##### Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2011

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 0-10795

BOEING CAPITAL CORPORATION



(Exact name of
registrant as specified in its charter)



|                                                              |  |  |  |                                     
|------------------------------------------------------------- |  |  |  | ------------------------------------
|Delaware                                                      |  |  |  | 95-2564584                          
|(State or other jurisdiction ofincorporation or organization) |  |  |  | (I.R.S. Employer Identification No.)



|                                                   |  |           
|-------------------------------------------------- |  | ----------
|500 Naches Ave. SW, 3rd Floor  Renton, Washington |  | 98057     
|(Address of principal executive offices)           |  | (Zip Code)

(425) 965-4000



(Registrants telephone number, including area code)





(Former name, former address and former fiscal year, if changed since last report)

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 such 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.                                        
                                         
                                         
                       x  Yes     ̈  
No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).                                        
                                        
     ̈  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                                               |  |                             
|----------------------- |  | - |  | --------------------------------------------- |  | ----------------------------
|Large accelerated filer |  |  ̈ |  |                                               |  | Accelerated filer  
 ̈       
|Non-accelerated filer   |  | x |  | (Do not check if a smaller reporting company) |  | Smaller reporting company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                                         
                                         
                                         
                         
 ̈  Yes    x  No

Common stock shares
outstanding at April 27, 2011: 50,000 shares, all of which were owned by The Boeing Company.

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



---

##### Table of Contents

Table of Contents



|                                          |  |  |                            |  |  |                                                                                    |      |  |    | 
|----------------------------------------- |  |  | -------------------------- |  |  | ---------------------------------------------------------------------------------- | ---- |  | -- | 
|                                          |  |  |                            |  |  |                                                                                    | Page | 
|Part I. Financial Information (Unaudited) |  |  |                            | 
|                                          |  |  | Item 1.                    |  |  | Financial Statements                                                               |      |  | 1  | 
|                                          |  |  |                            |  |  | Condensed Consolidated Balance Sheets                                              |      |  | 1  | 
|                                          |  |  |                            |  |  | Condensed Consolidated Statements of Operations                                    |      |  | 2  | 
|                                          |  |  |                            |  |  | Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income |      |  | 3  | 
|                                          |  |  |                            |  |  | Condensed Consolidated Statements of Cash Flows                                    |      |  | 4  | 
|                                          |  |  |                            |  |  | Notes to Condensed Consolidated Financial Statements                               |      |  | 5  | 
|                                          |  |  |                            |  |  | Review Report of Independent Registered Public Accounting Firm                     |      |  | 13 | 
|                                          |  |  | Forward-Looking Statements |  |  | 14                                                                                 |     
|                                          |  |  | Item 2.                    |  |  | Managements Narrative Analysis of the Results of Operations                       |      |  | 14 | 
|                                          |  |  | Item 4.                    |  |  | Controls and Procedures                                                            |      |  | 18 | 
|                                          | 
|Part II. Other Information                |  |  |                            | 
|                                          |  |  | Item 1.                    |  |  | Legal Proceedings                                                                  |      |  | 19 | 
|                                          |  |  | Item 1A.                   |  |  | Risk Factors                                                                       |      |  | 19 | 
|                                          |  |  | Item 6.                    |  |  | Exhibits                                                                           |      |  | 19 | 
|                                          |  |  | Signatures                 |  |  |                                                                                    |      |  | 20 | 





---

##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Boeing
Capital Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)



|                                                                                                |  |               |       |   |                  |   |       |  
|----------------------------------------------------------------------------------------------- |  | ------------- | ----- | - | ---------------- | - | ----- | -
|(Dollars in millions, except par value)                                                         |  | March 31,2011 |       |   | December 31,2010 |  
|ASSETS                                                                                          |  |               |       |   |                  |   |       |  
|Cash and cash equivalents                                                                       |  | $             | 180   |   |                  | $ | 425   |  
|Short-term investments                                                                          |  |               | 300   |   |                  |   | 900   |  
|Receivables:                                                                                    |  |               |       |   |                  |   |       |  
|Finance leases                                                                                  |  |               | 1,883 |   |                  |   | 1,907 |  
|Notes and other                                                                                 |  |               | 317   |   |                  |   | 375   |  
|                                                                                                |  |               | 2,200 |   |                  |   | 2,282 |  
|Allowance for losses on receivables                                                             |  |               | (81   | ) |                  |   | (87   | )
|                                                                                                |  |               | 2,119 |   |                  |   | 2,195 |  
|Equipment under operating leases, net                                                           |  |               | 1,777 |   |                  |   | 1,821 |  
|Investments                                                                                     |  |               | 7     |   |                  |   | 8     |  
|Assets held for sale or re-lease, net                                                           |  |               | 556   |   |                  |   | 583   |  
|Other assets                                                                                    |  |               | 44    |   |                  |   | 54    |  
|                                                                                                |  | $             | 4,983 |   |                  | $ | 5,986 |  
|                                                                                                | 
|LIABILITIES AND SHAREHOLDERS EQUITY                                                            |  |               |       |   |                  |   |       |  
|Liabilities:                                                                                    |  |               |       |   |                  |   |       |  
|Accounts payable and accrued expenses                                                           |  | $             | 50    |   |                  | $ | 88    |  
|Other liabilities                                                                               |  |               | 320   |   |                  |   | 328   |  
|Accounts with Boeing                                                                            |  |               | 83    |   |                  |   | 66    |  
|Deferred income taxes                                                                           |  |               | 1,354 |   |                  |   | 1,371 |  
|Debt                                                                                            |  |               | 2,649 |   |                  |   | 3,446 |  
|                                                                                                |  |               | 4,456 |   |                  |   | 5,299 |  
|Shareholders equity:                                                                           |  |               |       |   |                  |   |       |  
|Common shares  $100 par value; authorized 100,000 shares; issued and outstanding 50,000 shares |  |               | 5     |   |                  |   | 5     |  
|Additional paid-in capital                                                                      |  |               | 522   |   |                  |   | 682   |  
|Accumulated other comprehensive income (loss), net of tax                                       |  |               |      |   |                  |   |      |  
|Retained earnings                                                                               |  |               |      |   |                  |   |      |  
|                                                                                                |  |               | 527   |   |                  |   | 687   |  
|                                                                                                |  | $             | 4,983 |   |                  | $ | 5,986 |  
|                                                                                                | 

See Notes to the Condensed Consolidated Financial Statements.



1



---

##### Table of Contents

Boeing Capital Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                                  |  |                              |     |   |      |   |     | 
|----------------------------------------------------------------- |  | ---------------------------- | --- | - | ---- | - | --- | 
|                                                                  |  | Three Months Ended March 31, |    
|(Dollars in millions)                                             |  | 2011                         |     |   | 2010 |  
|REVENUE                                                           |  |                              |     |   |      |   |     | 
|Finance lease income                                              |  | $                            | 35  |   |      | $ | 37  | 
|Interest income on notes receivable                               |  |                              | 8   |   |      |   | 17  | 
|Operating lease income                                            |  |                              | 90  |   |      |   | 97  | 
|Net gain on disposal of assets                                    |  |                              | 5   |   |      |   | 6   | 
|Other income                                                      |  |                              | 5   |   |      |   | 5   | 
|                                                                  |  |                              | 143 |   |      |   | 162 | 
|EXPENSES                                                          |  |                              |     |   |      |   |     | 
|Interest expense                                                  |  |                              | 33  |   |      |   | 41  | 
|Depreciation expense                                              |  |                              | 42  |   |      |   | 51  | 
|Provision for (recovery of) losses                                |  |                              | (6  | ) |      |   | 3   | 
|Operating expenses                                                |  |                              | 11  |   |      |   | 12  | 
|Asset impairment expense                                          |  |                              | 9   |   |      |   | 7   | 
|Other expense                                                     |  |                              | 2   |   |      |   | 2   | 
|                                                                  |  |                              | 91  |   |      |   | 116 | 
|Income from continuing operations before provision for income tax |  |                              | 52  |   |      |   | 46  | 
|Provision for income tax                                          |  |                              | 19  |   |      |   | 17  | 
|Income from continuing operations                                 |  |                              | 33  |   |      |   | 29  | 
|Net loss on disposal of discontinued operations, net of tax       |  |                              | (2  | ) |      |   |    | 
|Net income                                                        |  | $                            | 31  |   |      | $ | 29  | 
|                                                                  | 

See Notes to the Condensed Consolidated Financial Statements.



