Boeing Reports Strong First Quarter EPS of $0.89, Excluding Non-Recurring Items; Reaffirms Positive Outlook

First Quarter Highlights:

- Reported net earnings of $762 million, ($0.89 per share diluted)

excluding non-recurring items

- Achieved operating margins of 9.2 percent

- Produced strong free cash flow of $850 million

- Reached agreement with IRS resulting in a one-time R&D tax credit of

$343 million and interest income totaling $210 million

- Delivered 122 commercial jet airplanes

- Completed JSF X-32A flight testing; achieved successful first flight of

STOVL JSF X-32B demonstrator

- Successfully launched 702 series satellite for XM Radio on Sea Launch

- Announced the first Delta IV commercial launch customer

- Definitized agreements to lease four C-17 military airlifters to the UK

- Announced corporate re-architecture to support growth and value

strategies

- Unveiled Boeing's sonic cruiser airplane for the 21st century and

focused the Commercial Airplanes long-range product strategy



Summary Financial Results:

(In millions, except per share data)



1st Quarter



2001 2000* %Change

Revenues $13,293 $9,910 34%



Net earnings $1,237 $418

Non-recurring amounts $475 $59

Earnings w/o non-recurring items $762 $359 112%



Earnings per share (diluted) $1.45 $0.48

Non-recurring items $0.56 $0.07

EPS w/o non-recurring items $0.89 $0.41 117%

Diluted Shares for EPS 852.2 878.0



* Reflects 1Q00 work stoppage impact



Apr 20, 2001, 01:00 ET from The Boeing Company

    SEATTLE, April 20 /PRNewswire Interactive News Release/ --
 The Boeing Company (NYSE:   BA) reported strong financial results for the first
 quarter with net earnings of $762 million or $0.89 per share on
 $13.3 billion of revenue.  These results exclude a $475 million non-recurring
 earnings tax benefit.  Net earnings including the non-recurring tax benefit
 totaled $1,237 million, or $1.45 per share.  Operating earnings and margins
 totaled $1.2 billion and 9.2 percent, respectively.  Total backlog at the end
 of the quarter was up slightly to $153 billion, of which $124 billion is
 contractually committed.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001004/BOEINGLOGO )
     The company generated $850 million of free cash flow (operating cash flow
 less capital expenditures) in the quarter.  Ending cash and short-term
 investment balances were nearly $1.6 billion.  Consolidated debt at the end of
 the period totaled $8.9 billion, of which $4.6 billion is attributable to
 Boeing Capital Corporation.
     General and administrative expenses attributable to deferred stock
 compensation decreased $55 million, resulting in a favorable 0.4 percent
 operating margin impact and $0.04 impact on earnings per share.  This is a
 result of the decrease in Boeing's share price over the quarter.
     Financial results for the quarter reflect continued solid operating
 performance across the company's core businesses.  Overall financial results
 were up significantly versus the first quarter of 2000, which was impacted by
 a 40-day work stoppage by engineers and technicians.  The February 28, 2001
 Puget Sound earthquake did not have a material financial impact.
     During the quarter the company took key actions that reflect its ongoing
 transformation.  On March 21, the company elevated the leaders of its
 three largest businesses to chief executive officers and announced plans for a
 new, leaner and strategically focused world headquarters.  On March 29, Boeing
 Commercial Airplanes unveiled plans to focus its new product development
 efforts on a longer-range sonic cruiser airplane able to fly at
 near-supersonic speeds and having the potential to change the way the world
 flies.
     "We are off to a great start for 2001," said Phil Condit, Boeing chairman
 and chief executive officer.  "I am extremely pleased with our quarterly
 operating results as they reflect our continuing focus on running healthy core
 businesses and achieving strong operating performance.  I am also very
 encouraged by our continuing transformation and the strategic potential
 represented by both the corporate re-architecture and our 'new frontier'
 opportunities.  These activities illustrate our collective determination to
 seize worldwide growth opportunities and generate shareholder value."
 
     Commercial Airplanes:  First quarter Commercial Airplanes segment revenues
 totaled $8.4 billion, up 63 percent compared to the first three months of
 2000, which was impacted by the work stoppage.  Commercial Airplanes delivered
 122 jet airplanes during the quarter compared to 75 during the first quarter
 of 2000.  Segment operating earnings and margins totaled $860 million and
 10.2 percent, respectively, driven by continued operating improvements as well
 as delivery mix.
     During the quarter Commercial Airplanes announced plans to focus its
 product development activities on a faster, longer-range sonic cruiser
 airplane, highlighting Commercial Airplanes' commitment to innovation and
 customer focus.  Commercial Airplanes will team with its customers to ensure
 that the design of the new airplane provides the most value to the industry,
 and initial customer response has been enthusiastic.
     Contractual backlog at the end of the quarter was $88.6 billion.  As
 expected, demand for new airplanes moderated when compared to the strong
 levels experienced in the latter half of 2000.  Commercial Airplanes received
 120 gross orders during the quarter versus 128 in the first quarter of 2000.
 Based on its current assessment that the U.S. economy will experience a
 "soft landing," the Commercial Airplanes delivery outlook is stable.  The 2001
 delivery forecast is nearly sold out, and the 2002 delivery forecast is more
 than 80 percent sold.
 
