Boeing 2013 Annual Report Download - page 34

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22
A portion of net periodic benefit cost is recognized as product costs in Earnings from operations in the
period incurred and the remainder is included in inventory at the end of the reporting period and recorded
in Earnings from operations in subsequent periods.
Costs are allocated to the business segments as described in Note 21.
Net periodic benefit costs included in Earnings from operations were as follows:
(Dollars in millions) Pension Other Postretirement
Benefits
Years ended December 31, 2013 2012 2011 2013 2012 2011
Allocated to business segments ($1,662) ($1,620) ($1,379) ($413) ($431) ($444)
Other unallocated items and eliminations (1,374) (787) (269) 60 (112) (248)
Total ($3,036) ($2,407) ($1,648) ($353) ($543) ($692)
Other Earnings Items
(Dollars in millions)
Years ended December 31, 2013 2012 2011
Earnings from operations $6,562 $6,290 $5,823
Other income, net 56 62 47
Interest and debt expense (386) (442) (477)
Earnings before income taxes 6,232 5,910 5,393
Income tax expense (1,646) (2,007) (1,382)
Net earnings from continuing operations $4,586 $3,903 $4,011
Interest and debt expense decreased by $56 million in 2013 and $35 million in 2012 as a result of lower
weighted average debt balances.
Our effective income tax rates were 26.4%, 34.0% and 25.6% for the years ended December 31, 2013,
2012 and 2011, respectively. Our 2013 effective tax rate was lower due to research tax credits for the 2013
and 2012 tax years that were both recorded in 2013 and research and experimental regulations issued
by the Internal Revenue Service in 2013 which resulted in $212 million of previously unrecognized tax
benefits being recorded in the fourth quarter of 2013. Our 2011 effective tax rate was lower primarily due
to tax benefits of $397 million recorded as a result of federal income tax audit settlements in addition to
research tax credits which were not available in 2012. Federal income tax audits have been settled for all
years prior to 2007.
For additional discussion related to Income Taxes, see Note 4 to our Consolidated Financial Statements.