Boeing 2012 Annual Report Download - page 91
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79
the costs of remediation cannot be reasonably estimated. At December 31, 2012 and 2011, the high end
of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $865
and $1,003.
Product Warranties
The following table summarizes product warranty activity recorded during the years ended December 31,
2012 and 2011.
2012 2011
Beginning balance – January 1 $1,046 $1,076
Additions for current year deliveries 678 232
Reductions for payments made (315) (269)
Changes in estimates 163 7
Ending balance – December 31 $1,572 $1,046
Commercial Aircraft Commitments
In conjunction with signing definitive agreements for the sale of new aircraft (Sale Aircraft), we have entered
into trade-in commitments with certain customers that give them the right to trade in used aircraft at a
specified price upon the purchase of Sale Aircraft. The probability that trade-in commitments will be
exercised is determined by using both quantitative information from valuation sources and qualitative
information from other sources. The probability of exercise is assessed quarterly, or as events trigger a
change, and takes into consideration the current economic and airline industry environments. Trade-in
commitments, which can be terminated by mutual consent with the customer, may be exercised only during
the period specified in the agreement, and require advance notice by the customer.
Trade-in commitment agreements at December 31, 2012 have expiration dates from 2013 through 2023.
At December 31, 2012 and 2011, total contractual trade-in commitments were $1,535 and $273. As of
December 31, 2012 and 2011, we estimated that it was probable we would be obligated to perform on
certain of these commitments with net amounts payable to customers totaling $108 and $30 and the fair
value of the related trade-in aircraft was $108 and $27.
Financing Commitments
Financing commitments related to aircraft on order, including options and those proposed in sales
campaigns, totaled $18,083 and $15,866 as of December 31, 2012 and 2011. The estimated earliest
potential funding dates for these commitments as of December 31, 2012 are as follows:
Total
2013 $1,341
2014 2,591
2015 3,997
2016 3,457
2017 2,796
Thereafter 3,901
$18,083
As of December 31, 2012 $17,014 of these financing commitments related to customers we believe have
less than investment-grade credit. We have concluded that no reserve for future potential losses is required