Sergey Kravchenko has been president of Boeing Russia/CIS since August 2002 and is based in Moscow.

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1 Backgrounder Boeing in Russia The Boeing Company has maintained a cooperative relationship with Russia and the Commonwealth of Independent States (CIS) since the era of the former Soviet Union. In the 1970s, Boeing was a part of the historic U.S.-Soviet space mission, Apollo-Soyuz, when spacecraft from both countries docked in orbit. Boeing and Russia have long-term partnerships in multiple areas, including aviation, metallurgy, space, engineering and information technology (IT). The company is also committed to a long-term relationship with the Russian aviation industry and with Russian airline operators to provide fleet solutions for the Russian market. In addition, Boeing collaborates with leading Russian and Ukrainian aerospace companies on the International Space Station program. Boeing is one of Russia s largest partners in the areas of innovation and high technology. Boeing places a high value on Russia s intellectual resources of skilled aerospace scientists and engineers and on its long history of aerospace expertise and innovation. The company has an established record of successful investments and partnerships with Russian industry and science. Boeing employees in Russia/CIS work in airplane and services sales, marketing, legal, communications and finance at the Boeing Design Center, the Technical Research Center in Moscow and in field services at various sites. Sergey Kravchenko has been president of Boeing Russia/CIS since August 2002 and is based in Moscow. Technical Activities and Partnerships Boeing Technical Research Center In 1993, Boeing opened the Boeing Technical Research Center (BTRC) in Moscow. Boeing cooperates with leading Russian research institutes to develop new materials for the aerospace industry. More than 600 Russian scientists and IT specialists work on Boeing contracts in flight science, titanium materials and technologies, flight safety training and IT. Boeing Design Center The Boeing Design Center (BDC) in Moscow is the largest design center for computeraided design of aerospace structures outside the United States. The BDC consists of nearly 250 Boeing direct employees managing a team of 1,200 contract engineers from the Russian and Ukrainian engineering companies NIK Research and Engineering Co. and Progresstech, as well as aerospace companies Ilyushin, Sukhoi Aviation Corp. and Khrunichev State Research and Production Space Center. 1

2 The BDC has participated in hundreds of projects in support of the SF, BCF, ER, ER/200LR, LFC, 747-8F/IC, 787-8/-9/-10 Dreamliner as well as several hundred medium-sized and several thousand small engineering projects. Specifically, the BDC supported the design of the BCF, the LR and the ER, including primary structure, interiors and systems. In 2008, more than 400 BDC engineers took part in the development of the Freighter and Intercontinental. The BDC has supported the following 787 Boeing suppliers for detail, assembly and installations design: Spirit AeroSystems, Wichita, Kan., for the 787 nose section (section 41) and pylon; Spirit AeroSystems, Tulsa, Okla., for the 787 fixed leading edge; Boeing Winnipeg, Manitoba, Canada, for the wing-to-body fairing; Boeing Interiors Responsibility Center, Everett, Wash., for the 787 interiors; Goodrich Corporation, Calif., for the nacelle; HdH, Australia, for the spoilers; and Hyde, U.K., for the 747 LCF tooling design. Another 300 Russian engineers helped to complete the design of the 747 LCF. BDC had more than 250 engineers working on the project: complex nose section, interiors, systems, wing-to-body fairing, struts and control surfaces for the wing. BDC had up to 400 engineers in support of and -10 product development: aft fuselage sections, systems, interiors and control surfaces for the wing. In February 2006, DNV s certification agency awarded the Moscow BDC with the ISO9001/AS9100 certificate for Quality Management in the Aerospace Industry. In November 2008 and December 2013, the certificate was successfully extended. DNV audit has been conducted every year since In November 2013, Boeing opened a site in Kiev as part of a global strategy to lay the foundation for increased competitiveness and ensure future growth in the marketplace. More than 200 people currently work for Boeing Ukraine. The Boeing Design Center is a big part of the recently launched 777X program development. Primary structure of fuselage sections as well as leading and trailing wing edges are under BDC responsibility. On top of that, systems and interior design also reside with BDC. Starting in 2013, the Boeing Design Center plays a critical role in Commercial Aviation Services global strategy. More than 300 engineers work day by day to ensure the Boeing global fleet is operational and all repair procedures are well developed. Implementation of a 24/7 operation model for engineering support allows airline customers to minimize the time their fleet is on the ground. Over the next several years, the BDC will continue to provide support to major Boeing Commercial Airplanes nonrecurring programs (787-10, 777X and others) and recurring production and postproduction support. 2

