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United States
Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

ý Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

        For the fiscal year ended December 31, 2002

OR

o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

        For the transition period from              to             

        Commission File Number 0-10795

BOEING CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)

500 Naches Ave., SW, 3rd Floor • Renton, Washington 98055
(Address of principal executive offices)

(425) 393-2914
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common stock, par value $100 per share

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

        No Common Stock is held by non-affiliates of the registrant.

        Common shares outstanding at February 27, 2003: 50,000 shares

        Registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format.

Table of Contents

*

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

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Part I

Item 1. Business

GENERAL

        Boeing Capital Corporation (together with its subsidiaries, the "Company") is an indirect wholly owned subsidiary of The Boeing Company ("Boeing"). The Company was incorporated in Delaware in 1968 and provides equipment financing and leasing arrangements to a diversified range of customers and industries. The Company's primary operations at December 31, 2002 included two principal financial reporting segments: Aircraft Financial Services and Commercial Financial Services. Currently, Aircraft Financial Services is active in providing lease and debt financing to domestic and international airlines. Commercial Financial Services provides lease and loan financing to a broad range of commercial and industrial customers. The Company also assists Boeing in arranging and structuring transactions to meet the financing needs of its commercial aircraft and space and defense customers. The principal executive offices of the Company are located in Renton, Washington.

        The Company's portfolio consists of financing leases, notes and other receivables, equipment under operating leases (net of accumulated depreciation), investments and equipment held for sale or re-lease (net of accumulated depreciation).

        The Company attempts to fund its business such that scheduled receipts from the portfolio will generally correspond to its expenses and debt payments as they become due. The Company satisfies a significant portion of its cash requirements from diversified global funding sources and is not dependent on any one lender. The Company increased the diversification of its borrowing this year by adding retail and foreign medium-term note programs and securitizations as funding sources. The Company plans to finance future activities through internally generated funds, issuance of debt and commercial paper and securitization programs. The Company believes it has adequate liquidity and access to the capital markets to allow the Company to fulfill its commitments.

        Information on the Company's principal segments is included in the following tables:

New Business Volume⁽¹⁾

⁽¹⁾

Excludes transfers from Boeing, unless new financing occurred in current year.

Portfolio Balances

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        Other is comprised of Space and Defense Financial Services, which provides lease and loan financing and advisory services for military-related products and commercial space systems.

        The following table summarizes the net change in total Company portfolio over the last three years:

⁽¹⁾

Excluding $359.5 million in 2001, which was accounted for as new business volume.

Impact of Boeing's Customer Financing Consolidation

        In 2000, Boeing began consolidating all of Boeing's aircraft customer financing portfolio into the Company. The financing portfolio consisted of lease and loan agreements and the related receivables and assets.

        During the first quarter of 2000, the Company acquired certain tangible assets and assumed certain liabilities of Boeing and certain subsidiaries of Boeing, pursuant to a Term Sheet dated as of January 1, 2000, as well as the various definitive asset transfer agreements dated as of March 31, 2000 (collectively referred to as the "Transfer Agreements"). Under the terms of the Transfer Agreements, the Company acquired, effective as of January 1, 2000, a significant portion of Boeing's aircraft customer financing portfolio, including lease and loan agreements and the related receivables and assets (the "Portfolio"). This transfer was not accounted for as new business volume. The purchase price was paid in the form of promissory notes, dated January 1, 2000, in the aggregate principal amount of $1,261.9 million, together with an equity contribution to the Company of $50.1 million. The Company recorded an intercompany receivable for $17.3 million from Boeing in consideration for which the Company assumed Boeing's deferred taxes with respect to the Portfolio. The promissory notes were paid in full during the third quarter of 2000.

        During 2001, the Company acquired certain tangible assets and liabilities of Boeing and certain subsidiaries of Boeing. The net assets transferred were $780.1 million, with equity contributions of $375.1 million. Of the transfers, $359.5 million was accounted for as new business volume, representing new financing in 2001.

        During 2002, the Company acquired certain tangible assets and liabilities of Boeing and certain subsidiaries of Boeing. The net assets transferred were $380.6 million, with equity contributions of $194.9 million. These transfers were not treated as new business volume as they did not represent new financing in 2002.

