Boeing

Boeing Reports Record Revenues, Earnings, Cash Flow & Backlog for 2007
- 2007 revenues rose 8 percent to $66.4 billion
- Full-year net income increased 84 percent to $4.1 billion while EPS grew to $5.28 per share, driving cash flow to $9.6 billion
- Fourth-quarter EPS grew to $1.36 per share on revenue of $17.5 billion
- Backlog reached a record $327 billion
- 2008 EPS guidance raised to between $5.70 and $5.85 per share
PRNewswire-FirstCall
CHICAGO
(NYSE:BA)

CHICAGO, Jan. 30 /PRNewswire-FirstCall/ -- The Boeing Company's (NYSE: BA) 2007 net income increased 84 percent to a record $4.1 billion, or $5.28 per share, up from $2.2 billion, or $2.85 per share, in 2006 on higher commercial airplane deliveries, strong growth in defense earnings, companywide productivity improvements, and certain charges recorded in 2006 (Table 1). Revenue rose 8 percent to a record $66.4 billion, while the operating margin expanded to 8.8 percent driven by double-digit margins in its commercial airplanes and defense businesses.

Fourth-quarter revenue held at $17.5 billion while the operating margin increased to 8.7 percent driven by margin expansion in its core businesses. Operating earnings grew 32 percent, while earnings per share increased 5 percent to $1.36 per share affected by a higher effective tax rate.

Boeing raised its 2008 earnings per share guidance to between $5.70 and $5.85, as productivity gains are being realized ahead of earlier plans.

"Our 2007 results demonstrate the kind of quality financial performance we can achieve through our simultaneous focus on growth and productivity," said Chairman, President and Chief Executive Officer Jim McNerney. "We added substantial backlog, made major efficiency gains, and executed well on our production and services programs. Despite some development program challenges, we are a strong company growing stronger, and we expect continued improvement in our financial results in 2008 and beyond."

Full-year operating cash flow grew 28 percent to a record $9.6 billion, reflecting strong operating earnings, higher commercial airplane orders, and a decrease in working capital requirements. Free cash flow* increased 35 percent to a record $7.9 billion (Table 2). Total company backlog at year-end reached a record $327 billion, up 31 percent in the last twelve months driven by commercial airplane orders and defense program wins.

  Table 2.  Cash Flow
                                          4th Quarter        Full Year
  (Millions)                              2007    2006     2007     2006

  Operating Cash Flow (1)                $1,893  $2,441   $9,584   $7,499
     Less Additions to Property, Plant
      & Equipment                         ($449)  ($588) ($1,731) ($1,681)
  Free Cash Flow*                        $1,444  $1,853   $7,853   $5,818

  (1) Operating cash flow includes $580 pension plans contribution in
      full-year 2007 and $522 in full-year 2006.

Cash and investments in marketable securities totaled $12.1 billion at year-end, up 30 percent from the same period last year and down slightly from the end of the third quarter (Table 3). During the fourth quarter, the company increased its share repurchase authorization by $7 billion and spent $890 million for 9.4 million shares. Share repurchases for the year totaled $2.8 billion for 29.0 million shares. Also in the fourth quarter, the company increased its dividend by 14 percent. Consolidated debt decreased 5 percent as Boeing Capital Corporation repaid maturing debt.

  Table 3.  Cash, Marketable Securities and Debt Balances
                                                         Quarter-End
  (Billions)                                        4Q07              3Q07
  Cash                                              $7.0              $8.9
  Marketable Securities (1)                         $5.1              $3.3
     Total                                         $12.1             $12.2

  Debt Balances:
  The Boeing Company                                $3.9              $3.9
  Boeing Capital Corporation                        $4.3              $4.7
     Total Consolidated Debt                        $8.2              $8.6

  (1) Marketable securities consists primarily of investments in
      high-quality fixed-income and asset-backed securities classified as
      "short-term investments" and "investments."  At December 31, 2007, it
      also includes time deposits of $1.0 billion and commercial paper of
      $0.8 billion classified as "short-term investments."



