State of Washington
Employment and Income Analysis of the Boeing 7E7 Project
June 22, 2004
State of Washington
June 2004
Deloitte Consulting, LLP
1
TABLE OF CONTENTS
Page
I. EXECUTIVE SUMMARY ...............................................................................................................................................................4
II. EMPLOYMENT AND INCOME ANALYSIS OF THE BOEING 7E7 PROJECT ...................................................................7
A. BACKGROUND AND STUDY REGION........................................................................................................................7
B. DEVELOPMENT OF ASSUMPTIONS...........................................................................................................................8
C. RESULTS ............................................................................................................................................................................12
1. OUTPUT ...............................................................................................................................................................13
2. VALUE ADDED (INCOME)..............................................................................................................................14
3. EMPLOYMENT ..................................................................................................................................................15
III. GLOSSARY .......................................................................................................................................................................................16
IV. APPENDIX .........................................................................................................................................................................................17
A. DETAILED ASSUMPTIONS............................................................................................................................................17
B. LIMITATIONS ...................................................................................................................................................................23
C. IMPLAN ..............................................................................................................................................................................23
State of Washington
June 2004
Deloitte Consulting, LLP
2
LIST OF TABLES
TABLE 1. GENERAL DEMOGRAPHICAL DATA FOR THE STATE OF WASHINGTON ........................................................7
TABLE 2. IMPLAN AIRCRAFT SECTOR ADJUSTMENTS ............................................................................................................10
TABLE 3. INPUTS TO THE MODEL ....................................................................................................................................................11
TABLE 4. OVERALL RESULTS ............................................................................................................................................................12
TABLE 5. SUMMARY OUTPUT RESULTS.........................................................................................................................................13
TABLE 6. SUMMARY VALUE ADDED (INCOME) RESULTS .......................................................................................................14
TABLE 7. SUMMARY EMPLOYMENT RESULTS ............................................................................................................................15
TABLE 8. CAPITAL ASSUMPTIONS ...................................................................................................................................................17
TABLE 9. GOODS AND SERVICES SPENDING ASSUMPTIONS ..................................................................................................19
TABLE 10. EMPLOYMENT ASSUMPTIONS ......................................................................................................................................21
State of Washington
June 2004
Deloitte Consulting, LLP
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I. Executive Summary
The State of Washington (“State”) engaged Deloitte Consulting (“Deloitte”) to complete an analysis of the potential employment and
associated income and sales that could result from the proposed 7E7 project. Boeing and an Advisory Group (Office of Financial
Management, Department of Revenue, and other leading economists) provided data or input. This analysis includes direct, indirect,
and multiplier effects the project could generate for the Washington economy during both the development phase and ongoing
operations.
In conducting this study Deloitte relied on assumptions that have been provided for the proposed project by Boeing and on revenue
information provided by the Office of Financial Management. The analyses and results contained herein are subject to the
limitations set forth in the Appendix attached to this report.
Deloitte then utilized IMPLAN’s input-output software to estimate the direct, indirect, and induced effects of the development upon
the local economy.
The analysis was contingent upon non-proprietary estimates provided by Boeing, including:





In-state construction and capital spending (for both goods and services) for the project, over the entire analysis period
In-state annual spending on goods and services by Boeing
Number of full-time equivalent Boeing jobs, including wages and benefits
In-state investment and annual spending (including construction) by suppliers;
Number of full-time equivalent supplier jobs, including wages and benefits
Office of Financial Management economists provided estimated State general fund tax figures which have been incorporated into
the IMPLAN model. These taxes are anticipated to result in additional revenue for the State general fund due to the 7E7 project.
It should be noted that the effect of the reduction in the State aerospace B&O tax rate and revenue related to the 7E7 project that
will occur as a direct result of the project, have been factored into the tax revenue estimates provided.
State of Washington
June 2004
Deloitte Consulting, LLP
4
This study does not address the impact of the 7E7 project on any future Boeing decision making related to the development of new or
derivative aircraft within the State of Washington.
Summary results for the analysis are included in following table (definitions of the key terminology can be found on page 16):
Summary Results
2004 - Pre-Construction
EMPLOYMENT
INCOME
OUTPUT
Impact
High
Direct
2006 - Construction
Low
High
2008 - Finish Construction/Early Operations
Low
High
Low
2012 - Steady State/Ongoing Operations
High
Low
$1,118,526,000
$686,369,000
$2,906,046,000
$1,630,265,000
$3,225,960,000
$1,206,259,000
$2,091,298,000
$729,845,000
Indirect & Induced
$843,560,000
$501,123,000
$2,208,015,000
$1,194,163,000
$2,403,157,000
$872,560,000
$1,553,375,000
$524,656,000
Total
$1,962,086,000
$1,187,491,000
$5,114,061,000
$2,824,429,000
$5,629,118,000
$2,078,819,000
$3,644,673,000
$1,254,501,000
Direct
$559,335,000
$244,960,000
$1,382,248,000
$561,880,000
$1,556,565,000
$410,898,000
$1,024,387,000
$254,832,000
Indirect & Induced
$489,559,000
$280,935,000
$1,280,819,000
$668,081,000
$1,386,607,000
$485,565,000
$896,597,000
$293,296,000
Total
$1,048,893,000
$525,896,000
$2,663,067,000
$1,229,961,000
$2,943,173,000
$896,463,000
$1,920,984,000
$548,127,000
Direct
5,090
2,860
15,820
7,120
14,110
5,140
9,280
3,250
Indirect & Induced
8,050
4,570
21,070
10,830
22,780
7,910
14,790
4,800
Total
13,130
7,430
2004 Dollars (Totals may not add due to rounding)
36,890
17,950
36,890
13,060
24,070
8,060
Highlights of the total direct, indirect and induced economic impacts for 2004 (Pre-Construction) for the 7E7 project include
(2004 dollars):




Direct employment of approximately 2,860-5,090 jobs created within the State from the proposed development (See
IMPLAN explanation in the Appendix on page 23.)
Total indirect and induced employment of approximately 4,570-8,050 jobs in the State of Washington as a result to
business and household spending effects
Output of $1.19 billion to $2.00 billion
Income of $526 million to $1.05 billion
State of Washington
June 2004
Deloitte Consulting, LLP
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Highlights of the total direct, indirect and induced economic impacts for 2006 (Construction) for the 7E7 project include (2004
dollars):




Direct employment of approximately 7,120-15,820 jobs created within the State from the proposed development
Total indirect and induced employment of approximately 10,830-21,070 jobs in the State of Washington as a result to
business and household spending effects
Output of $2.82 billion to $5.11 billion
Income of $1.23 billion to $2.66 billion
Highlights of the total direct, indirect and induced economic impacts for 2008 (Finish Construction/Early Operations) for the
7E7 project include (2004 dollars):




Direct employment of approximately 5,140-14,110 jobs created within the State from the proposed development
Total indirect and induced employment of approximately 7,910-22,780 jobs in the State of Washington as a result to
business and household spending effects
Output of $2.08 billion to $5.63 billion
Income of $897 million to $2.94 billion
Highlights of the total direct, indirect and induced economic impacts for 2012 (Steady State/Ongoing Operations) for the 7E7
project include (2004 dollars):




Annual direct employment of approximately 3,250-9,280 permanent jobs created within the State from the proposed
development
Total indirect and induced employment of approximately 4,800-14,790 jobs in the State of Washington as a result to
business and household spending effects
Output of $1.25 billion to $3.64 billion
Income of $548 million to $1.92 billion
State of Washington
June 2004
Deloitte Consulting, LLP
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II. Employment and Income Analysis of the Boeing 7E7 Project
Background and Study Region
The State of Washington (“State”) engaged Deloitte to complete an analysis of the potential employment and associated income and
sales that could result from the proposed 7E7 project. Boeing and an Advisory Group (Office of Financial Management, Department
of Revenue, and other leading economists) provided data or input. Our analysis includes direct, indirect, and multiplier effects the
project could generate for the Washington economy during both the development phase and ongoing operations.