AIRCRAFT FINANCIAL SERVICES SEGMENT

        Aircraft Financial Services, primarily located at the Company's headquarters in Renton, Washington, provides financing to buy or lease commercial jet airplanes and represented 77.5% of the Company's total portfolio at December 31, 2002. Services provided by Aircraft Financial Services extend to new and used Boeing and non-Boeing airplanes. Aircraft Financial Services assists Boeing commercial aircraft customers in arranging financing. This segment also operates in four international offices: Stockholm, Sweden; Brussels, Belgium; Dublin, Ireland; and Hong Kong, China. The Company's strategy is to generate and participate in finance transactions in which the Company's

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transaction structuring and financial expertise can provide satisfactory returns on its invested capital and to assist in arranging financing for Boeing's customers. Aircraft Financial Services also invests in used aircraft for lease to commercial airlines where such investments can be structured to provide a satisfactory return on invested capital. The Aircraft Financial Services portfolio also includes investments in pass-through certificates, such as Enhanced Equipment Trust Certificates ("EETCs"). These investments principally relate to subordinated tranches of the pass-through arrangements.

Current Commercial Aircraft Market Conditions

        The airline industry has been impacted by the worldwide economic downturn that began in 2000 and is continuing. In addition, the industry suffered a tremendous shock from the terrorist attacks on September 11, 2001, especially the major U.S. domestic airlines. Air travel volume in most regions of the world has not recovered to 2000 levels and passenger revenue yields remain depressed, which have negatively impacted profitability of the industry, especially full service domestic carriers. Additional costs related to strengthening airline security in the aftermath of September 11, 2001 have also impacted domestic airline profitability. European full service airlines are performing somewhat better, while Asian carriers are clearly the strongest. Most low cost carriers are financially healthier than their full service counterparts.

        The domestic airline industry lost an estimated $11.0 billion during 2002. Two major domestic carriers, U.S. Airways and United Airlines, declared bankruptcy. Most other major airlines are also restructuring by reducing flights, parking aircraft, and implementing cost savings initiatives, including attempting to renegotiate current labor contracts and lease and financing agreements, in an attempt to generate acceptable profit margins.

        Airline industry conditions directly impact the Company in terms of the number of new aircraft deliveries and financing opportunities, the ability of existing customers to meet current payment obligations, and the value of aircraft in its portfolio. In addition, traditional financing sources such as EETCs and leveraged leases may not be available to airlines in the near term, potentially increasing the necessity of the Company to finance aircraft deliveries to airlines that are unable to otherwise obtain financing. The Company attempts to mitigate the increased credit risk on such lender of last resort financing by reducing the amount financed on an individual aircraft, adjusting payment profiles, cross-collateralizing to other transactions and/or utilizing other risk mitigation techniques.

        The continuing decline in the credit condition of airline customers, the decline in the value of aircraft collateral, and depressed lease rates were primarily responsible for the Company recognizing non-cash charges in 2002 to strengthen its allowance for losses on receivables and recognize impairments on certain assets. Any additional impacts may be dependent upon the duration of the current economic and airline industry decline, or any significant defaults, repossessions or restructuring at a time when depressed aircraft values and lease rates make it difficult to sell or redeploy such aircraft.

        A war with Iraq would likely cause a further reduction in airline traffic. The impact of such a conflict on the airline industry would likely depend upon its duration; a prolonged conflict in the region could materially impact the already weak demand for air travel and could also increase the price of jet fuel. Likewise, air travel demand may also be negatively impacted by additional terrorist threats or attacks.

        Aircraft owned or financed by the Company may become significantly less valuable due to the discontinuation of existing aircraft models or the introduction of new aircraft models that may be more economical to operate, the aging of particular aircraft or technological obsolescence.

        For a discussion of specific customers within the Aircraft Financial Services portfolio, see "Significant Concentrations and Restructurings."

