Boeing 2009 Annual Report Download - page 93

Download and view the complete annual report

Please find page 93 of the 2009 Boeing annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

impact of a potential production shut-down, including any recovery that would be available from the
U.S. government. Such recovery from the U.S. government would not include the costs incurred by us
resulting from our direction to suppliers to begin working on aircraft beyond those currently under
contract with the USAF.
Satellites
Certain launch and satellite sales contracts include provisions that specify that we bear risk of loss
associated with the launch phase through acceptance in orbit by the customer. We have historically
purchased insurance to cover these exposures when allowed under the terms of the contract and when
economically advisable. The current insurance market reflects high premium rates and also suffers
from a lack of capacity to handle all insurance requirements. We make decisions on the procurement
of insurance based on our analysis of risk. There is a contractual launch scheduled for 2010 for which
full insurance coverage may not be available or, if available, could be prohibitively expensive. We will
continue to review this risk. We estimate that the potential uninsured amount for this launch could be
approximately $360.
Company Owned Life Insurance
McDonnell Douglas Corporation insured its executives with Company Owned Life Insurance (COLI),
which are life insurance policies with a cash surrender value. Although we do not use COLI currently,
these obligations from the merger with McDonnell Douglas are still a commitment at this time. We have
loans in place to cover costs paid or incurred to carry the underlying life insurance policies. As of
December 31, 2009 and 2008, the cash surrender value was $360 and $331 and the total loans were
$337 and $317. As we have the right to offset the loans against the cash surrender value of the
policies, we present the net asset in Other assets on the Consolidated Statements of Financial Position
as of December 31, 2009 and 2008.
Note 12 – Arrangements with Off-Balance Sheet Risk
We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in
the form of guarantees.
Third-Party Guarantees
The following tables provide quantitative data regarding our third-party guarantees. The maximum
potential payments represent a “worst-case scenario,” and do not necessarily reflect our expected
results. Estimated proceeds from collateral and recourse represent the anticipated values of assets we
could liquidate or receive from other parties to offset our payments under guarantees.
As of December 31, 2009
Maximum
Potential
Payments
Estimated
Proceeds
from
Collateral/
Recourse
Carrying
Amount of
Liabilities*
Contingent repurchase commitments $3,958 $3,940 $ 7
Indemnifications to ULA 682 23
Other credit guarantees 119 109 2
Residual value guarantees 51 44 10
81