     Military Aircraft and Missile Systems:  Military Aircraft and Missile
 Systems revenues for first quarter totaled $2.4 billion compared to
 $2.8 billion a year ago.  Revenues decreased primarily as a result of fewer
 F-15, C-17 and F/A-18 deliveries versus first quarter of 2000.  Overall
 operating performance continued to be solid as segment earnings and operating
 margins totaled $246 million and 10.1 percent, respectively, compared to
 $294 million and 10.3 percent during the first quarter of 2000.
     Major events during the quarter included significant progress on the Joint
 Strike Fighter program.  On February 5, the Boeing JSF X-32A concept
 demonstrator completed flight testing after its 66th flight, meeting all
 government test objectives and demonstrating additional capabilities.  On
 March 29, the Boeing JSF X-32B demonstrator successfully completed its first
 flight, entering a four month test program to validate the Boeing approach to
 short-takeoff and vertical landing (STOVL) flight.  Subsequent to the quarter,
 on April 13, the X-32B completed the first STOVL flight of the entire Joint
 Strike Fighter program.
     Contractual backlog at the end of the quarter increased 19 percent to
 $20.4 billion compared to $17.1 billion at the end of 2000.
 
     Space and Communications:  Space and Communications reported first quarter
 revenues of $2.2 billion, up 35 percent compared to the $1.7 billion revenues
 reported for the first three months of 2000.  The increase in revenues
 reflects Space and Communications' growing business base, primarily Boeing
 Satellite Systems.
     First quarter operating earnings totaled $84 million.  Operating margins
 increased slightly to 3.7 percent versus 3.6 percent during the first quarter
 of 2000 as the company continued to invest in developing its Delta IV launch
 vehicle.
     During the quarter operational integration of Boeing Satellite Systems
 (formerly Hughes space and communication businesses) was largely completed.
 Other milestones include the successful completion of extended duration
 testing on the RS-68 engine for the Delta IV, the announcement of the first
 Delta IV commercial launch customer and the successful launch of a Boeing
 Satellite Systems 702 satellite by Sea Launch.
     Contractual backlog at the end of the quarter increased 10 percent to
 $15.1 billion compared to $13.7 billion at the end of 2000.
 
     Financing Segment:  Customer and Commercial Financing, which consists
 primarily of Boeing Capital Corporation, had first quarter revenues totaling
 $206 million on total assets of $7.1 billion.  Operating income, excluding
 interest expense, relating to financing segment activities totaled
 $142 million.  Financing related interest costs totaled $74 million, and
 earnings before income taxes totaled $68 million.  Major events for first
 quarter included a well received $750 million 10-year Boeing Capital
 Corporation bond issue as well as the definitization of lease terms under
 which the United Kingdom Royal Air Force will lease four C-17 Globemaster III
 airlifters.  Initial deliveries of the leased airlifters are scheduled for
 May 2001.
 
     Non-Recurring Item (Taxes):  In March 2001 the company reached final
 agreement with the Internal Revenue Service, primarily regarding previously
 filed claims for refund of research and development tax credits.  These claims
 dealt primarily with historical fixed-price development program expenses
 incurred by McDonnell Douglas from 1986 to 1992.  The agreement with the IRS
 resulted in financial recognition during the quarter of $343 million of tax
 credit and $210 million ($132 million after-tax) of related interest income.
 The net earnings and EPS impact of this agreement totaled $475 million and
 $0.56, respectively, during the quarter.  A pro-forma summary of the earnings
 impact on the quarter is included below.
 
     Tax Settlement Impact - Income
     ($ millions, except EPS)
 
                               Excluding Tax   Including Tax  Tax Settlement
                                  Settlement      Settlement          Impact
 
     Earnings from operations         $1,218          $1,218
       Other income, principally
        interest                          25             235          $210
       Interest and debt expense       (148)           (148)
     Earnings before income taxes      1,095           1,305
       Income Taxes                    (334)            (69)          265*
       Accounting Change                   1               1
     Net earnings                       $762          $1,237          $475
     Earnings per share
      (852.2M shares)                  $0.89           $1.45         $0.56
     Effective Income Tax Rate         30.5%            5.3%       (25.2%)
 
     *$343 million tax credit less $78 million taxes (37.1% marginal rate) due
     on $210 million interest income
 
     Outlook:  The company's financial guidance for 2001 and 2002 is shown
 below.  The outlook remains consistent with that previously provided.  "I am
 pleased to report that we can reaffirm our guidance reflecting a solid
 financial outlook," said Mike Sears, senior vice president and chief financial
 officer.  "As promised, we continue to execute well on our core businesses,
 invest for future growth and competitiveness, and maintain significant balance
 sheet strength."
     For 2001, the company expects revenues of approximately $57 billion and an
 operating margin greater than 8.5 percent.  The company also expects to
 generate $3 billion to $4 billion of free cash flow.  This estimate includes
 the second quarter impact of paying approximately $900 million in taxes which
 come due as a result of completing activities under a long-term government
 contract.
     Guidance for 2002 reflects expected growth in revenues to greater than
 $62 billion, while the operating margin is expected to improve to more than
 9 percent.  Free cash flow is expected to exceed $4 billion.  The company
 estimates annual commercial airplane deliveries in 2001 and 2002 to
 approximate 530 each year.
     The company expects aggregate research and development expenses to be in
 the range of 3.0 percent to 3.5 percent of sales.
 
