Boeing 2014 Annual Report Download - page 89

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77
Environmental
The following table summarizes environmental remediation activity during the years ended December 31,
2014 and 2013.
2014 2013
Beginning balance – January 1 $649 $710
Reductions for payments made (89) (120)
Changes in estimates 41 59
Ending balance – December 31 $601 $649
The liabilities recorded represent our best estimate or the low end of a range of reasonably possible costs
expected to be incurred to remediate sites, including operation and maintenance over periods of up to 30
years. It is reasonably possible that we may incur charges that exceed these recorded amounts because
of regulatory agency orders and directives, changes in laws and/or regulations, higher than expected costs
and/or the discovery of new or additional contamination. As part of our estimating process, we develop a
range of reasonably possible alternate scenarios that includes the high end of a range of reasonably
possible cost estimates for all remediation sites for which we have sufficient information based on our
experience and existing laws and regulations. There are some potential remediation obligations where
the costs of remediation cannot be reasonably estimated. At December 31, 2014 and 2013, the high end
of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $874
and $928.
Product Warranties
The following table summarizes product warranty activity recorded during the years ended December 31,
2014 and 2013.
2014 2013
Beginning balance – January 1 $1,570 $1,572
Additions for current year deliveries 566 595
Reductions for payments made (432) (419)
Changes in estimates (200) (178)
Ending balance - December 31 $1,504 $1,570
Commercial Aircraft Commitments
In conjunction with signing definitive agreements for the sale of new aircraft (Sale Aircraft), we have entered
into trade-in commitments with certain customers that give them the right to trade in used aircraft at a
specified price upon the purchase of Sale Aircraft. The probability that trade-in commitments will be
exercised is determined by using both quantitative information from valuation sources and qualitative
information from other sources. The probability of exercise is assessed quarterly, or as events trigger a
change, and takes into consideration the current economic and airline industry environments. Trade-in
commitments, which can be terminated by mutual consent with the customer, may be exercised only during
the period specified in the agreement, and require advance notice by the customer.
Trade-in commitment agreements at December 31, 2014 have expiration dates from 2015 through 2026.
At December 31, 2014 and 2013, total contractual trade-in commitments were $2,392 and $1,605. As of
December 31, 2014 and 2013, we estimated that it was probable we would be obligated to perform on
certain of these commitments with net amounts payable to customers totaling $446 and $325 and the fair
value of the related trade-in aircraft was $446 and $325.