The ratings on BAe Systems PLC reflect the group's dominant position in the European defense industry, with a strong track record of profitability, proven expertise in the fast-growing electronics defense segment, and a strong backlog of £41 billion at year-end 2000. BAe is involved in the two most attractive European aircraft manufacturing platforms--Airbus Integrated Company and the Eurofighter military jet program--although both are now majority controlled by the group's competitor EADS N.V. (A/Stable/A-1). The ratings also acknowledge, however, the gradual deterioration of BAe's financial profile. The group's recent announcement that its Nimrod and Hawk programs are facing combined extraordinary costs of about £400 million ($570.3 million) over the 2000-2001 period comes on top of the debt-financed acquisitions in 2000 of
