Final Results

Boeing Co
19 January 2001



Boeing Reports $1.01 EPS for the Fourth Quarter, up 36%, and 2000 EPS of $2.88,
up 22%, Excluding Non-Recurring Items 

Generated $4.9 Billion Cash Flow, Increased Contractual Backlog 24% to $123
Billion

Highlights:
Full Year 2000:

* Achieved operating margins of 7.4 percent, a 25 percent increase year over
year from 1999, resulting in net earnings of $2.5 billion, or $2.88 per share
excluding non-recurring items. 
* Produced strong free cash flow of $4.9 billion 
* Completed 146 million share repurchase program and authorized a new 10 percent
share repurchase program; increased the dividend 21 percent 
* Completed strategic acquisitions, including Hughes' space and communication
businesses and Jeppesen; announced the disposition of St. Louis fabrication
operations, completed Jan. 8, 2001 
* Delivered 489 commercial jetliners, commercial backlog rose strongly to $89.8
billion; launched longer-range 777, 747-400 and 767-400ER aircraft 
* Received $8.9 billion multi-year contract for 222 F/A-18E/F Super Hornet
aircraft; JSF X-32A concept demonstrator entered test flight 
* Received $6 billion follow-on order National Missile Defense contract 

Fourth Quarter:

* Produced operating margins of 9.3 percent, a 46 percent increase over fourth
quarter 1999, resulting in net earnings of $877 million on revenues of $14.7
billion, or $1.01 per share, excluding non-recurring items 
* Delivered 130 jetliners; signed major services contracts with FedEx and UPS 
* Completed aircraft carrier variant tests, initial aerial refueling and first
supersonic flight with the JSF X-32A 
* Signed greater than $1 billion dollar contract for 4 Airborne Early Warning & 
Control aircraft for Australia 
* Won competition to provide Airborne Early Warning & Control aircraft for
Turkey with a potential contract value of $1.5 billion 
* Delivered 8 Delta II launch vehicles 


Summary Financial Results:                                Twelve months ended
(in millions except per share data)  4th Quarter  %       December 31       %
                                    2000    1999 Change  2000    1999   Change
Revenues                         $14,693  $15,200  -3%  $51,321 $57,993   -12%

Net earnings                        $481     $662        $2,128  $2,309
Non-recurring amounts               $396      $ 0          $385   ($112)
Earnings w/o non-recurring items    $877     $662   32%  $2,513  $2,197    14%

Earnings per share (diluted)        $0.55    $0.74        $2.44   $2.49
Non-recurring items                 $0.46    $0.00        $0.44  ($0.12)

EPS w/o non-recurring items         $1.01    $0.74  36%   $2.88   $2.37    22%


SEATTLE, Jan. 17, 2001 - The Boeing Company (NYSE: BA) reported net earnings for
the year 2000, excluding non-recurring items, of $2,513 million, or $2.88 per
share. Operating margins increased 25 percent to 7.4 percent, excluding
non-recurring items. Non-recurring pre-tax charges of $616 million, or $0.44
cents per share after-tax, were recorded for the year. These reflected fourth
quarter write-offs associated with acquisition and divestiture activities and
were primarily related to in-process research and development expenses and
employee benefit expenses, as well as previously disclosed costs related to a
Delta III demonstration launch. As a result, reported net earnings for 2000
totaled $2,128 million, or $2.44 per share. Non-recurring items for the year are
summarized below:


2000 Non-Recurring Items              Fourth Quarter        Full Year 2000
(in millions except per share data)   Pre-Tax    EPS       Pre-Tax      EPS
                                      Impact    Impact     Impact     Impact

Acquisitions/Divestitures:            
 In-process R&D                       ($557)   ($0.40)    ($557)     ($0.40) 
 Benefit costs impact                  ($96)   ($0.07)     ($96)     ($0.07)
Delta III demonstration launch                             ($78)     ($0.06)
Other                                   $20     $0.01      $115       $0.09
Total                                 ($633)   ($0.46)    ($616)     ($0.44)


Annual revenues totaled $51 billion, down 12 percent compared to 1999, largely
due to fewer commercial aircraft deliveries. 

