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Boeing Reports Strong Third-Quarter Results and Raises 2014 EPS Guidance Core EPS (non-GAAP)* rose 19 percent to $2.14 on strong operating performance;GAAP EPS of $1.86 Revenue increased 7 percent to $23.8 billion reflecting higher deliveries Backlog grew to a record $490 billion with over 5,500 commercial airplaneorders Solid operating cash flow before pension contributions* of $1.7 billion Repurchased 8 million shares for $1 billion 2014 Core EPS guidance increased $0.20 to between $8.10 and $8.30 CHICAGO, Oct. 22, 2014 -- Table 1. Summary Financial Results Third Quarter Nine months (Dollars in Millions, except per share data) 2014 2013 Change 2014 2013 Change Revenues $23,784 $22,130 7% $66,294 $62,838 5% Non-GAAP*Core Operating Earnings $2,430 $2,143 13% $6,516 $6,038 8%Core Operating Margin 10.2% 9.7% 0.5 Pts 9.8% 9.6% 0.2 PtsCore Earnings Per Share $2.14 $1.80 19% $6.30 $5.20 21%Operating Cash Flow Before Pension Contributions $1,689 $4,308 (61)% $4,610 $8,312 (45)% GAAPEarnings From Operations $2,119 $1,803 18% $5,448 $5,047 8%Operating Margin 8.9% 8.1% 0.8 Pts 8.2% 8.0% 0.2 PtsNet Earnings $1,362 $1,158 18% $3,980 $3,352 19%Earnings Per Share $1.86 $1.51 23% $5.36 $4.36 23%Operating Cash Flow $939 $2,808 (67)% $3,860 $6,799 (43)% * Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are onpage 6, "Non-GAAP Measures Disclosures." The Boeing Company [NYSE: BA] reported third-quarter revenue increased 7percent to $23.8 billion on higher deliveries (Table 1). Core earnings pershare (non-GAAP) increased 19 percent* to $2.14, driven by strong performanceacross the company's businesses. Third-quarter core operating earnings(non-GAAP) increased 13 percent* to $2.4 billion from the same period of theprior year. GAAP earnings per share was $1.86 and GAAP earnings from operationswas $2.1 billion. Core earnings per share guidance for 2014 increased to between $8.10 and $8.30,from $7.90 to $8.10 on continued strong operating performance. GAAP earningsper share guidance for 2014 increased to between $6.90 and $7.10, from $6.85 to$7.05. Operating cash flow before pension contributions* guidance increased togreater than $7 billion. Commercial Airplanes operating margin guidanceincreased to approximately 10.5 percent. "Continued strong operating performance across our production and servicesbusinesses drove significant growth in earnings-per-share, and enabled us tocontinue to capture new business, pushing our order backlog to a record $490billion," said Boeing Chairman and CEO Jim McNerney. "We added net new ordersfor 501 commercial airplanes, launched the high-capacity 737 MAX 200, captureda NASA contract for the Commercial Crew program, and returned $1.5 billion toshareholders through dividends and share repurchases." "With three solid quarters behind us and confidence in our ongoing performance,we are increasing our earnings per share outlook for 2014, as our team remainsfocused on providing value to our customers and shareholders, profitablyramping up airplane production, executing on our development programs, anddriving productivity and affordability throughout the enterprise," McNerneysaid. Table 2. Cash Flow Third Quarter Nine months(Millions) 2014 2013 2014 2013Operating Cash Flow Before Pension Contributions* $1,689 $4,308 $4,610 $8,312 Pension Contributions ($750) ($1,500) ($750) ($1,513)Operating Cash Flow $939 $2,808 $3,860 $6,799 Less Additions to Property, Plant & Equipment ($622) ($484) ($1,568) ($1,460)Free Cash Flow* $317 $2,324 $2,292 $5,339 Operating cash flow before pension contributions* in the quarter was $1.7billion, reflecting commercial airplane production rates, strong operatingperformance and timing of receipts and expenditures (Table 2). During thequarter, the