2



---

##### Table of Contents

Boeing Capital Corporation and Subsidiaries

Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income

(Unaudited)



|                                                       |  |       |      |   |              |   |   |                          |  |   |                                            |   |  |                  |    |   |                     |   |     |   |  |   |    | 
|------------------------------------------------------ |  | ----- | ---- | - | ------------ | - | - | ------------------------ |  | - | ------------------------------------------ | - |  | ---------------- | -- | - | ------------------- | - | --- | - |  | - | -- | 
|(Dollars in millions)                                  |  | Total |      |   | CommonShares |   |   | AdditionalPaid-InCapital |  |   | AccumulatedOtherComprehensiveIncome (Loss) |   |  | RetainedEarnings |    |   | ComprehensiveIncome |  
|Balance at January 1, 2010                             |  | $     | 699  |   |              | $ | 5 |                          |  | $ | 696                                        |   |  | $                | (2 | ) |                     | $ |    |   |  |   |    | 
|Net income                                             |  |       | 29   |   |              |   |  |                          |  |   |                                           |   |  |                  |   |   |                     |   | 29  |   |  | $ | 29 | 
|Balance at March 31, 2010                              |  | $     | 728  |   |              | $ | 5 |                          |  | $ | 696                                        |   |  | $                | (2 | ) |                     | $ | 29  |   |  | $ | 29 | 
|                                                       |  |       |      |   |              |   |   |                          |  |   |                                            |   |  |                  |    |   |                     |   |     |   |  |   |    | 
|Balance at January 1, 2011                             |  | $     | 687  |   |              | $ | 5 |                          |  | $ | 682                                        |   |  | $                |   |   |                     | $ |    |   |  |   |    | 
|Cash dividends to Boeing (including return of capital) |  |       | (191 | ) |              |   |  |                          |  |   | (160                                       | ) |  |                  |   |   |                     |   | (31 | ) |  |   |    | 
|Net income                                             |  |       | 31   |   |              |   |  |                          |  |   |                                           |   |  |                  |   |   |                     |   | 31  |   |  | $ | 31 | 
|Balance at March 31, 2011                              |  | $     | 527  |   |              | $ | 5 |                          |  | $ | 522                                        |   |  | $                |   |   |                     | $ |    |   |  | $ | 31 | 
|                                                       |  |       |      |   |              |   |   |                          |  |   |                                            |   |  |                  |    |   |                     |   |     |   |  |   |    | 

See Notes to the Condensed Consolidated Financial Statements.



3



---

##### Table of Contents

Boeing Capital Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                              |      |   |      |   |      |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ---- | - | ---- | - | ---- | -
|                                                                                  |  | Three Months Ended March 31, |     
|(Dollars in millions)                                                             |  | 2011                         |      |   | 2010 |  
|OPERATING ACTIVITIES                                                              |  |                              |      |   |      |   |      |  
|Net income                                                                        |  | $                            | 31   |   |      | $ | 29   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |      |   |      |   |      |  
|Non-cash items:                                                                   |  |                              |      |   |      |   |      |  
|Depreciation and amortization expense                                             |  |                              | 39   |   |      |   | 49   |  
|Net gain on disposal of assets                                                    |  |                              | (5   | ) |      |   | (6   | )
|Provision for (recovery of) losses                                                |  |                              | (6   | ) |      |   | 3    |  
|Asset impairment expense and other charges                                        |  |                              | 9    |   |      |   | 13   |  
|Adjustments related to discontinued operations, net of tax                        |  |                              | 2    |   |      |   |     |  
|Change in deferred income taxes                                                   |  |                              | (17  | ) |      |   | (15  | )
|Change in assets and liabilities:                                                 |  |                              |      |   |      |   |      |  
|Other assets                                                                      |  |                              | 3    |   |      |   | (2   | )
|Accrued interest and rents                                                        |  |                              | 1    |   |      |   | 1    |  
|Accounts payable and accrued expenses                                             |  |                              | (38  | ) |      |   | (28  | )
|Other liabilities                                                                 |  |                              | (11  | ) |      |   | (8   | )
|Accounts with Boeing                                                              |  |                              | 17   |   |      |   | 22   |  
|Net cash provided by operating activities                                         |  |                              | 25   |   |      |   | 58   |  
|INVESTING ACTIVITIES                                                              |  |                              |      |   |      |   |      |  
|Purchase of short-term investments                                                |  |                              | (300 | ) |      |   | (200 | )
|Proceeds from maturities of short-term investments                                |  |                              | 900  |   |      |   |     |  
|Proceeds from available-for-sale investments                                      |  |                              | 1    |   |      |   |     |  
|Payment for capitalizable costs in process                                        |  |                              |     |   |      |   | (9   | )
|Proceeds from disposition of equipment                                            |  |                              | 24   |   |      |   | 7    |  
|Payments of leases, notes and other receivables                                   |  |                              | 82   |   |      |   | 224  |  
|Net cash provided by investing activities                                         |  |                              | 707  |   |      |   | 22   |  
|FINANCING ACTIVITIES                                                              |  |                              |      |   |      |   |      |  
|Repayment of debt                                                                 |  |                              | (786 | ) |      |   | (35  | )
|Payment of dividends (including return of capital)                                |  |                              | (191 | ) |      |   |     |  
|Net cash used in financing activities                                             |  |                              | (977 | ) |      |   | (35  | )
|Net increase (decrease) in cash and cash equivalents                              |  |                              | (245 | ) |      |   | 45   |  
|Cash and cash equivalents at beginning of year                                    |  |                              | 425  |   |      |   | 596  |  
|Cash and cash equivalents at end of period                                        |  | $                            | 180  |   |      | $ | 641  |  
|                                                                                  | 
|NON-CASH INVESTING AND FINANCING ACTIVITIES                                       |  |                              |      |   |      |   |      |  
|Net transfer from assets held for sale or re-lease                                |  | $                            | (13  | ) |      | $ | (65  | )
|                                                                                  | 
|Net transfer to notes receivable                                                  |  | $                            |     |   |      | $ | 23   |  
|                                                                                  | 
|Net transfer to equipment under operating leases                                  |  | $                            | 13   |   |      | $ | 42   |  
|                                                                                  | 
|Transfer to finance leases                                                        |  | $                            |     |   |      | $ | 6    |  
|                                                                                  | 
|Transfer from other assets                                                        |  | $                            |     |   |      | $ | (6   | )
|                                                                                  | 
|(Increase)/decrease in debt due to fair value hedge derivatives                   |  | $                            | 8    |   |      | $ | (6   | )
|                                                                                  | 

See Notes to the Condensed Consolidated Financial Statements.