 
     Financial Outlook
                                                         2001           2002
 
     Revenue (in billions)                                $57           >$62
     Operating margins (%)                              >8.5%          >9.0%
     Free cash flow (in billions)                   $3.0-$4.0          >$4.0
 
     Change in Segment Financial Reporting:  Beginning this quarter, segment
 results have been realigned to reflect the business and management structure
 of the company.  Revenue and operating income for each of the core business
 units as well as the customer and commercial financing segment are now
 reported on a stand-alone basis.  Results for the company's other businesses,
 including Phantom Works, Connexion(SM) by Boeing and Air Traffic Management,
 have been combined into a single "Other" grouping.  Comparable prior periods
 have been restated.
 
     Forward-Looking Information Is Subject to Risk and Uncertainty
     Certain statements in this release contain "forward-looking" information
 that involves risk and uncertainty, including projections for new products
 (including, without limitation, the "sonic cruiser"), deliveries, realization
 of technical and market benefits from acquisitions, revenues, operating
 margins, free cash flow, taxes, research and development expenses, and other
 trend projections.  This forward-looking information is based upon a number of
 assumptions including assumptions regarding global economic, passenger and
 freight growth; current and future markets for the Company's products and
 services; demand for the Company's products and services; performance of
 internal plans, including, without limitation, plans for productivity gains,
 reductions in cycle time and improvements in design processes, production
 processes and asset utilization; product performance; customer financing;
 customer, supplier and subcontractor performance; customer model selections;
 favorable outcomes of certain pending sales campaigns and U.S. and foreign
 government procurement actions; supplier contract negotiations; price
 escalation; government policies and actions; successful negotiation of
 contracts with the Company's labor unions; regulatory approvals; and
 successful execution of acquisition and divestiture plans.  Actual future
 results and trends may differ materially depending on a variety of factors,
 including the Company's successful execution of internal performance plans,
 including continued research and development, production rate increases and
 decreases, production system initiatives, timing of product deliveries and
 launches, supplier contract negotiations, asset management plans, acquisition
 and divestiture plans, procurement plans, and other cost-reduction efforts;
 the actual outcomes of certain pending sales campaigns and U.S. and foreign
 government procurement activities; acceptance of new products and services;
 product performance risks;  the cyclical nature of some of the Company's
 businesses; volatility of the market for certain products and services;
 domestic and international competition in the defense, space and commercial
 areas; continued integration of acquired businesses; uncertainties associated
 with regulatory certifications of the Company's commercial aircraft by the
 U.S. Government and foreign governments; other regulatory uncertainties;
 collective bargaining labor disputes; performance issues with key suppliers,
 subcontractors and customers; governmental export and import policies; factors
 that result in significant and prolonged disruption to air travel worldwide;
 global trade policies; worldwide political stability; domestic and
 international economic conditions; price escalation trends; the outcome of
 political and legal processes, including uncertainty regarding government
 funding of certain programs; changing priorities or reductions in the U.S.
 Government or foreign government defense and space budgets; termination of
 government contracts due to unilateral government action or failure to
 perform; legal, financial and governmental risks related to international
 transactions; legal proceedings; and other economic, political and
 technological risks and uncertainties.  Additional information regarding these
 factors is contained in the Company's SEC filings, including, without
 limitation, the Company's Annual Report on Form 10-K for the year ended
 December 31, 2000.
 
                        The Boeing Company and Subsidiaries
                       Consolidated Statements of Operations
                                    (Unaudited)
 
     (Dollars in millions except per share data)        Three months ended
                                                              March 31
                                                         2001           2000
 
     Sales and other operating revenues               $13,293         $9,910
     Cost of products and services                     11,070          8,547
                                                        2,223          1,363
 
     Equity in income (loss) from joint ventures           22             31
     General and administrative expense                   523            490
     Research and development expense                     422            288
     Share-based plans expense                             82             60
 
     Earnings from operations                          $1,218           $556
     Other income, principally interest                   235            149
     Interest and debt expense                          (148)          (103)
     Earnings before income taxes                      $1,305           $602
     Income taxes                                          69            184
     Net earnings before cumulative effect
      of accounting change                             $1,236           $418
     Cumulative effect of accounting changes, net           1             --
     Net earnings                                      $1,237           $418
     Basic earnings per share                           $1.48           $.48
     Diluted earnings per share                         $1.45           $.48
     Cash dividends per share                            $.17           $.14
     Average diluted shares (millions)                  852.2          878.0
 
     Excluding the share-based plans:
       Net Earnings                                    $1,288           $456
       Diluted earnings per share                       $1.51           $.52
 
 
         Note:  All references to earnings per share in the text of this press
     release refer to diluted earnings per share.
 
