United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

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                                    Form 10-Q

|X| Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the quarterly period ended September 30, 1997

                                       OR

|_| Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

    For the transition period from ________________ to _________________


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                           BOEING CAPITAL CORPORATION
             (Exact name of registrant as specified in its charter)

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   Delaware                  95-2564584                0-10795
 (State or other         (I.R.S. Employer          (Commission File No.)
 jurisdiction of         Identification No.)
 Incorporation or 
  Organization)        

     4060 Lakewood Boulevard, 6th Floor - Long Beach, California 90808-1700
                    (Address of principal executive offices)

                                 (562) 627-3000
              (Registrant's telephone number, including area code)


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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, and (2) has been subject to such filing requirements
for the past 90 days. Yes |X| No |_|


Common shares outstanding at November 14, 1997:                  50,000 shares

Registrant meets the conditions set forth in General Instruction H(1)(a) and (b)
to Form 10-Q and is therefore filing this Form with the reduced disclosure
format.


<PAGE>


                                Table of Contents

                                                                     Page


Part I          Financial Information

    Item 1.     Financial Statements...................................3

    Item 2.     Management's Analysis of Results of Operations *.......8

Part II         Other Information

    Item 1.     Legal Proceedings......................................9

    Item 2.     Changes in Securities **

    Item 3.     Defaults Upon Senior Securities **

    Item 4.     Submission of Matters to a Vote of Security Holders **

    Item 5.     Other Information.....................................10

    Item 6.     Exhibits and Reports on Form 8-K......................14











----------------
*    Management's  Analysis  of  Results  of  Operations  included  in  lieu  of
     Management's  Discussion and Analysis of Financial Condition and Results of
     Operations,  which is omitted  pursuant to General  Instruction  H(1)(a) to
     Form 10-Q.

**   Omitted pursuant to General Instruction H(1)(b) to Form 10-Q.


<PAGE>


---------------------------------------------------------------------
                                     Part I
---------------------------------------------------------------------

Item 1.         Financial Statements

Boeing Capital Corporation and Subsidiaries
Consolidated Balance Sheet
<TABLE>
<CAPTION>

                                                                              (Unaudited)
                                                                             September 30,         December 31,
(Dollars in millions, except stated value and par value)                         1997                  1996
--------------------------------------------------------------------------------------------------------------------

ASSETS
    Financing receivables:
<S>                                                                          <C>                   <C>          
       Investment in finance leases                                          $     1,510.5         $     1,631.2
       Notes receivable                                                              262.4                 308.9
                                                                         -------------------------------------------
                                                                                   1,772.9               1,940.1
       Allowance for losses on financing receivables                                 (53.4)                (48.6)
                                                                         -------------------------------------------
                                                                                   1,719.5               1,891.5
                                                                         -------------------------------------------
    Cash and cash equivalents                                                         15.5                  16.9
    Equipment under operating leases, net                                            730.5                 689.5
    Equipment held for sale or re-lease                                               13.5                  14.0
    Other assets                                                                      34.1
                                                                                                            41.7
                                                                         -------------------------------------------
                                                                             $     2,513.1         $     2,653.6
                                                                         ===========================================

LIABILITIES AND SHAREHOLDER'S EQUITY
    Short-term notes payable                                                 $       105.1         $       161.3
    Accounts payable and accrued expenses                                             17.4                  47.7
    Accounts with McDonnell Douglas Corporation                                       20.0                   -
    Other liabilities                                                                100.0                  90.0
    Deferred income taxes                                                            374.0                 340.2
    Long-term debt:
       Senior                                                                      1,451.9               1,594.1
       Subordinated                                                                   79.8                  94.8
                                                                         -------------------------------------------
                                                                                   2,148.2               2,328.1
                                                                         -------------------------------------------

    Commitments and contingencies -- Note 3

    Shareholder's equity:
       Preferred stock -- no par value; authorized 100,000 shares:
         Series A; $5,000 stated value; authorized, issued and
           outstanding 10,000 shares                                                  50.0                  50.0
       Common stock-- $100 par value; authorized 100,000 shares;
       issued and outstanding 50,000 shares                                            5.0                   5.0
       Capital in excess of par value                                                 89.5                  89.5
       Income retained for growth                                                    220.4                 181.0
                                                                         -------------------------------------------
                                                                                     364.9                 325.5
                                                                         ===========================================
                                                                             $     2,513.1         $     2,653.6

                                                                         ===========================================
</TABLE>

See notes to consolidated financial statements.

