As of December 31, 2002 and 2001, installment receivables due under U.S. Government and commercial contracts totaled $295 and $185, respectively.

As of December 31, 2002 and 2001, other accounts receivable included $474 and $450 of reinsurance receivables relating to Astro Ltd., a wholly-owned subsidiary of the Company, that operates as a captive insurance company. Currently, Astro Ltd. insures aviation liability, workers compensation, general liability, property, as well as various other smaller risk liability insurances.

Note 9 – Inventories

Inventories at December 31 consisted of the following:

Inventory production costs incurred on in-process and delivered units in excess of the estimated average cost of such units determined as described in Note 1 represent deferred production costs. As of December 31, 2002 and 2001, there were no significant excess deferred production costs or unamortized tooling costs not recoverable from existing firm orders for the 737 Next-Generation and 777 programs.

The unamortized tooling and deferred production costs included in inventory at December 31 are summarized in the following table:

As of December 31, 2002 and 2001, the balance of deferred production costs and unamortized tooling related to the 717, 747, 757 and 767 programs was insignificant.

As of December 31, 2002 and 2001, the Commercial Airplanes segment inventory had a small quantity of airplanes that were completed but unsold. As of December 31, 2002 and 2001, these aircraft were valued at $246 and $183.

During the years ended December 31, 2002 and 2001, the Company purchased $508 and $524, respectively, of used aircraft. Used aircraft in inventory totaled $506 and $316 as of December 31, 2002 and 2001, respectively.

Inventory balances included $233 subject to claims or other uncertainties primarily relating to the A-12 program as of December 31, 2002 and 2001. See Note 23.

Note 10 – Customer and Commercial Financing

Aircraft financing and commercial equipment financing operating lease equipment is recorded at cost and depreciated over its useful life, primarily on a straight-line basis, to an estimated salvage value.

Commercial equipment consists of executive aircraft, machine tools and production equipment, containers and marine equipment, chemical, oil and gas equipment and other equipment, which the Company believes has adequate collateral value.

Customer and commercial financing at December 31 consisted of the following:

Interest rates on fixed-rate notes ranged from 5.99% to 14.68%, and effective interest rates on variable-rate notes ranged from 2.40% to 7.42%.

The change in the valuation allowance for the years ended December 31, 2002 and 2001, consisted of the following:

During the years ended December 31, 2002 and 2001, $39 and $42 were recorded to increase the valuation allowance due to the normal growth of the customer financing portfolio. However, during the year ended December 31, 2002, an additional pre-tax expense of $180 was recorded to increase the valuation allowance due to deteriorated airline credit ratings and depressed aircraft values based on the Company’s quarterly assessments of the adequacy of customer financing reserves.

The valuation allowance includes amounts recorded either as specific impairment allowances on receivables or general valuation allowances. As of December 31, 2002 and 2001, carrying amounts of impaired receivables were $1,367 and $195, respectively. Specific impairment allowances for losses of $50 and $11 were allocated to $146 and $55 of impaired receivables as of December 31, 2002 and 2001, respectively. Remaining allowance balances of $292 and $131 were recorded as general valuation allowances as of December 31, 2002 and 2001, respectively. Remaining allowance balances of $292 and $131 were recorded as general valuation allowances as of December 31, 2002 and 2001, respectively.