Boeing 2013 Annual Report Download - page 51

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39
2013 and 2012. Our investment in gross inventories increased by $5.7 billion in 2013, $6.2 billion in 2012
and $9.8 billion in 2011, driven by continued investment in commercial airplane program inventory, primarily
787 inventory. Advances and progress billings increased by $3.9 billion in 2013, $1.9 billion in 2012 and
$5 billion in 2011, primarily due to payments from commercial airplane customers. Discretionary
contributions to our pension plans totaled $1.5 billion in 2013 compared with $1.6 billion in 2012 and $0.5
billion in 2011.
Investing Activities Cash used by investing activities totaled $5.2 billion during 2013 compared with $3.8
billion used during 2012 and $2.4 billion provided during 2011, largely due to higher net contributions to
investments in time deposits. Net contributions to investments were $2.9 billion in 2013 compared with $2
billion in 2012 and net proceeds from investments of $4 billion in 2011. In 2013, capital expenditures totaled
$2.1 billion, up from $1.7 billion in the prior two years. We expect capital expenditures to remain higher in
2014 due to continued investment to support growth.
Financing Activities Cash used by financing activities was $4.2 billion during 2013, an increase of $0.8
billion compared with 2012 primarily due to share repurchases of $2.8 billion in 2013 partially offset by
higher new borrowings of $0.5 billion, lower debt repayments of $0.6 billion and an increase in stock options
exercised of $1 billion in the current year. Cash used by financing activities was $3.5 billion during 2012,
an increase of $1.8 billion compared with 2011 as a result of higher debt repayments of $1.1 billion and
lower new borrowings of $0.7 billion.
In 2013, we issued notes totaling $0.5 billion to fund the BCC segment and repaid $1.4 billion of debt,
including repayments of $0.6 billion of debt held at BCC. At December 31, 2013 and 2012, the recorded
balance of debt was $9.6 billion and $10.4 billion, of which $1.6 billion and $1.4 billion were classified as
short-term. This includes $2.6 billion and $2.7 billion of debt attributable to BCC, of which $0.7 billion was
classified as short-term in both periods.
During 2013, we repurchased 25.4 million shares totaling $2.8 billion through our open market share
repurchase program. There were no shares repurchased through the share repurchase program in 2012
and 2011. In 2013 and 2012, we had 0.8 million and 1 million shares transferred to us from employees for
tax withholdings.
Capital Resources We have substantial borrowing capacity. Any future borrowings may affect our credit
ratings and are subject to various debt covenants as described below. We have a commercial paper
program that continues to serve as a significant potential source of short-term liquidity. Throughout 2013
and at December 31, 2013, we had no commercial paper borrowings outstanding. Currently, we have $4.8
billion of unused borrowing capacity on revolving credit line agreements. We anticipate that these credit
lines will primarily serve as backup liquidity to support our general corporate borrowing needs.
Financing commitments totaled $18 billion and $18.1 billion at December 31, 2013 and 2012. We anticipate
that we will not be required to fund a significant portion of our financing commitments as we continue to
work with third party financiers to provide alternative financing to customers. Historically, we have not been
required to fund significant amounts of outstanding commitments. However, there can be no assurances
that we will not be required to fund greater amounts than historically required.
In the event we require additional funding to support strategic business opportunities, our commercial
aircraft financing commitments, unfavorable resolution of litigation or other loss contingencies, or other
business requirements, we expect to meet increased funding requirements by issuing commercial paper
or term debt. We believe our ability to access external capital resources should be sufficient to satisfy
existing short-term and long-term commitments and plans, and also to provide adequate financial flexibility
to take advantage of potential strategic business opportunities should they arise within the next year.
However, there can be no assurance of the cost or availability of future borrowings, if any, under our
commercial paper program, in the debt markets or our credit facilities.