Boeing 2010 Annual Report Download - page 49

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parked at the end of 2010, including both in-production and out-of-production aircraft types. Of these
parked aircraft, over 30% are not expected to return to service. At the end of 2009 and 2008, 11.6%
and 11.0% of the western-built commercial jet aircraft were parked. Aircraft valuations could decline if
significant numbers of additional aircraft, particularly types with relatively few operators, are placed out
of service.
Summary Financial Information
(Dollars in millions)
Years ended December 31, 2010 2009 2008
Revenues $639 $660 $703
Earnings from operations $152 $126 $162
Operating margins 24% 19% 23%
Revenues
BCC segment revenues consist principally of lease income from equipment under operating lease and
interest from financing receivables and notes. BCC’s revenues decreased $21 million and $43 million
in 2010 and 2009, due to a smaller portfolio of equipment under operating leases as a result of aircraft
returns and lower lease rates on re-leased aircraft.
Earnings From Operations
BCC’s operating earnings are presented net of interest expense, provision for (recovery of) losses,
asset impairment expense, depreciation on leased equipment and other operating expenses.
Operating earnings increased by $26 million in 2010 compared with 2009 primarily due to lower
impairment expense and lower provision for losses. The impact of declines in aircraft collateral values
recognized by BCC and reduced projected cash flows for certain aircraft was not as significant in 2010
as it was in 2009. The decrease in operating earnings in 2009 compared with 2008 was primarily due
to lower revenues and higher asset impairment expense and provision for losses.
Financial Position
The following table presents selected financial data for BCC as of December 31:
(Dollars in millions) 2010 2009
BCC Customer Financing and Investment Portfolio $ 4,694 $ 5,666
Valuation Allowance as a % of Total Receivables 3.8% 2.5%
Debt $ 3,446 $ 4,075
Debt-to-Equity Ratio 5.0-to-1 5.8-to-1
BCC’s customer financing and investment portfolio at December 31, 2010 decreased from
December 31, 2009 due to normal portfolio run-off and asset pre-payments. At December 31, 2010
and 2009, BCC had $583 million and $385 million of assets that were held for sale or re-lease, of
which $28 million and $345 million had either executed term sheets with deposits or firm contracts to
be sold or placed on lease. The increase was primarily due to BCC’s termination of aircraft leases with
Aevovias Caribe S.A. de C.V. (Click), an affiliate of Compania Mexicana de Aviacion S.A. de C.V.
(Mexicana), in August 2010. Additionally, aircraft subject to leases with a carrying value of
approximately $174 million are scheduled to be returned off lease during 2011. These aircraft are
being remarketed or we are seeking to have the leases extended.
37