Boeing Reports First-Quarter Earnings

Non-GAAP Measure Disclosure

Management believes that the non-GAAP (Generally Accepted Accounting Principles) measures (indicated by an asterisk *) used in this report provide investors with important perspectives into the company's ongoing business performance. The company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently. The following definitions are provided:

Free Cash Flow

Free cash flow is defined as GAAP operating cash flow less capital expenditures for property, plant and equipment additions. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow internally to assess both business performance and overall liquidity. Table 2 provides a reconciliation between GAAP operating cash flow and free cash flow.

Forward-Looking Information Is Subject to Risk and Uncertainty

Certain statements in this report may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "intends," "plans," "projects," "believes," "estimates," "targets," and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based upon assumptions about future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak to events only as of the date they are made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. Specific factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, those set forth below and other important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission: the effect of economic conditions in the United States and globally; the impact on our accounts receivable, customer financing portfolios and allowance for losses of customer defaults and changes in customer credit ratings, credit default rates and collateral values; the impact on our revenues and operating results of changes to indices included in indexed price escalation clauses included in our contracts with commercial airplane and defense customers; the successful execution of our Commercial Airplanes and Integrated Defense Systems backlog; the effects of customers cancelling, modifying and/or rescheduling contractual orders; the timing and effects of any decisions to increase or decrease the rate of commercial airplane production; the timing and effects of decisions to complete or launch a Commercial Airplanes program; the ability to successfully develop and timely produce the 787 and 747-8 aircraft; the ability of our suppliers and, as applicable, subcontractors to successfully and timely perform their obligations; the effect on our revenues of political and legal processes; changing defense priorities; and associated budget reductions by U.S. and international government customers affecting Boeing defense programs; our relationship with our union-represented workforce and the negotiation of collective bargaining agreements; the continuation of long-term trends in passenger and cargo traffic and revenue yields in the airline industry; the impact of volatile fuel prices and the airline industry's response; the effect of declines in aircraft valuation; the impact on our revenues or operating results of airline bankruptcies; the extent to which we are called upon to fund outstanding financing commitments or satisfy other financing requests, and our ability to satisfy those requirements; the continuation of historical costs for fleet support services; the receipt of estimated award and incentive fees on U.S. government contracts; the future demand for commercial satellites and projections of future order flow; the potential for technical or quality issues on development programs, including the Airborne Early Warning and Control program, International KC-767 Tanker, other fixed-price development programs, or commercial satellite programs, to affect schedule and cost estimates, or cause us to incur a material charge or experience a termination for default; the outcome of any litigation and/or government investigation in which we are a party, and other contingencies; returns on pension fund assets, impacts of future interest rate changes on pension obligations and rising healthcare costs; our ability to access external capital resources to fund our operations; the amounts and effects of underinsured operations, including satellite launches; and the scope, nature or impact of acquisition or disposition activity and investment in any joint ventures/strategic alliances, including Sea Launch and United Launch Alliance, and indemnifications related thereto.


    CONTACT:
    Investor Relations:    Diana Sands or Rob Young (312) 544-2140
    Communications:        Todd Blecher (312) 544-2002



                       The Boeing Company and Subsidiaries
                    Consolidated Statements of Operations
                                  (Unaudited)
                                                        Three months
                                                            ended
                                                          March 31
      (Dollars in millions except per share data)       2009     2008
      -------------------------------------------       ----     ----
      Sales of products                               $13,835  $13,688
      Sales of services                                 2,667    2,302
      -----------------                                 -----    -----
      Total revenues                                   16,502   15,990

      Cost of products                                (11,579) (10,788)
      Cost of services                                 (2,119)  (1,755)
      Boeing Capital Corporation interest expense         (47)     (62)
      -------------------------------------------         ---      ---
      Total costs and expenses                                                (13,745)  (12,605)
            ------------------------                                                -------    -------
                                                                                                                2,757        3,385
            Income  from  operating  investments,  net                              32              58
            General  and  administrative  expense                                  (791)        (775)
            Research  and  development  expense,  net                            (970)        (869)
            Loss  on  dispositions/business  shutdown,  net                    (3)
            -------------------------------------------                    --        -----
            Earnings  from  operations                                                    1,025        1,799
            Other  (loss)/income,  net                                                        (36)          100
            Interest  and  debt  expense                                                      (57)          (46)
            -------------------------                                                      ---            ---
            Earnings  before  income  taxes                                                932        1,853
            Income  tax  expense                                                                  (317)        (647)
            ------------------                                                                  ----          ----
            Net  earnings  from  continuing  operations                          615        1,206
            Net  (loss)/gain  on  disposal  of  discontinued
              operations,  net  of  taxes  of  $3  and  ($3)                          (5)              5
            -------------------------------------------                    --                -
            Net  earnings                                                                              $610      $1,211
            ============                                                                              ====      ======

