to Boeing's quarterly earnings call. With me today are Dave Calhoun, Boeing's President and Chief Executive Officer, and Jay Malave, Boeing's Executive Vice President and Chief Financial Officer. This quarter's webcast, earnings release, and presentation, which include relevant disclosures and non-GAAP reconciliations, are available on our website. Today's discussion includes forward-looking statements that are subject to risk and uncertainties, including the ones described in our SEC filings. As always, we will leave time at the end of the call for analyst questions. With that, I will turn the call over to Dave Calhoun.
Thanks, Eric, and good morning, everyone. Thank you for joining today's call. I'd like to take a moment to welcome our new CFO, Jay Malave. It's been great to have Jay on board and officially welcome him to his first quarterly earnings call for The Boeing Company. Now let's take a closer look at our business as we enter the final quarter of the year. Our sustained focus on safety and quality is driving better performance across the enterprise, and we are re-earning the trust of our stakeholders, including customers, regulators, and employees. Our focus on culture change continues to energize our teams and improve how we work together. By August of this year, we had delivered more commercial airplanes than all of last year. Our defense business is well-positioned in the current geopolitical environment, and our service business continues to deliver in a robust aftermarket.
Across all of our market segments, we continue to see strong demand, which is reflected in our growing backlog. We marked important milestones in our recovery as operations generated positive free cash flow in the quarter for the first time since 2023. Earlier this month, we jointly agreed with the FAA to increase 737 production to 42 airplanes per month. While we're turning the corner, we're well aware of the work ahead of us to fully recover our performance, particularly on our commercial development and certification programs. We'll talk more about our status, but I want to emphasize that we're exploring every lever to deliver better performance on all of our programs. Now turning to the businesses, let me start with Boeing Commercial Airplanes. We're making meaningful progress in line with our safety and quality plan, and our investments here continue to improve the health of our factories.
Notably, we've seen a 75% reduction in traveled work on our 737 and a reduction of 60% across all airplane programs. Supported by greater stability, we successfully ramped up the 737 production to 38 airplanes per month as we had planned. We then focused on enablers such as improved quality, training, and workplace coaches to help stabilize at that rate and demonstrate that all of our key performance indicators are healthy. Once we were satisfied with the sustained health and stability of the production system, we then presented our discipline plan to the FAA to increase production to 42 airplanes a month. We continue to be guided by our safety and quality plan, and we'll monitor our performance against these six KPIs as we methodically move to higher rates. As a reminder, we expect rate increases beyond 42 per month will go in increments of five.
While rate increase breaks won't be earlier than six months apart, we will remain disciplined, and we won't move to higher rates until we achieve stability and readiness. Also in the quarter, the FAA announced it will allow delegation to Boeing to issue airworthiness certificates for some 737 MAX and 787 airplanes. Our team continues to work under the oversight of the FAA in building safe, high-quality commercial airplanes that comply with all airworthiness certification requirements. We appreciate the FAA's confidence in Boeing, and earning limited delegation authority is a responsibility we take very seriously. On the 787, the team is performing well, and the program continues to work towards demonstrating stability at rate seven.
As we previously shared, we'll be guided by our KPIs before we transition to planned higher rates and aim to move to eight per month in the near future, having recently completed a successful rate eight capstone review with the FAA. At the same time, we're investing in the expansion of our South Carolina site to ensure we're prepared to meet exceptional market demand, and we look forward to an exciting future for the 787 program. Turning now to our development programs. On 777X, as we announced earlier this morning, we have delayed our expectations for certification and first delivery, resulting in a $4.9 billion non-cash charge during the quarter. As we previously said in the third quarter, completion of our certification program is taking longer than expected.