At a Statewide level, Boeing has provided Deloitte with the timing of construction and operations of the facility, overall spend by
Boeing, potential Boeing employment levels and estimated spending and employment for major suppliers of the proposed
development.
The proposed 7E7 project would generate a number of economic benefits for the State. This analysis quantifies ongoing economic
benefits to the area, such as an injection of additional or supported jobs for residents, new sales for businesses, and additional income
for workers and other residents. According to Boeing representatives, the extent of the impact generated within the entire State from
the 7E7 project is anticipated to be focused in a four-county area including Snohomish, King, Pierce, and Skagit. As such, while the
impact at the “State” level has been analyzed in this report, it is assumed that the majority of the impacts would take place within the
four-county area.
For the purposes of our analysis, the State of Washington is considered to be the geographic area of study. The summary data for the
region as reported by IMPLAN is as follows:
Table 1. General Demographical Data for the State of Washington
State
Washington
Area
(sq. mi.)
66,581
Population
5,987,973
Employment
3,584,766
Households
2,496,301
Total
Income
$191,644,600,000
Income per
Household
$76,771
2001 data
State of Washington
June 2004
Deloitte Consulting, LLP
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Development of Assumptions
Boeing provided Deloitte all of the inputs and assumptions utilized to evaluate the potential impact of the 7E7 project with the
exception of tax impacts, which were provided by the Office of Financial Management. Deloitte relied solely on information provided
by Boeing and the State of Washington in its analysis.
The following information was provided by Boeing in the form of ranges, estimated as low and high potential impacts:





Overall timing of the construction phases and operational phases of the 7E7 project;
Building construction, machinery and equipment, and other capital item spending information;
Raw materials and other relevant goods and services spending by Boeing;
Direct Boeing employment and wage and benefit information; and,
Estimated spending and employment for major suppliers as a result of the proposed project.
Office of Financial Management economists provided estimated State general fund tax figures which have been incorporated into
the IMPLAN model. These taxes are anticipated to result in additional revenue for the State general fund due to the 7E7 project.
It should be noted that the effect of the reduction in the State aerospace B&O tax rate and revenue related to the 7E7 project that
will occur as a direct result of the project, have been factored into the tax revenue estimates provided.
State of Washington
June 2004
Deloitte Consulting, LLP
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Boeing has indicated that it is estimated that new or increased spending as a result of the construction and operation of the 7E7
project will be less impactful in the following areas; and did not provide spending assumptions for:



Furniture, fixtures, and equipment
Office supplies
Contractor services in the areas of security, landscaping, building maintenance and food service
Additionally, Boeing could not confidently provide estimates for state and local sales taxes, property taxes, and major supplier
spending on furniture fixtures, and equipment, machinery and equipment, office supplies, or contractor services. As such, the
above spending categories have not been incorporated into the analysis in order to not overstate potential spending.
The investment, ongoing spending, and employment estimates were estimated at different points in the construction and operation
of the project. Key phases have been analyzed as follows:




2004 – Pre-Construction
2006 – Construction
2008 – Finish Construction / Early Operations
2012 – Steady State / Ongoing Operations
Due to the unique nature of the 7E7 project and the specialized type of workers necessary, specific project wage and benefit
information that was provided by Boeing was utilized to make adjustments to existing IMPLAN sectors 351-Aircraft
Manufacturing and 353-Other Aircraft Parts and Equipment.
These adjustments were made to provide a more accurate representation of the salaries estimated to be earned by Boeing 7E7
workers and major suppliers thereof. These salary adjustments, along with overall inputs to the model, can be seen in the
following tables.
Detailed assumptions for our analysis are found in the Appendix attached to this report.
State of Washington
June 2004
Deloitte Consulting, LLP
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Table 2. IMPLAN Aircraft Sector Adjustments
351 Aircraft Manufacturing
VALUE ADDED
Employee Compensation
Proprietary Income
Other Property Income
Indirect Business Taxes
Per Worker
EMPLOYMENT
All occupations
OUTPUT
Industry Output
353 Other Aircraft Parts and Equipment
VALUE ADDED
Employee Compensation
Proprietary Income
Other Property Income
Indirect Business Taxes
Per Worker
EMPLOYMENT
All occupations
OUTPUT
Industry Output
Original Implan
$ (Millions)
$5,901.660
$255.914
-$154.599
$98.553
$6,101.528
$82,149
74,274
High
$116,344
$8,641.365
$255.914
Estimated Boeing Weighted Average Wages and Benefits ($2004)
2006
2008
2012
Low
High
Low
High
Low
High
Low
$81,551
$116,344
$81,551
$111,471
$77,348
$108,081
$73,527
$6,057.092 $8,641.365 $6,057.092 $8,279.396 $5,744.937 $8,027.591 $5,461.160
$255.914
$255.914
$255.914
$255.914
$255.914
$255.914
$255.914
$8,897.279
$119,790
$6,313.006
$84,996
2004
74,274
74,274
$8,897.279
$119,790
74,274
$6,313.006
$84,996
74,274
$8,535.310
$114,917
74,274
$6,000.851
$80,793
74,274
$8,283.505
$111,526
74,274
$5,717.074
$76,973
74,274
$21,692.990
Original Implan
$ (Millions)
$435.869
$6.490
$85.786
$6.680
$534.825
$64,005
8,356
High
$142,980
$1,194.743
$6.490
Estimated Supplier Wages and Benefits ($2004)
2006
2008
Low
High
Low
High
Low
$100,317
$142,980
$100,317
$128,682
$86,941
$838.247 $1,194.743
$838.247 $1,075.269
$726.481
$6.490
$6.490
$6.490
$6.490
$6.490
2012
High
Low
$128,682
$86,941
$1,075.269
$726.481
$6.490
$6.490
$1,201.233
$143,757
$844.737
$101,093
$1,081.759
$129,459
2004
8,356
8,356
$1,201.233
$143,757
8,356
$844.737
$101,093
8,356
$1,081.759
$129,459
8,356
$732.971
$87,718
8,356
8,356
$732.971
$87,718
8,356
$1,878.971
Note: To adjust Implan sectors 351 and 353 to look more like estimated Boeing and supplier wages - employee compensation in the model was tied to estimated wages and benefits provided by Boeing
State of Washington
June 2004
Deloitte Consulting, LLP
10
Table 3. Inputs to the Model
2004 (Pre-Construction)
Impact
General Description
BOEING SPENDING/EMPLOYMENT
Building Construction
Machinery and Equipment
Tooling
Design
Construction
Assembly
Materials
Raw Materials
A
B
Fuel
Administrative
IMPLAN
Sector
IMPLAN Sector Description
Corresponding
NAICS Code(s)
High
2008 (Finish Construction /
Early Operations)
2006 (Construction)
Low
High
Low
$31,836,000
$44,836,000
Low
High
Low
Labor and materials for bldgs.
