Boeing 2015 Annual Report Download - page 100

Download and view the complete annual report

Please find page 100 of the 2015 Boeing annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

84
indemnification payment up to $261 and may record up to $277 in pre-tax losses associated with the three
missions.
Potential payments for Other Delta contracts include $85 related to deferred support costs and $91 related
to deferred production costs. In June 2011, the Defense Contract Management Agency (DCMA) notified
ULA that it had determined that $271 of deferred support costs are not recoverable under government
contracts. In December 2011, the DCMA notified ULA of the potential non-recoverability of an additional
$114 of deferred production costs. ULA and Boeing believe that all costs are recoverable and in November
2011, ULA filed a certified claim with the USAF for collection of deferred support and production costs.
The USAF issued a final decision denying ULA’s certified claim in May 2012. On June 14, 2012, Boeing
and ULA filed a suit in the Court of Federal Claims seeking recovery of the deferred support and production
costs from the U.S. government. On November 9, 2012, the U.S. government filed an answer to our claim
and asserted a counterclaim for credits that it alleges were offset by deferred support cost invoices. We
believe that the U.S. government’s counterclaim is without merit, and have filed an answer challenging it
on multiple grounds. The litigation is in the discovery phase and the Court has not yet set a trial date. If,
contrary to our belief, it is determined that some or all of the deferred support or production costs are not
recoverable, we could be required to record pre-tax losses and make indemnification payments to ULA
for up to $317 of the costs questioned by the DCMA.
Other Indemnifications In conjunction with our sales of Electron Dynamic Devices, Inc. and Rocketdyne
Propulsion and Power businesses and our Commercial Airplanes facilities in Wichita, Kansas and Tulsa
and McAlester, Oklahoma, we agreed to indemnify, for an indefinite period, the buyers for costs relating
to pre-closing environmental conditions and certain other items. We are unable to assess the potential
number of future claims that may be asserted under these indemnifications, nor the amounts thereof (if
any). As a result, we cannot estimate the maximum potential amount of future payments under these
indemnities and therefore, no liability has been recorded. To the extent that claims have been made under
these indemnities and/or are probable and reasonably estimable, liabilities associated with these
indemnities are included in the environmental liability disclosure in Note 11.
Credit Guarantees We have issued credit guarantees, principally to facilitate the sale and/or financing of
commercial aircraft. Under these arrangements, we are obligated to make payments to a guaranteed party
in the event that lease or loan payments are not made by the original lessee or debtor or certain specified
services are not performed. A substantial portion of these guarantees has been extended on behalf of
original lessees or debtors with less than investment-grade credit. Our commercial aircraft credit guarantees
are collateralized by the underlying commercial aircraft and certain other assets. Current outstanding credit
guarantees expire within the next five years.
Industrial Revenue Bonds
Industrial Revenue Bonds (IRB) issued by the City of Wichita and St. Louis County were used to finance
the purchase and/or construction of real and personal property at our Wichita and St. Louis sites. Tax
benefits associated with IRBs include a ten-year property tax abatement and a sales tax exemption from
the Kansas Department of Revenue, and a twelve-year property tax abatement and sales tax exemption
from St. Louis County. We record these properties on our Consolidated Statements of Financial Position,
along with capital lease obligations to repay the proceeds of the IRBs. We have also purchased the IRBs
and therefore are the bondholders as well as the borrower/lessee of the properties purchased with the
IRB proceeds.
The capital lease obligations and IRB assets are recorded net in the Consolidated Statements of Financial
Position. As of December 31, 2015 and 2014, the assets and liabilities associated with the City of Wichita
and St. Louis County IRBs were $584 and $638.