Annual Funding Notice

Annual Funding Notice Employee Benefits Plan Years Ending in 2009 A22193W

Foreword The Employee Retirement Income Security Act of 1974 (ERISA) sets forth requirements applicable to furnishing annual funding notices. The Pension Protection Act of 2006 (PPA) has amended Section 101(f) of ERISA to now require administrators of all defined benefit plans that are subject to title IV of ERISA to provide an annual funding notice to the Pension Benefit Guaranty Corporation (PBGC), to each plan participant and beneficiary, and to each labor organization representing such participants or beneficiaries. This new requirement is a replacement for the Summary Annual Report for Pension Plans. Also included on this Summary page are how to request a copy of the Annual Report and get more information about this notice. We have included standard information on the benefit payments guaranteed by the PBGC and the summary of rules governing termination of single-employer plans on the next page as it applies to all the plans in this booklet. Right to Request a Copy of the Annual Report A pension plan is required to file with the US Department of Labor an annual report (i.e., Form 5500) containing financial and other information about the plan. Copies of the annual report are available from the US Department of Labor, Employee Benefits Security Administration s Public Disclosure Room at 200 Constitution Avenue, NW, Room N-1513, Washington, DC 20210, or by calling 202.693.8673. Or you may obtain a copy of the Plan s annual report by making a written request to the Annual Funding Notice Coordinator, The Boeing Company, P.O. Box 3707, MC 11-57, Seattle, WA 98124-2207 or go to the Boeing Web site at http://active.boeing.com/companyoffices/ empinfo/benefits/news/pension_fund_2009.pdf. The annual reports as of December 31, 2009 will be available by September 15, 2010. Please note there will be a charge of 25 cents per page excluding the schedule H to obtain a hardcopy of the 5500 return. Benefit Payments Guaranteed by the PBGC If a single-employer pension plan terminates without enough money to pay all benefits, the PBGC will take over the plan and pay pension benefits through its insurance program. Most participants and beneficiaries receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits that are not guaranteed. The PBGC pays pension benefits up to certain maximum limits. The maximum guaranteed benefit is $4,500 per month, or $54,000 per year, payable in the form of a straight life annuity, for a 65-year-old person in a plan that terminates in 2009. The maximum benefit may be reduced for an individual who is younger than age 65. The maximum benefit will also be reduced when a benefit is provided to a survivor of a plan participant. The PBGC guarantees basic benefits earned before a plan is terminated, which includes: n pension benefits at normal retirement age; n most early retirement benefits; n annuity benefits for survivors of plan participants; and n disability benefits for a disability that occurred before the date the plan terminated. The PBGC does not guarantee certain types of benefits: n The PBGC does not guarantee benefits for which you do not have a vested right when a plan terminates, usually because you have not worked enough years for the company. n The PBGC does not guarantee benefits for which you have not met all age, service, or other requirements at the time the plan terminates. n Benefit increases and new benefits that have been in place for less than one year are not guaranteed. Those that have been in place for less than five years are only partly guaranteed. n Early retirement payments that are greater than payments at normal retirement age may not be guaranteed. For example, a supplemental benefit that stops when you become eligible for Social Security may not be guaranteed. n Benefits other than pension benefits, such as health insurance, life insurance, death benefits, vacation pay, or severance pay, are not guaranteed. n The PBGC generally does not pay lump sums exceeding $5,000. Even if certain benefits are not guaranteed, participants and beneficiaries still may receive some of those benefits from the PBGC depending on how much money the terminated plan has and how much the PBGC collects from the employer. i A22193W

