Major defense company, with a portfolio of diverse, high-priority programs and a substantial order backlog; Defense operations should have further opportunities, despite likely slowdown in future spending levels in the U.S., an important market for BAE Systems PLC; and Moderate balance sheet debt and good liquidity. Low profitability; Continued tight internal controls and focus needed to improve cost and schedule performance of complex programs; and Substantial pension deficit. The ratings on Farnborough, U.K.-based BAE Systems PLC are based on its strong competitive positions in the global defense market, an industry with generally favorable credit characteristics, and good liquidity, offset by low profitability and a sizable pension deficit. BAE Systems is a major supplier of military aircraft, defense electronics, submarines and
