Company: BA
Filing Date: 2025-02-03
Form Type: 10-K
Source: 0000012927-25-000015
Chunk: 197

Company: BOEING CO
Filing Date: 2025-02-03
Form: 10-K
Item: Item 1
Chunk 197
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 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.

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The following table summarizes cost of sales:

(Dollars in millions)Years ended December 3120242023Change20232022ChangeCost of sales$68,508 $70,070 ($1,562)$70,070 $63,078 $6,992 Cost of sales as a % of Revenues103.0 %90.1 %12.9 %90.1 %94.7 %(4.6)%

Cost of sales decreased by $1,562 million in 2024 compared with 2023, primarily due to lower revenues at BCA, partially offset by the reach-forward losses on the 777X and 767 programs and higher charges on the BDS fixed-price development programs. Cost of sales as a percentage of Revenues increased in 2024 compared to 2023 primarily due to the reach-forward losses on the 777X and 767 programs, lower margins at BCA, and higher charges on the BDS fixed-price development programs.

Cost of sales increased by $6,992 million in 2023 compared with 2022, primarily due to higher revenues at BCA and BGS, partially offset by lower development charges at BDS. Cost of sales as a percentage of Revenues decreased in 2023 compared to 2022 primarily due to lower charges on BDS development programs.

Research and Development  

The following table summarizes our Research and development expense:

(Dollars in millions)Years ended December 31,202420232022Commercial Airplanes$2,386 $2,036 $1,510 Defense, Space & Security917 919 945 Global Services132 107 119 Other377 315 278 Total$3,812 $3,377 $2