Portfolio Quality (Tables)

12 Months Ended

Dec. 31, 2012

Reconciles Activity in Allowance for Losses on Receivables

The following table reconciles the activity in the allowance for losses on receivables at December 31:


	2012			2011			2010
Allowance for losses on receivables at beginning of year	$	53		$	87		$	71
Provision for (recovery of) losses		(7	)		(23	)		16
Write-offs		–			(11	)		(1	)
Recovery of write-offs		–			–			1
Allowance for losses on receivables at end of year	$	46		$	53		$	87

Allowance as a percentage of total receivables		2.0	%		2.3	%		3.8	%

Allowance for losses on receivables collectively evaluated for impairment	$	46		$	53		$	87

Allowance for Losses

The following table details our receivable balance by the internal rating category which was used as a factor in determining our allowance for losses on receivables at December 31:


	2012						2011
Rating categories	Out-of- Production Aircraft		In-Production Aircraft/ Other		Total		Out-of- Production Aircraft		In-Production Aircraft/ Other		Total
BBB	$	1,201	$	–	$	1,201	$	1,316	$	–	$	1,316
BB		–		63		63		–		67		67
B		51		–		51		103		–		103
CCC		174		604		778		194		318		512
D		163		90		253		171		179		350
Total carrying value	$	1,589	$	757	$	2,346	$	1,784	$	564	$	2,348

Impaired Receivables

The following table details our average recorded investment and the related income recognized in the period of impairment on the impaired receivables for the years ended December 31:


2012	Average Carrying Value		Income Recognized
Out-of-production aircraft	$	180	$	6	⁽¹⁾

2011
Out-of-production aircraft	$	198	$	–

2010
Out-of-production aircraft	$	88	$	9	⁽¹⁾

⁽¹⁾

For the year ended December 31, 2012 and 2010, of the income recognized we received in cash $6 and $9.

Non-Performing Assets

Non-performing assets (assets not earning income on an accrual basis) consisted of the following at December 31:


	2012			2011
Assets placed on non-accrual status:
Receivables:
In-production aircraft	$	265		$	–
Out-of-production aircraft		163			171
Equipment under operating leases, net ⁽¹⁾		21			14
Assets held for sale or re-lease, net ⁽¹⁾		119	⁽²⁾		50
	$	568		$	235

Percent of total non-performing assets to total portfolio		14.0	%		5.4	%

⁽¹⁾

At December 31, 2012 and 2011, equipment under operating leases of $166 and $23 are not included in non-performing assets due to intercompany guarantees provided by Boeing. At December 31, 2012 and 2011, assets held for sale or re-lease of $235 and $471 are not included in non-performing assets due to intercompany guarantees provided by Boeing.

⁽²⁾

At December 31, 2012, non-performing assets held for sale or re-lease of $31 had either a purchase or lease commitment.