<PAGE>
                                      10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


 [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

 For the quarterly period ended               March 31, 1997
                                -----------------------------------------

 OR

 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

 For the transition period from                   to
                                -----------------    --------------------

 Commission file number    1-3685
                        -------------------------------------------------

                       MCDONNELL DOUGLAS CORPORATION
-------------------------------------------------------------------------      
             (Exact name of registrant as specified in its charter)


             Maryland                            43-0400674
---------------------------------   -------------------------------------
(State or other jurisdiction of     (I.R.S. Employer Identification No.)
 incorporation or organization)


                Post Office Box 516, St. Louis, MO  63166
-------------------------------------------------------------------------      
             (Address and zip code of principal executive offices)


                                 314-232-0232
-------------------------------------------------------------------------      
              (Registrant's telephone number, including area code)


Indicate  by check  mark  whether  the  registrant  (1) has filed  all  reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for each  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

        Yes   X    No


=========================================================================

 Common shares outstanding at April 30, 1997 - 209,977,846 shares


<PAGE>



TABLE OF CONTENTS
-----------------



PART I   FINANCIAL INFORMATION                                   Page
         ---------------------                                   ----

         ITEM 1.  FINANCIAL STATEMENTS

             CONSOLIDATED STATEMENT OF EARNINGS                   3

             BALANCE SHEET                                       4-5

             CONSOLIDATED STATEMENT OF CASH FLOWS                 6

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS          7-13

    
         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

             FINANCIAL CONDITION AND RESULTS OF OPERATIONS      14-23



PART II   OTHER INFORMATION
          -----------------

          ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K               24





<PAGE>


PART I  FINANCIAL INFORMATION
        ---------------------
ITEM 1. FINANCIAL STATEMENTS
        --------------------

MCDONNELL DOUGLAS CORPORATION
CONSOLIDATED STATEMENT OF EARNINGS
(Millions of dollars, except share data)


THREE MONTHS ENDED MARCH 31                         1997         1996
                                                  -------      -------
                                                       (unaudited)

Revenues                                          $ 3,230      $ 3,171

Costs and expenses:
  Cost of products, services and rentals            2,607        2,537
  General and administrative expenses                 171          169
  Research and development                             94           88
  Interest expense:
    Aerospace segments                                 35           31
    Financial services and other segment               35           30
                                                  --------     --------

      Total Costs and Expenses                      2,942        2,855
                                                  --------     --------

    EARNINGS BEFORE INCOME TAXES                      288          316

Income taxes                                          107          118
                                                  --------     --------

    NET EARNINGS                                  $   181      $   198
                                                  ========     ========


EARNINGS PER SHARE                                $   .86      $   .89
                                                  ========     ========

DIVIDENDS DECLARED PER SHARE                      $   .12      $   .12
                                                  ========    =========






----------------------
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>


BALANCE SHEET
(Millions of dollars and shares)


                                            McDonnell Douglas Corporation
                                            and Consolidated Subsidiaries
                                            -----------------------------
                                                March 31    December 31
                                                   1997         1996
                                                --------    -----------
                                               (unaudited)
Assets
  Cash and cash equivalents                      $   706      $ 1,094
  Accounts receivable                              1,064          882
  Finance receivables and property on lease        3,129        3,090
  Contracts in process and inventories             3,573        3,486
  Prepaid income taxes                                 -            -
  Property, plant, and equipment                   1,468        1,453
  Investment in Financial Services                     -            -
  Other assets                                     1,666        1,626
                                                 --------     --------
Total Assets                                     $11,606      $11,631
                                                 ========     ========

Liabilities and Shareholders' Equity
Liabilities
  Accounts payable and accrued expenses          $ 2,292      $ 2,595
  Accrued retiree benefits                         1,111        1,109
  Income taxes                                       175           83
  Advances and billings in excess of related
    costs                                          1,387        1,310
  Notes payable and long-term debt
    Aerospace segments                             1,417        1,438
    Financial services and other segment           1,956        1,995
                                                 --------     --------
                                                   8,338        8,530

Minority interest                                     64           63

Shareholders'  equity  
  Preferred  Stock - none issued  
  Common Stock - issued and outstanding:
    1997, 210.0 shares; 1996, 209.6 shares           210          210
  Additional capital                                  32            -
  Retained earnings                                3,007        2,850
  Unearned compensation                              (45)         (22)
                                                 --------     --------
                                                   3,204        3,038
                                                 --------     --------
Total Liabilities and Shareholders' Equity       $11,606      $11,631
                                                 ========     ========

---------------------
The accompanying notes are an integral part of the financial statements.


<PAGE>


      MDC Aerospace                     Financial Services
------------------------             -----------------------
  March 31   December 31              March 31   December 31
    1997         1996                    1997        1996
  -------     ---------               ---------   ---------
 (unaudited)                         (unaudited)

  $   694      $ 1,077                 $    12      $    17
    1,141          964                       -            -
      340          254                   2,789        2,836
    3,573        3,486                       -            -
      191          278                       -            -
    1,408        1,391                      60           62
      398          383                       -            -
    1,588        1,535                      78           91
  --------     --------                --------     --------
  $ 9,333      $ 9,368                 $ 2,939      $ 3,006
  ========     ========                ========     ========



  $ 2,216     $  2,470                 $   153      $   207
    1,111        1,109                       -            -
        -            -                     366          361

    1,336        1,265                      51           45

    1,402        1,423                      15           15
        -            -                   1,956        1,995
  --------     --------                --------     --------
    6,065        6,267                   2,541        2,623

       64           63                       -            -




      210          210                       -            -
       32            -                     238          238
    3,007        2,850                     160          145
      (45)         (22)                      -            -
  --------     --------                --------     --------
    3,204        3,038                     398          383
  --------     --------                --------     --------
  $ 9,333      $ 9,368                 $ 2,939      $ 3,006
  ========     ========                ========     ========


As used on this  page,  "MDC  Aerospace"  means  the basis of  consolidation  as
described  in  Note  1 to  the  consolidated  financial  statements;  "Financial
Services" means McDonnell Douglas Financial Services  Corporation and all of its
affiliates  and  associated  companies and  McDonnell  Douglas  Realty  Company.
Transactions  between MDC Aerospace and Financial  Services have been eliminated
from the "McDonnell Douglas Corporation and Consolidated Subsidiaries" columns.


