Boeing 2013 Annual Report Download - page 33

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21
Unallocated Items and Eliminations The most significant items included in Unallocated items and
eliminations are shown in the following table:
(Dollars in millions)
Years ended December 31, 2013 2012 2011
Share-based plans ($95) ($81) ($83)
Deferred compensation (238) (75) (61)
Eliminations and other (366) (457) (327)
Litigation settlements (406) 121
Sub-total (included in core operating earnings*) (1,105) (492) (471)
Pension (1,374) (787) (269)
Postretirement 60 (112) (248)
Pension and other postretirement benefit expense
(excluded from core operating earnings*) (1,314) (899) (517)
Total ($2,419) ($1,391) ($988)
* Core operating earnings is a Non-GAAP measure that excludes certain components of pension and other
postretirement benefit expense. See page 47.
Deferred compensation expense increased by $163 million in 2013, primarily driven by increases in our
stock price, and by $14 million in 2012, primarily driven by increases in the overall stock market performance.
Eliminations and other unallocated expense decreased by $91 million in 2013, primarily due to the timing
of elimination of profit on intercompany items, and increased by $130 million in 2012 due to the timing of
intercompany expense allocations and elimination of profit on intercompany items.
Litigation settlements include the 2013 charge of $406 million related to the settlement of the A-12 litigation
described in Note 20 and the $121 million benefit recorded in 2012 due to a favorable court judgment on
satellite litigation.
We recorded net periodic benefit cost related to pension and other postretirement benefits of $3,769 million,
$3,383 million and $3,127 million in 2013, 2012 and 2011, respectively. The increase in net periodic benefit
cost related to pension is primarily due to higher amortization of actuarial losses and higher service costs
driven by lower discount rates.
Unallocated pension expense in 2013 reflects the pension curtailment charge of $73 million related to the
decision in September 2013 to end production of the C-17 aircraft in 2015. See Note 11. During the third
quarter of 2013 we also determined that the pension expense in prior years was overstated and recorded
a reduction in pension expense of $63 million. Unallocated other postretirement benefit expense in 2011
includes $161 million of additional expense due to an adjustment primarily related to prior years’
accumulated postretirement benefit obligations. See the discussion of the postretirement liabilities in Note
14 to our Consolidated Financial Statements.