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Boeing Reports Record 2014 Revenue, Core EPS and Backlog and Provides 2015 Guidance Fourth-Quarter 2014 Core EPS (non-GAAP) rose 23 percent* to $2.31 on strong operating performance;GAAP EPS of $2.02 Operating cash flow increased to $5.0 billion on higher deliveries and timingof receipts and expenditures Full Year 2014 Core EPS increased 22 percent* to a record $8.60 on record revenue of $90.8billion; GAAP EPS of $7.38 Solid operating cash flow of $8.9 billion; strong liquidity of $13.1 billion incash and marketable securities Backlog grew to a record $502 billion, including a record $152 billion of netorders during the year Outlook for 2015 2015 Core EPS guidance of between $8.20 and $8.40; GAAP EPS guidance of between$8.10 and $8.30 Revenue guidance of between $94.5 and $96.5 billion with commercial deliveriesof between 750 and 755 Operating cash flow guidance of greater than $9.0 billion CHICAGO, Jan. 28, 2015 -- Table 1. SummaryFinancial Fourth Quarter Full YearResults(Dollars inMillions, exceptper share data) 2014 2013 Change 2014 2013 Change Revenues $24,468 $23,785 3% $90,762 $86,623 5% Non-GAAP*Core OperatingEarnings $2,344 $1,838 28% $8,860 $7,876 12%Core OperatingMargin 9.6% 7.7% 1.9 Pts 9.8% 9.1% 0.7 PtsCore EarningsPer Share $2.31 $1.88 23% $8.60 $7.07 22%Operating Cash FlowBefore PensionContributions $5,032 $1,409 257% $9,642 $9,721 (1)%GAAPEarnings FromOperations $2,025 $1,515 34% $7,473 $6,562 14%Operating Margin 8.3% 6.4% 1.9 Pts 8.2% 7.6% 0.6 PtsNet Earnings $1,466 $1,233 19% $5,446 $4,585 19%Earnings Per Share $2.02 $1.61 25% $7.38 $5.96 24%Operating Cash Flow $4,998 $1,380 262% $8,858 $8,179 8% * Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are onpage 7, "Non-GAAP Measures Disclosures." The Boeing Company [NYSE: BA] reported record fourth-quarter revenue of $24.5billion on higher deliveries (Table 1) and core earnings per share (non-GAAP)that increased 23 percent* to $2.31, reflecting strong performance across thecompany. Fourth-quarter 2014 core operating earnings (non-GAAP)* increased to$2.3 billion and GAAP earnings from operations increased to $2.0 billion.Fourth-quarter 2013 results included a $406 million non-cash charge ($0.34 pershare) related to the A-12 settlement. Revenue rose 5 percent in the full year to a record $90.8 billion and coreearnings per share (non-GAAP) increased 22 percent* to $8.60 on recorddeliveries. Full-year 2014 GAAP earnings per share was $7.38. Core earnings per share guidance for 2015 is set at between $8.20 and $8.40,while GAAP earnings per share guidance is established at between $8.10 and$8.30. Revenue guidance is between $94.5 and $96.5 billion, includingcommercial deliveries of between 750 and 755. Operating cash flow is expectedto be greater than $9.0 billion. "Strong operating performance in the final quarter of 2014 propelled us to someof our best-ever results and sealed a fifth consecutive year of core operatingearnings growth. By responding to strong demand with market-leading and provenproducts and capabilities, and delivering them more efficiently, we arestrengthening a powerful business platform that is providing increased returnsfor our shareholders," said Boeing Chairman and Chief Executive Officer JimMcNerney. "Our Commercial Airplanes business successfully increased production rates andset an industry record for annual deliveries while also growing its backlog tonew highs on record new orders for the year. Our Defense, Space & Security teamnavigated a challenging market environment to achieve solid revenue and healthymargins while also winning significant new contracts," said McNerney. "For 