<PAGE>


MCDONNELL DOUGLAS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions of dollars)


THREE MONTHS ENDED MARCH 31                       1997          1996
                                                --------      --------
                                                     (unaudited)
OPERATING ACTIVITIES
  Net earnings                                   $  181       $  198
  Adjustments to reconcile net earnings to net
    cash provided (used) by operating activities:
      Depreciation and amortization                  64           63
      Pension income                                (40)         (32)
      Change in operating assets and liabilities   (416)        (217)
                                                 -------      -------

    NET CASH PROVIDED (USED) BY OPERATING
      ACTIVITIES                                   (211)          12

INVESTING ACTIVITIES
  Property, plant and equipment acquired            (58)         (51)
  Finance receivables and property on lease         (55)        (295)
  Other                                              21           27
                                                 -------      -------

    NET CASH USED BY INVESTING ACTIVITIES           (92)        (319)

FINANCING ACTIVITIES
  Net change in borrowings (maturities 90 days
    or less)                                        (19)          89
  Debt having maturities more than 90 days:
    New borrowings                                   64          262
    Repayments                                     (105)         (82)
  Common shares purchased                             -         (174)
  Dividends paid                                    (25)         (22)
                                                 -------      -------

    NET CASH PROVIDED (USED) BY FINANCING
      ACTIVITIES                                    (85)          73
                                                 -------      -------

    DECREASE IN CASH AND CASH
      EQUIVALENTS                                  (388)        (234)

Cash and cash equivalents at beginning of year    1,094          797
                                                 -------      -------

Cash and cash equivalents at end of period       $  706       $  563
                                                 =======      =======



-----------------------
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>


MCDONNELL DOUGLAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Millions of dollars)




1.   Basis of Presentation

The  accompanying   unaudited  consolidated  financial  statements  reflect  all
adjustments (which comprise only normal recurring  accruals)  necessary,  in the
opinion of management,  for a fair presentation of the financial  position,  the
results of operations and the cash flows for the interim periods presented.  The
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and footnotes  thereto  included in McDonnell  Douglas  Corporation's
Annual Report to Shareholders for the year ended December 31, 1996.

The consolidated financial statements comprise the accounts of McDonnell Douglas
Corporation and its subsidiaries, including McDonnell Douglas Financial Services
Corporation  (MDFS),  which is the parent company of McDonnell  Douglas  Finance
Corporation (MDFC). In consolidation,  all significant intercompany balances and
transactions are eliminated.

The consolidating balance sheet represents the sum of all affiliates - companies
that  McDonnell  Douglas  Corporation  directly or indirectly  controls  through
majority  ownership or otherwise.  Financial data and related  measurements  are
presented in the following categories:

   MDC  Aerospace.  This  represents  the  consolidation  of  McDonnell  Douglas
   Corporation  including all of its subsidiaries  other than MDFS and McDonnell
   Douglas Realty Company (MDRC). Those two are presented on a one-line basis as
   Investment in Financial Services.

   Financial Services.  This represents the consolidation of MDFS (and
   its subsidiaries) and MDRC, both wholly owned subsidiaries of
   McDonnell Douglas.

   McDonnell Douglas Corporation and Consolidated Subsidiaries.  This
   represents the consolidation of McDonnell Douglas Corporation and
   all its subsidiaries (the Company).

Stock Split

In  January  1996  the  McDonnell  Douglas  Board  of  Directors   authorized  a
two-for-one split of the common stock. The stock split was completed in May 1996
after  receipt  of  shareholder  approval  in April 1996 of an  increase  in the
Company's authorized common stock to 400 million shares. References to number of
shares and per share  amounts of common stock have been  restated to reflect the
stock split.


<PAGE>



Earnings Per Share

Statement of Financial  Accounting  Standards  ("SFAS") No. 128,  "Earnings  Per
Share," issued in February 1997,  specifies the computation,  presentation,  and
disclosure  requirements  for earnings per share. The objective of SFAS No. 128,
which is effective  for  financial  statements  issued for periods  ending after
December 15, 1997, is to simplify the standards for computing earnings per share
and make them  comparable to  international  earnings per share  standards.  The
Company does not believe  that  adoption of this  standard  will have a material
impact on its earnings per share calculations.

2.   Proposed Merger with The Boeing Company

On December 14, 1996,  McDonnell Douglas and The Boeing Company (Boeing) entered
into a definitive  agreement  whereby a wholly owned  subsidiary  of Boeing will
merge into McDonnell  Douglas in a stock-for-stock  transaction,  as a result of
which McDonnell  Douglas will become a wholly owned subsidiary of Boeing.  Under
the  terms of the  transaction  and as a  result  of a two-for-one  stock  split
arising from a share  issuance  approved by Boeing's  shareholders  on April 28,
1997,  McDonnell  Douglas  shareholders will receive 1.3 shares of Boeing common
stock for each share of McDonnell  Douglas  common  stock.  The  transaction  is
subject to approval by the shareholders of both companies and certain regulatory
agencies; it is expected to close as early as August 1997.

3.   Contracts in Process and Inventories

Contracts in process and inventories consisted of the following:

                                               March 31   December 31
                                                 1997         1996
                                              ---------   -----------
Government contracts in process               $ 5,081      $ 5,177
Commercial products in process                  2,575        2,211
Material and spare parts                          713          713
Progress payments to subcontractors               775          843
Progress payments received                     (5,571)      (5,458)
                                              --------     --------

                                              $ 3,573      $ 3,486
                                              ========     ========

Substantially  all  government  contracts in process (less  applicable  progress
payments received)  represent unbilled revenue and revenue that is currently not
billable.

The U.S.  Navy on  January 7,  1991,  notified  McDonnell  Douglas  and  General
Dynamics  Corporation  (the Team) that it was terminating for default the Team's
contract  for  development  and initial  production  of the A-12  aircraft,  and
demanded  repayment  of the amounts paid to the Team under such  contracts.  The
Team filed a legal action to contest the Navy's default  termination,  to assert
its  rights  to  convert  the  termination  to one for "the  convenience  of the
Government,"  and to obtain payment for work done and costs incurred on the A-12
contract  but not paid to date.   