            Basic  earnings  per  share  from  continuing
              operations                                                                              $0.88        $1.63
            Net  (loss)/gain  on  disposal  of  discontinued
              operations,  net  of  taxes                                                  (0.01)        0.01
            -------------------------------------------              -----          ----
            Basic  earnings  per  share                                                    $0.87        $1.64
            ========================                                                    =====        =====

            Diluted  earnings  per  share  from  continuing
              operations                                                                              $0.87        $1.61
            Net  (loss)/gain  on  disposal  of  discontinued
              operations,  net  of  taxes                                                  (0.01)        0.01
            -------------------------------------------              -----          ----
            Diluted  earnings  per  share                                                $0.86        $1.62
            ==========================                                                =====        =====
            Cash  dividends  paid  per  share                                          $0.42        $0.40
            =============================                                          =====        =====
            Weighted  average  diluted  shares  (millions)                707.4        747.4
            ==========================================                =====        =====



                                            The  Boeing  Company  and  Subsidiaries
                                  Consolidated  Statements  of  Financial  Position
                                                                    (Unaudited)

                                                                                                        March  31      December  31
            (Dollars  in  millions  except  per  share  data)          2009                  2008
            -------------------------------------------          ----                  ----
            Assets
            Cash  and  cash  equivalents                                          $4,237              $3,268
            Short-term  investments                                                      213                      11
            Accounts  receivable,  net                                              6,238                5,602
            Current  portion  of  customer
              financing,  net                                                                    353                    425
            Deferred  income  taxes                                                    1,114                1,046
            Inventories,  net  of  advances  and  progress
              billings                                                                          15,649              15,612
            -----------------------------------------          ------              ------
                            Total  current  assets                                    27,804              25,964
            Customer  financing,  net                                                5,854                5,857
            Property,  plant  and  equipment,  net  of
              accumulated  depreciation  of  $12,402  and
              $12,280
                                                                                                          8,798                8,762
            Goodwill                                                                              3,654                3,647
            Other  acquired  intangibles,  net                                2,627                2,685
            Deferred  income  taxes                                                    3,880                4,114
            Investments                                                                        1,261                1,328
            Pension  plan  assets,  net                                                    12                      16
            Other  assets,  net  of  accumulated
              amortization  of  $437  and  $400                                  1,450                1,406
            --------------------------------                              -----                -----
                                                                                                      $55,340            $53,779
            =====================================                =======            =======
            Liabilities  and  Shareholders'  Equity
            Accounts  payable  and  other  liabilities              $17,553            $17,435
            Advances  and  billings  in  excess  of
              related  costs                                                                11,527              12,737
            Income  taxes  payable                                                          355                      41
            Short-term  debt  and  current  portion  of
              long-term  debt                                                                    530                    560
            --------------------------------------                      ---                    ---
                            Total  current  liabilities                          29,965              30,773
            Deferred  income  taxes
            Accrued  retiree  health  care                                        7,336                7,322
            Accrued  pension  plan  liability,  net                        8,484                8,383
            Non-current  income  taxes  payable                              1,035                1,154
            Other  long-term  liabilities                                            287                    337
            Long-term  debt                                                                  8,742                6,952
            Shareholders'  equity:
                    Common  shares,  par  value  $5.00  -
                      1,200,000,000  shares  authorized;
                      1,012,261,159  and  1,012,261,159
                      shares  issued                                                          5,061                5,061
                    Additional  paid-in  capital                                  3,289                3,456
                    Treasury  shares,  at  cost  -
                      286,098,252  and  285,661,944                          (17,756)          (17,758)
                    Retained  earnings                                                  23,284              22,675
                    Accumulated  other  comprehensive  loss          (13,511)          (13,525)
                    ShareValue  Trust  shares  -    28,861,019
                      and  28,460,769                                                      (1,029)            (1,203)
                    -------------------------------------          ------              ------
                    Total  Boeing  shareholders'  equity                      (662)            (1,294)
            Noncontrolling  interest                                                    153                    152
            -----------------------                                                    ---                    ---
                    Total  shareholders'  equity                                    (509)            (1,142)
            ---------------------------------                              ----              ------
                                                                                                      $55,340            $53,779
                                                                                                      =======            =======



                                              The  Boeing  Company  and  Subsidiaries
                                            Consolidated  Statements  of  Cash  Flows
                                                                      (Unaudited)

