Boeing Completes Goodwill Impairment Analysis and Assessment of Customer 
   Financing Portfolio; Will Record Non-Cash Charges Totaling $1.2 Billion 
 
   -- Reflects the severe downturn in commercial aviation and space markets 
 
    CHICAGO, April 10 -- The Boeing Company (NYSE: BA) 
announced today that it will recognize non-cash charges that will reduce first 
quarter 2003 pre-tax earnings from operations approximately $1.2 billion and 
net earnings per share approximately $1.23.  Boeing will report its results 
for the quarter ending March 31st on April 23, 2003. 
    As noted on the chart below, $931 million, or three-quarters of the 
charges, will be recognized in connection with the company's impairment of 
goodwill under Statement of Financial Accounting Standards (SFAS) 142.  These 
non-cash charges do not affect company business operations and will be 
attributable to goodwill recorded in connection with companies acquired since 
1996.  They will be recorded within the Commercial Airplanes segment and 
Launch and Orbital Systems segment.   
    The company will also record non-cash charges totaling approximately 
$251 million to strengthen customer financing reserves and revalue certain 
customer financing assets. The charges will be recorded within the Boeing 
Capital Corporation (BCC) and Other segments.   
 
    Pre-Tax         Boeing       Launch &      Boeing        
    Charges        Commercial     Orbital     Capital      "Other" 
    (Millions)     Airplanes     Systems*   Corporation    Segment      Total 
    Goodwill 
     Impairment      $341         $590           --           --        $931  
    Customer 
     Financing         --           --         $193          $58        $251  
    Total            $341         $590         $193          $58      $1,182  
 
    *Reporting Segment within Integrated Defense Systems                   
      
    Additional detail regarding these charges is provided below. 
 
    Goodwill Impairment 
    SFAS 142 requires goodwill to be tested for impairment annually and when 
an event occurs indicating that it is possible an impairment exists.   The 
company has selected April 1 as its annual testing date.  However, the 
reorganization of Boeing's space and defense businesses triggered a goodwill 
impairment analysis as of January 1, 2003.    
    The company will record $931 million of pre-tax charges in the quarter 
ending March 31, 2003.  Approximately $671 million of these charges are not 
tax-deductible primarily because the related acquisitions were stock 
purchases.  The company estimates the after-tax earnings impact will be 
approximately $835 million, or $1.03 per share.  After this impairment, 
Boeing's goodwill balances will total approximately $1.8 billion.  
    Key factors driving the amount of the impairment charge included: a) the 
continuing severity of market conditions in Boeing's commercial aviation and 
commercial space businesses, and b) decreases in the company's stock price 
since the company's previous goodwill evaluation in 2002.   
    The company does not expect to record any additional impairment to 
goodwill in connection with its annual assessment.  More information about the 
company's process for evaluating goodwill impairment can be found in the 
Management Discussion and Analysis section of Boeing's 2002 Annual Report on 
Form 10-K. 
 
    Customer Financing  
    Boeing and its financing subsidiary, BCC, have completed their first 
quarter 2003 assessment of BCC's financing portfolio.  As summarized on the 
chart below, Boeing will recognize non-cash, pre-tax charges of approximately 
$251 million split between BCC and Boeing's "Other" segment.  The company 
estimates the after-tax impact will total approximately $159 million, or $0.20 
per share.   
 
    Pre-Tax Charges               Boeing Capital       "Other"     
    (Millions)                      Corporation       Segment         Total 
 
    Increased Valuation Allowance      $130             $30          $160  
    Impairment of Operating Lease 
     Aircraft                           $42              --           $42  
    Other Adjustments                   $21             $28           $49  
    Total                              $193             $58          $251  
 
    The company is recognizing these charges primarily as a result of 
continued declines in airline customer credit ratings, airplane collateral 
values and lease rates.   Certain of the charges are recorded in Boeing's 
"Other" segment as a result of corporate guarantees that reduce BCC's 
exposure.   
 
    Forward-Looking Information Is Subject to Risk and Uncertainty 
    Certain statements in this release may constitute "forward-looking" 
statements within the meaning of the Private Litigation Reform Act of 1995.  
Words such as "expects," "intends," "plans," "projects," "believes," 
"estimates," and similar expressions are used to identify these forward-
looking statements.  These statements are not guarantees of future performance 
and involve risks, uncertainties and assumptions that are difficult to 
predict.  Forward-looking statements are based upon assumptions as to future 
events that may not prove to be accurate.  Actual outcomes and results may 
differ materially from what is expressed or forecasted in these forward-
looking statements.  As a result, these statements speak only as of the date 
they were made and we undertake no obligation to publicly update or revise any 
forward-looking statements, whether as a result of new information, future 
events or otherwise.  Our actual results and future trends may differ 
materially depending on a variety of factors, including the continued 
operation, viability and growth of major airline customers and non-airline 
customers (such as the U.S. Government); adverse developments in the value of 
collateral securing customer and other financings; the occurrence of any 
significant collective bargaining labor dispute; the Company's successful 
execution of internal performance plans, price escalation, production rate 
increases and decreases (including any reduction in or termination of an 
aircraft product), acquisition and divestiture plans, and other cost-reduction 
and productivity efforts; charges from any future SFAS 142 review; an adverse 
development in rating agency credit ratings or assessments; the actual 
outcomes of certain pending sales campaigns and U.S. and foreign government 
procurement activities, including the timing of procurement of tankers by the 
U.S. Department of Defense; the cyclical nature of some of the Company's 
businesses; unanticipated financial market changes which may impact pension 
plan assumptions; domestic and international competition in the defense, space 
and commercial areas; continued integration of acquired businesses; 
performance issues with key suppliers, subcontractors and customers; factors 
that could result in significant and prolonged disruption to air travel 
worldwide (including future terrorist attacks); any additional impacts from 
the attacks of September 11, 2001; global trade policies; worldwide political 
stability; domestic and international economic conditions; price escalation; 
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 or commercial contracts due to unilateral government 
or customer 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 December 31, 2002 and the Forms 10-Q for the quarters ended 
March 31, 2002, June 30, 2002 and September 30, 2002. 
 
SOURCE  The Boeing Company 
    -0-                             04/10/2003 
    /CONTACT:  Communications, Anne Eisele, +1-312-544-2002, Investor 
Relations, Paul Kinscherff or Bob Kurtz, +1-312-544-2140, or BCC 
Communications, Russ Young, +1-425-393-1534, all of The Boeing Company/ 
    /FCMN Contact: maritza.avila@boeing.com / 
    /Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/109119.html/ 
    /Web site:  http://www.boeing.com / 
    (BA) 
 

 
 







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