These statements are notguarantees of future performance and involve risks uncertainties andassumptions that are difficult to predict

These statements are notguarantees of future performance and involve risks, uncertainties andassumptions that are difficult to predict. Words suchas "expects," "intends," "plans," "projects," "believes," "estimates,""targets," and similar expressions are used to identify these forward-lookingstatements. Management uses free cashflow internally to assess both business performance and overall liquidity.Table 2 provides a reconciliation between GAAP operating cash flow and freecash flow.Forward-Looking Information Is Subject to Risk and UncertaintyCertain statements in this report may be "forward-looking" within themeaning of the Private Securities Litigation Reform Act of 1995. 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 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.

The company does not intend for the information to be consideredin isolation or as a substitute for the related GAAP measures Othercompanies may define the measures differently. The following definitions areprovided:Free Cash FlowFree cash flow is defined as GAAP operating cash flow less capitalexpenditures for property, plant and equipment additions. IDS guidance for 2009 remainsunchanged with revenue between $33 billion and $34 billion and operatingmargins of approximately 10 percent.Boeing Capital Corporation continues to expect that the aircraft financeportfolio will increase modestly as the amount of aircraft financing in 2009will exceed normal portfolio runoff due to customer payments anddepreciation.Boeing's 2009 R&D forecast is between $3.6 billion and $3.8 billion.Annual capital expenditures are expected to be approximately $1.4 billion in2009. The company has been anticipating changes in the U.S.defense budget for some time. The company continues to consider IDSwell-positioned with a diverse portfolio of defense, space and securityprograms, and will increase its focus on international defense opportunitiesand pursuit of adjacent markets in the U.S. Boeing will be evaluating the defense budget as itprogresses through Congress to determine the potential future effects on ourbusiness outlook.

BCA's 2009 revenue is unchanged between $34billion and $35 billion. BCA's operating margin is now expected to be between8 percent and 8.5 percent, down from approximately 10 percent, due to theeffect of lower twin-aisle deliveries in future periods and lower forecasteddelivery price escalation in future periods.Earlier this month, the U.S Department of Defense outlined its 2010budget priorities. Operating cash flow is still expected to be greater than$2.5 billion, including discretionary pension contributions of approximately$0.5 billion and an assumption of $1 billion for new commercial airplanefinancings.Commercial Airplanes' 2009 delivery guidance remains at between 480 and485 airplanes and is sold out. The company expects to issue 2010 financial guidance later inthe year.Boeing's 2009 revenue guidance is reaffirmed at $68 billion to $69billion. Earnings-per-share guidance for 2009 is reduced to $4.70 to $5.00per share from $5.05 to $5.35 per share due to lower earnings at CommercialAirplanes (Table 7). A total of $242 million wasallocated to the operating segments in the quarter (up from $124 million inthe same period last year), partially offset by a $23 million contribution toearnings in unallocated items.OutlookThe 2009 financial guidance reflects challenging commercial and defensemarkets, as well as company plans to reduce discretionary spending andrestructure various internal organizations to drive higher levels ofproductivity. Other segment expense was $23 million in the firstquarter, reduced from $50 million of expense in the same period last year.Unallocated expense was $115 million, up from $55 million in the samequarter last year driven by higher intersegment eliminations.Total pension expense for the quarter increased to $219 million, up from$191 million in the same period last year.

BCCcontributed $35 million in cash dividends to the company during the quarter.BCC's debt-to-equity ratio was unchanged at 5.0-to-1.Table 6.Boeing Capital Corporation Operating ResultsFirst Quarter -------- (Millions) 2009 2008 Change---------- ---- ---- ------ Revenues $163 $185(12%) Earnings from Operations$37$61(39%)Additional InformationThe "Other" segment consists primarily of Boeing Engineering, Operationsand Technology, as well as certain results related to the consolidation ofall business units. BCC's portfolio balance at the end of the quarter was $6.0 billion, down5 percent from $6.3 billion in the year-ago period primarily on normalportfolio run-off, including customer payments and depreciation, partiallyoffset by additions to its portfolio of $135 million in new financings. New orders for the quarter include the additional C-17s and thecontracts for integrated logistics and support.Boeing Capital CorporationBoeing Capital Corporation (BCC) reported first-quarter pre-tax earningsof $37 million compared to $61 million in the same period last year due to asmaller aircraft finance portfolio and higher reserves and impairments (Table6). During thequarter, GS&S continued to generate double-digit operating margins of 10.8percent. In this segment, the company captured contracts for V-22performance-based logistics as well as maintenance and operations support forGround-based Midcourse Defense.IDS' backlog is $73.0 billion, more than two times expected 2009revenues. Last year's resultsincluded a favorable settlement on a satellite program.Global Services & Support revenues increased 21 percent on higher volumein its broad portfolio of services and logistics programs.