The Boeing Company (NYSE:BA) | Research (R&D) Spending

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Research & Development

Research and development (R&D) expenditures involve experimentation, design, development and related test activities for defense systems, new and derivative jet aircraft including both commercial and military, advanced space and other company-sponsored product development. These are expensed as incurred including amounts allocable as reimbursable overhead costs on U.S. government contracts.

Boeing's total R&D expenses amounted to $3.0 billion, $3.1 billion, $3.3 billion, $3.9 billion and $4.1 billion in 2014, 2013, 2012, 2011 and 2010, respectively. R&D expenses in 2009 included $2.7 billion of production costs related to the first three flight test 787 aircraft that cannot be sold due to the inordinate amount of rework and unique and extensive modifications that would be made to the aircraft.

In the years from 2007 to 2015, Boeing spent the following on R&D activities (company-funded):
2014: $3,047 million, or 3.4% of total revenues.
2013: $3,071 million, or 3.5% of total revenues.
2012: $3,298 million, or 4.0% of total revenues.
2011: $3,918 million, or 5.7% of total revenues.
2010: $4,121 million, or 6.4% of total revenues.
2009: $6,506 million, or 9.5% of total revenues.
2008: $3,768 million, or 6.2% of total revenues.
2007: $3,850 million, or 5.8% of total revenues.
2006: $3,257 million, or 5.3% of total revenues.

R&D costs also include bid and proposal efforts related to government products and services, as well as costs incurred in excess of amounts estimated to be recoverable under cost-sharing research and development agreements. Bid and proposal costs were $289 million, $285 million, $326 million, $332 million and $355 million in 2014, 2013, 2012, 2011 and 2010, respectively.

R&D Information by Segment

Commercial Airplanes

Boeing's research and development expenses in 2014 decreased by $24 million compared to 2013. Commercial Airplanes spending increased on 777X, 787-10 and 737 MAX partially offset by lower spending on the 787-9. Boeing's research and development expenses in 2013 decreased by $227 million compared to 2012 primarily due to lower spending at Commercial Airplanes on the 787 program partially offset by increased spending on the 737 MAX and 777X. Boeing's research and development expenses decreased by $620 million and $203 million in 2012 and 2011. These decreases were primarily due to lower spending on the 747-8 and 787-8 programs. In 2010, Boeing's Research and development expense decreased by $2,385 million primarily due to the reclassification to research and development expenses of $2,693 million of production costs related to the three 787 flight test airplanes - in 2009, partially offset by a $285 million increase of other research and development expenses.

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