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Boeing Company, The

Company Profile

Publication Date: 16 Jul 2010

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Boeing Company, The

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Boeing Company, The
TABLE OF CONTENTS

TABLE OF CONTENTS

Company Overview..............................................................................................4
Key Facts...............................................................................................................4
Business Description...........................................................................................5
History...................................................................................................................7
Key Employees...................................................................................................14
Key Employee Biographies................................................................................15
Major Products and Services............................................................................23
Revenue Analysis...............................................................................................24
SWOT Analysis...................................................................................................26
Top Competitors.................................................................................................33
Company View.....................................................................................................34
Locations and Subsidiaries...............................................................................39

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Company Overview

COMPANY OVERVIEW

The Boeing (Boeing) is engaged in the design, development, manufacturing, sale and support of
commercial jetliners, military aircraft, satellites, missile defense, and launch systems and services.
The company operates in the US and Europe. It is headquartered in Chicago, Illinois and employs
about 157,100 people.

The company recorded revenues of $68,281 million during the financial year ended December 2009
(FY2009), an increase of 12.1% over FY2008. The increase in revenues was due to strong
performance of commercial airplanes, and Boeing defense, space and security divisions of the
company. The operating profit of the company was $2,096 million during FY2009, a decrease of
46.9% compared to FY2008. The net profit was $1,312 million in FY2009, a decrease of 50.9%
compared to FY2008.

KEY FACTS

Head Office Boeing Company, The


100 North Riverside Plaza
Chicago
Illinois 60606 1596
USA
Phone 1 312 544 2000
Fax
Web Address http://www.boeing.com
Revenue / turnover 68,281.0
(USD Mn)
Financial Year End December
Employees 157,100
New York Ticker BA

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Business Description

BUSINESS DESCRIPTION

The Boeing (Boeing) is one of the world’s largest aerospace companies and a leading manufacturer
of commercial airplanes and defense, space and security systems. It is one of the largest exporters
in the US, serving customers in 90 countries. The company is one of the two major manufacturers
of 100+ seat airplanes for the worldwide commercial airline industry and one of the largest defense
contractors in the US.

The company operates through six business divisions, commercial airplanes, Boeing military aircraft,
network and space systems, global services and support, Boeing Capital Corporation, and other.

The commercial airplanes division develops, produces and markets commercial jet aircraft and
related support services, principally to the commercial airline industry worldwide. This division offers
a range of commercial jetliners designed to meet a broad spectrum of passenger and cargo
requirements of domestic and non-U.S. airlines. This range of commercial jet aircraft currently
includes the 737 narrow-body model and the 747, 767, 777 and 787 wide-body models. The
commercial airplanes division also offers aviation services support, aircraft modifications, spares,
training, maintenance documents and technical advice to commercial and government customers
worldwide.

Boeing military aircraft, network and space systems, global services and support divisions comprise
the company’s Boeing Defense, Space and Security (BDS) business. BDS operations principally
involve research, development, production, modification and support of global strike systems, global
mobility systems, rotorcraft systems, airborne surveillance and reconnaissance aircraft, network and
tactical systems, intelligence and security systems, missile defense systems, and space and
intelligence systems. BDS’ customers include the United States Department of Defense (US DoD),
the National Aeronautics and Space Administration (NASA) and other significant entities in the
international defense, civil and commercial satellite markets.

Boeing military aircraft division is engaged in the research, development, production and modification
of military aircraft and precision engagement and mobility products and services. The division offers
AH-64 Apache, Airborne Early Warning and Control (AEW&C), CH-47 Chinook, C-17 Globemaster,
EA-18G Growler Airborne Attack Electronic Aircraft, F/A-18E/F Super Hornet, F-15 Strike Eagle,
F-22 Raptor, Harpoon, International KC-767 Tanker, Joint Direct Attack Munition, P-8A Poseidon,
Small Diameter Bomb, T-45 TS Goshawk and V-22 Osprey.

Network and space division is engaged in the research, development, production and modification
of products and services to assist its customers in transforming their operations through network
integration, intelligence and surveillance systems, communications, architectures and space
exploration. This division offers a wide range of products including airborne laser, family of advanced
beyond line-of-sight terminals, brigade combat team modernization (formerly Future Combat Systems),
future rapid effects system, global positioning system, ground-based midcourse defense, international
space station, joint tactical radio system, satellite systems, SBInet, space payloads and space shuttle.

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Business Description

Global services and support segment division is engaged in the operations, maintenance, training,
upgrades and logistics support functions for military platforms and operations. This division offers a
wide range of activities, including integrated logistics on platforms AH-64, AV-8B, C-17, CH-47, F-15,
F/A-18, F-22, GMD, International 767 Tanker and V-22; and maintenance, modifications and upgrades
on platforms A-10, B-1, B-52, C-32, C-40, C-130, E-4B, E-6, KC-10, KC-135, T-38 and VC-25. It
also offers training systems and services on platforms including AH-64, C-17, F-15, F-16, F/A-18
and T-45 and international support and advanced global services and support.

Boeing Capital Corporation (BCC) facilitates, arranges, structures and provides selective financing
solutions for the company’s commercial airplanes customers. In the space and defense markets,
BCC primarily arranges and structures financing solutions for its BDS government customers. BCC’s
portfolio consists of equipment under operating leases, finance leases, notes and other receivables,
assets held for sale or re-lease and investments.

All other activities fall within the other division, principally made up of engineering, operations and
technology (EO&T) and its shared services group. EO&T is an advanced research and development
organization focused on innovative technologies, improved processes and the creation of new
products.

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History

HISTORY

The Boeing’s (Boeing's) origination dates back to 1916, when William Boeing incorporated his
airplane manufacturing business as Pacific Aero Products. A year later, he changed the name to
Boeing Airplane and Transportation. The company changed its name to United Aircraft and
Transportation in 1929. By that time it started building airplanes, engines and propellers and diversified
into other businesses such as delivering mails, maintaining airports, and operating airlines across
the country.

The 1934 antitrust legislation prevented airline manufacturers from owning mail-carrying airlines.
Subsequently, the United Aircraft and Transport became three entities: United Air Lines (responsible
for air transportation), United Aircraft (responsible for manufacturing operations in the eastern US;
renamed United Technologies), and the Boeing Airplane (responsible for manufacturing operations
in the West; included Stearman Aircraft and Boeing Aircraft of Canada).

During World War II, Boeing built a huge number of bombers. The major project undertaken in 1950s
was the B-52 Stratofortress. Boeing began delivery of its B707, a four-engine, 156-passenger airliner,
in 1958. A few years later, Boeing added a second version of this aircraft, the B720 and B727.

During the 1960s, the company acquired Piasecki Helicopter, and later changed its name to Boeing
Vertol. The twin-rotor CH-47 Chinook, produced by Vertol, took its first flight in 1961. Vertol also
began production of the CH-46 Sea Knight in 1964. Boeing introduced another short and medium
range airliner, the twin-engine B737 in 1967. The company built the first B747, a four-engine
long-range airliner, with 450-passenger seating capacity in 1970.

Boeing assembled its 1,000th B737 passenger airliner in 1983. During the following years, commercial
aircraft and their military versions became the basic equipment of airlines and air forces. Boeing
expanded the Boeing Computer Services by the end of the 1980s. The company introduced a
commercial jet aircraft, the twin-engine B777, with a seating capacity of 390 passengers in 1994. It
was the first airliner to be designed entirely by computer by using Computer Aided Design techniques.

The company acquired Rockwell International's aerospace and defense units in 1996. Boeing and
McDonnell Douglas merged and began operations as a single company in 1997. Boeing acquired
Autometric, a geospatial information technology company, and Continental Graphics, a provider of
technical information to the aviation industry, in 2000. Other acquisitions in 2000 included AeroInfo
Systems, a provider of advanced maintenance software applications for the airline industry; SVS,
which specialized in electro-optical systems; and Hawker de Havilland, which specialized in aircraft
parts fabrication.

During 2002, the company underwent a restructuring program and created the integrated defense
systems, a business unit merging the company's total space, defense, government, intelligence and
communications capabilities into one organization. In 2003, the US Air Force leased 100 KC-767
tankers from Boeing, to replace the oldest 136 of its KC-135s.

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The company won two joint direct attack munition contracts in 2004, from the DoD valued at around
$857 million. Also in 2004, the company acquired Frontier Systems, a developer of the A-160
Hummingbird and Maverick unmanned aerial vehicles. In the same year, Boeing sold its commercial
financial services business to GE Commercial Finance. The company also finalized an order with
Air China, for seven new Next-Generation 737-700 jetliners. Later in the year, the company entered
into a co-operative partnership in the area of global missile defense with CEA Technologies of
Australia. Northwest Airlines awarded an order for up to 68 Boeing 787 Dreamliners. Also in 2004,
Japan Airlines entered a purchase contracts for 30 Boeing 787 Dreamliners and 30 Next-Generation
737-800 passenger airplanes.

In 2005, Boeing and Bavaria International Aircraft Leasing reached an agreement for six more Boeing
Next-Generation 737-700 airplanes, valued at $330 million at list prices. During the same year,
Boeing and the US Army signed a $549 million contract, for 17 new-build CH-47F Chinook helicopters.
Later in the year, SpiceJet placed a firm order for Boeing’s ten airplanes, valued at $630 million at
list prices. Also in 2005, Boeing completed the sale of Torrance, California-based Boeing Electron
Dynamic Devices to L-3 Communications. Subsequently, the company received a $609-million
contract from the US Air Force for additional Joint Direct Attack Munition tail kits.

Boeing and KLM Engineering and Maintenance signed a cooperative agreement in 2005, to jointly
offer the Next-Generation 737 Component Services Program, which provides fast access to critical
parts. In the same year, the company opened F-15C distributed mission training facility in Japan.
Later in the year, Boeing and BAE Systems Australia signed a world teaming agreement to work
closely together to capture future airborne early warning and control business. Subsequently, the
company and Hamilton Sundstrand, a subsidiary of United Technologies, signed an agreement that
allows them to significantly reduce an airline's maintenance costs.

n 2006, Boeing partnered with Israel Aircraft Industries to provide the Israel Missile Defense
Organization with all-weather defense capability against short-range ballistic missiles and long-range
artillery rockets. In the same year, the company developed flight control technologies that enhance
the autonomous operations of advanced unmanned aerial vehicles. Later in the year, the company
acquired Carmen Systems, a Sweden based provider of crew scheduling and disruption management
software for the world's airlines and railroads. During 2006, Boeing signed an agreement with the
US army for development of the Block III AH-64D Apache Longbow program.

Boeing unveiled the new 737-900ER airplane in 2006. During the same period, the company launched
Boeing 747-400 Large Cargo Freighter at Taipei's Chiang Kai-Shek International Airport. Later in
the year, Boeing acquired Aviall, the Texas based largest independent provider of new aviation parts
and related aftermarket services in the aerospace industry. Also during 2006, Boeing partnered with
Lockheed Martin to form a joint venture called United Launch Alliance.

In 2007, the company received an order from Jet Airways, India for 10 787-8 Dreamliners. In the
same year, Boeing purchased C-Map, a leading provider of digital maritime cartography, data services
and other navigational information. Later in the year, the company selected Rockwell Collins for the
entire suite of displays, autopilot, communication, navigation, surveillance, maintenance, emergency

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and data management systems for its new 747-8 family. Subsequently, Azerbaijan Airlines placed
an order for three 787-8 Dreamliners and two Next-Generation 737-900ERs.

Boeing received an order from ALAFCO Aviation Lease and Finance in 2007 for 12 787-8 airplanes
and six Next-Generation 737-800s. In the same year, the company opened a new Integrated Materials
Management Asia Regional Center in Singapore. Later in the year, Boeing confirmed an order by
Air Canada for 23 Boeing 787 Dreamliners. Further in 2007, the company received an order from
TUI Group, for 11 787-8 Dreamliners and 50 Next-Generation 737s. Later in the same year, Boeing
received an order from GE Commercial Aviation Services for six Boeing 777 Freighters.

In 2007, Boeing and Korea Aerospace Industries signed a Memorandum of Agreement for the
Republic of Korea's E-X 737 airborne early warning and control program. In 2007, Boeing received
an order from International Lease Finance for 63 airplanes. In the same year, the company launched
the Boeing 787 Dreamliner, a mid-sized, wide-body, twin engine jet airliner with seating capacity
between 290 and 310. The company received orders for 677 airplanes worth more than $110 billion
in 2007. In the same year, Air Berlin placed an order for 25 787-8 airplanes valued at $4 billion.

The company was awarded a contract to build a commercial satellite for ProtoStar, in the first quarter
of 2008. In the same quarter, Boeing and Bahrain's national carrier Gulf Air finalized negotiations
for up to 24 Boeing 787 Dreamliners. Later in the quarter, the company entered into an agreement
with India-based TAL Manufacturing Solutions, a wholly owned subsidiary of Tata Motors, for
manufacturing structural components for Boeing's 787 Dreamliner airplane program. The company
entered into a joint venture with Tata Industries, India during the same period, to include more than
$500 million of defense-related aerospace component work in India for export to Boeing and its
international customers. Also in the first quarter of 2008, Boeing and Orion Propulsion signed a
government-sponsored Mentor-Protege agreement to work together on NASA's Ares I rocket, which
would transport astronauts into space after the space shuttle retires.

In the second quarter of 2008, Boeing Launch Services was awarded a contract to launch
DigitalGlobe's second WorldView Earth-imaging satellite on a Delta II launch vehicle. In the same
quarter, Boeing received an order from the Government of Iraq, for 30 Boeing 737-800 commercial
airplanes. Also, Boeing opened its new EA-18G Growler Support Center at Naval Air Station Whidbey
Island, Washington, the US. During the same quarter, Boeing and SAS Technical Services signed
an Integrated Materials Management maintenance agreement to reduce operating costs and improve
service to STS airline customers. Later in the quarter, Boeing and Blue Air entered into an agreement
on an order for three Next-Generation 737-900ER jetliners.

Boeing finalized an agreement in the second quarter of 2008, to acquire Vought Aircraft Industries'
interest in Global Aeronautica, a South Carolina fuselage sub-assembly facility for Boeing's newest
airplane, the 787 Dreamliner. In the same quarter, the company was awarded B-52 airborne electronic
attack technical maturation contract, by the US Air Force Research Laboratory. In the next quarter,
Boeing received an order from Etihad Airways, for 35 787-9 Dreamliners and 10 777-300ERs.
Subsequently, the company also received an order from Arik Air for an additional seven
Next-Generation 737s.

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In the third quarter of 2008, Boeing received an order from Malaysia Airlines, for 35 Next-Generation
737-800 airplanes. During the same quarter, the company also received an order from Air China,
for 15 777-300ER and 30 Next-Generation 737-800 jetliners. Later in the quarter, the company
opened a New Mission Control Center in El Segundo, California to support satellite customers.
Further in the third quarter of 2008, Boeing received a fixed-price contract by the US Navy, to produce
an updated shipboard network communications system for the USS Arleigh Burke guided-missile
destroyer.

Boeing was awarded a $153 million US Navy contract in the third quarter of 2008, to design and
develop the Countermine System. Boeing was also awarded a five-year US Army contract in the
same period, for 191 CH-47F Chinook Helicopters. Later in the quarter, Boeing acquired Insitu, a
pioneer in the unmanned air systems market. Furthermore, Boeing was awarded a contract for the
initial phase of upgrading the radar on Saudi Arabia's fleet of five E-3A Airborne Warning and Control
System aircraft. Later in the third quarter of 2008, the company launched Defense and Government
Services division within its Integrated Defense Systems business. By the end of the quarter, Boeing
and the US Air Force opened a new F-15E Mission Training Center at Royal Air Force Lakenheath
in Suffolk, the UK.

In the fourth quarter of 2008, the company received a $650 million International Space Station
contract extension from NASA. The company also opened a new experimentation center in Suffolk,
Virginia, the US during the same period. Later in the quarter, Boeing completed its acquisition of
Tapestry Solutions, a San Diego-based company. The company selected Asian Composite
Manufacturing in the fourth quarter of 2008, to provide the elevator and rudder-machined honeycomb
core for Boeing's 777 airplane. In the same quarter, Boeing acquired Federated Software Group, a
St. Louis-based company; and a Digital Receiver Technology, a company that develops wireless
surveillance products for government customers.

In January 2009, Boeing received two contracts from the US Department of Defense for continued
production of Joint Direct Attack Munition tail kits and Small Diameter Bombs. In February 2009, the
company was awarded a one-year, $250 million Missile Defense Agency contract for Ground-based
Midcourse Defense maintenance and operations support.

Boeing entered into an agreement with Bharat Electronics in February 2009, to open analysis and
experimentation center in India. In March 2009, the company entered into a lease agreement with
Mexicana Group, for 25 Boeing 717-200 airplanes to be used by Mexicana's Click operation. In the
same month, Boeing signed a Memorandum of Agreement with Terma, to provide Terma a minimum
of 30% of the industrial co-operation investments outlined in Boeing's Super Hornet proposal to
Denmark. The company opened its research and technology centre in India in March 2009. In the
same month, Boeing received an order from the US Customs and Border Protection for Northern
Border Project.

In April 2009, Boeing and Systematic signed three MoU’s (Memoranda of Understanding) for future
business co-operation between the two companies. In the same month, the company was awarded
a US Navy contract to develop the Free Electron Laser weapon system. In May 2009, the company
received an order from Turkish Airlines, for five Boeing 777-300ER airplanes. In the same month,

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Boeing signed a contract with AgustaWestland, to provide ICH-47F Chinook helicopters to Italian
Army. In May 2009, the company also received a contract to develop and test a nonlethal, high
power microwave airborne demonstrator for the US Air Force Research Laboratory's
Counter-electronics High Power Microwave Advanced Missile Project.

In June 2009, Boeing received A-10 sustainment and integration contract from the US Air Force. In
the same month, Boeing formed an Unmanned Airborne Systems division within its defense and
space business unit. Later in the month, the company signed an agreement to acquire eXMeritus,
a company that provides hardware and software to federal government. Also during June 2009,
Boeing received a contract from the US Army, for future combat systems spin out production.
Subsequently, the company received a 10-year contract worth of $750 million, from the US Air Force
to provide engineering support for the B-52 bomber.

In July 2009, Boeing agreed to acquire the business and operations conducted by Vought Aircraft
Industries (Vought) at its South Carolina facility. In the same month, the company and IFAD TS, a
Danish leader in aviation simulation and networked training products, signed a MoU to explore
opportunities to support F/A-18E/F Super Hornet training systems facility requirements. Intelsat, a
provider of fixed satellite services, selected Boeing to build four telecommunication satellites, during
the same period. By the end of month, the company completed the acquisition of Vought.

Boeing received a $15 billion contract in August 2009, from the Canadian government for 15 new
CH-47F Chinook heavy-lift helicopters. During the same month, Boeing and DONG Energy of
Denmark signed a MoU, paving the way for combined innovation on energy-related technology and
business pursuits. In the next month, the company received a three-year Checkout, Assembly and
Payload Processing Services contract worth $156.5 million from NASA, to provide services at
Kennedy Space Center and Cape Canaveral Air Force Station. Also during September 2009, Boeing
connected two additional F-15E Mission Training Centers (one at Seymour Johnson Air Force Base,
North Carolina, and one at Royal Air Force Lakenheath, the UK) to the US Air Force's Distributed
Mission Operations Network.

In October 2009, Boeing joined with Honeywell's UOP to commission a study on the sustainability
of a leading family of saltwater-based plant candidates for renewable jet fuel. In the same month,
the company launched the WorldView-2 satellite for DigitalGlobe aboard a Delta II rocket. Later in
the month, Boeing; the Airports and Auxiliary Services agency, an arm of Mexico’s Ministry of
Communications and Transport; and Honeywell’s UOP; announced a collaboration to identify,
research and develop a commercially viable market for Mexico-sourced sustainable aviation biofuels.
Also during October 2009, Boeing completed its industrial cooperation program for the AH-64D
Apache Armed Helicopter Program for the Netherlands Ministry of Economic Affairs.

Boeing Defence Australia, a wholly owned subsidiary of Boeing, signed a Deed of Standing Offer
to provide Electromagnetic Environmental Effects testing and design services for Australian Defence
Force aircraft and systems, in November 2009. In the same month, Boeing was selected to receive
federal stimulus funds from the US Department of Energy as part of a three-year study to improve
the efficiency and reliability of the US' power grid. Later in December 2009, the company acquired

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Alenia North America's half of Global Aeronautica, a South Carolina fuselage subassembly facility
for Boeing's 787 Dreamliner.

In January 2010, Boeing, the Masdar Institute of Science and Technology, Etihad Airways, and
Honeywell's UOP announced an agreement to establish a major research institution and
demonstration project in Abu Dhabi dedicated to sustainable energy solutions. During the same
month, the company was awarded a five-year In-Service Support contract worth $600 million for
Project Wedgetail, Australia's 737 Airborne Early Warning and Control program. The contract was
awarded from Australia's Defence Materiel Organization. Later in February 2010, Boeing was awarded
a $324 million Foreign Military Sales contract from the Electronics Systems Center at Hanscom Air
Force Base, Massachusetts, to upgrade France's fleet of four E-3F Airborne Warning and Control
System aircraft, as well as the fleet's ground system.

Boeing signed a contract in February 2010, with Hindustan Aeronautics (India based manufacturer)
to provide weapons bay doors for eight P-8I long-range maritime reconnaissance and anti-submarine
warfare aircraft that will be delivered to the Indian navy. In the same month, the company received
a $138 million worth contract from the US Army, for low-rate initial production of the initial brigade
set of Brigade Combat Team Modernization Increment 1 capabilities. In March 2010, Boeing launched
two new versions of its Visual Security Operations Console (VSOC) security management product,
VSOC Responder and VSOC Smart Building. The new products build on the sensor-networking
capabilities of VSOC Sentinel to display 3-D models and real-time incident information on one
computer screen, allowing for greater situational awareness.

In April 2010, the company completed its industrial cooperation program for the third phase of the
CH-47D Chinook rotorcraft upgrades performed for the Spanish Army's Airmobile Force, FAMET.
In May 2010, Boeing announced the formation of the Airlift and Tankers division within its military
aircraft business unit. The new division will lead the company's sustained pursuit and execution of
the US and international tanker and fixed-wing mobility aircraft business. In the same month, the
company announced London-based Monarch Aircraft Engineering, as a maintenance, repair and
overhaul partner for the aerospace company's GoldCare service offering for the 787 Dreamliner.
Monarch Aircraft Engineering will provide scheduled maintenance operations in support of the 787
fleet.

Boeing unveiled the fighter-sized Phantom Ray unmanned airborne system in May 2010. Later in
June 2010, Boeing and Canadian industry partners announced the launch of a new research and
development consortium aimed at strengthening Canada's competitive position in the manufacturing
of advanced composite materials for aerospace and other industries. During the same month, the
company won a major research and development support contract worth up to $1.7 billion for the
Next-Generation Air Transportation System from the US Federal Aviation Administration. Later in
the month, Boeing was awarded the US Air Force's Mission Planning Enterprise Contract-II (MPEC-II)
to provide software management, development, integration and services for mission planning systems.
MPEC-II was a multiple-award, indefinite delivery/indefinite quantity contract with a $1 billion total
value over 10 years.

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In June 2010, Boeing and Northrop Grumman announced a strategic partnership to pursue the
competitive development and sustainment contract for future work on the Ground-based Midcourse
Defense system for the US Missile Defense Agency. In the same month, the company received a
$216 million contract from the US Air Force to upgrade the service's 59-jet KC-10 tanker fleet with
a new communication, navigation, surveillance and air traffic management system. Later in the
month, Boeing and the US Federal Aviation Administration announced plans of working together to
speed the development and application of environmentally progressive technologies for cleaner and
quieter jet aircraft. Also during June 2010, Boeing and VSMPO AVISMA signed a new five-year
contract extension. According to the contract, Boeing will buy titanium forgings and rough-machined
titanium forgings from VSMPO-AVISMA that will be used on the Boeing 787 Dreamliner, 777 and
737 commercial airplane models.

Boeing and Innovation Center of Skolkovo, Russia, signed an agreement in June 2010, to formalize
Boeing’s participation in the Skolkovo Innocity project. Under the agreement, Boeing, together with
its Russian partners, Progresstech and Luxoft, will set up a division of Boeing’s Moscow Design
Center at Skolkovo. During the same month, Boeing and Argon entered into an agreement for
Boeing's acquisition of Argon, a developer of command, control, communications, computers,
intelligence, surveillance, and reconnaissance (C4ISR) and combat systems.

Later in July 2010, the company announced an agreement to acquire Narus, a provider of real-time
network traffic and analytics software used to protect against cyber attacks and persistent threats
aimed at large Internet Protocol networks. In the same month, Boeing unveiled the hydrogen-powered
Phantom Eye unmanned airborne system. The capabilities inherent in Phantom Eye's design offers
game-changing opportunities for the company’s military, civil and commercial customers.

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Key Employees

KEY EMPLOYEES

Name Job Title Board


W. James McNerney Chairman, President and Chief Executive Officer Executive Board
John H. Biggs Director Non Executive Board
John E. Bryson Director Non Executive Board
David L. Calhoun Director Non Executive Board
Arthur D. Collins Director Non Executive Board
Linda Z. Cook Director Non Executive Board
William M. Daley Director Non Executive Board
Kenneth M. Duberstein Director Non Executive Board
Edmund P. Giambastiani Director Non Executive Board
Edward M. Liddy Director Non Executive Board
John F. Mcdonnell Director Non Executive Board
Susan C. Schwab Director Non Executive Board
Mike S. Zafirovski Director Non Executive Board
James F. Albaugh Executive Vice President; and President and Senior Management
Chief Executive Officer, Commercial Airplanes
James A. Bell Executive Vice President, Corporate President Senior Management
and Chief Financial Officer
Wanda K. Denson-Low Senior Vice President, Office of Internal Senior Management
Governance
Thomas J. Downey Senior Vice President, Communications Senior Management
Shephard W. Hill President, Boeing International; and Senior Vice Senior Management
President, Business Development and Strategy
Timothy Keating Senior Vice President, Government Operations Senior Management
J. Michael Luttig Executive Vice President and General Counsel Senior Management
Dennis A. Muilenburg Executive Vice President; President and Chief Senior Management
Executive Officer, Boeing Defense, Space and
Security
Richard Stephens Senior Vice President, Human Resources and Senior Management
Administration
John J. Tracy Chief Technology Officer and Senior Vice Senior Management
President, Engineering, Operations and
Technology

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Key Employee Biographies

KEY EMPLOYEE BIOGRAPHIES

W. James McNerney

Board: Executive Board


Job Title: Chairman, President and Chief Executive Officer
Since: 2005
Age: 60

Mr. McNerney has been the Chairman, President and Chief Executive Officer at Boeing since 2005.
Previously, he served four and a half years as the Chairman and Chief Executive Officer at 3M. Mr.
McNerney served in various management positions at General Electric, most recent being the
President and Chief Executive Officer at GE Aircraft Engines from 1997 until 2000. He is also a
Director at Boeing, Procter & Gamble, and IBM. Mr. McNerney serves as a Member at The Field
Museum Board of Trustees in Chicago, and at the Northwestern Memorial HealthCare Board. He
is also a Trustee at Northwestern University. Mr. McNerney also serves on the executive committee
of The Business Roundtable. He is the former Chairperson at The Business Council, the US-China
Business Council, and the American Society of Corporate Executives.

John H. Biggs

Board: Non Executive Board


Job Title: Director
Since: 1997
Age: 73

Mr. Biggs has been a Director at Boeing since 1997. He served as the Chairman and Chief Executive
Officer at Teachers Insurance and Annuity Association-College Retirement Equities Fund
(TIAA-CREF) from 1993 to 2002. Mr. Biggs also served as the President at TIAA-CREF. He serves
as a Director at National Bureau of Economic Research and at Pension Rights Center in Washington;
and as a Trustee at Washington University in St. Louis, Missouri and at The Danforth Foundation
in St. Louis, Missouri. Mr. Biggs is also a Member of the Board of Emeriti and the Chairman of the
Washington University Investment Management.

John E. Bryson

Board: Non Executive Board


Job Title: Director
Since: 1995
Age: 66

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Mr. Bryson has been a Director at Boeing since 1995. He is the Senior Advisor, at Kohlberg Kravis
Roberts & Co. Mr. Bryson served as the Chairman, President and Chief Executive Officer at Edison
International from 1990 to 2008. He is also on the Board at The Walt Disney and at CODA Automotive.
Mr. Bryson serves as a Trustee at the California Institute of Technology; a Director at the W.M. Keck
Foundation and The California Endowment; and the Chairman at Pacific Council on International
Policy.

David L. Calhoun

Board: Non Executive Board


Job Title: Director
Since: 2009
Age: 52

Mr. Calhoun has been a Director at Boeing since 2009. He has been the Chairman of the Executive
Board and Chief Executive Officer at The Nielsen, since 2006. Previously, Mr. Calhoun served as
Vice Chairman at General Electric and as the President and Chief Executive Officer at GE
Infrastructure. Before that, he served as the President and Chief Executive Officer at GE
Transportation, GE Aircraft Engines, Employers Reinsurance, GE Lighting, and GE Transportation
Systems. Mr. Calhoun also serves on the Board of Directors at Medtronic, and at the National
Underground Freedom Center. He serves as Co-Chairman of the Campaign for Virginia Tech.

Arthur D. Collins

Board: Non Executive Board


Job Title: Director
Since: 2007
Age: 62

Mr. Collins has been a Director at Boeing since 2007. He is the Senior Advisor at Oak Hill Capital
Partners. Mr. Collins served as the Chairman at Medtronic from 2002 to 2008. At Medtronic, he
served as the Chairman and Chief Executive Officer, from 2002 to 2007; President and Chief
Executive Officer, from 2001 to 2002; President and Chief Operating Officer, from 1996 to 2001;
and Chief Operating Officer from 1994 to 1996. Mr. Collins also served as the Executive Vice
President at Medtronic and as President at Medtronic International from 1992 to 1994. He also
served as the Corporate Vice President at Abbott Laboratories (health care products) from 1989 to
1992 and Divisional Vice President at Abbott from 1984 to 1989. Mr. Collins is also on the Board at
US Bancorp and Cargill and is also a member of the Board of Overseers at The Wharton School at
the University of Pennsylvania.

Linda Z. Cook

Board: Non Executive Board


Job Title: Director

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Since: 2003
Age: 51

Ms. Cook has been a Director at Boeing since 2003. She served as the Executive Director at Royal
Dutch Shell, from 2004 to 2009. Prior to that, Ms. Cook was the Managing Director at Royal Dutch
Petroleum. She served as the President, Chief Executive Officer and a Director at Shell Canada,
from 2003 to 2004. Ms. Cook served as Chief Executive Officer at Shell Gas & Power from, 2000
through 2003. She is a Director at Cargill. Ms. Cook is also a member of the Society of Petroleum
Engineers, the China Development Forum, the Board of Trustees for the University of Kansas
Endowment Association, and the Advisory Board for the University of Texas Energy Institute.

William M. Daley

Board: Non Executive Board


Job Title: Director
Since: 2006
Age: 61

Mr. Daley has been a Director at Boeing since 2006. He has been the Vice Chairman and Head of
the Office of Corporate Responsibility at JPMorgan Chase & Co, since 2007. Mr. Daley has also
been the Chairman of the Midwest Region at JPMorgan Chase & Co, since 2004. He served as the
US Secretary of Commerce from 1997 to 2000. Mr. Daley served as President, SBC Communications,
from 2001 to 2004. He also served as Vice Chairman at Evercore Capital Partners, during 2001.
Mr. Daley is also on the Board at Abbott Laboratories and at Boston Properties, from 2003 until
2007.

Kenneth M. Duberstein

Board: Non Executive Board


Job Title: Director
Since: 1997
Age: 65

Mr. Duberstein has been a Director at Boeing since 1997. He has been the Chairman and Chief
Executive Officer at Duberstein Group, since 1989. Mr. Duberstein was White House Chief of Staff
in 1988 and 1989. He served on the Boards at Fannie Mae from 1998 until 2007 and at Collegiate
Funding Services, from 2004 until 2007. Mr. Duberstein is also a Director at ConocoPhillips, Mack-Cali
Realty and The Travelers Companies.

Edmund P. Giambastiani

Board: Non Executive Board


Job Title: Director
Since: 2009

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Age: 61

Mr. Giambastiani has been a Director at Boeing since 2009. He served as the Vice Chairman of the
US Joint Chiefs of Staff, from 2005 to 2007 and as former NATO Supreme Allied Commander
Transformation, from 2003 to 2005. Mr. Giambastiani also served as a Commander for U.S. Joint
Forces Command, from 2002 to 2005. He is a career nuclear Submarine Officer with extensive
operational experience, including command at the submarine, squadron and fleet level. His staff
experience includes service as the co-Chairman of the Defense Acquisition Board and the Chairman
of the Joint Requirements Oversight Council. Mr. Giambastiani currently serves on the Boards at
Monster Worldwide and QinetiQ Group. Previously, he served on the Board at SRA International.
Mr. Giambastiani also served as the Non Executive Chairman at Alenia North America, from 2008
through 2009.

Edward M. Liddy

Board: Non Executive Board


Job Title: Director
Since: 2010

Mr. Liddy has been a Director at Boeing since 2010. He served as a Partner at Clayton, Dubilier &
Rice during 2008 and rejoined the firm in January 2010. Mr. Liddy served as Interim Chairman and
Chief Executive Officer at American International Group, from 2008 through 2009. He served as the
Chairman of the Board at The Allstate from 1999 until 2008. Mr. Liddy is also on the Boards at 3M
and Abbott Laboratories, and served on the Boards at The Goldman Sachs Group, from 2003 until
2008 and at The Kroger from 1996 until 2006.

John F. Mcdonnell

Board: Non Executive Board


Job Title: Director
Since: 1997
Age: 71

Mr. McDonnell has been a Director at Boeing since 1997. He served as the Chairman at McDonnell
Douglas from 1988 until its merger with Boeing in 1997, and as its Chief Executive Officer from 1988
to 1994. Mr. McDonnell is the Vice Chairman of the Board at Washington University and at Donald
Danforth Plant Sciences Center.

Susan C. Schwab

Board: Non Executive Board


Job Title: Director
Since: 2010
Age: 54

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Ms. Schwab has been a Director at Boeing since 2010. She serves as a Professor at University of
Maryland School of Public Policy. Ms. Schwab served as US Trade Representative from 2006 to
2009 and as Deputy US Trade Representative from 2005 to 2006. Prior to her service as Deputy
US Trade Representative, she served as the President and Chief Executive Officer at the University
System of Maryland Foundation, from 2004 to 2005; as a Consultant for the US Department of
Treasury during 2003; and as Dean of the University of Maryland School of Public Policy, from 1995
to 2003. Ms. Schwab also serves on the Boards at Caterpillar and FedEx.

Mike S. Zafirovski

Board: Non Executive Board


Job Title: Director
Since: 2004
Age: 56

Mr. Zafirovski has been a Director at Boeing since 2004. He served as Director, President and Chief
Executive Officer at Nortel, from 2005 through 2009. Previously, Mr. Zafirovski was the President
and Chief Operating Officer at Motorola from 2002 to 2005. He served as the Executive Vice President
and President of the Personal Communications Sector of Motorola from 2000 to 2002. Prior to joining
Motorola, Mr. Zafirovski spent 24 years with General Electric, where he served in various management
positions, most recent being the President and CEO at GE Lighting from 1999 to 2000.

James F. Albaugh

Board: Senior Management


Job Title: Executive Vice President; and President and Chief Executive Officer, Commercial Airplanes
Since: 2009
Age: 59

Mr. Albaugh has been the Executive Vice President at Boeing, since 2002 and as President and
Chief Executive Officer at Boeing Commercial Airplanes, since 2009. Previously, he served as the
President and Chief Executive Officer at Boeing Defense, Space and Security, from 2002 to 2009.
Prior thereto, Mr. Albaugh served as the Senior Vice President at Boeing and President of Space
and Communications Group. Later, he was named as Chief Executive Officer of Space and
Communications Group in 2001. Mr. Albaugh also served as the President at Boeing Space
Transportation and at Rocketdyne Propulsion and Power. He serves on the Board at TRW Automotive
Holdings.

James A. Bell

Board: Senior Management


Job Title: Executive Vice President, Corporate President and Chief Financial Officer
Since: 2008
Age: 61

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Mr. Bell has been the Executive Vice President and Chief Financial Officer at Boeing, since 2008
and as its Corporate President, since 2004. Previously, he served as the Senior Vice President of
Finance and Corporate Controller from 2000 to 2004. Prior to that, Mr. Bell served as Vice President
of Contracts and Pricing at Boeing Space Communications from 1997 to 2000. He serves on the
Boards at The Dow Chemical and at Boeing Capital.

Wanda K. Denson-Low

Board: Senior Management


Job Title: Senior Vice President, Office of Internal Governance
Since: 2007
Age: 53

Ms. Denson-Low has been the Senior Vice President, Office of Internal Governance at Boeing since
2007. Previously, she served as the company's Vice President and Assistant General Counsel with
responsibility for leading the legal staff for Boeing Integrated Defense Systems, from 2003 to 2007.
Ms. Denson-Low was the Vice President of Human Resources for Integrated Defense Systems,
from 2002 to 2003. She served as the Vice President and Assistant General Counsel at Hughes
Electronics from 1992 to 1998. Ms. Denson joined the company in 1984.

Thomas J. Downey

Board: Senior Management


Job Title: Senior Vice President, Communications
Since: 2007
Age: 45

Mr. Downey has been the Senior Vice President of Communications at Boeing since 2007. Prior to
this, he served as the Vice President, Corporate Communications during 2006 and as the Vice
President, Commercial Airplanes Communications from 2002 to 2006. Mr. Downey served as the
Corporate Vice President, Internal and Executive Communications, from 1999 to 2002. He also
served as the General Manager of Communications and Community Relations for Military Aircraft
and Missile Systems unit. Mr. Downey joined the company in 1986.

Shephard W. Hill

Board: Senior Management


Job Title: President, Boeing International; and Senior Vice President, Business Development and
Strategy
Since: 2009
Age: 57

Mr. Hill has been the President at Boeing International since 2007 and has been the Senior Vice
President of Business Development and Strategy at Boeing since 2009. Previously, Mr. Hill served

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as the Senior Vice President of Business Development and Strategy from 2006 to 2007. Prior thereto,
he served as the Vice President, Business Development at BDS from 2002 to 2006. Mr. Hill joined
Boeing in 1996.

Timothy Keating

Board: Senior Management


Job Title: Senior Vice President, Government Operations
Since: 2008
Age: 48

Mr. Keating has been the Senior Vice President of Government Operations at Boeing, since 2008.
Previously, he served as the Senior Vice President of Global Government Relations at Honeywell
International, from 2002 to 2008. Prior to that, Mr. Keating served as the Chairman of the Board and
Managing Partner at Timmons, from 1998 until 2002.

J. Michael Luttig

Board: Senior Management


Job Title: Executive Vice President and General Counsel
Since: 2009
Age: 55

Mr. Luttig has been the Executive Vice President and General Counsel at Boeing since 2009.
Previously, he served as the Senior Vice President and General Counsel, from 2006 to 2009. Prior
to that, he served on the US Court of Appeals for the Fourth Circuit from 1991 to 2006. Mr. Luttig
also served as an Assistant Attorney General of the US, and the Counselor to the Attorney General
at the Department of Justice. Mr. Luttig was associated with Davis Polk and Wardwell from 1985 to
1989. He serves on the Board at Boeing Capital and as Director at Franklin Templeton Mutual Funds.

Dennis A. Muilenburg

Board: Senior Management


Job Title: Executive Vice President; President and Chief Executive Officer, Boeing Defense, Space
and Security
Since: 2009
Age: 45

Mr. Muilenburg has been the Executive Vice President at Boeing and President and Chief Executive
Officer of Boeing Defense, Space and Security since 2009. Previously, he served as the President
of Global Services and Support from 2008 to 2009. Prior thereto, Mr. Muilenburg served as the Vice
President and General Manager of Combat Systems from 2006 to 2008. He also served as Vice
President and Program Manager for Future Combat Systems from 2003 to 2006. Mr. Muilenburg
joined Boeing in 1985.

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Richard Stephens

Board: Senior Management


Job Title: Senior Vice President, Human Resources and Administration
Since: 2005
Age: 57

Mr. Stephens has been the Senior Vice President, Human Resources and Administration at Boeing,
since 2005. He previously served as the Senior Vice President of Internal Services and the President
of Shared Services Group. Mr. Stephens was the Vice President and General Manager, Integrated
Defense Systems Homeland Security and Services. He joined Boeing in 1980.

John J. Tracy

Board: Senior Management


Job Title: Chief Technology Officer and Senior Vice President, Engineering, Operations and
Technology
Since: 2006
Age: 55

Mr. Tracy has been the Chief Technology Officer and the Senior Vice President of Engineering,
Operations and Technology at Boeing, since 2006. Previously, he served as the Vice President of
Engineering and Mission Assurance for Boeing Defense, Space and Security from 2004 to 2006.
Prior to that, Mr. Tracy served as the Vice President of Structural Technologies, Prototyping, and
Quality for Phantom Works, from 2001 to 2004; and the General Manager of Engineering for Military
Aircraft and Missiles, from 2000 to 2001. He joined Boeing in 1981.

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Major Products and Services

MAJOR PRODUCTS AND SERVICES

The Boeing (Boeing) is engaged in the design, development, manufacturing, sale and support of
commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch
systems and services. The company's key products and services include the following:

Commercial airplanes:

Commercial aircraft
Commercial jetliners

Integrated defense systems:

Military aircraft (fighters, transports, tankers, and helicopters)


Missiles
Space systems
Missile defense systems
Satellites and satellite launch vehicles
Space launch vehicles
Communications satellites
Delta rockets
International space station
Space shuttle
Maintenance services

Boeing Capital Corporation:

Financial leases
Operational leases
Risk management services

Other:

IT communication solutions
eBusiness
Computing and network operations

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Revenue Analysis

REVENUE ANALYSIS

Overview

The Boeing (Boeing) recorded revenues of $68,281 million during the financial year ended December
2009 (FY2009), an increase of 12.1% over FY2008. For FY2009, the US, the company's largest
geographic market, accounted for 57.8% of the total revenues.

Boeing generates revenues through six business divisions: commercial airplanes (49.7% of the total
revenues during FY2009); Boeing military aircraft (20.5%); network and space systems (15.9%);
global services and support (12.7%); Boeing capital corporation (1%); and other (0.2%)

Revenue by division

During FY2009, the commercial airplanes division recorded revenues of $34,051 million, an increase
of 20.5% over FY2008.

The Boeing military aircraft division recorded revenues of $14,057 million in FY2009, an increase
of 5.6% over FY2008.

The network and space systems division recorded revenues of $10,877 million in FY2009, a decrease
of 4.1% compared to FY2008.

The global services and support division recorded revenues of $8,727 million in FY2009, an increase
of 18.1% over FY2008.

The Boeing capital corporation division recorded revenues of $660 million in FY2009, a decrease
of 6.1% compared to FY2008.

The other division recorded revenues of $165 million in FY2009, a decrease of 70.9% compared to
FY2008.

Revenue by geography

The US, Boeing's largest geographical market, accounted for 57.8% of the total revenues in FY2009.
Revenues from the US reached $39,498 million in FY2009, an increase of 6.4% over FY2008.

China accounted for 7.2% of the total revenues in FY2009. Revenues from China reached $4,888
million in FY2009, when compared to $2,404 million in FY2008.

Canada accounted for 0.7% of the total revenues in FY2009. Revenues from Canada reached $493
million in FY2009, a decrease of 73.3% compared to FY2008.

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Revenue Analysis

Asia (other than China) accounted for 11% of the total revenues in FY2009. Revenues from Asia
(other than China) reached $7,536 million in FY2009, a decrease of 4.8% compared to FY2008.

Europe accounted for 11% of the total revenues in FY2009. Revenues from Europe reached $7,516
million in FY2009, an increase of 25.4% over FY2008.

Middle East accounted for 7.8% of the total revenues in FY2009. Revenues from Middle East reached
$5,338 million in FY2009, when compared to $2,568 million in FY2008.

Oceania accounted for 2.1% of the total revenues in FY2009. Revenues from Oceania reached
$1,447 million in FY2009, an increase of 46.3% over FY2008.

Latin America, Caribbean and other accounted for 1.4% of the total revenues in FY2009. Revenues
from Latin America, Caribbean and other reached $963 million in FY2009, a decrease of 41.8%
compared to FY2008.

Africa accounted for 0.9% of the total revenues in FY2009. Revenues from Africa reached $602
million in FY2009, an increase of 48.3% over FY2008.

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SWOT Analysis

SWOT ANALYSIS

The Boeing (Boeing) is engaged in the design, development, manufacturing, sale and support of
commercial jetliners, military aircraft, satellites, missile defense and launch systems and services.
Boeing focuses on acquisitions to expand its business and to earn more revenues. Therefore,
acquisitions bring complementary technologies, support geographic expansion, and leverage existing
infrastructure for Boeing. However, intense competition across all business divisions of Boeing could
erode the market share of the company and could also affect its profit margins.

Strengths Weaknesses

Robust inorganic growth High indebtedness and low credit ratings


Strong focus on research and development Declining profits and margins
Realignment for growth and expansion to Sluggish performance of business divisions
new markets

Opportunities Threats

Poised to benefit from strategic acquisition Intense competition and pricing pressure
of Argon Risks concerning labor issues
Boeing’s global outlook for aircraft demand H1N1 2009 influenza pandemic
Surge in the US defense spending

Strengths

Robust inorganic growth

Boeing focuses on acquisitions to expand its business and to earn more revenues. In FY2009, the
company acquired the business, assets and operations of Vought Aircraft Industries’ (Vought) 787
business conducted at North Charleston, South Carolina. Vought’s 787 business produces fuselage
sections, including the fabrication, assembly and systems installation, for the 787 program. The
acquisition of Vought strengthens Boeing’s 787 program and bolsters its capability to develop and
produce large composite structures.

During the same year, Boeing acquired eXMeritus, a Fairfax, Virginia based company that provides
hardware and software to federal government and law enforcement organizations, for sharing
information securely, across classified and unclassified networks and systems. The acquisition of
eXMeritus complements FY2008 acquisitions of Digital Receiver Technology, Ravenwing and Kestrel
Enterprises. These acquisitions are part of company's strategy to expand its presence in the cyber
and intelligence markets. The addition of eXMeritus enhances Boeing capabilities developed through
years of experience on secure networks for some of the most complex systems in national security.

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SWOT Analysis

In addition, during FY2009 Boeing acquired Alenia North America's half of Global Aeronautica, a
South Carolina fuselage subassembly facility for Boeing's 787 Dreamliner. Alenia North America is
a subsidiary of Italy's Alenia Aeronautica, a Finmeccanica company. This acquisition increases
productivity for the 787 program and allows Boeing to maintain its long-term competitiveness.
Therefore, acquisitions bring complementary technologies, support geographic expansion, and
leverage existing infrastructure for Boeing.

Strong focus on research and development

Boeing has a strong focus on research and development (R&D) activities. Its 'other' business division
principally includes the engineering, operations and technology (EO&T) activities. EO&T is an
advanced research and development organization focused on innovative technologies, improved
processes and the creation of new products. R&D expenditures involve experimentation, design,
development and related test activities for defense systems, new and derivative jet aircrafts, including
both commercial and military, advanced space and other company-sponsored product developments.

The company’s R&D investment amounted to $6,506 million, $3,768 million and $3,850 million in
FY2009, FY2008 and FY2007, respectively. The Boeing military aircraft division continues to focus
on R&D resources to leverage customer knowledge, technical expertise and system integration of
manned and unmanned systems that provide innovative solutions to meet the warfighter’s enduring
needs. The network and space systems division of Boeing is investing in capabilities to enhance
connectivity between existing and new air/ ground and maritime platforms; to increase communications
availability, utility and bandwidth through more robust space systems; and to leverage innovative
networking and ISR concepts. Key programs in this area include BCTM, JTRS, Wideband Global
Satellite System Ares, FAB-T and SBInet. Investments were also made to develop concepts and
capabilities related to cyber and security products, as well as the development of next-generation
space and intelligence systems.

The company’s global services and support (GS&S) continues to focus investment strategies on its
core businesses. Examples of successful programs stemming from these investment strategies
include the C-17 Globemaster Sustainment Partnership, the F/A-18 Integrated Readiness Support
Teaming program, the F-15 Singapore Performance-Based Logistics contract, and Smart Grid
Projects. Successful development of adaptable systems has allowed GS&S to transition from Boeing
platforms into the broader aviation market. Strong focus on R&D allows Boeing to develop proprietary
products, strengthen its product portfolio, and have an advantage over its competitors.

Realignment for growth and expansion to new markets

The company focuses on realignment, which is part of a continuing effort to successfully compete
in a rapidly evolving global defense and security marketplace. From January 2010, Boeing’s integrated
defense systems business unit began operating under the name Boeing defense, space and security
(BDS). While BDS will retain its current operating divisions (Boeing military aircraft, network and
space systems, and global services and support), the realignment consolidates some businesses.
Boeing consolidated two businesses in network and space systems division, the combat systems

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SWOT Analysis

business and the command, control and communications networks business. These businesses will
be unified as the new network and tactical systems business.

BDS operations principally involve research, development, production, modification and support of
global strike systems, global mobility systems, rotorcraft systems, airborne surveillance and
reconnaissance aircraft, network and tactical systems, intelligence and security systems, missile
defense systems, and space and intelligence systems. Boeing anticipated flattening defense budgets
and shifting customer priorities for the past few years and has been taking aggressive steps to
position the company for profitable growth in a challenging economy. With this latest strategic move,
the company extends its core programs even as it enhances its capabilities designed to capture
business in promising markets in the US and around the world.

BDS provides affordable solutions and brings value to customers through its ability to solve complex
problems utilizing expertise in large-scale systems integration, knowledge of legacy platforms, and
development of common network-enabled solutions across all customers’ domains. Therefore,
realignment positions Boeing for further growth in new and adjacent markets while continuing to
serve existing defense and space customers.

Weaknesses

High indebtedness and low credit ratings

Boeing witnessed high indebtedness in FY2009. In FY2009, the company’s total debt increased by
72% to reach $12,924 million compared to $7,512 million in FY2008. Boeing’s long term debt
increased by 75.7% in FY2009 over FY2008 to reach $12,217 million. Boeing’s debt service
obligations with respect to its indebtedness could have an adverse impact on earnings, cash flows,
and financial position for as long as the indebtedness is outstanding.

In addition, the company’s borrowing costs can be affected by short and long-term debt ratings
assigned by independent rating agencies. In April 2009, Fitch Ratings affirmed Boeing’s and Boeing
Capital’s A+ credit rating but changed its outlook from stable to negative. In July 2009, Standard &
Poor’s lowered Boeing’s and Boeing Capital’s long-term ratings from A+ to A. Later in October 2009,
Moody’s affirmed Boeing’s and Boeing Capital’s A2 and P-1 ratings, but changed its outlook from
neutral to negative.

Any future long-term borrowings or the extension or replacement of the company’s short-term
borrowing facilities will reflect the negative impact of this rating. This in turn increases the borrowing
costs, limiting Boeing’s financing options. Additional reductions in the company’s credit ratings could
further increase its borrowing costs and reduce its borrowing flexibility in the future. Such limitations
on Boeing’s financing options may affect its ability to fund major new acquisitions or capital-intensive
internal initiatives.

Declining profits and margins

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SWOT Analysis

Boeing has witnessed decline in its operating and net profits since FY2007. The company’s operating
profit decreased from $5,830 million in FY2007 to $3,950 million in FY2008 and further decreased
to $2,096 million in FY2009. Similarly, the operating margin of the company declined from 8.8% in
FY2007 to 6.5% in FY2008 and further declined to 3.1% in FY2009. In addition, the net profit
decreased from $4,074 million in FY2007 to $2,672 million in FY2007 and further decreased to
$1,312 million in FY2009. Further, the net profit margin of the company declined from 6.1% in FY2007
to 4.4% in FY2008 and later to 1.9% in FY2009. Declining profits and margins implies inefficient
cost management by the management, which can adversely affect the long term financial position
of Boeing.

Sluggish performance of business divisions

Boeing has witnessed a decline in its sales in network and space systems, Boeing Capital Corporation
and other business divisions. The network and space systems division witnessed 4.1% decline in
its sales in FY2009 compared to FY2008. The decline in its sales was due to lower volume on the
ground-based midcourse defense, intelligence and security systems, and proprietary programs.
Similarly, Boeing Capital Corporation also witnessed 6.1% decline in its sales in FY2009 compared
to FY2008. The decline in its sales was due to lower operating lease income. This was due to smaller
portfolio of equipment under operating leases, as a result of aircraft returns and asset dispositions.
In addition, the other business division witnessed 70.9% decline in its sales during the same period,
as a result of the sale of three C-17 aircraft in FY2008 held under operating lease. Therefore, sluggish
performance of few business divisions pressurizes the other profit making divisions of Boeing, which
in turn affects the profitability of the company.

Opportunities

Poised to benefit from strategic acquisition of Argon

Boeing has been expanding its portfolio of products and strengthening its position in the industry by
acquiring assets or organizations. In June 2010, Boeing and Argon entered into an agreement for
Boeing's acquisition of Argon in an all cash tender offer and merger for $34.5 per share, or
approximately $775 million, net of cash acquired. Argon is a leading developer of command, control,
communications, computers, intelligence, surveillance, and reconnaissance; and combat systems.
The transaction is expected to close by the end of the third quarter 2010. Once acquired, Argon will
be a stand-alone subsidiary of Boeing and a new division of Boeing network and space systems.
The agreement to acquire Argon advances Boeing's growth strategy and expands the company's
capabilities to address the C4ISR, cyber and intelligence markets.

Boeing’s global outlook for aircraft demand

Air transport throughout the world is constantly changing in response to market opportunities and
challenges. The rise of new airline business models and rapid growth of air travel in the world's
emerging economies are stabilizing worldwide demand for airplanes. The emerging markets are

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SWOT Analysis

driving economic expansion, with China leading the way at 7.2% GDP growth, followed by Southwest
Asia (6.1%), Africa (4.9%), Southeast Asia (4.6%) and Asia-Pacific (4.4%). The global GDP is at
3.1% and North America is at 2.1%. All this translates into world average air travel growth of 4.9%,
of which Asia-Pacific, including China, will experience growth in air travel of 6.9%. At a global level,
the number of airplanes in the world fleet grows at an average 3.2% each year. At the same time,
passenger traffic, measured in revenue passenger-kilometers, grows 4.9% per year and cargo traffic,
measured in revenue tonne-kilometers, grows 5.4% a year.

According to Boeings’ Current Market Outlook for the period 2009-28, the demand for new airplanes
worldwide is expected to be 29,000, over the next two decades, of which 2,100 will be regional jets,
19,460 will single-aisles, 6,700 will be twin-aisle and 740 will be large. All of this translates into
revenues of $3.2 trillion over a score of years, for an average of $160 billion/annum. Boeing is well
positioned both geographically and technically to service the huge aircraft market in the future. The
growing demand for aircraft represents an opportunity for Boeing to capitalize on this market and
would be able to expand its revenues and profits from this market.

Surge in the US defense spending

The economic crisis would not dampen the US defense spending. Defense spending is a long-term
recession-proof industry which would not be affected by cyclical downturns and upturns. The 2011
US budget allocates $708.2 billion to the Department of Defense (DoD). The US Federal Budget for
FY2011, is a spending request by President Barack Obama, to fund defense operations from October
2010 to September 2011. The 2011 Budget for DOD provides $548.9 billion for the DoD base budget
in 2011, a 3.4% increase over the 2010 enacted level. This funding increase allows DOD to address
its highest priorities, such as the President's commitment to reform defense acquisition, develop a
ballistic missile defense system that addresses modern threats, and continue to provide high quality
health care to wounded servicemembers. In addition, the 2011 Budget provides $159.3 billion for
DoD’s ongoing overseas contingency operations in Iraq, Afghanistan, and Pakistan. A supplemental
funding request of $33.0 billion for 2010 addresses immediate funding requirements for these
missions. Boeing’s primary customer is the US DoD with approximately 80% of Boeing defense,
space and security’s 2009 revenues being derived from this customer. Therefore, a surge in the US
defense spending could provide the topline growth for the company in the short to medium term.

Threats

Intense competition and pricing pressure

The commercial jet aircraft market and the airline industry remain extremely competitive.The company
faces aggressive international competitors, including Airbus, who are intent on increasing their market
share. Boeing Defense, Space and Security (BDS) business also faces strong competition in all
market segments, primarily from Lockheed Martin, Northrop Grumman, Raytheon Company and
General Dynamics. Non-US companies such as BAE Systems and European Aeronautic Defence
and Space Company (EADS), the parent of Airbus, continue to pursue a strategic presence in the

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SWOT Analysis

US market by strengthening their North American operations and partnering with US defense
companies.

International competitors who are intent on increasing their market share, offer competitive products
and have access to most of the same customers and suppliers. Airbus has historically invested
heavily to create a range of products to compete with Boeing. Regional jet makers Embraer and
Bombardier continue to develop larger and more capable airplanes. Additionally, other competitors
from Russia, China and Japan are likely to enter the 70 to 190 seat aircraft market over the next few
years.

In addition, certain of Boeing’s competitors have occasionally formed teams with other competitors
to address specific customer requirements. BDS expects the trend of strong competition to continue
into 2010 with many international firms pursuing announced intentions of increasing their US presence.
Furthermore, market liberalization in Europe and Asia has enabled low-cost airlines to continue
gaining market share. These airlines have increased the downward pressure on airfares. This results
in continued cost pressures for all airlines and price pressure on Boeing’s products. This market
environment has resulted in intense pressures on pricing and other competitive factors and Boeing
expects these pressures to continue or intensify in the coming years. Therefore, intense competition
across all business divisions of Boeing could erode the market share of the company and could also
affect its profit margins.

Risks concerning labor issues

Boeing faces risk concerning labor issues at its plants. Approximately 57,000 employees, which
constitute approximately 36% of the company’s total workforce, are union represented as of December
31, 2009. Boeing experiences work stoppages from time to time due to worker strikes. The company
experienced a work stoppage in 2008 when a labor strike delayed commercial aircraft and certain
BMA program production. Also in May 2010, 1,700 Boeing workers who assemble giant C-17 cargo
jets in Long Beach, California were on strike for a month over pension and medical benefits.

As a result, the C-17 production line was shut down indefinitely, although 3,000 non-union workers
were on the job. The work stoppage was tough at a plant where workers were accustomed to rolling
a new C-17 onto the tarmac every three weeks. The strike was halted in June 2010, as Boeing
offered to pay a $4,000 payout and a 3.4% over the life of the agreement. It also offered an increase
in the basic pension benefit to $79 per month for each year of service, from $70. Boeing may
experience additional work stoppages in the future, which could adversely affect its business. The
company cannot predict how stable its relationships will be with 14 different US labor organizations
and 7 different non-US labor organizations. Union actions at suppliers can also affect the company.
Work stoppages and instability in the company’s union relationships could delay the production and
development of its products, which could strain relationships with customers and cause a loss of
revenues.

H1N1 2009 influenza pandemic

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Boeing Company, The
SWOT Analysis

The 2009 flu pandemic is a global outbreak of influenza A virus, subtype H1N1, referred to as the
‘swine flu’. In early June 2009, the virus has spread globally. As of March 2010, almost all countries
had reported cases, and more than 17,700 deaths among laboratory-confirmed cases had been
reported to the World Health Organization (WHO). The number of laboratory-confirmed cases
significantly underestimates the pandemic's impact. In the US, an estimated 59 million illnesses,
265,000 hospitalizations, and 12,000 deaths had been caused by the 2009 H1N1 virus as of
mid-February 2010.

Although pandemic influenza virus continues to be the predominant circulating influenza virus
worldwide, circulation of seasonal influenza B viruses continue to increase and spread across Asia,
parts of Eastern Europe, and Eastern Africa. In South and Southeast Asia, pandemic influenza virus
circulation persists in most countries. The passenger trips worldwide have been affected by the
outbreak of swine flu, which in turn affected the sales of airline industry. Full-year 2009 demand
statistics for international scheduled air traffic showed the industry ended 2009 with the largest ever
post-war decline. Passenger demand in 2009 was down 3.5%. Boeing is heavily dependent on
commercial airline customers, to generate revenues.The company generates 49.7% of total revenues
from commercial airlines division. In response to events such as H1N1, and the resulting negative
impact on the airline industry or particular airlines, Boeing may suffer from a decline in demand for
all or certain types of its aircraft.

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Boeing Company, The
Top Competitors

TOP COMPETITORS

The following companies are the major competitors of Boeing Company, The

BAE Systems Plc


Lockheed Martin Corporation
Northrop Grumman Corporation
Raytheon Company
EADS
Airbus S.A.S.
General Dynamics Corporation

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Boeing Company, The
Company View

COMPANY VIEW

A statement by W. James McNerney, Chairman President, and Chief Executive Officer of The Boeing
Company is given below. The statement has been taken from the company’s 2009 annual report.

In the end, it was a year of notable achievement, culminating with the historic first flight of the
breakthrough 787 Dreamliner. Through the tireless determination of employees who proudly serve
our customers every day, I believe we’ve turned momentum in our favor for addressing the challenges
that still lie ahead.

2009 Review

During the year, we confronted unprecedented market environments. The global recession and
record-setting declines in passenger and cargo air traffic drove Boeing Commercial Airplanes orders
down, softened its services revenues and slowed wide-body airplane production rates. Boeing
Defense, Space & Security (formerly Integrated Defense Systems) was challenged by the changing
priorities of the U.S. Department of Defense and other agencies as they addressed their own budget
pressures; we felt the impact most in our Army modernization and missile defense programs.

Despite these stresses, and notwithstanding our development-program challenges, our core operating
performance was strong:

– We booked record revenues; retained a large, diverse total backlog (which stood at $316 billion
at year end); and maintained strong liquidity and cash flows.

– Our services businesses and the vast majority of our production programs — including the 737,
777 and our portfolio of military aircraft — generated solid profit margins.

– We delivered 481 commercial airplanes — including the most-ever 737s and 777s in a given year
— along with 121 military aircraft and six satellites.

– Boeing Capital, our financing arm, successfully engaged third-party financiers to support our
customers’ deliveries, while generating solid pre-tax earnings, reducing its portfolio and returning
cash dividends to the company.

We made important progress on several development programs — in delivering the first 777 freighters,
winning full-rate production approval for the EA-18G electronic-warfare aircraft, flying the first
737-based P-8A maritime patrol aircraft and performing well on the Brigade Combat Team
Modernization program (formerly Future Combat Systems). However, a reclassification of costs on
the 787 program and higher costs on the 747-8 (due in part to difficult market conditions) significantly
affected our overall financial results. By year’s end, however, our team had made substantial progress
on these programs, too. Both airplanes are now in flight testing and are steadily reducing risk as
they move through the certification process.

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Boeing Company, The
Company View

Preparing for an Eventual Rebound

With two tough years behind us, and our financial strength and competitive strategies intact, we
enter 2010 with growing confidence about the future. Yet we are acutely aware that this is no time
for complacency. We must execute exceptionally well, support our customers better every day and
preserve our financial position in a tenuous economy. Our basic challenge is to balance the financial
with the strategic; it is to produce the short-term results that will enable us to pursue long-term growth
objectives.

Although the global economy shows signs of improvement, we believe it will take some time for
economic indicators to rebound significantly. Fortunately, our discipline in setting commercial airplane
production rates and diversifying our customer base during the recent up-cycle is paying off. We
ended 2009 with Commercial Airplanes’ backlog holding strong at more than 3,300 firm orders valued
at $250 billion. We believe the strength of this backlog is sufficient to keep our production lines full
until an expected recovery in order activity in 2012. The commercial airplane market remains a
substantial long-term growth opportunity, and we are strongly positioned for the eventual rebound.

At the same time, we anticipate a continued flattening and reprioritization of U.S. defense budgets,
given the size of the federal deficit and spending increases in other areas. Defense markets outside
the U.S. are expanding, however, as more countries are making market- and technology-based
decisions on defense and security products. That has created huge opportunities for Boeing.
International sales have grown from just 7 percent of total defense revenues in 2004 to 15 percent
in 2009. Over the next five years, we expect international sales to increase to as much as a quarter
of defense and security revenues. Given these market conditions and our commitments to our
customers, we have set clear priorities for 2010 and beyond:

Deliver on Our Development Programs

Our top priority is to deliver on the incredible promise of our major development programs, starting
with the 787 Dreamliner, which accounts for nearly 40 percent of our contracted backlog.

Made mostly with composites rather than metals, the 787 is the most important new airplane since
the Boeing 707 at the dawn of the Jet Age, half a century ago. The Boeing 787 marks a major
advance in fuel efficiency. It will soon become known as the world’s most comfortable passenger
jet — with the lightest environmental footprint in its class. It will connect scores of new city-pairs
around the globe and change the way airplanes are made through the rest of this century.

While we have clearly experienced unforeseen difficulties in this program, including last year’s
delayed first flight, the 787 remains the best-selling new airplane in history, with approximately 850
orders from 56 customers around the world.

The innovation brought to life in the 787 should separate us from our competitors for many years to
come — and in ways that reach beyond the 787 itself. We already have applied key elements of
that innovation to the 747-8, which entered flight testing in February 2010. With 108 total orders on
the books, including 76 for the freighter version and a second major passenger-airline order secured

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Company View

at the end of 2009, the outlook for this airplane and its unmatched efficiency remains solid despite
temporary weakness in the demand for very large airplanes.

As testing of both airplanes continues, their production ramp-ups are also progressing. We plan to
deliver our first 787 and 747-8 Freighter late this year, and our first passenger variant of the 747-8
in the fourth quarter of 2011.

Even as our Commercial Airplanes production programs continue to perform well, improving our
performance on development programs remains an intense focus. We have incorporated lessons
learned from our setbacks and are strengthening ourselves where we need to do so — particularly
in our program management and engineering organizations, processes and leadership.

We have also taken steps to reduce risk in our supply chain. We have brought certain work back
inside Boeing, and we have increased visibility and coordination across all suppliers with new
information technology tools. Through the purchase of Vought and Global Aeronautica facilities in
North Charleston, South Carolina, and the establishment of a 787 final assembly facility there, we
will also improve our long-term competitiveness and reduce the risk of production interruptions for
our customers.

Accelerate the Repositioning of Our Defense Business

No other company possesses a more complete range of technical capabilities in defense, space
and security than Boeing.

Over the years, this side of our business has consistently delivered strong operating performance
and had great success in capturing new and follow-on contracts. Through a series of acquisitions
over the past two years, we have been reshaping our capabilities in anticipation of shifting customer
needs.

Our focus here is three-fold: extend our existing lines of business, capture a healthy share of
international defense and services opportunities and move aggressively into high-growth adjacencies
(both civilian and government) with investments in cyber-security, intelligence and surveillance,
unmanned systems, logistics command and control, energy solutions and infrastructure services.

In 2009, we made progress on all three fronts. We added either U.S. or international orders for
several existing programs, including the C-17, F/A-18 and Chinook, as well as 27 major services
and support contracts. We also had key unmanned systems and cyber-security wins and won three
Smart Grid demonstration awards from the U.S. Department of Energy, where we will endeavor to
apply our capability in large-scale systems integration to the creation of a more efficient,
environmentally progressive and secure power-distribution system. And we became the sole finalist
as delivery partner for the United Kingdom’s Future Logistic Information Systems program.

Expand Our International Advantage

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Company View

Our international relationships, reputation and experience are among this company’s strongest
competitive advantages. And our opportunity is large and growing: More than 80 percent of our
current Commercial Airplanes backlog will go to international customers, and a big percentage of
future growth in Defense, Space & Security will come from international markets. So we must continue
to address market opportunities as one company — with a global team that broadens and deepens
our relationships with customers, governments, nongovernmental organizations, technology centers,
industry partners and communities. This approach resulted in recent multi-billion-dollar defense
sales to Australia, India, Japan, the Republic of Korea, Qatar, Saudi Arabia, the United Arab Emirates
and the United Kingdom. But we’ve only scratched the surface of how much we can achieve as we
compete for new business in 2010 and beyond.

Grow Our Services Businesses

In 2009, our services businesses accounted for more than $13 billion of revenue. Defense services
earned double-digit margins and grew its top line 18 percent. Commercial services also maintained
double-digit margins even as it experienced marketplace realities that brought its revenue down 6
percent. Meanwhile, both services businesses have been improving customer satisfaction and
reducing costs by sharing infrastructure, logistics, training and technology in key areas. Both also
have worked together to integrate acquisitions that are making meaningful financial contributions in
a difficult market while sowing seeds of growth that will flourish when today’s struggling commercial
markets revive.

Drive Innovation Through Focused R&D

We have made excellent progress in aligning our technology investments with our overall business
strategies and managing them centrally. In 2009, our enterprise technology team found hundreds
of millions of dollars in synergies that will allow us to spend once, reap multiple benefits and generate
greater impact from the company’s substantial investment in research and development.

Last year we also strengthened the role of Boeing Research & Technology, our central research
arm, and consolidated our multiple test-and-evaluation teams into a single companywide organization
— Boeing Test & Evaluation, which is responsible for all of our flight and laboratory testing.

This consolidation and alignment allows us to eliminate redundancies while expanding capabilities
to speed new products to market.

Maintain Our Financial Strength

In 2009, employee teams across the company rose to the challenge of improving productivity through
Lean+ and our other growth-and-productivity initiatives. That focus, along with disciplined cash
management, helped Boeing generate $5.6 billion of operating cash flow while at the same time
enabling significant investments in programs (such as the 787 and 747-8) that will grow our business
in the years ahead. We also issued $5 billion of corporate debt at very attractive rates.

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Boeing Company, The
Company View

In starting 2010 with more than $11 billion of cash and marketable securities, Boeing has sufficient
liquidity to continue investing in our development efforts and growth strategies — while navigating
ongoing market uncertainties. And we have renewed our commitment to manage our finances just
as tightly this year as we did last.

Empower a New Generation of Leaders

I believe we have the best overall team in the industry. But our goal is to develop an even better
team for the future. So we have proactively moved promising leaders into key positions based on
how well they perform their jobs, develop their own teams, act with integrity and model the company’s
Leadership Attributes (chart the course, set high expectations, inspire others, find a way, live the
Boeing values and deliver results). We will continue to develop and promote leaders on this basis,
stretching ourselves to make Boeing a better company with each passing day.

Corporate Citizenship

Boeing and its people continue to make steady progress in protecting the environment and helping
to meet vital needs in communities all around the world.

We remain on track to achieve aggressive five-year targets for 25-percent improvements in


greenhouse-gas emissions intensity, energy efficiency, recycling rates and hazardous waste at our
major manufacturing facilities.

Our team also showed tremendous generosity of spirit throughout the global recession. In total,
Boeing, its employees and The Boeing Company Charitable Trust contributed more than $142 million
— and employees also volunteered many hours of their time and expertise — to help improve lives
and communities worldwide in 2009.

In Closing

These are challenging times for most businesses. They are challenging for us. The people of Boeing
have been tested. And we have pulled together. I believe the actions we are taking today will make
this company even more competitive for decades to come. We are energized, focused on shared
objectives and ready to take advantage of the tremendous opportunities that call out for this company’s
unique strengths. I am honored to lead the Boeing team as we strive to make this the strongest,
best and best integrated aerospace-based company in the world — for today and tomorrow.

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Boeing Company, The
Locations and Subsidiaries

LOCATIONS AND SUBSIDIARIES


Head Office
Boeing Company, The
100 North Riverside Plaza
Chicago
Illinois 60606 1596
USA
P:1 312 544 2000
http://www.boeing.com

Other Locations and Subsidiaries

Boeing Australia Boeing Canada Operations Limited


Level 10 99 Murray Park Road
Exchange House Winnipeg
10 Bridge St Manitoba
Sydney R3J 3M6
New South Wales 2000 CAN
AUS

Boeing International Corporation India Pvt Boeing Aerostructures Australia Pty Limited
Ltd 226 Lorimer St
3rd Floor Port Melbourne VIC 3207
DLF Centre AUS
Sansad Marg
New Delhi 110001
IND

Boeing France Boeing International Corporation


75 rue du Faubourg Saint - Honore Lenne strabe 9
75008 Paris 10785 Berlin
FRA DEU

Boeing International Corporation Boeing International Corporation, Israel


Piazza Sallustio 4 Berkowitz Street
24 00187 Rome Tel Aviv
ITA Israel 64238
ISR

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Boeing Company, The
Locations and Subsidiaries

Boeing (China) Investment Co., Ltd. Boeing UK Ltd.


Gong Ti North Road 25 Victoria Street
Chaoyang District London SW1H 0EX
Beijing No. 2 A 16-storey Tower A GBR
Pacific Century 100027
CHN

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