Boeing 2011 Annual Report Download - page 96

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The funded status of the plans is measured as the difference between the plan assets at fair value and
the projected benefit obligation (PBO). We have recognized the aggregate of all overfunded plans in
Pension plan assets, net, and the aggregate of all underfunded plans in either Accrued retiree health
care or Accrued pension plan liability, net. The portion of the amount by which the actuarial present
value of benefits included in the PBO exceeds the fair value of plan assets, payable in the next 12
months, is reflected in Accrued liabilities.
The components of net periodic benefit cost are as follows:
Pension
Other
Postretirement
Plans
Years ended December 31, 2011 2010 2009 2011 2010 2009
Service cost $ 1,406 $ 1,176 $ 1,090 $221 $121 $132
Interest cost 3,116 3,002 2,964 484 404 466
Expected return on plan assets (3,741) (3,850) (3,738) (6) (6) (5)
Amortization of prior service costs 244 248 242 (96) (78) (90)
Recognized net actuarial loss 1,254 777 650 178 56 92
Settlement/curtailment/transfer loss 64 14 13 3
Net periodic benefit cost $ 2,343 $ 1,367 $ 1,221 $784 $497 $595
Net periodic benefit cost included in Earnings from
operations $ 1,648 $ 1,101 $ 879 $692 $480 $615
During the quarter ended September 30, 2011, we determined the accumulated benefit obligation
(ABO) for certain other postretirement benefit plans was understated. As a result, we recognized an
additional $294 of postretirement benefit obligations at September 30, 2011. This increased net
periodic benefit cost during 2011 by $184, which includes service cost of $73, interest cost of $68 and
recognized net actuarial loss of $43. Had the understatement been recorded at December 31, 2010,
the postretirement benefit obligation would have increased by $274 from $8,546 to $8,820.
Management believes that these understatements were not material to the current period or prior
periods.
Under our accounting policy, a portion of net periodic benefit cost is allocated to production as
inventoried costs. Of the $184 increase in net periodic benefit cost described above, the associated
cost included in Earnings from operations was $161 for the quarter ended September 30, 2011, with
the remaining cost of $23 classified as inventory.
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