General equipment
37
269
Manufacturing & Industrial Bldgs.
All Other Industrial Machinery
23
333298
$42,448,000
$10,612,000
Internal aerospace labor
Equipment erection, foundations, etc.
Scaffolding, welding, etc.
Tool materials
Machine parts
Engine parts (50% of Total)
Other parts (50% of Total)
For test flights & planes to leave state
351
45
296
282
Aircraft Manufacturing
Other Maint. & Repair Construction
Welding & Soldering Equipment
Special Tool, Die, Jig, & Fixture
336411
230340
3339992
333514
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
$3,714,000
$1,486,000
$1,486,000
$743,000
352
353
407
Aircraft Engine & Engine Parts
Other Aircraft Parts & Equipment
Gasoline Stations
336412
336413
447
$0
$0
Negligible
$0
$0
Negligible
$0
$0
Negligible
417
243
455
Sofware Publishers
Machine Shops
Business Support Services
5112
33271
5614
$85,077,000
$26,177,000
$6,544,000
$13,211,000 $204,184,000
$4,404,000 $62,826,000
$2,202,000 $15,706,000
$33,028,000 $299,082,000 $28,194,000 $162,959,000 $13,515,000
$11,009,000 $92,025,000 $9,398,000 $50,141,000 $4,505,000
$5,505,000 $23,006,000 $4,699,000 $12,535,000 $2,253,000
State general fund
504
State & Local Non-Education
NA
$37,595,000
$21,758,000 $110,539,000
$55,021,000 $115,688,000 $41,894,000
Engineers, tooling, manufacturing, etc.
Production
All OH not related to a specific part
Administrative
351
351
351
351
Aircraft Manufacturing
Aircraft Manufacturing
Aircraft Manufacturing
Aircraft Manufacturing
336411
336411
336411
336411
Engineers, tooling, manufacturing, etc.
Production
All OH not related to a specific part
Administrative
351
351
351
351
Aircraft Manufacturing
Aircraft Manufacturing
Aircraft Manufacturing
Aircraft Manufacturing
336411
336411
336411
336411
37
Manufacturing & Industrial Bldgs.
23
352
353
Aircraft Engine & Engine Parts
Other Aircraft Parts & Equipment
336412
336413
$0
$0
$0
$0
353
353
Other Aircraft Parts & Equipment
Other Aircraft Parts & Equipment
336413
336413
800
0
500
0
353
353
Other Aircraft Parts & Equipment
Other Aircraft Parts & Equipment
336413
336413
$114,384,000
$0
Virtual Manufacturing Environment Computers purchase, setup and maintenance
Supplies Other perishable tools, shop supplies
Training Training and other related
$3,184,000 $297,138,000
$3,449,000 $169,793,000
High
2012 (Steady State Ongoing
Operations)
$531,000
$212,000
$212,000
$106,000
$42,448,000 $10,612,000 $21,224,000 $10,612,000
Negligible
Negligible
Negligible
Negligible
$3,714,000
$1,486,000
$1,486,000
$743,000
$531,000
$212,000
$212,000
$106,000
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
$0 $19,523,000
$0 $19,523,000
Negligible $1,000,000
$3,429,000
$3,429,000
$150,000
$16,714,000
$16,714,000
$2,000,000
$2,816,000
$2,816,000
$1,000,000
Taxes
Income Taxes
Employment (Jobs Created)
Direct Nonrecurring
Direct Recurring
Indirect Recurring (Misc. Overhead)
Support
Employment (Wages and Benefits)
Direct Nonrecurring
Direct Recurring
Indirect Recurring (Misc. Overhead)
Support
MAJOR SUPPLIER SPENDING/EMPLOYMENT
Building Construction
Labor and materials for bldgs.
Raw Materials
Machine parts
A Engine parts (50% of Total)
B Other parts (50% of Total)
Employment (Jobs Created)
Direct Nonrecurring Tooling, manufacturing, etc.
Direct Recurring Production
Employment (Wages and Benefits)
Direct Nonrecurring Tooling, manufacturing, etc.
Direct Recurring Production
State of Washington
June 2004
1,625
0
0
875
1,170
0
0
630
3,900
0
0
2,100
2,925
0
0
1,575
1,950
2,500
375
2,488
975
1,000
100
1,075
$78,979,000 $27,037,000
0
2,500
375
1,438
0
1,000
100
550
$232,343,000 $117,371,000 $557,623,000 $293,427,000 $278,812,000 $97,809,000
$0
$0
$0
$0
$0
$0 $321,706,000 $86,941,000 $321,706,000 $86,941,000
$0
$0
$0
$0 $48,256,000 $8,694,000 $48,256,000 $8,694,000
$58,518,000 $29,420,000 $140,444,000 $73,551,000 $166,359,000 $50,202,000 $96,137,000 $25,685,000
Negligible
Negligible $106,121,000
$21,224,000
Negligible
Negligible
Negligible
Negligible
$0
$0
$0
$0
$10,295,000
$10,295,000
$1,739,000
$1,739,000
$10,295,000
$10,295,000
$1,739,000
$1,739,000
800
0
500
0
0
2,000
0
800
0
2,000
0
800
$50,158,000 $114,384,000
$0
$0
$50,158,000
$0
$0
$0
$0
$0 $257,364,000 $69,553,000 $257,364,000 $69,553,000
Deloitte Consulting, LLP
11
Overall Results
The estimated economic impacts of the proposed 7E7 project for each of the major phases of the development and operations of the
project are as follows:
Table 4. Overall Results
2004 - Pre-Construction
EMPLOYMENT
INCOME
OUTPUT
Impact
High
Direct
2006 - Construction
Low
High
2008 - Finish Construction/Early Operations
Low
High
Low
2012 - Steady State/Ongoing Operations
High
Low
$1,118,526,000
$686,369,000
$2,906,046,000
$1,630,265,000
$3,225,960,000
$1,206,259,000
$2,091,298,000
$729,845,000
Indirect & Induced
$843,560,000
$501,123,000
$2,208,015,000
$1,194,163,000
$2,403,157,000
$872,560,000
$1,553,375,000
$524,656,000
Total
$1,962,086,000
$1,187,491,000
$5,114,061,000
$2,824,429,000
$5,629,118,000
$2,078,819,000
$3,644,673,000
$1,254,501,000
Direct
$559,335,000
$244,960,000
$1,382,248,000
$561,880,000
$1,556,565,000
$410,898,000
$1,024,387,000
$254,832,000
Indirect & Induced
$489,559,000
$280,935,000
$1,280,819,000
$668,081,000
$1,386,607,000
$485,565,000
$896,597,000
$293,296,000
Total
$1,048,893,000
$525,896,000
$2,663,067,000
$1,229,961,000
$2,943,173,000
$896,463,000
$1,920,984,000
$548,127,000
Direct
5,090
2,860
15,820
7,120
14,110
5,140
9,280
3,250
Indirect & Induced
8,050
4,570
21,070
10,830
22,780
7,910
14,790
4,800
Total
13,130
7,430
2004 Dollars (Totals may not add due to rounding)



36,890
17,950
36,890
13,060
24,070
8,060
Output – represents the estimated increase in total production for all industries in the State supported by the project, and is
a measure of overall economic activity. Output can also be thought of as the increase in the value of total sales for the
State, or “Gross Local Product”. See detailed results on Page 13.