2015, we will continue to build on our commercial airplanes marketleadership, strengthening and repositioning our defense, space and securitybusiness and working to better meet the needs of our customers by focusing onimproving productivity, executing to development plans and delivering ourindustry-leading portfolio of innovative aerospace products and services." Table 2. Cash Flow Fourth Quarter Full Year(Millions) 2014 2013 2014 2013 Operating Cash Flow Before Pension Contributions* $5,032 $1,409 $9,642 $9,721 Pension Contributions ($34) ($29) ($784) ($1,542)Operating Cash Flow $4,998 $1,380 $8,858 $8,179 Less Additions to Property, Plant & Equipment ($668) ($638) ($2,236) ($2,098)Free Cash Flow* $4,330 $742 $6,622 $6,081 Operating cash flow in the quarter was $5.0 billion, reflecting commercialairplane production rates, strong operating performance and timing of receiptsand expenditures (Table 2). During the quarter, the company repurchased 7.8million shares for $1 billion and paid $0.5 billion in dividends. Based on thestrong cash generation and outlook, in December, the board of directorsincreased the share repurchase authorization to a total of $12 billion,replacing the authorization approved in 2013 of which approximately $4.8billion was remaining, and raised the quarterly dividend 25 percent. Sharerepurchases are expected to be made over the next two to three years. Table 3. Cash, Marketable Securities and Debt Balances Quarter-End(Billions) Q4 14 Q3 14Cash $11.7 $6.7Marketable Securities(1) $1.4 $3.4 Total $13.1 $10.1Debt Balances:The Boeing Company, net of intercompany loans to BCC $6.7 $6.4Boeing Capital, including intercompany loans $2.4 $2.5 Total Consolidated Debt $9.1 $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 $13.1 billion atquarter-end (Table 3), up from $10.1 billion at the beginning of the quarter.Debt was $9.1 billion, up from $8.9 billion at the beginning of the quarter,primarily due to the issuance of new debt. Total company backlog at quarter-end was a record $502 billion, up from $490billion at the beginning of the quarter, and included net orders for thequarter of $37 billion. Backlog is up $61 billion from prior year-end,reflecting $152 billion of net orders in 2014. Segment Results Commercial Airplanes Table 4.Commercial Fourth Quarter Full YearAirplanes(Dollars in 2014 2013 Change 2014 2013 ChangeMillions) CommercialAirplanesDeliveries 195 172 13% 723 648 12% Revenues $16,839 $14,680 15% $59,990 $52,981 13%Earnings fromOperations $1,562 $1,506 4% $6,411 $5,795 11 %OperatingMargin 9.3% 10.3% (1.0) Pts 10.7% 10.9% (0.2) Pts Commercial Airplanes fourth-quarter revenue increased 15 percent to a record$16.8 billion on higher delivery volume and mix. Fourth-quarter operatingmargin was 9.3 percent, reflecting higher planned period costs and the dilutiveimpact of 787 deliveries partially offset by the delivery volume (Table 4). During the quarter, the company began production on the fuselage stringers ofthe first 737 MAX airplane. The 737 program has won over 2,600 firm orders forthe 737 MAX since launch. Also during the quarter, the company began finalassembly of the 787-9 Dreamliner at the South Carolina facility and brokeground on the 777X composite centers in Everett and St. Louis. Commercial Airplanes booked 432 net orders during the quarter with a record1,432 orders in 2014. Backlog remains strong with nearly 5,800 airplanes valuedat a record $440 billion. Defense, Space & Security Table 5. Defense, Space& Security Fourth Quarter Full Year(Dollars in Millions) 2014 2013 Change 2014 2013 ChangeRevenues(1) Boeing Military Aircraft $2,993 $4,226 (29)% $13,511 $15,285 (12)% Network & Space Systems $2,180 $2,272 (4)% $8,003 $8,512 (6)% Global Services & Support $2,415 $2,357 2% $9,367 $9,400 0%Total BDS Revenues $7,588 $8,855 (14)% $30,881 $33,197 (7)%Earnings from Operations(1) Boeing Military Aircraft $367 $446 (18)% $1,304 $1,504 (13)% Network & Space Systems $191 $233 (18)% $698 $719 (3)%Global Services & Support $359 $275 31% $1,131 $1,012 12%Total BDS Earnings fromOperations $917 $954 (4)% $3,133 $3,235 (3)%Operating Margin 12.1% 10.8% 1.3 Pts 10.1% 9.7% 0.4 Pts (1) During the first quarter of 2014, certain programs were realigned betweenBoeing Military Aircraft and Global Services & Support. Defense, Space & Security's fourth-quarter revenue was $7.6 billion with anoperating margin of 12.1 percent (Table 5). Boeing Military Aircraft (BMA) fourth-quarter revenue was $3.0 billion,reflecting lower planned F-15 and C-17 deliveries. Operating margin increasedto 12.3 percent, reflecting strong operating performance. During the quarter,BMA completed the first flight of the 767-2C test aircraft for the KC-46 tankerprogram and Congress approved funding for 15 EA-18G Growlers. Network & Space Systems (N&SS) fourth-quarter revenue was $2.2 billion,reflecting lower government satellite volume, and operating margin was 8.8percent. During the quarter, N&SS completed the first two all-electricpropulsion 702SP satellites. Global Services & Support (GS&S) fourth-quarter revenue increased to $2.4billion on higher volume in maintenance, modification and upgrades (MM&U).Operating margin increased to 14.9 percent reflecting strong operatingperformance across the segment and mix within MM&U. During the quarter, GS&Swas awarded a 25-year order from the Australian government to train navy andarmy rotary wing aircrew. Backlog at Defense, Space & Security was $62 billion, of which 36 percentrepresents orders with international customers. Additional Financial Information Table 6. Additional Financial Information Fourth Quarter Full Year(Dollars in Millions) 2014 2013 2014 2013Revenues Boeing Capital $153 $105 $416 $408 Unallocated items, eliminations and other ($112) $145 ($525) $37Earnings from Operations Boeing Capital $26 $9 $92 $107 Unallocated items, eliminations and other excluding unallocated pension/postretirement ($161) ($631) ($776) ($1,261) Unallocated pension/postretirement ($319) ($323) ($1,387) ($1,314)Other (loss)/income, net ($14) $15 ($3) $56Interest and debt expense ($81) ($96) ($333) ($386)Effective tax rate 24.0% 14.0% 23.7% 26.4% At quarter-end, Boeing Capital's net portfolio balance was $3.5 billion.Unallocated items, eliminations and other fourth-quarter revenue decreased fromthe same period in the prior year due to the timing of eliminations forintercompany aircraft deliveries (Table 6). Unallocated items, eliminations and other excluding unallocated pension/postretirement in the fourth quarter of 2013 included a $406 million chargeassociated with the A-12 settlement. Total pension expense for the fourthquarter was $772 million, up from $717 million in the same period of the prioryear. The company's income tax expense was $464 million in the quarter,compared to $201 million in the same period of the prior year primarily due tohigher earnings. Fourth-quarter 2014 results include the full year 2014 U.S.research and development tax credit of $188 million; fourth-quarter 2013results include a $212 million benefit for a tax regulation change. Outlook The company's 2015 financial guidance (Table 7) reflects continued strongperformance across the company. Table 7. 