company repurchased 8 million shares for $1 billion, leaving $5.8billion remaining under the current repurchase authorization expected to becompleted over approximately the next one to two years. The company also paid$0.5 billion in dividends in the quarter. Table 3. Cash, Marketable Securities and Debt Balances Quarter-End(Billions) Q3 14 Q2 14Cash $6.7 $7.5Marketable Securities(1) $3.4 $3.8 Total $10.1 $11.3Debt Balances:The Boeing Company, net of intercompany loans to BCC $6.4 $6.4Boeing Capital, including intercompany loans $2.5 $2.5 Total Consolidated Debt $8.9 $8.9 (1) Marketable securities consists primarily of time deposits due within one yearclassified as "short-term investments." Cash and investments in marketable securities totaled $10.1 billion atquarter-end (Table 3), down from $11.3 billion at the beginning of the quarter.Debt was $8.9 billion, unchanged from the beginning of the quarter. Total company backlog at quarter-end was a record $490 billion, up from $440billion at the beginning of the quarter, and included net orders for thequarter of $73 billion. Segment Results Commercial Airplanes Table 4.Commercial Airplanes Third Quarter Nine months(Dollars in Millions) 2014 2013 Change 2014 2013 Change Commercial Airplanes Deliveries 186 170 9% 528 476 11% Revenues $16,110 $13,987 15% $43,151 $38,301 13%Earnings from Operations $1,797 $1,617 11% $4,849 $4,289 13%Operating Margin 11.2% 11.6% (0.4) Pts 11.2% 11.2% 0.0 Pts Commercial Airplanes third-quarter revenue increased 15 percent to a record$16.1 billion on higher deliveries. Third-quarter operating margin was 11.2percent, reflecting the dilutive impact of 787 and 747-8 deliveries and higherperiod costs partially offset by the delivery volume and continued strongoperating performance (Table 4). During the quarter, the company launched the 737 MAX 200 with a commitment fromRyanair for 100 airplanes. The 737 program has won nearly 2,300 firm orders forthe 737 MAX since launch. Due to the continued strong demand for the 737 familyof airplanes, the company intends to increase the 737 production rate from 42to 47 per month in 2017, with recently announced plans to increase to 52 permonth in 2018. Also during the quarter, the first GEnx-powered 787-9 Dreamlinerwas delivered. Commercial Airplanes booked 501 net orders during the quarter. Backlog remainsstrong with over 5,500 airplanes valued at a record $430 billion. Defense, Space & Security Table 5. Defense, Space & Security Third Quarter Nine months(Dollars in Millions) 2014 2013 Change 2014 2013 ChangeRevenues(1) Boeing Military Aircraft $3,537 $3,438 3% $10,518 $11,059 (5)% Network & Space Systems $2,027 $2,231 (9)% $5,823 $6,240 (7)% Global Services & $2,349 $2,377 (1)% $6,952 $7,043 (1)% SupportTotal BDS Revenues $7,913 $8,046 (2)% $23,293 $24,342 (4)%Earnings from Operations(1) Boeing Military Aircraft $440 $245 80% $937 $1,058 (11)% Network & Space Systems $189 $193 (2)% $507 $486 4% Global Services & $227 $235 (3)% $772 $737 5% SupportTotal BDS Earnings from $856 $673 27% $2,216 $2,281 (3)% OperationsOperating Margin 10.8% 8.4% 2.4 Pts 9.5% 9.4% 0.1 Pts (1) During the first quarter of 2014, certain programs were realigned betweenBoeing Military Aircraft and Global Services & Support. Defense, Space & Security's third-quarter revenue was $7.9 billion with anoperating margin of 10.8 percent (Table 5). Boeing Military Aircraft (BMA) third-quarter revenue was $3.5 billion,reflecting higher P-8 deliveries. Operating margin increased to 12.4 percent,reflecting improved performance. During the quarter, BMA delivered the firstU.S Army Multiyear II configured Chinook. Network & Space Systems (N&SS) third-quarter revenue was $2.0 billion,reflecting timing on United Launch Alliance (ULA) launches and lower governmentsatellite