We have worked to understand the implications to our go-forward plan and now anticipate first delivery of the 777-9 will occur in 2027. Jay will provide further details on this in his prepared remarks. We've accumulated more than 4,000 flight hours, more than double a typical flight test program, and so far there are no major technical issues on the airplane or on the engine. In the quarter, we completed critical testing of the airplane's brakes, engines, takeoff performance, and aerodynamic performance. However, we still have a significant portion of the flight test certification program to go, and our team is executing plans to complete this certification as part of the schedule we shared today. The airplane and the engine are performing well, demand for the airplane remains strong, and we remain confident that the 777X will be the next flagship airplane for our global customers.
This is obviously a disappointment, but we just need more time to complete the certification process. With this charge, we now have a higher confidence that we'll complete the certification within the financial estimate. Better news on the 737-7 and 737-10 programs. With more than 3,000 hours of lab testing and analysis, we now have a final deck of design changes to permanently address the engine anti-ice issue. This effort remains on the critical path, and we're now following the lead of the FAA as we work to certify the suite of design updates. As we previously shared, we anticipate certification for the 737-7 and the 737-10 to happen in 2026. Looking now at our defense business, we continue our active management approach, and we're making progress to de-risk our development programs.
We again demonstrated stability on our EACs in the quarter, and our BDS team is working hard every day to earn trust of our customers. We also continue to proactively engage with our customers and suppliers. In many cases, we've been able to revise contract baselines, lower execution risk, and create win-win outcomes for the customer and for Boeing. We still have work to get these programs through the development phase, and as I've said before, you're never done until you're done, but we clearly are making progress. In the quarter, BDS had several notable milestones, including delivery of the 100th KC-46 tanker across our combined U.S. Air Force and global customer base. We're proud our platform continues to provide unique value and capability to our customers. We also secured key contract awards in the quarter. The U.S.
Space Force awarded Boeing a $2.8 billion contract for the Evolved Strategic SatCom program, solidifying our position as a leader in the national security space. More recently, we signed multi-year contracts valued at $2.7 billion to produce additional PAC-3 seekers, leveraging the advanced investments we've made to ramp up quickly and meet the demand. In St. Louis, we are executing our contingency plan as our IAM representative workforce remains on strike. While, of course, we'd prefer not to be in this position, the team continues to work in support of our customers. We are building JDAMs without IAM workforce at about the same production rate as before the work stoppage, and the team is progressing on our MQ-25 and T-7A development programs. We'll continue to manage through this with focus on supporting our customers. Now moving on to Global Services.
BGS had another strong quarter delivering exceptional performance for our company as they support our defense and commercial customers. The U.S. Navy awarded Boeing contracts totaling more than $400 million for the repair of the F/A-18 landing gear and outer wing panels. We're still on track to close the sale of Jeppesen and the other portions of our digital business later in this quarter. At the same time, the BGS team continues to secure deals for the digital capabilities that we'll retain related to fleet maintenance, operations, and repair. A good example, we recently announced an agreement with EVA Air that includes digital diagnostic tools and advanced analytics to improve efficiency and maintenance operations. Now, lastly, I'll share another update on our company's culture change. This remains a topic of interesting conversations with many of our stakeholders. I'm pleased with how the employees have embraced culture change.
You'll recall that we use feedback and direct employee input to help shape our new values and behaviors earlier this year. Since then, as I've traveled around the company, I'm excited to see how many teams are using the values and behaviors to affect change in their daily work. For example, I have come across production teams that are using their daily tier meetings to call out which values and behaviors help them work better with each other. During my recent visits in Miami and some of our global sites, teams told me how championing our values around safety and quality is strengthening our relationships with our customers. I'm confident that with our new values, behaviors, and the processes we're putting in place with performance management, leadership development, and new training opportunities, we'll continue to see positive culture change.
Before we close out the year, we're also going to do another voice of employee survey like we did back in February. We'll get a feel for how we're doing on the culture change and get feedback on the areas that are working and where we still need to improve. All this work is going to take time to really take hold, and while I don't expect overnight improvement, we'll continue to listen to our people and use the values and behaviors. Now, before I finish my prepared remarks, I'd like to say thank you to our employees for their dedication to safety and quality and enabling another quarter of improved performance. While we're all disappointed with the 777X delays, it shouldn't overshadow the progress we're making. Our customers are giving us great feedback on the quality and delivery performance. We're increasing production rates.