Summary of Rules Governing Termination of Single-Employer Plans Employers can end a pension plan through a process called plan termination. There are two ways an employer can terminate its pension plan. The employer can end the plan in a standard termination but only after showing the PBGC that the plan has enough money to pay all benefits owed to participants. The plan must either purchase an annuity from an insurance company (which will provide you with lifetime benefits when you retire) or, if your plan allows, issue one lump-sum payment that covers your entire benefit. Before purchasing your annuity, your plan administrator must give you advance notice that identifies the insurance company (or companies) that your employer may select to provide the annuity. The PBGC s guarantee ends when your employer purchases your annuity or gives you the lump-sum payment. If the plan is not fully funded, the employer may apply for a distress termination if the employer is in financial distress. To do so, however, the employer must prove to a bankruptcy court or to the PBGC that the employer cannot remain in business unless the plan is terminated. If the application is granted, the PBGC will take over the plan as trustee and pay plan benefits, up to the legal limits, using plan assets and PBGC guarantee funds. Under certain circumstances, the PBGC may take action on its own to end a pension plan. Most terminations initiated by the PBGC occur when the PBGC determines that plan termination is needed to protect the interests of plan participants or of the PBGC insurance program. The PBGC can do so if, for example, a plan does not have enough money to pay benefits currently due. Where to Get More Information For more information about this notice, you may e-mail the Annual Funding Notice Coordinator at annualfundingnotice@boeing.com or call Boeing TotalAccess at 1-866-473-2016. Hearing-impaired callers can access TTY/TDD services by calling 1-800-755-6363. For identification purposes, the official plan number and the plan sponsor s employer identification number or EIN are located on the page of your plan within this booklet. For more information about the PBGC and benefit guarantees, go to PBGC s web site, www.pbgc.gov, or call PBGC toll-free at 1-800-400-7242 (TTY/TDD users may call the Federal relay service toll free at 1-800-877-8339 and ask to be connected to 1-800-400-7242). ii A22193W

Contents The Boeing Company Employee Retirement Plan (001)............................................ 2 The Pension Value Plan for Employees of The Boeing Company (029)............................... 4 Boeing North American Retirement Plan (048)................................................... 6 Employee Retirement Income Plan of McDonnell Douglas Corporation Hourly East Plan (MDC-003).... 8 Employee Retirement Income Plan of McDonnell Douglas Corporation Hourly West Plan (MDC-002)... 10 Non-Contributory Retirement Plan (005)....................................................... 12 Boeing Satellite Systems Retirement Plan for Bargained Employees (061)........................... 14 Boeing Satellite Systems Retirement Plan (060)................................................. 16 Retirement Plan for BAO Florida IAM Hourly Employees (013)..................................... 18 Boeing Information Services, Inc. Retirement Plan (017).......................................... 20 Boeing Corinth Retirement Plan (037)........................................................ 22 Boeing Oak Ridge Retirement Plan (022)..................................................... 24 Aviall, Inc., Retirement Plan (A-001)........................................................... 26 1 A22193W

The Boeing Company Employee Retirement Plan Introduction This notice includes important funding information about The Boeing Company Employee Retirement plan ( the Plan ), EIN 91-0425694, Plan No. 001 for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). As required by law, this notice also includes general information regarding pension plan terminations and benefits guaranteed by the Pension Benefit Guaranty Corporation, which is found elsewhere in this booklet. Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $12,790,886,698 $14,051,284,696 $13,909,027,877 b. Funding Standard Carryover Balance $2,877,156,384 $3,700,529,702 $3,616,254,452 c. Prefunding Balance $0 $0 $0 d. Net Plan Assets (a) (b) (c) = (d) $9,913,730,314 $10,350,754,994 $10,292,774,425 3. Plan Liabilities $10,641,210,063 $12,451,801,256 $12,474,883,993 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 93.2% 83.1% 82.5% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 120.2% 112.8% 111.5% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $13,560,933,466. On this same date, the Plan s liabilities were $14,068,364,109. Participant Information The total number of participants in the plan as of the Plan s valuation date was 150,726. Of this number, 53,062 were active participants, 68,341 were retired or separated from service and receiving benefits, and 29,323 were retired or separated from service and entitled to future benefits. 2 A22193W

Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits. The funding policy of the Plan is to contribute an amount each year that is at least equal to the minimum required contribution under federal law and that is tax-deductible under the Internal Revenue Code. Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The objective of the investment strategy is to reduce volatility related to pension liabilities and achieve a competitive investment return at an appropriate level of diversification. In order to reduce the volatility, the Company increased its allocation to fixed income as well as lengthened the duration of its fixed income holdings. The Company also diversified its allocation to alternative investments including private equity, real estate, real assets, hedge funds, and global strategies. In accordance with the Plan s investment policy, the Plan s assets were allocated among the following categories of investments, as of the end of the Plan Year. These allocations are percentages of total assets: Asset Allocation Percentage 1. Interest-bearing cash 0.4% 2. U.S. Government securities 10. 3. Corporate debt instruments (other than employer securities): All other 4. Corporate stocks (other than employer securities): Common 17.9% 16.9% 0.5% 25.9% 5. Partnership/joint venture interests 8.2% 6. Real estate (other than employer real property) 0.4% 7. Loans (other than to participants) 8. Participant loans 9. Value of interest in common/collective trusts 6. 10. Value of interest in pooled separate accounts 0.8% 11. Value of interest in master trust investment accounts 12. Value of interest in 103-12 investment entities 0.9% 13. Value of interest in registered investment companies (e.g., mutual funds) 5. 14. Value of funds held in insurance co. general account (unallocated contracts) 15. Employer-related investments: Employer securities Employer real property 16. Buildings and other property used in plan operation 17. Other 3.7% Events With Material Effect on Assets or Liabilities Federal law requires the plan administrator to provide in this notice a written explanation of events, taking effect in the current plan year, which are expected to have a material effect on plan liabilities or assets. For the Plan Year beginning on January 1, 2010 and ending on December 31, 2010, there are no events expected to have such an effect. 3.4% 3 A22193W

The Pension Value Plan for Employees of The Boeing Company Introduction This notice includes important funding information about The Pension Value Plan for Employees of The Boeing Company, EIN 43-0400674, Plan No. 029 ( the Plan ) for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). As required by law, this notice also includes general information regarding pension plan terminations and benefits guaranteed by the Pension Benefit Guaranty Corporation, which is found elsewhere in this booklet. Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. Assets and liabilities from the MDC Salaried Employee Retirement Income Plan were merged into the Pension Value Plan on December 31, 2007. The figures as of January 1, 2007 in the table that follows are prior to the plan merger. Figures as of January 1, 2008 and January 1, 2009 reflect the merger. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $21,506,437,599 $23,097,388,366 $18,152,303,673 b. Funding Standard Carryover Balance $4,250,552,559 $5,885,672,705 $5,004,107,403 c. Prefunding Balance $0 $0 $0 d. Net Plan Assets (a) (b) (c) = (d) $17,255,885,040 $17,211,715,661 $13,148,196,270 3. Plan Liabilities $16,396,990,538 $19,473,934,618 $15,535,936,298 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 105.2% 88.4% 84.6% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 131.2% 118.6% 116.8% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $22,114,815,940. On this same date, the Plan s liabilities were $22,855,537,603. Participant Information The total number of participants in the plan as of the Plan s valuation date was 194,771. Of this number, 89,883 were active participants, 58,519 were retired or separated from service and receiving benefits, and 46,369 were retired or separated from service and entitled to future benefits. 4 A22193W

Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits. The funding policy of the Plan is to contribute an amount each year that is at least equal to the minimum required contribution under federal law and that is tax-deductible under the Internal Revenue Code. Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The objective of the investment strategy is to reduce volatility related to pension liabilities and achieve a competitive investment return at an appropriate level of diversification. In order to reduce the volatility, the Company increased its allocation to fixed income as well as lengthened the duration of its fixed income holdings. The Company also diversified its allocation to alternative investments including private equity, real estate, real assets, hedge funds, and global strategies. In accordance with the Plan s investment policy, the Plan s assets were allocated among the following categories of investments, as of the end of the Plan Year. These allocations are percentages of total assets: Asset Allocations Percentage 1. Interest-bearing cash 0.4% 2. U.S. Government securities 10. 3. Corporate debt instruments (other than employer securities): All other 4. Corporate stocks (other than employer securities): Common 17.8% 16.8% 0.5% 25.8% 5. Partnership/joint venture interests 8.1% 6. Real estate (other than employer real property) 0.4% 7. Loans (other than to participants) 8. Participant loans 9. Value of interest in common/collective trusts 6. 10. Value of interest in pooled separate accounts 0.8% 11. Value of interest in master trust investment accounts 12. Value of interest in 103-12 investment entities 0.9% 13. Value of interest in registered investment companies (e.g., mutual funds) 5. 14. Value of funds held in insurance co. general account (unallocated contracts) 0.5% 15. Employer-related investments: Employer securities Employer real property 16. Buildings and other property used in plan operation 17. Other 3.7% Events With Material Effect on Assets or Liabilities Federal law requires the plan administrator to provide in this notice a written explanation of events, taking effect in the current plan year, which are expected to have a material effect on plan liabilities or assets. For the Plan Year beginning on January 1, 2010 and ending on December 31, 2010, there are no events expected to have such an effect. 3.3% 5 A22193W