4



---

##### Table of Contents

Boeing Capital Corporation and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

(Dollars in millions)

Note 1 Basis of Presentation

Boeing Capital Corporation (together with its subsidiaries, referred to as us, we, our or the Company) is a wholly owned subsidiary of The Boeing Company (Boeing). We
prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America 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 notes required by accounting principles generally accepted in the United States of America for complete financial statements. In our opinion all normal
recurring adjustments necessary for a fair presentation are reflected in the condensed consolidated financial statements. Operating results for the period ended March 31, 2011 are not necessarily indicative of the results for the full year. The
condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2010 Annual Report on Form 10-K.

Note 2 Transactions with Boeing

As a wholly owned subsidiary of Boeing,
our mission is to arrange for the financing of products manufactured by Boeing. When third party financing is not available, we may provide such financing directly.

We have a number of general contractual arrangements with Boeing to facilitate our operations including, among others, a support agreement, tax sharing agreement and an agreement allowing us to borrow under
Boeings committed revolving lines of credit. We also have an intercompany borrowing and lending arrangement with Boeing.

In
addition, we may require other forms of support from Boeing with respect to certain financing transactions we undertake. This support may take the form of intercompany guarantees, subsidies, remarketing agreements or other support arrangements.

There can be no assurances that these intercompany agreements and arrangements will not be terminated or modified by us or Boeing.
However, our and Boeings ability to terminate or modify the support agreement is subject to certain conditions. See Item 8. Financial Statements and Supplementary Data, Note 2 of our 2010 Annual Report on Form 10-K.

At March 31, 2011, we were the beneficiary under $1,717 of guarantees from Boeing which mitigates our risk with respect to portfolio assets
totaling $2,298.

Intercompany guarantee amounts by aircraft type are summarized as follows:



|                                        |  |                  |       |  |                   |   |       |                  |  |   |                |  |  |   |       | 
|--------------------------------------- |  | ---------------- | ----- |  | ----------------- | - | ----- | ---------------- |  | - | -------------- |  |  | - | ----- | 
|                                        |  | March 31, 2011   |       |  | December 31, 2010 |  
|                                        |  | Guarantee
Amount |       |  | Carrying
Value    |   |       | Guarantee
Amount |  |   | Carrying
Value | 
|717 (out of production)                 |  | $                | 1,559 |  |                   | $ | 2,079 |                  |  | $ | 1,586          |  |  | $ | 2,099 | 
|Out of production single-aisle aircraft |  |                  | 63    |  |                   |   | 63    |                  |  |   | 66             |  |  |   | 66    | 
|Out of production twin-aisle aircraft   |  |                  | 51    |  |                   |   | 70    |                  |  |   | 51             |  |  |   | 71    | 
|Other, including other Boeing aircraft  |  |                  | 44    |  |                   |   | 86    |                  |  |   | 46             |  |  |   | 90    | 
|                                        |  | $                | 1,717 |  |                   | $ | 2,298 |                  |  | $ | 1,749          |  |  | $ | 2,326 | 
|                                        | 

At March 31, 2011 and December 31, 2010, Accounts with Boeing included $45 and $47 for deferred revenue
associated with guarantee and subsidy settlements and terminations.



5



---

##### Table of Contents

We recorded the following activity under the intercompany guarantee and subsidy agreements for the
three months ended March 31:



|                                    |  |      |    |  |      |   |    | 
|----------------------------------- |  | ---- | -- |  | ---- | - | -- | 
|                                    |  | 2011 |    |  | 2010 |  
|Finance lease income                |  | $    |   |  |      | $ | 1  | 
|Interest income on notes receivable |  |      |   |  |      |   | 1  | 
|Operating lease income              |  |      | 16 |  |      |   | 12 | 
|Asset impairment expense            |  |      |   |  |      |   | 4  | 
|                                    |  | $    | 16 |  |      | $ | 18 | 
|                                    | 

For the three months ended March 31, 2010, we recorded operating lease income from Boeing, exclusive of
guarantees and subsidies, of $2.

For the three months ended March 31, 2010, we recorded new business volume of $2 related to
Boeing aircraft, equipment or services we purchased or financed.

Note 3 Portfolio Quality

Allowance for Losses on Receivables

The
following table reconciles the activity in the allowance for losses on receivables for the three months ended March 31:



|                                                                          |  |      |     |   |      |   |     |  
|------------------------------------------------------------------------- |  | ---- | --- | - | ---- | - | --- | -
|                                                                          |  | 2011 |     |   | 2010 |  
|Allowance for losses on receivables at beginning of period                |  | $    | 87  |   |      | $ | 71  |  
|Provision for (recovery of) losses                                        |  |      | (6  | ) |      |   | 3   |  
|Allowance for losses on receivables at end of period                      |  | $    | 81  |   |      | $ | 74  |  
|                                                                          | 
|Allowance as a percentage of total receivables                            |  |      | 3.7 | % |      |   | 2.7 | %
|Allowance for losses on receivables collectively evaluated for impairment |  | $    | 81  |   |      | $ | 74  |  

Credit Quality

We assign internal credit ratings for all customers and determine the creditworthiness of each customer based upon public information and
information obtained directly from our customers. We utilize these credit ratings as one of the factors in assessing the adequacy of our allowance for losses on receivables. Our rating categories are comparable to those used by the major credit
rating agencies. Credit risk profile by internally assigned creditworthiness category for our receivables consisted of the following:



|                     |  |                           |       |  |                             |   |     |       |  |   |                           |  |  |                             |       |  |       |   |     |  |  |   |       | 
|-------------------- |  | ------------------------- | ----- |  | --------------------------- | - | --- | ----- |  | - | ------------------------- |  |  | --------------------------- | ----- |  | ----- | - | --- |  |  | - | ----- | 
|                     |  | March 31, 2011            |       |  | December 31, 2010           |  
|Rating categories    |  | Out-of-ProductionAircraft |       |  | In-ProductionAircraft/Other |   |     | Total |  |   | Out-of-ProductionAircraft |  |  | In-ProductionAircraft/Other |       |  | Total |  
|B                    |  | $                         | 128   |  |                             | $ | 65  |       |  | $ | 193                       |  |  | $                           | 135   |  |       | $ | 72  |  |  | $ | 207   | 
|CCC                  |  |                           | 1,644 |  |                             |   | 363 |       |  |   | 2,007                     |  |  |                             | 1,658 |  |       |   | 417 |  |  |   | 2,075 | 
|Total carrying value |  | $                         | 1,772 |  |                             | $ | 428 |       |  | $ | 2,200                     |  |  | $                           | 1,793 |  |       | $ | 489 |  |  | $ | 2,282 | 
|                     | 

At March 31, 2011 and December 31, 2010, all of our receivables were related to customers we believe have
less than investment-grade credit. We utilize default rates as one of the factors in determining our allowance for losses. At March 31, 2011, we applied default rates that averaged 10% and 49% to receivables from customers with internally
assigned B and CCC ratings.

Impaired Receivables

At March 31, 2011 and December 31, 2010, we had no impaired receivables.



6



---

##### Table of Contents

For the three months ended March 31, 2010, our average recorded investment, related income
recognized and cash received on the impaired receivables, all of which related to out-of-production aircraft, were $143, $2 and $2, respectively.

Past Due Receivables

At March 31, 2011
and December 31, 2010, we had no past due receivables.

