Company: BA
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0000012927-25-000062
Chunk: 114

Company: BOEING CO
Filing Date: 2025-07-29
Form: 10-Q
Item: Item 3
Chunk 114
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, 2025, increased by $176 million and $37 million compared with the same periods in the prior year primarily as a result of higher average debt balances.

For a discussion related to Income Taxes, see Note 5 to our Condensed Consolidated Financial Statements.

Total Costs and Expenses (“Cost of Sales”)

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 Global Services (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)Six months ended June 30Three months ended June 3020252024Change20252024ChangeCost of sales$37,393 $30,330 $7,063 $20,314 $15,637 $4,677 Cost of sales as a % of Revenues88.5 %90.7 %(2.2)%89.3 %92.7 %(3.4)%

Cost of sales for the six months ended June 30, 2025, increased by $7,063 million, or 23%, compared with the same period in 2024, primarily due to higher revenues at BCA. Cost of sales as a percentage of Revenues decreased during the six months ended June 30, 2025, compared with the same period in 2024, primarily due to lower charges on BDS fixed-price development programs and the absence of 737-9 customer considerations at BCA, partially offset by lower program margins at BCA.

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Cost of sales for the three months ended June 30, 2025, increased by $4,677 million, or 30%, compared with the same period in 2024, primarily due to higher revenues at BCA. Cost of sales as a percentage of Revenues decreased during the three months ended June 30,