Boeing 2009 Annual Report Download - page 94

As of December 31, 2008
Maximum
Potential
Payments
Estimated
Proceeds
from
Collateral/
Recourse
Carrying
Amount
of
Liabilities*
Contingent repurchase commitments $4,024 $4,014 $ 7
Indemnifications to ULA 1,184 7
Credit guarantees related to the Sea Launch venture** 451 271 180
Other credit guarantees 158 145 11
Residual value guarantees 51 47 10
* Amounts included in Other accrued liabilities
** See Note 6.
Contingent Repurchase Commitments We have entered into contingent repurchase commitments
with certain customers in conjunction with signing definitive agreements for the sale of new aircraft
(Sale Aircraft). Under these commitments, we agreed to repurchase the Sale Aircraft at a specified
price, generally 10 years after delivery of the Sale Aircraft. Our repurchase of the Sale Aircraft is
contingent upon a future, mutually acceptable agreement for the sale of additional new aircraft, and the
subsequent exercise by the customer of its right to sell the Sale Aircraft to us. The repurchase price
specified in contingent repurchase commitments is generally lower than the expected fair value at the
specified repurchase date. Estimated Proceeds from Collateral/Recourse in the table above represent
the lower of the contracted repurchase price or the expected fair value of each aircraft at the specified
repurchase date.
Indemnifications to ULA We agreed to indemnify ULA against losses in the event that costs
associated with $1,360 of Delta launch program inventories included in contributed assets and $1,860
of Delta program inventories subject to an inventory supply agreement are not recoverable and
allowable from existing and future orders. The term of the inventory indemnification extends to
December 31, 2020. Since inception, ULA has consumed $1,111 of inventories that were contributed
by us and has made advances of $120 to us under the inventory supply agreement. The table above
includes indemnifications to ULA for contributed Delta launch program inventory of $277 and $813,
plus $348 related to the pricing of certain contracts and $57 and $23 related to miscellaneous Delta
contracts at December 31, 2009 and 2008.
We agreed to indemnify ULA against potential losses that ULA may incur in the event ULA is unable to
obtain certain additional contract pricing from the USAF for four satellite missions. We believe ULA is
entitled to additional contract pricing. In December 2008, ULA submitted a claim to the USAF to
re-price the contract value for two of the four satellite missions covered by the indemnification. In
March 2009, the USAF issued a denial of that claim and in June 2009, ULA filed an appeal. During
2009, the USAF exercised its option for a third satellite mission. ULA intends to submit a claim to the
USAF in 2010 to re-price the contract value of the third mission. If ULA is unsuccessful obtaining
additional pricing, we may be responsible for a portion of the shortfall and may record up to $382 in
pre-tax losses associated with the four missions.
Other Credit Guarantees We have issued credit guarantees, principally to facilitate the sale and/or
financing of commercial aircraft. Under these arrangements, we are obligated to make payments to a
guaranteed party in the event that lease or loan payments are not made by the original lessee or
debtor or certain specified services are not performed. A substantial portion of these guarantees has
been extended on behalf of original lessees or debtors with less than investment-grade credit. Our
commercial aircraft credit-related guarantees are collateralized by the underlying commercial aircraft
and certain other assets. Current outstanding credit guarantees expire within the next 11 years.
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