Boeing 2009 Annual Report Download - page 95

Residual Value Guarantees We have issued various residual value guarantees principally to facilitate
the sale and financing of certain commercial aircraft. Under these guarantees, we are obligated to
make payments to the guaranteed party if the related aircraft or equipment fair values fall below a
specified amount at a future time. These obligations are collateralized principally by commercial aircraft
and expire within the next 9 years.
Other Indemnifications
In conjunction with our sales of the Electron Dynamic Devices, Inc. and Rocketdyne Propulsion and
Power businesses and the sale of our Commercial Airplanes facilities in Wichita, Kansas and Tulsa
and McAlester, Oklahoma in 2005, we provided indemnifications to the buyers relating to pre-closing
environmental contamination and certain other items. The terms of the indemnifications are indefinite.
As it is impossible to assess whether there will be damages in the future or the amounts thereof (if
any), we cannot estimate the maximum potential amount of future payments under these guarantees.
Therefore, no liability has been recorded.
Industrial Revenue Bonds
Industrial Revenue Bonds (IRBs) issued by the City of Wichita are used to finance the purchase and/or
construction of real and personal property at our Wichita site. Tax benefits associated with IRBs
include a ten-year property tax abatement and a sales tax exemption from the Kansas Department of
Revenue. We record the property on our Consolidated Statements of Financial Position, along with a
capital lease obligation to repay the proceeds of the IRB. We have also purchased the IRBs and
therefore are the bondholders as well as the borrower/lessee of the property purchased with the IRB
proceeds.
The capital lease obligation and IRB asset are recorded net in the Consolidated Statements of
Financial Position. As of December 31, 2009 and 2008, the assets and liabilities associated with the
City of Wichita IRBs were $856 and $887.
Note 13 – Debt
On March 9, 2009, we filed a public shelf registration with the U.S. Securities and Exchange
Commission (SEC) for the issuance of an indeterminate amount of debt securities and common stock.
On March 13, 2009, we issued notes totaling $1,850, which included $700 bearing an interest rate of
5% due March 15, 2014, $650 bearing an interest rate of 6% due March 15, 2019 and $500 bearing an
interest rate of 6.875% due March 15, 2039. The net proceeds after deducting the discount,
underwriting fees and issuance costs were $1,817. On July 28, 2009, we issued notes totaling $1,950,
which included $750 bearing an interest rate of 3.5% due February 15, 2015, $750 bearing an interest
rate of 4.875% due February 15, 2020 and $450 bearing an interest rate of 5.875% due February 15,
2040. The net proceeds after deducting the discount, underwriting fees and issuance costs were
$1,914. On November 20, 2009, we issued notes totaling $1,200, which included $700 bearing an
interest rate of 1.875% due November 20, 2012, and $500 bearing an interest rate of 3.750% due
November 20, 2016. The net proceeds after deducting the discount, underwriting fees and issuance
costs were $1,184. We may redeem each series of notes issued in 2009 at any time prior to maturity,
in whole or in part, upon at least 30 days notice, at a redemption price equal to the principal amount of
the notes to be redeemed plus a make-whole premium, together with accrued interest on such notes to
the redemption date. The notes are unsecured senior obligations and rank equally in right of payment
with all our existing and future unsecured and unsubordinated indebtedness.
On October 30, 2008, BCC filed a public shelf registration for up to $5,000 of debt securities with the
SEC that became effective on November 12, 2008. On October 27, 2009, BCC issued notes totaling
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