Leading international defense contractor, with a portfolio of diverse, high-priority programs and a substantial order backlog of £39.7 billion. Generally favorable defense industry credit characteristics. Good overall financial profile with track record of solid free cash flow generation and strong financial flexibility. Potential for additional acquisitions. Operating risks inherent in large defense projects. Likelihood that growth of defense spending in most markets will slow in the coming years. The ratings on the U.K.-headquartered defense contractor BAE Systems PLC reflect Standard&Poor's Ratings Services' view of BAE's strong competitive positions in the global defense market through a portfolio of diverse high-priority programs. BAE designs, develops, and manufacturers a wide range of land combat vehicles and armaments, defense electronics, submarines, surface
