Boeing Reports First-Quarter Earnings

    Table 6.  Boeing Capital Corporation Operating Results

                                       First
                                      Quarter
                                      --------
    (Millions)                       2009 2008   Change
    ----------                       ---- ----   ------

    Revenues                         $163 $185    (12%)

    Earnings from Operations          $37  $61    (39%)

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 $23 million in the first quarter, reduced from $50 million of expense in the same period last year.

Unallocated expense was $115 million, up from $55 million in the same quarter last year driven by higher intersegment eliminations.

Total pension expense for the quarter increased to $219 million, up from $191 million in the same period last year. A total of $242 million was allocated to the operating segments in the quarter (up from $124 million in the same period last year), partially offset by a $23 million contribution to earnings in unallocated items.

Outlook

The 2009 financial guidance reflects challenging commercial and defense markets, as well as company plans to reduce discretionary spending and restructure various internal organizations to drive higher levels of productivity. The company expects to issue 2010 financial guidance later in the year.

Boeing's 2009 revenue guidance is reaffirmed at $68 billion to $69 billion. Earnings-per-share guidance for 2009 is reduced to $4.70 to $5.00 per share from $5.05 to $5.35 per share due to lower earnings at Commercial Airplanes (Table 7). Operating cash flow is still expected to be greater than $2.5 billion, including discretionary pension contributions of approximately $0.5 billion and an assumption of $1 billion for new commercial airplane financings.

Commercial Airplanes' 2009 delivery guidance remains at between 480 and 485 airplanes and is sold out. BCA's 2009 revenue is unchanged between $34 billion and $35 billion. BCA's operating margin is now expected to be between 8 percent and 8.5 percent, down from approximately 10 percent, due to the effect of lower twin-aisle deliveries in future periods and lower forecasted delivery price escalation in future periods.

Earlier this month, the U.S. Department of Defense outlined its 2010 budget priorities. Boeing will be evaluating the defense budget as it progresses through Congress to determine the potential future effects on our business outlook. The company has been anticipating changes in the U.S. defense budget for some time. The company continues to consider IDS well-positioned with a diverse portfolio of defense, space and security programs, and will increase its focus on international defense opportunities and pursuit of adjacent markets in the U.S. IDS guidance for 2009 remains unchanged with revenue between $33 billion and $34 billion and operating margins of approximately 10 percent.

Boeing Capital Corporation continues to expect that the aircraft finance portfolio will increase modestly as the amount of aircraft financing in 2009 will exceed normal portfolio runoff due to customer payments and depreciation.

Boeing's 2009 R&D forecast is between $3.6 billion and $3.8 billion. Annual capital expenditures are expected to be approximately $1.4 billion in 2009. The company's non-cash pension expense is now expected to be approximately $0.9 billion in 2009.

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

    The Boeing Company
      Revenues                           $68 - $69
      Earnings Per Share (GAAP)        $4.70 - $5.00
      Operating Cash Flow(1)               > $2.5

    Boeing Commercial Airplanes
      Deliveries                         480 - 485
      Revenues                           $34 - $35
      Operating Margin                    8% - 8.5%

    Integrated Defense Systems
      Revenues
        Boeing Military Aircraft          ~ $14.0
        Network & Space Systems           ~ $11.5
        Global Services & Support          ~ $8.0
                                           ------
      Total IDS Revenues                 $33 - $34

      Operating Margin
        Boeing Military Aircraft              ~10%
        Network & Space Systems                ~9%
        Global Services & Support           ~11.5%
                                             -----
      Total IDS Operating Margin              ~10%

    Boeing Capital Corporation
      Portfolio Size                  Modest increase
      Revenue                              ~ $0.6
      Return on Assets                       >1.0%

    Research & Development               $3.6 - $3.8
    Capital Expenditures                   ~ $1.4
    --------------------                             ------
        (1)  After  pension  contributions  of  $0.5  billion  and
                assumed  $1  billion  for  new  aircraft  financings  in
                2009.

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