<PAGE>


At March 31, 1997, Contracts in Process and Inventories  included  approximately
$574 million of recorded costs on the A-12  contract,  against which the Company
has  established a loss provision of $350 million.  The amount of the provision,
which was  established  in 1990,  was  based on the  Company's  belief  that the
termination  for default  would be converted to a termination  for  convenience,
that the Team would  establish a minimum of $250 million in claims  adjustments,
that  there  was a range of  reasonably  possible  results  on  termination  for
convenience,  and that it was  prudent  to  provide  for what the  Company  then
believed was the upper range of possible loss on  termination  for  convenience,
namely $350 million.

On  December  19,  1995,  the U.S.  Court of  Federal  Claims  ordered  that the
Government's  termination  of the A-12  contract  for default be  converted to a
termination for  convenience of the Government.  On December 13, 1996, the Court
issued an opinion confirming its prior no-loss adjustment and no-profit recovery
order.  Subsequent  to an early 1997  stipulation  based on the prior orders and
findings of the Court in which the parties agreed that  plaintiffs were entitled
to recover  $1.071  billion,  the Court has  preliminarily  determined  that the
Government is liable for certain adjustments that increase plaintiffs' possible
recovery.  A June 1997 trial has been set to determine  plaintiffs'  recovery if
the parties  are unable to reach an  agreement  adjusting  the  stipulation.  On
January 22, 1997, the Court issued an opinion in which it ruled that  plaintiffs
are entitled to recover interest on that recovery.

Although the Government is expected to appeal the resulting judgment,  McDonnell
Douglas  believes  that it will  be  sustained.  Final  resolution  of the  A-12
litigation  will depend on such  appeals and  possible  further  litigation,  or
negotiations,  with the Government. If sustained,  however, the expected damages
judgment,  including interest,  ultimately could result in pretax income ranging
up to an amount that could more than offset the loss  provision  established  in
1990.


4.   Debt & Credit Arrangements

MDC Aerospace Credit Agreements

MDC Aerospace has a revolving credit  agreement  (RCA),  amended and restated in
January 1997,  under which MDC Aerospace may borrow up to $1.75 billion  through
January 2002. MDC Aerospace has the option to increase that limit by 20 percent.
Under the RCA, the interest rate, at the option of MDC Aerospace,  is a floating
rate  generally  based on (1) a defined prime rate,  (2) a fixed rate related to
the London interbank offered rate (LIBOR),  or (3) as quoted under a competitive
bid.  A fee is  charged  on the  amount  of the  commitment.  The  RCA  contains
restrictive  covenants including,  but not limited to, indebtedness,  subsidiary
indebtedness,   customer  financing,  and  liens.  There  were  no  RCA  amounts
outstanding at March 31, 1997.

During  1996,  MDC  Aerospace  filed a shelf  registration  statement  with  the
Securities and Exchange Commission (SEC) relating to debt securities. The filing
increased a prior offering,  commenced in 1992, by an aggregate principal amount
of $1 billion. In the fourth quarter of 1996, the

<PAGE>


Company  issued  $250  million  of 6.9%  notes  due in  2006  under  this  shelf
registration.  As of March 31, 1997,  MDC Aerospace had $948 million of unissued
debt  securities  registered  with the SEC. The interest rate applicable to each
note and certain other variable terms are established at the date of issue.

Senior debt  securities  totaling  $1.394 billion were  outstanding at March 31,
1997.  The notes were issued in 1992,  1993 and 1996 with interest rates of 6.9%
to 9.8% and  maturities  from 1997 to 2012.  Outstanding  notes of $250 million,
bearing  interest  at  8.6%,  were due and  retired  in  April  1997.  Aerospace
long-term debt also includes aerospace-related  obligations of McDonnell Douglas
Realty Company in the amount of $15 million at March 31, 1997.

Financial Services Credit Agreements

MDFS and  MDFC  have a joint  RCA  which  expires  in  August  2001.  Under  the
agreement, MDFC may borrow a maximum of $240 million, reduced by MDFS borrowings
under this same agreement,  which are limited to $16 million. The interest rate,
at the option of MDFC or MDFS, is either a floating rate,  generally  based on a
defined  prime rate or fixed rate  related to LIBOR.  There were no  outstanding
borrowings  under this agreement at March 31, 1997.  Commercial  paper issued by
MDFC in the amount of $97 million was  outstanding  at March 31, 1997. The joint
RCA could  therefore  be used to support  the full  amount of  commercial  paper
outstanding.

Various credit and debt agreements require MDFC to maintain a minimum net worth,
to  restrict  indebtedness,  and  to  limit  MDFC's  cash  dividends  and  other
distributions.

During the second  quarter of 1995,  MDFC filed a shelf  registration  statement
with the SEC relating to up to $750 million  aggregate  principal amount of debt
securities.  MDFC established a $750 million medium-term note program under this
shelf registration  statement and, as of March 31, 1997, had issued $550 million
of such notes.

During July 1995,  MDFS  initiated a  medium-term  note program  under a private
placement  of up to  $100  million  principal  amount.  This  note  program  was
increased to $200 million in April 1996.  As of March 31, 1997,  MDFS had issued
$135 million of securities under this program.

MDFC's senior debt at March 31, 1997,  included $53 million secured by equipment
that had a carrying  value of $70  million.  MDRC's debt of $39 million at
March 31, 1997,  was secured by indentures of mortgage and deeds of trust on its
interest in real estate developments that had a carrying value of $52 million.

5.   Financial Instruments

McDonnell Douglas uses derivative  financial  instruments to manage well-defined
foreign exchange  subcontract price risks and foreign currency  denominated debt
risks,  and  on a  selective  basis  to  reduce  the  impact  of  interest  rate
fluctuations on certain debt  instruments.  McDonnell  Douglas does not trade in
derivatives for speculative purposes.



<PAGE>



At March 31, 1997, the notional amount of forward exchange contracts denominated
in currencies of major industrial  countries was $322 million.  The terms of the
currency  derivatives  vary, but the longest is three years.  At March 31, 1997,
unrealized gains, net of losses, on forward exchange contracts were $10 million.

At March 31, 1997,  MDFC had interest rate swap  agreements  outstanding  listed
below.  The Company  believes it has no market  rate risk as the  interest  rate
swaps are matched with specific debt.

