Boeing 2011 Annual Report Download - page 26

Some of our and our suppliers’ workforces are represented by labor unions, which may lead to
work stoppages.
Approximately 63,000 employees, which constitute 37% of our total workforce, are union represented
as of December 31, 2011. We experienced a work stoppage in 2008 when a labor strike halted
commercial aircraft and certain BMA program production and we may experience additional work
stoppages in the future, which could adversely affect our business. We cannot predict how stable our
relationships, currently with 12 U.S. labor organizations and 7 non-U.S. labor organizations, will be or
whether we will be able to meet the unions’ requirements without impacting our financial condition. The
unions may also limit our flexibility in dealing with our workforce. Union actions at suppliers can also
affect us. Work stoppages and instability in our union relationships could delay the production and/or
development of our products, which could strain relationships with customers and cause a loss of
revenues which would adversely affect our operations.
Significant changes in discount rates, actual investment return on pension assets and other
factors could reduce our earnings, equity, and increase pension contributions in future periods.
The actuarial assumptions underlying the income or expense we record for our pension and other
postretirement benefit plans reflect assumptions relating to financial market and other economic
conditions, such as the discount rate, the expected long-term rate of return on plan assets and
expected future medical inflation. Changes to these assumptions and differences between projected
and actual performance can have a significant effect on our annual pension and other post retirement
costs and/or result in a significant change to Shareholders’ equity. For U.S. government contracts, we
must allocate pension costs to individual contracts based on U.S. Cost Accounting Standards which
can also affect contract profitability. For a discussion regarding how our financial statements can be
affected by pension and other postretirement plan accounting policies, see “Management’s Discussion
and Analysis—Critical Accounting Policies—Postretirement Plans” on pages 45 – 46 of this Form 10-K.
Although GAAP expense and pension or other postretirement contributions are not directly related, the
key economic factors that affect GAAP expense would also likely affect the amount of cash or common
stock we would contribute to our plans. Potential pension contributions include both mandatory
amounts required under federal law Employee Retirement Income Security Act (ERISA) and
discretionary contributions to improve the plans’ funded status.
Our operations expose us to the risk of material environmental liabilities.
We are subject to various federal, state, local and non-U.S. laws and regulations related to
environmental protection, including the discharge, treatment, storage, disposal and remediation of
hazardous substances and wastes. We could incur substantial costs, including cleanup costs, fines
and civil or criminal sanctions, as well as third-party claims for property damage or personal injury, if
we were to violate or become liable under environmental laws or regulations. In some cases, we may
be subject to such costs due to environmental impacts attributable to our current or past manufacturing
operations or the operations of companies we have acquired. In other cases, we may become subject
to such costs due to an indemnification agreement between us and a third party relating to such
environmental liabilities. In addition, new laws and regulations, more stringent enforcement of existing
laws and regulations, the discovery of previously unknown contamination or the imposition of new
remediation requirements could result in additional costs. For additional information relating to
environmental contingencies, see Note 12 to our Consolidated Financial Statements.
Unauthorized access to our or our customers’ information and systems could negatively
impact our business.
We face certain security threats, including threats to the confidentiality, availability and integrity of our
data and systems. We maintain an extensive network of technical security controls, policy enforcement
mechanisms and monitoring systems in order to address these threats. While these measures are
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