Net fourth quarter earnings, excluding non-recurring items, were up 32 percent
versus the fourth quarter of 1999 to $877 million, or $1.01 per share. Quarterly
earnings also included general and administrative expenses of $36 million, or
$0.03 cents per share, related primarily to performance share vesting resulting
from the increase in Boeing's share price. Reported fourth quarter earnings were
$481 million, or $0.55 per share.

Cash flow remained a major strength of the company. In the fourth quarter, the
company generated significant free cash flow (operating cash flow less capital
expenditures) of $1.7 billion and, for the full year, generated $4.9 billion.
The company repurchased 42 million shares for $2.4 billion and completed the 146
million share repurchase program authorized by the Board of Directors in August
1998. After share repurchase and acquisition activity, year-end cash and
short-term investment balances totaled $1,010 million.

'The Boeing team did a tremendous job in 2000,' Boeing Chairman and Chief
Executive Officer Phil Condit said. 'Despite anticipated lower revenues, we
promised better margins, solid profitability and powerful cash flow in 2000, and
we delivered. All of this resulted in significant returns to our shareholders.
Our entire leadership team is focused on running healthy core businesses. The
outstanding performance improvement at our commercial airplane group was
especially noteworthy,' he added. 'We also took significant strategic actions to
continue to build a world class team and a growing, global enterprise.' 

During 2000, a variety of actions added to the company's strong intellectual
capital base and set the stages for future growth. Boeing completed several key
acquisitions, including Hughes' space and communications businesses, Jeppesen,
Continental Graphics and Autometrics. Three major initiatives were elevated to
separate business unit status: Connexion by BoeingSM, Air Traffic Management and
Boeing Capital Corporation.

Commercial Airplanes: Commercial Airplanes 2000 operating earnings were $2,736
million compared with $2,082 million reported for 1999. Commercial aircraft
results were favorably impacted by fourth quarter adjustments totaling $68
million for subcontractor termination and other termination activity primarily
related to completed MD-80, MD-90 and MD-11 programs. These offset $52 million
non-recurring pre-tax charges for in-process research and development associated
with the acquisitions of Jeppesen and Continental Graphics. After netting the
impacts of these items, segment operating margins for 2000 were 8.7 percent, up
from 5.4 percent in 1999, reflecting strong operating performance improvements
despite a 19 percent drop in revenues to $31.2 billion. 

For the fourth quarter, segment operating earnings were $856 million on revenues
of $8.7 billion. After netting the impacts of the fourth quarter termination
adjustments and non-recurring charges described above, segment operating margins
for 2000 were 9.7 percent, up from 7.0 percent in 1999.

The 130 commercial jet airplanes delivered in the fourth quarter brought total
deliveries for 2000 to 489, compared with 620 in 1999. The contractual backlog
for Commercial Airplanes products and commercial aviation services reached $89.8
billion, a $17 billion increase versus year-end 1999, reflecting prospects for
sustained strength in the aircraft delivery stream. 

Military Aircraft and Missiles: Military Aircraft and Missiles operating
earnings for the year 2000 were $1,271 million on revenues of $12.2 billion.
Comparable 1999 operating earnings, which exclude the impact of non-recurring
charges associated with the F-15 program, were $1,463 million on revenues of
$12.2 billion. Operating margins were 10.4 percent compared with 12.0 percent in
1999, reflecting cost growth on certain services and helicopter programs. 

For the fourth quarter, segment operating earnings were $349 million on revenues
of $3.2 billion. During the same period last year comparable operating earnings
were $401 million on revenues of $3.3 billion. Operating margins totaled 10.8
percent versus 12.2 percent in 1999. 

As a result of strong customer demand for its premier portfolio of products and
services, segment contractual backlog for products and aerospace support
services increased $4.3 billion to $19.9 billion. 