  Segment Results

  Commercial Airplanes

Boeing Commercial Airplanes (BCA) fourth-quarter revenues increased 17 percent to $8.9 billion on a 9 percent increase in deliveries, to 112 airplanes, and higher commercial aviation services revenue (Table 4). Operating earnings grew 46 percent to $973 million on favorable product mix, and operating margins expanded to 11.0 percent. Margins in the latest quarter primarily reflect higher operating leverage and expanding productivity.

  Table 4. Commercial Airplanes Operating Results

  (Millions, except
   deliveries & margin     4th Quarter                 Full Year
   percent)                2007    2006     Change   2007     2006    Change

  Commercial Airplanes
   Deliveries               112     103       9%      441      398      11%

  Revenues               $8,866  $7,606      17%  $33,386  $28,465      17%
  Earnings from
   Operations              $973    $665      46%   $3,584   $2,733      31%

  Operating Margins       11.0%    8.7%  2.3 Pts    10.7%     9.6%  1.1 Pts

For the full year, BCA revenues rose 17 percent to $33.4 billion on an 11 percent increase in airplane deliveries and higher services volume. Operating earnings grew 31 percent to $3.6 billion while margins expanded to 10.7 percent, driven by higher delivery volume and services sales, partially offset by increased R&D spending.

BCA booked 520 gross orders during the quarter and a record 1,423 during the year. Contractual backlog rose to a record $255 billion, increasing 46 percent in 2007 to more than seven times BCA's annual revenues.

Progress on the new 787 Dreamliner continues on the revised schedule announced earlier this month. Boeing continues to address challenges associated with assembly of the first airplanes, including start-up issues in our factory and in our extended global supply chain. The company expects the first flight to occur around the end of the second quarter of 2008 with first delivery in early 2009. The program won a record 369 787 orders in 2007, bringing total firm orders since launch to 857 airplanes from 56 customers.

Integrated Defense Systems

Boeing Integrated Defense Systems (IDS) expanded operating margins more than 100 basis points to 11.7 percent in the fourth-quarter on revenue of $8.4 billion. Revenues declined from the same period last year driven by timing of aircraft deliveries and the December 2006 formation of the United Launch Alliance (ULA) joint venture.

For the full year, IDS grew operating earnings by 13 percent to $3.4 billion and expanded operating margins to 10.7 percent on revenues of $32.1 billion. IDS results reflect strong execution in all segments and extensive productivity improvements. During the year, IDS won nine out of eleven significant competitions, demonstrating the value its defense products provide to customers worldwide.

  Table 5.  Integrated Defense Systems Operating Results

  (Millions, except       4th Quarter                 Full Year
   margin percent)        2007    2006     Change   2007     2006     Change

  Revenues
     Precision Engagement
      & Mobility Systems $3,622  $4,259     (15%) $13,685  $14,107      (3%)
     Network & Space
      Systems            $2,891  $3,414     (15%) $11,696  $11,941      (2%)
     Support Systems     $1,857  $2,014      (8%)  $6,699   $6,391       5%
  Total IDS Revenues     $8,370  $9,687     (14%) $32,080  $32,439      (1%)

  Earnings (Loss) from
   Operations
     Precision Engagement
      & Mobility Systems   $397    $293      35%   $1,629   $1,208      35%
     Network & Space
      Systems              $295    $467     (37%)    $891     $952      (6%)
     Support Systems       $286    $267       7%     $920     $872       6%
  Total IDS Earnings
   from Operations         $978  $1,027      (5%)  $3,440   $3,032      13%

  Operating Margins       11.7%   10.6%  1.1 Pts    10.7%     9.3%  1.4 Pts

Precision Engagement & Mobility Systems expanded fourth-quarter operating margin to 11.0 percent on lower revenue of $3.6 billion. Margin results were driven by strong execution across aircraft production programs, including EA-18G and C-17. The change in revenues reflects lower aircraft deliveries compared to the year-ago period.