<PAGE>


Boeing Capital Corporation and Subsidiaries
Consolidated Statement of Income and Income Retained for Growth
(Unaudited)

<TABLE>
<CAPTION>

                                                                         Three months ended            Nine months ended
                                                                            September 30,                September 30,
 (Dollars in millions)                                                   1997           1996          1997          1996
 =================================================================== ============== ============= ============= ==============

 OPERATING INCOME
<S>                                                                    <C>            <C>           <C>           <C>      
     Finance lease income                                              $    34.0      $    30.0     $   104.6     $    87.3
     Interest income on notes receivable                                     6.3            6.2          19.9          17.7
     Operating lease income, net of depreciation expense                    14.0           14.9          41.7          41.2
     Net gain on disposal or re-lease of assets                              6.5            0.8          10.6          11.1
     Other                                                                   2.2            0.5           5.1           3.1
                                                                     -------------- ------------- ------------- --------------
                                                                            63.0           52.4         181.9         160.4
                                                                     -------------- ------------- ------------- --------------

 EXPENSES
     Interest expense                                                       30.8           30.1          95.0          87.1
     Provision for losses                                                    2.9            3.5           8.7          10.8
     Operating expenses                                                      2.8            3.0           8.5           9.1
     Other                                                                   0.7            1.4           4.0           2.6
                                                                     -------------- ------------- ------------- --------------
                                                                            37.2           38.0         116.2         109.6
                                                                     -------------- ------------- ------------- --------------
 Income before taxes on income                                              25.8           14.4          65.7          50.8
 Provision for income taxes                                                  9.2            4.8          23.7          17.8
                                                                     -------------- ------------- ------------- --------------
 Net income                                                                 16.6            9.6          42.0          33.0
 Income retained for growth at beginning of period                         204.7          157.4         181.0         135.7
 Dividends                                                                  (0.9)          (0.9)         (2.6)         (2.6)
                                                                     -------------- ------------- ------------- --------------
 Income retained for growth at end of period                           $   220.4      $   166.1     $   220.4     $   166.1
                                                                     ============== ============= ============= ==============
</TABLE>

 See notes to consolidated financial statements.


<PAGE>


Boeing Capital Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>

                                                                                Nine months ended September 30,
(Dollars in millions)                                                             1997                 1996
=====================================================================================================================

OPERATING ACTIVITIES
<S>                                                                             <C>                  <C>        
    Net income                                                                  $    42.0            $      33.0
    Adjustments to reconcile net income to net cash provided by
       operating activities:
       Depreciation expense-- equipment under operating leases                       44.0                   42.9
       Net gain on disposal or re-lease of assets                                   (10.6)                 (11.1)
       Provision for losses                                                           8.7                   10.8
    Change in assets and liabilities:
       Accounts with McDonnell Douglas Corporation                                   20.0                   18.5
       Other assets                                                                   7.6                    1.2
       Accounts payable and accrued expenses                                        (31.2)                 (19.6)
       Other liabilities                                                             10.0                    4.2
       Deferred income taxes                                                         33.8                   28.4
    Other, net                                                                       (0.6)                  (3.1)
                                                                           ------------------------------------------
                                                                                    123.7                  105.2
                                                                           ------------------------------------------
INVESTING ACTIVITIES
    Net change in short-term notes and leases receivable                            101.7                   10.4
    Purchase of equipment for operating leases                                     (128.7)                (267.2)
    Proceeds from disposition of equipment, notes and leases receivable              87.6                   41.5
    Collection of notes and leases receivable                                       183.6                  139.6
    Acquisition of notes and leases receivable                                     (153.5)                (335.4)
                                                                           ------------------------------------------
                                                                                     90.7                 (411.1)
                                                                           ------------------------------------------