                        The Boeing Company and Subsidiaries
                        Consolidated Statements of Position
 
     (Dollars in millions except per share data)      March 31    December 31
                                                        2001           2000
                                                  (Unaudited)
     Assets
     Cash and cash equivalents                         $1,552         $1,010
     Accounts receivable                                4,524          4,928
     Current portion of customer and
      commercial financing                                926            995
     Deferred income taxes                              2,153          2,137
     Inventories, net of advances and
      progress billings                                 8,016          6,794
         Total current assets                          17,171         15,864
     Customer and commercial financing                  6,185          5,964
     Property, plant and equipment, net                 8,712          8,814
     Goodwill and acquired intangibles, net             5,247          5,214
     Prepaid pension expense                            5,080          4,845
     Deferred income taxes                                 --             60
     Other assets                                       1,403          1,267
                                                      $43,798        $42,028
     Liabilities and Shareholders' Equity
     Accounts payable and other liabilities           $12,169        $11,979
     Advances in excess of related costs                3,943          3,517
     Income taxes payable                               1,336          1,561
     Short-term debt and current portion
      of long-term debt                                   658          1,232
         Total current liabilities                     18,106         18,289
     Deferred income taxes                                 38             --
     Accrued retiree health care                        5,182          5,152
     Long-term debt                                     8,238          7,567
     Minority interest in subsidiaries                     16             --
       Shareholders' equity:
        Common shares, par value $5.00 -
        1,200,000,000 shares authorized;
        Shares issued - 1,011,870,159 and
        1,011,870,159                                   5,059          5,059
       Additional paid-in capital                       2,381          2,693
       Treasury shares, at cost -
        137,604,401 and 136,385,222                   (6,307)        (6,221)
       Retained earnings                               13,327         12,090
       Accumulated other comprehensive income            (26)            (2)
       Unearned compensation                              (6)            (7)
       ShareValue Trust shares -
        39,266,086 and 39,156,280                     (2,210)        (2,592)
         Total shareholders' equity                    12,218         11,020
                                                      $43,798        $42,028
 
 
                        The Boeing Company and Subsidiaries
                       Consolidated Statements of Cash Flows
                                    (Unaudited)
 
     (Dollars in millions)                             Three months ended
                                                             March 31
                                                         2001           2000
 
     Cash flows - operating activities:
       Net earnings                                    $1,237           $418
       Adjustments to reconcile net earnings to net
        cash provided by operating activities:
         Share-based plans                                 82             60
         Depreciation                                     315            323
         Amortization of goodwill and intangibles          69             29
         Customer and commercial financing
          valuation provision                               4              1
         Changes in assets and liabilities -
           Short-term investments                          --              1
           Accounts receivable                            404             31
           Inventories, net of advances
            and progress billings                     (1,227)        (1,435)
            Accounts payable and other liabilities        343          (211)
            Advances in excess of related costs           426             36
            Income taxes payable and deferred           (128)             15
            Other                                       (488)          (274)
            Accrued retiree health care                    53             45
 
     Net cash provided (used) by
      operating activities                              1,090          (961)
       Cash flows - investing activities:
         Customer financing and properties
          on lease, additions                           (470)          (397)
         Customer financing and properties
          on lease, reductions                            264          1,011
         Property, plant and
          equipment, net additions                      (240)          (205)
         Proceeds from dispositions                        68             17
 
     Net cash provided (used) by
      investing activities                              (378)            426
 
       Cash flows - financing activities:
         New borrowings                                   850            125
         Debt repayments                                (770)          (104)
         Common shares purchased                        (131)          (104)
         Stock options exercised, other                    29             19
         Dividends paid                                 (148)          (127)
 
     Net cash used by financing activities              (170)          (191)
 
       Net increase (decrease) in cash
        and cash equivalents                              542          (726)
 
         Cash and cash equivalents at
          beginning of year                             1,010          3,354
 
       Cash and cash equivalents at end
        of 1st quarter                                 $1,552         $2,628
 
 
 
                        The Boeing Company and Subsidiaries
                               Business Segment Data
                                    (Unaudited)
 
     (Dollars in millions)                                Three months ended
                                                                March 31
                                                         2001           2000
     Revenues:
       Commercial Airplanes                            $8,443         $5,171
       Military Aircraft and Missiles                   2,427          2,846
       Space and Communications                         2,246          1,659
       Customer and Commercial Financing                  206            167
       Other                                               71             61
       Accounting differences / eliminations            (100)              6
 
     Operating revenues                               $13,293         $9,910
     Earnings from operations:
       Commercial Airplanes                              $860           $259
       Military Aircraft and Missiles                     246            294
       Space and Communications                            84             60
       Customer and Commercial Financing                  142            107
       Other                                             (51)              2
       Accounting differences / eliminations               25           (48)
       Share-based plans                                 (82)           (60)
       Unallocated expense                                (6)           (58)
 
     Earnings from operations                          $1,218           $556
       Other income, principally interest                $235           $149
       Interest and debt expense                        (148)          (103)
       Earnings before income taxes                    $1,305           $602
       Income Taxes                                        69            184
 
     Net earnings before cumulative effect of
      accounting change                                $1,236           $418
       Effective income tax rate                         5.3%          30.5%
     Research and development:
       Commercial Airplanes                              $195           $103
       Military Aircraft and Missiles                      53             61
       Space and Communications                           123            124
       Other                                               51
 
     Total research and development expense              $422           $288
 
 
                        The Boeing Company and Subsidiaries
                            Operating and Financial Data
 
     Deliveries                                              1st Quarter
     Commercial Airplanes                                2001           2000
 
     717                                                 7(1)           3(1)
     737                                                   --              2
     737 Next-Generation                                  72*             39
     747                                                    7            4**
     757                                                    8             10
     767                                                   10              5
     777                                                   16             10
     MD-11                                                  2              2
       Total                                              122             75
 
     Military Aircraft and Missiles
     C-17                                                   2              3
     F-15                                                  --              4
     F/A-18 C/D                                            --              6
     F/A-18 E/F                                             7              4
     T-45TS                                                 4              4
     CH-47                                                  2              1
     Apache                                                 2              2
 
     Space and Communications
     Delta II                                              --              2
     Delta III                                             --             --
     Satellites                                             1             --
 
     *  Includes one C-40 Aircraft
     **  Includes one ABL 747
 
         Note:Commercial Airplanes deliveries by model include deliveries under
     operating lease, which are identified by parentheses.
 