Non-Performing Assets

Non-performing assets (assets not earning income on an accrual basis) consisted of the following:



|                                                          |  |               |     |   |                  |   |     |  
|--------------------------------------------------------- |  | ------------- | --- | - | ---------------- | - | --- | -
|                                                          |  | March 31,2011 |     |   | December 31,2010 |  
|Assets placed on non-accrual status:                      |  |               |     |   |                  |   |     |  
|Equipment under operating leases, net                     |  | $             | 22  |   |                  | $ | 29  |  
|Assets held for sale or re-lease, net(1)(2)               |  |               | 21  |   |                  |   | 43  |  
|                                                          |  | $             | 43  |   |                  | $ | 72  |  
|                                                          | 
|Percent of total non-performing assets to total portfolio |  |               | 0.9 | % |                  |   | 1.5 | %



|(1) |  | At March 31, 2011 and December 31, 2010, assets held for sale or re-lease of $535 and $540 are not included in non-performing assets due to
intercompany guarantees provided by Boeing.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) |  | At March 31, 2011 and December 31, 2010, non-performing assets held for sale or re-lease of $8 and $28 had either a purchase or lease commitment.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------

Note 4 Debt

The carrying value of debt, including the net effect of interest rate swap revaluation adjustments and unamortized deferred debt costs, consisted of the following:



|                                                             |  |               |       |  |                  |   |       | 
|------------------------------------------------------------ |  | ------------- | ----- |  | ---------------- | - | ----- | 
|(Interest rates are the contractual rates at March 31, 2011) |  | March 31,2011 |       |  | December 31,2010 |  
|3.25% - 7.58% fixed rate notes due through 2019              |  | $             | 2,520 |  |                  | $ | 3,314 | 
|1.54% floating rate note due in 2023                         |  |               | 25    |  |                  |   | 25    | 
|1.36% - 5.79% non-recourse notes due through 2013            |  |               | 54    |  |                  |   | 55    | 
|0.94% capital lease obligation due through 2015              |  |               | 50    |  |                  |   | 52    | 
|                                                             |  | $             | 2,649 |  |                  | $ | 3,446 | 
|                                                             | 

At March 31, 2011, and December 31, 2010, we had interest rate swaps which effectively convert debt of $575
and $875 from fixed rates to floating rates.

The most restrictive covenants in our debt agreements require us to (a) limit the
payment of cash dividends to the extent that our consolidated assets would be less than 115% of our consolidated liabilities (excluding deferred taxes) after dividend payments and (b) restrict the amount of liens on our property to secure
indebtedness to 15% or less of consolidated assets, other than liens specifically excluded. At March 31, 2011, we were in compliance with these covenants.

Note 5 Derivative Financial Instruments

We primarily use derivative
instruments to manage exposures to interest rate risk. We enter into interest rate swap contracts to hedge interest rate risk associated with our debt obligations. These interest rate swap contracts are designated as cash flow hedges or fair value
hedges. Our contracts entered into as of March 31, 2011 do not require collateral or other security from either party.



7



---

##### Table of Contents

The fair values of derivative instruments included in the Consolidated Balance Sheets were as
follows:



|                                                                    |  |              |    |  |                   |   |   | 
|------------------------------------------------------------------- |  | ------------ | -- |  | ----------------- | - | - | 
|March 31, 2011                                                      |  | Other Assets |    |  | Other Liabilities |  
|Derivatives designated as hedging instruments - Interest rate swaps |  | $            | 16 |  |                   | $ |  | 
|                                                                    | 
|                                                                    |  |             
|December 31, 2010                                                   |  |              |    |  |                   |   |   | 
|Derivatives designated as hedging instruments - Interest rate swaps |  | $            | 24 |  |                   | $ |  | 
|                                                                    | 

The notional amount of our interest rate swaps is disclosed inNote 4  Debt.

For the three months ended March 31, 2011 and 2010, we did not hold any derivatives in cash flow hedging relationships, resulting in no effect
to Accumulated Other Comprehensive Income (AOCI) or the Statement of Operations.

Note 6 Commitments and Contingencies

Litigation

Various legal
proceedings and claims are pending or have been asserted against us. We believe that the final outcome of these proceedings and claims will not have a material adverse effect on our earnings, cash flows and/or financial position.

Restructurings and Restructuring Requests

From time to time, certain customers have requested a restructuring of their transactions with us. As of March 31, 2011, we have not reached
agreement on any restructuring requests that would have a material adverse effect on our earnings, cash flows and/or financial position.

Commitments

At March 31, 2011, we and Boeing had unfunded financing commitments of $9,934, primarily resulting from firm contracts, options
for deliveries or proposals as part of sales campaigns. These commitments are provided to give Boeing customers reasonable assurance of financing in connection with orders of Boeing products in advance of delivery. However, customers typically seek
lower cost financing from other sources prior to actual delivery. In addition, we continue to work with third party financiers to provide alternative financing to customers and eliminate the need for our financing. Based on historical experience and
anticipated capital market acceptance of Boeing aircraft covered by Boeings and our current commitments, we anticipate that a significant portion of these commitments will not be exercised by the customer or will expire without being fully
drawn upon. However, there can be no assurance that we will not be required to fund greater amounts than historically required. To the extent we are obligated to provide financing, such financing generally includes participation by engine
manufacturers which further reduces our obligation. Therefore, the reported amount of commitments does not necessarily represent a future net cash requirement. However, we expect to ultimately provide funding for those commitments which are
exercised, whether they are Boeings or our commitments. If there were requirements to fund all Boeings and our commitments, the timing in which these commitments may be funded (based on estimated earliest potential funding dates as of
March 31, 2011) is as follows:



|                            |  |       |       | 
|--------------------------- |  | ----- | ----- | 
|                            |  | Total |      
|April through December 2011 |  | $     | 1,211 | 
|2012                        |  |       | 898   | 
|2013                        |  |       | 675   | 
|2014                        |  |       | 1,496 | 
|2015                        |  |       | 1,812 | 
|Thereafter                  |  |       | 3,842 | 
|                            |  | $     | 9,934 | 
|                            | 



8



---

##### Table of Contents

Note 7 Fair Value Measurements

The following tables present our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three
levels of fair value hierarchy.



|                                |  |       |    |  |                                                              |   |   |                                             |  |   |                                        |  |  |   |   | 
|------------------------------- |  | ----- | -- |  | ------------------------------------------------------------ | - | - | ------------------------------------------- |  | - | -------------------------------------- |  |  | - | - | 
|March 31, 2011                  |  | Total |    |  | Quoted Prices inActive Markets forIdentical Assets
(Level 1) |   |   | Significant OtherObservableInputs (Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|Assets                          |  |       |    |  |                                                              |   |   |                                             |  |   |                                        |  |  |   |   | 
|Available-for-sale investments: |  |       |    |  |                                                              |   |   |                                             |  |   |                                        |  |  |   |   | 
|EETC                            |  | $     | 5  |  |                                                              | $ |  |                                             |  | $ |                                       |  |  | $ | 5 | 
|Interest rate swaps             |  |       | 16 |  |                                                              |   |  |                                             |  |   | 16                                     |  |  |   |  | 
|Total                           |  | $     | 21 |  |                                                              | $ |  |                                             |  | $ | 16                                     |  |  | $ | 5 | 
|                                | 
|                                |  |       |    | 
|December 31, 2010               |  |       |    |  |                                                              |   |   |                                             |  |   |                                        |  |  |   |   | 
|Assets                          |  |       |    |  |                                                              |   |   |                                             |  |   |                                        |  |  |   |   | 
|Available-for-sale investments: |  |       |    |  |                                                              |   |   |                                             |  |   |                                        |  |  |   |   | 
|Marketable equity securities    |  | $     | 1  |  |                                                              | $ | 1 |                                             |  | $ |                                       |  |  | $ |  | 
|EETC                            |  |       | 5  |  |                                                              |   |  |                                             |  |   |                                       |  |  |   | 5 | 
|Interest rate swaps             |  |       | 24 |  |                                                              |   |  |                                             |  |   | 24                                     |  |  |   |  | 
|Total                           |  | $     | 30 |  |                                                              | $ | 1 |                                             |  | $ | 24                                     |  |  | $ | 5 | 
|                                | 

Marketable equity securities.The fair value of our marketable equity securities is determined using quoted
prices in active markets for identical assets. Unrealized gains (losses) are recorded in AOCI.