                                                                                                                          Three  months
                                                                                                                                  ended
                                                                                                                              March  31
            (Dollars  in  millions)                                                                      2009        2008
            ---------------------                                                                      ----        ----
            Cash  flows  -  operating  activities:
                    Net  earnings                                                                                $610    $1,211
                    Adjustments  to  reconcile  net  earnings  to
                      net  cash  provided  by  operating
                      activities:
                        Non-cash  items  -
                            Share-based  plans  expense                                                  60            45
                            Depreciation                                                                          335          322
                            Amortization  of  other  acquired
                              intangibles                                                                            49            40
                            Amortization  of  debt  discount/premium  and
                              issuance  costs                                                                        2              2
                            Investment/asset  impairment
                              charges,  net                                                                          21
                            Customer  financing  valuation
                              provision/(benefit)                                                              9            (6)
                            Loss/(gain)  on  disposal  of
                              discontinued  operations                                                      8            (8)
                            Loss  on  dispositions/business
                              shutdown,  net                                                                          3
                            Other  charges  and  credits,  net                                        63            56
                            Excess  tax  benefits  from  share-based
                              payment  arrangements                                                          (5)        (43)
                          Changes  in  assets  and  liabilities  -
                            Accounts  receivable                                                          (869)        197
                            Inventories,  net  of  advances  and
                              progress  billings                                                              (82)      (604)
                            Accounts  payable  and  other
                              liabilities                                                                          475          628
                            Advances  and  billings  in  excess  of
                              related  costs                                                                (1,210)        113
                            Income  taxes  receivable,  payable  and
                              deferred                                                                                534          502
                            Other  long-term  liabilities                                            (51)      (127)
                            Pension  and  other
                              postretirement  plans                                                        304        (419)
                            Customer  financing,  net                                                      21            72
                            Other                                                                                        (84)        (48)
            ----------------------------------------------                      ---          ---
                                    Net  cash  provided  by  operating
                                      activities                                                                    193      1,933
            ----------------------------------------------                      ---      -----
            Cash  flows  -  investing  activities:
                    Property,  plant  and  equipment  additions                          (442)      (409)
                    Property,  plant  and  equipment  reductions                            25              9
                    Acquisitions,  net  of  cash  acquired                                      (30)        (40)
                    Contributions  to  investments                                                (200)  (2,958)
                    Proceeds  from  investments                                                          49      3,630
                    Other                                                                                                                (95)
            ----------------------------------------------                    ----          ---
                                    Net  cash  (used)/provided  by
                                      investing  activities                                              (598)        137
            -------------------------------------------                          ----          ---
            Cash  flows  -  financing  activities:
                    New  borrowings                                                                          1,827              5
                    Debt  repayments                                                                            (71)        (32)
                    Stock  options  exercised,  other                                                                15
                    Excess  tax  benefits  from  share-based
                      payment  arrangements                                                                    5            43
                    Employee  taxes  on  certain  share-based
                      payment  arrangements                                                                (15)
                    Common  shares  repurchased                                                        (50)  (1,158)
                    Dividends  paid                                                                            (305)      (306)
            ----------------------------------------------                    ----        ----
                                    Net  cash  provided/(used)  by
                                      financing  activities                                            1,391    (1,433)
            ----------------------------------------------                  -----    ------
            Effect  of  exchange  rate  changes  on  cash  and
              cash  equivalents                                                                                (17)          28
            ----------------------------------------------                      ---            --
            Net  increase  in  cash  and  cash  equivalents                                969          665
            Cash  and  cash  equivalents  at  beginning  of  year                  3,268      7,042
            ----------------------------------------------                  -----      -----
            Cash  and  cash  equivalents  at  end  of  period                        $4,237    $7,707
            ==============================================                ======    ======



                                          The  Boeing  Company  and  Subsidiaries
                                            Summary  of  Business  Segment  Data
                                                                  (Unaudited)

                                                                                                                Three  months
                                                                                                                      ended
                                                                                                                    March  31
            (Dollars  in  millions)                                                          2009          2008
            ---------------------                                                          ----          ----
            Revenues:
                  Commercial  Airplanes                                                  $8,554      $8,161
                  Integrated  Defense  Systems:
                        Boeing  Military  Aircraft                                      3,010        3,202
                        Network  and  Space  Systems                                    2,678        2,694
                        Global  Services  and  Support                                2,032        1,679
            ---------------------------------                                -----        -----
                  Total  Integrated  Defense  Systems                            7,720        7,575
                  Boeing  Capital  Corporation                                            163            185
                  Other                                                                                        39              75
                Unallocated  items  and  eliminations                                26              (6)
                ----------------------------------                                --              --
                  Total  revenues                                                            $16,502    $15,990
            =================                                                            =======    =======

