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Boeing Reports Strong First-Quarter Results Core EPS (non-GAAP)* of $1.76 on continued strong operating performance; GAAPEPS of $1.28 Revenue increased 8 percent to $20.5 billion reflecting higher commercialdeliveries Operating cash flow increased significantly to $1.1 billion Repurchased 19.4 million shares for $2.5 billion Backlog of $440 billion includes $19 billion of net orders during the quarter 2014 core EPS guidance increased to between $7.15 and $7.35 to reflect a taxsettlement CHICAGO, April 23, 2014 -- Table 1. Summary Financial Results First Quarter (Dollars in Millions, except per share data) 2014 2013 Change Revenues $20,465 $18,893 8% Non-GAAP*Core Operating Earnings $2,095 $1,867 12%Core Operating Margin 10.2% 9.9% 0.3 PtsCore Earnings Per Share $1.76 $1.73 2%Operating Cash Flow Before Pension Contributions $1,112 $524 112% GAAPEarnings From Operations $1,542 $1,528 1%Operating Margin 7.5% 8.1% (0.6) PtsNet Earnings $965 $1,106 (13)%Earnings Per Share $1.28 $1.44 (11)%Operating Cash Flow $1,112 $524 112% * Non-GAAP measures (core operating earnings, core operating margin and coreearnings per share) exclude certain components of pension and post retirementbenefit expense that management believes are not reflective of underlyingbusiness performance. Complete definitions of Boeing's non-GAAP measures are onpage 7, "Non-GAAP Measures Disclosures." The Boeing Company (NYSE: BA) reported first-quarter revenue increased 8percent to $20.5 billion on higher commercial volume (Table 1). Core earningsper share (non-GAAP) increased 14 percent* to $1.76 when excluding a benefit of$0.19 per share for the 2012 research and development tax credit recorded inthe first quarter of 2013. First-quarter 2014 core operating earnings(non-GAAP) increased 12 percent to $2.1 billion and core operating margin(non-GAAP) increased to 10.2 percent reflecting continued strong operatingperformance. GAAP earnings from operations included previously announcednon-cash charges totaling $334 million ($0.29 per share) for retirement planchanges. Core earnings per share guidance for 2014 increased to between $7.15 and $7.35,from $7.00 to $7.20, to reflect the benefit of a tax settlement to berecognized in the second quarter of 2014. GAAP earnings per share guidance for2014 is reaffirmed at between $6.10 to $6.30 as the tax settlement benefit wasoffset by the retirement plan charges. GAAP pension expense guidance for 2014is now at approximately $3.2 billion, up from $3.1 billion, to reflect theretirement plan charges. The company reaffirmed its 2014 revenue, operatingcash flow and deliveries guidance. "Disciplined execution across our production and development programs producedstrong first quarter results," said Boeing Chairman and Chief Executive OfficerJim McNerney. "We measurably increased revenue, core operating earnings andcash flow, and expanded core operating margins. This financial and operationalstrength enabled the return of more than $3 billion to shareholders in thequarter through share repurchase and an increased dividend, even as wecontinued to invest in our future." "Our outlook for the full year remains positive on the strength of demand forour fuel-efficient new commercial airplanes, our solid position in globaldefense, space and security markets, and our enterprise focus on meetingcustomer commitments, improving productivity and profitably delivering thegrowth in our sizable backlog," McNerney said. Table 2. Cash Flow First Quarter(Millions) 2014 2013Operating Cash Flow Before Pension Contributions* $1,112 $524 Pension Contributions - -Operating Cash Flow $1,112 $524 Less Additions to Property, Plant & Equipment ($497) ($521)Free Cash Flow* $615 $3 Operating cash flow in the quarter was $1.1 billion, reflecting commercialairplane production rates, strong core operating performance and timing ofreceipts and expenditures (Table 2). During the quarter, the companyrepurchased 19.4 million shares for $2.5 billion, leaving $8.3 billionremaining under the current repurchase authorization expected to be completedover the next 2-3 years. The company also paid $0.5 billion in dividends in thequarter, reflecting an approximately 50 percent increase in dividends per sharecompared to the same period of the prior year. Table 3. Cash, Marketable Securities and Debt Balances