FINANCING ACTIVITIES
    Net change in short-terms                                             (56.2)                  70.6
    Debt having maturities more than 90 days:
       Proceeds                                                                      60.0                  408.3
       Repayments                                                                  (217.9)                (168.5)
    Payment of cash dividend                                                         (1.7)                  (1.7)
                                                                           ------------------------------------------
                                                                                   (215.8)                 308.7
                                                                           ------------------------------------------
Increase (decrease) in cash and cash equivalents                                     (1.4)                   2.8
Cash and cash equivalents at beginning of year                                       16.9                   12.6
                                                                           ==========================================
Cash and cash equivalents at end of period                                      $    15.5            $      15.4
                                                                           ==========================================
</TABLE>

See notes to consolidated financial statements.


<PAGE>


Boeing Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)


Note 1 -- Basis of Presentation

Boeing Capital Corporation (formerly McDonnell Douglas Finance Corporation) (the
"Company") is a wholly-owned  subsidiary of Boeing Capital Services  Corporation
(formerly  McDonnell  Douglas  Financial  Services   Corporation)   ("BCSC"),  a
wholly-owned  subsidiary of McDonnell Douglas Corporation ("McDonnell Douglas"),
which in turn,  as of August 1, 1997,  is  wholly-owned  by The  Boeing  Company
("Boeing").  The accompanying  unaudited  consolidated financial statements have
been prepared by the Company in accordance  with generally  accepted  accounting
principles for interim  financial  information and with the instructions to Form
10-Q and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles for complete  financial  statements.  In the opinion of management of
the Company,  the accompanying  consolidated  financial  statements  reflect all
adjustments  (consisting of normal  recurring  accruals)  which are necessary to
present  fairly the  consolidated  balance  sheet and the  related  consolidated
statements  of income  and  income  retained  for  growth and cash flows for the
interim periods  presented.  Operating  results for the nine-month  period ended
September 30, 1997,  are not  necessarily  indicative of the results that may be
expected for the year ended December 31, 1997. The statements  should be read in
conjunction with the notes to the consolidated  financial statements included in
the Company's Form 10-K for the year ended December 31, 1996.

Certain 1996 amounts have been reclassified to conform to the 1997 presentation.


Note 2 -- Credit Agreements and Long-Term Debt

The  provisions  of various  credit and debt  agreements  require the Company to
maintain a minimum net worth,  restrict  indebtedness,  and limit cash dividends
and other distributions. Under the most restrictive provision, $118.8 million of
the  Company's  income  retained  for  growth was  available  for  dividends  at
September 30, 1997.


Note 3 -- Commitments and Contingencies

On November 1, 1996, The Allen Austin Harris Group, Inc. (the "Plaintiff") filed
a complaint in the Superior Court of the State of California, County of Alameda,
against the Company,  McDonnell  Douglas,  McDonnell  Douglas Aerospace - Middle
East Limited and the Selah Group, Inc. (the "Defendants").  The Plaintiff, which
had hoped to establish a manufacturing plant abroad with various assistance from
the  Defendants,  seeks more than $57.0  million in alleged  damages  (primarily
consisting of lost profits) based on various  theories.  The Company believes it
has meritorious  defenses to all of the allegations and that the litigation will
have  no  material  adverse  effect  on the  Company's  earnings,  cash  flow or
financial condition.



<PAGE>


The  Company is a party to  litigation  pending in the  United  States  District
Court,  Southern  District  of  Florida,   entitled  McDonnell  Douglas  Finance
Corporation   adv.   Aviaco   International   Leasing,   Inc.,   Aviaco  Traders
International,  Inc.  and  Craig L.  Dobbin  with  Related  Counter-Claims.  The
foregoing  litigation arose out of an action brought by the Company in July 1991
seeking  remedies on account of defaults by the other parties to the  litigation
under loan and  related  documents  involving a $17.9  million  loan made by the
Company.  In January  1994,  in response  to the  Company's  foreclosure  of two
aircraft and a related  aircraft lease  agreement  which had been collateral for
the loan, Aviaco Traders International, Inc., Aviaco International Leasing, Inc.
and Craig L. Dobbin (collectively referred to as "Aviaco") filed a counter-claim
against the Company,  asserting nine claims for alleged damages based on various
tort and contractual theories relating to the Company's foreclosure.

