Company: BA
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0000012927-25-000062
Chunk: 124

Company: BOEING CO
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 3
Chunk 124
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 same period in 2024. The increase in earnings is primarily due to lower net unfavorable cumulative catch-up adjustments of $1,352 million compared to the prior year comparable period. The lower net unfavorable cumulative contract catch-up adjustments were partially offset by lower volume. During the six months ended June 30, 2024, losses incurred on the five major fixed-price development programs totaled $1,266 million.

BDS earnings from operations was $110 million for the three months ended June 30, 2025, compared with loss from operations of $913 million in the same period in 2024. The year over year increase in earnings reflects a decrease in net unfavorable cumulative contract catch-up adjustments which were $1,139 million lower than the comparable period in the prior year. During the second quarter of 2024, losses incurred on the five major fixed-price development programs totaled $1,044 million.

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 $20 million and $14 million for the six and three months ended June 30, 2025, compared with $95 million and $20 million for the same periods in 2024.

49

Backlog

BDS backlog was $73,957 million at June 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-25B, and commercial and military satellites. A number of our ongoing fixed-price development programs have reach-forward losses. New programs could also have risk for reach-forward loss upon contract award and during the period of contract performance. Many development programs have highly complex designs. As technical or quality issues arise during development, we may experience schedule