Quarter-End(Billions) Q1 14 Q4 13Cash $6.9 $9.1Marketable Securities(1) $5.3 $6.2 Total $12.2 $15.3Debt Balances:The Boeing Company, net of intercompany loans to BCC $6.3 $7.0Boeing Capital Corporation, including intercompany loans $2.6 $2.6 Total Consolidated Debt $8.9 $9.6 (1) Marketable securities consists primarily of time deposits due within one yearclassified as "short-term investments." Cash and investments in marketable securities totaled $12.2 billion atquarter-end (Table 3), down from $15.3 billion at the beginning of the year,primarily due to the share repurchases and the pay-down of maturing debt. Debtwas $8.9 billion, down from $9.6 billion at the beginning of the year,primarily due to maturities. Total company backlog at quarter-end was a $440 billion, down slightly from thebeginning of the year, and included net orders for the quarter of $19 billion. Segment Results Boeing Commercial Airplanes Table 4. Boeing Commercial Airplanes First Quarter(Dollars in Millions) 2014 2013 Change Commercial Airplanes Deliveries 161 137 18% Revenues $12,737 $10,690 19%Earnings from Operations $1,502 $1,219 23%Operating Margin 11.8% 11.4% 0.4 Pts Boeing Commercial Airplanes first-quarter revenue increased to $12.7 billion onhigher 787 and 737 deliveries. First-quarter operating margin improved to 11.8percent reflecting the delivery volume and mix and lower period costs partiallyoffset by higher R&D (Table 4). During the quarter, the 787 program reached a 10 per month production rate andcompleted preliminary design review on the 787-10. The company selected theEverett, Washington site as the location for a new composite wing center forthe 777X. In April, the 737 program reached a production rate of 42 per month. Commercial Airplanes booked 235 net orders during the quarter. Backlog remainsstrong with over 5,100 airplanes valued at $374 billion. Boeing Defense, Space & Security Table 5. Defense, Space & Security First Quarter(Dollars in Millions) 2014 2013 Change Revenues(1) Boeing Military Aircraft $3,458 $3,980 (13)% Network & Space Systems $1,876 $1,960 (4)% Global Services & Support $2,299 $2,170 6%Total BDS Revenues $7,633 $8,110 (6)%Earnings from Operations(1) Boeing Military Aircraft $332 $427 (22)% Network & Space Systems $168 $156 8% Global Services & Support $278 $249 12%Total BDS Earnings from Operations $778 $832 (6)%Operating Margin 10.2% 10.3% (0.1) Pts (1) During the first quarter of 2014, certain programs were realigned betweenBoeing Military Aircraft and Global Services & Support. See page 15 of thisrelease for additional information. Boeing Defense, Space & Security's first-quarter revenue was $7.6 billion withan operating margin of 10.2 percent (Table 5). Boeing Military Aircraft (BMA) first-quarter revenue declined to $3.5 billion,as the first quarter of 2013 included revenue associated with F-15 developmentmilestones and due to fewer P-8 deliveries in the first quarter of 2014.Operating margin was 9.6 percent, reflecting strong performance offset by apreviously announced C-17 inventory-related charge. During the quarter, BMA wasawarded a contract for 16 P-8A Poseidon aircraft from the U.S. Navy and acontract for 82 Apache Block III helicopters from the U.S. Army. Network & Space Systems (N&SS) first-quarter revenue was $1.9 billion,reflecting lower satellites volume, and operating margin increased to 9.0percent on strong performance. During the quarter, N&SS completed on-orbittesting of the first Inmarsat-5 satellite. Global Services & Support (GS&S) first-quarter revenue increased to $2.3billion, reflecting higher volume in maintenance, modifications and upgrades.Operating margin increased to 12.1 percent on improved performance inintegrated logistics. During the quarter, GS&S was awarded a contract toprovide maintenance training devices for the U.S. Navy's P-8A Poseidonaircraft. Backlog at Defense, Space & Security was $66 billion, of which 35 percentrepresents orders with international customers. Additional Financial Information Table 6. Additional Financial Information First Quarter(Dollars in Millions) 2014 2013Revenues Boeing Capital Corporation $82 $105 Other segment $20 $27 Unallocated items and eliminations ($7) ($39)Earnings from Operations Boeing Capital Corporation $44 $44 Other segment income/(expense) ($62) ($58)Unallocated items and eliminations excluding unallocated pension/postretirement expense ($167) ($170)Unallocated pension/postretirement expense ($553) ($339)Other income, net $9 $9Interest and debt expense ($92) ($99)Effective tax rate 33.9% 23.1% At quarter-end, Boeing Capital Corporation's (BCC) net portfolio balance was$3.5 billion down from $3.9 billion at the beginning of the year. BCC'sdebt-to-equity ratio was 5.0-to-1. Unallocated items and eliminations increased in the first quarter of 2014primarily due to previously announced non-cash charges totaling $334 millionfor retirement plan changes. Total pension expense for the first quarter was$1,035 million, up from $791 million in the same period last year. Thecompany's income tax expense was $494 million in the quarter, compared to $332million in the same period of the prior year, as a $145 million benefit for the2012 research and development credit was reflected in the first quarter of2013. Outlook The company's 2014 financial guidance (Table 7) reflects continued strongperformance in both businesses. Table 7. Financial Outlook(Dollars in Billions, except per share data) 2014 The Boeing Company Revenue $87.5 - 90.5 Core Earnings Per Share* $7.15 - 7.35 GAAP Earnings Per Share $6.10 - 6.30 Operating Cash Flow Before Pension Contributions* ~ $7 Operating Cash Flow (1) ~ $6.25Boeing Commercial Airplanes Deliveries (2) 715 - 725 Revenue $57.5 - 59.5 Operating Margin ~ 10%Boeing Defense, Space & Security (revised for business realignment) Revenue Boeing Military Aircraft ~ $14.2 Network & Space Systems ~ $7.7 Global Services & Support ~ $8.6 Total BDS Revenue $30 - 31 Operating Margin Boeing Military Aircraft ~ 9.5% Network & Space Systems ~ 8.5% Global Services & Support ~ 10.5% Total BDS Operating Margin ~ 9.5% Boeing Capital Corporation Portfolio Size Lower Revenue ~ $0.3 Pre-Tax Earnings ~ $0.05 Research & Development ~ $3.2Capital Expenditures ~ $2.5Pension Expense (3) ~ $3.2Effective Tax Rate (4) ~ 29% (1) After discretionary cash pension contributions of $0.75 billion and assumingnew aircraft financings under $0.5 billion(2) Assumes approximately 110 787 deliveries(3) Approximately $1.3 billion is expected to be recorded in unallocated itemsand eliminations(4) Assumes the extension of the research and development tax credit* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are onpage 7, "Non-GAAP Measures Disclosures." Boeing's core earnings per share guidance for 2014 increased to between $7.15and $7.35, from $7.00 to $7.20, to reflect the benefit of a tax settlement tobe recognized in the second quarter of 2014. GAAP earnings per share guidancefor 2014 is reaffirmed at between $6.10 and $6.30 as the tax settlement benefitwas offset by the retirement plan charges. Total GAAP pension expense guidancefor 2014 is now at approximately $3.2 billion, up from $3.1 billion to reflectthe retirement plan charges. The pension expense expected to be included inunallocated items and eliminations is approximately $1.3 billion, up from $1.1billion. Boeing Military Aircraft revenue for 2014 is now expected to be approximately$14.2 billion, down from $15.0 billion, and Global Support & Services revenueis now expected to be approximately $8.6 billion, up from $7.8 billion, bothreflecting a business realignment completed during the quarter. Boeing's effective tax rate is now expected to be approximately 29 percent in2014, down from approximately 31 percent, to reflect the benefit of the taxsettlement and continues to assume the extension of the research anddevelopment tax credit. Non-GAAP Measures Disclosures We supplement the reporting of our financial information determined under U.S.generally accepted accounting principles (GAAP) with certain non-GAAP financialinformation. The non-GAAP financial information presented excludes certainsignificant items that may not be indicative of, or are unrelated to, resultsfrom our ongoing business operations. We believe that these non-GAAP measuresprovide investors with additional insight into the company's ongoing businessperformance. These non-GAAP measures should not be considered in isolation oras a substitute for the related GAAP measures, and other companies may definesuch measures differently. We encourage investors to review our financialstatements and publicly-filed reports in their entirety and not to rely on anysingle financial measure. The following definitions are provided: Core Operating Earnings, Core