2015 Financial Outlook(Dollars in Billions, except per share data) 2015 The Boeing Company Revenue $94.5 - 96.5 Core Earnings Per Share* $8.20 - 8.40 GAAP Earnings Per Share $8.10 - 8.30 Operating Cash Flow greater than $9 Commercial Airplanes Deliveries 750 - 755 Revenue $64.5 - 65.5 Operating Margin 9.5% - 10.0% Defense, Space & Security (revised for business realignment) Revenue Boeing Military Aircraft ~$12.5 Network & Space Systems ~$8.0 Global Services & Support ~$9.5 Total BDS Revenue $29.5 - 30.5 Operating Margin Boeing Military Aircraft ~9.5% Network & Space Systems ~9.0% Global Services & Support ~11.0% Total BDS Operating Margin 9.75% - 10.0% Boeing Capital Portfolio Size Stable Revenue ~$0.3 Pre-Tax Earnings ~$0.05 Research & Development ~ $3.5Capital Expenditures ~ $2.8Pension Expense (1) ~ $2.1Effective Tax Rate (2) ~ 30.5% (1) Approximately $0.3 billion is expected to be recorded in unallocated itemsand eliminations (2) 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." 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. 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) Twelve months ended December 31 Three months ended December 31(Dollars in millions, except per share data) 2014 2013 2014 2013Sales of products $80,688 $76,792 $21,768 $21,482Sales of services 10,074 9,831 2,700 2,303Total revenues 90,762 86,623 24,468 23,785 Cost of products (68,551) (65,640) (18,528) (18,610)Cost of services (8,132) (7,553) (2,167) (1,758)Boeing Capital interest expense (69) (75) (16) (20)Total costs and expenses (76,752) (73,268) (20,711) (20,388) 14,010 13,355 3,757 3,397Income from operating investments, net 287 214 75 67General and administrative expense (3,767) (3,956) (1,040) (1,100)Research and development expense, net (3,047) (3,071) (755) (848)(Loss)/gain on dispositions, net (10) 20 (12) (1)Earnings from operations 7,473 6,562 2,025 1,515Other (loss)/income, net (3) 56 (14) 15Interest and debt expense (333) (386) (81) (96)Earnings before income taxes 7,137 6,232 1,930 1,434Income tax expense (1,691) (1,646) (464) (201)Net earnings from continuing operations 5,446 4,586 1,466 1,233Net loss on disposal of discontinuedoperations, net of taxes of $0, $0,$0 and $0 (1)Net earnings $5,446 $4,585 $1,466 $1,233Basic earnings per share fromcontinuing operations $7.47 $6.03 $2.05 $1.63Net loss on disposal of discontinuedoperations, net of taxesBasic earnings per share $7.47 $6.03 $2.05 $1.63Diluted earnings per share fromcontinuing operations $7.38 $5.96 $2.02 $1.61Net loss on disposal of discontinuedoperations, net of taxesDiluted earnings per share $7.38 $5.96 $2.02 $1.61Cash dividends paid per share $2.92 $1.94 $0.73 $0.485Weighted average diluted shares (millions) 738.0 769.5 724.8 768.4 The Boeing Company and Subsidiaries Consolidated Statements of Financial Position (Unaudited) (Dollars in millions, except per share data) December 31 2014 December 31 2013AssetsCash and cash equivalents $11,733 $9,088Short-term and other investments 1,359 6,170Accounts receivable, net 7,729 6,546Current portion of customer financing, net 190 344Deferred income taxes 18 14Inventories, net of advances and progress billings 46,756 42,912 Total current assets 67,785 65,074Customer financing, net 3,371 3,627Property, plant and equipment, net of accumulateddepreciation of $15,689 and $15,070 11,007 10,224Goodwill 5,119 5,043Acquired intangible assets, net 2,869 3,052Deferred income taxes 6,576 2,939Investments 1,154 1,204Other assets, net of accumulated amortization of $479 and $448 1,317 1,500 Total assets $99,198 $92,663Liabilities and equityAccounts payable $10,667 $9,498Accrued liabilities 13,343 14,131Advances and billings in excess of related costs 23,175 20,027Deferred income taxes and income taxes payable 8,603 6,267Short-term debt and