The case  proceeded to jury trial on the three of nine claims which survived the
Company's  Motion for Summary  Judgment.  The case was  submitted to the jury on
October 16, 1997.  On October 17, 1997,  the jury returned a verdict in favor of
Aviaco awarding  aggregate  damages of  approximately  $12.2 million,  including
damages of  approximately  $10.0 million for the failure to exercise  reasonable
care  with  regard  to the  related  lease  agreement.  The  jury  also  awarded
pre-judgment  interest,  which  under  applicable  law  is 7% per  annum,  to be
determined by the Judge.

The Company  believes  the $10.0  million  award is not  supported by the record
evidence or by applicable law. The Company intends to take appropriate action to
contest that award  through  post-trial  motions and, if  necessary,  an appeal.
Given the inherent  uncertainties  of litigation,  however,  no assurance can be
given that the Company will be successful in reducing the jury's verdict. In the
event the Company is ultimately  unsuccessful  in eliminating  the $10.0 million
award,  this  litigation  would have a material  adverse impact on the Company's
earnings.

A number of other 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 third  parties,  including  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.

Trans World Airlines,  Inc. ("TWA")  accounted for $231.9 million (9.3% of total
Company  portfolio)  and $249.5  million  (9.5% of total  Company  portfolio) at
September  30,  1997,  and December 31,  1996,  respectively.  TWA  continues to
operate under a reorganization  plan,  confirmed by the United States Bankruptcy
Court in 1995, that  restructured its indebtedness and leasehold  obligations to
its  creditors.  In addition,  TWA continues to face  financial and  operational
challenges.  Additionally,  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.  McDonnell  Douglas  provides  guaranties  to the
Company  for  certain  obligations  of TWA under the  various  lease  agreements
between the  Company  and TWA. At  September  30,  1997,  the maximum  aggregate
coverage under such guaranties was $40.4 million. In addition, McDonnell Douglas
provides a supplemental guaranty in favor of the Company for up to an additional
$10.0  million of the Company's  financings  to TWA.  This guaranty  supplements
individual  guaranties  provided by McDonnell Douglas with respect to certain of
the Company's  financings  to TWA to the extent that the  estimated  fair market
value of the financings (after applying the individual  guaranties) is less than
the net asset value of the financings on the Company's  books.  The supplemental
guaranty terminates in March 1998. TWA has reported relatively low cash balances
of $104.6  million as of  September  30,  1997,  compared  to $248.5  million at
September 30, 1996. As of the date hereof,  TWA is current on its obligations to
the Company. If, however, TWA were to default on its obligations to the Company,
this could have a material adverse effect on the Company's  earnings,  cash flow
or financial position.

At September 30, 1997, the Company had  commitments to provide leasing and other
financing totaling $153.2 million.

In  conjunction  with  prior  asset  dispositions  and  certain  guaranties,  at
September  30,  1997,  the Company  was  subject to a maximum  recourse of $68.8
million.  Based on trends to date, the Company's losses related to such exposure
are not expected by the Company to be significant.

The Company  leases  aircraft  under capital leases which have been subleased to
others.  At September 30, 1997, the Company had guaranteed the repayment of $6.4
million in capital lease obligations associated with a 50% partner.


Item 2.         Management's Analysis of Results of Operations

From  time to  time,  the  Company  may make  certain  statements  that  contain
projections  or  "forward-looking"  information  (as  defined  in the  Private
Securities  Litigation  Reform Act of 1995) and  involve  risk and  uncertainty.
Certain statements in this Form 10-Q, and particularly in Item 1 of Part II, may
contain forward-looking  information.  The subject matter of such statements may
include,  but not be limited  to, the  Boeing-McDonnell  Douglas  merger and its
possible effects, future earnings, costs, expenditures, losses, residual values,
and various business  environment trends. In addition to those contained herein,
forward-looking  statements  and  projections  may be made by  management of the
Company orally or in writing including,  but not limited to, various sections of
the Company's  filings with the  Securities  and Exchange  Commission  under the
Securities Act of 1933 and the Securities Exchange Act of 1934.