Boeing North American Retirement Plan Introduction This notice includes important funding information about the Boeing North American Retirement Plan, EIN 91-0425694, Plan No. 048 ( the Plan ) for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). As required by law, this notice also includes general information regarding pension plan terminations and benefits guaranteed by the Pension Benefit Guaranty Corporation, which is found elsewhere in this booklet. Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $4,689,030,434 $5,352,385,593 $5,633,490,813 b. Funding Standard Carryover Balance $501,605,543 $596,960,369 $552,741,082 c. Prefunding Balance $0 $0 $0 d. Net Plan Assets (a) (b) (c) = (d) $4,187,424,891 $4,755,425,224 $5,080,749,731 3. Plan Liabilities $4,027,437,702 $5,072,202,674 $5,481,236,618 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 104. 93.8% 92.7% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 116.4% 105.5% 102.8% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $4,400,754,863. On this same date, the Plan s liabilities were $4,728,623,721. Participant Information The total number of participants in the plan as of the Plan s valuation date was 91,257. Of this number, 848 were active participants, 60,956 were retired or separated from service and receiving benefits, and 29,453 were retired or separated from service and entitled to future benefits. 6 A22193W

Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits. The funding policy of the Plan is to contribute an amount each year that is at least equal to the minimum required contribution under federal law and that is tax-deductible under the Internal Revenue Code. Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The objective of the investment strategy is to reduce volatility related to pension liabilities and achieve a competitive investment return at an appropriate level of diversification. In order to reduce the volatility, the Company increased its allocation to fixed income as well as lengthened the duration of its fixed income holdings. The Company also diversified its allocation to alternative investments including private equity, real estate, real assets, hedge funds, and global strategies. In accordance with the Plan s investment policy, the Plan s assets were allocated among the following categories of investments, as of the end of the Plan Year. These allocations are percentages of total assets: Asset Allocations Percentage 1. Interest-bearing cash 0.4% 2. U.S. Government securities 10. 3. Corporate debt instruments (other than employer securities): All other 4. Corporate stocks (other than employer securities): Common 17.7% 16.8% 0.5% 25.7% 5. Partnership/joint venture interests 8.1% 6. Real estate (other than employer real property) 0.4% 7. Loans (other than to participants) 8. Participant loans 9. Value of interest in common/collective trusts 6. 10. Value of interest in pooled separate accounts 0.8% 11. Value of interest in master trust investment accounts 12. Value of interest in 103-12 investment entities 0.9% 13. Value of interest in registered investment companies (e.g., mutual funds) 5. 14. Value of funds held in insurance co. general account (unallocated contracts) 0.7% 15. Employer-related investments: Employer securities Employer real property 16. Buildings and other property used in plan operation 17. Other 3.7% Events With Material Effect on Assets or Liabilities Federal law requires the plan administrator to provide in this notice a written explanation of events, taking effect in the current plan year, which are expected to have a material effect on Plan liabilities or assets. For the Plan Year beginning on January 1, 2010 and ending on December 31, 2010, there were no events expected to have such an effect. 3.3% 7 A22193W