Operating Margin and Core Earnings Per Share Core operating earnings is defined as GAAP earnings from operations excludingunallocated pension and post-retirement expense. Core operating margin isdefined as core operating earnings expressed as a percentage of revenue. Coreearnings per share is defined as GAAP diluted earnings per share excluding thenet earnings per share impact of unallocated pension and post-retirementexpense. Unallocated pension and post-retirement expense represents the portionof pension and other post-retirement costs that are not recognized by businesssegments for segment reporting purposes. Management uses core operatingearnings, core operating margin and core earnings per share for purposes ofevaluating and forecasting underlying business performance. Management believesthese core earnings measures provide investors additional insights intooperational performance as they exclude unallocated pension and post-retirementcosts, which primarily represent costs driven by market factors and costs notallocable to government contracts. A reconciliation between the GAAP andnon-GAAP measures is provided on page 14. Increase in Core Earnings Per Share Excluding First Quarter 2013 Benefit for2012 Research and Development Tax Credit The company is disclosing the increase in core operating earnings per share inthe first quarter of 2014 over the first quarter of 2013 excluding the benefitfor the 2012 research and development tax credit recorded in the first quarterof 2013. Management believes it is useful to occasionally exclude certain itemsthat are not reflective of underlying performance and that can distort periodto period performance comparisons. Management uses similar measures forpurposes of evaluating and forecasting underlying business performance. Areconciliation between the GAAP and non-GAAP measures is provided on page 14. Operating Cash Flow Before Pension Contributions Operating cash flow before pension contributions is defined as GAAP operatingcash flow less pension contributions. Management believes operating cash flowbefore pension contributions provides additional insights into underlyingbusiness performance. Management uses operating cash flow before pensioncontributions as a measure to assess both business performance and overallliquidity. Table 2 provides a reconciliation between GAAP operating cash flowand operating cash flow before pension contributions. Free Cash Flow Free cash flow is defined as GAAP operating cash flow less capital expendituresfor property, plant and equipment additions. Management believes free cash flowprovides investors with an important perspective on the cash available forshareholders, debt repayment, and acquisitions after making the capitalinvestments required to support ongoing business operations and long term valuecreation. Free cash flow does not represent the residual cash flow availablefor discretionary expenditures as it excludes certain mandatory expendituressuch as repayment of maturing debt. Management uses free cash flow as a measureto assess both business performance and overall liquidity. Table 2 provides areconciliation between GAAP operating cash flow and free cash flow. Caution Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning ofthe Private Securities Litigation Reform Act of 1995. Words such as "may,""should," "expects," "intends," "projects," "plans," "believes," "estimates,""targets," "anticipates," and similar expressions are used to identify theseforward-looking statements. Examples of forward-looking statements includestatements relating to our future financial condition and operating results, aswell as any other statement that does not directly relate to any historical orcurrent fact. Forward-looking statements are based on our current expectationsand assumptions, which may not prove to be accurate. These statements are notguarantees and are subject to risks, uncertainties, and changes incircumstances that are difficult to predict. Many factors could cause actualresults to differ materially and adversely from these forward-lookingstatements. Among these factors are risks related to: (1) general conditions inthe economy and our industry, including those due to regulatory changes; (2)our reliance on our commercial airline customers; (3) the overall health of ouraircraft production system, planned production rate increases across