Boeing 2009 Annual Report Download - page 84

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Unbillable receivables on long-term contracts arise when the sales or revenues based on performance
attainment, though appropriately recognized, cannot be billed yet under terms of the contract as of the
balance sheet date. Accounts receivable related to claims are items that we believe are earned, but
are subject to uncertainty concerning their determination or ultimate realization. Accounts receivable,
other than those described above, expected to be collected after one year are not material.
Sea Launch
On June 22, 2009, the Sea Launch venture, in which Boeing Commercial Satellite Company (BCSC), a
subsidiary of The Boeing Company, is a 40% partner with S.P. Koroley Rocket and Space Corporation
Energia of Russia (25%), Aker ASA of Norway (Aker) (20%), PO Yuzhnoye Mashinostroitelny Zavod of
Ukraine (10%) and KB Yuzhnoye of Ukraine (5%), filed a voluntary petition for relief under Chapter 11
of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware
(the Chapter 11 Filing). The Chapter 11 Filing constituted an event of default or otherwise accelerated
approximately $448 of outstanding indebtedness of Sea Launch for which we and an affiliate of Aker
had previously issued credit guarantees on a joint-and-several basis. On July 1, 2009, we paid the
entire $448 due under our guarantee. Among other options, we have rights to reimbursement from Sea
Launch as well as the other Sea Launch partners, who are each obligated to reimburse us so that we
contribute no more than our proportional ownership percentage (40% or $179) in Sea Launch of the
aggregate guarantee payment obligations. On September 11, 2009, an affiliate of Aker executed a
promissory note which obligates it to pay us $122 in three payments. The first payment of $40 was
received in December 2009 and the final two payments are due in 2010. On October 19, 2009, we filed
a Notice of Arbitration with the Stockholm Chamber of Commerce seeking reimbursement from the
other Sea Launch partners of the remaining $147 related to our guarantee payment.
In addition, as a result of the Sea Launch bankruptcy, $523 of principal and interest associated with a
loan by BCSC also become repayable by Sea Launch. Certain other Sea Launch partners have
guaranteed portions of this loan (collectively, 40% of the total amount is guaranteed). We have also
filed certain proofs of claim in the bankruptcy on account of various goods and services provided to
Sea Launch prior to the bankruptcy filing.
We intend to pursue vigorously all of our rights and remedies against Sea Launch and the other Sea
Launch partners with respect to the amounts described above.
Receivables at December 31, 2009 consisted of the following:
Gross
Receivables
Established
Reserves
Net
Receivable
Balance
Credit guarantee
Promissory note $ 82 $ 82
Other 326 $179 147
Receivables related to partner loans (principal and
interest) 523 314 209
Total $931 $493 $438
In the event we are unable to secure reimbursement from Sea Launch or certain Sea Launch partners
of $229 related to our payment under the credit guarantees and $209 related to the previously made
loans to Sea Launch, we could incur additional pre-tax charges of up to $438.
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