Boeing 2014 Annual Report Download - page 17

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Commercial Aircraft. In the U.S., our commercial aircraft products are required to comply with FAA
regulations governing production and quality systems, airworthiness and installation approvals, repair
procedures and continuing operational safety. Internationally, similar requirements exist for airworthiness,
installation and operational approvals. These requirements are generally administered by the national
aviation authorities of each country and, in the case of Europe, coordinated by the European Joint Aviation
Authorities.
Environmental. We are subject to various federal, state, local and non-U.S. laws and regulations relating
to environmental protection, including the discharge, treatment, storage, disposal and remediation of
hazardous substances and wastes. We continually assess our compliance status and management of
environmental matters to ensure our operations are in substantial compliance with all applicable
environmental laws and regulations. Investigation, remediation, operation and maintenance costs
associated with environmental compliance and management of sites are a normal, recurring part of our
operations. These costs often are allowable costs under our contracts with the U.S. government. It is
reasonably possible that costs incurred to ensure continued environmental compliance could have a
material impact on our results of operations, financial condition or cash flows if additional work requirements
or more stringent clean-up standards are imposed by regulators, new areas of soil, air and groundwater
contamination are discovered and/or expansions of work scope are prompted by the results of
investigations.
A Potentially Responsible Party (PRP) has joint and several liability under existing U.S. environmental
laws. Where we have been designated a PRP by the Environmental Protection Agency or a state
environmental agency, we are potentially liable to the government or third parties for the full cost of
remediating contamination at our facilities or former facilities or at third-party sites. If we were required to
fully fund the remediation of a site for which we were originally assigned a partial share, the statutory
framework would allow us to pursue rights to contribution from other PRPs. For additional information
relating to environmental contingencies, see Note 11 to our Consolidated Financial Statements.
International. Our international sales are subject to U.S. and non-U.S. governmental regulations and
procurement policies and practices, including regulations relating to import-export control, investment,
exchange controls and repatriation of earnings. International sales are also subject to varying currency,
political and economic risks.
Raw Materials, Parts, and Subassemblies
We are highly dependent on the availability of essential materials, parts and subassemblies from our
suppliers and subcontractors. The most important raw materials required for our aerospace products are
aluminum (sheet, plate, forgings and extrusions), titanium (sheet, plate, forgings and extrusions) and
composites (including carbon and boron). Although alternative sources generally exist for these raw
materials, qualification of the sources could take one year or more. Many major components and product
equipment items are procured or subcontracted on a sole-source basis with a number of companies.
Suppliers
We are dependent upon the ability of a large number of suppliers and subcontractors to meet performance
specifications, quality standards and delivery schedules at our anticipated costs. While we maintain an
extensive qualification and performance surveillance system to control risk associated with such reliance
on third parties, failure of suppliers or subcontractors to meet commitments could adversely affect
production schedules and program/contract profitability, thereby jeopardizing our ability to fulfill
commitments to our customers. We are also dependent on the availability of energy sources, such as
electricity, at affordable prices.