Annual Disclosure of Plan Investment Information

Transcription

1 Annual Disclosure of Plan Investment Information The Boeing Company Voluntary Investment Plan August 30, 2014* *Revised January 1, 2015 Copyright 2015 Boeing. All rights reserved

2 Introduction This document summarizes information about The Boeing Company Voluntary Investment Plan (VIP) as of December 31, It is intended for the sole purpose of complying with the disclosure requirements for participant-directed individual account plans under the Employee Retirement Income Security Act of 1974, as amended (ERISA), and intended to supplement the detailed information about your VIP investment options provided in the VIP s summary plan description (SPD) and the Fund Fact Sheets. If there is a conflict between the information in this document and the official VIP document, the official VIP document will govern. For any updates related to information provided in this document, the My Retirement Income website or the Boeing Savings Plan Information web page are your sources of information. Please read all these materials carefully before you decide how to invest your VIP account balance. The VIP allows eligible employees to contribute a portion of their base pay into their accounts on a pretax, aftertax, and/or Roth* basis. Certain employees may also be eligible to defer their incentive payments to the plan on a pretax and/or Roth* basis. In addition, certain employees may be eligible for employer matching contributions or automatic company contributions. Employer matching contributions may be made in cash, which will be invested according to your investment elections, or, for eligible nonunion employees and employees represented by a union that has so negotiated, in the form of company stock at the discretion of The Boeing Company (the Company ). Please see the SPD for further information regarding eligibility for company contributions. The VIP offers a variety of investment options and lets participants choose how to invest their account balance. If you participate in the VIP, you will receive quarterly benefit statements that will include account values, unit prices, number of units, fund balances, fees charged to your account, and other information relating to your account, which will be made available 15 business days after the end of each calendar quarter. You also will receive an annual benefit statement in January of each year. And, you have access to your VIP account through the My Retirement Income website. Your Boeing Savings Plan quarterly and annual benefit statements are available in the Account Statements section of your account at the My Retirement Income home page. You can also generate a customized statement any time through My Retirement Income or you can, at anytime and for no charge, request a quarterly or annual benefit statement to be mailed to your home by calling TotalAccess at (hearing-impaired callers are encouraged to use the relay service offered by their telephone service provider) and when prompted, say, Savings. The following sections of this document summarize general information about the VIP, including: How to give investment instructions; Restrictions on investment instructions; Importance of diversification; Voting and tender rights in the Boeing Stock Fund; Designated investment alternatives; Designated investment manager; Fees for investment management and administrative services; and Other fees. Beginning on page 7, you will find the Annual Comparative Investment Disclosure, which provides the following: Historical performance information for VIP investment options; and Information about fees and expenses you will pay if you invest in a VIP investment option. *Eligible employees may elect Roth contributions beginning January 5, You are an eligible employee if you are nonunion or an employee represented by a union that has negotiated this change

3 How to Give Investment Instructions The VIP permits participants to direct the investment of their account balance and, with limited exceptions (as noted below), make changes at any time, as long as the market is open. You can change your investment choices at any time. When you enroll as a participant in the VIP or have an account established under your name as a beneficiary or an alternate payee, you may direct your investments by accessing the My Retirement Income website and performing the following actions: Log on to using your BEMSID and your Boeing TotalAccess password. On the TotalAccess home page, click My Retirement Benefits, and then click Manage My Retirement Income. Subsidiary participants: Log on to using your BEMSID and your Boeing TotalAccess password, and then click My Retirement Benefits and follow the same instructions listed above. You may also direct your investments by calling Boeing TotalAccess at (hearing-impaired callers are encouraged to use the relay service offered by their telephone service provider) and when prompted, say, Savings. You will need your BEMSID and your Boeing TotalAccess password to access your account. Restrictions on Investment Instructions Insider Trading Insider trading rules apply to transferring funds into or out of the Boeing Stock Fund. This means that Boeing employees cannot transfer funds into or out of the Boeing Stock Fund if they are aware of material nonpublic information about Boeing. See PRO-12, Buying and Selling Securities Insider Trading, and the VIP SPD for additional information regarding insider trading. Short-term Redemption Rules The purpose of the VIP s trading rules is to limit the impact on fund performance due to frequent trading. These rules provide participants with investment flexibility while maintaining adequate protection against short-term trading on all funds. To discourage short-term trading, which can hurt long-term fund performance, all VIP funds charge a 1.5 percent redemption fee on the value of units sold within 15 full calendar days of their purchase. Redemption fees are paid to the funds that experience short-term trading to help offset brokerage commission, market impact, and other costs associated with short-term trading. Also, the Plan Administrator reserves the right to limit your trading if it is determined to be excessive. This restriction has no impact on your investment elections directing contributions (including contributions made through automatic enrollment), loan payments, and rollover contributions. Units purchased through these methods will be excluded from the redemption fee calculation and will not be counted as purchases for the purpose of applying the redemption fee. This restriction also has no impact on transactions such as withdrawals, distributions, or new loans. Units sold through these methods are excluded from the redemption fee calculation