                          Contract    Notional   Receive        Pay
                          Maturity     Amount     Rate          Rate
                          --------    --------   -------        ----

Capital lease
  obligations            2006 - 2008    $393     Floating   6.7% - 7.6%
Medium-term notes           1997        $ 20     Floating       6.7%
Medium-term notes        2000 - 2001    $ 50    6.8% - 8.6%   Floating

The floating rates are based on LIBOR or on Federal Funds.

Because of the off-balance-sheet nature of derivative instruments,  counterparty
failure would result in recognition of unrealized gains and losses.  The Company
does not anticipate nonperformance by any of its counterparties.


6.   Commitments and Contingencies

A number of legal  proceedings  and  claims are  pending  or have been  asserted
against the Company.  A substantial  number of such legal proceedings and claims
are covered by insurance or settlements  with insurance  companies.  The Company
believes that the final outcome of such  proceedings  and claims will not have a
material adverse effect on its earnings, cash flow, or financial position.

The marketing of commercial  aircraft sometimes results in agreements to provide
or to guarantee  long-term  financing  of some portion of the delivery  price of
aircraft, to lease aircraft, or to guarantee customer lease payments or aircraft
values.  At March 31, 1997, the Company had made offers of this nature  totaling
$1.970  billion  related to aircraft on order or under  option.  The Company had
made  guarantees  and other  commitments  totaling  $843  million  on  delivered
aircraft.  At March 31, 1997,  MDFS also had  commitments to provide leasing and
other  financing in the aggregate  amount of $104 million.  The Company does not
expect  these offers or  commitments  to have a material  adverse  effect on its
earnings, cash flow, or financial position.

The Company's outstanding  guarantees include amounts related to MD-11s operated
by Viacao Aerea  Rio-Grandense  S.A.  (VARIG).  During 1994,  VARIG notified its
aircraft  lenders  and  lessors  that it was  temporarily  suspending  payments,
pending the restructuring of its financial obligations.  In connection with that
restructuring,  the Company made lease, loan, and interest payments totaling $70
million on behalf of VARIG in 1994


<PAGE>


and 1995. At March 31, 1997,  VARIG had made repayments  totaling $24 million to
the  Company.  During  January  1996,  VARIG  requested  deferral of  additional
obligations covering the January 1996 through January 1998 period. VARIG and the
Company  agreed  to defer up to $60  million  in  certain  payments  owed to the
Company,  with  repayment  by VARIG to begin in 1998.  At March  31,  1997,  the
Company had made payments  related to this additional  deferral in the amount of
$34 million on behalf of VARIG.  These  restructurings and payments have not had
and,  if the  restructuring  steps are  successful,  are not  expected to have a
material  adverse  effect on the  Company's  earnings,  cash flow,  or financial
position.

Trans World Airlines Inc. (TWA), one of the Company's  largest  aircraft-leasing
customers,  continues to operate under a reorganization  plan,  confirmed by the
U.S.  Bankruptcy Court in 1995, that restructured its indebtedness and leasehold
obligations  to its creditors.  TWA continues to face financial and  operational
challenges  due in part to an  airliner  crash in July 1996 and  turnover of key
management,  which  occurred  during  1996.  The  reorganization  plan and TWA's
current  financial  condition  have not had,  and are not  expected  to have,  a
material  adverse  effect on the  Company's  earnings,  cash flow,  or financial
position.  However, TWA's independent auditors included an explanatory paragraph
in their  "Independent  Auditors'  Report" for TWA's December 31, 1996 financial
statements  expressing  "substantial doubt" about TWA's ability to continue as a
going concern. The Company anticipates  deliveries of additional aircraft to TWA
during 1997. The Company will continue to evaluate the impact of TWA's financial
condition on existing and potential future financial  commitments and guarantees
to TWA.

The  Company  is  a  party  to  a  number  of  proceedings   brought  under  the
Comprehensive Environmental Response,  Compensation, and Liability Act, commonly
known as  Superfund,  and under  similar  state  statutes.  The Company has been
identified as a potentially  responsible  party (PRP) at 37 sites. Of these, the
Company  believes  that it has de minimis  liability  at 23 sites,  including 17
sites at which it believes that it has no future liability. At four of the sites
where the Company's  liability is not  considered to be de minimis,  the Company
lacks  sufficient  information  to  determine  its  probable  share or amount of
liability.  At the remaining  ten sites at which the Company's  liability is not
considered  to be de minimis,  either final or interim  cost-sharing  agreements
have been effected between the cooperating PRPs, although such agreements do not
fix the amount of cleanup  costs that the parties will bear.  In  addition,  the
Company  is  remediating,  or has begun  environmental  engineering  studies  to
determine  cleanup  requirements  for, certain of its current operating sites or
former sites of industrial activity.

At March 31, 1997, the accrued liability for study and remediation  expenditures
at Superfund sites and at the Company's  current and former  operating sites was
$44 million.  Because of the inherent  uncertainty  of the  estimation  process,
actual costs could differ from  estimates.  Ongoing  operating  and  maintenance
costs at current  operating sites and remediation  expenditures on property held
for sale are not included in this amount.  The Company believes that any amounts
paid in excess of the accrued  liability will not have a material  effect on its
earnings, cash flow, or financial position.  Claims for recovery are recorded as
receivables  and therefore they have not been netted  against the  environmental
liabilities.  At  March  31,  1997,  a  receivable  had been  recorded  from one
insurance  carrier  for  agreed  reimbursement  of  environmental  costs  for $7
million.

<PAGE>


7.   Operations of MDFS

The condensed  financial  data  presented  below have been  summarized  from the
unaudited consolidated financial statements of MDFS:

Three Months Ended March 31                 1997             1996
                                          --------         --------

Earned income                              $  63            $  57
Costs and expenses                            43               36
Net earnings                                  13               13

Cash flow provided (used) by:

   Operating activities                    $   2            $   9
   Investing activities                       37             (292)
   Financing activities                      (44)             286

8.   Supplementary Payment Information

Three Months Ended March 31                 1997             1996
                                          --------         --------

Interest paid                              $  62            $  57
Income taxes paid                              6               18

9.   Earnings Per Share

Earnings  per share  computations  are based upon the  weighted  average  common
shares  outstanding  during the  three-month  period which were 209.9 million in
1997 and 222.2 million in 1996.