Actual results and trends in the future may differ  materially from  projections
depending on a variety of factors  including,  but not limited to, the impact of
the Boeing-McDonnell  Douglas merger and the Company's relationship with its new
shareholder,  decisions made by the newly  constituted  Board of Directors,  the
capital  equipment   requirements  of  U.S.  and  foreign  businesses,   capital
availability  and cost,  changes in law and tax  benefits,  the tax  position of
Boeing (including the applicability of the alternative minimum tax), competition
from  other  financial  institutions,  the  Company's  successful  execution  of
internal operating plans,  defaults by customers,  regulatory  uncertainties and
legal proceedings.

Finance lease income  increased $17.3 million (19.8%) from the first nine months
of 1996,  primarily  attributable to the financings of two MD-11 aircraft funded
in December 1996 under finance lease agreements.

Interest on notes receivable  increased $2.2 million (12.4%) from the first nine
months of 1996,  primarily  attributable to increased  volume in 1996 within the
commercial equipment leasing portfolio.

Other income  increased $2.0 million (64.5%) from the first nine months of 1996,
primarily  attributable to  approximately  $1.6 million in prepayment  penalties
received for an early payoff on a commercial equipment leasing note receivable.

Interest  expense  increased  $7.9 million  (9.1%) from the first nine months of
1996,  attributable  to a higher level of  borrowings  in 1997,  resulting  from
increased financing activity in 1996.

Provision for losses  decreased $2.1 million  (19.4%) from the first nine months
of 1996, primarily  attributable to the Company's  determination that additional
provisions for losses relating to the commercial aircraft portfolio in excess of
those previously  provided were not necessary or appropriate  during the current
period and to a decrease in new aircraft lease volume,  which  aggregated  $81.2
million in the first nine months of 1997,  compared to aircraft  lease volume of
$358.9 million in the first nine months of 1996.

Other  expenses  increased  $1.4  million  (53.9%) from the first nine months of
1996,  primarily  attributable  to maintenance  expenses of  approximately  $1.8
million on an airplane that was repossessed in March 1997.



                                  Part II

Item 1.         Legal Proceedings

On November 1, 1996, The Allen Austin Harris Group, Inc. (the "Plaintiff") filed
a complaint in the Superior Court of the State of California, County of Alameda,
against the Company,  McDonnell  Douglas,  McDonnell  Douglas Aerospace - Middle
East Limited and the Selah Group, Inc. (the "Defendants").  The Plaintiff, which
had hoped to establish a manufacturing plant abroad with various assistance from
the  Defendants,  seeks more than $57.0  million in alleged  damages  (primarily
consisting of lost profits) based on various  theories.  The Company believes it
has meritorious  defenses to all of the allegations and that the litigation will
have  no  material  adverse  effect  on the  Company's  earnings,  cash  flow or
financial condition.

The  Company is a party to  litigation  pending in the  United  States  District
Court,  Southern  District  of  Florida,   entitled  McDonnell  Douglas  Finance
Corporation   adv.   Aviaco   International   Leasing,   Inc.,   Aviaco  Traders
International,  Inc.  and  Craig L.  Dobbin  with  Related  Counter-Claims.  The
foregoing  litigation arose out of an action brought by the Company in July 1991
seeking  remedies on account of defaults by the other parties to the  litigation
under loan and  related  documents  involving a $17.9  million  loan made by the
Company.  In January  1994,  in response  to the  Company's  foreclosure  of two
aircraft and a related  aircraft lease  agreement  which had been collateral for
the loan, Aviaco Traders International, Inc., Aviaco International Leasing, Inc.
and Craig L. Dobbin (collectively referred to as "Aviaco") filed a counter-claim
against the Company,  asserting nine claims for alleged damages based on various
tort and contractual theories relating to the Company's foreclosure.



