Boeing 2007 Annual Report Download - page 66

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Notes to Consolidated Financial Statements
On June 6, 2002, BCC established a Euro medium-term note
program in the amount of $1,500. At December 31, 2007 and
2006, BCC had zero debt outstanding under the program
such that $1,500 would normally be available for potential debt
issuance. However, debt issuance under this program requires
that documentation, information, and other procedures relating
to BCC and the program be updated within the prior twelve
months. In view of BCC’s cash position and other available
funding sources, BCC determined during 2004 that it was
unlikely they would need to use this program in the foreseeable
future. The program is thus inactive but available subject to
updated documentation and procedures. The availability of
funding under this program would be dependent on investor
demand and market conditions.
Short-term debt and current portion of long-term debt, con-
sisted of the following:
At December 31, 2007 At December 31, 2006
Consolidated BCC Consolidated BCC
Total Only Total Only
Unsecured debt
securities $685 $685 $1,256 $1,256
Capital lease obligations 17 16 55 47
Non-recourse debt
and notes 31 5 42 4
Other notes 29 28
$762 $706 $1,381 $1,307
Debt consisted of the following:
December 31, December 31,
2007 2006
Boeing Capital Corporation debt:
Unsecured debt securities
3.600% – 7.580% due through 2023 $4,170 $5,382
Non-recourse debt and notes
4.840% – 7.690% notes due through 2013 71 76
Capital lease obligations
4.070% – 8.250% due through 2015 86 132
Subtotal Boeing Capital Corporation debt $4,327 $5,590
Other Boeing debt:
Non-recourse debt and notes
Enhanced equipment trust $«««405 $«««442
Unsecured debentures and notes
350, 9.750% due Apr. 1, 2012 349 349
600, 5.125% due Feb. 15, 2013 598 598
400, 8.750% due Aug. 15, 2021 398 398
300, 7.950% due Aug. 15, 2024
(puttable at holder’s option on
Aug. 15, 2012) 300 300
250, 7.250% due Jun. 15, 2025 248 247
250, 8.750% due Sep. 15, 2031 249 248
175, 8.625% due Nov. 15, 2031 173 173
400, 6.125% due Feb. 15, 2033 393 393
300, 6.625% due Feb. 15, 2038 300 300
100, 7.500% due Aug. 15, 2042 100 100
175, 7.875% due Apr. 15, 2043 173 173
125, 6.875% due Oct. 15, 2043 125 125
Capital lease obligations due through 2010 2 11
Other notes 77 91
Subtotal other Boeing debt $3,890 $3,948
Total debt $8,217 $9,538
At December 31, 2007, $150 of BCC debt was collateralized
by portfolio assets and underlying equipment totaling $247. The
debt consists of the 4.07% to 8.25% notes due through 2015.
Maturities of long-term debt for the next five years are as follows:
2008 2009 2010 2011 2012
BCC $710 $528 $645 $798 $«««878
Other Boeing 52 23 22 73 363
$762 $551 $667 $871 $1,241
Note 15 – Postretirement Plans
We have various pension plans covering substantially all
employees. We fund all our major pension plans through
trusts. Pension assets are placed in trust solely for the benefit
of the plans’ participants, and are structured to maintain liquid-
ity that is sufficient to pay benefit obligations as well as to keep
pace over the long term with the growth of obligations for
future benefit payments.
We also have postretirement benefits other than pensions
which consist principally of health care coverage for eligible
retirees and qualifying dependents, and to a lesser extent, life
insurance to certain groups of retirees. Retiree health care is
provided principally until age 65 for approximately half those
retirees who are eligible for health care coverage. Certain
employee groups, including employees covered by most
United Auto Workers bargaining agreements, are provided life-
time health care coverage. We use a measurement date of
September 30 for our pension and other postretirement benefit
(OPB) plans.
Effective December 31, 2006, we adopted SFAS No. 158,
which requires that the Consolidated Statements of Financial
Position reflect the funded status of the pension and postretire-
ment plans. The funded status of the plans is measured as the
difference between the plan assets at fair value and the pro-
jected benefit obligation (PBO). We have recognized the aggre-
gate of all overfunded plans in Pension plan assets, net and
the aggregate of all underfunded plans in either Accrued retiree
health care or Accrued pension plan liability, net. The portion of
the amount by which the actuarial present value of benefits
included in the PBO exceeds the fair value of plan assets,
payable in the next 12 months, is reflected in Accounts
payable and other liabilities.
Effective December 31, 2008, SFAS No. 158 will require us to
measure plan assets and benefit obligations at fiscal year end.
We currently perform this measurement at September 30 of
each year. Beginning in fourth quarter of 2007 in accordance
with this Standard, we eliminated the use of a three-month lag
period when recognizing the impact of curtailments or settle-
ments and, instead, recognize these amounts in the period
in which they occur. The provisions of SFAS No. 158 do not
permit retrospective application.
The Boeing Company and Subsidiaries