                                                     March 31    December 31
 
 
     Contractual backlog (Dollars in billions)           2001           2000
 
       Commercial Airplanes                             $88.6          $89.8
       Military Aircraft and Missiles                    20.4           17.1
       Space and Communications                          15.1           13.7
 
     Total contractual backlog                         $124.1         $120.6
     Unobligated backlog                                $29.2          $31.3
     Workforce                                        199,000        198,000
 
 

SOURCE The Boeing Company
    SEATTLE, April 20 /PRNewswire Interactive News Release/ --
 The Boeing Company (NYSE:   BA) reported strong financial results for the first
 quarter with net earnings of $762 million or $0.89 per share on
 $13.3 billion of revenue.  These results exclude a $475 million non-recurring
 earnings tax benefit.  Net earnings including the non-recurring tax benefit
 totaled $1,237 million, or $1.45 per share.  Operating earnings and margins
 totaled $1.2 billion and 9.2 percent, respectively.  Total backlog at the end
 of the quarter was up slightly to $153 billion, of which $124 billion is
 contractually committed.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001004/BOEINGLOGO )
     The company generated $850 million of free cash flow (operating cash flow
 less capital expenditures) in the quarter.  Ending cash and short-term
 investment balances were nearly $1.6 billion.  Consolidated debt at the end of
 the period totaled $8.9 billion, of which $4.6 billion is attributable to
 Boeing Capital Corporation.
     General and administrative expenses attributable to deferred stock
 compensation decreased $55 million, resulting in a favorable 0.4 percent
 operating margin impact and $0.04 impact on earnings per share.  This is a
 result of the decrease in Boeing's share price over the quarter.
     Financial results for the quarter reflect continued solid operating
 performance across the company's core businesses.  Overall financial results
 were up significantly versus the first quarter of 2000, which was impacted by
 a 40-day work stoppage by engineers and technicians.  The February 28, 2001
 Puget Sound earthquake did not have a material financial impact.
     During the quarter the company took key actions that reflect its ongoing
 transformation.  On March 21, the company elevated the leaders of its
 three largest businesses to chief executive officers and announced plans for a
 new, leaner and strategically focused world headquarters.  On March 29, Boeing
 Commercial Airplanes unveiled plans to focus its new product development
 efforts on a longer-range sonic cruiser airplane able to fly at
 near-supersonic speeds and having the potential to change the way the world
 flies.
     "We are off to a great start for 2001," said Phil Condit, Boeing chairman
 and chief executive officer.  "I am extremely pleased with our quarterly
 operating results as they reflect our continuing focus on running healthy core
 businesses and achieving strong operating performance.  I am also very
 encouraged by our continuing transformation and the strategic potential
 represented by both the corporate re-architecture and our 'new frontier'
 opportunities.  These activities illustrate our collective determination to
 seize worldwide growth opportunities and generate shareholder value."
 
     Commercial Airplanes:  First quarter Commercial Airplanes segment revenues
 totaled $8.4 billion, up 63 percent compared to the first three months of
 2000, which was impacted by the work stoppage.  Commercial Airplanes delivered
 122 jet airplanes during the quarter compared to 75 during the first quarter
 of 2000.  Segment operating earnings and margins totaled $860 million and
 10.2 percent, respectively, driven by continued operating improvements as well
 as delivery mix.
     During the quarter Commercial Airplanes announced plans to focus its
 product development activities on a faster, longer-range sonic cruiser
 airplane, highlighting Commercial Airplanes' commitment to innovation and
 customer focus.  Commercial Airplanes will team with its customers to ensure
 that the design of the new airplane provides the most value to the industry,
 and initial customer response has been enthusiastic.
     Contractual backlog at the end of the quarter was $88.6 billion.  As
 expected, demand for new airplanes moderated when compared to the strong
 levels experienced in the latter half of 2000.  Commercial Airplanes received
 120 gross orders during the quarter versus 128 in the first quarter of 2000.
 Based on its current assessment that the U.S. economy will experience a
 "soft landing," the Commercial Airplanes delivery outlook is stable.  The 2001
 delivery forecast is nearly sold out, and the 2002 delivery forecast is more
 than 80 percent sold.
 
     Military Aircraft and Missile Systems:  Military Aircraft and Missile
 Systems revenues for first quarter totaled $2.4 billion compared to
 $2.8 billion a year ago.  Revenues decreased primarily as a result of fewer
 F-15, C-17 and F/A-18 deliveries versus first quarter of 2000.  Overall
 operating performance continued to be solid as segment earnings and operating
 margins totaled $246 million and 10.1 percent, respectively, compared to
 $294 million and 10.3 percent during the first quarter of 2000.
     Major events during the quarter included significant progress on the Joint
 Strike Fighter program.  On February 5, the Boeing JSF X-32A concept
 demonstrator completed flight testing after its 66th flight, meeting all
 government test objectives and demonstrating additional capabilities.  On
 March 29, the Boeing JSF X-32B demonstrator successfully completed its first
 flight, entering a four month test program to validate the Boeing approach to
 short-takeoff and vertical landing (STOVL) flight.  Subsequent to the quarter,
 on April 13, the X-32B completed the first STOVL flight of the entire Joint
 Strike Fighter program.
     Contractual backlog at the end of the quarter increased 19 percent to
 $20.4 billion compared to $17.1 billion at the end of 2000.
 