Network & Space Systems achieved significant milestones on several key programs. Operating margin expanded to 10.2 percent in the quarter driven by strong performance across the segment's broad array of programs, including Future Combat Systems and Ground-based Midcourse Defense, which captured 100 percent of award fees. Revenues fell to $2.9 billion on the removal of ULA-reported revenue.

Support Systems again generated strong profits on its broad portfolio of services and logistics programs. Operating margin grew to 15.4 percent on solid program execution and contract mix, while revenues for the quarter fell to $1.9 billion on lower volume and timing of aircraft modifications,

IDS' backlog at quarter-end grew to $71.7 billion reflecting new orders that exceeded current-period revenues. Significant new orders in the quarter include the Tracking & Data Relay Satellites, Singapore F-15SGs and Ares I Instrument Unit Avionics award.

Boeing Capital Corporation

Boeing Capital Corporation (BCC) reported fourth-quarter pre-tax earnings of $30 million compared to $37 million in the same period last year which included a larger portfolio (Table 6). BCC's portfolio balance at the end of the quarter was $6.5 billion, down from $8.0 billion at the beginning of the year primarily on normal portfolio run-off, customer prepayments and depreciation. BCC contributed $92 million in cash dividends to the company during the quarter and $408 million in 2007. BCC's debt-to-equity ratio remained steady at 5.0-to-1.

  Table 6.  Boeing Capital Corporation Operating Results

                              4th Quarter               Full Year
  (Millions)                2007      2006   Change   2007     2006   Change

  Revenues                  $196      $241   (19%)    $815   $1,025   (20%)

  Pre-Tax Income             $30       $37   (19%)    $234     $291   (20%)



  Additional Information

The "Other" segment consists primarily of Boeing Engineering, Operations and Technology and the Connexion business (which was exited at the end of 2006), as well as certain results related to the consolidation of all business units. Other segment expense was $165 million in the fourth quarter, up from $93 million of expense in the same period last year due to higher environmental remediation expenses.

Unallocated share-based-plans expense was $6 million, down from $140 million in the same period last year due to changes in the company's long-term compensation plans implemented in 2006. Reversal of deferred compensation expense recorded earlier in the year contributed $66 million to earnings due to a lower share price and broad stock market conditions. Pension expense for the quarter rose $80 million to $301 million, of which $141 million was recorded in unallocated expense, and the balance was recorded as expense at BCA and IDS. At year-end, Boeing's pension plans were more than fully funded at 110 percent of the projected benefit obligation.

Outlook

The company's financial guidance summarized in Table 7 reflects strong business performance forecasts at IDS and BCA, increasing commercial airplane deliveries, continued investment in new airplane development and company-wide productivity gains. As previously disclosed, Boeing will provide complete financial guidance for 2009 when the company issues its first-quarter 2008 earnings report in late April, which will follow the assessment of the impact of the previously announced 787 schedule changes.

Boeing's 2008 revenue guidance is now between $67 billion and $68 billion, down from between $67.5 billion and $68.5 billion due to the 787 delay. Earnings-per-share guidance for 2008 is raised to $5.70 to $5.85 per share, from $5.55 to $5.75 per share, as productivity gains are being realized ahead of earlier plans. Operating cash flow guidance for 2008 is reduced to greater than $2.5 billion reflecting the 787 schedule, from greater than $3 billion.

For 2009, the outlook for the company's defense business and in-production commercial airplane programs remains very strong. As a result, the company continues to expect strong earnings per share growth in 2009.

Commercial Airplanes now expects to deliver between 475 and 480 airplanes in 2008 and is sold out, down slightly from 480 to 490 airplanes to reflect the rescheduling of initial 787 deliveries into 2009. BCA revenue guidance for 2008 is now $34.5 billion to $35 billion, down from $35 billion to $36 billion, and operating margin guidance is increased to approximately 11.5 percent from approximately 11 percent as productivity gains are being realized ahead of earlier plans.

