Boeing 2015 Annual Report Download - page 90
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74
Operating lease equipment primarily includes large commercial jet aircraft and regional jet aircraft. At
December 31, 2015 and 2014, operating lease equipment included $49 and $48 available for sale or re-
lease. At December 31, 2015 and 2014, we had firm lease commitments for $15 and $0 of this equipment.
Financing receivable balances evaluated for impairment at December 31 were as follows:
2015 2014
Individually evaluated for impairment $86 $86
Collectively evaluated for impairment 1,790 1,819
Total financing receivables $1,876 $1,905
We determine a receivable is impaired when, based on current information and events, it is probable that
we will be unable to collect amounts due according to the original contractual terms. As of December 31,
2015 and 2014, we had no material receivables that were greater than 30 days past due and we had no
impaired customer financing receivables during 2015 and 2014.
Income recognition is generally suspended for financing receivables at the date full recovery of income
and principal becomes not probable. Income is recognized when financing receivables become
contractually current and performance is demonstrated by the customer. For the year ended December
31, 2013, interest income recognized on such receivables was $30, and the average recorded investment
in impaired financing receivables was $376.
The change in the allowance for losses on financing receivables for the years ended December 31, 2015,
2014 and 2013, consisted of the following:
2015 2014 2013
Beginning balance - January 1 ($21) ($49) ($60)
Customer financing valuation benefit 528 11
Ending balance - December 31 ($16) ($21) ($49)
Collectively evaluated for impairment ($16) ($21) ($49)
The adequacy of the allowance for losses is assessed quarterly. Three primary factors influencing the level
of our allowance for losses on customer financing receivables are customer credit ratings, default rates
and collateral values. We assign internal credit ratings for all customers and determine the creditworthiness
of each customer based upon publicly available information and information obtained directly from our
customers. Our rating categories are comparable to those used by the major credit rating agencies.
Our financing receivable balances at December 31 by internal credit rating category are shown below:
Rating categories 2015 2014
BBB $973 $1,055
BB 536
B258 633
CCC 23 131
Other 86 86
Total carrying value of financing receivables $1,876 $1,905
At December 31, 2015, our allowance related to receivables with ratings of B, BB and BBB. We applied
default rates that averaged 16%, 10% and 2% to the exposure associated with those receivables.