<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         -------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------

The following  discussion and analysis  should be read in  conjunction  with the
Notes  to  Consolidated  Financial  Statements  beginning  on page 7,  and  with
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  (MD&A),  Audited  Consolidated  Financial  Statements  and  Notes to
Consolidated  Financial Statements appearing in the Company's 1996 Annual Report
to Shareholders (the 1996 Annual Report).

Forward-Looking Information

Certain  statements  in  Management's   Discussion  and  Analysis  of  Financial
Condition and Results of Operations  contain  "forward-looking"  information (as
defined in the Private  Securities  Litigation Reform Act of 1995) that involves
risk and uncertainty,  including  projections for the timing of the consummation
of the proposed Boeing merger,  future sales,  earnings,  production  levels and
costs,  aircraft deliveries,  research and development,  environmental and other
expenditures, and various business environment trends. Actual results and trends
in the future may differ materially depending on a variety of factors including,
but not limited to, changing  priorities or reductions in the U.S. and worldwide
defense and space budgets; global trade policies;  worldwide political stability
and economic  growth;  termination  of  government  contracts  due to unilateral
government action or the Company's failure to perform;  governmental  export and
import policies; the Company's successful execution of internal operating plans;
performance issues with key suppliers and subcontractors; factors that result in
significant and prolonged disruption to air travel worldwide;  aircraft delivery
delays or defaults by customers;  collective  bargaining  labor disputes;  other
regulatory  uncertainties;  and legal  proceedings.  For further  discussion  of
certain  risks and  uncertainties  that may  affect  the  actual  results of any
forward-looking information contained herein, refer to the Form 8-K filed by the
Company with the Securities and Exchange Commission (SEC) on April 17, 1996.

Results of Operations

McDonnell  Douglas  revenues  were $3.2  billion  in the first  quarter of 1997,
slightly above the 1996 revenues for the same period.  An increase in revenue in
the  commercial  aircraft  segment was largely  offset by lower  revenues in the
military aircraft and missiles, space and electronic systems segments.

Net earnings for the first  quarter of 1997 were $181  million,  a decrease from
the first quarter 1996 net earnings of $198 million.  Operating earnings for the
first quarter of 1997 were $321  million,  compared to $347 million in the first
quarter of 1996. The decrease was largely due to lower earnings in the missiles,
space and electronic systems segment.

Interest  expense  totaled $35 million in the first quarter of 1997, up from $31
million in the first quarter of 1996. The increase  relates to a higher 

<PAGE>


level of  aerospace  debt,  brought  about by the  issuance  of $250  million of
10-year notes in late 1996.

Pension  income  totaled  $40  million  in the 1997 first  quarter,  up from $32
million in the first quarter of 1996.  The increase is associated  with a higher
level of plan assets.


                                          Three Months Ended
                                                March 31
                                           1997         1996
                                         --------     --------
                                         (Millions of dollars)
Revenues
  Military aircraft                      $ 1,946       $ 2,039
  Commercial aircraft                        624           428
  Missiles, space and electronic
    systems                                  553           608
  Financial services and other               101            87
                                         --------      --------
    Operating revenues                     3,224         3,162

  Non-operating income                         6             9
                                         --------      --------

  Total Revenues                         $ 3,230       $ 3,171
                                         ========      ========

Earnings
  Military aircraft                      $   259       $   250
  Commercial aircraft                          4            19
  Missiles, space and electronic
    systems                                   36            58
  Financial services and other                22            20
                                         --------      --------
    Operating earnings                       321           347

  Corporate and other                          2
  Interest expense                           (35)          (31)
  Income taxes                              (107)         (118)
                                         --------      --------

  Net Earnings                           $   181       $   198
                                         ========      ========


Military Aircraft

Revenues in the military aircraft segment decreased to $1.9 billion in the first
quarter  of 1997,  compared  with $2.0  billion  in the first  quarter  of 1996.
Increased  volume on the F-15  program,  where  McDonnell  Douglas is increasing
production rate, was offset by planned lower activity on the F/A-18C/D program.

Operating  earnings in this segment  were $259  million in the first  quarter of
1997, compared with $250 million in the same period in 1996.  Operating earnings
in this segment were favorably  impacted by increased  earnings in the F/A-18E/F
program,  which were nearly offset by reduced earnings in the F-15 and F/A-18C/D
production programs.

<PAGE>


Several positive  developments occurred in the F/A-18E/F program during the 1997
first quarter. The F/A-18E/F program successfully  completed all test objectives
of initial sea trials, delivered the last aircraft of the development phase, and
received  approval  from the  Department  of Defense to begin  low-rate  initial
production of the first 12 aircraft. In connection with the achievement of these
significant milestones, McDonnell Douglas increased the overall earnings rate on
this program to include an estimate of a portion of remaining  award fees.  Most
of the remaining  potential  award fees will be determined at the  completion of
technical and operational evaluations scheduled for 1999.

Production  cost  increases,  primarily  on the  F/A-18C/D  and  F-15  programs,
negatively  impacted 1997 first quarter operating results.  The phase-in of work
subsequent  to a 99-day  strike  at the St.  Louis  operations,  which  ended in
September 1996, along with increased  retirements of experienced  personnel late
in the year, impacted  productivity levels. A build-up of the production rate on
the F-15 program,  and with it the use of personnel less experienced on the F-15
program, added to the increased production costs.


Commercial Aircraft

Revenues in the  commercial  aircraft  segment  increased to $624 million in the
1997  first  quarter,  compared  with $428  million  in the 1996  same  quarter.
McDonnell  Douglas  delivered seven MD-90 twin jets and two MD-11 trijets in the
1997 first  quarter,compared with four MD-80 and three MD-90 twin jets and three
MD-11 trijets in the 1996 same period.  Two of the MD-90 twin jet  deliveries in
each year and two of the MD-11  trijet 1996  deliveries  were  accounted  for as
operating leases with minimal revenue recorded on such  transactions at the time
of delivery.