Employee Retirement Income Plan of McDonnell Douglas Corporation Hourly East Plan Introduction This notice includes important funding information about Employee Retirement Income Plan of McDonnell Douglas Corporation Hourly East Plan, EIN 43-0400674, Plan No. 003 ( the Plan ) for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). As required by law, this notice also includes general information regarding pension plan terminations and benefits guaranteed by the Pension Benefit Guaranty Corporation, which is found elsewhere in this booklet. Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the Plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $ 1,392,357,115 $1,518,796,115 $1,531,962,520 b. Funding Standard Carryover Balance $ 370,893,577 $454,862,222 $428,204,984 c. Prefunding Balance $0 $0 $0 d. Net Plan Assets (a) (b) (c) = (d) $1,021,463,538 $1,063,933,893 $1,103,757,536 3. Plan Liabilities $ 1,169,567,221 $1,407,399,555 $1,363,675,463 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 87.3% 75.6% 80.9% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 119. 107.9% 112.3% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $1,416,765,449. On this same date, the Plan s liabilities were $1,514,739,367. Participant Information The total number of participants in the plan as of the Plan s valuation date was 20,654. Of this number, 5,605 were active participants, 10,054 were retired or separated from service and receiving benefits, and 4,995 were retired or separated from service and entitled to future benefits. 8 A22193W

Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits. The funding policy of the Plan is to contribute an amount each year that is at least equal to the minimum required contribution under federal law and that is tax-deductible under the Internal Revenue Code. Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The objective of the investment strategy is to reduce volatility related to pension liabilities and achieve a competitive investment return at an appropriate level of diversification. In order to reduce the volatility, the Company increased its allocation to fixed income as well as lengthened the duration of its fixed income holdings. The Company also diversified its allocation to alternative investments including private equity, real estate, real assets, hedge funds, and global strategies. In accordance with the Plan s investment policy, the Plan s assets were allocated among the following categories of investments, as of the end of the Plan Year. These allocations are percentages of total assets: Asset Allocations Percentage 1. Interest-bearing cash 0.4% 2. U.S. Government securities 9.7% 3. Corporate debt instruments (other than employer securities): All other 4. Corporate stocks (other than employer securities): Common 17.2% 16.2% 0.5% 25. 5. Partnership/joint venture interests 7.9% 6. Real estate (other than employer real property) 0.4% 7. Loans (other than to participants) 8. Participant loans 9. Value of interest in common/collective trusts 5.8% 10. Value of interest in pooled separate accounts 0.7% 11. Value of interest in master trust investment accounts 12. Value of interest in 103-12 investment entities 0.8% 13. Value of interest in registered investment companies (e.g., mutual funds) 4.8% 14. Value of funds held in insurance co. general account (unallocated contracts) 3.8% 15. Employer-related investments Employer securities Employer real property 16. Buildings and other property used in plan operation 17. Other 3.6% Events With Material Effect on Assets or Liabilities Federal law requires the plan administrator to provide in this notice a written explanation of events, taking effect in the current plan year, which are expected to have a material effect on Plan liabilities or assets. For the Plan Year beginning on January 1, 2010 and ending on December 31, 2010, there are no events expected to have such an effect. 3.2% 9 A22193W

Employee Retirement Income Plan of McDonnell Douglas Corporation Hourly West Plan Introduction This notice includes important funding information about the Employee Retirement Income Plan of McDonnell Douglas Corporation Hourly West Plan, EIN 43-0400674, Plan No. 002, ( the Plan ) for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). As required by law, this notice also includes general information regarding pension plan terminations and benefits guaranteed by the Pension Benefit Guaranty Corporation which is found elsewhere in this booklet. Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $1,566,869,046 $1,720,510,950 $1,633,840,472 b. Funding Standard Carryover Balance $498,670,239 $607,046,238 $579,948,783 c. Prefunding Balance $0 $0 $0 d. Net Plan Assets (a) (b) (c) = (d) $1,068,198,807 $1,113,464,712 $1,053,891,689 3. Plan Liabilities $1,269,273,420 $1,531,366,365 $1,558,646,646 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 84.2% 72.7% 67.6% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 123.4% 112.4% 104.8% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $1,577,763,013. On this same date, the Plan s liabilities were $1,648,634,379. Participant Information The total number of participants in the plan as of the Plan s valuation date was 32,831. Of this number, 5,032 were active participants, 16,485 were retired or separated from service and receiving benefits, and 11,314 were retired or separated from service and entitled to future benefits. 10 A22193W

Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits. The funding policy of the Plan is to contribute an amount each year that is at least equal to the minimum required contribution under federal law and that is tax-deductible under the Internal Revenue Code. Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The objective of the investment strategy is to reduce volatility related to pension liabilities and achieve a competitive investment return at an appropriate level of diversification. In order to reduce the volatility, the Company increased its allocation to fixed income as well as lengthened the duration of its fixed income holdings. The Company also diversified its allocation to alternative investments including private equity, real estate, real assets, hedge funds, and global strategies. In accordance with the Plan s investment policy, the Plan s assets were allocated among the following categories of investments, as of the end of the Plan Year. These allocations are percentages of total assets: Asset Allocations Percentage 1. Interest-bearing cash 0.4% 2. U.S. Government securities 10. 3. Corporate debt instruments (other than employer securities) All other 4. Corporate stocks (other than employer securities): Common 17.9% 16.9% 0.5% 25.9% 5. Partnership/joint venture interests 8.2% 6. Real estate (other than employer real property) 0.4% 7. Loans (other than to participants) 8. Participant loans 9. Value of interest in common/collective trusts 6. 10. Value of interest in pooled separate accounts 0.8% 11. Value of interest in master trust investment accounts 12. Value of interest in 103-12 investment entities 0.9% 13. Value of interest in registered investment companies (e.g., mutual funds) 5. 14. Value of funds held in insurance co. general account (unallocated contracts) 15. Employer-related investments: Employer securities Employer real property 16. Buildings and other property used in plan operation 17. Other 3.7% Events With Material Effect on Assets or Liabilities Federal law requires the plan administrator to provide in this notice a written explanation of events, taking effect in the current plan year, which are expected to have a material effect on plan liabilities or assets. For the Plan Year beginning on January 1, 2010 and ending on December 31, 2010, there are no events expected to have such an effect. 3.4% 11 A22193W

Non-Contributory Retirement Plan Introduction This notice includes important funding information about the Non-Contributory Retirement Plan, EIN 91-0425694, Plan No. 005, ( the Plan ) for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). As required by law, this notice also includes general information regarding pension plan terminations and benefits guaranteed by the Pension Benefit Guaranty Corporation, which is found elsewhere in this booklet. Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $477,725,541 $521,934,503 $500,314,727 b. Funding Standard Carryover Balance $147,852,961 $182,738,052 $152,192,870 c. Prefunding Balance $0 $0 0 d. Net Plan Assets (a) (b) (c) = (d) $329,872,580 $339,196,451 $348,121,857 3. Plan Liabilities $374,323,047 $463,567,702 $465,058,855 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 88.1% 73.2% 74.9% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 127.6% 112.6% 107.6% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $485,787,285. On this same date, the Plan s liabilities were $491,854,832. Participant Information The total number of participants in the plan as of the Plan s valuation date was 5,004. Of this number, 1,998 were active participants, 2,683 were retired or separated from service and receiving benefits, and 323 were retired or separated from service and entitled to future benefits. 12 A22193W

Funding & Investment Policies The law requires that every pension plan have a procedure for establishing a funding policy to carry out the plan objectives. A funding policy relates to the level of contributions needed to pay for promised benefits. The funding policy of the Plan is to contribute an amount each year that is at least equal to the minimum required contribution under federal law and that is tax-deductible under the Internal Revenue Code. Once money is contributed to the Plan, the money is invested by plan officials called fiduciaries. Specific investments are made in accordance with the Plan s investment policy. Generally speaking, an investment policy is a written statement that provides the fiduciaries who are responsible for plan investments with guidelines or general instructions concerning various types or categories of investment management decisions. The objective of the investment strategy is to reduce volatility related to pension liabilities and achieve a competitive investment return at an appropriate level of diversification. In order to reduce the volatility, the Company increased its allocation to fixed income as well as lengthened the duration of its fixed income holdings. The Company also diversified its allocation to alternative investments including private equity, real estate, real assets, hedge funds, and global strategies. In accordance with the Plan s investment policy, the Plan s assets were allocated among the following categories of investments, as of the end of the Plan Year. These allocations are percentages of total assets: Asset Allocations Percentage 1. Interest-bearing cash 0.4% 2. U.S. Government securities 10. 3. Corporate debt instruments (other than employer securities) All other 4. Corporate stocks (other than employer securities): Common 17.9% 16.9% 0.5% 25.9% 5. Partnership/joint venture interests 8.2% 6. Real estate (other than employer real property) 0.4% 7. Loans (other than to participants) 8. Participant loans 9. Value of interest in common/collective trusts 6. 10. Value of interest in pooled separate accounts 0.8% 11. Value of interest in master trust investment accounts 12. Value of interest in 103-12 investment entities 0.9% 13. Value of interest in registered investment companies (e.g., mutual funds) 5. 14. Value of funds held in insurance co. general account (unallocated contracts) 15. Employer-related investments: Employer securities Employer real property 16. Buildings and other property used in plan operation 17. Other 3.7% Events With Material Effect on Assets or Liabilities Federal law requires the plan administrator to provide in this notice a written explanation of events, taking effect in the current plan year, which are expected to have a material effect on plan liabilities or assets. For the Plan Year beginning on January 1, 2010 and ending on December 31, 2010, the basic benefit rate increased from $70 to $80 per month for each year of service effective January 1, 2010. This change increased the plan s liabilities as of December 31, 2010 by $31,700,000. 3.4% 13 A22193W