Enhanced Equipment Trust Certificate
(EETC). The fair value of our EETC is derived using discounted cash flows at market yield based on estimated trading prices for comparable debt securities. Unrealized gains (losses) are recorded in AOCI.

Interest rate swaps. The fair values of our interest rate swaps are determined using cash flows discounted at market interest rates in
effect at the period close.

The following tables present a reconciliation of Level 3 assets measured at fair value on a recurring basis
for the three months ended March 31:



|       |  |                            |   |  |                                  |   |   |                                            |  |   |                               |  |  |                   |   |  |                           |   |   |  |  |   |   | 
|------ |  | -------------------------- | - |  | -------------------------------- | - | - | ------------------------------------------ |  | - | ----------------------------- |  |  | ----------------- | - |  | ------------------------- | - | - |  |  | - | - | 
|2011   |  | Fair ValueBeginningof Year |   |  | UnrealizedGainsIncludedin Income |   |   | AccumulatedOtherComprehensiveIncome/(Loss) |  |   | Purchases,Sales, andIssuances |  |  | TransfersIn/(Out) |   |  | Fair Valueat End ofPeriod |  
|Assets |  |                            |   |  |                                  |   |   |                                            |  |   |                               |  |  |                   |   |  |                           |   |   |  |  |   |   | 
|EETC   |  | $                          | 5 |  |                                  | $ |  |                                            |  | $ |                              |  |  | $                 |  |  |                           | $ |  |  |  | $ | 5 | 
|Total  |  | $                          | 5 |  |                                  | $ |  |                                            |  | $ |                              |  |  | $                 |  |  |                           | $ |  |  |  | $ | 5 | 
|       | 
|       |  |                            |   |  |                                  |  
|2010   |  |                            |   |  |                                  |   |   |                                            |  |   |                               |  |  |                   |   |  |                           |  
|Assets |  |                            |   |  |                                  |   |   |                                            |  |   |                               |  |  |                   |   |  |                           |   |   |  |  |   |   | 
|EETC   |  | $                          | 5 |  |                                  | $ |  |                                            |  | $ | 1                             |  |  | $                 |  |  |                           | $ |  |  |  | $ | 6 | 
|Total  |  | $                          | 5 |  |                                  | $ |  |                                            |  | $ | 1                             |  |  | $                 |  |  |                           | $ |  |  |  | $ | 6 | 
|       | 



9



---

##### Table of Contents

Certain assets are measured at fair value on a non-recurring basis using significant unobservable
inputs (Level 3). The table below presents the non-recurring losses recognized for the three months ended March 31, and the carrying value and asset classification of the related assets still held as of March 31:



|                                    |  |               |    |  |             |   |    |               |  |   |             |  |  |   |     |  
|----------------------------------- |  | ------------- | -- |  | ----------- | - | -- | ------------- |  | - | ----------- |  |  | - | --- | -
|                                    |  | 2011          |    |  | 2010        |  
|                                    |  | CarryingValue |    |  | TotalLosses |   |    | CarryingValue |  |   | TotalLosses | 
|Assets                              |  |               |    |  |             |   |    |               |  |   |             |  |  |   |     |  
|Equipment under operating leases(1) |  | $             | 43 |  |             | $ | (5 | )             |  | $ | 33          |  |  | $ | (9  | )
|Assets held for sale or re-lease(1) |  |               | 8  |  |             |   | (4 | )             |  |   | 23          |  |  |   | (2  | )
|Total                               |  | $             | 51 |  |             | $ | (9 | )             |  | $ | 56          |  |  | $ | (11 | )
|                                    | 



|(1) |  | Represents carrying value and related write downs which were based on the fair value for the related aircraft. For the three months ended March 31, 2010,
losses on equipment under operating leases includes $4 which were offset by intercompany guarantees.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following
table presents the carrying values and estimated fair values of our financial instruments for which we did not elect the fair value option:



|                                          |  |                |        |   |                   |   |        |                |  |   |            |   |  |   |        |  
|----------------------------------------- |  | -------------- | ------ | - | ----------------- | - | ------ | -------------- |  | - | ---------- | - |  | - | ------ | -
|                                          |  | March 31, 2011 |        |   | December 31, 2010 |  
|                                          |  | Carrying
Value |        |   | Fair
Value        |   |        | Carrying
Value |  |   | Fair
Value |  
|Assets                                    |  |                |        |   |                   |   |        |                |  |   |            |   |  |   |        |  
|Notes and other                           |  | $              | 317    |   |                   | $ | 335    |                |  | $ | 375        |   |  | $ | 395    |  
|Liabilities                               |  |                |        |   |                   |   |        |                |  |   |            |   |  |   |        |  
|Debt, excluding capital lease obligations |  | $              | (2,599 | ) |                   | $ | (2,730 | )              |  | $ | (3,394     | ) |  | $ | (3,528 | )

Items not included in the above disclosures
are Cash and cash equivalents and Short-term investments. The carrying value of those items approximate their fair value at March 31, 2011 and December 31, 2010 as reflected in the Consolidated Balance Sheets.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Notes and other. The fair value of our variable rate notes that reprice frequently approximate their carrying values. The fair values
of fixed rate notes are estimated using discounted cash flows analysis using interest rates currently offered on loans with similar terms to borrowers of similar credit quality.

Debt.The fair value of debt is based on current market yields for our debt traded in the secondary market.

Financing commitments. It is not practicable to estimate the fair value of future financing commitments because the amount and timing
of funding those commitments are uncertain.

Note 8 Concentrations

A significant portion of our portfolio is concentrated among a few customers and in distinct geographic regions, particularly in the United States.
Our portfolio is also concentrated by varying degrees across aircraft product types and vintages. Our concentration risk is mitigated in part by intercompany guarantees from Boeing with respect to certain portfolio assets, which primarily relate to
717 aircraft.



10



---

##### Table of Contents

Portfolio carrying values for our five largest customers were as follows:



|            |  |                |       |  |                     |  |      |               |  |   |                     |  |  |  |       | 
|----------- |  | -------------- | ----- |  | ------------------- |  | ---- | ------------- |  | - | ------------------- |  |  |  | ----- | 
|            |  | March 31, 2011 |       |  | December 31, 2010   | 
|            |  | CarryingValue  |       |  | % of TotalPortfolio |  |      | CarryingValue |  |   | % of TotalPortfolio | 
|AirTran     |  | $              | 1,338 |  |                     |  | 29.5 | %             |  | $ | 1,364               |  |  |  | 29.0% | 
|Continental |  |                | 439   |  |                     |  | 9.7  |               |  |   | 447                 |  |  |  | 9.5   | 
|Hawaiian    |  |                | 421   |  |                     |  | 9.3  |               |  |   | 422                 |  |  |  | 9.0   | 
|American    |  |                | 406   |  |                     |  | 8.9  |               |  |   | 426                 |  |  |  | 9.1   | 
|Korean      |  |                | 169   |  |                     |  | 3.7  |               |  |   | 172                 |  |  |  | 3.7   | 
|            |  | $              | 2,773 |  |                     |  | 61.1 | %             |  | $ | 2,831               |  |  |  | 60.3% | 
|            | 

For the three months ended March 31, 2011 and 2010, AirTran Holdings, Inc. accounted for 21% and 21% of our
revenue.