Space and Communications: Space and Communications operating earnings for the
full year were $260 million compared with $320 million in 1999, excluding
non-recurring items. Segment reported results were impacted by $505 million
pre-tax non-recurring charges associated with the acquisition of several
businesses, principally Hughes' space and communications businesses in the
fourth quarter, as well as $78 million of costs associated with a Delta III
demonstration launch earlier in the year. Segment operating margins excluding
non-recurring charges for 2000 and 1999 were 3.2 percent, and 4.7 percent,
reflecting continued research and development investments for the future and
program mix. Revenues for the 12-month period were $8.0 billion compared to $6.8
billion in 1999, reflecting growth of Integrated Defense Systems programs and
the addition of Boeing Satellite Systems revenues. 

Fourth quarter segment operating earnings excluding non-recurring items totaled
$174 million on revenues of $3.0 billion, compared to operating earnings of $123
million on revenues of $1.9 billion for the same period in 1999. Quarterly
operating margins were 5.9 percent compared with 6.5 percent in 1999.

With the inclusion of Boeing Satellite Services and as a result of significant
contract wins, contractual backlog for the segment increased to $13.4 billion
compared with $10.6 billion at year-end 1999, a 26 percent increase. 

Value Scorecard: The company met its 2000 Value Scorecard goals for inventory
turns, facilities consolidation, overhead cost management and supplier base
consolidations.

'We are pleased that our focus on running healthy businesses has resulted in
achieving our 2000 financial and performance goals,' said Mike Sears, senior
vice president and chief financial officer. 'Our results clearly indicate we
have made significant progress towards driving a value-oriented discipline deep
into the organization,' he added. 'Looking ahead, we will maintain our sharp
focus on operating excellence, increased competitiveness and greater
profitability.

Value Scorecard**               1999          2000          2000
Performance Initiatives        Results        Goal         Results
Inventory turns                  2.9          3.0           3.0
Facility consolidation (in
                   millions)   122sq ft       109sq ft       109sq ft 
Overhead reduction (in
                   millions)*  $780          $1,600        $1,603
Supplier base                  28,800        25,000        20,406


* Baseline established 1998
**Excluding impact of Hughes and other acquisitions 

Outlook: The company's financial guidance for 2001 and 2002 is shown below. 

The strong outlook for 2001 remains consistent with that previously provided.
Initial guidance for 2002 reflects expected continued growth in revenues to
greater than $62 billion, while the operating margin is expected to improve to
more than 9 percent. Cash flow is expected to exceed $4 billion. The company
estimates annual commercial aircraft deliveries in 2001 and 2002 to be
approximately 530 each year, which is consistent with totals previously
provided. Research and development expenses, including development of the new
747X aircraft, Delta IV launch vehicles and Connexion by BoeingSM, are expected
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
                                                                   

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 prospects for sustained
strength in the commercial aircraft delivery stream, company focus on operating
excellence, increased competitiveness and greater profitability, revenues,
operating margins, free cash flow, a stable delivery environment, deliveries,
research and development expense, 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 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
1999 and the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000.
 

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

(Dollars in millions except per share data)
                                   Twelve months ended     Three months ended
                                    December 31              December 31

                                       2000     1999         2000     1999
Sales and other operating revenues  $51,321  $57,993      $14,693  $15,200
Cost of products and services        43,712   51,320       12,228   13,340

                                      7,609    6,673        2,465    1,860
Equity in income from joint ventures     64        4           26        1
General and administrative expense    2,335    2,044          696      535
Research and development expense      1,998    1,341          974      315
Gain on dispositions, net                34       87           14       17
Share-based plans expense               316      209          123       58

Earnings from operations            $ 3,058  $ 3,170      $   712   $  970

Other income, principal interest        386      585           43       84
Interest and debt expense              (445)    (431)        (125)    (101)
Earnings before income taxes        $ 2,999  $ 3,324      $   630   $  953

