Boeing 2014 Annual Report Download - page 49

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37
Results of Operations
(Dollars in millions)
Years ended December 31, 2014 2013 2012
Revenues $416 $408 $468
Earnings from operations $92 $107 $88
Operating margins 22% 26% 19%
Revenues
BCC segment revenues consist principally of lease income from equipment under operating lease, interest
income from financing receivables and notes, and other income. BCC’s revenues in 2014 increased by
$8 million compared with 2013 primarily due to higher aircraft return condition payments of $60 million,
partially offset by a decrease in finance lease income and lower interest income. BCC’s revenues in 2013
decreased by $60 million compared with 2012 primarily due to lower other income driven by lower aircraft
return condition payments and operating lease income.
Earnings From Operations
BCC’s earnings from operations are presented net of interest expense, provision for (recovery of) losses,
asset impairment expense, depreciation on leased equipment and other operating expenses. Earnings
from operations in 2014 decreased by $15 million compared with 2013 due to $60 million increase in asset
impairment expense, partially offset by a reduction in the provision for losses on receivables, driven by a
change to a customer credit rating recorded in the first quarter of 2014, in addition to lower depreciation
and interest expense. 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.
Financial Position
The following table presents selected financial data for BCC as of December 31:
(Dollars in millions) 2014 2013
Customer financing and investment portfolio, net $3,493 $3,883
Other assets, primarily cash and short-term investments 615 505
Total assets $4,108 $4,388
Other liabilities, primarily deferred income taxes $1,212 $1,296
Debt, including intercompany loans 2,412 2,577
Equity 484 515
Total liabilities and equity $4,108 $4,388
Debt-to-equity ratio 5.0-to-1 5.0-to-1
BCC’s customer financing and investment portfolio at December 31, 2014 decreased from December 31,
2013 primarily due to portfolio run-off, partially offset by the origination of notes receivable and equipment
under operating lease totaling $489 million. At December 31, 2014 and 2013, BCC had $48 million and
$83 million of assets that were held for sale or re-lease. Additionally, aircraft subject to leases with a carrying
value of approximately $183 million are scheduled to be returned off lease during 2015. We are seeking
to remarket these aircraft or have the leases extended.