Boeing 2012 Annual Report Download - page 87

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75
Our financing receivable balances at December 31 by internal credit rating category are shown below:
Rating categories 2012 2011
BBB $1,201 $1,316
BB 63 67
B51 103
CCC 511 512
D524 653
Other 92 200
Total carrying value of financing receivables $2,442 $2,851
At December 31, 2012, our allowance primarily related to receivables with ratings of CCC and we applied
default rates that averaged 46% to the exposure associated with those receivables.
In the fourth quarter of 2011, American Airlines Inc. (American Airlines) filed for Chapter 11 bankruptcy
protection. We believe that our customer financing receivables from American Airlines of $524 are
sufficiently collateralized such that we do not expect to incur losses related to those receivables and have
not recorded an allowance for losses as of December 31, 2012 as a result of the bankruptcy.
Customer Financing Exposure Customer financing is collateralized by security in the related asset. The
value of the collateral is closely tied to commercial airline performance and may be subject to reduced
valuation with market decline. Declines in collateral values are also a significant driver of our allowance
for losses. Generally, out-of-production aircraft have experienced greater collateral value declines than in-
production aircraft. Our customer financing portfolio consists primarily of financing receivables for out-of-
production aircraft. The value of the collateral is closely tied to commercial airline performance and overall
market conditions. The majority of customer financing carrying values are concentrated in the following
aircraft models:
2012 2011
717 Aircraft ($465 and $480 accounted for as operating leases)(1) $1,781 $1,906
757 Aircraft ($454 and $451 accounted for as operating leases)(1) 561 631
MD-80 Aircraft ($0 and $0 accounted for as operating leases)(1)(2) 446 485
737 Aircraft ($193 and $242 accounted for as operating leases) 316 394
787 Aircraft ($286 and $0 accounted for as operating leases) 286
MD-11 Aircraft ($269 and $321 accounted for as operating leases)(1) 269 321
767 Aircraft ($63 and $103 accounted for as operating leases) 223 307
(1) Out-of-production aircraft
(2) Disclosure omitted from 2011 financial statements
Charges related to customer financing asset impairment for the years ended December 31 were as follows:
2012 2011 2010
Boeing Capital $73 $109 $85
Other Boeing (15) (36) 85
Total $58 $73 $170