Portfolio carrying values were represented in the following regions:



|                 |  |                |       |  |                     |  |       |               |  |   |                     |  |  |  |        | 
|---------------- |  | -------------- | ----- |  | ------------------- |  | ----- | ------------- |  | - | ------------------- |  |  |  | ------ | 
|                 |  | March 31, 2011 |       |  | December 31, 2010   | 
|                 |  | CarryingValue  |       |  | % of TotalPortfolio |  |       | CarryingValue |  |   | % of TotalPortfolio | 
|United States(1) |  | $              | 3,509 |  |                     |  | 77.3  | %             |  | $ | 3,604               |  |  |  | 76.8%  | 
|Europe           |  |                | 572   |  |                     |  | 12.6  |               |  |   | 619                 |  |  |  | 13.2   | 
|Asia/Australia   |  |                | 274   |  |                     |  | 6.0   |               |  |   | 280                 |  |  |  | 5.9    | 
|Latin America    |  |                | 86    |  |                     |  | 1.9   |               |  |   | 89                  |  |  |  | 1.9    | 
|Other            |  |                | 99    |  |                     |  | 2.2   |               |  |   | 102                 |  |  |  | 2.2    | 
|                 |  | $              | 4,540 |  |                     |  | 100.0 | %             |  | $ | 4,694               |  |  |  | 100.0% | 
|                 | 



|(1) |  | United States includes assets held for sale or re-lease that may be physically located in another region.
|--- |  | ---------------------------------------------------------------------------------------------------------

Portfolio carrying values were represented by the following product types:



|         |  |               |       |  |                  |   |       | 
|-------- |  | ------------- | ----- |  | ---------------- | - | ----- | 
|         |  | March 31,2011 |       |  | December 31,2010 |  
|717      |  | $             | 2,142 |  |                  | $ | 2,163 | 
|757      |  |               | 693   |  |                  |   | 720   | 
|767      |  |               | 366   |  |                  |   | 383   | 
|737      |  |               | 361   |  |                  |   | 386   | 
|MD-11(1) |  |               | 354   |  |                  |   | 359   | 
|747      |  |               | 248   |  |                  |   | 256   | 
|MD-80    |  |               | 197   |  |                  |   | 200   | 
|777      |  |               | 43    |  |                  |   | 47    | 
|Other(2) |  |               | 136   |  |                  |   | 180   | 
|         |  | $             | 4,540 |  |                  | $ | 4,694 | 
|         | 



|(1) |  | MD-11 aircraft are currently in freighter configuration or are committed to be modified into freighter configuration.
|--- |  | ---------------------------------------------------------------------------------------------------------------------



|(2) |  | Other includes aircraft, equipment, notes and stock. Some of these aircraft are out of production, but are supported by the manufacturer or other third party
parts and service providers.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11



---

##### Table of Contents

Our aircraft portfolio by vintage, based on carrying value (excluding investments and pooled assets),
are categorized as follows:



|               |  |               |       |   |                  |  |        | 
|-------------- |  | ------------- | ----- | - | ---------------- |  | ------ | 
|               |  | March 31,2011 |       |   | December 31,2010 | 
|2006 and newer |  |               | 3.9   | % |                  |  | 3.8%   | 
|2001  2005    |  |               | 64.5  |   |                  |  | 64.1   | 
|1996  2000    |  |               | 20.2  |   |                  |  | 20.0   | 
|1995 and older |  |               | 11.4  |   |                  |  | 12.1   | 
|               |  |               | 100.0 | % |                  |  | 100.0% | 
|               | 

Note 9 Discontinued Operations

On May 24, 2004, we entered into a purchase and sale agreement with General Electric Capital Corporation (GECC) to sell substantially all of the assets related to our Commercial Financial Services business.
The final asset sale closed December 27, 2004.

Part of the purchase and sale agreement with GECC includes a loss sharing
arrangement for losses that may exist at the end of the initial and subsequent financing periods of the transferred portfolio assets, or in some instances, prior to the end of the financing period. Such losses may result from asset sales, provisions
for loss or asset impairment charges offset by gains from asset sales. The loss sharing arrangement provides that cumulative net losses (if any) are to be shared between us and GECC. The provisions effectively limit our exposure to any losses to
$245. At March 31, 2011, our maximum future cash exposure to loss associated with the loss sharing arrangement was $232, for which we have accrued a liability of $85.

The following table reconciles the reserve under the loss sharing arrangement, which is included in Other liabilities for the three months ended March 31:



|                               |  |      |    |  |      |   |    | 
|------------------------------ |  | ---- | -- |  | ---- | - | -- | 
|                               |  | 2011 |    |  | 2010 |  
|Reserve at beginning of period |  | $    | 82 |  |      | $ | 77 | 
|Increase in reserve            |  |      | 3  |  |      |   |   | 
|Reserve at end of period       |  | $    | 85 |  |      | $ | 77 | 
|                               | 



12



---

##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of

Boeing Capital Corporation

Renton, Washington

We have reviewed the accompanying condensed consolidated balance sheet of Boeing Capital Corporation and subsidiaries (the Company) as
of March 31, 2011, and the related condensed consolidated statements of operations, shareholders equity and comprehensive income, and cash flows for the three-month periods ended March 31, 2011 and 2010. These interim financial
statements are the responsibility of the Companys management.

We conducted our reviews in accordance with the standards of the
Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated
balance sheet of Boeing Capital Corporation and subsidiaries as of December 31, 2010, and the related consolidated statements of operations, shareholders equity and comprehensive income, and cash flows for the year then ended (not
presented herein); and in our report dated February 9, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as
of December 31, 2010 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ DELOITTE & TOUCHE LLP

Seattle, Washington

April 27, 2011



13



---

##### Table of Contents

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such
as may, will, should, expects, intends, projects,, plans, believes, estimates, targets, anticipates and similar
expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, future portfolio size, amounts of new aircraft financing,
future levels of indebtedness and debt-to-equity ratios, the outcome of contingencies as well as any other statement that does not directly relate to any historical or current fact.

Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are
risks related to:



| |  |  | the financial condition of the airline industry, which could be adversely affected by changes in general economic conditions, credit ratings, increases in
fuel-related costs, the liquidity of the global financial markets, responses to increasing environmental concerns, as well as events such as war, terrorist attacks or a serious health epidemic;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the impact of bankruptcies, restructurings or mergers and acquisitions on commercial airline customers;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | the impact of changes in aircraft valuations;
| | - |  | ---------------------------------------------



| |  |  | the sufficiency of our liquidity, including access to capital markets;
| | - |  | ----------------------------------------------------------------------



| |  |  | the impact on us of strategic decisions by The Boeing Company (Boeing), including the amount of financing necessary to support the sale of Boeing products,
the level and types of transactional or other support made available to us by Boeing and the ending of production of certain aircraft programs;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the market acceptance of Boeing products;
| | - |  | -----------------------------------------



| |  |  | a decline in Boeings or our financial performance, outlook or credit ratings;
| | - |  | ------------------------------------------------------------------------------



| |  |  | the availability of commercial and governmental financing and the extent to which we are called upon to fund Boeings and our outstanding financing
commitments or satisfy other financing requests, and our ability to satisfy those requirements;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | reduced lease rates as a result of competition in the used aircraft market, or the inability to maintain aircraft on lease at satisfactory lease rates;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | financial, legal, tax, regulatory, legislative and accounting changes or actions that may affect the overall performance of our business;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the adequacy of coverage of our allowance for losses on receivables; and
| | - |  | ------------------------------------------------------------------------



| |  |  | volatility in our earnings due to the timing of asset sales, other risk mitigation activities, fluctuations in our portfolio size and changes in interest
rates.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

Additional information concerning these and other factors can be found in our filings with the Securities and
Exchange Commission (SEC), including the Risk Factors on pages 3 through 5 of our most recent Annual Report on Form 10-K, Managements Narrative Analysis of the Results of Operations and Note 6 to our condensed Financial
Statements included in this report and our Current Reports on Form 8-K. Any forward-looking statement herein speaks only as of the date on which it is made, and we assume no obligation to publicly update or revise any forward-looking statement
whether as a result of new information, future events or otherwise, except as required by law.