Operating  earnings in this  segment in the 1997 first  quarter were $4 million,
down from $19  million  in the first  quarter of 1996.  Increased  losses on the
MD-95 program, currently in development, were in part offset by some improvement
in cost estimates  related to prior  deliveries of trijet and twin jet aircraft.
Additionally,  earnings in the 1996 first quarter  included  recoveries  from an
insurance  carrier related to  environmental  coverage at several sites. As with
the last several  quarters,  earnings from the sale of spare parts and services,
while largely offset by development  costs, have allowed the commercial  segment
to remain profitable.  At the same time, profits from the production and sale of
commercial aircraft remain at or near break-even levels.

During the 1997 first quarter,  McDonnell  Douglas received orders for two MD-90
twin jets and completed lease  arrangements  with Lufthansa Cargo for five MD-11
freighters.  One of the MD-90 orders is scheduled for delivery in 1997,  and the
other in 1998.  The five MD-11 orders  represent 1998  deliveries.  On March 31,
1997,  McDonnell  Douglas had firm orders for 29 MD-80 twin jets, 100 MD-90 twin
jets, 50 MD-95 twin jets, and 18 MD-11 trijets.


<PAGE>

Missiles, Space and Electronic Systems

Revenues in the missiles, space and electronic systems segment were $553 million
in the first  quarter of 1997,  compared with $608 million in the same period in
1996. Lower revenue in the Delta II program, due to a reduction in launches from
four in the 1996  first  quarter to only one in the first  quarter of 1997,  was
partially  offset by increased  Space  Station  program and  classified  program
activities.

Operating  earnings in this  segment  were $36  million in the first  quarter of
1997,  compared with $58 million in the first quarter of 1996.  Expenditures  on
the Delta III, a launch vehicle currently under development,  and lower earnings
on the Delta II program  caused the decrease.  The Delta II program was impacted
by  accident-related  costs and fewer  launches  resulting from the failure of a
January 1997 launch.

Financial Services

Operating  earnings in the financial services and other segment were $22 million
in the first  quarter of 1997,  compared with $20 million in the same quarter in
1996.  Revenues in this segment were $101 million in the first  quarter of 1997,
an increase of $14 million  over the same period in 1996.  The revenue  increase
resulted from the  corporation's  continued focus on growing this segment of its
business.

Liquidity

Debt and Credit Arrangements. MDC Aerospace debt at March 31, 1997 and
December 31, 1996,  was $1.4  billion.  MDC Aerospace had $250 million of senior
debt which matured in early April 1997.

MDC  Aerospace has in place a number of credit  facilities  with banks and other
institutions.  At March 31, 1997, MDC Aerospace had a revolving credit agreement
(RCA),  amended and  restated in January  1997,  under which it can borrow up to
$1.75 billion through June 2002. There were no amounts outstanding under the RCA
at March 31, 1997.

During 1996,  MDC Aerospace  filed a shelf  registration  statement with the SEC
relating to debt securities. The filing increased a prior offering, commenced in
1992 for up to $550  million of notes,  by an aggregate  principal  amount of $1
billion.  As of March 31, 1997,  MDC Aerospace had $948 million of unissued debt
securities registered with the SEC.

The  Company  also  has an  agreement  with a  financial  institution  to sell a
participation  interest  in a  designated  pool  of  government  and  commercial
receivables, with limited recourse, in amounts up to $300 million. As of
March 31, 1997, no receivable interests were sold.

Financial  Services  debt at March  31,  1997  and  December  31,  1996 was $2.0
billion.


<PAGE>


MDFS and  MDFC  have a joint  RCA  which  expires  in  August  2001.  Under  the
agreement, MDFC may borrow a maximum of $240 million, reduced by MDFS borrowings
under  this same  agreement,  which are  limited to $16  million.  There were no
outstanding  borrowings  under this  agreement at March 31,  1997.  At March 31,
1997, $97 million of commercial paper issued by MDFC was outstanding.  The joint
RCA could  therefore  be used to support  the full  amount of  commercial  paper
outstanding.

During 1995, MDFC filed a shelf registration  statement with the SEC relating to
up  to  $750  million  aggregate  principal  amount  of  debt  securities.  MDFC
established  a $750 million  medium-term  note program  under this  registration
statement and as of March 31, 1997, had issued $550 million of such notes.

During 1995, MDFS initiated a medium-term note program under a private placement
of up to $100 million principal amount.  This note program was increased to $200
million in April 1996.  As of March 31,  1997,  MDFS had issued $135  million of
securities under this program.

Amounts  available  under the RCAs, note programs,  and the receivables  program
discussed  above  may be used  to  meet  cash  requirements.  McDonnell  Douglas
believes that it has sufficient sources of capital to meet anticipated needs.

Shareholder  Initiatives.  On October 28, 1994, the Company's Board of Directors
approved a stock repurchase plan that authorized  McDonnell  Douglas to purchase
up to 36 million  shares,  or about 15 percent  of its  then-outstanding  common
stock. Through mid-December 1996, the Company had acquired 29 million shares, or
about 81 percent of its authorized repurchase amount, at a cost of $1.1 billion.
The Company suspended common stock  acquisitions  associated with the repurchase
program as a result of the proposed merger with Boeing. See Note 2 on page 8 for
a further discussion of the proposed merger.

In  January  1996,  the  McDonnell  Douglas  Board  of  Directors  authorized  a
two-for-one split of the common stock and a 20 percent increase in the quarterly
dividend. In April 1996, McDonnell Douglas shareholders approved an amendment to
the Company's charter increasing the number of the Company's  authorized shares;
the  stock  split  was  effected  in the form of a stock  dividend  in May 1996.
References  to number of shares  and per share  amounts  have been  restated  to
reflect the stock split.

Aerospace Cash & Cash Equivalents. Aerospace cash and cash equivalents were $694
million at March 31, 1997,  compared  with $1,077  million at December 31, 1996.
Cash used by  aerospace  operations  was a little more than $350 million for the
1997  first  quarter.  Most of the  cash  was  used in the  commercial  aircraft
segment.  Higher  commercial  deliveries are expected in the second half of this
year.


<PAGE>


Development  Programs.  In October 1995, McDonnell Douglas launched the MD-95, a
100-seat  medium-range  airliner.  Initial  deliveries  of the MD-95 to  ValuJet
Airlines Inc.  (ValuJet),  the launch customer for the MD-95,  are scheduled for
1999.  ValuJet's  operations were suspended for more than three months following
an airliner crash in May 1996.  The carrier  resumed  scaled-back  operations in
September  1996 and  affirmed  its  order for 50 MD-95s  in  December  1996.  No
additional  orders for the MD-95 from other  customers were received during 1996
or in the first quarter of 1997.