Thanks, Dave, and good morning, everyone. Let me start by saying that it has been an honor to join The Boeing Company at such an important time in the company's history, and I'd like to thank the team here for the warm welcome these last few months. Throughout my career, I've always been impressed with Boeing's people, products, and services, and iconic legacy. I'm very excited to partner with Dave in support of our continued recovery and delivering for our global customers and stakeholders. Boeing is in a much stronger position than it was a year ago, and it's my job to help Kelly and the leadership team build on that progress. I'd also like to thank Brian West for his role in getting us to where we are and for his support throughout this transition. Now, let's start with the total company financial performance for the quarter.
Revenue was up 30% to $23.3 billion, primarily driven by improved operational performance across the business, including higher commercial deliveries and defense volume. The core loss per share of $7.47 primarily reflects the $6.45 impact of the $4.9 billion charge on the 777X program, which I'll discuss in more detail shortly. Free cash flow was positive $238 million in the quarter, primarily reflecting higher commercial deliveries and working capital that improved compared to both the prior year and the prior quarter. Importantly, this was the first positive free cash flow quarter since the fourth quarter of 2023 and serves as an important progress point in our company's recovery. These free cash flow results were better than expectations in July, driven by higher commercial deliveries as well as the potential DOJ payment shifting to the fourth quarter.
Turning to BCA on the next page, BCA delivered 160 airplanes in the quarter, the highest quarterly delivery total since 2018. Revenue was up nearly 50% to $11.1 billion, primarily reflecting higher deliveries compared to last year. Operating margin of negative 48.3% was impacted by the charge on the 777X program. BCA booked 161 net orders in the quarter, including 50 787 airplanes for Turkish Airlines and 30 737-8 airplanes for the Norwegian Group. Backlog in the quarter ended at $535 billion and includes more than 5,900 airplanes, with the 737 and 787 both sold firm into the next decade. Now let's click down to the commercial programs. The 737 program delivered 121 airplanes in the quarter, including 41 in September. On production, the factory stabilized at 38 per month in the quarter.
Importantly, we jointly agreed with the FAA in October to increase to 42 per month, and the program is now focused on continuing to drive a stable production system as they transition to this new rate. Spirit continues to deliver fuselages with improved quality and flow, which sets us up well for both our future production ramp and the planned reintegration. That transaction is still expected to close this year. The quarter ended with approximately five 737-8s built prior to 2023, down 15 from the second quarter. Importantly, we completed the rework on the last of these airplanes and shut down the shadow factory in the third quarter. On the 737 MAX 7 and 737 MAX 10, inventory levels were stable at approximately 35 airplanes.
As Kelly said, we have made good progress on a suite of engine anti-ice design updates over the past few months and continue to work with the FAA on the certification path for these programs. On the 787, we delivered 24 airplanes in the third quarter and ended with approximately 10 787 airplanes in inventory that were built prior to 2023, down five from last quarter. We still expect to deliver these airplanes through 2026, which is aligned with our customers' fleet planning requirements. Finally, on 777X, during the quarter, we recorded a $4.9 billion loss provision net of a cost-based extension benefit to reset the development and production schedule on the program, with first delivery now expected in 2027 versus the prior expectation of 2026.
To provide more background and color, we received approval to begin the second phase of certification flight testing in early 2025 and had anticipated authorization to start the next major phase of certification flight testing in the third quarter. However, this authorization has been delayed as Boeing and the FAA work through the supporting analysis that enables the next phase of certification flight testing. Given this delay and our assessment of the timeline to enter future certification phases, we have shifted our flight test and production schedules to reflect these learnings. We now expect the next major phase to start later this year or early 2026. The certification program delay, coupled with our reassessment of production costs, constitutes the basis of the incremental loss provision this quarter.