Item 2.
Managements Narrative Analysis of the Results of Operations

Overview

During the three months ended March 31, 2011, we continued to focus on supporting Boeings major businesses and managing our overall
financial exposures.



14



---

##### Table of Contents

Sources of financing continued to be sufficient for aircraft deliveries and as a result we provided
no financing for Boeing aircraft deliveries during the first quarter of 2011.

On September 26, 2010, Southwest Airlines Co.
(Southwest) and AirTran Holdings, Inc. (AirTran) entered into an Agreement and Plan of Merger, whereby Southwest will acquire, subject to certain conditions, all of the outstanding common stock of AirTran. As disclosed in Item 1. Financial
Statements, Note 8  Concentrations, AirTran, together with its subsidiaries, is our largest customer in terms of revenue and portfolio carrying value.

At March 31, 2011, our portfolio consisted of equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease and investments. At March 31, 2011, we owned
252 commercial aircraft and had partial ownership or security interest in an additional 28 aircraft. Our portfolio at March 31, 2011 decreased to $4.5 billion from $4.7 billion at December 31, 2010. The following table summarizes the net
change in our total portfolio:



|                                      |  |                                  |      |   |                            |   |      |  
|------------------------------------- |  | -------------------------------- | ---- | - | -------------------------- | - | ---- | -
|(Dollars in millions)                 |  | Three Months EndedMarch 31, 2011 |      |   | Year EndedDecember 31,2010 |  
|New business volume                   |  | $                                |     |   |                            | $ | 72   |  
|Write-offs                            |  |                                  |     |   |                            |   | (1   | )
|Recovery of write-offs                |  |                                  |     |   |                            |   | 1    |  
|Asset impairment and other charges    |  |                                  | (9   | ) |                            |   | (85  | )
|Asset run off and prepayments         |  |                                  | (83  | ) |                            |   | (605 | )
|Asset dispositions                    |  |                                  | (20  | ) |                            |   | (153 | )
|Depreciation and amortization expense |  |                                  | (42  | ) |                            |   | (201 | )
|Net change in portfolio balance       |  | $                                | (154 | ) |                            | $ | (972 | )
|                                      | 

At March 31, 2011 and December 31, 2010, we had $556 million and $583 million of assets that were held for
sale or re-lease, of which $8 million and $28 million had either executed term sheets with deposits or firm contracts to be sold or placed on lease. Additionally, aircraft subject to leases with a carrying value of approximately $248 million are
scheduled to be returned off lease in the next 12 months. These aircraft are being remarketed or the leases are being extended and approximately $161 million of such aircraft had either executed term sheets with deposits or firm contracts at
March 31, 2011.

Our net income was $31 million for the three months ended March 31, 2011 compared with $29 million for the
same period in 2010, an increase of $2 million.

Consolidated Results of Operations

Revenue

Revenue was $143 million for the three months ended March 31, 2011 compared with
$162 million for the same period in 2010, a decrease of $19 million.

Interest income on notes receivables was $8 million for the three
months ended March 31, 2011, a decrease of $9 million compared with the same period in 2010, primarily due to lower weighted average notes receivable balance during the three months ended March 31, 2011.

Operating lease income was $90 million for the three months ended March 31, 2011, a decrease of $7 million compared with the same period in
2010, primarily due to a decrease in the equipment under operating leases as a result of the return of aircraft. Without the support from Boeing in the form of intercompany guarantees our Operating lease income, which includes income applied to
assets classified as held for re-lease, would have been $16 million and $12 million less than reported, for the three months ended March 31, 2011 and 2010. For a discussion of our relationship with Boeing, see Item 1. Financial
Statements, Note 2  Transactions with Boeing.



15



---

##### Table of Contents

Expenses

Expenses were $91 million for the three months ended March 31, 2011 compared with $116 million for the same period in 2010, a decrease of $25 million.

Interest expense was $33 million for the three months ended March 31, 2011, a decrease of $8 million compared with the same period in 2010,
primarily due to a decrease in the balance of debt outstanding as a result of scheduled debt repayments.

Depreciation expense was $42
million for the three months ended March 31, 2011, a decrease of $9 million compared with the same period in 2010, primarily due to a lower depreciable balance of equipment under operating leases as a result of asset dispositions and a change
in our intention to hold or sell equipment.

The recovery of losses was $6 million for the three months ended March 31, 2011,
compared with a provision of $3 million for the same period in 2010. The decrease in our allowance through a recovery of losses for the three months ended March 31, 2011 was due to the effect of run off of our finance leases and decreases in
default rates.

Asset impairment expense was $9 million for the three months ended March 31, 2011, an increase of $2 million
compared with the same period in 2010. The asset impairment expense during the first three months of 2011 was primarily due to reduced expected undiscounted cash flows on certain aircraft.

Provision for income tax

Provision for income tax was $19 million for the three months ended
March 31, 2011, an increase of $2 million compared with the same period in 2010, primarily due to an increase in pre-tax income.

Loss on
disposal of discontinued operations

Loss on disposal of discontinued operations, net of tax, was $2 million for the three months
ended March 31, 2011 due to an increase in our expected losses from claims associated with specific assets subject to the loss sharing agreement with General Electric Capital Corporation related to the sale of certain assets of our Commercial
Financial Services business in 2004.

Liquidity and Capital Resources

Our cash and cash equivalents balance was $180 million at March 31, 2011, a decrease from $425 million at December 31, 2010. The following is a summary of the change in our cash and cash equivalents for
the three months ended March 31:



|                                                     |  |      |      |   |      |   |     |  
|---------------------------------------------------- |  | ---- | ---- | - | ---- | - | --- | -
|(Dollars in millions)                                |  | 2011 |      |   | 2010 |  
|Net cash provided by operating activities            |  | $    | 25   |   |      | $ | 58  |  
|Net cash provided by investing activities            |  |      | 707  |   |      |   | 22  |  
|Net cash used in financing activities                |  |      | (977 | ) |      |   | (35 | )
|Net increase (decrease) in cash and cash equivalents |  | $    | (245 | ) |      | $ | 45  |  
|                                                     | 

Operating activities

During the three months ended March 31, 2011, net cash provided by operating activities included net income from operations of $31 million. We had net adjustments for non-cash items of $22 million, which
primarily related to depreciation expense. We also had a net decrease in cash due to changes in assets and liabilities of $28 million.

During the three months ended March 31, 2010, net cash provided by operating activities included net income from operations of $29 million. We had net adjustments for non-cash items of $44 million, which
primarily related to depreciation expense. We also had a net decrease in cash due to changes in assets and liabilities of $15 million.



16



---

##### Table of Contents

Investing activities

During the three months ended March 31, 2011, net cash provided by investing activities primarily included net proceeds of $600 million from short-term investment maturities and payments of leases, notes and
other receivables of $82 million.

During the three months ended March 31, 2010, net cash provided by investing activities included
payments of leases, notes and other receivables of $224 million, primarily offset by the purchase of $200 million in short-term investments.

Financing activities

During the three
months ended March 31, 2011, net cash used in financing activities included scheduled debt repayments of $786 million and cash dividends (including return of capital) to Boeing of $191 million.

During the three months ended March 31, 2010, net cash used in financing activities included scheduled debt repayments of $35 million.

Outstanding debt at March 31, 2011 and December 31, 2010 was $2.6 billion and $3.4 billion, of which $789 million will be due
in the next 12 months. During the three months ended March 31, 2011, we had no commercial paper borrowings outstanding. Our leverage (ratio of Debt to Shareholders equity) at March 31, 2011 and December 31, 2010 was 5.0-to-1.

