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Severe Weather Event
12 Months Ended
Dec. 31, 2012
Impact From Severe Weather Event [Abstract]  
Severe Weather Event [Text Block]

4. Impact from Severe Weather Event

 

On April 14, 2012, during a severe weather event, the Company's Wichita, Kansas facility, which includes its headquarters and manufacturing facilities for all Boeing models as well as operations for maintenance, repair and overhaul support and services (MRO), was hit by a tornado which caused significant damage to many buildings, disrupted utilities and resulted in complete suspension of production for eight days. The Company's work-in-process and production equipment generally remained intact, and the Company resumed production on April 23, 2012, although some inefficiencies continued thereafter as a result of the damage and repair efforts.

 

As of December 31, 2012, the Company had received a total of $234.9 in insurance payments based on estimated losses incurred as a result of the April 14, 2012 tornado. In accordance with its credit agreement, the Company provided a certificate to its lenders indicating that all net proceeds received in connection with the destruction caused by the April 14th tornado would be used for repair, replacement or restoration at the Wichita facility.

On October 19, 2012, the Company reached an agreement with its insurers on a final settlement for all claims relating to the April 14, 2012 severe weather event. Under the terms of this settlement the insurers agreed to pay to the Company $234.9 (including payments previously made) to resolve all property damage, clean-up and recovery costs related to the severe weather event as well as all expenses incurred to make up for the interruption of production and to reduce further disruptions. Under the settlement agreement, the Company assumes all further risk involving the severe weather event on April 14, 2012.

 

For the twelve months ended December 31, 2012, the Company recorded a net gain of $146.2 under severe weather event, which represents the settlement amount of $234.9 less cumulative charges of $88.7, which and primarily relates to repair, clean-up, asset impairment and incremental freight, labor and warehousing costs to restore normal operations. Future expenditures for incremental freight, warehousing and other costs will be recorded as incurred. The Company's estimate of these future expenditures is likely to change as the Company evaluates different repair and build-back options.

 

During the twelve months ended December 31, 2012, the Company recorded an impairment charge of $0.2 for certain assets that were destroyed during the severe weather event. Any future impairment charges are expected to be immaterial.