Boeing 2010 Annual Report Download - page 110

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Note 18 – Significant Group Concentrations of Risk
Credit Risk
Financial instruments involving potential credit risk are predominantly with commercial aircraft
customers and the U.S. government. Of the $10,496 in gross accounts receivable and gross customer
financing included in the Consolidated Statements of Financial Position as of December 31, 2010,
$4,996 related to commercial aircraft customers ($570 of accounts receivable and $4,426 of customer
financing) and $2,969 related to the U.S. government. Of the $5,033 in gross customer financing,
$4,310 related to customers we believe have less than investment-grade credit. AirTran Airways,
American Airlines, Continental Airlines and Hawaiian Airlines were associated with 27%, 16%, 9% and
8%, respectively, of our financing portfolio. Financing for aircraft is collateralized by security in the
related asset. As of December 31, 2010, there was $9,865 of financing commitments related to aircraft
on order including options and proposed as part of sales campaigns described in Note 11, of which
$8,490 related to customers we believe have less than investment-grade credit.
BDS Fixed-Price Development Contracts
Fixed-price development work is inherently uncertain and subject to significant variability in estimates
of the cost and time required to complete the work. Significant BDS fixed-price development contracts
include AEW&C, P-8I, KC-767 International Tanker and commercial and military satellites. The
operational and technical complexities of these contracts create financial risk, which could trigger
termination provisions, order cancellations or other financially significant exposure. Changes to cost
and revenue estimates could also result in lower margins or a material charge for reach-forward losses
in 2011.
Commercial Airplane Development Programs
Significant risks are inherent throughout the development of new commercial airplanes and new
commercial airplane derivatives. Currently both the 787-8 and 747-8 freighter are in the demanding
flight test and certification stages of program development. The 787-9 and 747-8 Intercontinental
airplanes are also in development. These programs require substantial investments and research and
development as well as investments in working capital and infrastructure. They also entail significant
commitments to customers and suppliers and require substantial internal resources. Performance
issues on these programs could have a material adverse impact on our consolidated results and
financial position in 2011.
Other Risk
As of December 31, 2010, approximately 36% of our total workforce was represented by collective
bargaining agreements and approximately 1% of our total workforce was represented by agreements
expiring during 2011.
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