Value Added (Income) – represents the estimated increase in total payroll (including benefits) for all industries in the
State supported by the project. It includes wages and salaries of workers, self-employed individuals, and income received
by private business owners, doctors, lawyers, etc. See detailed results on Page 14.
Employment – represents the estimated total jobs created and supported by the project, on both a temporary and ongoing
basis. See detailed results on Page 15.
State of Washington
June 2004
Deloitte Consulting, LLP
12
Detailed Summary of Results – Output
The output contribution for specific industry sectors follow in the table below:
Table 5. Summary Output Results
2004 - Pre-Construction
Industry
Ag, Forestry, Fish & Hunting
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Transportation & Warehousing
Retail Trade
Information
Finance & Insurance
Real Estate & Rental
Professional-Scientific & Tech Svcs
Management of Companies
Administrative & Waste Services
Educational Svcs
Health & Social Services
Arts- Entertainment & Recreation
Accomodation & Food Services
Other Services
Government & Non NAICs
Total
Multiplier
2006 - Construction
High
Low
High
6,235,000
3,119,000
16,400,000
590,000
342,000
1,607,000
7,235,000
4,079,000
18,728,000
47,622,000
6,314,000
418,090,000
1,136,849,000
780,466,000
2,657,480,000
80,550,000
54,724,000
220,661,000
33,122,000
21,221,000
86,094,000
63,882,000
31,691,000
167,745,000
107,511,000
24,993,000
263,384,000
60,878,000
33,312,000
161,043,000
41,500,000
21,847,000
111,211,000
52,082,000
34,616,000
145,783,000
12,598,000
9,276,000
31,137,000
23,193,000
11,124,000
60,248,000
5,343,000
2,952,000
13,613,000
82,161,000
40,671,000
209,468,000
9,504,000
4,913,000
24,354,000
36,694,000
19,362,000
94,069,000
39,733,000
21,376,000
104,811,000
114,804,000
61,094,000
308,135,000
$1,962,086,000
$1,187,491,000
$5,114,061,000
1.75
1.73
1.76
2004 Dollars (Totals may not add due to rounding)
Low
7,365,000
788,000
9,409,000
60,449,000
1,810,932,000
132,799,000
48,665,000
75,042,000
61,091,000
79,067,000
51,942,000
83,150,000
20,321,000
26,783,000
7,028,000
95,364,000
11,553,000
45,551,000
50,148,000
146,982,000
$2,824,429,000
1.73
2008 - Finish Construction/Early Operations
High
17,206,000
1,657,000
20,506,000
58,863,000
3,300,760,000
232,155,000
95,496,000
177,254,000
363,783,000
170,702,000
117,167,000
149,811,000
37,998,000
71,527,000
15,118,000
227,512,000
26,599,000
102,918,000
111,382,000
330,705,000
$5,629,118,000
1.74
Low
5,311,000
598,000
7,080,000
16,326,000
1,356,852,000
96,670,000
37,489,000
54,017,000
48,768,000
57,590,000
37,860,000
61,796,000
16,662,000
20,454,000
5,091,000
68,837,000
8,398,000
33,187,000
36,920,000
108,912,000
$2,078,819,000
1.72
2012 - Steady State/Ongoing Operations
High
11,250,000
1,107,000
13,585,000
31,137,000
2,163,579,000
149,856,000
63,566,000
116,981,000
204,371,000
111,135,000
75,992,000
97,049,000
26,122,000
43,409,000
9,725,000
148,631,000
17,324,000
67,039,000
73,088,000
219,725,000
$3,644,673,000
1.74
Low
3,260,000
386,000
4,464,000
14,103,000
810,078,000
58,080,000
23,775,000
33,892,000
26,028,000
35,138,000
23,309,000
37,783,000
11,075,000
11,858,000
3,022,000
41,909,000
5,109,000
20,179,000
22,911,000
68,141,000
$1,254,501,000
1.72
Output represents the net new increase in total production for all industries in the State supported by the project (given the stated
assumptions), and is a measure of overall economic activity. Output can also be thought of as the increase in the value of total sales
for the State, or “Gross Local Product”. Figures in the table include direct, indirect, and induced impacts.
.