The charge amount includes additional customer concessions, the cost of incremental rework on built aircraft, learning curve adjustments, and the carrying cost of production operations spread out over a longer period of time. On a comparable basis to last year's total charges on the program, the costs are higher due to rework on built aircraft, incremental production disruption, and learning curve adjustments. As far as the cash profile, we see two impacts. The first is related to delivery timing, where we expect headwinds of about $2 billion in 2026 as deliveries move to the right. This converts to a tailwind later in the decade as we deliver delay units. Second, the cash roll-off of the $4.9 billion accounting charge is expected to be spread into the next decade. While disappointing, the reset allows us to operate to a higher confidence plan and allows our customers to manage their operations accordingly.
As Kelly mentioned, this confidence also stems from our completion of dry run flight tests. While we have not received certification credit with the FAA for those flights, we have obtained important verification data to support technical risk burndown. Okay, let's shift over to BDS on the next page. BDS delivered 30 aircraft and two satellites in the quarter, and revenue grew 25% to $6.9 billion on improved operational performance and higher volume. Operating margin of 1.7% was up significantly compared to last year, also reflecting the better operating performance in the third quarter. These results also included immaterial impacts associated with the IAM work stoppage as we continue to execute our contingency plans. BDS booked $9 billion in order during the quarter, and backlog grew to a record $76 billion.
Overall, we continue to make progress stabilizing our fixed price development programs, even with minor cost updates on a few programs, such as for the tanker, which absorbed additional Everett shared costs from the 777X update. We have seen benefits from our active management approach in retiring risk and developing win-win opportunities for both us and our customers. We remain focused on delivering these important capabilities to our customers and met several important milestones in the quarter. For example, on the T-7A program, we achieved four additional customer milestones under the MOA and started assembly on the first production representative test aircraft. The remainder of the portfolio continues to benefit from exceptional demand supported by the global threat environment confronting our nation and allies. Performance on these programs also continues to stabilize and build on the improved operational performance that began earlier this year.
Overall, the defense portfolio is well-positioned for the future, as evidenced by our record backlog, and we still expect the business to return to historical performance levels as we continue to drive execution and transition to new contracts with tighter underwriting standards. Moving to global services on the next page, BGS continued to perform well, again delivering strong financial results in the quarter. Revenue was up 10% to $5.4 billion, primarily reflecting improved commercial and government volume. Operating margin was 17.5% in the quarter, up 50 basis points compared to last year on favorable commercial volume and mix. Both our commercial and government businesses again delivered double-digit margins. The business also received $8 billion in orders with a year-to-date book-to-bill of 1.2. Okay, shifting to cash and debt. Cash and marketable securities ended at $23 billion, and the debt balance ended at $53.4 billion.
The company also maintains access to $10 billion of revolving credit facilities, all of which remain undrawn. We remain committed to strengthening the balance sheet and supporting our investment-grade rating. Regarding cash flow, we still expect the fourth quarter to be positive before any impact from a potential DOJ payment. This outlook continues to assume significant capital expenditures for future products and growth, particularly in St. Louis and Charleston. This ramp-up was seen in our third-quarter CapEx spend, which we now expect to be closer to $3 billion for the year. Net-net, even with the higher CapEx, our better-than-expected performance year-to-date supports updating our 2025 outlook to a free cash flow usage of about $2.5 billion, barring the impact of a prolonged government shutdown. Okay, let's sum it all up. Another quarter of progress in our recovery. While the 777 reset was disappointing, our overall performance continues to trend favorably.
This includes receiving limited FAA delegation to issue 737 and 787 airworthiness certificates, transitioning to higher 737 and 787 production rates, delivering improved performance across the company, as well as generating positive free cash flow in the quarter. Broadly speaking, the markets we serve continue to be significant, and our backlog of more than $600 billion demonstrates the strength of our portfolio. Long-term, these fundamentals underpin our confidence in managing the business with a long-term view built on safety, quality, and delivering for our customers. With that, let's open up the call for questions.