Global Aerospace and Defense (A&D) Sector Financial Performance Study2014

Profitability outpaced revenue growth globally$62.6 Billion

Commercial aerospacegrew earnings

15.7%

Defense companies grew earnings

3.6%

+ $5 Billion / +8.8%growth, a record performance companies

50 showed an improvement in operating margins in 2013 compared to 2012

50

2013 Operating Profits

Commercial aerospace growth slowed from “ultra-fast” to “very fast”

0.4% growth

to 2.04 million2.03companies

reported anincrease inthe numberof employees

companiesreported an increase inthe numberof employees

European A&D companiesreported a 3.2% increasein employment numbers

1.3% decline in the U.S. companies

49% 61%

Total global employment remained flat

Only 3 of the top 20U.S. defense contractors experienced revenue growth in

Top 20 U.S. defense contractors’ revenues declined $5.8 Billion (-2.5%) in 2013

$38 Billion (+16.1%) 178 additional aircrafts delivered

2012

Revenue increased

Out of

$706 Billion

revenues grew tolargest percentageincrease in the past five years

2nd

2009 2010

2

011

20

12

2013

+$21

2013

Revenues grewat a slower ratein 2013 comparedto 2012

+3.1%

2012

+5.9%

2013 Revenues

Billion

The Deloitte Touche Tohmatsu Limited’s (DTTL) Global Manufacturing Industry group analyzed the 2013 financial performance of 100 major global aerospace and defense (A&D) companies using information from public company filings and press releases. The following is a summary of key financial indicators.

$28 Billion (+9.8%) 85 additionalaircraft delivered

2013

Revenue increased

comparedto 8 in and 10

in

2013 2012

milliongrowth

2013 2012 2011

100

U.S. basedA&D companies accounted for 59% 60%

While Europeanheadquartered companiesrepresented

U.S. companies still dominate A&D sectors

of totalglobal revenues

2013 201234% 33%2013 2012

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A&D sector growth in Europe exceeded the U.S

5.4% revenue growth in Europe vs. 1.3% revenue growth in the U.S.

European A&D companies lagged the U.S. companies in profitability

European companies experienced 3.6%decline in earnings in 2013

compared to a 11.6% increase in earnings for the U.S. companies

UnitedStates

11.0% 10.0%

Europe

Europe still lags the U.S. in profit margin performance

Industry Free cashflow increasedby 6.2%

Industry Book-to-bill ratio increased 17.6% to 1.38x 1.18x

$47Billion

$50Billion

2013 2012 2013 2012

A&D sector share prices outpaced global equity indices

U.S. A&D companiesshare prices rose 39.4%31.8% for S&P 500

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2013

2013

European A&D companiesoutpaced the STOXX 600 index, 41.4% to 17.3%

2012

2012Operating margins

5.6% 6.2%2013 2012

Operating margins

UnitedStates

Europe