Boeing 2012 Annual Report Download - page 26

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14
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.
We have substantial pension and other postretirement benefit obligations, which have a material
impact on our earnings, shareholders' equity and cash flows from operations and could have
significant adverse impacts in future periods.
We have qualified defined benefit pension plans that cover the majority of our employees. Potential pension
contributions include both mandatory amounts required under the Employee Retirement Income Security
Act (ERISA) and discretionary contributions to improve the plans' funded status. The extent of future
contributions depends heavily on market factors such as the discount rate and the actual return on plan
assets. We estimate future contributions to these plans using assumptions with respect to these and other
items. Changes to those assumptions could have a significant effect on future contributions as well as on
our annual pension costs and/or result in a significant change to Shareholders' equity. For U.S. government
contracts, we allocate pension costs to individual contracts based on U.S. Cost Accounting Standards
which can also affect contract profitability. We also provide other postretirement benefits to certain of our
employees, consisting principally of health care coverage for eligible retirees and qualifying dependents.
Our estimates of future costs associated with these benefits are also subject to assumptions, including
estimates of the level of medical cost increases. 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 page 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 stock we
would contribute to our plans.
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.