Capital resources The Company has the following Standard & Poor’s credit ratings: short-term, A-1; senior debt, A+. BCC has the following Standard & Poor’s credit ratings: short-term, A-1; senior debt, A+. The Company has the following Moody’s credit ratings: short-term, P-1; senior debt, A2. BCC has the following Moody’s credit ratings: short-term, P-2; senior debt, A3. The Company has the following Fitch’s credit ratings: short-term, F-1; senior debt, A+. BCC has the following Fitch’s credit ratings: short-term, F-1; senior debt, A+.

The events of September 11, 2001, negatively impacted the liquidity and capital resources of the Company. Subsequent to September 11, 2001, the Company established a commercial paper program providing additional short-term liquidity. Commercial paper remains a significant liquidity source.

The Company has debt obligations of $14.4 billion, which are unsecured. Approximately $1.8 billion will mature in 2003, and the balance has an average maturity of 12.4 years. Excluding BCC debt of $9.5 billion and non-recourse debt of $0.6 billion, total debt is at 42% of total shareholders’ equity plus debt. The consolidated debt, including BCC, is at 65% of total shareholders’ equity plus debt. As previously noted, the Company has recognized a significant non-cash charge to equity of $3.6 billion, net of tax. Excluding this item and BCC debt, the consolidated debt was 31% of shareholders’ equity plus debt.

The Company has additional substantial borrowing capability. Currently, the Company has $4.3 billion that remains available from shelf registrations filed with the Securities and Exchange Commission (SEC) and $4.5 billion ($2.0 billion exclusively available for BCC) of unused borrowing on revolving credit line agreements with a group of major banks. See Note 15. The Company believes its internally generated liquidity, together with access to external capital resources, will be sufficient to satisfy existing commitments and plans, and also to provide adequate financial flexibility to take advantage of potential strategic business opportunities should they arise within the next year.

Due to the continuing downturn in the commercial aviation market and the recent airline announcements in the United States that confirm the delayed recovery of airline traffic and profitability, several customers have rescheduled aircraft delivery dates. The rescheduling of delivery dates will reduce aircraft advance payments in the near term. The reduction in advance payments will be offset by reduced inventory spending, resulting in an immaterial impact on the Company’s liquidity.

Off-Balance Sheet Arrangements

The Company is a party to certain off-balance sheet arrangements, as defined by the SEC, including certain guarantees and variable interests in unconsolidated entities.

Guarantees The following tables provide quantitative data regarding the Company’s third-party guarantees. The maximum potential payment amounts represent “worst-case scenarios,” and do not necessarily reflect results expected by the Company. Estimated proceeds from collateral and recourse represent the anticipated values of assets the Company could liquidate or receive from other parties to offset its payments under guarantees. The carrying amount of liabilities recorded on the balance sheet reflects the Company’s best estimate of future payments it may be required to make as part of fulfilling its guarantee obligations. Portions of certain liabilities were established in prior periods as part of the Company’s special charges due to the events of September 11, 2001.

The Company has issued various asset-related guarantees, principally to facilitate the sale of certain commercial aircraft. Under these arrangements, the Company is obligated to make payments to a guaranteed party in the event the related aircraft fair values fall below a specified amount at a future point in time. These obligations are collateralized principally by commercial aircraft. No aircraft have been delivered with these types of guarantees in several years. Recent declines in asset values of commercial aircraft increase the risk of future payment by the Company under these guarantees. During the year ended December 31, 2002, the Company recorded a reduction to expense of $3 million and made net cash payments totaling $138 million related to its asset-related guarantees.

The Company has issued credit guarantees to creditors of the Sea Launch venture, of which the Company is a 40% owner, to assist the venture in obtaining financing. In the event the Company is required to perform on these guarantees, it has the right to recover a portion of the loss from another venture partner, and has collateral rights to certain assets of the venture. In addition, the Company has issued credit guarantees, principally to facilitate the sale of certain commercial aircraft. Under these arrangements, the Company is obligated to make payments to a guaranteed party in the event that lease or loan payments are not made by the original debtor or lessee. The Company’s commercial aircraft credit-related guarantees are collateralized by the underlying commercial aircraft. A substantial portion of these guarantees have been extended on behalf of original debtors or lessees with less than investment-grade credit. Recent financial weakness in certain airlines further exposes the Company to loss under its credit guarantees. During the year ended December 31, 2002, the Company recorded no expenses and made net cash payments totaling $9 million related to its credit guarantees.