Boeing 2010 Annual Report Download - page 94

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 satellite missions. 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. During the third quarter of 2010, ULA submitted a claim to the USAF to re-price the
contract value of the third mission. The USAF did not exercise an option for a fourth mission prior to
expiration. If ULA is unsuccessful in obtaining additional pricing, we may be responsible for a portion of
the shortfall and may record up to $283 in pre-tax losses associated with the three missions,
representing up to $261 for the indemnification payment and up to $22 for our portion of additional
contract losses incurred by ULA.
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 guarantees are collateralized by the underlying commercial aircraft and
certain other assets. Current outstanding credit guarantees expire within the next ten years.
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 the underlying
commercial aircraft and expire within the next eight 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 agreed to indemnify, for an indefinite period, the buyers for
costs relating to pre-closing environmental contamination and certain other items. 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 indemnities. Therefore, no liability has
been recorded. There have been no claims submitted to date.
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, 2010 and 2009, the net assets associated with the City of
Wichita IRBs were $822 and $856.
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