Boeing 2010 Annual Report Download - page 54

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Commercial Commitments
The following table summarizes our commercial commitments outstanding as of December 31, 2010.
(Dollars in millions)
Total Amounts
Committed/Maximum
Amount of Loss
Less than
1 year
1-3
Years
4-5
years
After 5
years
Standby letters of credit and surety bonds $ 7,599 $5,560 $1,542 $ 328 $ 169
Commercial aircraft financing commitments 9,865 1,234 2,035 2,775 3,821
Total commercial commitments $17,464 $6,794 $3,577 $3,103 $3,990
Commercial aircraft financing commitments include commitments to provide financing related to aircraft
on order, under option for deliveries or proposed as part of sales campaigns based on estimated
earliest potential funding dates. Based on historical experience, we currently do not anticipate that all
of these commitments will be exercised by our customers; however there can be no assurances that
we will not be required to fund greater amounts than historically required. See Note 11 to our
Consolidated Financial Statements.
Contingent Obligations
We have significant contingent obligations that arise in the ordinary course of business, which include
the following:
Legal Various legal proceedings, claims and investigations are pending against us. Legal
contingencies are discussed in Note 20 to our Consolidated Financial Statements, including our
contesting the default termination of the A-12 aircraft, certain employment and benefits litigation,
litigation/arbitration involving BSSI programs and civil securities litigation relating to disclosures
concerning the 787 program.
Environmental Remediation We are involved with various environmental remediation activities and
have recorded a liability of $721 million at December 31, 2010. For additional information, see Note 11
to our Consolidated Financial Statements.
Income Taxes We have recorded a net liability of $1,198 million at December 31, 2010 for uncertain
tax positions. For further discussion of these contingencies, see Note 5 to our Consolidated Financial
Statements.
Off-Balance Sheet Arrangements
We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion
of these arrangements, see Note 12 to our Consolidated Financial Statements.
Critical Accounting Policies
Contract Accounting
Contract accounting involves a judgmental process of estimating the total sales and costs for each
contract, which results in the development of estimated cost of sales percentages. For each contract,
the amount reported as cost of sales is determined by applying the estimated cost of sales percentage
to the amount of revenue recognized.
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