Table 6. Boeing Capital Corporation Operating Results
                          2nd Quarter                 First Half
    (Millions)          2008      2007   Change    2008      2007   Change
    Revenues            $179      $209   (14%)     $364      $422   (14%)
    Pre-Tax Income       $45       $70   (36%)     $106      $143   (26%)

Additional Information

The "Other" segment consists primarily of Boeing Engineering, Operations and Technology as well as certain results related to the consolidation of all business units. Other segment expense was $135 million in the second quarter, up from $66 million in the same period last year due to the increased aircraft financing reserves noted above.

Unallocated expense was $77 million, down from $313 million last year. Share-based plans expense was $118 million lower due to acceleration of expense in the year-ago quarter. Deferred compensation expense was $73 million lower due to changes in Boeing stock price and broad stock market conditions. Unallocated pension expense was lower by $65 million.

Total pension expense was $216 million, down from $251 million in the same quarter last year, of which $76 million was recorded in unallocated expense and the balance was recorded as expense in the business segments.

Outlook

The financial guidance issued in April is unchanged, other than an adjustment between IDS segment margins that is referenced below. The guidance reflects expectations for strong business performance in BCA and IDS, increasing commercial airplane deliveries, decreasing investment in new airplane development, and company-wide productivity gains.

Boeing's 2008 revenue guidance is $67 billion to $68 billion. For 2009, the company expects revenues between $72 billion and $73 billion. Earnings-per-share guidance for 2008 is reaffirmed at $5.70 to $5.85 per share while EPS guidance for 2009 remains at $6.80 to $7.00 per share. For 2008 operating cash flow is expected to be greater than $2.5 billion, increasing to more than $6 billion in 2009.

Commercial Airplanes' 2008 delivery guidance remains between 475 and 480 airplanes and is sold out. BCA revenue guidance for 2008 remains $34.5 billion to $35 billion, and operating margin guidance is approximately 11.5 percent, as the mix and expense timing issues experienced in the second quarter are addressed in the second half of the year. In 2009 BCA expects to deliver between 500 and 505 commercial airplanes -- including approximately 25 Dreamliners -- and is essentially sold out. BCA's 2009 revenue is expected to grow to between $37 billion and $38 billion, accompanied by margins of approximately 11.5 percent. Boeing also expects to deliver more airplanes in 2010 than in 2009.

IDS revenue guidance for 2008 is $32 billion to $33 billion. Expected operating margins for IDS remain unchanged at approximately 10.5 percent, although the segment margins within IDS have been adjusted for 2008. For 2009, IDS expects revenue to grow to between $33.5 billion and $34.5 billion, with operating margins exceeding 10.5 percent.

Boeing's 2008 R&D forecast is between $3.6 billion and $3.8 billion. R&D spending in 2009 is expected to decline to between $3.1 billion and $3.3 billion. Annual capital expenditures are expected to be approximately $1.8 billion in 2008 and approximately $1.7 billion in 2009.

The company's non-cash pension expense is expected to be approximately $0.8 billion for 2008, falling to approximately $0.5 billion in 2009, although it may vary due to discount rates and investment returns. Discretionary cash funding of Boeing's pension plans is expected to be approximately $0.5 billion in 2008 (contributed during the first quarter) and 2009, although the company will continue to evaluate making additional discretionary contributions to its pension plans.

     Table 7.  Financial Outlook
    (Billions, except per share data)             2008             2009

    The Boeing Company
      Revenues                                  $67 - $68        $72 - $73
      Earnings Per Share (GAAP)               $5.70 - $5.85    $6.80 - $7.00
      Operating Cash Flow(1)                     > $2.5            > $6

    Boeing Commercial Airplanes
      Deliveries                                475 - 480        500 - 505
      Revenues                                 $34.5 - $35       $37 - $38
      Operating Margin                           ~ 11.5%          ~ 11.5%

    Integrated Defense Systems
      Revenues
        Precision Engagement & Mobility Systems  ~ $13.5      Moderate Growth
        Network & Space Systems                   ~ $12       Moderate Growth
        Support Systems                           ~ $7        Moderate Growth
      Total IDS Revenues                        $32 - $33      $33.5 - $34.5

      Operating Margin
        Precision Engagement & Mobility Systems  ~ 10.5%     Low Double Digit
        Network & Space Systems                   ~ 9%       High Single Digit
        Support Systems                           ~ 13%      Low Double Digit
      Total IDS Operating Margin                 ~ 10.5%          > 10.5%

    Boeing Capital Corporation
      Portfolio Size                              Lower            Lower
           Revenue                                                                        ~  $0.7                      ~  $0.6
            Return  on  Assets                                                      ~  1.5%                      ~  1.5%

        Research  &  Development                                          $3.6  -  $3.8            $3.1  -  $3.3
        Capital  Expenditures                                                  ~  $1.8                      ~  $1.7

          (1)    After  pension  contributions  of  $0.5  billion  in  the  first  quarter  of
                    2008  and  $0.5  billion  forecast  in  2009.