McDonnell  Douglas is currently  developing the Delta III, an expendable  launch
vehicle. Launch of the first Delta III is scheduled for 1998.

The  MD-95  twin  jet and  the  Delta  III  launch  vehicle  will  require  cash
expenditures  in  development,  inventory,  and tooling  during the next several
years,  which the Company  intends to fund from its cash flow or from  resources
available under its existing credit agreements.

Commercial  Aircraft  Financing.  Airlines may decline  deliveries  of aircraft,
request changes in delivery schedules,  or default on contracts for firm orders.
Aircraft  delivery  delays or  defaults by  commercial  aircraft  customers  not
anticipated by the Company could have a negative short-term impact on cash flow.
During recent years,  several  airlines filed for  protection  under the Federal
Bankruptcy  Code or  became  delinquent  on  their  obligations  for  commercial
aircraft.  As indicated in Note 6, "Commitments and Contingencies," page 11, the
Company also has outstanding guarantees of $843 million related to the marketing
of commercial aircraft.  The Company does not believe that the existence of such
guarantees,  after  considering  residual  values,  or  delays  or  defaults  by
commercial  aircraft  customers,  will  have a  material  adverse  effect on its
earnings, cash flow, or financial position.

McDonnell Douglas has made lease, loan principal,  and interest payments and has
agreed to make certain  additional loan principal  payments through January 1998
on behalf of Viacao Aerea Rio-Grandense S.A. (VARIG).  In addition,  Trans World
Airlines Inc. (TWA), one of the Company's  largest  aircraft-leasing  customers,
continues  to  operate  under  a  reorganization  plan,  confirmed  by the  U.S.
Bankruptcy  Court in 1995,  that  restructured  its  indebtedness  and leasehold
obligations  to its creditors.  TWA continues to face financial and  operational
challenges  due in part to an  airliner  crash in July 1996 and  turnover of key
management,  which occurred during 1996. Neither payments on behalf of VARIG nor
the effects of TWA's  reorganization  plan and current  financial  condition are
expected to have a material adverse effect on earnings,  cash flow, or financial
position of the Company.  See Note 6, "Commitments and Contingencies,"  page 11,
for a further discussion of VARIG and TWA.

The Company,  including  MDFC,  has also made offers  totaling  $1.97 billion to
arrange or provide financing for ordered but undelivered  aircraft.  The Company
does not  anticipate  that the  existence of such  financing  offers will have a
material adverse effect on its earnings,  cash flow, or financial position.  See
Note 6, "Commitments and Contingencies," page 11.


<PAGE>



Information  Systems.  The Company has several  information  system  improvement
initiatives  underway that will require increased  expenditures  during the next
several  years.  These  initiatives,  which  began in prior  years,  include the
conversion  of  certain  Company  computer  systems  to be Year 2000  compliant.
McDonnell  Douglas has assessed  and  continues to assess the impact of the Year
2000 issue on its  operations,  including the development of cost estimates for,
and the extent of programming changes required to address,  this issue. Although
final cost  estimates have yet to be  determined,  it is anticipated  that these
Year 2000 costs will result in an increase to Company expenses during 1997, 1998
and 1999.  The  Company  expects to  complete  its Year 2000 cost  estimates  by
mid-1997.

Business and Market Considerations

General

McDonnell Douglas is one of the largest U.S. defense  contractors and NASA prime
contractors.  McDonnell  Douglas has a wide range of programs in production  and
development, and is the world's leading producer of military aircraft. McDonnell
Douglas is also a manufacturer of large commercial transport aircraft.

Discussion  under  the  captions  "Military  Aerospace  Business,"   "Commercial
Aircraft Business," and "Government Business Audits, Reviews and Investigations"
reflect  developments  during  the first  quarter  of 1997 and should be read in
conjunction  with  the  "Business  and  Market  Considerations"   discussion  in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations   in  McDonnell   Douglas   Corporation's   1996  Annual   Report  to
Shareholders.


Military Aerospace Business

F/A-18  Hornet.  In January  1997,  the  F/A-18E/F  Super  Hornet  successfully
completed initial sea trials aboard a U.S.  aircraft  carrier.  The program also
delivered the last aircraft of the development  phase and received approval from
the  Department of Defense  (DoD) to begin  low-rate  initial  production of the
first 12 aircraft.  In  addition,  the DoD  authorized  the release of long-lead
funding  for the  next 20  aircraft  and a total  initial  production  run of 62
planes. The DoD authorized the Navy to make future production  decisions for the
F/A-18E/F  program,  including the decision to begin full-rate  production of 48
aircraft per year in fiscal year 2000.

In March,  the first of eight F-18D's was delivered to the Royal  Malaysian Air
Force.

F-15. In February 1997, MDC definitized its contract with Israel for 25 aircraft
valued at $1.0 billion. This finalized a previously announced order with Israel.



<PAGE>


AH-64D  Apache  Longbow.  The  first   remanufactured   AH-64D  Apache  Longbow
multi-mission  combat  helicopter  was  delivered to the U.S.  Army on March 31,
1997. The Apache  Longbow's fire control radar and advanced  avionics suite will
provide combat pilots the ability to rapidly detect, classify,  prioritize,  and
engage  stationary  or  moving  enemy  targets  at  standoff  ranges.  MDC  will
remanufacture 232 AH-64D helicopters under a $1.9 billion, five-year, multi-year
contract.  Production will gradually  increase from one aircraft a month in 1997
to five aircraft a month by 1999.

C-17  Globemaster.  The U.S.  Air  Force's  fleet  of  McDonnell  Douglas  C-17
Globemaster  IIIs  surpassed  50,000  total  flying  hours.   McDonnell  Douglas
delivered aircraft P-31 on March 25, 1997, one month ahead of schedule, the 19th
consecutive C-17 delivered ahead of schedule.

Delta  Program.  In January  1997,  a Delta II rocket  launched by the U.S. Air
Force  self-destructed  shortly into flight.  There were no injuries  associated
with the incident.  Other  scheduled 1997 Delta II launches were delayed pending
determination of the cause of the explosion. On April 3, 1997, the USAF released
a  statement  indicating  the  failure  was caused by a vertical  rupture in the
casing of one of the Delta's nine solid rocket strap-on motors. Launches resumed
in May 1997.