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Factors Affecting Aircraft Financial Services Volume

        At December 31, 2002, the Aircraft Financial Services segment had commitments to provide leasing and other financing related to commercial aircraft totaling $479.5 million. Of the $479.5 million of commercial aircraft commitments, up to $179.5 million may be funded in less than one year and an additional $300.0 million may be funded in one to three years. Additionally, Boeing and Boeing Capital Services Corporation (see "Relationship with Boeing and Boeing Capital Services Corporation") had unfunded commercial aircraft financing commitments of $2,898.0 million at December 31, 2002. The Company anticipates that not all these commitments will be utilized based on its historical experience. However, if all commitments were to be funded, up to $1,428.0 million may be funded in less than one year, an additional $1,449.0 million may be funded in one to three years and an additional $21.0 million may be funded after five years. It is expected that the Company will ultimately fund a portion of such commitments. Certain of those funded may be subject to receiving such credit enhancements or other guarantee support from Boeing as the Company may require in order to meet its underwriting and investment criteria.

        The Company generally enters into agreements or commitments to purchase commercial aircraft only when such aircraft are subject to a signed lease contract or signed commitment letter from an airline.

        The following table lists information on new business volume⁽¹⁾ by product type for the Company's Aircraft Financial Services segment:

⁽¹⁾

Excludes transfers from Boeing, unless new financing occurred in current year.

Aircraft Financial Services Portfolio

        The Aircraft Financial Services portfolio consisted of the following aircraft types⁽¹⁾ at December 31:

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⁽¹⁾

Excludes executive aircraft of $949.5 million, $865.8 million and $507.5 million at December 31, 2002, 2001 and 2000, respectively, which are included in the Commercial Financial Services portfolio.

⁽²⁾

Includes owned aircraft and aircraft collateralizing receivables, some of which are subordinated.

⁽³⁾

Out of production, but currently supported by Boeing with respect to parts and other services.

⁽⁴⁾

Some of these aircraft are out of production, but are supported by the manufacturer or other third party part and service providers.

⁽⁵⁾

Represents aircraft collateralizing EETCs, equipment trust certificates ("ETCs") and other trust-related interests and other investments held by the Company.

⁽⁶⁾

Investments are supported by asset pools secured by various commercial aircraft types.

⁽⁷⁾

Represents investments in mandatorily redeemable preferred stock, common stock and bonds.

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        At December 31, 2002, the Company owned 317 commercial aircraft and had partial ownership or security interest in an additional 223 aircraft, including those owned in joint ventures, EETC and other investment transactions.

        At December 31, 2002, $8,106.9 million (94.3%) of the Aircraft Financial Services portfolio, excluding investments, was collateralized by Boeing products.

        At December 31, 2002, the Aircraft Financial Services portfolio (excluding investments) was comprised of the following aircraft vintages:

Aircraft Financial Services Portfolio by Product Type and Location

Aircraft Financial Services Guarantees

        At December 31, 2002, the Company was the beneficiary under $2,662.6 million of guarantees with respect to the Aircraft Financial Services portfolio relating to transactions totaling $4,135.8 million. Any

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guarantee calls by the Company would be net of realization of underlying residual values, partial rent payments, re-lease rental payments or other mitigating value received.

        The guarantees in favor of the Company are both full and partial in nature and include, but are not limited to, residual value guarantees, first loss deficiency guarantees and rental guarantees. Residual value guarantees provide a specified asset value at the end of a lease agreement in the event of a decline in market value of the financed aircraft. First loss deficiency guarantees cover a specified portion of the Company's losses on aircraft financed by the Company in the event of a loss upon disposition of the aircraft following a default by the lessee. Rental guarantees are whole or partial guarantees covering the Company against the lessee's failure to pay rent under the lease agreement or the Company's ability to re-lease these aircraft at or above a specified rent level.

        The following table summarizes such guarantees:

⁽¹⁾

Excludes guarantees made by entities affiliated with the primary obligor.

        Guarantee amounts by aircraft type at December 31, 2002 are summarized as follows:

        During the year ended December 31, 2002, the Company recognized income of $60.1 million under these guarantees, all of which were from Boeing. Additionally, as provided for under the terms of the intercompany guarantee agreements, Boeing recorded charges of $226.0 million for the year ended December 31, 2002, related to asset impairments and adjustments to its allowance for losses on receivables in the Company's portfolio.

Significant Concentrations and Restructurings

        A substantial portion of the Company's total portfolio is concentrated among the Aircraft Financial Services customers. Four of the Aircraft Financial Services customers each accounted for more than 5.0% of the total Company portfolio at December 31, 2002.

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        The following table includes the five largest Aircraft Financial Services customers at December 31, 2002, with their related portfolio balances at December 31, 2001: