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Filed Pursuant to
Rule 424(b)(3)
File No. 33-31419
PRICING SUPPLEMENT NO. 123 DATED
March 10, 1994 TO PROSPECTUS
DATED May 21, 1993
McDONNELL DOUGLAS FINANCE CORPORATION
General Term Notes (R), Series A
Due 9 Months to 25 Years from date of issue
Interest payable Monthly on the 15th
and at maturity
Except as set forth herein, the General Term Notes(R) offered hereby (the
"Notes") have such terms as are described in the accompanying Prospectus dated
May 21, 1993, as amended and supplemented by the Prospectus Supplement dated
November 18, 1993 (the "Prospectus").
Aggregate Principal Amount: $ 150,000.00
Original Issue Date
(Settlement Date): March 17, 1994
Stated Maturity Date: March 15, 2006
Issue Price to Public: 100.00% of Principal Amount
Interest Rate: 7.25% Per Annum
Interest Payment Dates: Monthly on the 15th commencing April 15, 1994
Survivor's Option: [ X] Yes
[ ] No
Optional Redemption: [ X] Yes
[ ] No
Initial Redemption Date: March 15, 1998
Redemption Price: Initially 102.00% of Principal Amount and
declining by 1.00% of the Principal Amount on
each anniversary of the Initial Redemption Date
until the Redemption Price is 100% of the
Principal Amount.
Principal Amount of Notes
Agent Solicited by Each Agent
PaineWebber, Inc. $ 70,000.00
J. W. Korth & Company 80,000.00
Total $ 150,000.00
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Per Note Per Note
Sold by Agents Sold by Agents
To Public To Employees Total
Issue Price: $ 1,000.00 $ -0- $ 150,000.00
Agent's Discount
or Commission: $ 22.50 $ -0- $ 3,375.00
Maximum Dealer's
Discount or
Selling Concession: $ 16.50 $ -0- $ 2,475.00
Proceeds to the
Company: $ 977.50 $ -0- $ 146,625.00
CUSIP Number: 58017CFE7
SELECTED CONSOLIDATED FINANCIAL DATA
The following amends and supplements the information set forth under the
caption "SELECTED CONSOLIDATED FINANCIAL DATA" on page 10 of the Prospectus:
The following table presents selected consolidated financial information
of the Company as of December 31, 1992 and 1993 and for the years ended
December 31, 1992 and 1993. The information in the table should be read in
conjunction with, and is qualified in its entirety by reference to, the
Company's consolidated financial statements included in the Company's Current
Report on Form 8-K dated February 3, 1994 and the Company's Annual Report on
Form 10-K for the year ended December 31, 1992. Results for the year ended
December 31, 1993 are unaudited, but include all adjustments, consisting of
normal accruals, that the Company considers necessary for a fair presentation
of such results. See "Selected Consolidated Financial Data" in the
accompanying Prospectus.
(DOLLARS IN MILLIONS) Years Ended December 31,
1993 1992
Selected earnings data: (Unaudited)
Operating income . . . . . . . . . . $ 198.5 $ 254.7
Interest expense . . . . . . . . . . 116.4 145.9
Net income . . . . . . . . . . . . . 16.8 27.7
Ratio of income from continuing
operations to fixed charges. . . . . . 1.34x 1.32x
Selected balance sheet data:
Total assets . . . . . . . . . . . . $2,076.8 $1,999.0
Total debt . . . . . . . . . . . . 1,385.1 1,330.4
Shareholder's equity . . . . . . . . 269.4 256.4
Cash dividends paid . . . . . . . . . 3.5 105.8
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OTHER INFORMATION
The information in the Prospectus set forth under the caption "RISK FACTORS-
Relationship with MDC" is supplemented by the following:
MDC has accepted, with clarifications, a proposal from the Department of
Defense on an overall business settlement of a variety of issues
concerning the C-17 program. In connection with the settlement, MDC
recorded a charge to pre-tax earnings of approximately $450 million in the
fourth quarter of 1993. The settlement is not expected to result in a
significant adverse cash impact to MDC. MDC and the U.S. Air Force will
be developing plans, contractual modifications and agreements to implement
the business arrangement, which is subject to congressional authorization
and appropriations.
The U.S. Navy has advised MDC and General Dynamics Corporation ("GD") that
the 1993 review of the deferment agreement between MDC, GD and the Navy
with respect to the A-12 aircraft is continuing, in particular with
respect to the impact of the C-17 settlement between the Government and
MDC described in the preceding paragraph. The Navy has stated that MDC
and GD will be advised of the results of the review and any action that
may be taken by the Government on or about February 4, 1994. MDC and GD
also were advised that this timing does not suggest any adverse
implication for the outcome of the review. MDC firmly believes it is
entitled to have the deferment agreement continued and did not agree to
the Navy's unilateral continuation of the review.
MDC believes it is likely that the weakness of the commercial aircraft
market will continue during 1994.
(R) Registered Servicemark of J. W. Korth & Company
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