Boeing 2013 Annual Report Download - page 41

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29
Program Development The following chart summarizes the time horizon between go-ahead and planned
initial delivery for major Commercial Airplanes derivatives and programs.
We launched the 787-10 in June 2013 and the 777X in November 2013.
Additional Considerations
The development and ongoing production of commercial aircraft is extremely complex, involving extensive
coordination and integration with suppliers and highly-skilled labor from thousands of employees and other
partners. Meeting or exceeding our performance and reliability standards, as well as those of customers
and regulators, can be costly and technologically challenging. In addition, the introduction of new aircraft
and derivatives, such as the 787-9, 787-10, 737 MAX and 777X, involves increased risks associated with
meeting development, production and certification schedules. As a result, our ability to deliver aircraft on
time, satisfy performance and reliability standards and achieve or maintain, as applicable, program
profitability is subject to significant risks. Factors that could result in lower margins (or a material charge
if an airplane program has or is determined to have reach-forward losses) include the following: changes
to the program accounting quantity, customer and model mix, production costs and rates, changes to price
escalation factors in aircraft purchase contracts, performance or reliability issues involving completed
aircraft, capital expenditures and other costs associated with increasing or adding new production capacity,
learning curve, additional change incorporation, anticipated cost reductions, flight test and certification
schedules, costs, schedule and demand for derivative airplanes and status of customer claims, supplier
assertions and other contractual negotiations. While we believe the cost and revenue estimates
incorporated in the consolidated financial statements are appropriate, the technical complexity of our
airplane programs creates financial risk as additional completion costs may become necessary or
scheduled delivery dates could be extended, which could trigger termination provisions, order cancellations
or other financially significant exposure.