Boeing 2013 Annual Report Download - page 53

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Purchase Obligations Not Recorded on the Consolidated Statements of Financial Position
Production related purchase obligations not recorded on the Consolidated Statements of Financial Position
include agreements for inventory procurement, tooling costs, electricity and natural gas contracts, property,
plant and equipment, and other miscellaneous production related obligations. The most significant
obligation relates to inventory procurement contracts. We have entered into certain significant inventory
procurement contracts that specify determinable prices and quantities, and long-term delivery timeframes.
In addition, we purchase raw materials on behalf of our suppliers. These agreements require suppliers
and vendors to be prepared to build and deliver items in sufficient time to meet our production schedules.
The need for such arrangements with suppliers and vendors arises from the extended production planning
horizon for many of our products. A significant portion of these inventory commitments is supported by
firm contracts and/or has historically resulted in settlement through reimbursement from customers for
penalty payments to the supplier should the customer not take delivery. These amounts are also included
in our forecasts of costs for program and contract accounting. Some inventory procurement contracts may
include escalation adjustments. In these limited cases, we have included our best estimate of the effect
of the escalation adjustment in the amounts disclosed in the table above.
Purchase Obligations Recorded on the Consolidated Statements of Financial Position Purchase
obligations recorded on the Consolidated Statements of Financial Position primarily include accounts
payable and certain other current and long-term liabilities including accrued compensation.
Industrial Participation Agreements We have entered into various industrial participation agreements
with certain customers outside of the U.S. to facilitate economic flow back and/or technology transfer to
their businesses or government agencies as the result of their procurement of goods and/or services from
us. These commitments may be satisfied by our placement of direct work or vendor orders for supplies,
opportunities to bid on supply contracts, transfer of technology or other forms of assistance. However, in
certain cases, our commitments may be satisfied through other parties (such as our vendors) who purchase
supplies from our non-U.S. customers. We do not commit to industrial participation agreements unless a
contract for sale of our products or services is signed. In certain cases, penalties could be imposed if we
do not meet our industrial participation commitments. During 2013, we incurred no such penalties. As of
December 31, 2013, we have outstanding industrial participation agreements totaling $18.4 billion that
extend through 2030. Purchase order commitments associated with industrial participation agreements
are included in purchase obligations in the table above. To be eligible for such a purchase order commitment
from us, a foreign supplier must have sufficient capability to meet our requirements and must be competitive
in cost, quality and schedule.
Income Tax Obligations As of December 31, 2013, our net asset for income taxes receivable, including
uncertain tax positions, was $24 million. We are not able to reasonably estimate the timing of future cash
flows related to uncertain tax positions. Our income tax matters are excluded from the table above. See
Note 4 to our Consolidated Financial Statements.