Boeing 2012 Annual Report Download - page 97

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85
those retirees who are eligible for health care coverage. Certain employee groups, including employees
covered by most United Auto Workers bargaining agreements, are provided lifetime health care coverage.
The funded status of the plans is measured as the difference between the plan assets at fair value and
the projected benefit obligation (PBO). We have recognized the aggregate of all overfunded plans in
Pension plan assets, net, and the aggregate of all underfunded plans in either Accrued retiree health care
or Accrued pension plan liability, net. The portion of the amount by which the actuarial present value of
benefits included in the PBO exceeds the fair value of plan assets, payable in the next 12 months, is
reflected in Accrued liabilities. The components of net periodic benefit cost were as follows:
Pension Other Postretirement Plans
Years ended December 31, 2012 2011 2010 2012 2011 2010
Service cost $1,649 $1,406 $1,176 $146 $221 $121
Interest cost 3,005 3,116 3,002 313 484 404
Expected return on plan assets (3,831)(3,741) (3,850) (7) (6) (6)
Amortization of prior service costs 225 244 248 (197) (96) (78)
Recognized net actuarial loss 1,937 1,254 777 119 178 56
Settlement and curtailment loss 25 64 14 (1) 3
Net periodic benefit cost $3,010 $2,343 $1,367 $373 $784 $497
Net periodic benefit cost included in
Earnings from operations $2,407 $1,648 $1,101 $543 $692 $480
During the quarter ended September 30, 2011, we determined the accumulated benefit obligation (ABO)
for certain other postretirement benefit plans was understated. As a result, we recognized an additional
$294 of postretirement benefit obligations at September 30, 2011. This increased net periodic benefit cost
during 2011 by $184, which includes service cost of $73, interest cost of $68 and recognized net actuarial
loss of $43. Had the understatement been recorded at December 31, 2010, the postretirement benefit
obligation would have increased by $274 from $8,546 to $8,820. Management believes that these
understatements were not material.
Under our accounting policy, a portion of net periodic benefit cost is allocated to production as inventoried
costs. Of the $184 increase in net periodic benefit cost described above, the associated cost included in
Earnings from operations was $161 for the quarter ended September 30, 2011, with the remaining cost
of $23 classified as inventory.