IDS revenue guidance for 2008 is unchanged at $32 billion to $33 billion. Guidance for 2008 IDS operating margin is unchanged at approximately 10.5 percent.

Boeing's total R&D forecast for 2008 is unchanged at between $3.2 billion and $3.4 billion, a decline of approximately 14 percent from the 2007 level. Annual capital expenditures are expected to be approximately $1.8 billion in 2008.

The company's non-cash pension expense is expected to be approximately $0.8 billion for 2008. Discretionary funding of Boeing's pension plans in 2008 is expected to be approximately $500 million.

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

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

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

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

    Operating Margin
      Precision Engagement & Mobility Systems      ~ 11%
      Network & Space Systems                       ~ 9%
      Support Systems                             ~ 12.5%
    Total IDS Operating Margin                    ~ 10.5%

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

  Research & Development                        $3.2 - $3.4
  Capital Expenditures                            ~ $1.8

  (1) After forecast pension contributions of $0.5 billion in 2008.



  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:

Adjusted Earnings per Share

Adjusted earnings per share is defined as GAAP diluted earnings per share adjusted for certain significant charges or credits. Management believes adjusted earnings per share is important to understanding the company's on-going operations and provide additional insights into underlying business performance. Significant charges or credits are described in the attachments to this release which provide reconciliations between GAAP earnings per share and adjusted earnings per share.

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 constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "intends," "plans," "projects," "believes," "estimates," and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements in this press release include, among others, statements regarding future results as a result of our growth and productivity initiatives, our 2007 and 2008 financial outlook and the benefits of the IDS structure. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were 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. Our actual results and future trends may differ materially depending on a variety of factors, including the continued operation, viability and growth of major airline customers and non-airline customers (such as the U.S. Government); adverse developments in the value of collateral securing customer and other financings; the occurrence of any significant collective bargaining labor dispute; our successful execution of internal performance plans including our companywide growth and productivity initiatives, production rate increases and decreases (including any reduction in or termination of an aircraft product), availability of raw materials, acquisition and divestiture plans, and other cost-reduction and productivity efforts; charges from any future SFAS No. 142 review; ability to meet development, production and certification schedules for the 787 program and the ability to meet scheduled deliveries of the 787 airplane; technical or quality issues in development programs (affecting schedule and cost estimates) or in the satellite industry; an adverse development in rating agency credit ratings or assessments; the actual outcomes of certain pending sales campaigns and U.S. and foreign government procurement activities, including the uncertainty associated with the procurement of tankers by the U.S. Department of Defense (DoD) and funding of the C-17 program; the cyclical nature of some of our businesses; unanticipated financial market changes which may impact pension plan assumptions; domestic and international competition in the defense, space and commercial areas; continued integration of acquired businesses; performance issues with key suppliers, subcontractors and customers; significant disruption to air travel worldwide (including future terrorist attacks); global trade policies; worldwide political stability; domestic and international economic conditions; price escalation; the outcome of political and legal processes, changing priorities or reductions in the U.S. Government or foreign government defense and space budgets; termination of government or commercial contracts due to unilateral government or customer action or failure to perform; legal, financial and governmental risks related to international transactions; legal and investigatory proceedings; tax settlements with the IRS and various states; U.S. Air Force review of previously awarded contracts; costs associated with the exit of the Connexion by Boeing business; and other economic, political and technological risks and uncertainties. Additional information regarding these factors is contained in our SEC filings, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2006 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.

                   The Boeing Company and Subsidiaries
                  Consolidated Statements of Operations
                               (Unaudited)

    (Dollars in millions except    Twelve months ended  Three months ended
     per share data)                   December 31          December 31
                                     2007       2006       2007     2006
    Sales of products              $57,049    $52,644    $14,856  $15,105
    Sales of services                9,338      8,886      2,621    2,436
    Total revenues                  66,387     61,530     17,477   17,541

