Boeing 2010 Annual Report Download - page 50

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BCC enters into certain transactions with the Other segment in the form of intercompany guarantees
and other subsidies that mitigate the effects of certain credit quality or asset impairment issues on the
BCC segment.
Bankruptcies
In August 2010, Mexicana filed for bankruptcy protection in Mexico and the United States. At the time
of those filings, BCC had leased and delivered 19 717 aircraft to Click, and 6 additional 717 aircraft
were scheduled for delivery to Click under executed leases. On August 27, 2010, BCC served Click a
notice of termination of all 25 leases as a result of non-payment. On or about August 28, 2010, Click
ceased flight operations. In September 2010, Click filed for bankruptcy protection. BCC has recovered
all of the aircraft that had been delivered to Click. In the third quarter of 2010, we recorded an $81
million net impairment charge related to certain 717 aircraft leased to Click. This charge was primarily
recorded in the Other segment due to an intercompany guarantee between us and BCC. Additional
impairment charges could be recorded if we are unable to re-lease the aircraft at anticipated rental
rates.
Southwest/AirTran Merger
On September 26, 2010, Southwest Airlines Co. (Southwest) and AirTran Holdings, Inc. (AirTran)
entered into an Agreement and Plan of Merger, whereby Southwest will acquire, subject to certain
conditions, all of the outstanding common stock of AirTran. AirTran, together with its subsidiaries,
represents approximately 27% of our gross customer financing portfolio carrying value, consisting
principally of 717 aircraft. AirTran is the largest customer in terms of BCC’s segment revenue and
customer financing portfolio carrying value.
Restructurings and Restructuring Requests
From time to time, certain customers have requested a restructuring of their transactions with BCC. As
of December 31, 2010, BCC has not reached agreement on any restructuring requests that would have
a material adverse effect on its earnings, cash flows and/or financial position.
Other Segment
(Dollars in millions)
Years ended December 31, 2010 2009 2008
Revenues $ 138 $ 165 $ 567
Loss from operations (327) (152) (307)
Other segment operating losses for the year ended December 31, 2010 increased by $175 million
primarily due to $144 million of charges related to our customer financing portfolio and higher
environmental remediation expenses of $36 million.
Other segment revenues for the year ended December 31, 2009 decreased by $402 million compared
with 2008 primarily due to the sale of three C-17 aircraft in 2008 held under operating lease. Other
segment operating losses for the year ended December 31, 2009 decreased by $155 million primarily
due to recognition of pre-tax expense of $82 million in the prior year to increase the allowance for
losses on customer financing receivables related to lower U.S. airline customer credit ratings. During
2009, Other segment recognized $76 million in lower charges relating to environmental remediation
than in 2008.
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