<PAGE>


The case  proceeded to jury trial on the three of nine claims which survived the
Company's  Motion for Summary  Judgment.  The case was  submitted to the jury on
October 16, 1997.  On October 17, 1997,  the jury returned a verdict in favor of
Aviaco awarding  aggregate  damages of  approximately  $12.2 million,  including
damages of  approximately  $10.0 million for the failure to exercise  reasonable
care  with  regard  to the  related  lease  agreement.  The  jury  also  awarded
pre-judgment  interest,  which  under  applicable  law  is 7% per  annum,  to be
determined by the Judge.

The Company  believes  the $10.0  million  award is not  supported by the record
evidence or by applicable law. The Company intends to take appropriate action to
contest that award  through  post-trial  motions and, if  necessary,  an appeal.
Given the inherent  uncertainties  of litigation,  however,  no assurance can be
given that the Company will be successful in reducing the jury's verdict. In the
event the Company is ultimately  unsuccessful  in eliminating  the $10.0 million
award,  this  litigation  would have a material  adverse impact on the Company's
earnings.

A number of other 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 third  parties,  including  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.

Item 5.         Other Information

Summarized below is information on the effects of the  Boeing-McDonnell  Douglas
merger, the Company's borrowing  operations,  portfolio  balances,  new business
volume,  analysis of allowance  for losses on financing  receivables  and credit
loss experience, and receivable write-offs, net of recoveries by business unit.

The Effects of the Boeing-McDonnell Douglas Merger

On August 1, 1997, the Boeing-McDonnell  Douglas merger was consummated pursuant
to an Agreement and Plan of Merger dated as of December 14, 1996,  among Boeing,
West  Acquisition  Corp.,  a  wholly-owned  subsidiary  of Boeing  ("Sub"),  and
McDonnell  Douglas  (the  "Merger  Agreement").  Under the  terms of the  Merger
Agreement,  Sub was  merged  into  McDonnell  Douglas,  with  McDonnell  Douglas
surviving as a wholly-owned subsidiary of Boeing.

The  Board  of  Directors  of  the  Company  was  reconstituted   following  the
consummation of the  Boeing-McDonnell  Douglas merger.  The new Board intends to
conduct a detailed  review of the Company and its assets,  corporate  structure,
strategy,  capitalization,  operations,  properties,  policies,  management  and
personnel and to consider  what, if any,  changes would be desirable in light of
the circumstances then existing,  and may thereafter determine to implement such
changes.

The many possible  long-term  effects of the merger on the Company (for example,
decisions  regarding the strategic value of the Company to Boeing, the impact of
the merger on residual  values of aircraft in the Company's  portfolio,  the tax
position  of Boeing and the effect of  decisions  relating to the  financing  of
Boeing aircraft) are currently unknown and,  therefore,  cannot be quantified at
this time.

The Company,  McDonnell Douglas and Boeing intend to file a consolidated federal
income tax return,  with the  consolidated  tax payments,  if any, being made by
Boeing.  Boeing,  BCSC and the Company have entered into agreements (the "Boeing
Operating  Agreements")  which provide that so long as consolidated  federal tax
returns are filed, payments shall be made, directly or indirectly,  by Boeing to
the Company or by the Company to Boeing, as appropriate, equal to the difference
between the  consolidated  tax  liability  and Boeing's tax  liability  computed
without  consolidation with the Company.  If, subsequent to any such payments by
Boeing (or the  Company),  the payer incurs tax losses which may be carried back
to the year for which such payments were made, the payee  nevertheless  will not
be obligated to repay any portion of such payments.

The Operating Agreement among the Company, BCSC and McDonnell Douglas remains in
effect and  amounts  payable  under the Boeing  Operating  Agreements  take into
account payments made under the Operating  Agreement,  provided that in no event
will the Company receive an amount which is materially  less, or be obligated to
pay an amount which is materially greater,  than it would have received, or been
obligated  to  pay,  under  the  Operating  Agreement.  Likewise,  the  informal
arrangement which generally entitles the Company to rely upon the realization of
tax  benefits  for the portion of projected  taxable  earnings  allocated to the
Company remains in effect.