3 Titanium Procurement and Machining Russian titanium producer Verkhnaya Salda Metallurgical Production Association (VSMPO, now VSMPO-AVISMA) is a Boeing partner and supplier. Boeing awarded its first contract to VSMPO in Boeing Commercial Airplanes currently purchases 35 percent of its titanium supply from VSMPO-AVISMA. The companies are performing joint research and development in new alloys. The Boeing VSMPO Innovation Center was established in 2000 to expand cooperation and continue new alloy development. In 2006, Boeing and VSMPO also announced a joint venture agreement for the rough machining of titanium forgings, and the 50/50 equity joint venture Ural Boeing Manufacturing (UBM) opened in July Russian Prime Minister Vladimir Putin and Gary Locke, U.S. Secretary of Commerce, attended the UBM opening ceremony in Moscow. In June 2010, Boeing and VSMPO announced the signing of a new five-year titanium contract extension for Boeing to buy titanium forgings and rough machined titanium forgings from VSMPO for use on Boeing 787, 777 and 737 commercial airplane models. In April 2010, UBM was certified to the international aerospace quality standard AS9100. UBM currently performs rough machining of forgings for Boeing 737, 777 and 787 programs. In 2011, the owners announced that they would expand the capacity of UBM by 30 percent through investment in additional machines to support the 787 program. By the end of 2011, UBM had employed more than 150 people in its 110,000- square-foot (10,219 square meter) manufacturing facility. The Boeing Portland, Ore., fabrication facility and other machining subcontractors perform finish machining. In addition, the titanium machine turnings from UBM are recycled by VSMPO-AVISMA, creating an efficient closed-loop supply chain. In November 2013, Boeing and Rostec State Corp. (partial owner of VSMPO-AVISMA) signed a Memorandum of Understanding on establishing a second UBM joint venture production facility to be built in Urals in the Titanium Valley, Russia. In July 2014, at the Farnborough Airshow, Boeing and VSMPO-AVISMA extended a long-term agreement for the supply of titanium mill products including rolled sheet, billet and plate until In August 2015 at the Moscow Airshow, it was announced that VSMPO-AVISMA would be a key supplier for the Boeing 777X program. In December 2016, Boeing and VSMPO-AVISMA announced the expansion of Ural Boeing Manufacturing. The partners plan to open a new facility in 2018, which will be based in the Titanium Valley special economic zone in the Sverdlovsk region. The facility will focus on the machining of titanium forgings for Boeing Commercial Airplanes programs including the new 737 MAX models, 787 family and 777X, with production on that program scheduled to begin in In July 2017, Boeing, VSMPO-AVISMA and special economic zone Titanium Valley announced that Boeing and VSMPO-AVISMA joint venture Ural Boeing Manufacturing 3

4 became a resident of SEZ Titanium Valley and will be able to use all special economic zone preferences. Boeing has also been pursuing ways to use Russian aluminum capabilities. The company will eventually receive plates and forgings through Alcoa s plants and is currently supporting efforts to get the sites qualified. In 2007, Boeing signed an aluminum-plate supply agreement with Kamensk Uralsky Metallurgical Works (KUMZ), an all-purpose aluminum mill focused on the aerospace market with a history of supplying the Russian military and commercial markets. KUMZ remains a qualified source of aluminum for Boeing. Boeing is a strategic partner of the United Aircraft Corporation (UAC), based in Moscow, and is working closely with the UAC on development of new aviation technologies, including advanced composite and titanium materials and structures. Boeing has completed its contract with UAC on the Sukhoi Superjet program, a regional jet with up to 100 seats. EDTO Certification (Formerly ETOPS) for Cross-Polar Routes Boeing helped Russia certify to Extended Diversion Time Operation (EDTO), allowing the use of new cross-polar routes. Leading Western airlines have made thousands of scheduled flights along these routes, saving money, fuel and flight time and significantly reducing carbon emissions. Since 2000, Russia has allowed airlines to use its airspace, enabling international flights to cross its polar region. Passengers previously had to stop in Europe or Japan to reach those destinations. As part of this, Boeing surveyed the sparsely populated Siberian region, identifying Russian airfields there that qualified as suitable alternative airports to meet EDTO. The availability of the Russian polar routes also has proved essential for sales of the 777 Longer Range and Extended Range models and 787 Dreamliner to Russian airlines. Boeing Commercial Airplanes Some 64 Russian/CIS airlines and customers including Aeroflot, Air Astana, Azerbaijan Airlines (AZAL), S7 Airlines, Silk Way Airlines, UTair Aviation and Volga- Dnepr Airlines operate more than 450 Boeing airplanes (737 Classics, Next- Generation 737s, 757s, 767s, 777s, 787s, MD-11SFs, 747 passenger jets and 747 freighters). The fleets are a combination of new and used equipment mainly on operating leases from international lessors. Boeing has a roughly 50 percent share of the Western-built fleet market. According to the 2017 Current Market Outlook (CMO), Russia/CIS will need about 1,230 new airplanes, valued at nearly $140 billion, over the next 20 years. 4