    Cost of products               (45,375)   (42,490)   (11,904) (12,180)
    Cost of services                (7,732)    (7,594)    (2,346)  (2,185)
    Boeing Capital Corporation
     interest expense                 (295)      (353)       (70)     (86)
    Total costs and expenses       (53,402)   (50,437)   (14,320) (14,451)
                                    12,985     11,093      3,157    3,090
    Income from operating
     investments, net                  188        146         88       51
    General and administrative
     expense                        (3,531)    (4,171)      (796)  (1,094)
    Research and development
     expense, net                   (3,850)    (3,257)      (993)    (937)
    Gain/(loss) on  dispositions/
     business shutdown, net             38       (226)        60       42
    Settlement with U.S. Department
     of Justice, net of accruals
                                                 (571)
    Earnings from operations         5,830      3,014      1,516    1,152
    Other income, net                  484        420        129      124
    Interest and debt expense         (196)      (240)       (57)     (37)
    Earnings before income taxes     6,118      3,194      1,588    1,239
    Income tax expense              (2,060)      (988)      (561)    (259)
    Net earnings from continuing
     operations                      4,058      2,206      1,027      980
    Net gain on disposal of
     discontinued operations,
     net of taxes of $9, $5, $3
     and $5                             16          9          6        9
    Net earnings                    $4,074     $2,215     $1,033     $989

    Basic earnings per share
     from continuing operations      $5.36      $2.88      $1.38    $1.29
    Net gain on disposal of
     discontinued operations,
     net of taxes                     0.02       0.01       0.01     0.01
    Basic earnings per share         $5.38      $2.89      $1.39    $1.30

    Diluted earnings per share
     from continuing operations      $5.26      $2.84      $1.35    $1.28
    Net gain on disposal of
     discontinued operations,
     net of taxes                     0.02       0.01       0.01     0.01
    Diluted earnings per share       $5.28      $2.85      $1.36    $1.29

    Cash dividends paid per share    $1.40      $1.20      $0.35    $0.30
    Weighted average diluted shares
     (millions)                      772.5      787.6      761.0    782.5

    The numerator used to compute
     diluted earnings per share
     is as follows:
    Net earnings                    $4,074     $2,215     $1,033     $989
    Expense related to diluted
     shares                              2         27                  17
    Total numerator                 $4,076     $2,242     $1,033   $1,006



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


                                               December 31  December 31
    (Dollars in millions except per share data)   2007         2006
    Assets
    Cash and cash equivalents                    $7,042       $6,118
    Short-term investments                        2,266          268
    Accounts receivable, net                      5,740        5,285
    Current portion of customer financing, net      328          370
    Deferred income taxes                         2,107        2,837
    Inventories, net of advances and progress
     billings                                     9,563        8,105
         Total current assets                    27,046       22,983
    Customer financing, net                       6,777        8,520
    Property, plant and equipment, net of
     accumulated depreciation of $11,915
     and $11,635
                                                  8,265        7,675
    Goodwill                                      3,081        3,047
    Other acquired intangibles, net               2,093        1,698
    Deferred income taxes                           217        1,051
    Investments                                   4,111        4,085
    Pension plan assets, net                      5,924        1,806
    Other assets, net of accumulated
     amortization of $385 and $272                1,258          929
                                                $58,772      $51,794
    Liabilities and Shareholders'  Equity
    Accounts payable and other liabilities      $16,676      $16,201
    Advances and billings in excess of
     related costs                               13,847       11,449
    Income taxes payable                            253          670
    Short-term debt and current portion of
     long-term debt                                 762        1,381
        Total current liabilities                31,538       29,701
    Deferred income taxes                           976
    Accrued retiree health care                   7,007        7,671
    Accrued pension plan liability, net           1,155        1,135
    Non-current income taxes payable              1,121
    Other long-term liabilities                     516          391
    Long-term debt                                7,455        8,157
    Shareholders' equity:
      Common shares, par value $5.00 -
       1,200,000,000 shares authorized;
       Shares issued - 1,012,261,159 and
       1,012,261,159                              5,061        5,061
      Additional paid-in capital                  4,757        4,655
      Treasury shares, at cost - 244,217,170
       and 223,522,176                          (14,842)     (12,459)
      Retained earnings                          21,376       18,453
      Accumulated  other comprehensive loss      (4,596)      (8,217)
      ShareValue Trust Shares - 31,362,850 and
       30,903,026                                (2,752)      (2,754)
    Total shareholders' equity                    9,004        4,739
        Total liabilities and shareholders'
         equity                                 $58,772      $51,794