     Space and Communications:  Space and Communications reported first quarter
 revenues of $2.2 billion, up 35 percent compared to the $1.7 billion revenues
 reported for the first three months of 2000.  The increase in revenues
 reflects Space and Communications' growing business base, primarily Boeing
 Satellite Systems.
     First quarter operating earnings totaled $84 million.  Operating margins
 increased slightly to 3.7 percent versus 3.6 percent during the first quarter
 of 2000 as the company continued to invest in developing its Delta IV launch
 vehicle.
     During the quarter operational integration of Boeing Satellite Systems
 (formerly Hughes space and communication businesses) was largely completed.
 Other milestones include the successful completion of extended duration
 testing on the RS-68 engine for the Delta IV, the announcement of the first
 Delta IV commercial launch customer and the successful launch of a Boeing
 Satellite Systems 702 satellite by Sea Launch.
     Contractual backlog at the end of the quarter increased 10 percent to
 $15.1 billion compared to $13.7 billion at the end of 2000.
 
     Financing Segment:  Customer and Commercial Financing, which consists
 primarily of Boeing Capital Corporation, had first quarter revenues totaling
 $206 million on total assets of $7.1 billion.  Operating income, excluding
 interest expense, relating to financing segment activities totaled
 $142 million.  Financing related interest costs totaled $74 million, and
 earnings before income taxes totaled $68 million.  Major events for first
 quarter included a well received $750 million 10-year Boeing Capital
 Corporation bond issue as well as the definitization of lease terms under
 which the United Kingdom Royal Air Force will lease four C-17 Globemaster III
 airlifters.  Initial deliveries of the leased airlifters are scheduled for
 May 2001.
 
     Non-Recurring Item (Taxes):  In March 2001 the company reached final
 agreement with the Internal Revenue Service, primarily regarding previously
 filed claims for refund of research and development tax credits.  These claims
 dealt primarily with historical fixed-price development program expenses
 incurred by McDonnell Douglas from 1986 to 1992.  The agreement with the IRS
 resulted in financial recognition during the quarter of $343 million of tax
 credit and $210 million ($132 million after-tax) of related interest income.
 The net earnings and EPS impact of this agreement totaled $475 million and
 $0.56, respectively, during the quarter.  A pro-forma summary of the earnings
 impact on the quarter is included below.
 
     Tax Settlement Impact - Income
     ($ millions, except EPS)
 
                               Excluding Tax   Including Tax  Tax Settlement
                                  Settlement      Settlement          Impact
 
     Earnings from operations         $1,218          $1,218
       Other income, principally
        interest                          25             235          $210
       Interest and debt expense       (148)           (148)
     Earnings before income taxes      1,095           1,305
       Income Taxes                    (334)            (69)          265*
       Accounting Change                   1               1
     Net earnings                       $762          $1,237          $475
     Earnings per share
      (852.2M shares)                  $0.89           $1.45         $0.56
     Effective Income Tax Rate         30.5%            5.3%       (25.2%)
 
     *$343 million tax credit less $78 million taxes (37.1% marginal rate) due
     on $210 million interest income
 
     Outlook:  The company's financial guidance for 2001 and 2002 is shown
 below.  The outlook remains consistent with that previously provided.  "I am
 pleased to report that we can reaffirm our guidance reflecting a solid
 financial outlook," said Mike Sears, senior vice president and chief financial
 officer.  "As promised, we continue to execute well on our core businesses,
 invest for future growth and competitiveness, and maintain significant balance
 sheet strength."
     For 2001, the company expects revenues of approximately $57 billion and an
 operating margin greater than 8.5 percent.  The company also expects to
 generate $3 billion to $4 billion of free cash flow.  This estimate includes
 the second quarter impact of paying approximately $900 million in taxes which
 come due as a result of completing activities under a long-term government
 contract.
     Guidance for 2002 reflects expected growth in revenues to greater than
 $62 billion, while the operating margin is expected to improve to more than
 9 percent.  Free cash flow is expected to exceed $4 billion.  The company
 estimates annual commercial airplane deliveries in 2001 and 2002 to
 approximate 530 each year.
     The company expects aggregate research and development expenses to be in
 the range of 3.0 percent to 3.5 percent of sales.
 
 
     Financial Outlook
                                                         2001           2002
 
     Revenue (in billions)                                $57           >$62
     Operating margins (%)                              >8.5%          >9.0%
     Free cash flow (in billions)                   $3.0-$4.0          >$4.0
 
     Change in Segment Financial Reporting:  Beginning this quarter, segment
 results have been realigned to reflect the business and management structure
 of the company.  Revenue and operating income for each of the core business
 units as well as the customer and commercial financing segment are now
 reported on a stand-alone basis.  Results for the company's other businesses,
 including Phantom Works, Connexion(SM) by Boeing and Air Traffic Management,
 have been combined into a single "Other" grouping.  Comparable prior periods
 have been restated.
 