            Earnings  from  operations:
                  Commercial  Airplanes                                                      $417          $983
                  Integrated  Defense  Systems:
                        Boeing  Military  Aircraft                                          282            384
                        Network  and  Space  Systems                                        207            267
                        Global  Services  and  Support                                    220            209
            ---------------------------------                                    ---            ---
                  Total  Integrated  Defense  Systems                                709            860
                  Boeing  Capital  Corporation                                              37              61
                  Other                                                                                      (23)          (50)
                Unallocated  items  and  eliminations                            (115)          (55)
                ----------------------------------                            ----            ---
                  Earnings  from  operations                                            1,025        1,799
                Other  (loss)/income,  net                                                  (36)          100
                  Interest  and  debt  expense                                              (57)          (46)
            ----------------------------                                              ---            ---
                  Earnings  before  income  taxes                                        932        1,853
                  Income  tax  expense                                                          (317)        (647)
            ---------------------                                                          ----          ----
                  Net  earnings  from  continuing  operations                  615        1,206
                Net  (loss)/gain  on  disposal  of  discontinued
                  operations,  net  of  taxes  of  $3  and  ($3)                    (5)              5
                -------------------------------------------              --                -
                  Net  earnings                                                                        610        1,211
            ===============                                                                        ===        =====

            Research  and  development  expense:
                  Commercial  Airplanes                                                      $711          $633
                  Integrated  Defense  Systems:
                        Boeing  Military  Aircraft                                          130            125
                        Network  and  Space  Systems                                          86              76
                        Global  Services  and  Support                                      34              34
            ---------------------------------                                      --              --
                  Total  Integrated  Defense  Systems                                250            235
                  Other                                                                                          9                1
            --------                                                                                          -                -
                  Total  research  and  development  expense                  $970          $869
            =========================================                  ====          ====

            Unallocated  items  and  eliminations:
                  Share-based  plans                                                            $(57)        $(30)
                  Deferred  compensation                                                        23              61
                  Pension                                                                                    23            (67)
                  Postretirement                                                                    (23)          (20)
                  Capitalized  interest                                                        (15)          (13)
                  Other                                                                                      (66)            14
            --------                                                                                      ---              --
            Total                                                                                        $(115)        $(55)
            =====                                                                                        =====          ====



                                    The  Boeing  Company  and  Subsidiaries
                                          Operating  and  Financial  Data
                                                            (Unaudited)

                                                                                              Three  months  ended
        Deliveries                                                                            March  31
        ----------                                                                            --------
        Commercial  Airplanes                                                    2009                2008
        --------------------                                                    ----                ----
                  737  Next-Generation                                                91                    87
                  747                                                                                4                      4
                  767                                                                                3                      3
                  777                                                                                23                    21
                  ---                                                                                --                    --
                  Total                                                                          121                  115
        =========                                                                            ===                  ===


        --------------------------
        Integrated  Defense  Systems
        --------------------------
        Boeing  Military  Aircraft
                  F/A-18  Models                                                            10                    10
                  F-15                                                                                4                      4
                  C-17  Globemaster                                                        3                      3
                  KC-767  Tanker                                                              1                      2
                  CH-47  Chinook                                                                                      2
                  T-45TS  Goshawk                                                            2                      1
                  AH-64  Apache                                                                5

        Network  and  Space  Systems
                  Commercial  and  Civil  Satellites                                                  1
                  Military  Satellites                                                  1


                                                                                            March  31  December  31
        Contractual  backlog  (Dollars  in  billions)          2009                2008
        -----------------------------------------          ----                ----
                Commercial  Airplanes                                        $266.0            $278.6
              Integrated  Defense  Systems:
                  Boeing  Military  Aircraft                                  28.2                25.7
                  Network  and  Space  Systems                                  8.9                  8.9
                  Global  Services  and  Support                            11.6                10.7
        --------------------------------                            ----                ----
              Total  Integrated  Defense  Systems                      48.7                45.3
        -----------------------------------                      ----                ----
        Total  contractual  backlog                                      $314.7            $323.9
        =========================                                      ======            ======
        Unobligated  backlog                                                    $24.7              $28.2
        ===================                                                    =====              =====
        Total  backlog                                                              $339.4            $352.1
        =============                                                              ======            ======
        Workforce                                                                    160,900          162,200
        =========                                                                    =======          =======



 

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