Boeing 2010 Annual Report Download - page 91

The liabilities recorded represent our best estimate or the low end of a range of reasonably possible
costs expected to be incurred to remediate sites, including operation and maintenance over periods of
up to 30 years. It is reasonably possible that we may incur charges that exceed these recorded
amounts because of regulatory agency orders and directives, changes in laws and/or regulations,
higher than expected costs and the discovery of additional contamination. As part of our estimating
process, we develop a range of reasonably possible alternate scenarios which include highest cost
estimates for all remediation sites based on our experience and existing laws and regulations. At
December 31, 2010 and 2009, our reasonably possible highest cost estimate for all remediation sites
exceeded our recorded liabilities by $957 and $948.
Product Warranties
The following table summarizes product warranty activity recorded for the years ended December 31,
2010 and 2009.
2010 2009
Beginning balance – January 1 $ 999 $ 959
Additions for current year deliveries 141 167
Reductions for payments made (234) (237)
Changes in estimates 170 110
Ending balance – December 31 $1,076 $ 999
Discontinued Operations
As part of the 2004 purchase and sale agreement with General Electric Capital Corporation related to
the sale of Boeing Capital Corporation’s (BCC) Commercial Financial Services business, BCC is
involved in a loss sharing arrangement for losses on transferred portfolio assets, such as asset sales,
provisions for loss or asset impairment charges offset by gains from asset sales. At December 31,
2010 and 2009, our maximum future cash exposure to losses associated with the loss sharing
arrangement was $232 and $234 and our accrued liability under the loss sharing arrangement was $82
and $77.
Commercial Aircraft Commitments
In conjunction with signing definitive agreements for the sale of new aircraft (Sale Aircraft), we have
entered into specified-price trade-in commitments with certain customers that give them the right to
trade in used aircraft upon the purchase of Sale Aircraft. The total contractual trade-in value was $295
and $427 as of December 31, 2010 and 2009. We anticipate that a significant portion of these
commitments will not be exercised by customers.
The probability that trade-in commitments will be exercised is determined by using both quantitative
information from valuation sources and qualitative information from other sources. The probability of
exercise is continually assessed, taking into consideration the current economic environment. Trade-in
commitments, which can be terminated by mutual consent with the customer, may be exercised only
during the period specified in the agreement, and require advance notice by the customer. The
estimated fair value of trade-in aircraft related to probable contractual trade-in commitments was $30
and $34 as of December 31, 2010 and 2009. Trade-in commitment agreements have expiration dates
from 2011 through 2023.
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