     Forward-Looking Information Is Subject to Risk and Uncertainty
     Certain statements in this release contain "forward-looking" information
 that involves risk and uncertainty, including projections for new products
 (including, without limitation, the "sonic cruiser"), deliveries, realization
 of technical and market benefits from acquisitions, revenues, operating
 margins, free cash flow, taxes, research and development expenses, and other
 trend projections.  This forward-looking information is based upon a number of
 assumptions including assumptions regarding global economic, passenger and
 freight growth; current and future markets for the Company's products and
 services; demand for the Company's products and services; performance of
 internal plans, including, without limitation, plans for productivity gains,
 reductions in cycle time and improvements in design processes, production
 processes and asset utilization; product performance; customer financing;
 customer, supplier and subcontractor performance; customer model selections;
 favorable outcomes of certain pending sales campaigns and U.S. and foreign
 government procurement actions; supplier contract negotiations; price
 escalation; government policies and actions; successful negotiation of
 contracts with the Company's labor unions; regulatory approvals; and
 successful execution of acquisition and divestiture plans.  Actual future
 results and trends may differ materially depending on a variety of factors,
 including the Company's successful execution of internal performance plans,
 including continued research and development, production rate increases and
 decreases, production system initiatives, timing of product deliveries and
 launches, supplier contract negotiations, asset management plans, acquisition
 and divestiture plans, procurement plans, and other cost-reduction efforts;
 the actual outcomes of certain pending sales campaigns and U.S. and foreign
 government procurement activities; acceptance of new products and services;
 product performance risks;  the cyclical nature of some of the Company's
 businesses; volatility of the market for certain products and services;
 domestic and international competition in the defense, space and commercial
 areas; continued integration of acquired businesses; uncertainties associated
 with regulatory certifications of the Company's commercial aircraft by the
 U.S. Government and foreign governments; other regulatory uncertainties;
 collective bargaining labor disputes; performance issues with key suppliers,
 subcontractors and customers; governmental export and import policies; factors
 that result in significant and prolonged disruption to air travel worldwide;
 global trade policies; worldwide political stability; domestic and
 international economic conditions; price escalation trends; the outcome of
 political and legal processes, including uncertainty regarding government
 funding of certain programs; changing priorities or reductions in the U.S.
 Government or foreign government defense and space budgets; termination of
 government contracts due to unilateral government action or failure to
 perform; legal, financial and governmental risks related to international
 transactions; legal proceedings; and other economic, political and
 technological risks and uncertainties.  Additional information regarding these
 factors is contained in the Company's SEC filings, including, without
 limitation, the Company's Annual Report on Form 10-K for the year ended
 December 31, 2000.
 
                        The Boeing Company and Subsidiaries
                       Consolidated Statements of Operations
                                    (Unaudited)
 
     (Dollars in millions except per share data)        Three months ended
                                                              March 31
                                                         2001           2000
 
     Sales and other operating revenues               $13,293         $9,910
     Cost of products and services                     11,070          8,547
                                                        2,223          1,363
 
     Equity in income (loss) from joint ventures           22             31
     General and administrative expense                   523            490
     Research and development expense                     422            288
     Share-based plans expense                             82             60
 
     Earnings from operations                          $1,218           $556
     Other income, principally interest                   235            149
     Interest and debt expense                          (148)          (103)
     Earnings before income taxes                      $1,305           $602
     Income taxes                                          69            184
     Net earnings before cumulative effect
      of accounting change                             $1,236           $418
     Cumulative effect of accounting changes, net           1             --
     Net earnings                                      $1,237           $418
     Basic earnings per share                           $1.48           $.48
     Diluted earnings per share                         $1.45           $.48
     Cash dividends per share                            $.17           $.14
     Average diluted shares (millions)                  852.2          878.0
 
     Excluding the share-based plans:
       Net Earnings                                    $1,288           $456
       Diluted earnings per share                       $1.51           $.52
 
 
         Note:  All references to earnings per share in the text of this press
     release refer to diluted earnings per share.
 
                        The Boeing Company and Subsidiaries
                        Consolidated Statements of Position
 
     (Dollars in millions except per share data)      March 31    December 31
                                                        2001           2000
                                                  (Unaudited)
     Assets
     Cash and cash equivalents                         $1,552         $1,010
     Accounts receivable                                4,524          4,928
     Current portion of customer and
      commercial financing                                926            995
     Deferred income taxes                              2,153          2,137
     Inventories, net of advances and
      progress billings                                 8,016          6,794
         Total current assets                          17,171         15,864
     Customer and commercial financing                  6,185          5,964
     Property, plant and equipment, net                 8,712          8,814
     Goodwill and acquired intangibles, net             5,247          5,214
     Prepaid pension expense                            5,080          4,845
     Deferred income taxes                                 --             60
     Other assets                                       1,403          1,267
                                                      $43,798        $42,028
     Liabilities and Shareholders' Equity
     Accounts payable and other liabilities           $12,169        $11,979
     Advances in excess of related costs                3,943          3,517
     Income taxes payable                               1,336          1,561
     Short-term debt and current portion
      of long-term debt                                   658          1,232
         Total current liabilities                     18,106         18,289
     Deferred income taxes                                 38             --
     Accrued retiree health care                        5,182          5,152
     Long-term debt                                     8,238          7,567
     Minority interest in subsidiaries                     16             --
       Shareholders' equity:
        Common shares, par value $5.00 -
        1,200,000,000 shares authorized;
        Shares issued - 1,011,870,159 and
        1,011,870,159                                   5,059          5,059
       Additional paid-in capital                       2,381          2,693
       Treasury shares, at cost -
        137,604,401 and 136,385,222                   (6,307)        (6,221)
       Retained earnings                               13,327         12,090
       Accumulated other comprehensive income            (26)            (2)
       Unearned compensation                              (6)            (7)
       ShareValue Trust shares -
        39,266,086 and 39,156,280                     (2,210)        (2,592)
         Total shareholders' equity                    12,218         11,020
                                                      $43,798        $42,028
 