There  can  be no  assurance,  however,  that  these  (and  other)  intercompany
arrangements will not change as time permits the Company's new Board members and
shareholder  to study and become more familiar with these working  arrangements.
While it is difficult to predict the  applicability  of the alternative  minimum
tax to Boeing  and the  effect  thereof  under such  informal  arrangement, if
Boeing were subject to alternative  minimum tax liability for an extended  
period,  it could have a material adverse impact on the  competitiveness of the
Company's pricing of new business and on the earnings of the Company.

On November 3, 1997, Boeing announced that it will continue to produce MD-80 and
MD-90 aircraft only until approximately mid-1999.  Boeing also stated that MD-80
and MD-90 customers, with 1,200 such aircraft in service overall, can expect the
same level of long-term  support that Boeing  provides for all of its  aircraft,
whether they are in or out of  production.  The  Company's  commercial  aircraft
portfolio  as of  September  30,  1997  included  36 MD-80s  and  three  MD-90s,
representing $460.7 million and $101.1 million, respectively, in net asset value
or 18.4% and 4.0%,  respectively,  of the Company's total portfolio. The Company
periodically  reviews the carrying  and  residual  values of all aircraft in its
portfolio.  Such reviews  will  include the effects,  if any, of the November 3,
1997  announcement  as they become known or can be reasonably  estimated.  While
management  believes that current residual values are conservative,  significant
declines in market value could impact the gain or loss on  disposition  of these
aircraft.

Borrowing Operations

On  October  10,  1997 the  Company  filed  with  the  Securities  and  Exchange
Commission  ("Commission") a Form S-3 Registration  Statement for a public shelf
registration of $1.2 billion of its debt securities (SEC File No. 333-37635). On
October 31, 1997,  the  Commission  declared such  Registration  Statement to be
effective. The Company has authorized the sale and issuance from time to time at
the Company's  discretion  of up to $400 million of such debt  securities in the
form of the Company's Series X medium-term notes.

Under the discussion of Borrowing Operations,  the Company's Report on Form 10-K
dated  December 31, 1996 states that on December  16,  1996,  as a result of the
Boeing-McDonnell  Douglas  merger,  the rating  agencies  placed the  Company on
review with positive  implications.  On July 17, 1997, Moody's Investors Service
said that it upgraded the ratings of Boeing and  McDonnell  Douglas but that the
ratings  for the  Company  remain  under  review for  possible  upgrade  because
"critical  questions  regarding the strategic value and future business plan for
the Company remain unanswered."

On July 31,  1997,  Standard & Poor's  raised its  ratings on Boeing,  McDonnell
Douglas and the Company.  The Company's  senior unsecured debt rating was raised
to AA from A- and its subordinated  debt rating was raised to AA- from BBB+. The
Company's commercial paper rating was raised to A-1+ from A-2. Standard & Poor's
stated that "The upgrade on McDonnell Douglas Finance  Corporation  reflects the
benefits  of the  merger,  including  the 100%  indirect  ownership  by Boeing."
Standard & Poor's also stated that "the finance unit's ratings are not equalized
with those of Boeing because there is some  uncertainty  about the strategic fit
of financial services in Boeing's long-term business mix."

As of July 25,  1997,  the  Company is no longer  rated by Duff & Phelps  Credit
Rating Company because  McDonnell  Douglas is no longer rated as a result of the
Boeing-McDonnell Douglas merger.

Although security ratings impact the rate at which the Company can borrow funds,
a security rating is not a recommendation  to buy, sell or hold  securities.  In
addition,  a security rating is subject to revision or withdrawal at any time by
the  assigning   rating   organization  and  each  rating  should  be  evaluated
independently of any other rating.



