Boeing 2010 Annual Report Download - page 52

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In the event we require additional funding to support strategic business opportunities, our commercial
aircraft financing commitments, unfavorable resolution of litigation or other loss contingencies, or other
business requirements, we expect to meet increased funding requirements by issuing commercial
paper or term debt. We believe our ability to access external capital resources should be sufficient to
satisfy existing short-term and long-term commitments and plans, and also to provide adequate
financial flexibility to take advantage of potential strategic business opportunities should they arise
within the next year. However, there can be no assurance of the cost or availability of future
borrowings, if any, under our commercial paper program, in the debt markets or our credit facilities.
At December 31, 2010 and 2009, our pension plans were $9,854 million and $6,356 million
underfunded as measured under GAAP. On an ERISA basis our plans are more than 100% funded. In
2011, we expect to make discretionary contributions to our plans of approximately $500 million. Absent
increases in interest rates and/or higher asset values, we may be required to make significant
contributions to our pension plans in the future.
As of December 31, 2010, we were in compliance with the covenants for our debt and credit facilities.
The most restrictive covenants include a limitation on mortgage debt and sale and leaseback
transactions as a percentage of consolidated net tangible assets (as defined in the credit agreements),
and a limitation on consolidated debt as a percentage of total capital (as defined). When considering
debt covenants, we continue to have substantial borrowing capacity.
Contractual Obligations
The following table summarizes our known obligations to make future payments pursuant to certain
contracts as of December 31, 2010, 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) $ 12,253 $ 876 $ 3,510 $ 2,103 $ 5,764
Interest on debt (1) 6,990 622 1,025 773 4,570
Pension and other postretirement cash
requirements 20,638 632 1,622 6,643 11,741
Capital lease obligations 190 63 97 30
Operating lease obligations 1,159 217 280 164 498
Purchase obligations not recorded on the
Consolidated Statements of Financial Position 104,775 34,572 40,197 20,442 9,564
Purchase obligations recorded on the
Consolidated Statements of Financial Position 12,676 12,345 331
Total contractual obligations $158,681 $49,327 $47,062 $30,155 $32,137
(1) Includes interest on variable rate debt calculated based on interest rates at December 31, 2010.
Variable rate debt was approximately 1% of our total debt at December 31, 2010.
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
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