volume. Operating margin increased to 9.3 percent, reflecting strongperformance. During the quarter, N&SS was awarded a contract for NASA'sCommercial Crew program. Global Services & Support (GS&S) third-quarter revenue was $2.3 billion onlower volume, and operating margin was 9.7 percent reflecting delivery mix.During the quarter, GS&S delivered the first upgraded French Airborne Warningand Control System (AWACS) aircraft. Backlog at Defense, Space & Security was $60 billion, of which 37 percentrepresents orders with international customers. Additional Financial Information Table 6. Additional Financial Information Third Quarter Nine months(Dollars in Millions) 2014 2013 2014 2013Revenues Boeing Capital $91 $94 $263 $303 Unallocated items, eliminations and other ($330) $3 ($413) ($108)Earnings from Operations Boeing Capital ($11) $35 $66 $98 Unallocated items, eliminations and other excluding unallocated pension/ ($212) ($182) ($615) ($630) postretirement Unallocated pension/postretirement ($311) ($340 ($1,068) ($991)Other income/(loss), net ($9) $19 $11 $41Interest and debt expense ($79) ($95) ($252) ($290)Effective tax rate 32.9% 32.8% 23.6% 30.1% At quarter-end, Boeing Capital's net portfolio balance was $3.5 billion.Unallocated items, eliminations and other third-quarter revenue decreased fromthe same period in the prior year due to the elimination of intersegmentrevenue for two aircraft delivered under operating leases (Table 6). Totalpension expense for the third quarter was $715 million, down from $775 millionin the same period of the prior year. Outlook The company's 2014 financial guidance (Table 7) reflects continued strongperformance in both businesses. Table 7. 2014 Financial Outlook Current Prior(Dollars in Billions, except per share data) Guidance Guidance The Boeing Company Revenue $87.5 - 90.5 $87.5 - 90.5 Core Earnings Per Share* $8.10 - 8.30 $7.90 - 8.10 GAAP Earnings Per Share $6.90 - 7.10 $6.85 - 7.05 Operating Cash Flow Before Pension Contributions* greater than $7 ~ $7 Operating Cash Flow(1) greater than $6.25 ~ $6.25 Commercial Airplanes Deliveries(2) 715 - 725 715 - 725 Revenue $57.5 - 59.5 $57.5 - 59.5 Operating Margin ~ 10.5% greater than 10.0% Defense, Space & Security (revised for business realignment) Revenue Boeing Military Aircraft ~ $13.7 ~ $14.2 Network & Space Systems ~ $7.7 ~ $7.7 Global Services & Support ~ $9.1 ~ $8.6 Total BDS Revenue $30 - 31 $30 - 31 Operating Margin Boeing Military Aircraft ~ 9.0% ~ 9.0% Network & Space Systems ~ 8.5% ~ 8.5% Global Services & Support ~ 11.0% ~ 11.0% Total BDS Operating Margin ~ 9.5% ~ 9.5% Boeing Capital Portfolio Size Lower Lower Revenue ~ $0.3 ~ $0.3 Pre-Tax Earnings ~ $0.05 ~ $0.05 Research & Development ~ $3.2 ~ $3.2Capital Expenditures ~ $2.3 ~ $2.5Pension Expense(3) ~ $3.3 ~ $3.2Effective Tax Rate(4) ~ 23% ~ 23% (1) After discretionary cash pension contributions of $0.75 billion for thecurrent and prior guidance and assuming new aircraft financings ofapproximately $0.5 billion for the current guidance and under $0.5 billion forthe prior guidance (2) Assumes approximately 110 787 deliveries for the current and prior guidance (3) Approximately $1.5 billion for the current guidance and $1.3 billion for theprior guidance is expected to be recorded in unallocated items and 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 6, "Non-GAAP Measures Disclosures." 