4 The Boeing Stock Fund Importance of Diversification To help achieve long-term retirement security, you should give careful consideration to the benefits of a wellbalanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or another particular security, to perform poorly. If you invest more than 20 percent of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk. In deciding how to invest your retirement savings, you should take into account all your assets, including any retirement savings outside the Plan. No single approach is right for everyone because, among other factors, individuals have different financial goals, different time horizons for meeting their goals, and different tolerances for risk. Therefore, you should carefully consider the rights described in this notice and how these rights affect the amount of money that you invest in company stock through the VIP. It is also important to periodically review your investment portfolio, your investment objectives, and the investment options under the VIP to help ensure that your retirement savings will meet your retirement goals. Voting and Tender Rights in the Boeing Stock Fund Voting Rights You are entitled to exercise voting rights for your interest in the Boeing Stock Fund allocated to your savings account under the VIP. Your allocation is a proportionate share of the Boeing Stock held in the Boeing Stock Fund based on the amount of your investment. You do not have direct ownership of your allocated shares of Boeing Stock; the shares are registered in the name of a trustee and held for your benefit. Before each shareholders meeting, you will receive a proxy statement and a form so that you can indicate how you would like your allocated shares to be voted. The trustee will vote your share allocation according to your instructions. If you do not exercise your voting rights, the trustee for the VIP will vote your allocated shares in the same manner and proportion as those instructions received from other VIP participants who voted, in accordance with the VIP. Tender Rights A tender offer is an offer to buy stock, usually at a premium over the current market price. As defined in the VIP, a tender offer must be one that requires a filing with the U.S. Securities and Exchange Commission. If there is a tender offer for Boeing Stock, you will be notified of the terms and conditions of the offer. You will be given forms and instructions on how to tender, or offer, your allocated shares. The trustee will vote the shares held in the Boeing Stock Fund allocated to your account in accordance with your instructions. The trustee will reject the tender offer with regard to any unallocated shares or shares for which instructions are not received, in accordance with the VIP. Designated Investment Alternatives Please refer to the Annual Comparative Investment Disclosure, starting on page 7, for information about designated investment alternatives available to VIP participants. The funds are subject to change from time to time. The Boeing Savings Plan Information web page is your source of information on available funds at: Designated Investment Manager The VIP offers a Professional Management program available to nonunion participants and certain unionrepresented participants through Financial Engines Advisors, L.L.C. This program is an optional service that provides personal guidance, investment strategy, and ongoing account management for a quarterly fee that is deducted directly from your account. There is no charge or obligation for an initial consultation, and the service can be canceled prospectively at any time. Please refer to the Participant Transaction Activity Fees table below for detailed information about Professional Management fees