multiplecommercial airline programs, our commercial development and derivative aircraftprograms, and our aircraft being subject to stringent performance andreliability standards; (4) changing budget and appropriation levels andacquisition priorities of the U.S. government; (5) our dependence on U.S.government contracts; (6) our reliance on fixed-price contracts; (7) ourreliance on cost-type contracts; (8) uncertainties concerning contracts thatinclude in-orbit incentive payments; (9) our dependence on our subcontractorsand suppliers, as well as the availability of raw materials, (10) changes inaccounting estimates; (11) changes in the competitive landscape in our markets;(12) our non-U.S. operations, including sales to non-U.S. customers; (13)potential adverse developments in new or pending litigation and/or governmentinvestigations; (14) customer and aircraft concentration in Boeing Capital'scustomer financing portfolio; (15) changes in our ability to obtain debt oncommercially reasonable terms and at competitive rates in order to fund ouroperations and contractual commitments; (16) realizing the anticipated benefitsof mergers, acquisitions, joint ventures/strategic alliances or divestitures;(17) the adequacy of our insurance coverage to cover significant riskexposures; (18) potential business disruptions, including those related tophysical security threats, information technology or cyber-attacks or naturaldisasters; (19) work stoppages or other labor disruptions; (20) significantchanges in discount rates and actual investment return on pension assets; (21)potential environmental liabilities; and (22) threats to the security of our orour customers' information. Additional information concerning these and other factors can be found in ourfilings with the Securities and Exchange Commission, including our most recentAnnual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reportson Form 8-K. Any forward-looking statement speaks only as of the date on whichit is made, and we assume no obligation to update or revise any forward-lookingstatement, whether as a result of new information, future events, or otherwise,except as required by law. Contact: Investor Relations: Troy Lahr or Matt Welch (312) 544-2140 Communications: Chaz Bickers (312) 544-2002 The Boeing Company and Subsidiaries Consolidated Statements of Operations (Unaudited) Three months ended March 31(Dollars in millions, except per share data) 2014 2013 Sales of products $18,015 $16,318Sales of services 2,450 2,575Total revenues 20,465 18,893 Cost of products (15,258) (13,728)Cost of services (2,020) (2,009)Boeing Capital interest expense (18) (19)Total costs and expenses (17,296) (15,756) 3,169 3,137Income from operating investments, net 59 45General and administrative expense (877) (971)Research and development expense, net (809) (705)Gain on dispositions, net 22Earnings from operations 1,542 1,528Other income, net 9 9Interest and debt expense (92) (99)Earnings before income taxes 1,459 1,438Income tax expense (494) (332)Net earnings from continuing operations 965 1,106Net gain on disposal of discontinued operations, net of taxesNet earnings $965 $1,106Basic earnings per share from continuing operations $1.30 $1.45Net gain on disposal of discontinued operations, net of taxesBasic earnings per share $1.30 $1.45Diluted earnings per share from continuing operations $1.28 $1.44Net gain on disposal of discontinued operations, net of taxesDiluted earnings per share $1.28 $1.44Cash dividends paid per share $0.73 $0.49 Weighted average diluted shares (millions) 754.1 768.7 The Boeing Company and Subsidiaries Consolidated Statements of Financial Position (Unaudited) March 31 December 31(Dollars in millions, except per share data) 2014 2013AssetsCash and cash equivalents $6,942 $9,088Short-term and other investments 5,282 6,170Accounts receivable, net 7,341 6,546Current portion of customer financing, net 256 344Deferred income taxes 15 14Inventories, net of advances and progress billings 44,941 42,912 Total current assets 64,777 65,074Customer financing, net 3,280 3,627Property, plant and equipment, net of accumulated depreciation of $15,281 and $15,070 10,263 10,224Goodwill 5,046 5,043Acquired intangible assets, net 2,996 3,052Deferred income taxes 2,463 2,939Investments 1,208 1,204Other assets, net of accumulated amortization of $478 and $448 1,542 1,500 Total