Boeing 2013 Annual Report Download - page 49

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37
$79 million compared with 2011 primarily due to lower operating and finance lease income. Operating
lease income decreased as a result of the return of aircraft and lower lease rates on re-leased aircraft. In
addition, lower finance lease income reflects the revised contractual terms of BCC’s leases with AirTran
Airways Inc. (Airtran), a wholly owned subsidiary of Southwest Airlines Co. (Southwest), negotiated in
conjunction with receiving a full guarantee from Southwest of those lease payment obligations in the fourth
quarter of 2011.
Earnings From Operations
BCC’s earnings from operations are presented net of interest expense, recovery of losses, asset impairment
expense, depreciation on leased equipment and other operating expenses. Earnings from operations in
2013 increased by $19 million compared with 2012 primarily due to lower depreciation expense and interest
expense offset by lower revenues. Earnings from operations in 2012 decreased by $31 million compared
with 2011 primarily due to lower revenues partially offset by lower interest and asset impairment expense.
Financial Position
The following table presents selected financial data for BCC as of December 31:
(Dollars in millions) 2013 2012
Customer financing and investment portfolio, net $3,883 $4,290
Other assets, primarily cash and short-term investments 505 402
Total assets $4,388 $4,692
Other liabilities, primarily deferred income taxes $1,296 $1,429
Debt, including intercompany loans 2,577 2,742
Equity 515 521
Total liabilities and equity $4,388 $4,692
Debt-to-equity ratio 5.0-to-1 5.3-to-1
The customer financing portfolio and debt balances presented above as of December 31, 2012 have been
revised from balances previously reported in the BCC 2012 10-K filing to reflect the alignment of BCC's
accounting to the consolidated Boeing accounting for certain leasing transactions within the portfolio.
BCC’s customer financing and investment portfolio at December 31, 2013 decreased from December 31,
2012 primarily due to normal portfolio run-off and asset sales, partially offset by the origination of notes
receivable. At December 31, 2013 and 2012, BCC had $83 million and $354 million of assets that were
held for sale or re-lease, of which $57 million and $266 million had either executed term sheets with
deposits or firm contracts to be sold or placed on lease. Additionally, aircraft subject to leases with a carrying
value of approximately $36 million are scheduled to be returned off lease during 2014. These aircraft are
being remarketed or the leases are being extended and $11 million of these aircraft were committed at
December 31, 2013.
BCC enters into certain transactions with Boeing, reflected in the Other segment, in the form of
intercompany guarantees and other subsidies that mitigate the effects of certain credit quality or asset
impairment issues on the BCC segment.