5 Fees for Investment Management and Administrative Services Investment management fees and administrative fees (which include expenses for recordkeeping, trust and custody, audit, and other third-party and internal administrative expenses directly related to the operation of the plan and trust) will reduce the rate of return on your investments. Please refer to the Fees and Expenses table (see pages 10 and 11) for detailed information about investment management and administrative fees. Other Fees In addition to the investment management and administrative fees, separate fees may be deducted from your account if you elect certain transactions, such as a plan loan, or you elect certain service programs. Participant transaction activity fees are displayed on your quarterly benefit statement, which is made available in your account in the secure My Retirement Income website. You may access your account information at any time by logging onto the My Retirement Income website to review your most current balance or recent benefit statement. Please refer to the Participant Transaction Activity Fees table below for detailed information about specific transaction fees. Participant Transaction Activity Fees Short-term Redemption Fee for All Funds Loan Fee Returned Check Fee Expedited Delivery Fee Financial Engines Advisors, L.L.C. Online Advice Investment Advice Professional Management Quarterly Fee* A short-term redemption fee of 1.5 percent is applied to the proceeds of the value of the units sold on any transfer that occurs 15 or fewer calendar days from the date the units are purchased (excluding contributions, loan repayments, or rollover contributions). These fees do not benefit Boeing or Xerox they are paid directly to each respective fund, benefiting all investors in the fund by helping offset brokerage commission, market impact, and other costs associated with short-term trading. A $50 nonrefundable loan application fee. A $20 fee will be assessed for any payment, either by check, money order, or direct debit, that is returned to Xerox as unpaid. A $25 expedited check delivery fee. The Online Advice service is a personalized online retirement planning tool that is available to all VIP participants who are eligible* for this no-fee service. *Eligible participants include nonunion employees and employees represented by a union that provides for participation in the service. The Professional Management Service is an optional investment management service that provides personalized investment management advice. It is available to eligible** VIP participants. An eligible** VIP participant who elects to use this service is charged a quarterly fee according to the following schedule: Plan Balance Quarterly Fee Annual Fee First $100, % 0.30% Next $50, % 0.20% Over $150, % 0.10% For example, if your account balance is $138,000, your fee would be approximately $94 per quarter or $376 per year. * Professional Management Annual Fee schedule effective since May 1, **Eligible participants include nonunion employees and employees represented by a union that provides for participation in the service

6 All the participant transaction activity fees listed above, except for the short-term redemption fees, are charged based on the following fund order depending on your lineup of investments and where they fall in the priority order. For example, if you have money invested in the Balanced Index Fund and the Russell 2000 Index Fund, because the Balanced Index Fund is listed higher on the table, fees will be charged against that fund before they would be charged against the Russell 2000 Index Fund. Individual transaction fees actually charged and deducted from a participant s account can be viewed from your VIP account at My Retirement Income and are also shown on your most recent quarterly benefit statement. Lifecycle Retirement Fund Lifecycle 2020 Fund Lifecycle 2025 Fund Lifecycle 2030 Fund Lifecycle 2035 Fund Lifecycle 2040 Fund Lifecycle 2045 Fund Lifecycle 2050 Fund Lifecycle 2055 Fund* Bond Market Index Fund Balanced Index Fund S&P 500 Index Fund International Index Fund Russell 2000 Index Fund Stable Value Fund Global Bond Fund Diversified Real Asset Fund U.S. Large Companies Fund Global Equity Fund International Companies Fund U.S. Small/Mid Companies Fund Science & Technology Fund Boeing Stock Fund *In December 2014 the Lifecycle 2015 Fund was phased out and merged with the Lifecycle Retirement Fund, and a new lifecycle fund, the Lifecycle 2055 Fund, was offered in December