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 13. Operating Cash Flow Before Pension Contributions Operating cash flow before pension contributions is defined as GAAP operatingcash flow without pension contributions. Management believes operating cashflow before 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 without capitalexpenditures for property, plant and equipment additions. Management believesfree cash flow provides investors with an important perspective on the cashavailable for shareholders, debt repayment, and acquisitions after making thecapital investments required to support ongoing business operations and longterm value creation. Free cash flow does not represent the residual cash flowavailable for discretionary expenditures as it excludes certain mandatoryexpenditures such as repayment of maturing debt. Management uses free cash flowas a measure to assess both business performance and overall liquidity. Table 2provides a reconciliation 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 Rob Martin (312) 544-2140Communications: Chaz Bickers (312) 544-2002 The Boeing Company and Subsidiaries Consolidated Statements of Operations (Unaudited) Nine months ended Three months ended September 30 September 30(Dollars in millions, except per share data) 2014 2013 2014 2013Sales of products $58,920 $55,310 $21,378 $19,754Sales of services 7,374 7,528 2,406 2,376Total revenues 66,294 62,838 23,784 22,130 Cost of products (50,023) (47,030) (18,091) (16,865)Cost of services (5,965) (5,795) (1,966) (1,791)Boeing Capital interest expense (53) (55) (18) (18)Total costs and expenses (56,041) (52,880) (20,075) (18,674) 10,253 9,958 3,709 3,456Income from operating investments, net 212 147 92 59General and administrative expense (2,727) (2,856) (932) (956)Research and development expense, net (2,292) (2,223) (750) (755)Gain/(loss) on dispositions, net 2 21 (1)Earnings from operations 5,448 5,047 2,119 1,803Other income/(loss), net 11 41 (9) 19Interest and debt expense (252) (290) (79) (95)Earnings before income taxes 5,207 4,798 2,031 1,727Income tax expense (1,227) (1,445) (669) (567)Net earnings from continuing operations 3,980 3,353 1,362 1,160Net loss on disposal of discontinued operations, net of taxes of $0, $0, $0 and $0 (1) (2)Net earnings $3,980 $3,352 $1,362 $1,158Basic earnings per share from continuing operations $5.43 $4.40 $1.88 $1.53Net loss on disposal of discontinued operations, net of taxesBasic earnings per share $5.43 $4.40 $1.88 $1.53Diluted earnings per share from continuing operations $5.36 $4.36 $1.86 $1.51Net loss on disposal of discontinued operations, net of taxesDiluted earnings per share $5.36 $4.36 $1.86 $1.51Cash dividends paid per share $2.19 $1.455 $0.73 $0.485Weighted average diluted shares (millions) 742.3 769.8 731.9 769.1 The Boeing Company and Subsidiaries Consolidated Statements of Financial Position (Unaudited) (Dollars in millions, except per share data) September 30 December 31 2014 2013AssetsCash and cash equivalents $6,655 $9,088Short-term and other investments 3,422 6,170Accounts receivable, net 7,799 6,546Current portion of customer financing, net 257 344Deferred income taxes 27 14Inventories, net of advances and progress billings 47,058 42,912 Total current assets 65,218 65,074Customer financing, net 3,347 3,627Property, plant and equipment, net of accumulated depreciation of $15,645 and $15,070 10,707 10,224Goodwill 5,131 5,043Acquired intangible assets, net 2,954 3,052Deferred income taxes 2,546 2,939Investments 1,203 1,204Other assets, net of accumulated amortization of $447 and $448 1,547 1,500 Total assets $92,653 $92,663Liabilities and equityAccounts payable $11,136 $9,498Accrued liabilities 12,677 14,131Advances and billings in excess of related costs 21,127 20,027Deferred income taxes and income taxes payable 6,685 6,267Short-term debt and current portion of long-term debt 1,579 1,563 Total current liabilities 53,204 51,486Accrued retiree health care 6,494 6,528Accrued pension plan liability, net 9,262 10,474Non-current income taxes payable 709 156Other long-term liabilities 1,046 950Long-term debt 7,301 8,072Shareholders' equity: Common stock, par value $5.00 - 