Boeing 2014 Annual Report Download - page 51

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39
Financing Activities Cash used by financing activities was $8.6 billion during 2014, an increase of $4.3
billion compared with 2013 primarily due to higher share repurchases of $3.2 billion, higher dividends paid
of $0.6 billion and a decrease in proceeds from stock options exercised of $0.8 billion in 2014, partially
offset by higher new borrowings of $0.4 billion in 2014. Cash used by financing activities was $4.2 billion
during 2013, an increase of $0.8 billion compared with 2012 primarily due to share repurchases of $2.8
billion in 2013 partially offset by higher new borrowings of $0.5 billion, lower debt repayments of $0.6 billion
and an increase in stock options exercised of $1.0 billion in 2013.
During 2014, we issued unsecured debt totaling $0.8 billion, of which $0.5 billion was used to fund the
BCC segment, and we repaid $1.4 billion of unsecured debt, including repayments of $0.7 billion of debt
held at BCC. At December 31, 2014 and 2013 the recorded balance of debt was $9.1 billion and $9.6
billion of which $0.9 billion and $1.6 billion was classified as short-term. This includes $2.4 billion and $2.6
billion of debt attributable to BCC, of which $0.1 billion and $0.7 billion was classified as short-term at
December 31, 2014 and 2013.
During 2014 and 2013 we repurchased 46.6 million and 25.4 million shares totaling $6.0 billion and $2.8
billion through our open market share repurchase program. In 2014 and 2013, we had 0.7 million and 0.8
million shares transferred to us from employees for tax withholdings. At December 31, 2014, the amount
available under the share repurchase plan, announced on December 15, 2014, totaled $12 billion.
Capital Resources We have substantial borrowing capacity. Any future borrowings may affect our credit
ratings and are subject to various debt covenants as described below. We have a commercial paper
program that continues to serve as a significant potential source of short-term liquidity. Throughout 2014
and at December 31, 2014, we had no commercial paper borrowings outstanding. Currently, we have $5.0
billion of unused borrowing capacity on revolving credit line agreements. We anticipate that these credit
lines will primarily serve as backup liquidity to support our general corporate borrowing needs.
Financing commitments totaled $16.7 billion and $18.0 billion at December 31, 2014 and 2013. We
anticipate that we will not be required to fund a significant portion of our financing commitments as we
continue to work with third party financiers to provide alternative financing to customers. Historically, we
have not been required to fund significant amounts of outstanding commitments. However, there can be
no assurances that we will not be required to fund greater amounts than historically required.
In the event we require additional funding to support strategic business opportunities, our commercial
aircraft financing commitments, unfavorable resolution of litigation or other loss contingencies, or other
business requirements, we expect to meet increased funding requirements by issuing commercial paper
or term debt. We believe our ability to access external capital resources should be sufficient to satisfy
existing short-term and long-term commitments and plans, and also to provide adequate financial flexibility
to take advantage of potential strategic business opportunities should they arise within the next year.
However, there can be no assurance of the cost or availability of future borrowings, if any, under our
commercial paper program, in the debt markets or our credit facilities.
At December 31, 2014 and 2013, our pension plans were $17.3 billion and $10.5 billion underfunded as
measured under GAAP. The increase in the liability primarily reflects the decrease in the discount rate
used from 4.80% at December 31, 2013 to 3.90% at December 31, 2014. See Note 14. On an Employee
Retirement Income Security Act (ERISA) basis our plans are more than 100% funded at December 31,
2014 with minimal required contributions in 2015. We do not expect the contributions to our pension and
other postretirement benefit plans to be significant in 2015. We may be required to make higher contributions
to our pension plans in future years.
At December 31, 2014, we were in compliance with the covenants for our debt and credit facilities. The
most restrictive covenants include a limitation on mortgage debt and sale and leaseback transactions as
a percentage of consolidated net tangible assets (as defined in the credit agreements), and a limitation