7 The Boeing Company Voluntary Investment Plan ( VIP ) Annual Comparative Investment Disclosure August 30, 2014 This Annual Comparative Investment Disclosure ( Annual Investment Disclosure ) includes important information to help you compare the investment options under the VIP. If you want additional information about your investment options, you can go to the specific Internet website, empinfo/benefits/savings_plans.page, or you can contact Boeing TotalAccess at (hearing-impaired callers are encouraged to use the relay service offered by their telephone service provider) and request Savings. A free paper copy of the information that is available on the website can be obtained by contacting Boeing TotalAccess at (hearing-impaired callers are encouraged to use the relay service offered by their telephone service provider) and when prompted, say, Savings. Document Summary The Annual Investment Disclosure has two parts. Part I consists of performance information for VIP investment options. This part shows you how well the investments have performed in the past. Part II shows you the fees and expenses you will pay if you invest in an investment option. Part I. Performance Information Table 1 focuses on the performance of investment options that do not have a fixed or stated rate of return. Table 1 shows how these options have performed over time and allows you to compare them with a widely recognized benchmark for the same time periods. Past performance does not guarantee how the investment option will perform in the future. Your investment in these options could lose money. Information about an option s principal risks is available on the Fund Fact Sheet link on the Boeing Savings Plan Information web page at: Information in the Annual Investment Disclosure is as of December 31, 2013, unless otherwise noted. In addition to the widely recognized benchmarks for each investment option published here, many of the funds have customized benchmarks. The customized benchmarks are tailored to be more indicative of performance in relation to a fund s actual portfolio holdings and strategies. Information about the customized benchmarks and more recent performance return data, which is updated quarterly, can be found on the Fund Fact Sheets web page provided above. Table 1 Variable Return Investments Name/Type of Option Average Annual Total Return as of Benchmark 12/31/13 1 yr 5 yr 10 yr Since Inception 6 1 yr 5 yr 10 yr Since Inception 6 Equity Funds S&P 500 Index Fund/ U.S. Large Cap Index 32.36% 17.97% 7.42% N/A 32.39% 17.94% 7.41% N/A Russell 2000 Index Fund/ U.S. Small Cap Index U.S. Large Companies Fund/ U.S. Large Cap U.S. Small/Mid Companies Fund/ U.S. Small/Mid Cap International Index Fund 1 / Global All Cap Ex-U.S. Index S&P 500 Index 38.80% 20.37% 9.17% N/A 38.82% 20.08% 9.07% N/A Russell 2000 Index 34.34% N/A N/A 13.61% 33.11% N/A N/A 15.24% Russell 1000 Index 40.10% N/A N/A 15.78% 36.80% N/A N/A 16.61% Russell 2500 Index 15.29% 11.41% 6.51% N/A 15.82% 13.46% 7.91% N/A MSCI ACWI IMI ex-u.s. Index

8 Table 1 Variable Return Investments Name/Type of Option International Companies Fund 1 / Global All Cap Ex-U.S. Global Equity Fund/ Global All Cap Average Annual Total Return as of Benchmark 12/31/13 1 yr 5 yr 10 yr Since Inception 6 1 yr 5 yr 10 yr Since Inception % 9.11% N/A 3.22% 15.82% 13.46% N/A 4.60% MSCI ACWI IMI ex-u.s. Index 26.92% N/A N/A 10.84% 23.55% N/A N/A 10.19% Science & Technology Fund/ Technology Global All Cap Bond Funds Bond Market Index Fund/ U.S. Fixed Income Index Global Bond Fund/ Global Fixed Income s Lifecycle Retirement Fund 2 / Lifecycle 2015 Fund 3, 4 / Lifecycle 2020 Fund 2 / Lifecycle 2025 Fund 3 / Lifecycle 2030 Fund 2 / Lifecycle 2035 Fund 3 / Lifecycle 2040 Fund 2 / Lifecycle 2045 Fund 3 / Lifecycle 2050 Fund 2 / 42.38% 23.59% 7.53% N/A 34.57% 23.09% 7.92% N/A S&P North American Tech Sector Index 2.09% 4.45% 4.57% N/A 2.02% 4.44% 4.55% N/A Barclays U.S. Aggregate Bond Index 2.76% N/A N/A 4.26% 2.60% N/A N/A 3.55% Barclays Global Aggregate Bond Index 9.12% 10.78% N/A 6.15% 23.55% 15.62% N/A 5.82% 9.74% N/A N/A 9.14% 23.55% N/A N/A 18.27% 11.50% 12.22% N/A 5.62% 23.55% 15.62% N/A 5.82% 13.05% N/A N/A 11.35% 23.55% N/A N/A 18.27% 14.48% 13.55% N/A 5.49% 23.55% 15.62% N/A 5.82% 15.90% N/A N/A 13.33% 23.55% N/A N/A 18.27% 17.47% 14.71% N/A 5.42% 23.55% 15.62% N/A 5.82% 18.67% N/A N/A 15.21% 23.55% N/A N/A 18.27% 19.72% N/A N/A 12.35% 23.55% N/A N/A 11.29%

