Boeing 2010 Annual Report Download - page 85

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Sea Launch
At December 31, 2010, Other assets included $356 of receivables, previously recorded as Accounts
receivable, related to our former investment in the Sea Launch venture which became payable by
certain Sea Launch partners following Sea Launch’s bankruptcy filing in June 2009. The $356 includes
$147 related to a payment made by us under a bank guarantee on behalf of Sea Launch and $209
related to loans we made to Sea Launch. The net amounts owed to Boeing by each of the partners are
as follows; S.P. Koroley Rocket and Space Corporation Energia of Russia – $223, PO Yuzhnoye
Mashinostroitelny Zavod of Ukraine – $89 and KB Yuzhnoye of Ukraine – $44.
Although each partner is contractually obligated to reimburse us for its share of the bank guarantee,
the Russian and Ukrainian partners have raised defenses to enforcement and contested our claims.
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 $147 bank guarantee payment. On
October 7, 2010, the arbitrator ruled that the Stockholm Chamber of Commerce lacked jurisdiction to
hear the matter but did not resolve the merits of our claim. We filed a notice appealing the arbitrator’s
ruling on January 11, 2011. We believe the partners have the financial wherewithal to pay and intend
to pursue vigorously all of our rights and remedies. In the event we are unable to secure
reimbursement of $147 related to our payment under the bank guarantee and $209 related to loans
made to Sea Launch, we could incur additional pre-tax charges of up to $356.
Note 7 – Inventories
Inventories at December 31 consisted of the following:
2010 2009
Long-term contracts in progress $ 14,400 $ 14,673
Commercial aircraft programs 26,550 18,568
Commercial spare parts, used aircraft, general stock materials and other 5,788 5,004
Inventory before advances and progress billings 46,738 38,245
Less advances and progress billings (22,421) (21,312)
Total $ 24,317 $ 16,933
Long-Term Contracts in Progress
Long-term contracts in progress included Delta launch program inventory that will be sold at cost to
United Launch Alliance (ULA) under an inventory supply agreement that terminates on March 31,
2021. At December 31, 2010 and 2009, the inventory balance was $1,385 and $1,685. As of
December 31, 2010, $1,070 of this inventory relates to yet unsold launches. ULA is continuing to
assess the future of the Delta II program. In the event ULA is unable to sell additional Delta II
inventory, our earnings could be reduced by up to $70. See Note 12.
Inventory balances included $236 and $235 subject to claims or other uncertainties relating to the A-12
program as of December 31, 2010 and 2009. See Note 20.
Commercial Aircraft Programs
As of December 31, 2010 and 2009 commercial aircraft programs inventory included the following
amounts related to the 787 program: $9,461 and $3,885 of work in process (including deferred
production costs), $1,956 and $2,187 of supplier advances, and $1,447 and $1,231 of tooling and
other non-recurring costs.
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