Boeing 2009 Annual Report Download - page 115
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using an income approach based on the present value of the commodity index prices less the contract
rate multiplied by the notional amount. The fair value of our interest rate swaps is derived from a
discounted cash flow analysis based on the terms of the contract and the interest rate curve. The fair
value of warrants is based on a third-party options model and principal inputs of stock price, volatility
and time to expiry.
The following table presents our assets that are measured at fair value on a nonrecurring basis for the
years ended December 31:
2009 2008
Carrying
Value
Total
Losses
Carrying
Value
Total
Losses
Equipment under operating leases $164 $(57)
Assets held for sale or re-lease 35 (18)
Property, plant and equipment 13 (13)
Receivables 1 (6) $8 $(8)
Total $213 $(94) $8 $(8)
Fair Value Disclosures
The following table presents our assets and liabilities that are not measured at fair value on a recurring
basis. The carrying values and estimated fair values were as follows at December 31:
2009 2008
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Assets
Accounts receivable, net $ 5,785 $ 5,658 $ 5,602 $ 5,443
Notes receivable 1,045 1,072 950 954
Liabilities
Debt, excluding capital lease obligations (12,848) (13,809) (7,441) (7,923)
Accounts payable (7,096) (7,063) (5,871) (5,871)
Residual value and credit guarantees (35) (20) (208) (52)
Contingent repurchase commitments (7) (63) (7) (38)
The fair values of the Accounts receivable and Accounts payable are based on current market rates for
loans of the same risk and maturities. The fair values of our variable rate notes receivable that reprice
frequently approximate their carrying values. The fair values of fixed rate notes receivable are
estimated using discounted cash flow analysis using interest rates currently offered on loans with
similar terms to borrowers of similar credit quality. The fair value of our debt is based on current market
yields for our debt traded in the secondary market. The fair values of the residual value guarantees and
contingent repurchase commitments are determined using a Black Futures Options formula and
includes such assumptions as the expected value of the aircraft on the settlement date, volatility of
aircraft prices, time until settlement and the risk free discount rate. The fair value of the credit
guarantees is estimated based on the expected cash flows of those commitments, given the creditor’s
probability of default, and discounted using the risk free rate. With regard to financial instruments with
off-balance sheet risk, it is not practicable to estimate the fair value of future financing commitments
because the amount and timing of funding those commitments are uncertain.
103