We require liquidity, primarily to fund financing commitments, meet debt obligations and fund our operating expenses. Financing
commitments made by us and Boeing totaled $9.9 billion as of March 31, 2011. We anticipate that a significant portion of these commitments will not be exercised due to alternative financing sources we expect to be available to our customers. We
expect that any future borrowing needs would be met by issuing commercial paper or term debt, or obtaining funding from Boeing. There can be no assurance that the cost or availability of funding sources to us will not be adversely impacted in the
future.

As of March 31, 2011, we have $4.0 billion remaining under our $5.0 billion Securities and Exchange Commission (SEC) shelf
registration statement for issuance of debt securities. During 2009, we established under the registration statement a $750 million medium-term notes program and a $750 million retail notes program. We have not issued any securities under those
programs. The availability of such funding under those programs or otherwise pursuant to our SEC registration statement will depend on investor demand and market conditions.

We believe we have adequate borrowing capacity. We have $1.5 billion available exclusively for us under Boeings committed revolving credit line agreements for general corporate purposes. In addition, we have
a support agreement with Boeing under which Boeing has committed to make contributions to us if our fixed-charge coverage ratio, as defined in the support agreement, falls below 1.05-to-1 on a four-quarter rolling basis.

Risks that could affect our sources of liquidity include, among others;



| |  |  | a downturn in the economy,
| | - |  | --------------------------

| |  |  | significant restructurings, defaults or bankruptcies by airlines,
| | - |  | -----------------------------------------------------------------

| |  |  | disruptions in the global capital markets, and
| | - |  | ----------------------------------------------

| |  |  | a decrease in our and/or Boeings credit ratings and/or financial performance.
| | - |  | ------------------------------------------------------------------------------

We continually assess our leverage, as measured by our Debt to Shareholders equity ratio, in light of the risks in our business, including
those set forth in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2010.

Additional
Disclosures Regarding Allowance for Losses on Receivables and Asset Impairment Expense

The following tables reconcile the changes in
the allowance for losses on receivables and asset impairment expense for the three months ended March 31, 2011 and 2010. Column 3 presents this information, calculated in



17



---

##### Table of Contents

accordance with our accounting policy, if the impact of intercompany guarantees from Boeing were excluded. The exclusion of the net impact of intercompany guarantees shown in Column 2 would
increase the applicable exposure for various receivables and would increase asset impairment expense. Management believes that the presentation of this information provides more complete information on the effect of intercompany guarantees provided
by Boeing.



|                                                           |  |                     |     |   |                                            |   |     |                                          |  |   |      |  
|---------------------------------------------------------- |  | ------------------- | --- | - | ------------------------------------------ | - | --- | ---------------------------------------- |  | - | ---- | -
|(Dollars in millions)                                      |  | (1)                 |     |   | (2)                                        |   |     | (3)                                      | 
|2011                                                       |  | Allowancefor losses |     |   | Impact ofintercompanyguaranteesfrom Boeing |   |     | Allowanceexcludingintercompanyguarantees | 
|Allowance for losses on receivables at beginning of period |  | $                   | 87  |   |                                            | $ | 266 |                                          |  | $ | 353  |  
|Recovery of losses                                         |  |                     | (6  | ) |                                            |   | (9  | )                                        |  |   | (15) |  
|Allowance for losses on receivables at end of period       |  | $                   | 81  |   |                                            | $ | 257 |                                          |  | $ | 338  |  
|                                                           | 
|Allowance as a percentage of total receivables             |  |                     | 3.7 | % |                                            |   |     |                                          |  |   | 15.4 | %
|                                                           | 
|2010                                                       |  |                     |     |  
|Allowance for losses on receivables at beginning of period |  | $                   | 71  |   |                                            | $ | 231 |                                          |  | $ | 302  |  
|Provision for losses                                       |  |                     | 3   |   |                                            |   | 8   |                                          |  |   | 11   |  
|Allowance for losses on receivables at end of period       |  | $                   | 74  |   |                                            | $ | 239 |                                          |  | $ | 313  |  
|                                                           | 
|Allowance as a percentage of total receivables             |  |                     | 2.7 | % |                                            |   |     |                                          |  |   | 11.6 | %



|                         |  |                        |   |  |                                            |   |   |                                           |  |   |    | 
|------------------------ |  | ---------------------- | - |  | ------------------------------------------ | - | - | ----------------------------------------- |  | - | -- | 
|                         |  |                        |  
|(Dollars in millions)    |  | (1)                    |   |  | (2)                                        |   |   | (3)                                       | 
|2011                     |  | Assetimpairmentexpense |   |  | Impact ofintercompanyguaranteesfrom Boeing |   |   | Impairmentexcludingintercompanyguarantees | 
|Asset impairment expense |  | $                      | 9 |  |                                            | $ |  |                                           |  | $ | 9  | 
|                         | 
|                         | 
|2010                     |  |                        |   | 
|Asset impairment expense |  | $                      | 7 |  |                                            | $ | 4 |                                           |  | $ | 11 | 
|                         | 

Item 4. Controls and Procedures



|(a) |  | Disclosure Controls and Procedures
|--- |  | ----------------------------------

Our principal executive officer and principal financial officer have evaluated our disclosure controls and procedures as of March 31, 2011 and have concluded that these disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the
Commissions rules and forms and is accumulated and communicated to our management, including the President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.



|(b) |  | Changes in Internal Control over Financial Reporting
|--- |  | ----------------------------------------------------

There were no changes in our internal control over financial reporting that occurred during the first quarter of 2011 that have materially affected or are reasonably likely to materially affect our internal control
over financial reporting.



18



---

##### Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Various legal proceedings and claims
are pending or have been asserted against us. We believe that the final outcome of these proceedings and claims will not have a material adverse effect on our earnings, cash flows and/or financial position.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 6. Exhibits

A.
Exhibits



| |              |  |  |                                                                                                                                                                                                                                                                             
| | ------------ |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit 12   |  |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                          
| |             
| | Exhibit 15   |  |  | Letter From Independent Registered Public Accounting Firm Regarding Unaudited Interim Financial Information.                                                                                                                                                                
| |             
| | Exhibit 31.1 |  |  | Certification of President pursuant to Rules 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                           
| |             
| | Exhibit 31.2 |  |  | Certification of Chief Financial Officer pursuant to Rules 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.                                                                                             
| |             
| | Exhibit 32.1 |  |  | Certification of President pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This document is being furnished in
accordance with Securities and Exchange Commission Release Nos. 33-8212 and 34-47551.              
| |             
| | Exhibit 32.2 |  |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This document is
being furnished in accordance with Securities and Exchange Commission Release Nos. 33-8212 and 34-47551.

In
accordance with Item 601(b)(4)(iii) of Regulation S-K, we are not filing certain instruments with respect to our debt, as the total amount of securities currently provided for under each of the instruments does not exceed 10 percent of our
total assets on a consolidated basis. We hereby agree to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.



19



---

##### Table of Contents

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 thereunto duly authorized.



|               |  |                                                                                                                               
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------
|               |  | Boeing Capital Corporation                                                                                                    
|               | 
|April 27, 2011 |  | /S/ KELVIN E. COUNCIL                                                                                                         
|               |  | Kelvin E. Council Vice President and Chief
Financial Officer (Principal Financial Officer) and Registrants Authorized Officer
|               | 
|April 27, 2011 |  | /s/ KEVIN J. MURPHY                                                                                                           
|               |  | Kevin J. Murphy Controller (Principal
Accounting Officer)                                                                     



20