Boeing Satellite Systems Retirement Plan for Bargained Employees Introduction This notice includes important funding information about Boeing Satellite Systems Retirement Plan for Bargained Employees, EIN 91-0425694, Plan No. 061 ( the Plan ). This notice also provides a summary of federal rules governing the termination of single-employer defined benefit pension plans and of benefit payments guaranteed by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. This notice is for the plan year beginning January 1, 2009 and ending December 31, 2009 ( Plan Year ). Funding Target Attainment Percentage The funding target attainment percentage of a plan is a measure of how well the plan is funded on a particular date. This percentage for a plan year is obtained by dividing the Plan s Net Plan Assets by Plan Liabilities on the Valuation Date. In general, the higher the percentage, the better funded the plan. The Plan s funding target attainment percentage for the Plan Year and 2 preceding plan years is shown in the chart below, along with a statement of the value of the Plan s assets and liabilities for the same period. 2009 2008 2007 1. Valuation Date January 1, 2009 January 1, 2008 January 1, 2007 2. Plan Assets a. Total Plan Assets $206,541,268 $228,902,671 $224,619,131 b. Funding Standard Carryover Balance $47,478,813 $63,714,005 $53,507,499 c. Prefunding Balance $0 $0 $0 d. Net Plan Assets (a) (b) (c) = (d) $159,062,455 $165,188,666 $171,111,632 3. Plan Liabilities $187,107,801 $218,813,460 $219,072,632 4. At-Risk Liabilities not applicable not applicable not applicable 5. Funding Target Attainment Percentage (2d)/(3) 85. 75.5% 78.1% 6. Funding Target Attainment Percentage based on Total Plan Assets (2a)/(3) 110.4% 104.6% 102.5% Credit Balances Credit balances were subtracted from the Plan s assets before calculating the funding target attainment percentage in the chart above. While pension plans are permitted to maintain credit balances (called funding standard carryover balance or prefunding balance ) for funding purposes, such credits may not be taken into account when calculating a plan s funding target attainment percentage. A plan might have a credit balance, for example, if in a prior year an employer made contributions at a level in excess of the minimum level required by law. Generally, the excess payments are counted as credits and may be applied in future years toward the minimum level of contributions a plan sponsor is required by law to make to the plan in those years. Fair Market Value of Assets Asset values in the chart above are actuarial values, not market values. Market values tend to show a clearer picture of a plan s funded status as of a given point in time. However, because market values can fluctuate daily based on factors in the marketplace, such as changes in the stock market, pension law allows plans to use actuarial values for funding purposes. While actuarial values fluctuate less than market values, they are estimates. As of December 31, 2009, the fair market value of the Plan s assets was $214,988,191. On this same date, the Plan s liabilities were $232,358,582. Participant Information The total number of participants in the plan as of the Plan s valuation date was 2,584. Of this number, 972 were active participants, 654 were retired or separated from service and receiving benefits, and 958 were retired or separated from service and entitled to future benefits. 14 A22193W