Boeing Reports Second Quarter

CHICAGO, July 23, 2003 - The Boeing Company [NYSE: BA] reported a net loss for the second quarter of 2003 of $192 million, or $0.24 per share, on revenues of $12.8 billion. This compares with net earnings of $779 million, or $0.96 per share, on revenues of $13.9 billion for the second quarter of 2002.

On July 15, 2003, the company disclosed it would recognize charges related to its launch and satellite businesses. These charges decreased net earnings for the quarter by $693 million, or $0.87 per share.

“We took strong actions this quarter to recognize and address the challenges in our commercial space businesses,” said Boeing Chairman and Chief Executive Officer Phil Condit. “Our strong defense portfolio again performed well, and Commercial Airplanes and Boeing Capital Corporation are successfully managing through the downturn for strong future returns.”

As shown in Table 2, the company reported losses from operations totaling $293 million in the second quarter compared with earnings from operations of $1.2 billion in the second quarter of 2002. Previously announced charges related to the satellite and launch businesses reduced earnings from operations $1.1 billion. In addition, second quarter results reflect lower planned commercial airplane deliveries and pension income, partially offset by strong performance on military programs and ongoing production improvements at Commercial Airplanes.

Deferred stock compensation pre-tax expense increased $59 million during the quarter due to the increase in the company’s stock price from March 31 through June 30. This resulted in a $0.05 unfavorable impact to earnings per share. Pre-tax expense for share-based plans totaled $120 million and reduced earnings per share by $0.09. Taken together, consolidated stock compensation expenses lowered second quarter earnings per share by a total of $0.14.