Boeing 2011 Annual Report Download - page 52

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Contractual Obligations
The following table summarizes our known obligations to make future payments pursuant to certain
contracts as of December 31, 2011, and the estimated timing thereof.
(Dollars in millions) Total
Less
than 1
year
1-3
years
3-5
years
After 5
years
Long-term debt (including current portion) $ 12,158 $ 2,257 $ 2,563 $ 1,864 $ 5,474
Interest on debt(1) 6,433 584 893 737 4,219
Pension and other postretirement cash
requirements 27,778 612 4,503 8,827 13,836
Capital lease obligations 235 99 118 17 1
Operating lease obligations 1,311 202 333 180 596
Purchase obligations not recorded on the
Consolidated Statements of Financial Position 106,235 36,589 37,591 21,749 10,306
Purchase obligations recorded on the
Consolidated Statements of Financial Position 14,153 13,432 699 4 18
Total contractual obligations $168,303 $53,775 $46,700 $33,378 $34,450
(1) Includes interest on variable rate debt calculated based on interest rates at December 31, 2011.
Variable rate debt was approximately 1% of our total debt at December 31, 2011.
Pension and Other Postretirement Benefits Pension cash requirements are based on an estimate of
our minimum funding requirements, pursuant to ERISA regulations, although we may make additional
discretionary contributions. Estimates of other postretirement benefits are based on both our estimated
future benefit payments and the estimated contributions to plans that are funded through trusts.
Purchase Obligations Purchase obligations represent contractual agreements to purchase goods or
services that are legally binding; specify a fixed, minimum or range of quantities; specify a fixed,
minimum, variable, or indexed price provision; and specify approximate timing of the transaction.
Purchase obligations include amounts recorded as well as amounts that are not recorded on the
Consolidated Statements of Financial Position. Approximately 6% of the purchase obligations
disclosed above are reimbursable to us pursuant to cost-type government contracts.
Purchase Obligations Not Recorded on the Consolidated Statements of Financial Position
Production related purchase obligations not recorded on the Consolidated Statements of Financial
Position include agreements for inventory procurement, tooling costs, electricity and natural gas
contracts, property, plant and equipment, and other miscellaneous production related obligations. The
most significant obligation relates to inventory procurement contracts. We have entered into certain
significant inventory procurement contracts that specify determinable prices and quantities, and long-
term delivery timeframes. In addition, we purchase raw materials on behalf of our suppliers. These
agreements require suppliers and vendors to be prepared to build and deliver items in sufficient time to
meet our production schedules. The need for such arrangements with suppliers and vendors arises
from the extended production planning horizon for many of our products. A significant portion of these
inventory commitments is supported by firm contracts and/or has historically resulted in settlement
through reimbursement from customers for penalty payments to the supplier should the customer not
take delivery. These amounts are also included in our forecasts of costs for program and contract
accounting. Some inventory procurement contracts may include escalation adjustments. In these
limited cases, we have included our best estimate of the effect of the escalation adjustment in the
amounts disclosed in the table above.
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