1,200,000,000 shares authorized; 1,012,261,159 and 1,012,261,159 shares issued 5,061 5,061 Additional paid-in capital 4,572 4,415 Treasury stock, at cost - 298,419,764 and 264,882,461 shares (22,349) (17,671) Retained earnings 35,880 32,964 Accumulated other comprehensive loss (8,653) (9,894) Total shareholders' equity 14,511 14,875 Noncontrolling interests 126 122 Total equity 14,637 14,997 Total liabilities and equity $92,653 $92,663 The Boeing Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Nine months ended September 30(Dollars in millions) 2014 2013Cash flows - operating activities: Net earnings $3,980 $3,352 Adjustments to reconcile net earnings to net cash provided by operating activities: Non-cash items - Share-based plans expense 152 156 Depreciation and amortization 1,378 1,323 Investment/asset impairment charges, net 140 38 Customer financing valuation benefit (26) (7) Loss on disposal of discontinued operations 1 Gain on dispositions, net (2) (21) Other charges and credits, net 145 48 Excess tax benefits from share-based payment arrangements (104) (86) Changes in assets and liabilities - Accounts receivable (1,385) (1,006) Inventories, net of advances and progress billings (4,425) (3,631) Accounts payable 1,819 943 Accrued liabilities (1,054) (338) Advances and billings in excess of related costs 1,100 3,543 Income taxes receivable, payable and deferred 887 1,336 Other long-term liabilities (42) (52) Pension and other postretirement plans 746 954 Customer financing, net 494 223 Other 57 23 Net cash provided by operating activities 3,860 6,799Cash flows - investing activities: Property, plant and equipment additions (1,568) (1,460) Property, plant and equipment reductions 27 47 Acquisitions, net of cash acquired (163) (26) Contributions to investments (7,874) (9,640) Proceeds from investments 10,608 6,997 Receipt of economic development program funds 4 Net cash provided/(used) by investing activities 1,034 (4,082)Cash flows - financing activities: New borrowings 105 547 Debt repayments (910) (1,397) Payments to noncontrolling interests (12) Repayments of distribution rights and other asset (184) (139) financing Stock options exercised, other 293 871 Excess tax benefits from share-based payment arrangements 104 86 Employee taxes on certain share-based payment arrangements (94) (60) Common shares repurchased (5,000) (1,799) Dividends paid (1,596) (1,102) Net cash used by financing activities (7,294) (2,993) Effect of exchange rate changes on cash and cash equivalents (33) (24) Net decrease in cash and cash equivalents (2,433) (300) Cash and cash equivalents at beginning of year 9,088 10,341 Cash and cash equivalents at end of period $6,655 $10,041 The Boeing Company and Subsidiaries Summary of Business Segment Data (Unaudited) Nine months ended September 30 Three months ended September 30(Dollars in millions) 2014 2013 2014 2013Revenues: Commercial Airplanes $43,151 $38,301 $16,110 $13,987 Defense, Space & Security: Boeing Military Aircraft 10,518 11,059 3,537 3,438 Network & Space Systems 5,823 6,240 2,027 2,231 Global Services & Support 6,952 7,043 2,349 2,377 Total Defense, Space & Security 23,293 24,342 7,913 8,046 Boeing Capital 263 303 91 94 Unallocated items, eliminations and other (413) (108) (330) 3Total revenues $66,294 $62,838 $23,784 $22,130Earnings from operations: Commercial Airplanes $4,849 $4,289 $1,797 $1,617 Defense, Space & Security: Boeing Military Aircraft 937 1,058 440 245 Network & Space Systems 507 486 189 193 Global Services & Support 772 737 227 235 Total Defense, Space & Security 2,216 2,281 856 673 Boeing Capital 66 98 (11) 35 Unallocated items, eliminations and other (1,683) (1,621) (523) (522)Earnings from operations 5,448 5,047 2,119 1,803Other income/(loss), net 11 41 (9) 19Interest and debt