Income taxes                            871    1,015          149      291

Net earnings                        $ 2,128  $ 2,309      $   481   $  662

Basic earnings per share             $2.48     $2.52         $.57     $.75

Diluted earnings per share           $2.44     $2.49         $.55     $.74

Cash dividends per share             $.59      $.56          $.17     $.14

Average diluted shares (millions)    871.3    925.9          867.2    896.0

Excluding the share-based plans:

     Net Earnings                   $2,325   $2,439          $558    $698
     Diluted earnings per share      $2.67    $2.63          $.64    $78

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) 
                                       December 31           December 31
                                           2000                  1999
                                       (Unaudited)
Assets
Cash and cash equivalents               $ 1,010              $ 3,354
Short-term investments                                           100
Accounts receivable                       4,928                3,453
Current portion of customer and 
commercial financing                        359                  799
Deferred income taxes                     2,130                1,467
Inventories, net of advances 
and progress billings                     6,794                6,539
     Total current assets                15,221               15,712
Customer and commercial financing         6,600                5,205
Property, plant and equipment, net        8,814                8,245
Goodwill and acquired intangibles         5,214                2,233
Prepaid pension expense                   4,845                3,845 
Other assets                              1,324                  907
                                        $42,018              $36,147

Liabilities and Shareholders' Equity

Accounts payable and other liabilities  $11,979              $11,269
Advances in excess of related costs       3,517                1,215
Income taxes payable                      1,551                  420
Short-term debt and current portion of
 long-term debt                           1,232                  752
     Total current liabilities           18,279               13,656

Deferred income taxes                                            172
Accrued retiree health care               5,152                4,877
Long-term debt                            7,567                5,980

 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                2,693                1,684
Treasury shares, at cost- 136,385,222 
                      and 102,356,897    (6,221)              (4,161)
Retained earnings                        12,090               10,487
Accumulated other comprehensive income       (2)                   6
Unearned compensation                        (7)                 (12)
ShareValue Trust shares -39,156,230 
                      and 38,696,289     (2,592)              (1,601)
     Total shareholders'equity           11,020               11,462

                                        $42,018              $36,147

                      The Boeing Company and Subsidiaries
                     Consolidated Statements of Cash Flows
                                  (Unaudited)

                                            Twelve months ended
(Dollars in millions)                            December 31
                                          2000       1999     1998
Cash flows - operating activities:
  Net earnings                           $2,128     $2,309    $1,120
  Adjustments to reconcile net earnings
   to net cash provided by operating 
   activities:
    Share-based plans                       316        209       153
    Depreciation                          1,317      1,533     1,517
    Amortization of goodwill 
    and intangibles                         719        107       105
    Customer and commercial financing 
    valuation provision                      13         72        61
    Gain on dispositions, net               (34)       (87)      (13)
    Changes in assets and liabilities -
     Short-term investments                 100        179       450
     Accounts receivable                   (768)      (225)     (167)
     Inventories, net of advances and 
     progress billings                    1,097      2,030       652
     Accounts payable and other 
     liabilities                           (311)       217      (840)
     Advances in excess of related costs  1,387        (36)     (324)
     Income taxes payable and deferred      421        462       145
     Other                                 (712)      (597)     (479)
     Accrued retiree health care            269         46        35
         Net cash provided by operating 
         activities                       5,942      6,224     2,415
Cash flows - investing activities:
     Customer financing and properties
     on lease, additions                 (2,571)    (2,398)   (2,603)
     Customer financing and properties 
     on lease, reductions                 1,433      1,842     1,357
     Property, plant and equipment,
     net additions                         (932)    (1,236)   (1,665)
     Acquisitions. net of cash acquired  (5,727)
     Proceeds from dispositions             169        359        37

       Net cash used by investing 
       activities                        (7,628)    (1,433)   (2,874)

Cash flows - financing activities:
     New borrowings                       2,687        437       811
     Debt Repayments                       (620)      (676)     (693)
     Common shares purchased             (2,357)    (2,937)   (1,397)
     Stock options exercised, other         136         93        65
     Dividends paid                        (504)      (537)     (564)

       Net cash used by financing 
       activities                          (658)     (3,620)  (1,778)