9 Table 1 Variable Return Investments Name/Type of Option Other Funds Stable Value Fund 5 / U.S. Fixed Income Fund Average Annual Total Return as of Benchmark 12/31/13 1 yr 5 yr 10 yr Since Inception 6 1 yr 5 yr 10 yr 2.18% 2.86% 3.87% N/A 0.07% 0.12% 1.69% N/A Since Inception 6 Balanced Index Fund 1 (S&P 500 Index, International Index, and Bond Market Index) Diversified Real Asset Fund (Treasury Inflation Protected Securities, Equities and Commodities) Boeing Stock Fund/ Employer Stock Fund BofAML U.S. Treasury Bill 3 month 12.76% 10.89% 5.71% N/A 23.55% 15.62% 7.59% N/A 6.60% N/A N/A 1.67% 5.58% N/A N/A 3.40% Barclays U.S year TIPS Index 79.62% 25.64% 12.03% N/A 32.39% 17.94% 7.41% N/A S&P 500 Index 1. As of April 6, 2010, the investment strategy of the fund was redesigned. Therefore, the performance information for periods before April 6, 2010, does not reflect the fund s current investment strategies. For more information regarding this change, please see the March 2010 update to the VIP SPD at: boeing.com/companyoffices/empinfo/benefits/savings/spd/spd_76.pdf. Additional information on the fund s current investment strategies can be found on the Fund Fact Sheets on the web page indicated on page As of April 23, 2012, the 10-year increment lifecycle funds, including the Lifecycle Retirement Fund, were significantly redesigned and customized to more closely reflect Boeing s VIP participant demographics. The investment objectives of the funds did not change, but the fund managers and the allocations among equity and fixed-income investments were changed. The funds performance before April 23, 2012, is a blend of the previous funds performance and the newly redesigned and customized funds performance. For more information, please see the March 2012 update to the VIP SPD at: 3. The five-year increment lifecycle funds were introduced April 23, 2012, and therefore, only have one prior calendar year performance as of December 31, In December 2014 the Lifecycle 2015 Fund was phased out and merged with the Lifecycle Retirement Fund, and a new lifecycle fund, the Lifecycle 2055 Fund, was offered in December For information regarding the new Lifecycle 2055 Fund, please see the Fund Fact Sheets at: 5. The Stable Value Fund seeks to provide preservation of principal and a stable yield over the long term. However, it is not considered a fixed return investment because there is a risk of loss of investment in this fund. The Stable Value Fund has a fixed crediting rate that is reset on a quarterly basis, and the daily equivalent of this quarterly crediting rate is paid daily to fund holders. The fund s performance is not guaranteed. For additional information, please see the Stable Value Fund Fact Sheet on the Fund Fact Sheets web page and the Stable Value Fund Overview on the Boeing Savings Plan Information web page. Both web pages are indicated on page Funds showing Since Inception performance information have been in existence for less than 10 years. Inception dates for those funds can be found on the Fund Fact Sheets at: companyoffices/empinfo/benefits/fund_fact_sheets.page