                   The Boeing Company and Subsidiaries
                  Consolidated Statements of Cash Flows
                               (Unaudited)
                                                       Twelve months ended
 (Dollars in millions)                                     December 31
                                                       2007           2006
  Cash flows - operating activities:
    Net earnings                                      $4,074         $2,215
    Adjustments to reconcile net earnings to net
     cash provided by operating activities:
      Non-cash items -
        Share-based plans expense                        287            743
        Depreciation                                   1,334          1,445
        Amortization of other acquired intangibles       152            100
        Amortization of debt discount/premium and
         issuance costs                                   (1)            14
        Pension expense                                1,082            746
        Investment/asset impairment charges, net          51            118
        Customer financing valuation (benefit)/
         provision                                       (60)            32
        Gain on disposal of discontinued operations      (25)           (14)
        Gain on dispositions/business shutdown           (38)           226
        Other charges and credits, net                   197             82
        Excess tax benefits from share-based payment
         arrangements                                   (144)          (395)
      Changes in assets and liabilities -
        Accounts receivable                             (392)          (244)
        Inventories, net of advances and progress
         billings                                     (1,558)           444
        Accounts payable and other liabilities           928           (744)
        Advances and billings in excess of related
         costs                                         2,369          1,739
        Income taxes receivable, payable and deferred  1,290            933
        Other long-term liabilities                       71            (62)
        Pension contributions                           (580)          (522)
        Accrued retiree health care                     (664)           114
        Customer financing, net                        1,458            718
        Other                                           (247)          (189)
          Net cash provided by operating activities    9,584          7,499
    Cash flows - investing activities:
      Property, plant and equipment additions         (1,731)        (1,681)
      Property, plant and equipment reductions            59            225
      Acquisitions, net of cash acquired                 (75)        (1,854)
      Proceeds from dispositions                                        123
      Contributions to investments                    (5,710)        (2,815)
      Proceeds from investments                        3,817          2,850
      Other                                             (182)           (34)
          Net cash used by investing activities       (3,822)        (3,186)
    Cash flows - financing activities:
      New borrowings                                      40              1
      Debt repayments                                 (1,406)        (1,681)
      Stock options exercised, other                     209            294
      Excess tax benefits from share-based payment
       arrangements                                      144            395
      Common shares repurchased                       (2,775)        (1,698)
      Dividends paid                                  (1,096)          (956)
          Net cash used by financing activities       (4,884)        (3,645)
    Effect of exchange rate changes on cash and
     cash equivalents                                     46             38
    Net increase/(decrease) in cash and cash
     equivalents                                         924            706
    Cash and cash equivalents at beginning of year     6,118          5,412
    Cash and cash equivalents at end of period        $7,042         $6,118

    Non-cash investing and financing activities:
      Capital lease obligations incurred                               $357



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

                                  Twelve months ended  Three months ended
  (Dollars in millions)               December 31         December 31
                                     2007      2006      2007      2006
  Revenues:
    Commercial Airplanes           $33,386   $28,465    $8,866   $7,606
    Integrated Defense Systems:
       Precision Engagement and
        Mobility Systems            13,685    14,107     3,622    4,259
       Network and Space Systems    11,696    11,941     2,891    3,414
       Support Systems               6,699     6,391     1,857    2,014
    Total Integrated Defense
     Systems                        32,080    32,439     8,370    9,687
    Boeing Capital Corporation         815     1,025       196      241
    Other                              280       299        62       81
    Accounting differences/
    eliminations                      (174)     (698)      (17)     (74)
       Total revenues              $66,387   $61,530   $17,477  $17,541

