
	2021	2020
Accrued compensation and employee benefit costs	$6,573	$7,121
737 MAX customer concessions and other considerations	2,940	5,537
Department of Justice agreement liability		744
Environmental	605	565
Product warranties	1,900	1,527
Forward loss recognition	2,014	1,913

Income taxes payable	5	43
Current portion of lease liabilities	268	268
Other	4,150	4,453
Total	$18,455	$22,171

In 2019, following two fatal 737 MAX accidents, the Federal Aviation Administration (FAA) and non-U.S. civil aviation authorities issued orders suspending commercial operations of 737 MAX aircraft. Deliveries of the 737 MAX were suspended following these orders. Deliveries in the U.S. resumed in late 2020 following rescission by the FAA of its grounding order. In addition, several other non-U.S. civil aviation authorities, including the Brazilian National Civil Aviation Agency, Transport Canada, and the European Union Aviation Safety Agency have subsequently approved return of operations, allowing us to resume deliveries in those jurisdictions. The Civil Aviation Administration of China issued an airworthiness directive in the fourth quarter of 2021 outlining actions required for airlines to return to service. We expect 737 MAX deliveries to China to resume in 2022, subject to final regulatory approvals, although risk remains around the timing and rate of those deliveries. Over 185 countries have approved the resumption of 737 MAX operations. The 737 MAX remains grounded in a small number of non-U.S. jurisdictions.

We have gradually increased production rates in 2020 and 2021 and continue to expect to increase the production rate to 31 per month by early 2022, as well as implement further gradual production rate increases in subsequent periods based on market demand and supply chain capacity.

We produced at abnormally low production rates in 2020 and 2021 and expensed abnormal production costs of $1,887 and $2,567 during the years ended December 31, 2021 and 2020. We do not expect the remaining abnormal costs related to the 737 MAX to be significant and expect most of the remainder to be incurred in early 2022.

In 2021, we delivered 245 aircraft. We have approximately 335 airplanes in inventory as of December 31, 2021 and we anticipate delivering most of these aircraft by the end of 2023. We continue to work with customers who have requested to defer deliveries or to cancel orders for 737 MAX aircraft, and we are remarketing and/or delaying deliveries of certain aircraft included within inventory. In the event that we are unable to resume aircraft deliveries in China and/or ramp up deliveries consistent with our assumptions, our expectation of delivery timing and our expectation regarding future gradual production rate increases could be impacted.

We have also recorded additional expenses of $175, $416, and $328 due to the 737 MAX grounding during 2021, 2020, and 2019, respectively. The expenses include costs related to storage, inventory impairment, pilot training, and software updates.


	2021	2020
Beginning balance – January 1	$5,537	$7,389

Reductions for payments made	(2,535)	(2,188)
Reductions for concessions and other in-kind considerations	(48)	(162)
Changes in estimates	(14)	498
Ending balance – December 31	$2,940	$5,537

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, 2021 and 2020, the high end of the estimated range of reasonably possible remediation costs exceeded our recorded liabilities by $1,094 and 1,095.

The increase in the product warranty reserve during the year ended December 31, 2020 is primarily driven by charges related to “pickle forks” on 737NG aircraft. During 2019, we detected cracks in the "pickle forks", a frame fitting component of the structure connecting the wings to the fuselages of 737NG aircraft. We notified the FAA, which issued a directive requiring that certain 737NG airplanes be inspected. In 2019, we estimated the number of aircraft that would have to be repaired in the future and provisioned for the estimated costs of completing the repairs. During the first quarter of 2020, we recognized charges of $336 based on revised engineering and fleet utilization estimates as well as updated repair cost estimates. We cannot estimate a range of reasonably possible losses, if any, in excess of amounts recognized due to the ongoing nature of the inspections and repairs and pending the completion of investigations into the cause of the condition.

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, 2021 have expiration dates from 2022 through 2028. At December 31, 2021 and 2020, total contractual trade-in commitments were $612 and $950. As of December 31, 2021 and 2020, we estimated that it was probable we would be obligated to perform on certain of these commitments with net amounts payable to customers totaling $283 and $599, and the fair value of the related trade-in aircraft was $283 and $580.

Financing commitments related to aircraft on order, including options and those proposed in sales campaigns, and refinancing of delivered aircraft, totaled $12,905 and $11,512 as of December 31, 2021 and 2020. The estimated earliest potential funding dates for these commitments as of December 31, 2021 are as follows:

As of December 31, 2021, all of these financing commitments relate to customers we believe have less than investment-grade credit. We have concluded that no reserve for future potential losses is required for these financing commitments based upon the terms, such as collateralization and interest rates, under which funding would be provided.

We have entered into standby letters of credit and surety bonds with financial institutions primarily relating to the guarantee of our future performance on certain contracts. Contingent liabilities on outstanding letters of credit agreements and surety bonds aggregated approximately $3,634 and $4,238 as of December 31, 2021 and 2020.

McDonnell Douglas Corporation insured its executives with Company Owned Life Insurance (COLI), which are life insurance policies with a cash surrender value. Although we do not use COLI currently, these obligations from the merger with McDonnell Douglas are still a commitment at this time. We have loans in place to cover costs paid or incurred to carry the underlying life insurance policies. As of December 31, 2021 and 2020, the cash surrender value was $374 and $395 and the total loans were $360 and $382. As we have the right to offset the loans against the cash surrender value of the policies, we present the net asset in Other assets on the Consolidated Statements of Financial Position as of December 31, 2021 and 2020.

We have recorded earnings charges for losses on a number of fixed-price development contracts. Fixed-price development work is inherently uncertain and subject to significant variability in estimates of the cost and time required to complete the work. The operational and technical complexities of these contracts create financial risk, which could trigger additional earnings charges, termination provisions, order cancellations or other financially significant exposure.

In 2011, we were awarded a contract from the U.S. Air Force (USAF) to design, develop, manufacture and deliver four next generation aerial refueling tankers. This Engineering, Manufacturing and Development (EMD) contract is a fixed-price incentive fee contract and involves highly complex designs and systems integration. Since 2016, the USAF has authorized seven low rate initial production (LRIP) lots for a total of 94 aircraft. The EMD contract and authorized LRIP lots are valued at approximately $19 billion as of December 31, 2021.

Our final incurred costs for each year are subject to audit and review for allowability by the U.S. government, which can result in payment demands related to costs they believe should be disallowed. We work with the U.S. government to assess the merits of claims and where appropriate reserve for amounts disputed. If we are unable to satisfactorily resolve disputed costs, we could be required to record an earnings charge and/or provide refunds to the U.S. government.

During 2020, the Company recorded severance costs for approximately 26,000 employees expected to leave the Company through a combination of voluntary and involuntary terminations. The severance packages are consistent with the Company’s ongoing compensation and benefits plans. During the first quarter of 2021, we reduced the estimated number of employees expected to leave the Company through voluntary and involuntary terminations to approximately 23,000. During the second quarter of 2021, we further reduced the estimated number of employees expected to leave the company through voluntary and involuntary terminations to approximately 19,000. As of December 31, 2021, our severance liability primarily relates to remaining severance payments to terminated employees.