 |  |
| Notes
to Consolidated Financial Statements | | |
|
| |
| On October 31, 1997,
a federal securities lawsuit was filed against the Company in the U.S. District
Court for the Western District of Washington, in Seattle. The lawsuit names as
defendants the Company and three of its then executive officers. Additional lawsuits
of a similar nature have been filed in the same court. These lawsuits were consolidated
on February 24, 1998. The lawsuits generally allege that the defendants desired
to keep the Company’s share price as high as possible in order to ensure
that the McDonnell Douglas shareholders would approve the merger and, in the case
of the individual defendants, to benefit directly from the sale of Boeing stock
during the period from April 7, 1997 through October 22, 1997. By order dated
May 1, 2000, the Court certified two subclasses of plaintiffs in the action: a.
all persons or entities who purchased Boeing stock or call options or who sold
put options during the period from July 21, 1997 through October 22, 1997, and
b. all persons or entities who purchased McDonnell Douglas stock on or after April
7, 1997, and who held such stock until it converted to Boeing stock pursuant to
the merger. The plaintiffs sought compensatory damages and treble damages. On
September 17, 2001, the Company reached agreement with class counsel to settle
the lawsuit for $92.5. The settlement will have no effect on the Company’s
earnings, cash flow or financial position, as it is within insurance limits. The
settlement is conditioned on notice to the class members and Court approval, which
is expected to occur in 2002. | | On February 25, 2000, a purported
class action lawsuit alleging gender discrimination and harassment was filed against
The Boeing Company, Boeing North American, Inc., and McDonnell Douglas Corporation.
The complaint, filed with the United States District Court in Seattle, alleges
that the Company has engaged in a pattern and practice of unlawful discrimination,
harassment and retaliation against females over the course of many years. The
complaint, Beck v. Boeing, names 28 women who have worked for Boeing in the Puget
Sound area; Wichita, Kansas; St. Louis, Missouri; and Tulsa, Oklahoma. On March
15, 2000, an amended complaint was filed naming an additional 10 plaintiffs, including
the first from California. The lawsuit attempts to represent all women who currently
work for the Company, or who have worked for the Company in the past several years. |
| The Company has denied the allegation that it has engaged in any unlawful
“pattern and practice.” Plaintiffs’ motion for class certification
was filed in May 2001. The class they sought included salaried employees in Puget
Sound, Wichita, St. Louis, and Long Beach, and hourly employees in Puget Sound,
Wichita, and St. Louis. | | On October 19, 2001, the court granted
class certification to a segment of the population sought by the plaintiffs. The
court ruled that the action could proceed on the basis of two limited subclasses:
a. all non-executive salaried women (including engineers) in the Puget Sound area,
and b. all hourly women covered by the Machinists’ Bargaining Agreement in
the Puget Sound area. The claims to be litigated are alleged gender discrimination
in compensation and promotion. The court also held that the plaintiffs could not
seek back pay. Rather, should liability be found, the potential remedies include
some form of injunctive relief as well as punitive damages. The U.S. Ninth Circuit
Court of Appeals has accepted the Company’s interlocutory appeal of the class
certification decision, particularly the ruling that leaves open the possibility
of punitive damages. The Company intends to continue its aggressive defense of
these cases. It is not possible to predict what impact, if any, these cases could
have on the financial statements. |
| Note 28 – Segment Information |
| The Company is organized based on the products and services it offers.
Under this organizational structure, the Company operates in the following principal
areas: Commercial Airplanes, Military Aircraft and Missile Systems, Space and
Communications, and Customer and Commercial Financing. Commercial Airplanes operations
principally involve development, production and marketing of commercial jet aircraft
and providing related support services, principally to the commercial airline
industry worldwide. Military Aircraft and Missile Systems operations principally
involve research, development, production, modification and support of the following
products and related systems: military aircraft, both land-based and aircraft-carrier-based,
including fighter, transport and attack aircraft with wide mission capability,
and vertical/short takeoff and landing capability; helicopters and missiles. Space
and Communications operations principally involve research, development, production,
modification and support of the following products and related systems: space
systems, missile defense systems, satellites and satellite launching vehicles,
rocket engines, and information and battle management systems. Although some Military
Aircraft and Missile Systems and Space and Communications products are contracted
in the commercial environment, the primary customer is the U.S. Government. The
Customer and Commercial Financing segment is primarily engaged in the financing
of commercial and private aircraft, commercial equipment, and real estate. |
| In 2001, the Company adjusted the segment classification of certain business
activities. The Company established an “Other” segment classification
which principally includes the activities of Connexion by BoeingSM, a twoway data
communications service for global travelers; Air Traffic Management, a business
unit developing new approaches to a global solution to address air traffic management
issues; and Phantom Works, an advanced research and development organization focused
on innovative technologies, improved processes and the creation of new products.
The results for 2000 and 1999 have been reclassified to conform to the revised
segment classifications. | | | |
