Company: BA
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0000012927-25-000031
Chunk: 100

Company: BOEING CO
Filing Date: 2025-04-23
Form: 10-Q
Item: Item 3
Chunk 100
---
)

Cost of sales, for both products and services, consists primarily of raw materials, parts, sub-assemblies, labor, overhead and subcontracting costs. Our BCA segment predominantly uses program accounting to account for cost of sales. Under program accounting, cost of sales for each commercial aircraft program equals the product of (i) revenue recognized in connection with customer deliveries and (ii) the estimated cost of sales percentage applicable to the total remaining program. For long-term contracts, the amount reported as cost of sales is recognized as incurred. Substantially all contracts at our BDS segment and certain contracts at our BGS segment are long-term contracts with the U.S. government and other customers that generally extend over several years. Cost of sales for commercial spare parts is recorded at average cost.

The following table summarizes cost of sales:

(Dollars in millions)Three months ended March 3120252024ChangeCost of sales$17,079 $14,693 $2,386 Cost of sales as a % of Revenues87.6 %88.7 %(1.1)%

Cost of sales for the three months ended March 31, 2025, increased by $2,386 million, or 16%, compared with the same period in 2024, primarily due to higher revenues at BCA, partially offset by lower volume and the absence of fixed-price development program charges at BDS. Cost of sales as a percentage of Revenues decreased during the three months ended March 31, 2025, compared with the same period in 2024, primarily due to the absence of 737-9 customer considerations at BCA and the absence of charges on BDS fixed-price development programs, partially offset by higher revenues at BCA.

Research and Development 

Research and development expense, net is summarized in the following table:

(Dollars in millions)Three months ended March 3120252024Commercial Airplanes$534 $518 Defense, Space & Security199 235 Global Services29 26 Other82 89 Total$844 $868 

Research and development expense was largely unchanged during the three months ended March 31, 2025, compared to the same period in 2024.

37

Backlog 

(Dollars in millions)March 312025December 312024Commercial Airplanes$460,447 $435,175 Defense, Space & Security61,567 64,023 Global Services22,036 21,403 Un