Customer Financing

12 Months Ended

Dec. 31, 2021

Customer financing primarily relates to our BCC segment. Financing arrangements typically range in terms from 1 to 12 years and may include options to extend or terminate the lease. Certain leases include provisions to allow the lessee to purchase the underlying aircraft at a specified price.

Customer financing consisted of the following at December 31:


	2021	2020
Financing receivables:
Investment in sales-type/finance leases	$944	$919
Notes	412	420
Total financing receivables	1,356	1,339
Less allowance for losses on receivables	(18)	(17)
Financing receivables, net	1,338	1,322
Operating lease equipment, at cost, less accumulated depreciation of $58 and $209	474	715

Total	$1,812	$2,037

The components of investment in sales-type/finance leases at December 31 were as follows:


	2021	2020
Minimum lease payments receivable	$1,099	$756
Estimated residual value of leased assets	110	299
Unearned income	(265)	(136)
Total	$944	$919

At December 31, 2021 and 2020, $378 and $380 were determined to be uncollectible financing receivables and placed on non-accrual status. We recorded no allowance for losses on these uncollectible financing receivables as the collateral values exceeded the carrying values of the receivables. Customer financing interest income received for the years ended December 31, 2021 and 2020 was $18 and $34.

There were no past due customer financing receivables as of December 31, 2021.

Our financing receivable balances at December 31 by internal credit rating category and year of origination consisted of the following:


Rating categories	Current	2020	2019	2018	2017	Prior	Total
BBB						$108	$108
BB	$235	$120	$42	$13		126	536
B	76				$49	142	267
CCC		7	26		235	177	445


Total carrying value of financing receivables	$311	$127	$68	$13	$284	$553	$1,356

At December 31, 2021, our allowance for losses related to receivables with ratings of CCC, B, BB and BBB. We applied default rates that averaged 24.2%, 5.5%, 2.6% and 0.2%, respectively, to the exposure associated with those receivables.

Customer Financing Exposure

The majority of our customer financing portfolio is concentrated in the following aircraft models at December 31:


	2021	2020
717 Aircraft ($62 and $98 accounted for as operating leases)	$603	$637
747-8 Aircraft ($0 and $121 accounted for as operating leases)	435	480
737 Aircraft ($145 and $214 accounted for as operating leases)	163	235
777 Aircraft ($225 and $216 accounted for as operating leases)	233	225
MD-80 Aircraft (Accounted for as sales-type finance leases)	142	167
757 Aircraft ($0 and $4 accounted for as operating leases)	126	147
747-400 Aircraft ($1 and $19 accounted for as operating leases)	50	71

Operating lease equipment primarily includes large commercial jet aircraft.

Impairment charges related to customer financing operating lease assets for the years ended December 31 were as follows:


	2021	2020	2019
Boeing Capital	$23	$32	$53
Other Boeing	8	(8)	217
Total	$31	$24	$270

Lease income recorded in Revenue on the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 included $54 and $57 from sales-type/finance leases, and $68 and $118 from operating leases. Profit at the commencement of sales-type leases was recorded in revenue for the years ended December 31, 2021 and 2020 in the amount of $78 and $26.

As of December 31, 2021, undiscounted cash flows for notes receivable, sales-type/finance and operating leases over the next five years and thereafter are as follows:


	Notes receivable	Sales-type/finance leases	Operating leases
Year 1	$194	$201	$66
Year 2	34	180	55
Year 3	18	171	39
Year 4	19	141	18
Year 5	21	127	15
Thereafter	126	279	37
Total financing receipts	412	1,099	230
Less imputed interest		(265)
Estimated unguaranteed residual values		110
Total	$412	$944	$230

At December 31, 2021 and December 31, 2020, unguaranteed residual values were $110 and $299. Guaranteed residual values at December 31, 2021 were not significant.