  Earnings from operations:
    Commercial Airplanes            $3,584    $2,733      $973     $665
    Integrated Defense Systems:
       Precision Engagement and
        Mobility Systems             1,629     1,208       397      293
       Network and Space Systems       891       952       295      467
       Support Systems                 920       872       286      267
    Total Integrated Defense Systems 3,440     3,032       978    1,027
    Boeing Capital Corporation         234       291        30       37
    Other                             (243)     (738)     (165)     (93)
    Unallocated expense             (1,185)   (1,733)     (300)    (484)
    Settlement with U.S.
     Department of Justice, net
     of accruals                                (571)
  Earnings from operations            5,830    3,014     1,516    1,152
  Other income, net                     484      420       129      124
  Interest and debt expense            (196)    (240)      (57)     (37)
  Earnings before income taxes        6,118    3,194     1,588    1,239
  Income tax expense                 (2,060)    (988)     (561)    (259)
  Net earnings from continuing
   operations                         4,058    2,206     1,027      980
  Net gain on disposal of
   discontinued operations, net
   of taxes of $9, $5, $3 and $5         16        9         6        9
  Net earnings                       $4,074   $2,215    $1,033     $989



  Research and development expense:
    Commercial Airplanes             $2,962   $2,390      $770     $722
    Integrated Defense Systems:
       Precision Engagement and
        Mobility Systems                447      392       109      104
       Network and Space Systems        300      301        69       76
       Support Systems                  104       98        30       26
  Total Integrated Defense Systems      851      791       208      206
  Other                                  37       76        15        9
  Total research and development
   expense                           $3,850   $3,257      $993     $937



                                    Twelve months ended  Three months ended
                                        December 31         December 31
  Unallocated expense                  2007      2006      2007     2006
  Share-based plans                  $(233)    $(680)      $(6)   $(140)
  Deferred compensation                (51)     (211)       66      (80)
  Pension                             (561)     (369)     (141)     (67)
  Post-retirement                     (125)     (103)      (32)     (43)
  Capitalized interest                 (53)      (48)      (17)     (15)
  Other                               (162)     (322)     (170)    (139)
  Total                            $(1,185)  $(1,733)    $(300)   $(484)



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

                               Twelve months ended    Three months ended
  Deliveries                       December 31            December 31
  Commercial Airplanes           2007      2006       2007         2006
    717                                       5(3)
    737 Next-Generation           330       302         80           79
    747                            16        14          4            3
    767                            12        12          3            3
    777                            83        65         25           18
    Total                         441       398        112          103

  Note: Commercial Airplanes deliveries by model include deliveries under
        operating lease, which are identified by parentheses.

  Integrated Defense Systems
  Precision Engagement and
   Mobility Systems
    F/A-18 Models                  44        42         11           10
    T-45TS Goshawk                  9        13          2            2
    F-15E Eagle                    12        12          6            9
    C-17 Globemaster               16        16          4            4
    CH-47 Chinook                  10         2          3            2
    AH-64 Apache                   17        31                      10
    C-40A Clipper                   3         1          1

  Network and Space Systems
    Delta II                        3         2          1            1
    Delta IV                                  3                       1
    Commercial and Civil Satellites 3         4                       1
    Military Satellites             1


  Contractual backlog (Dollars        December 31 September 30 December 31
   in billions)                           2007       2007        2006
    Commercial Airplanes                 $255.2     $224.4       $174.3
    Integrated Defense Systems:
       Precision Engagement and
        Mobility Systems                   23.0       22.1         24.8
       Network and Space Systems            9.2        7.0          7.8
       Support Systems                      9.6        9.4          9.7
    Total Integrated Defense Systems       41.8       38.5         42.3
  Total contractual backlog              $297.0     $262.9       $216.6
  Unobligated backlog                     $30.2      $32.2        $33.7
  Total backlog                          $327.2     $295.1       $250.3
  Workforce                             159,300    158,500      154,000