5 Boeing Defense, Space & Security Shuttle-Mir, International Space Station and Space Exploration Since 1992, Boeing has cooperated closely with the Russian space industry as a partner and contractor to the leading Russian space enterprises Rocket and Space Corporation (RSC) Energia and Khrunichev State Research and Production Space Center on the most visible and important space programs. As the lead integrator for NASA on such programs as the Shuttle-Mir and the International Space Station (ISS), Boeing successfully completed multimillion dollar contracts with RSC Energia on the procurement of the Russian Androgynous Peripheral Attach System and its integration on the shuttle Atlantis in support of the joint docking missions to the Russian space station Mir. Boeing also supported a procurement contract with Khrunichev Space Center on the first module of the ISS. In November 2013, Boeing and Khrunichev Space Center signed a contract on the ISS Functional Cargo Block (FGB) module checkout and service life extension, demonstrating their commitment to further deepen cooperation in space research. Under the contract, Khrunichev designs, produces, tests and delivers critical components to ensure safe and effective operation of the FGB until Under contract with Boeing, RSC Energia produced the primary structure for the International Docking Adapter (IDA) for the U.S. segment of the ISS. IDA will retrofit docking ports on the U.S. segment for acceptance of new U.S. crew vehicles to the ISS. Over the past five years, Boeing has signed contracts with Russian companies in excess of $142 million for ISS activities. Boeing Investment in Russia/CIS Boeing activity in Russia contributes more than $600 million annually in direct support of Russia s economy. This is a part of the company s 30-year partnership program launched in 1991 and Boeing s commitment to invest $27 billion: about $18 billion in titanium purchases, $5 billion in design and engineering services, and $4 billion in other services and materials, including those used for space programs. Boeing has created more than 2,000 high-technology jobs in Russia and has become one of the largest Western customers for exported Russian intellectual services, including engineering, research and development, and IT. Boeing Global Services Boeing Global Services delivers complete, cost-competitive service solutions for commercial, defense and space customers, regardless of their equipment's original manufacturer. With engineering, digital analytics, supply chain and training support spanning across both the government and commercial service offerings, Boeing Global Services is uniquely positioned to keep passengers flying. For more than 10 years, 5

6 Boeing has been supporting the market of Russia and CIS by providing support and services to the airlines in the region. Boeing Russian Flight Training Campus In June 2016, Boeing opened a state-of-the-art Flight Training Center in the Skolkovo Innovation Center in Moscow. Aviation personnel training in the facility includes pilot recurrent training for 737 Classic, Next-Generation 737 and 777; and custom-made courses. Annually, the facility trains more than 1,000 aviation specialists. Currently, it features two full-flight simulators: Next-Generation 737 and 777. There is space for two more simulators to be installed, as needed. The building comprises three floors of flight and maintenance training, as well as research and development. In July 2017, Boeing and the Federal Air Transport Agency of Russia, announced that Boeing s Flight Training Center received an Aviation Training Center certificate and became fully operational. Boeing and the Federal Air Transport Agency also agreed to perform joint research works in the field of flight safety. The Boeing 2017 Pilot & Technician Outlook estimates that the CIS, including Russia, will require 22,000 new commercial airline pilots and 25,000 new technicians over the next two decades, supporting 1,1230 new commercial airplanes by The new training campus in Russia is a significant investment in the region s aviation safety and will reduce travel times for airline crews and the costs of sending students for training. Global Corporate Citizenship (GCC) Boeing has supported more than 50 charitable projects in Russia focusing on health and human services (50 percent), education (45 percent), and arts and culture (5 percent). High-standard education is a top priority for Russia. The nation has a growing need for highly qualified professionals with a good educational background, especially in high-tech industries, to help improve the competitiveness of Russian intellectual potential. In the education area, Boeing focuses on improving the quality of math and science education and on fostering an entrepreneurial mindset among young people. The Boeing-supported Moscow School for Continuous Mathematical Education provides programs that include engaging middle school students in advanced math studies and research work, introducing motivated and gifted students to math academic circles at an early age, providing extracurricular opportunities to secondary school students and providing distance-learning opportunities for students from Russia s remote regions. The Junior Achievement organization works with Russian schools and educators through a system of market-oriented training and hands-on business activities and events to increase student interest in the benefits of a market economy, free enterprise and civil society. In health and human services, GCC-Russia supports a number of long-term programs that address priority community needs: the Rehabilitation Center for Children With 6

7 Cancer and Blood Diseases (Children of Russia Foundation), speech therapy for children with Down syndrome (Downside Up), teaching independent living skills and social adjustment for orphaned children (Kidsave International, Nadezhda Fund) and many others. Boeing Russia philanthropy efforts include cash grants, in-kind donations and employee volunteerism. Sergey Kravchenko serves on the governance board of Junior Achievement Russia. Key emphasis is given to measuring the outcome of every GCCsupported initiative, which helps in determining the ultimate effect of Boeing investments. Until recently, most of the Boeing charitable programs had been concentrated in Moscow and a few other Russian cities. Increased allocation in 2008 made it possible to diversify Boeing Russia charitable efforts geographically including more needy communities in Russian regions other than Moscow and expand Boeing GCC outreach to the CIS countries Ukraine, Uzbekistan and Kazakhstan. It also enabled a Boeing joint venture in the Urals (UBM) to establish community relations as a good corporate citizen by providing assistance to the local children s hospital. The goal for 2017 is to develop current partnerships and further expand the Boeing GCC footprint to CIS countries to include all GCC focus areas: education, health and human services, environment, arts and culture and civic services. Contact: Elena Alexandrova elena.alexandrova@boeing.com # # # Last revised September