Boeing 2011 Annual Report Download - page 94

In conjunction with our sales of the Electron Dynamic Devices, Inc. and Rocketdyne Propulsion and
Power businesses and the sale of our Commercial Airplanes facilities in Wichita, Kansas and Tulsa
and McAlester, Oklahoma in 2005, we agreed to indemnify, for an indefinite period, the buyers for
costs relating to pre-closing environmental contamination and certain other items. As it is impossible to
assess whether there will be damages in the future or the amounts thereof (if any), we cannot estimate
the maximum potential amount of future payments under these indemnities. Therefore, no liability has
been recorded. There have been no claims submitted to date.
Industrial Revenue Bonds
Industrial Revenue Bonds (IRBs) issued by the City of Wichita were used to finance the purchase and/
or construction of real and personal property at our Wichita site. Tax benefits associated with IRBs
include a ten-year property tax abatement and a sales tax exemption from the Kansas Department of
Revenue. We record the property on our Consolidated Statements of Financial Position, along with a
capital lease obligation to repay the proceeds of the IRB. We have also purchased the IRBs and
therefore are the bondholders as well as the borrower/lessee of the property purchased with the IRB
proceeds.
The capital lease obligation and IRB asset are recorded net in the Consolidated Statements of
Financial Position. As of December 31, 2011 and 2010, the net assets associated with the City of
Wichita IRBs were $783 and $822.
Note 14 – Debt
On August 1, 2011, BCC issued notes totaling $750, which included $500 bearing an interest rate of
2.125% due August 15, 2016 and $250 bearing an interest rate of 2.90% due August 15, 2018. The net
proceeds after deducting the discount, underwriting fees and issuance costs were $745. The notes are
unsecured senior obligations and rank equally in right of payment with all of BCC’s existing and future
unsecured and unsubordinated indebtedness.
Total debt interest incurred, including amounts capitalized, was $683, $729 and $610 for the years
ended December 31, 2011, 2010 and 2009, respectively. Interest expense recorded by BCC is
reflected as a separate line item on our Consolidated Statements of Operations, and is included in
Earnings from operations. Total Company interest payments were $626, $670 and $502 for the years
ended December 31, 2011, 2010 and 2009, respectively.
We have $4,600 currently available under credit line agreements, of which $2,300 is a 364-day
revolving credit facility expiring in November 2012 and $2,300 is a five-year credit facility expiring in
November 2016. The 364-day credit facility has a one-year term out option which allows us to extend
the maturity of any borrowings one year beyond the aforementioned expiration date. We have given
BCC exclusive access to $750 under the 364-day facility and $750 under the five-year facility. We
continue to be in full compliance with all covenants contained in our debt or credit facility agreements,
including those at BCC.
Short-term debt and current portion of long-term debt at December 31 consisted of the following:
2011 2010
Consolidated
Total
BCC
Only
Consolidated
Total
BCC
Only
Unsecured debt securities $2,186 $837 $785 $785
Non-recourse debt and notes 45 32 79 6
Capital lease obligations 97 10 62 10
Other notes 25 22
Total $2,353 $879 $948 $801
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