Boeing 2006 Annual Report Download - page 62

60 The Boeing Company and Subsidiaries
Notes to Consolidated Financial Statements
Maturities of available-for-sale debt securities at December 31,
2006, were as follows:
Amortized Estimated
Cost Fair Value
Due in 1 year or less $«««259 $«««257
Due from 1 to 5 years 1,652 1,648
Due from 5 to 10 years 186 185
Due after 10 years 1,249 1,242
$3,346 $3,332
Supplemental information about gross realized gains and losses
on available-for-sale investment securities follows.
2006 2005 2004
Gains $«56
Losses, including impairments (11)$(64)$(79)
Net $«45 $(64)$(79)
Equity Method and Other Investments
Equity Method Investments The following table reflects the
Company’s effective ownership percentages and balances of
equity method investments as of December 31, 2006 and 2005.
Ownership Investment
Segment Percentages Balance
2006 2005
United Launch Alliance N&SS 50%$960
United Space Alliance N&SS 50%(92)* $(29) *
HRL Laboratories PE&MS 50%34 28
APB Winglets Commercial 45%12 23
Airplanes
Other Primarily Commercial
Airplanes and
Support Systems 50 43
$964 $«65
*Credit balances are a result of our proportionate share of the joint venture’s
pension and postretirement related adjustments which reduce the carrying value
of the investment.
On December 1, 2006 we closed the transaction with
Lockheed Martin Corporation (Lockheed) to create a 50/50 joint
venture named United Launch Alliance L.L.C. (ULA). ULA com-
bines the production, engineering, test and launch operations
associated with U.S. Government launches of Boeing Delta and
Lockheed Atlas rockets. As a result of the transaction, we
contributed assets of $1,609, generally consisting of accounts
receivable of $372, inventories, net of advances, of $156 and
property, plant and equipment of $1,080, and liabilities of $695,
consisting of accounts payable and other liabilities of $536 and
advances and billings in excess of related costs of $159 to ULA
in exchange for 50% ownership. These amounts are subject to
adjustment pending final review of the respective parties’
contributions. We will each provide ULA with an initial cash
contribution of up to $25, and we each have agreed to extend
a line of credit to ULA of up to $200 to support its working
capital requirements. (See Notes 8, 9 and 23).
The Sea Launch venture, in which we are a 40% partner with
RSC Energia of Russia (25%), Aker ASA of Norway (20%), and
KB Yuzhnoye/PO Yuzhmash of the Ukraine (15%), provides
ocean-based launch services to commercial satellite customers.
The venture conducted five, four and three successful launches
for the years ended December 31, 2006, 2005 and 2004,
respectively. The venture incurred losses in 2006, 2005 and
2004 due to the relatively low price and volume of launches,
driven by a depressed commercial satellite market and over-
supply of launch vehicles as well as a high level of debt and
debt servicing requirements. We have financial exposure with
respect to the venture, which relates to guarantees provided
by us to certain Sea Launch creditors, performance guarantees
provided by us to a Sea Launch customer and financial
exposure related to advances and other assets reflected in
the consolidated financial statements.
We suspended recording equity losses after writing our invest-
ment in and direct loans to Sea Launch down to zero in 2001
and accruing our obligation for third-party guarantees on
Sea Launch indebtedness. We are not obligated to provide any
further financial support to the Sea Launch venture. However,
in the event that we do extend additional financial support to
Sea Launch in the future, we will recognize suspended losses
as appropriate.
A Sea Launch Zenit-3SL vehicle, carrying a Boeing-built
satellite, experienced an anomaly during launch on
January 30, 2007. The impact to Sea Launch operations,
including the remaining launches scheduled for 2007 is not
yet known. Based on our preliminary assessment, we do not
believe that this anomaly will have a material adverse impact
on our results of operations, financial position, or cash flows.
Other Investments During 2005, we recorded an asset impair-
ment charge of $42 in Other Income related to the sale of
certain investments in technology related funds for proceeds
of $24.