<PAGE>


Portfolio Balances

Portfolio  balances for the  Company's two business  segments are  summarized as
follows:
<TABLE>
<CAPTION>

                                                                             September 30,         December 31,
(Dollars in millions)                                                            1997                  1996
---------------------------------------------------------------------------------------------------------------------
Aircraft Financing
    Boeing/McDonnell Douglas aircraft financing
<S>                                                                         <C>                   <C>         
       Finance leases                                                       $    1,007.7          $    1,132.6
       Operating leases                                                            398.4                 402.0
       Notes receivable                                                             66.3                  82.9
                                                                         --------------------------------------------
                                                                                 1,472.4               1,617.5
                                                                         --------------------------------------------
    Other commercial aircraft financing
       Finance leases                                                              131.8                 136.9
       Operating leases                                                             52.9                  56.0
       Notes receivable                                                              4.4                   4.5
                                                                         --------------------------------------------
                                                                                   189.1                 197.4
                                                                         --------------------------------------------
Commercial Equipment Leasing
    Finance leases                                                                 371.0                 361.7
    Operating leases                                                               279.2                 231.5
    Notes receivable                                                               176.9                 176.6
                                                                         --------------------------------------------
                                                                                   827.1                 769.8
                                                                         --------------------------------------------
Other                                                                               14.8                  44.9
                                                                         --------------------------------------------
                                                                            $    2,503.4          $    2,629.6
                                                                         ============================================
</TABLE>


New Business Volume

New business volume is summarized as follows:
<TABLE>
<CAPTION>

                                                                               Nine months ended September 30,
(Dollars in millions)                                                            1997                   1996
----------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                   <C>          
Boeing/McDonnell Douglas aircraft financing                                   $      81.2           $       338.8
Other commercial aircraft financing                                                   -                      20.1
Commercial equipment leasing                                                        188.1                   236.6
                                                                         ---------------------------------------------
                                                                              $     269.3           $       595.5
                                                                         =============================================

</TABLE>

<PAGE>


Analysis of Allowance for Losses on Financing Receivables and Credit Loss
Experience
<TABLE>
<CAPTION>

                                                                             September 30,         December 31,
(Dollars in millions)                                                            1997                  1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                   <C>       
Allowance for losses on financing receivables at beginning of year           $     48.6            $     42.3
Provision for losses                                                                8.7                  14.2
Write-offs, net of recoveries                                                      (2.3)                 (6.0)
Other                                                                              (1.6)                 (1.9)
                                                                         --------------------------------------------
Allowance for losses on financing receivables at end of
  period                                                                     $     53.4            $     48.6
                                                                         ============================================

Allowance as percent of total portfolio                                             2.1%                  1.8%

Net write-offs as percent of financing receivables                                  0.1%                  0.3%

More than 90 days delinquent:
  Amount of delinquent installments                                          $      1.9            $      2.1
  Total receivables due from delinquent obligors                                    1.5                  23.4
  Total receivables due from delinquent obligors
     as a percentage of total portfolio                                             0.1%                  0.9%

</TABLE>

Receivable Write-offs, Net of Recoveries by Business Unit

The  following  table  summarizes  the  writeoffs  (recoveries)  of  each of the
Company's continuing businesses:
<TABLE>
<CAPTION>

                                                                               Nine months ended September 30,
(Dollars in millions)                                                            1997                  1996
---------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                   <C>       
Commercial aircraft financing                                                  $        -            $        -
Commercial equipment leasing                                                           (0.3)                  3.3
                                                                         --------------------------------------------
                                                                               $       (0.3)         $        3.3
                                                                         ============================================

</TABLE>

Item 6.         Exhibits and Reports on Form 8-K

A.   Exhibits

         Exhibit 10 Amended and Restated Operating Agreement

         Exhibit 12 Computation of ratio of income to fixed charges.

         Exhibit 27 Financial Data Schedule.

B.   Reports on Form 8-K

     None.


<PAGE>




                                                     Signatures


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  financial  officer  and its  principal  accounting
officer, thereunto duly authorized.


                                     Boeing Capital Corporation


November 14, 1997                    /s/ STEVEN W. VOGEDING
                                     ----------------------------------
                                     Steven W. Vogeding
                                     Vice President and Chief Financial
                                     Officer (Principal Financial Officer) and
                                     Registrant's Authorized Officer




                                     /s/ MAURA R. MIZUGUCHI
                                     ----------------------------------
                                     Maura R. Mizuguchi
                                     Controller (Principal Accounting Officer)



<PAGE>