Boeing 2013 Annual Report Download - page 94

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Note 12 – Arrangements with Off-Balance Sheet Risk
We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in the
form of guarantees.
The following table provides quantitative data regarding our third party guarantees. The maximum potential
payments represent a “worst-case scenario,” and do not necessarily reflect amounts that we expect to
pay. Estimated proceeds from collateral and recourse represent the anticipated values of assets we could
liquidate or receive from other parties to offset our payments under guarantees. The carrying amount of
liabilities represents the amount included in Accrued liabilities.
Maximum
Potential
Payments
Estimated
Proceeds from
Collateral/
Recourse
Carrying
Amount of
Liabilities
December 31, 2013 2012 2013 2012 2013 2012
Contingent repurchase commitments $1,872 $2,065 $1,871 $2,065 $5 $5
Indemnifications to ULA:
Contributed Delta program launch
inventory 127 137
Contract pricing 261 261 77
Other Delta contracts 227 232 88
Other indemnifications 106 137 28 32
Credit guarantees 35 13 27 422
Contingent Repurchase Commitments The repurchase price specified in contingent repurchase
commitments is generally lower than the expected fair value at the specified repurchase date. Estimated
proceeds from collateral/recourse in the table above represent the lower of the contracted repurchase
price or the expected fair value of each aircraft at the specified repurchase date.
Indemnifications to ULA In 2006, we agreed to indemnify ULA through December 31, 2020 against
potential non-recoverability and non-allowability of $1,360 of Boeing Delta launch program inventory
included in contributed assets plus $1,860 of inventory subject to an inventory supply agreement which
ends on March 31, 2021. Since inception, ULA has consumed $1,233 of the $1,360 of inventory that was
contributed by us and has yet to consume $127. ULA has made advance payments of $1,380 to us and
we have recorded revenues and cost of sales of $1,049 under the inventory supply agreement through
December 31, 2013.
We agreed to indemnify ULA against potential losses that ULA may incur in the event ULA is unable to
obtain certain additional contract pricing from the U.S. Air Force (USAF) for four satellite missions. We
believe ULA is entitled to additional contract pricing. In December 2008, ULA submitted a claim to the
USAF to re-price the contract value for two satellite missions. In March 2009, the USAF issued a denial
of that claim. In June 2009, ULA filed a notice of appeal, and in October 2009, ULA filed a complaint before
the Armed Services Board of Contract Appeals (ASBCA) for a contract adjustment for the price of the two
satellite missions. In September 2009, the USAF exercised its option for a third satellite mission. During
the third quarter of 2010, ULA submitted a claim to the USAF to re-price the contract value of the third
mission. The USAF did not exercise an option for a fourth mission prior to the expiration. In March 2011,
ULA filed a notice of appeal before the ASBCA, seeking to re-price the third mission. The hearing before
the ASBCA concluded on December 20, 2013 and a post-trial briefing is expected by May 2014. If ULA is
unsuccessful in obtaining additional pricing, we may be responsible for a portion of the shortfall and may
record up to $278 in pre-tax losses associated with the three missions, representing up to $261 for
the indemnification payment and up to $17 for our portion of additional contract losses incurred by ULA.