                   The Boeing Company and Subsidiaries
                   Reconciliation of Non-GAAP Measures
                       Adjusted Earnings Per Share
                               (Unaudited)

  In addition to disclosing results that are determined in accordance with
  U.S. generally accepted accounting principles (GAAP), the company also
  discloses non-GAAP results that exclude certain significant charges or
  credits that are important to an understanding of the company's ongoing
  operations.  The company provides reconciliations of its non-GAAP
  financial reporting to the most comparable GAAP reporting.  The company
  believes that discussion of results excluding certain significant charges
  or credits provides additional insights into underlying business
  performance.  Adjusted earnings per share is not a measure recognized
  under GAAP.  The determination of significant charges or credits may not
  be comparable to similarly titled measures used by other companies and
  may vary from quarter to quarter.


                                                   Three months ended
  Dollars in millions except per share data            December 31
                                                    2007         2006

  GAAP Diluted earnings per share                  $1.36        $1.29

  Business Shutdown/Divestitures                                 0.02 a

  Net gain on Discontinued Operations,
   Net of Taxes                                    (0.01)b      (0.01)b

  Adjusted earnings per share * "Core
   Earnings" per share                             $1.35        $1.30

  Weighted average diluted shares (millions)       761.0        782.5

   a Represents the net earnings per share impact related to exit of the
     Connexion by Boeing business ($40 pre-tax charge) and the EDD
     divestiture which was completed in 2005 ($15 pre-tax benefit). The per
     share amount for the fourth quarter is presented net of income taxes
     at 37.3%

   b Represents an after-tax adjustment to the 2004 sale of assets from
     BCC's Commercial Financial Services to General Electric Capital
     Corporation.



                   The Boeing Company and Subsidiaries
                   Reconciliation of Non-GAAP Measures
                       Adjusted Earnings Per Share
                               (Unaudited)

  In addition to disclosing results that are determined in accordance with
  U.S. generally accepted accounting principles (GAAP), the company also
  discloses non-GAAP results that exclude certain significant charges or
  credits that are important to an understanding of the company's ongoing
  operations.  The company provides reconciliations of its non-GAAP
  financial reporting to the most comparable GAAP reporting.  The company
  believes that discussion of results excluding certain significant charges
  or credits provides additional insights into underlying business
  performance.  Adjusted earnings per share is not a measure recognized
  under GAAP.  The determination of significant charges or credits may not
  be comparable to similarly titled measures used by other companies and
  may vary from quarter to quarter.

                                                   Twelve months ended
  Dollars in millions except per share data            December 31
                                                     2007        2006

  GAAP Diluted earnings per share                   $5.28        $2.85

  Global settlement with U.S. Department
   of Justice                                                     0.75 a

  Business Shutdown/Divestitures                                  0.24 b

  Net gain on Discontinued Operations,
   Net of Taxes                                     (0.02)c      (0.01)c

  Adjusted earnings per share * "Core
   Earnings" per share                              $5.26        $3.83

  Weighted average diluted shares
   (millions)                                       772.5        787.6


   a Represents the net earnings per share impact for the global settlement
     of the Evolved Expendable Launch Vehicle (EELV) and Druyun matters
     with the U.S. Department of Justice ($571 pre-tax charge and reversal
     of a tax benefit of $16, which was recorded on previous accruals of
     $44 at 37.3%).  No tax benefit was recognized relating to global
     settlement.

   b Represents the net earnings per share impact related to exit of the
     Connexion by Boeing business ($320 pre-tax charge) and the EDD
     divestiture which was completed in 2005 ($15 pre-tax benefit). The per
     share amount is presented net of income taxes at 37.3%

   c Represents an after-tax adjustment to the 2004 sale of assets from
     BCC's Commercial Financial Services to General Electric Capital
     Corporation.

SOURCE: The Boeing Company

CONTACT: investor relations, David Dohnalek or Rob Young,
+1-312-544-2140, or communications, Todd Blecher, +1-312-544-2002, all of The
Boeing Company

Web site: http://www.boeing.com/