expense (252) (290) (79) (95) Earnings before income taxes 5,207 4,798 2,031 1,727Income tax expense (1,227) (1,445) (669) (567)Net earnings from continuing operations 3,980 3,353 1,362 1,160Net loss on disposal of discontinued operations, net of taxes of $0, $0, $0 and $0 (1) (2)Net earnings $3,980 $3,352 $1,362 $1,158 Research and development expense, net: Commercial Airplanes $1,422 $1,297 $452 $432 Defense, Space & Security 866 892 289 313 Other 4 34 9 10Total research and development $2,292 $2,223 $750 $755 expense, net Unallocated items, eliminations and other: Share-based plans ($66) ($74) ($22) ($21) Deferred compensation (22) (165) (3) (63) Amortization of previously capitalized interest (55) (52) (19) (18) Eliminations and other unallocated items (472) (339) (168) (80) Sub-total (included in core operating earnings) (615) (630) (212) (182) Pension (1,135) (1,045) (331) (356) Postretirement 67 54 20 16Total unallocated items, eliminations and other ($1,683) ($1,621) ($523) ($522) The Boeing Company and Subsidiaries Operating and Financial Data (Unaudited) Deliveries Nine months ended September 30 Three months ended September 30Commercial Airplanes 2014 2013 2014 2013 737 359 330 120 112 747 12 (2) 16 6 (2) 4 767 3 17 2 5 777 75 73 27 26 787 79 40 (1) 31 23 Total 528 476 186 170 Note: Deliveries under operating lease are identified by parentheses. Defense, Space & SecurityBoeing Military Aircraft F/A-18 Models 36 36 13 12 F-15E Eagle 10 3 2 C-17 Globemaster III 7 8 2 2 CH-47 Chinook 46 32 14 15 AH-64 Apache 30 31 11 11 P-8 Models 6 7 4 2 Global Services & Support AEW&C 3 1 Network & Space Systems Commercial and Civil Satellites 3 1 1 Military Satellites 1 1 Contractual backlog (Dollars in September 30 June 30 March 31 December 31 billions) 2014 2014 2014 2013 Commercial Airplanes $429.6 $376.3 $374.0 $373.0 Defense, Space & Security: Boeing Military 21.2 23.8 23.2 23.6 Aircraft Network & Space 8.8 9.6 9.4 9.8 Systems Global Services & 15.5 16.3 16.1 16.2 Support Total Defense, Space 45.5 49.7 48.7 49.6 & SecurityTotal contractual $475.1 $426.0 $422.7 $422.6 backlogUnobligated backlog $14.9 $14.3 $17.1 $18.3Total backlog $490.0 $440.3 $439.8 $440.9Workforce 168,000 169,300 169,000 168,400 The Boeing Company and Subsidiaries Reconciliation of Non-GAAP Measures Core Operating Earnings, Core Operating Margin and Core Earnings Per Share (Unaudited) The tables provided below reconcile the non-GAAP financial measures coreoperating earnings, core operating margin and core earnings per share with themost directly comparable GAAP financial measures, earnings from operations,operating margin and diluted earnings per share. See page 6 of this release foradditional information on the use of these non-GAAP financial measures. Third Quarter Nine Months Guidance 2014 2013 2014 2013 2014Revenues $23,784 $22,130 $66,294 $62,838 GAAP Earnings From Operations $2,119 $1,803 $5,448 $5,047GAAP Operating Margin 8.9% 8.1% 8.2% 8.0% Unallocated Pension/Postretirement Expense $311 $340 $1,068 $991 ~ $1,360Core Operating Earnings (non-GAAP) $2,430 $2,143 $6,516 $6,038Core Operating Margin (non-GAAP) 10.2% 9.7% 9.8% 9.6% Increase/(Decrease) in GAAP Earnings From Operations 18% 8%Increase/(Decrease) in Core Operating Earnings (non-GAAP) 13% 8% GAAP Diluted Earnings Per Share $1.86 $1.51 $5.36 $4.36 $6.90 - $7.10Unallocated Pension/Postretirement Expense(1) $0.28 $0.29 $0.94 $0.84 $1.20Core Earnings Per Share (non-GAAP) $2.14 $1.80 $6.30 $5.20 $8.10 - $8.30 Weighted Average Diluted Shares (millions) 731.9 769.1 742.3 769.8 ~ 739Increase/(Decrease) in GAAP Earnings Per Share 23% 23%Increase/(Decrease) in Core Earnings Per Share (non-GAAP) 19% 21% (1) Earnings per share impact is presented net of the federal statutory tax rateof 35.0 percent.

SOURCE Boeing