 
                        The Boeing Company and Subsidiaries
                       Consolidated Statements of Cash Flows
                                    (Unaudited)
 
     (Dollars in millions)                             Three months ended
                                                             March 31
                                                         2001           2000
 
     Cash flows - operating activities:
       Net earnings                                    $1,237           $418
       Adjustments to reconcile net earnings to net
        cash provided by operating activities:
         Share-based plans                                 82             60
         Depreciation                                     315            323
         Amortization of goodwill and intangibles          69             29
         Customer and commercial financing
          valuation provision                               4              1
         Changes in assets and liabilities -
           Short-term investments                          --              1
           Accounts receivable                            404             31
           Inventories, net of advances
            and progress billings                     (1,227)        (1,435)
            Accounts payable and other liabilities        343          (211)
            Advances in excess of related costs           426             36
            Income taxes payable and deferred           (128)             15
            Other                                       (488)          (274)
            Accrued retiree health care                    53             45
 
     Net cash provided (used) by
      operating activities                              1,090          (961)
       Cash flows - investing activities:
         Customer financing and properties
          on lease, additions                           (470)          (397)
         Customer financing and properties
          on lease, reductions                            264          1,011
         Property, plant and
          equipment, net additions                      (240)          (205)
         Proceeds from dispositions                        68             17
 
     Net cash provided (used) by
      investing activities                              (378)            426
 
       Cash flows - financing activities:
         New borrowings                                   850            125
         Debt repayments                                (770)          (104)
         Common shares purchased                        (131)          (104)
         Stock options exercised, other                    29             19
         Dividends paid                                 (148)          (127)
 
     Net cash used by financing activities              (170)          (191)
 
       Net increase (decrease) in cash
        and cash equivalents                              542          (726)
 
         Cash and cash equivalents at
          beginning of year                             1,010          3,354
 
       Cash and cash equivalents at end
        of 1st quarter                                 $1,552         $2,628
 
 
 
                        The Boeing Company and Subsidiaries
                               Business Segment Data
                                    (Unaudited)
 
     (Dollars in millions)                                Three months ended
                                                                March 31
                                                         2001           2000
     Revenues:
       Commercial Airplanes                            $8,443         $5,171
       Military Aircraft and Missiles                   2,427          2,846
       Space and Communications                         2,246          1,659
       Customer and Commercial Financing                  206            167
       Other                                               71             61
       Accounting differences / eliminations            (100)              6
 
     Operating revenues                               $13,293         $9,910
     Earnings from operations:
       Commercial Airplanes                              $860           $259
       Military Aircraft and Missiles                     246            294
       Space and Communications                            84             60
       Customer and Commercial Financing                  142            107
       Other                                             (51)              2
       Accounting differences / eliminations               25           (48)
       Share-based plans                                 (82)           (60)
       Unallocated expense                                (6)           (58)
 
     Earnings from operations                          $1,218           $556
       Other income, principally interest                $235           $149
       Interest and debt expense                        (148)          (103)
       Earnings before income taxes                    $1,305           $602
       Income Taxes                                        69            184
 
     Net earnings before cumulative effect of
      accounting change                                $1,236           $418
       Effective income tax rate                         5.3%          30.5%
     Research and development:
       Commercial Airplanes                              $195           $103
       Military Aircraft and Missiles                      53             61
       Space and Communications                           123            124
       Other                                               51
 
     Total research and development expense              $422           $288
 
 
                        The Boeing Company and Subsidiaries
                            Operating and Financial Data
 
     Deliveries                                              1st Quarter
     Commercial Airplanes                                2001           2000
 
     717                                                 7(1)           3(1)
     737                                                   --              2
     737 Next-Generation                                  72*             39
     747                                                    7            4**
     757                                                    8             10
     767                                                   10              5
     777                                                   16             10
     MD-11                                                  2              2
       Total                                              122             75
 
     Military Aircraft and Missiles
     C-17                                                   2              3
     F-15                                                  --              4
     F/A-18 C/D                                            --              6
     F/A-18 E/F                                             7              4
     T-45TS                                                 4              4
     CH-47                                                  2              1
     Apache                                                 2              2
 
     Space and Communications
     Delta II                                              --              2
     Delta III                                             --             --
     Satellites                                             1             --
 
     *  Includes one C-40 Aircraft
     **  Includes one ABL 747
 
         Note:Commercial Airplanes deliveries by model include deliveries under
     operating lease, which are identified by parentheses.
 
                                                     March 31    December 31
 
 
     Contractual backlog (Dollars in billions)           2001           2000
 
       Commercial Airplanes                             $88.6          $89.8
       Military Aircraft and Missiles                    20.4           17.1
       Space and Communications                          15.1           13.7
 
     Total contractual backlog                         $124.1         $120.6
     Unobligated backlog                                $29.2          $31.3
     Workforce                                        199,000        198,000
 
 SOURCE  The Boeing Company

RELATED LINKS

http://www.boeing.com