Strong competitive position in global defense markets through a portfolio of diverse high-priority programs. Good customer, program, and geographic diversification. Support from favorable characteristics of the defense industry. Risks of cuts for defense procurement spending, particularly in the U.S. Consistent generation of positive free cash flow, which we anticipate will continue. Low capital intensity, with capital expenditures at about 3% of sales. Positive discretionary cash flow (free operating cash flow less regular dividends), but an announced £1 billion three-year share buyback program could lead to higher leverage. A substantial pension deficit that requires ongoing cash contributions. The stable outlook on U.K.-headquartered defense contractor BAE Systems PLC reflects Standard&Poor's Ratings Services' expectation that BAE will maintain fairly steady operating
