Boeing 2012 Annual Report Download - page 54

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42
Commercial Commitments
The following table summarizes our commercial commitments outstanding as of December 31, 2012.
(Dollars in millions)
Total Amounts
Committed/
Maximum
Amount of Loss
Less than
1 year
1-3
years
4-5
years
After 5
years
Standby letters of credit and surety bonds $4,545 $2,791 $1,332 $292 $130
Commercial aircraft financing commitments 18,083 1,341 6,588 6,253 3,901
Total commercial commitments $22,628 $4,132 $7,920 $6,545 $4,031
Commercial aircraft financing commitments include commitments to provide financing related to aircraft
on order, under option for deliveries or proposed as part of sales campaigns based on estimated earliest
potential funding dates. Based on historical experience, we anticipate that we will not be required to fund
a significant portion of our financing commitments. However, there can be no assurances that we will not
be required to fund greater amounts than historically required. See Note 12 to our Consolidated Financial
Statements.
Contingent Obligations
We have significant contingent obligations that arise in the ordinary course of business, which include the
following:
Legal Various legal proceedings, claims and investigations are pending against us. Legal contingencies
are discussed in Note 21 to our Consolidated Financial Statements, including our contesting the default
termination of the contract for A-12 aircraft, certain employment, labor and benefits litigation and civil
securities litigation relating to disclosures concerning the 787 program.
Environmental Remediation We are involved with various environmental remediation activities and have
recorded a liability of $710 million at December 31, 2012. For additional information, see Note 12 to our
Consolidated Financial Statements.
Income Taxes We have recorded a liability of $1,055 million at December 31, 2012 for uncertain tax
positions.
For further discussion of income taxes, see Note 5 to our Consolidated Financial Statements.
Off-Balance Sheet Arrangements
We are a party to certain off-balance sheet arrangements including certain guarantees. For discussion of
these arrangements, see Note 13 to our Consolidated Financial Statements.
Critical Accounting Policies
Contract Accounting
We use contract accounting to determine revenue, cost of sales, and profit for almost all of our BDS
business. Contract accounting involves a judgmental process of estimating the total sales and costs for
each contract, which results in the development of estimated cost of sales percentages. For each contract,
the amount reported as cost of sales is determined by applying the estimated cost of sales percentage to
the amount of revenue recognized.