assets $91,575 $92,663Liabilities and equityAccounts payable $10,779 $9,498Accrued liabilities 12,219 14,131Advances and billings in excess of related costs 21,112 20,027Deferred income taxes and income taxes payable 6,732 6,267Short-term debt and current portion of long-term debt 1,660 1,563 Total current liabilities 52,502 51,486Accrued retiree health care 6,515 6,528Accrued pension plan liability, net 9,676 10,474Non-current income taxes payable 166 156Other long-term liabilities 808 950Long-term debt 7,275 8,072Shareholders' equity: Common stock, par value $5.00 - 1,200,000,000 shares authorized; 1,012,261,159 shares issued 5,061 5,061 Additional paid-in capital 4,441 4,415 Treasury stock, at cost - 281,510,590 and 264,882,461 shares (20,028) (17,671) Retained earnings 33,929 32,964 Accumulated other comprehensive loss (8,883) (9,894) Total shareholders' equity 14,520 14,875 Noncontrolling interest 113 122 Total equity 14,633 14,997 Total liabilities and equity $91,575 $92,663 The Boeing Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31(Dollars in millions) 2014 2013Cash flows - operating activities: Net earnings $965 $1,106 Adjustments to reconcile net earnings to net cash provided by operating activities: Non-cash items - Share-based plans expense 52 58 Depreciation and amortization 448 429 Investment/asset impairment charges, net 29 26 Customer financing valuation benefit (23) (3) Gain on disposal of discontinued operations (1) Gain on dispositions, net (22) Other charges and credits, net 47 53 Excess tax benefits from share-based payment arrangements (68) (23) Changes in assets and liabilities - Accounts receivable (792) (437) Inventories, net of advances and progress billings (2,049) (3,000) Accounts payable 1,350 654 Accrued liabilities (1,385) (1,133) Advances and billings in excess of related costs 1,085 1,833 Income taxes receivable, payable and deferred 455 214 Other long-term liabilities (124) (73) Pension and other postretirement plans 733 821 Customer financing, net 408 24 Other (18) (3) Net cash provided by operating activities 1,112 524Cash flows - investing activities: Property, plant and equipment additions (497) (521) Property, plant and equipment reductions 15 33 Acquisitions, net of cash acquired (26) Contributions to investments (2,737) (2,955) Proceeds from investments 3,625 2,655 Net cash provided/(used) by investing activities 406 (814)Cash flows - financing activities: New borrowings 51 15 Debt repayments (757 (1,262) Payments to noncontrolling interests (12) Repayments of distribution rights and other asset financing (3) (138) Stock options exercised, other 109 76 Excess tax benefits from share-based payment arrangements 68 23 Employee taxes on certain share-based payment arrangements (84) (52) Common shares repurchased (2,500) Dividends paid (540) (367) Net cash used by financing activities (3,668) (1,705)Effect of exchange rate changes on cash and cash equivalents 4 (11)Net decrease in cash and cash equivalents (2,146) (2,006)Cash and cash equivalents at beginning of year 9,088 10,341Cash and cash equivalents at end of period $6,942 $8,335 The Boeing Company and Subsidiaries Summary of Business Segment Data (Unaudited) Three months ended March 31(Dollars in millions) 2014 2013Revenues: Commercial Airplanes $12,737 $10,690 Defense, Space & Security: Boeing Military Aircraft 3,458 3,980 Network & Space Systems 1,876 1,960 Global Services & Support 2,299 2,170 Total Defense, Space & Security 7,633 8,110 Boeing Capital 82 105 Other segment 20 27 Unallocated items and eliminations (7) (39)Total revenues $20,465 $18,893Earnings from operations: Commercial Airplanes $1,502 $1,219 Defense, Space & Security: Boeing Military Aircraft 332 427 Network & Space Systems 168 156 Global Services & Support 278 249 Total Defense, Space & Security 778 832 Boeing Capital 44 44 Other segment (62) (58) Unallocated items and eliminations (720) (509)Earnings from operations 1,542 1,528Other income, net 9 9Interest and debt expense (92) (99)Earnings before income taxes 1,459 1,438Income tax expense (494) (332)Net earnings from continuing operations 965 1,106Net gain on disposal of discontinued operations, net of taxesNet earnings $965 $1,106 Research and development expense, net: Commercial Airplanes $529 $419 Defense, Space & Security 280 272 Other 14Total research and development expense, net $809 $705 