State of Washington
June 2004
Deloitte Consulting, LLP
13
Detailed Summary of Results – Value Added (Income)
The value added (income) contribution for specific industry sectors follows below:
Table 6. Summary Value Added (Income) Results
2004 - Pre-Construction
Industry
Ag, Forestry, Fish & Hunting
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Transportation & Warehousing
Retail Trade
Information
Finance & Insurance
Real Estate & Rental
Professional-Scientific & Tech Svcs
Management of Companies
Administrative & Waste Services
Educational Svcs
Health & Social Services
Arts- Entertainment & Recreation
Accomodation & Food Services
Other Services
Government & Non NAICs
Total
Multiplier
2006 - Construction
High
Low
High
2,029,000
1,012,000
5,430,000
138,000
79,000
381,000
3,357,000
1,897,000
8,669,000
23,252,000
3,007,000
205,292,000
514,933,000
259,596,000
1,115,199,000
54,040,000
36,714,000
148,037,000
17,981,000
11,656,000
46,434,000
39,730,000
19,710,000
104,375,000
72,601,000
15,942,000
177,266,000
34,316,000
19,054,000
90,617,000
30,031,000
15,859,000
80,354,000
39,658,000
26,454,000
110,790,000
9,065,000
6,674,000
22,404,000
16,895,000
8,023,000
43,849,000
3,342,000
1,849,000
8,520,000
47,123,000
23,326,000
120,138,000
5,900,000
3,042,000
15,113,000
19,185,000
10,193,000
49,219,000
21,374,000
11,467,000
56,292,000
93,944,000
50,340,000
254,690,000
$1,048,893,000
$525,896,000
$2,663,067,000
1.88
2.15
1.93
2004 Dollars (Totals may not add due to rounding)
Low
2,406,000
185,000
4,370,000
29,518,000
572,699,000
89,092,000
26,615,000
46,680,000
39,075,000
45,197,000
37,698,000
63,435,000
14,621,000
19,352,000
4,401,000
54,695,000
7,152,000
23,991,000
26,909,000
121,870,000
$1,229,961,000
2.19
2008 - Finish Construction/Early Operations
High
5,582,000
387,000
9,524,000
28,570,000
1,415,697,000
155,748,000
52,076,000
110,162,000
247,404,000
96,568,000
84,895,000
114,218,000
27,341,000
52,319,000
9,459,000
130,488,000
16,506,000
53,881,000
59,891,000
272,458,000
$2,943,173,000
1.89
Low
1,727,000
139,000
3,294,000
7,873,000
422,645,000
64,854,000
20,626,000
33,588,000
31,478,000
33,015,000
27,494,000
47,241,000
11,989,000
14,806,000
3,190,000
39,481,000
5,197,000
17,495,000
19,789,000
90,541,000
$896,463,000
2.18
2012 - Steady State/Ongoing Operations
High
3,646,000
257,000
6,311,000
14,993,000
949,270,000
100,536,000
34,727,000
72,604,000
138,226,000
62,854,000
55,034,000
74,070,000
18,795,000
31,630,000
6,085,000
85,246,000
10,751,000
35,087,000
39,285,000
181,576,000
$1,920,984,000
1.88
Low
1,061,000
89,000
2,078,000
6,829,000
257,054,000
38,965,000
13,121,000
21,010,000
16,580,000
20,143,000
16,915,000
28,931,000
7,969,000
8,543,000
1,894,000
24,037,000
3,162,000
10,636,000
12,265,000
56,846,000
$548,127,000
2.15
Value added (income) represents the net new increase in total payroll (including benefits) for all industries in the State supported by
the project given the stated assumptions. It includes wages and salaries of workers, self-employed individuals, and income received
by private business owners, doctors, lawyers, etc. Figures in the table include direct, indirect, and induced impacts.
State of Washington
June 2004
Deloitte Consulting, LLP
14
Detailed Summary of Results – Employment
The employment contribution for specific industry sectors follows below:
Table 7. Summary Employment Results
Industry
Ag, Forestry, Fish & Hunting
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Transportation & Warehousing
Retail Trade
Information
Finance & Insurance
Real Estate & Rental
Professional-Scientific & Tech Svcs
Management of Companies
Administrative & Waste Services
Educational Svcs
Health & Social Services
Arts- Entertainment & Recreation
Accomodation & Food Services
Other Services
Government & Non NAICs
Total
Multiplier
2004 - Pre-Construction
High
Low
100
50
0
0
10
10
590
70
4,370
2,920
570
390
330
220
1,160
580
270
90
430
240
270
140
650
430
110
80
480
230
130
70
1,120
550
250
130
830
440
620
330
820
470
13,130
7,430
2.58
2.59
2006 - Construction
High
Low
260
120
10
0
40
20
5,240
750
10,050
6,640
1,570
950
860
490
3,050
1,370
670
210
1,130
560
720
340
1,800
1,030
270
180
1,260
550
340
180
2,850
1,300
640
310
2,130
1,030
1,610
770
2,370
1,170
36,890
17,950
2.33
2.52
2008 - Finish Construction/Early Operations
High
Low
280
90
10
0
40
10
720
200
12,740
5,070
1,660
690
970
380
3,230
980
860
160
1,200
410
770
250
1,870
770
330
150
1,490
420
380
130
3,100
940
700
220
2,330
750
1,730
560
2,490
890
36,890
13,060
2.61
2.54
2012 - Steady State/Ongoing Operations
High
Low
180
50
10
0
30
10
380
170
8,440
3,090
1,070
410
640
240
2,130
620
500
90
780
250
500
150
1,220
470
230
100
900
240
250
80
2,020
570
460
140
1,520
450
1,130
340
1,690
570
24,070
8,060
2.59
2.48
Employment represents the estimated total net new jobs created and supported by the project given the stated assumptions. Figures in
the table include direct, indirect, and induced impacts.
State of Washington
June 2004
Deloitte Consulting, LLP
15
III. Glossary
For the purposes of this report, specific terms are defined as follows:
Direct Impacts:
Include output, income, and employment generated from the operation and construction of the
facility. Includes both Boeing employees tied to the 7E7 project, specific jobs created at major
suppliers of the project, and additional jobs created from direct expenditures of the project
including construction, raw materials, fuel, tooling, income taxes etc. Direct impacts measure
the changes in the employment and expenditures due to the operation of the facility itself.
Employment:
Represents the estimated total jobs created and supported by the project, on both a temporary and
ongoing basis.
Indirect Impacts:
Include output, income, and employment generated from the changes in inter-industry purchases
(supplier to supplier) as they respond to the demands of the directly affected industries. Indirect
impacts include business-to-business purchases arising from local spending for goods and
services.
Induced Impacts:
Include output, income, and employment effects on all local industries caused by the
expenditures of household income generated by the direct and indirect impacts.
Output:
Represents the estimated increase in total production for all industries in the region supported by
the project, and is a measure of overall economic activity. Output can also be thought of as the
increase in the value of total sales for the State, or “Gross Local Product”.
Value Added/Income:
Represents the estimated increase in total payroll (including benefits) for all industries in the
region supported by the project. It includes wages and salaries of workers, self-employed
individuals, and income received by private business owners, doctors, lawyers, etc.
