Boeing 2007 Annual Report Download - page 61

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Notes to Consolidated Financial Statements
The contractual maturities of available-for-sale debt securities
at December 31, 2007, were as follows:
Estimated
Cost Fair Value
Due in 1 year or less $÷«578 $÷«576
Due from 1 to 5 years 1,575 1,591
Due from 5 to 10 years 99 100
Due after 10 years 1,278 1,279
$3,530 $3,546
Supplemental information about gross realized gains and loss-
es on available-for-sale investment securities for the years
ended December 31, are as follows:
2007 2006 2005
Gains $«5 $56
Losses, including impairments (11) (11) $(64)
Net $(6) $45 $(64)
Held-To-Maturity Investments Our investments in held-to-
maturity securities consist of commercial paper with maturities
of less than one year. The held-to-maturity securities are
recorded at their amortized cost of $2,301 and $290 as of
December 31, 2007 and 2006, which approximates their
fair value.
Equity Method and Other Investments
Equity Method Investments Our effective ownership percent-
ages and balances of equity method investments consisted
of the following as of December 31:
Ownership Investment
Segment Percentages Balance
2007 2006
United Launch Alliance N&SS 50% $1,019 $960
United Space Alliance N&SS 50% (70) (1) (92) (1)
HRL Laboratories PE&MS 50% 35 34
APB Winglets Commercial
Airplanes 45% 31 12
Other Primarily
Commercial Airplanes
and Support Systems 70 50
$1,085 $964
(1) 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 entered into a transaction with
Lockheed Martin Corporation (Lockheed) to create a 50/50
joint venture named United Launch Alliance L.L.C. (ULA). ULA
combines the production, engineering, test and launch opera-
tions associated with U.S. government launches of Boeing
Delta and Lockheed Atlas rockets. ULA conducted 13 and one
successful launches for the years ended December 31, 2007
and 2006. We and Lockheed each have agreed to provide
ULA with initial cash contributions 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 Note 21.
On July 24, 2007, we and Lockheed reached an agreement
with respect to resolution of the final working capital and the
value of the launch vehicle support contracts that each party
contributed to form ULA. Effective August 15, 2007, the par-
ties received all necessary approvals pursuant to the terms of
the Consent Order with the U.S. Federal Trade Commission
and the terms of the agreement, which resulted in additional
contributions from both parties with Boeing agreeing to con-
tribute an additional $97. Our additional contribution liability will
be offset by future payments from ULA under the Inventory
Supply Agreement.
The Sea Launch venture, in which we are a 40% partner with
RSC Energia of Russia (25%), Aker ASA of Norway (20%), PO
Yuzhmash (10%) and SDO Yuzhnoye (5%) of the Ukraine, pro-
vides ocean-based launch services to commercial satellite cus-
tomers. The venture conducted zero, five and four successful
launches for the years ended December 31, 2007, 2006 and
2005, respectively. A Sea Launch Zenit-3SL vehicle, carrying a
Boeing-built NSS-8 satellite, experienced an anomaly during
launch on January 30, 2007. The launch platform has been
repaired and resumed flight operations on January 15, 2008,
successfully launching a Boeing-built satellite. We have finan-
cial 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 cus-
tomer, 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 fur-
ther 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. In addition, we continue to look at alternative cap-
ital structures for the venture.
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.
The Boeing Company and Subsidiaries