current portion of long-term debt 929 1,563 Total current liabilities 56,717 51,486Accrued retiree health care 6,802 6,528Accrued pension plan liability, net 17,182 10,474Non-current income taxes payable 358 156Other long-term liabilities 1,208 950Long-term debt 8,141 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 4,625 4,415 Treasury stock, at cost - 305,533,606 and 264,882,461 shares (23,298) (17,671) Retained earnings 36,180 32,964 Accumulated other comprehensive loss (13,903) (9,894) Total shareholders' equity 8,665 14,875 Noncontrolling interests 125 122 Total equity 8,790 14,997 Total liabilities and equity $99,198 $92,663 The Boeing Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Twelve months ended December 31(Dollars in millions) 2014 2013Cash flows - operating activities:Net earnings $5,446 $4,585Adjustments to reconcile net earnings to net cash providedby operating activities: Non-cash items - Share-based plans expense 195 206 Depreciation and amortization 1,906 1,844 Investment/asset impairment charges, net 229 96 Customer financing valuation benefit (28) (11) Loss on disposal of discontinued operations 1 Loss/(gain) on dispositions, net 10 (20) Other charges and credits, net 317 528 Excess tax benefits from share-based payment arrangements (114) (128) Changes in assets and liabilities - Accounts receivable (1,328) (879) Inventories, net of advances and progress billings (4,330) (5,562) Accounts payable 1,339 (298) Accrued liabilities (1,088) 883 Advances and billings in excess of related costs 3,145 3,353 Income taxes receivable, payable and deferred 1,325 1,445 Other long-term liabilities 36 2 Pension and other postretirement plans 1,186 1,720 Customer financing, net 578 391 Other 34 23 Net cash provided by operating activities 8,858 8,179Cash flows - investing activities:Property, plant and equipment additions (2,236) (2,098)Property, plant and equipment reductions 34 51Acquisitions, net of cash acquired (163) (26)Contributions to investments (8,617) (15,394)Proceeds from investments 13,416 12,453Purchase of distribution rights (140)Other 33 Net cash provided/(used) by investing activities 2,467 (5,154)Cash flows - financing activities:New borrowings 962 571Debt repayments (1,601) (1,434)Payments to noncontrolling interests (12)Repayments of distribution rights and other asset financing (185) (280)Stock options exercised, other 343 1,097Excess tax benefits from share-based payment arrangements 114 128Employee taxes on certain share-based payment arrangements (98) (63)Common shares repurchased (6,001) (2,801)Dividends paid (2,115) (1,467) Net cash used by financing activities (8,593) (4,249)Effect of exchange rate changes on cash and cash equivalents (87) (29)Net increase/(decrease) in cash and cash equivalents 2,645 (1,253)Cash and cash equivalents at beginning of year 9,088 10,341Cash and cash equivalents at end of period $11,733 $9,088 The Boeing Company and Subsidiaries Summary of Business Segment Data (Unaudited) Twelve months ended December 31 Three months ended December 31(Dollars in millions) 2014 2013 2014 2013Revenues: Commercial Airplanes $59,990 $52,981 $16,839 $14,680 Defense, Space & Security: Boeing Military Aircraft 13,511 15,285 2,993 4,226 Network & Space Systems 8,003 8,512 2,180 2,272 Global Services & Support 9,367 9,400 2,415 2,357 Total Defense, Space & Security 30,881 33,197 7,588 8,855 Boeing Capital 416 408 153 105 Unallocated items, eliminations and other (525) 37 (112) 145Total revenues $90,762 $86,623 $24,468 $23,785Earnings from operations: Commercial Airplanes $6,411 $5,795 $1,562 $1,506 Defense, Space & Security: Boeing Military Aircraft 1,304 1,504 367 446 