State of Washington
June 2004
Deloitte Consulting, LLP
16
IV. Appendix
Detailed Assumptions
Table 8. Capital Assumptions:
Boeing Construction/Capital Spending
Pre-Construction (2004)
Total Spend
$2001 (High)
$400,000,000
$200,000,000
$28,000,000
$14,000,000
$5,600,000
$5,600,000
$2,800,000
Total Spend
$2001 (Low)
$60,000,000
$65,000,000
$4,000,000
$2,000,000
$800,000
$800,000
$400,000
% Spend in
Period (High)
10%
5%
% Spend in
Period (Low)
5%
5%
Inflation
Rate
2%
2%
Period Spend
$2004 (High)
$42,448,000
$10,612,000
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
NA
NA
NA
NA
$0
$0
$0
$0
Total Spend
$2001 (High)
$400,000,000
$200,000,000
$28,000,000
$14,000,000
$5,600,000
$5,600,000
$2,800,000
Total Spend
$2001 (Low)
$60,000,000
$65,000,000
$4,000,000
$2,000,000
$800,000
$800,000
$400,000
% Spend in
Period (High)
70%
80%
% Spend in
Period (Low)
50%
65%
Inflation
Rate
2%
2%
Period Spend
$2004 (High)
$297,138,000
$169,793,000
25%
25%
25%
25%
25%
25%
25%
25%
2%
2%
2%
2%
$3,714,000
$1,486,000
$1,486,000
$743,000
Finish Construction/Early Operations (2008)
Total Spend
Impact
$2001 (High)
Building Construction
$40,000,000
Machinery & Equipment Total
Negligible
(1)
Tooling Total
$28,000,000
Design (50%)
$14,000,000
Construction (20%)
$5,600,000
Assembly (20%)
$5,600,000
Materials (10%)
$2,800,000
Total Spend
$2001 (Low)
$10,000,000
Negligible
$4,000,000
$2,000,000
$800,000
$800,000
$400,000
% Spend in
Period (High)
100%
0%
% Spend in
Period (Low)
100%
0%
Inflation
Rate
2%
NA
Period Spend
$2004 (High)
$42,448,000
$0
25%
25%
25%
25%
25%
25%
25%
25%
2%
2%
2%
2%
$3,714,000
$1,486,000
$1,486,000
$743,000
Total Spend
$2001 (High)
$20,000,000
Negligible
Total Spend
$2001 (Low)
$10,000,000
Negligible
% Spend in
Period (High)
100%
0%
% Spend in
Period (Low)
100%
0%
Inflation
Rate
2%
NA
Period Spend
$2004 (High)
$21,224,000
$0
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
Negligible
0%
0%
0%
0%
0%
0%
0%
0%
NA
NA
NA
NA
$0
$0
$0
$0
Impact
Building Construction
Machinery & Equipment Total
Tooling Total (1)
Design (50%)
Construction (20%)
Assembly (20%)
Materials (10%)
Period Spend
Comments
$2004 (Low)
$3,184,000 From 2004-2006
$3,449,000
$7M-$1M (2001$) per year of cons. (2005-2008)
$0
Assumed 50% of total tooling
$0
Assumed 20% of total tooling
$0
Assumed 20% of total tooling
$0
Assumed 10% of total tooling
Mid-Construction (2006)
Impact
Building Construction
Machinery & Equipment Total
Tooling Total (1)
Design (50%)
Construction (20%)
Assembly (20%)
Materials (10%)
Period Spend
Comments
$2004 (Low)
$31,836,000 From 2004 to 2006 (Est. 25%-40% spend in 2005)
$44,836,000 (Est. 15%-30% spend in 2005)
$7M-$1M (2001$) per year of cons. (2005-2008)
$531,000
Assumed 50% of total tooling
$212,000
Assumed 20% of total tooling
$212,000
Assumed 20% of total tooling
$106,000
Assumed 10% of total tooling
Period Spend
Comments
$2004 (Low)
$10,612,000 Remaining increment of initial construction
$0
$7M-$1M (2001$) per year of cons. (2005-2008)
$531,000
Assumed 50% of total tooling
$212,000
Assumed 20% of total tooling
$212,000
Assumed 20% of total tooling
$106,000
Assumed 10% of total tooling
Steady State/Ongoing Operations (2012)
Impact
Building Construction
Machinery & Equipment Total
Tooling Total (1)
Design (50%)
Construction (20%)
Assembly (20%)
Materials (10%)
(1)
State of Washington
June 2004
Period Spend
Comments
$2004 (Low)
$10,612,000 Continual yearly construction
$0
$7M-$1M (2001$) per year of cons. (2005-2008)
$0
Assumed 50% of total tooling
$0
Assumed 20% of total tooling
$0
Assumed 20% of total tooling
$0
Assumed 10% of total tooling
Estimated total spend of $10M-$140M from 2005 to 2008 of which 10%-20% ($1M-$7M annually) is In-State. Almost all is labor (88%-94%), of which 50% contractors/50% direct), 6-12% is materials (assumed 10%).
Deloitte Consulting, LLP
17
Top Supplier Construction/Capital Spending
Pre-Construction (2004)
Total Spend
$2001 (High)
$100,000,000
Total Spend
$2001 (Low)
$20,000,000
% Spend in
Period (High)
0%
% Spend in
Period (Low)
0%
Inflation
Rate
2%
Period Spend
$2004 (High)
Negligible
Period Spend
$2004 (Low)
Negligible
Total Spend
$2001 (High)
$100,000,000
Total Spend
$2001 (Low)
$20,000,000
% Spend in
Period (High)
100%
% Spend in
Period (Low)
100%
Inflation
Rate
2%
Period Spend
$2004 (High)
$106,121,000
Period Spend
$2004 (Low)
$21,224,000
Finish Construction/Early Operations (2008)
Total Spend
Impact
$2001 (High)
$100,000,000
Building Construction
Total Spend
$2001 (Low)
$20,000,000
% Spend in
Period (High)
0%
% Spend in
Period (Low)
0%
Inflation
Rate
2%
Period Spend
$2004 (High)
Negligible
Period Spend
$2004 (Low)
Negligible
Total Spend
$2001 (Low)
$20,000,000
% Spend in
Period (High)
0%
% Spend in
Period (Low)
0%
Inflation
Rate
2%
Period Spend
$2004 (High)
Negligible
Period Spend
$2004 (Low)
Negligible
Impact
Building Construction
Comments
Mid-Construction (2006)
Impact
Building Construction
Comments
Comments
Steady State/Ongoing Operations (2012)
Impact
Building Construction
Total Spend
$2001 (High)
$100,000,000
Comments
General Assumptions
All numbers provided by Boeing as 2001 dollars inflated to 2004 dollars
As per Boeing, expenditure and employment in State is similar to what would occur in 4-County area
All data from Boeing unless otherwise indicated
All wage figures inflated from 2001 dollars @
3.5%
All other relevant figures inflated from 2001 dollars @
2.0%
Totals may not add due to rounding
State of Washington
June 2004
Deloitte Consulting, LLP
18
Table 9. Goods and Services Spending Assumptions
Boeing Goods/Services Spending
Pre-Construction (2004)
Impact
Raw Materials (1)
Engine parts (50% of Total)
Other parts (50% of Total)
Fuel
Administrative (2)
Computers
Supplies
Training
Taxes
Income Taxes
Mid-Construction (2006)
Impact
Raw Materials (1)
Engine parts (50% of Total)
Other parts (50% of Total)
Fuel
Administrative (2)
Computers
Supplies
Training
Taxes
Income Taxes
Boeing
$0
Boeing
$0
Negligible
$400,849,000
Negligible
$124,492,000
Boeing
$0
Boeing
$0
Negligible
$962,038,000
Negligible
$311,230,000
Finish Construction/Early Operations (2008)
Impact
Boeing
Raw Materials (1)
$578,869,000
Engine parts (50% of Total)
Other parts (50% of Total)
Fuel
$942,000
Administrative (2)
$1,409,156,000
Computers
Supplies
Training
Taxes
Income Taxes
Steady State/Ongoing Operations (2012)
Impact
Boeing
Raw Materials (1)
$457,002,000
Engine parts (50% of Total)
Other parts (50% of Total)
Fuel
$1,885,000
Administrative (2)
$767,798,000
Computers
Supplies
Training
Taxes
Income Taxes
Boeing
$162,713,000
$141,000
$265,680,000
Boeing