Unallocated items and eliminations: Share-based plans ($24) ($31) Deferred compensation 7 (56) Capitalized interest (18) (17) Eliminations and other (132) (66) Sub-total (included in core operating earnings) (167) (170) Pension (576) (358) Postretirement 23 19Total unallocated items and eliminations ($720) ($509) The Boeing Company and Subsidiaries Operating and Financial Data (Unaudited) Three months endedDeliveries March 31Commercial Airplanes 2014 2013 737 115 102 747 4 6 767 4 777 24 24 787 18 1 Total 161 137 Defense, Space & SecurityBoeing Military Aircraft F/A-18 Models 11 12 F-15E Eagle 4 3 C-17 Globemaster III 3 3 CH-47 Chinook 17 9 AH-64 Apache 10 15 P-8 Models 2 Global Services & Support AEW&C 1 Network & Space Systems Commercial and Civil Satellites 1 March 31 December 31Contractual backlog (Dollars in billions) 2014 2013 Commercial Airplanes $374.0 $373.0 Defense, Space & Security: Boeing Military Aircraft 23.2 23.6 Network & Space Systems 9.4 9.8 Global Services & Support 16.1 16.2 Total Defense, Space & Security 48.7 49.6Total contractual backlog $422.7 $422.6Unobligated backlog $17.1 $18.3Total backlog $439.8 $440.9Workforce 169,000 168,400 The Boeing Company and Subsidiaries Reconciliation of Non-GAAP Measures Core Operating Earnings, Core Operating Margin and Core Earnings Per Share Increase in Core EPS Excluding First Quarter 2013 Benefit for 2012 Research and Development Tax Credit (Unaudited) The tables provided below reconcile the non-GAAP financial measures coreoperating earnings, core operating margin and core earnings per share as wellas the increase in Core EPS Excluding First Quarter 2013 Benefit for 2012Research and Development Tax Credit with the most directly comparable GAAPfinancial measures, earnings from operations, operating margin and dilutedearnings per share. See page 7 of this release for additional information onthe use of these non-GAAP financial measures. First Quarter Guidance 2014 2013 2014Revenues $20,465 $18,893 GAAP Earnings From Operations $1,542 $1,528GAAP Operating Margin 7.5% 8.1% Unallocated Pension/Postretirement Expense $553 $339 ~ $1,215Core Operating Earnings (non-GAAP) $2,095 $1,867Core Operating Margin (non-GAAP) 10.2% 9.9% Increase/(Decrease) in GAAP Earnings From Operations 1% GAAP Diluted Earnings Per Share $1.28 $1.44 $6.10 - 6.30Unallocated Pension/Postretirement Expense(1) $0.48 $0.29 $1.05Core Earnings Per Share (non-GAAP) $1.76 $1.73 $7.15 - 7.35First Quarter 2013 Benefit for 2012 Research and Development Tax Credit(2) - $0.19Core Earnings Per Share Excluding First Quarter 2013 Benefit for 2012 Research and Development Tax Credit $1.76 $1.54 Weighted Average Diluted Shares (millions) 754.1 768.7 750 - 755Increase in GAAP Earnings Per Share -11%Increase in Core Earnings Per Share 2%Increase in Core Earnings Per Share Excluding First Quarter 2013 Benefit for 2012 Research and Development Tax Credit 14% (1) Earnings per share impact is presented net of the federal statutory tax rateof 35.0 percent.(2) Earnings per share impact of $145 million tax benefit in the first quarter of2013 due to the retroactive reinstatement of the 2012 research and developmenttax credit under the American Taxpayer Relief Act of 2012. The Boeing Company and Subsidiaries Defense, Space & Security Realignment (Unaudited) Effective during the first quarter of 2014, certain programs were realignedamong Defense, Space & Security segments. The Airborne Warning and ControlSystems and Airborne Early Warning and Control aircraft programs and the F-22Modernization program were realigned from Boeing Military Aircraft to GlobalServices & Support. Business segment data for 2013 has been adjusted as followsto reflect the realignment. As Reported in 2013 As Reported in 2014(Dollars in millions) Revenue Earnings Revenue Earnings First Quarter 2013 Boeing Military Aircraft $4,109 $430 $3,980 $427 Global Services & Support 2,041 246 2,170 249 Second Quarter 2013 Boeing Military Aircraft 3,889 373 3,641 386 Global Services & Support 2,248 266 2,496 253 Third Quarter 2013 Boeing Military Aircraft 3,543 221 3,438 220 Global Services & Support 2,272 259 2,377 260 Fourth Quarter 2013 Boeing Military Aircraft 4,395 441 4,226 491 Global Services & Support 2,188 280 2,357 230 Full Year 2013 Boeing Military Aircraft $15,936 $1,465 $15,285 $1,524 Global Services & Support 8,749 1,051 9,400 992

SOURCE Boeing