In February  1997,  MDC and Space  Systems/Loral  entered into an agreement for
five  Delta III  launches  between  1999 and 2001.  Delta III  backlog is now 18
launches through 2002, with the first launch planned for 1998.

Missiles.  The  Standoff  Land  Attack  Missile  Expanded  Response  (SLAM  ER)
successfully  completed  its  first  flight  in March  1997.  The Navy  approved
low-rate initial  production of SLAM ER in April.  SLAM ER is an upgrade program
to the U.S.  Navy's  inventory of SLAM  missiles  that will provide  significant
improvements in survivability, standoff range, weapon effectiveness and reaction
time.  The U.S.  Navy plans to retrofit  all 700 SLAMs in its  inventory to SLAM
ERs.


Commercial Aircraft Business

During the first  quarter of 1997,  McDonnell  Douglas  received  orders for two
MD-90 twin jets and completed lease  arrangements  with Lufthansa Cargo for five
MD-11  freighters.  New  orders  and  production  rates  for  McDonnell  Douglas
commercial  aircraft products have fallen to low levels. No orders for the MD-95
twin jet have  been  received  since it was  launched  on the basis of a sale to
ValuJet in October,  1995. The Company's share of worldwide  commercial aircraft
orders declined to 4% during 1996.

During the last nine months, American Airlines,  Continental Airlines, Delta Air
Lines and US Airways, each long standing major McDonnell Douglas customers, have
chosen Boeing or Airbus Industrie in major competitions for a significant number
of  aircraft.   Recently,  Finnair,  another  previously  staunch  supporter  of
McDonnell Douglas aircraft, invited only Boeing and Airbus to bid on its planned
replacement of McDonnell  Douglas narrow body aircraft.  One of these customers,
Delta, 

<PAGE>


operates 16 MD-90s,  has firm orders for 15 MD-90s and options for many more. As
part of its fleet rationalization strategy, Delta intends in time to replace all
of its current fleet of MD-90s,  and is  considering  its  alternatives  for the
remaining  aircraft  on  firm  order;  even  though  McDonnell  Douglas  has  an
enforceable firm contract,  the companies are forming a joint task force to seek
a  business  resolution  to  these  firm  orders.  Sales  of  McDonnell  Douglas
commercial  aircraft products have been adversely  affected by (1) the lack of a
full family of  aircraft,  (2) customer and  marketplace  uncertainty  as to the
future of Douglas Aircraft Company (DAC), an unincorporated  operating  division
of the  Company  through  which the Company  operates  its  commercial  aircraft
segment, and (3) investment in product development at levels significantly below
competition.  Significant price competition for the sale of commercial  aircraft
is expected to continue.  At the same time, the Company's  production  costs are
affected  by  decreased   economies  of  scale  and  older   aircraft   designs,
manufacturing   technology   and   production   processes  as  compared  to  its
competitors.  As a result,  it is difficult  for the Company to sell  commercial
aircraft profitably.

At various times during the last several years, McDonnell Douglas has considered
its strategic  alternatives  for DAC. These have included:  strategic  alliances
with  non-United  States  partners  bringing new markets and  investment to DAC;
significant  investment  to  permit  DAC to offer a full  family  of  commercial
aircraft;  a niche strategy with DAC principally offering a smaller product line
and as a lesser player in commercial  aircraft;  sale of the commercial aircraft
business;  and an exit from the commercial  aircraft  production  business while
retaining  its spares  business.  Earlier  efforts over a several year period to
find a strategic partner were not successful.  The amount of investment required
to offer a full family of aircraft  was  estimated at $15 billion and was deemed
too high and risky for the Company to incur without partners. The success of the
Company's niche strategy  announced in October 1996 will be determined over time
and, in part,  is based on its ability to generate in the near term a sufficient
number of new  customer  orders and to  sustain a  reasonable  production  rate.
Current backlog, other than the ValuJet order for 50 MD-95 twin jets which begin
delivery in mid 1999, will be largely produced and delivered by the end of 1998.

The proposed  merger with Boeing  provides the best  alternative  for  McDonnell
Douglas  to  maximize  the  utilization  of its  investments  and  skills in the
commercial aircraft production business.  In the event the merger with Boeing is
not  consummated,  McDonnell  Douglas  would  continue to evaluate its strategic
alternatives.


Government Business Audits, Reviews and Investigations

McDonnell Douglas,  as a large defense  contractor,  is subject to many audits,
reviews,  and  investigations  by the U.S.  Government  of its  negotiation  and
performance  of,  accounting for, and general  practices  relating to Government
contracts.  An  indictment  of  a  contractor  may  result  in  suspension  from
eligibility  for  award of any new  Government  contract,  and a guilty  plea or
conviction may result in debarment from

<PAGE>


eligibility for awards.  The Government  may, in certain cases,  also terminate
existing contracts,  recover damages,  and impose other sanctions and penalties.
Based on presently known facts,  the Company believes that it has not engaged in
any criminal misconduct with respect to any of the matters currently known to be
under  investigation  and that the ultimate  resolution of these  investigations
will not have a material adverse effect on the Company's earnings, cash flow, or
financial position.

Backlog

McDonnell Douglas had firm backlog of $23.4 billion on March 31, 1997,  compared
with $23.7  billion on December 31,  1996.  Total  backlog was $43.1  billion on
March 31, 1997, compared with $44.4 billion on December 31, 1996.


<PAGE>



PART II OTHER INFORMATION
        -----------------
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------
     (a) Exhibits
         --------
         (12)  Computation of Ratio of Earnings to Fixed Charges

         (27)  Financial Data Schedule

     (b) Reports on Form 8-K
         -------------------
          None.




 SIGNATURE
 ---------
       Pursuant to the requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, its principal accounting officer, thereunto duly authorized.


                                             MCDONNELL DOUGLAS CORPORATION
                                             -----------------------------
                                                      (Registrant)



 Date:       May 14, 1997                    /s/ M. N. Schroeder
      ---------------------------            -----------------------------
                                             M. N. Schroeder
                                             Vice President and Controller
                                             and Registrant's Authorized
                                             Officer