$121,545,000
$942,000
$127,356,000
% Spend in % Spend in
8%
5%
0%
0%
2%
Period Spend
$0
$0
$0
Negligible
20%
80%
10%
10%
60%
5%
2%
2%
2%
$85,077,000
$26,177,000
$6,544,000
$13,211,000
$4,404,000
$2,202,000
30%-65% of 35%-45% of all direct labor spend
10%-20% of 30%-45% of all direct labor spend
5% of 30%-45% of all direct labor spend
$37,595,000
$21,758,000
Estimated by State representatives - based on job creation
Period Spend
Comments
$0
Based on 5%-8% of annual recurring direct labor spend
$0
Estimated 50% of total raw materials
$0
Estimated 50% of total raw materials
Negligible
% Spend in % Spend in
8%
5%
Inflation
3.5%
0%
0%
2.0%
Period Spend
$0
$0
$0
Negligible
20%
80%
10%
10%
60%
5%
2%
2%
2%
$204,184,000
$62,826,000
$15,706,000
$33,028,000
$11,009,000
$5,505,000
30%-65% of 35%-45% of all direct labor spend
10%-20% of 30%-45% of all direct labor spend
5% of 30%-45% of all direct labor spend
$110,539,000
$55,021,000
Estimated by State representatives - based on job creation
Period Spend
Comments
$6,857,000 Based on 5%-8% of annual recurring direct labor spend
$3,429,000 Estimated 50% of total raw materials
$3,429,000 Estimated 50% of total raw materials
$150,000
% Spend in % Spend in
8%
5%
Inflation
3.5%
Period Spend
Comments
$0
Based on 5%-8% of annual recurring direct labor spend
$0
Estimated 50% of total raw materials
$0
Estimated 50% of total raw materials
Negligible
100%
100%
2.0%
Period Spend
$39,045,000
$19,523,000
$19,523,000
$1,000,000
20%
80%
10%
10%
60%
5%
2%
2%
2%
$299,082,000
$92,025,000
$23,006,000
$28,194,000
$9,398,000
$4,699,000
30%-65% of 40%-60% of all direct labor spend
10%-20% of 40%-60% of all direct labor spend
5% of 40%-60% of all direct labor spend
$115,688,000
$41,894,000
Estimated by State representatives - based on job creation
Period Spend
Comments
$5,631,000 Based on 5%-8% of annual recurring direct labor spend
$2,816,000 Estimated 50% of total raw materials
$2,816,000 Estimated 50% of total raw materials
$1,000,000
% Spend in % Spend in
8%
5%
Inflation
3.5%
Inflation
3.5%
100%
100%
2.0%
Period Spend
$33,427,000
$16,714,000
$16,714,000
$2,000,000
20%
80%
10%
10%
60%
5%
2%
2%
2%
$162,959,000
$50,141,000
$12,535,000
$13,515,000
$4,505,000
$2,253,000
30%-65% of 40%-60% of all direct labor spend
10%-20% of 40%-60% of all direct labor spend
5% of 40%-60% of all direct labor spend
$78,979,000
$27,037,000
Estimated by State representatives - based on job creation
(1) Based on direct recurring labor, which is calculated on labor assumptions tables (equates to $38-$56/hr for 2,080 hrs for 1,000-2,500 employees)
(2) Based on 30%-45% of direct labor (recurring and nonrecurring), which is calculated on labor assumptions tables (utilizing hourly wages for 2,080 hrs and applicable direct employees for each period)
State of Washington
June 2004
Deloitte Consulting, LLP
19
Top Supplier Goods/Services Spending
Pre-Construction (2004)
Impact
Raw Materials
Engine parts (50% of Total)
Other parts (50% of Total)
Supplier Direct Supplier Direct
% Spend in % Spend in
Recurring Labor Recurring Labor
Period
Period
Spend $2001
Spend $2001
(High)
(Low)
(High)
(Low)
$0
$0
8%
5%
Inflation
Rate
Period Spend
$2004 (High)
Period Spend
$2004 (Low)
3.5%
$0
$0
$0
$0
$0
$0
Inflation
Rate
Period Spend
$2004 (High)
Period Spend
$2004 (Low)
3.5%
$0
$0
$0
$0
$0
$0
Inflation
Rate
Period Spend
$2004 (High)
Period Spend
$2004 (Low)
3.5%
$20,589,000
$10,295,000
$10,295,000
$3,478,000
$1,739,000
$1,739,000
Inflation
Rate
Period Spend
$2004 (High)
Period Spend
$2004 (Low)
3.5%
$20,589,000
$10,295,000
$10,295,000
$3,478,000
$1,739,000
$1,739,000
Comments
Based on 5%-8% of annual recurring direct labor spend
Estimated 50% of total raw materials
Estimated 50% of total raw materials
Pre-Construction (2006)
Impact
Raw Materials
Engine parts (50% of Total)
Other parts (50% of Total)
Supplier Direct Supplier Direct
% Spend in % Spend in
Recurring Labor Recurring Labor
Period
Period
Spend $2001
Spend $2001
(High)
(Low)
(High)
(Low)
$0
$0
8%
5%
Finish Construction/Early Operations (2008)
Supplier Direct Supplier Direct
% Spend in % Spend in
Recurring Labor Recurring Labor
Impact
Period
Period
Spend $2001
Spend $2001
(High)
(Low)
(High)
(Low)
Raw Materials
$624,000,000 $183,040,000
8%
5%
Engine parts (50% of Total)
Other parts (50% of Total)
Steady State/Ongoing Operations (2012)
Supplier Direct Supplier Direct
% Spend in % Spend in
Recurring Labor Recurring Labor
Impact
Period
Period
Spend $2001
Spend $2001
(High)
(Low)
(High)
(Low)
Raw Materials
$624,000,000 $183,040,000
8%
5%
Engine parts (50% of Total)
Other parts (50% of Total)
Comments
Based on 5%-8% of annual recurring direct labor spend
Comments
Based on 5%-8% of annual recurring direct labor spend
Estimated 50% of total raw materials
Estimated 50% of total raw materials
Comments
Based on 5%-8% of annual recurring direct labor spend
Estimated 50% of total raw materials
Estimated 50% of total raw materials
General Assumptions
All numbers provided by Boeing as 2001 dollars inflated to 2004 dollars
As per Boeing, expenditure and employment in State is similar to what would occur in 4-County area
All data from Boeing unless otherwise indicated
All wage figures inflated from 2001 dollars @
3.5%
All other relevant figures inflated from 2001 dollars @
2.0%
Totals may not add due to rounding
State of Washington
June 2004
Deloitte Consulting, LLP
20
Table 10. Employment Assumptions
Boeing Employment, Wages and Benefits
Pre-Construction (2004)
Impact
Employment (Wages and Benefits)
Direct Nonrecurring
Direct Recurring
Indirect Recurring (Misc. Overhead)
Support
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Headcount Headcount Wages+ Wages+ d Hours
Comments
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
1,625
1,170
$62
$44
2,080 $209,560,000 $105,862,000 3.5%
$232,343,000
$117,371,000
65% of total 2,500 high/1,500 low nonrecurring jobs
0
0
$56
$38
2,080
$0
$0
3.5%
$0
$0
0
0
$56
$38
2,080
$0
$0
3.5%
$0
$0
875
630
$29
$20
2,080
$52,780,000 $26,536,000
3.5%
$58,518,000
$29,420,000
35% of total 2,500 high/1,500 low nonrecurring jobs
Mid-Construction (2006)
Impact
Employment (Wages and Benefits)
Direct Nonrecurring
Direct Recurring
Indirect Recurring (Misc. Overhead)
Support
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Headcount Headcount Wages+ Wages+ d Hours
Comments
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
3,900
2,925
$62
$44
2,080 $502,944,000 $264,654,000 0.0%
$557,623,000
$293,427,000
65% of total 6,000 high/4,500 low nonrecurring jobs
0
0
$56
$38
2,080
$0
$0
0.0%
$0
$0
0
0
$56
