Company: BA
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001628280-25-047023
Chunk: 25

Company: BOEING CO
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 3
Chunk 25
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 in earnings is primarily due to lower net unfavorable cumulative catch-up adjustments of $3,714 million compared to the prior year comparable period. During the nine months ended September 

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30, 2024, losses incurred on the five major fixed-price development programs totaled $3,302 million. Losses on the five major development programs were not significant in 2025. In addition, the year over year earnings improvement reflects higher earnings from other programs including fighters, P-8, satellites and weapons.

BDS earnings from operations was $114 million for the three months ended September 30, 2025, compared with loss from operations of $2,384 million in the same period in 2024. The year over year improvement in earnings reflects a decrease in net unfavorable cumulative contract catch-up adjustments which were $2,362 million lower than the comparable period in the prior year. Higher volume also contributed to the comparative earnings increase. During the third quarter of 2024, losses incurred on the five major fixed-price development programs totaled $2,036 million. In addition, earnings in 2024 were adversely impacted by lower earnings on several programs including fighters, P-8 and E-7, reflecting production and engineering inefficiencies.

See further discussion of fixed-price contracts in Note 11 to our Condensed Consolidated Financial Statements.

BDS earnings/(loss) from operations includes our share of earnings from equity method investments of $30 million and $10 million for the nine and three months ended September 30, 2025, compared with $104 million and $9 million for the same periods in 2024.

Backlog

BDS backlog was $76,084 million at September 30, 2025 compared with $64,023 million as of December 31, 2024. The increase reflects the timing of awards, partially offset by revenue recognized on contracts awarded in prior periods.

Additional Considerations

Our BDS business includes a variety of development programs which have complex design and technical challenges. Some of these programs have cost-type contracting arrangements. In these cases, the associated financial risks are primarily reduced award or incentive fees, lower profit rates or program cancellation if cost, schedule or technical performance issues arise. Examples of these programs include Ground-based Midcourse Defense, Proprietary and Space Launch System programs.

Some of our development programs are contracted on a fixed-price basis. Examples of significant fixed-price development programs include Commercial Crew, KC-46A Tanker, MQ-25, T-7A Red Hawk, VC-25