10 Part II. Fee and Expense Information Table 2 shows the total annual operating expenses for the investment options listed in Table 1. Total annual operating expenses are expenses that reduce the rate of return of the investment option, such as expenses for investment management, recordkeeping, trust and custody, audit, and other third-party and internal administrative expenses directly related to the operation of the plan and trust. Table 2 also shows shareholder-type fees. These are fees in addition to total annual operating expenses. Information in this notice is as of December 31, 2013, unless otherwise noted. Table 2 Fees and Expenses Name/Type of Option Total Annual Operating Expenses 1, 2 Shareholder Type Fees 5 As a percentage Per $1,000 investment Equity Funds S&P 500 Index Fund/ 0.05% $ % short-term redemption fee U.S. Large Cap Index Russell 2000 Index Fund/ 0.07% $ % short-term redemption fee U.S. Small Cap Index U.S. Large Companies Fund/ 0.31% $ % short-term redemption fee U.S. Large Cap U.S. Small/Mid Companies Fund/ 0.69% $ % short-term redemption fee U.S. Small/Mid Cap International Index Fund/ 0.13% $ % short-term redemption fee Global All Cap Ex-U.S. Index International Companies Fund/ 0.63% $ % short-term redemption fee Global All Cap Ex-U.S. Global Equity Fund/ 0.68% $ % short-term redemption fee Global All Cap Science & Technology Fund/ 0.65% $ % short-term redemption fee Technology Global All Cap Bond Funds Bond Market Index Fund/ 0.06% $ % short-term redemption fee U.S. Fixed Income Index Global Bond Fund/ 0.36% $ % short-term redemption fee Global Fixed Income s Lifecycle Retirement Fund 3 / 0.32% $ % short-term redemption fee Lifecycle 2015 Fund 3,4 / 0.33% $ % short-term redemption fee Lifecycle 2020 Fund 3 / 0.35% $ % short-term redemption fee Lifecycle 2025 Fund 3 / 0.36% $ % short-term redemption fee Lifecycle 2030 Fund 3 / 0.37% $ % short-term redemption fee Lifecycle 2035 Fund 3 / 0.38% $ % short-term redemption fee Lifecycle 2040 Fund 3 / 0.38% $ % short-term redemption fee Lifecycle 2045 Fund 3 / 0.38% $ % short-term redemption fee Lifecycle 2050 Fund 3 / 0.39% $ % short-term redemption fee

11 Table 2 Fees and Expenses Name/Type of Option Total Annual Operating Expenses 1, 2 Shareholder Type Fees 5 Other Stable Value Fund/ U.S. Fixed Income Fund Balanced Index Fund (S&P 500 Index, International Index, and Bond Market Index) Diversified Real Asset Fund (Treasury Inflation Protected Securities, Equities and Commodities) Boeing Stock Fund/ Employer Stock Fund As a percentage Per $1,000 investment 0.29% $ % short-term redemption fee 0.07% $ % short-term redemption fee 0.72% $ % short-term redemption fee 0.04% $ % short-term redemption fee 1. Expenses are rounded up or down to the nearest dime. 2. Expenses provided are as of December 31, 2013, and are updated on the quarterly Fund Fact Sheets. If the 2013 fees for any investment fund are updated, it will be reflected on the individual Fund Fact Sheets issued after the Annual Investment Disclosure at: 3. As of April 23, 2012, existing 10-year increment lifecycle funds and the Retirement Fund were redesigned, and the five-year increment lifecycle funds were introduced. All the lifecycle funds were customized to more closely reflect Boeing s VIP participants demographics. For more information, please see the March 2012 Update to the VIP SPD at: 4. In December 2014 the Lifecycle 2015 Fund was phased out and merged with the Lifecycle Retirement Fund, and a new lifecycle fund, the Lifecycle 2055 Fund, was offered in December For information regarding the new Lifecycle 2055 Fund, please see the Fund Fact Sheets at: 5. A short-term redemption fee of 1.5 percent is applied to the proceeds of the value of the units sold on any transfer that occurs 15 or fewer calendar days from the date the units are purchased (excluding contributions, loan repayments, or rollover contributions). These fees do not benefit Boeing or Xerox they are paid directly to each respective fund, benefiting all investors in the fund by helping offset brokerage commission, market impact, and other costs associated with short-term trading. The cumulative effect of fees and expenses can substantially reduce the growth of your retirement savings. Visit the Department of Labor s website for an example showing the long-term effect of fees and expenses at Fees and expenses are only one of many factors to consider when you decide to invest in an option. You may also want to think about whether an investment in a particular option, along with your other investments, will help you achieve your financial goals. For a glossary of investment terms relevant to the investment options under this plan, please visit the Savings Plan Investment Disclosures section on the Boeing Savings Plan Information web page at: com/boeing/companyoffices/empinfo/benefits/savings_plans.page. The VIP Glossary is intended to help you better understand your investment options. The glossary can be found at: For information regarding custom benchmarks that are referenced in the Fund Fact Sheets, please see the Fund Benchmark Glossary at: You may contact the Plan Administrator by writing to the Employee Benefit Plans Committee, The Boeing Company, 100 North Riverside, MC , Chicago, IL

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