Network & Space Systems 698 719 191 233 Global Services & Support 1,131 1,012 359 275 Total Defense, Space & Security 3,133 3,235 917 954 Boeing Capital 92 107 26 9 Unallocated items, eliminations and other (2,163) (2,575) (480) (954)Earnings from operations 7,473 6,562 2,025 1,515Other (loss)/income, net (3) 56 (14) 15Interest and debt expense (333) (386) (81) (96)Earnings before income taxes 7,137 6,232 1,930 1,434Income tax expense (1,691) (1,646) (464) (201)Net earnings from continuing operations 5,446 4,586 1,466 1,233Net loss on disposal ofdiscontinued operations, net of taxes of $0, $0, and $0 and $0 (1)Net earnings $5,446 $4,585 $1,466 $1,233 Research and development expense, net:Commercial Airplanes $1,881 $1,807 $459 $510Defense, Space & Security 1,158 1,215 292 323Other 8 49 4 15Total research and development expense, net $3,047 $3,071 $755 $848 Unallocated items, eliminations and other: Share-based plans ($67) ($95) ($1) ($21) Deferred compensation (44) (238) (22) (73) Amortization of previously capitalized interest (72) (69) (17) (17) Eliminations and other unallocated items (593) (859) (121) (520) Sub-total (included in core operating earnings) (776) (1,261) (161) (631) Pension (1,469) (1,374) (334) (329) Postretirement 82 60 15 6Total unallocated items, eliminations and other ($2,163) ($2,575) ($480) ($954) The Boeing Company and Subsidiaries Operating and Financial Data (Unaudited) Deliveries Twelve months ended December 31 Three months ended December 31Commercial Airplanes 2014 2013 2014 2013737 485 440 126 110747 19 (3) 24 7 (1) 8767 6 21 3 4777 99 98 24 25787 114 65 (1) 35 25Total 723 648 195 172 Note: Deliveries under operating lease are identified by parentheses. Defense, Space & SecurityBoeing Military Aircraft F/A-18 Models 44 48 8 12 F-15 Models 14 14 4 11 C-17 Globemaster III 7 10 2 CH-47 Chinook 54 44 8 12 AH-64 Apache 45 37 15 6 P-8 Models 11 11 5 4 Global Services & Support AEW&C 3 C-40A 1 1 Network & Space SystemsCommercial and Civil Satellites 5 3 2 2Military Satellites 4 3 Contractual backlog (Dollars in billions) December 31 September 30 December 31 2014 2014 2013 Commercial Airplanes $440.1 $429.6 $373.0 Defense, Space & Security: Boeing Military Aircraft 21.1 21.2 23.6 Network & Space Systems 8.9 8.8 9.8 Global Services & Support 16.9 15.5 16.2 Total Defense, Space & Security 46.9 45.5 49.6Total contractual backlog $487.0 $475.1 $422.6Unobligated backlog $15.3 $14.9 $18.3Total backlog $502.3 $490.0 $440.9Workforce 165,500 168,000 168,400 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 7 of this release foradditional information on the use of these non-GAAP financial measures. Fourth Quarter Full Year Guidance 2014 2013 2014 2013 2015Revenues $24,468 $23,785 $90,762 $86,623GAAP Earnings FromOperations $2,025 $1,515 $7,473 $6,562GAAP Operating Margin 8.3% 6.4% 8.2% 7.6% Unallocated Pension/Postretirement Expense $319 $323 $1,387 $1,314 $110Core OperatingEarnings (non-GAAP) $2,344 $1,838 $8,860 $7,876Core OperatingMargin (non-GAAP) 9.6% 7.7% 9.8% 9.1% Increase/(Decrease) in GAAPEarnings From Operations 34% 14%Increase/(Decrease)in Core OperatingEarnings (non-GAAP) 28% 12% GAAP DilutedEarnings Per Share $2.02 $1.61 $7.38 $5.96 $8.10 - $8.30Unallocated Pension/Postretirement Expense(1) $0.29 $0.27 $1.22 $1.11 $0.10Core Earnings PerShare (non-GAAP) $2.31 $1.88 $8.60 $7.07 $8.20 - $8.40 Weighted Average DilutedShares (millions) 724.8 768.4 738.0 769.5 695 - 700Increase/(Decrease) in GAAPEarnings Per Share 25% 24%Increase/(Decrease) in CoreEarnings Per Share (non-GAAP) 23% 22% (1) Earnings per share impact is presented net of the federal statutory tax rateof 35.0 percent.

SOURCE Boeing