Net increase (decrease)in cash and 
cash equivalents                         (2,344)      1,171   (2,237)
Cash and cash equivalents at beginning
of year                                   3,354       2,183    4,420
Cash and cash equivalents at end of year $1,010      $3,354   $2,183


                   The Boeing Company and Subsidiaries
                         Business Segment Data
                               (Unaudited)

(Dollars in millions)       Twelve months ended     Three months ended
                                    December 31     December 31
                                2000     1999       2000     1999
Revenues:                      

  Commercial Airplanes         $31,171  $38,475     $8,659     $9,996
  Military Aircraft and 
  Missiles                      12,197   12,220      3,246      3,283
  Space and Communications       8,039    6,831      2,968      1,896
  Customer and Commercial 
  Financing, Other                 758      771        232        228
  Accounting differences
  /eliminations                   (844)    (304)      (412)      (203)

  Operating revenues           $51,321   $57,993   $14,693    $15,200

Earnings from operations:

   Commercial Airplanes         $2,736    $2,082      $856       $704
   Military Aircraft and 
   Missiles                      1,271     1,193       349        401
   Space and Communications       (323)      415      (331)       123
   Customer and Commercial 
   Financing, Other                494       426       151        156
   Accounting differences
   /eliminations                  (442)     (432)      (82)      (268)
   Share-based plans              (316)     (209)     (123)       (58)
   Unallocated expense            (362)     (305)     (1O8)       (88)

Earnings from operations        $3,058    $3,170      $712       $970

   Other income, principally
   interest                      $ 386     $ 585      $ 43       $ 84
   Interest and debt expense      (445)     (431)     (125)      (101)
   Earnings before income taxes $2,999    $3,324      $630       $953
   Income Taxes                    871     1,015       149        291
   Net earnings                 $2,128    $2,309      $481       $662
   Effective income tax rate      29.0%     30.5%     23.7%     30.5%

Research and development:

  Commercial Airplanes           $ 626     $ 585      $ 232      $89
   Military Aircraft and Missiles  262       264         72       89
   Space and Communications      1,110       492        670      137

Total research and development 
expense                         $1,998     $1,341      $974     $315

                    The Boeing Company and Subsidiaries
                      0perating and Financial Data

Deliveries                      Twelve months              4th Quarter
Commercial Airplanes               2000     1999           2000     1999
717                               32 (23)   12 (2)        12(11)     10
737                                2        42             -          8
737 Next-Generation              279 *     278            70*        71
747                               25 **     47             6          9
757                               45        67             8         16
767                               44        44(1)         14         11
777                               55        83            17         22
MD-80                              -        26(21)         -          9 (7)
MD-90                              3        13             3          7
MD-11                              4         8             -          2
       Total                     489       620           130        165

Military Aircraft and Missiles
C-17                              13        11             3          3
F-15                               5        35             -          8
F/A-18 C/D                        16        25             -          5
F/A-18 E/F                        26        13             9          3
T-45TS                             8        12             2          3
CH-47                              7        14             2          4
Apache                            16        11             3          2
Space and Communications
767 AWACS                          -         2             -          -
Delta ll                          10        11             8          3
Delta lll                          -***      1             -          -
*     Includes three C-40 Aircraft
**    Includes one ABL 747
***   Excludes 3Q 2000 demonstration launch

Note: Commercial Airplanes deliveries by model include deliveries under
operating lease, which are identified by parentheses. The first 12 F/A-18 E/F
aircraft were delivered under a cost-type contract; sales were recognized as
work progressed rather than upon delivery.

                                           Dec. 31     Sep. 30     Dec. 31
Contractual backlog (Dollars in billions)    2000       2000        1999
     Commercial Airplanes                  $ 89.8      $ 82.8     $73.0
     Military Aircraft and Missiles          19.9        19.1      15.6
     Space and Communications                13.4         9.2      10.6
Total contractual backlog                  $123.1      $111.1     $99.2
Unobligated backlog                         $29.9       $25.1     $24.4
Workforce                                 198,000     188,000     197,000



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