$38
2,080
$0
$0
0.0%
$0
$0
2,100
1,575
$29
$20
2,080 $126,672,000 $66,339,000
0.0%
$140,444,000
$73,551,000
35% of total 6,000 high/4,500 low nonrecurring jobs
Finish Construction/Early Operations (2008)
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Impact
Headcount Headcount Wages+ Wages+ d Hours
Comments
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
Employment (Wages and Benefits)
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
Direct Nonrecurring
1,950
975
$62
$44
2,080 $251,472,000 $88,218,000
0.0%
$278,812,000
$97,809,000
65% of 3,000 high/1,500 low nonrecurring jobs
Direct Recurring
2,500
1,000
$56
$38
2,080 $290,160,000 $78,416,000
0.0%
$321,706,000
$86,941,000
Avg. at midpoint of yr
Indirect Recurring (Misc. Overhead)
375
100
$56
$38
2,080
$43,524,000
$7,842,000
0.0%
$48,256,000
$8,694,000
Est. at 10%-15% of $2008 recurring wages
35% of 3,000 high/1,500 low nonrecurring jobs + 50%
over total recurring
Support
2,488
1,075
$29
$20
2,080 $150,046,000 $45,279,000
0.0%
$166,359,000
$50,202,000
Steady State/Ongoing Operations (2012)
Impact
Employment (Wages and Benefits)
Direct Nonrecurring
Direct Recurring
Indirect Recurring (Misc. Overhead)
Support
State of Washington
June 2004
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Headcount Headcount Wages+ Wages+ d Hours
Comments
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
0
0
$62
$44
2,080
$0
$0
0.0%
$0
$0
2,500
1,000
$56
$38
2,080 $290,160,000 $78,416,000
0.0%
$321,706,000
$86,941,000
Avg. at midpoint of yr
375
100
$56
$38
2,080
$43,524,000
$7,842,000
0.0%
$48,256,000
$8,694,000
Est. at 10%-15% of $2012 recurring wages
1,438
550
$29
$20
2,080
$86,710,000 $23,166,000
0.0%
$96,137,000
$25,685,000
50% additional jobs over total recurring
Deloitte Consulting, LLP
21
Top Supplier Employment, Wages and Benefits
Pre-Construction (2004)
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Impact
Headcount Headcount Wages+ Wages+ d Hours
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
per
Year
Benefits Benefits
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
Employment (Wages and Benefits)
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
Direct Nonrecurring
800
500
$62
$44
2,080 $103,168,000 $45,240,000
3.5%
$114,384,000
$50,158,000
Direct Recurring
0
0
$56
$38
2,080
$0
$0
2.0%
$0
$0
Comments
Mid-Construction (2006)
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Impact
Headcount Headcount Wages+ Wages+ d Hours
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
Employment (Wages and Benefits)
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
Direct Nonrecurring
800
500
$62
$44
2,080 $103,168,000 $45,240,000
0.0%
$114,384,000
$50,158,000
Direct Recurring
0
0
$56
$38
2,080
$0
$0
0.0%
$0
$0
Comments
Finish Construction/Early Operations (2008)
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Impact
Headcount Headcount Wages+ Wages+ d Hours
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
Employment (Wages and Benefits)
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
Direct Nonrecurring
0
0
$62
$44
2,080
$0
$0
0.0%
$0
$0
Direct Recurring
2,000
800
$56
$38
2,080 $232,128,000 $62,733,000
0.0%
$257,364,000
$69,553,000
Comments
Steady State/Ongoing Operations (2012)
Est.
Est.
Estimated
Estimated
Estimated Estimated Hourly Hourly Estimate
$2001 Wages $2001 Wages Inflation
Period Wages and
Period Wages and
Impact
Headcount Headcount Wages+ Wages+ d Hours
and Benefits and Benefits
Rate
Benefits $2004 (High)
Benefits $2004 (Low)
(High)
(Low)
Benefits Benefits per Year
(High)
(Low)
(High)
(Low)
A
B
C
D
E
F
G
H
I
J
Employment (Wages and Benefits)
(A x C x E)
(B x D x E)
(F x (1+H)^(2004-2001)) (G x (1+H)^(2004-2001))
Direct Nonrecurring
0
0
$62
$44
2,080
$0
$0
0.0%
$0
$0
Direct Recurring
2,000
800
$56
$38
2,080 $232,128,000 $62,733,000
0.0%
$257,364,000
$69,553,000
Comments
General Assumptions
All numbers provided by Boeing as 2001 dollars inflated to 2004 dollars
As per Boeing, expenditure and employment in State is similar to what would occur in 4-County area
All data from Boeing unless otherwise indicated
All wage figures inflated from 2001 dollars @
3.5%
All other relevant figures inflated from 2001 dollars @ 2.0%
Totals may not add due to rounding
State of Washington
June 2004
Deloitte Consulting, LLP
22
Limitations
All information contained in this report is the sole representation and responsibility of the State of Washington and Boeing.
The financial information and analysis herein does not constitute an examination of compilation of prospective financial information,
nor a fairness or solvency opinion in accordance with standards established by the American Institute of Certified Public Accountants.
Accordingly, we express no opinion or other form of assurance on the market or financial feasibility of the proposed development or
upon the financial information and analyses contained herein. Further, Deloitte does not assume any responsibility for any financial
and tax reporting with respect to the information contained herein, and has no responsibility to address any legal matters or questions
of law.
This analysis is based on information and estimates available through the date of this report, provided to us by Boeing and the State of
Washington as indicated herein. We cannot confirm or warrant the completeness or accuracy of the information provided by these
sources.
Estimates, by their very nature, are inherently subject to both known and unknown risks, uncertainties, and other factors that may
cause actual results to vary materially from the estimates, including but not limited to general economic and business conditions,
demographic and technology changes, existing and future government regulations and tax policies, active and potential future
competition, and other relevant factors.
This report may not be included, referenced, or incorporated by reference in any prospectus, financial placement, private placement
memorandum, or other financing-related document. Furthermore, no reference to Deloitte or this report may be made in any filing
with the Securities and Exchange Commission or any other federal, state, or foreign regulatory agency.
IMPLAN
The employment and income projections in this report were developed using IMPLAN (Impact Analysis for Planning), a model
originally developed to assist the U.S. Forest Service in land and resource management planning. IMPLAN was developed
independently and is a respected and widely acknowledged tool for this type of analysis.
State of Washington
June 2004
Deloitte Consulting, LLP
23