Table of Contents 1. Introduction 12 1.1. What is this Report bout? 12 1.2. Definitions 12 1.3. Summary Methodology 14 1.4. About Strategic Defence Intelligence 15 2. Executive Summary 16 3. Market Attractiveness and Emerging Opportunities 18 3.1. Current Market Scenario 19 3.1.1. Primary Threat Perception 19 3.1.2. Military Doctrine & Strategy 20 3.1.3. Military Fleet Size 29 3.1.4. Procurement Programs 35 3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023 39 3.1.6. Social, Political and Economic Environment & Support for Defense Projects 40 3.1.7. Political and Strategic Alliances 41 3.2. Defense Market Size Historical and Forecast 43 3.2.1. US defense expenditure expected to increase at a CAGR of 1.98% over the forecast period 43 3.2.2. Defense spending drivers - initiatives to retain military edge, subsequent military modernization, instability in Middle East and rivalry with Russia & China 46 3.2.3. Defense expenditure as a percentage of GDP estimated to decline over the forecast period 48 3.2.4. Per capita defense spending projected to decline over the forecast period 50 3.3. Analysis of Defense Budget Allocation 52 3.3.1. Total Department of Defense (DoD) budget forecasted to grow at a CAGR of 1.98% 52 3.3.2. Share of revenue expenditure expected to increase over the forecast period 54 3.3.3. US defense capital expenditure expected to increase at a CAGR of 3.95% over the forecast period 56 3.3.4. Navy to receive the major allocation of the defense budget over the forecast period 60 3.3.5. Allocation for defense expenditure on army expected to increase over the forecast period 62 3.4. Homeland Security Market Size and Forecast 69 3.4.1. The US homeland security expenditure to reach US$84.2 billion by 2023 69 3.4.2. Prevention of terrorism, securing and managing borders, safeguarding cyberspace and disaster management to drive homeland security expenditure over the forecast period 71 3.4.3. The nation is at “highly affected” category of terrorism 73 3.4.4. The US faces high level of threats from terrorist organizations 74 3.4.5. The US has a terrorism index score of 5.4 76 3.5. Benchmarking with Key Global Markets 77 3.5.1. The US will dominate global military spending over the forecast period 77 3.5.2. US defense budget is much higher than other leading spenders 79 3.5.3. US is one of the top defense spenders in terms of expenditure as a percentage of GDP 80 3.6. Market Opportunities: Key Trends and Growth Stimulators 81 3.6.1. Top Defense Market Sectors by Value (US$ Million) - Projections over 2018-2023 81 3.6.2. Land Based - C4ISR 82 3.6.3. Critical Infrastructure Protection (CIP) - Physical Security 84 3.6.4. Critical Infrastructure Protection (CIP) - Network Security 85 3.6.5. Multirole Aircraft 86 3.6.6. Airborne - C4ISR 87 4. Defense Procurement Market Dynamics 88 4.1. Import Market Dynamics 90 4.1.1. US primarily imports defense equipment to build strategic relations 90 4.1.2. Defense imports expected to increase over the forecast period 91 4.1.3. The Germany and UK dominated the US defense imports during the historic period 92 4.1.4. Aircraft account for majority of arms imports 93 4.2. Export Market Dynamics 94 4.2.1. US arms exports are driven by political and economic factors 94 4.2.2. Arms exports expected to increase in the period 2019-2023 96 4.2.3. US defense exports to increase during the forecast period 97 4.2.4. Aircraft are the most exported defense equipment 98 4.2.5. The US maintains controlled defense export policy 99 5. Industry Dynamics 100 5.1. Five Forces Analysis 100 5.1.1. Bargaining power of Supplier: Low to Medium 101 5.1.2. Bargaining power of Buyer: High 101 5.1.3. Barrier to entry: Medium 101 5.1.4. Intensity of rivalry: Low to high 101 5.1.5. Threat of Substitution: Low to high 102 6. Market Entry Strategy 103 6.1. Market Regulation 103 6.1.1. The US defense industry is open to FDI 103 6.1.2. No offset policy exists in the US 104 6.1.3. US arms trade is heavily regulated 104 6.2. Market Entry Route 105 6.2.1. Budgeting Process 105 6.2.2. Procurement Policy & Process 107 6.2.3. Foreign OEMs enter the market through the acquisition of domestic defense companies 111 6.2.4. Joint product development programs, an attractive market entry route 111 6.2.5. Formation of partnerships with domestic defense firms provide good market entry opportunities 111 6.2.6. Direct sale of defense equipment provides foreign OEMs with an opportunity to enter the market 112 6.3. Key Challenges 113 6.3.1. Decreasing economies of scale and defense inflation 113 7. Competitive Landscape and Strategic Insights 114 7.1. Competitive Landscape Overview 114 7.2. Domestic Public Companies 117 7.2.1. Lockheed Martin Corp.: overview 117 7.2.2. Lockheed Martin Corp.: products 117 7.2.3. Lockheed Martin Corp.: recent announcements and strategic initiatives 122 7.2.4. Lockheed Martin Corp.: alliances 126 7.2.5. Lockheed Martin Corp.: recent contract wins 128 7.2.6. Lockheed Martin Corp.: financial analysis 134 7.2.7. Raytheon: overview 136 7.2.8. Raytheon: products 136 7.2.9. Raytheon: recent announcements and strategic initiatives 136 7.2.10. Raytheon: alliances 139 7.2.11. Raytheon: recent contract wins 141 7.2.12. Raytheon: financial analysis 147 7.2.13. General Dynamics: overview 149 7.2.14. General Dynamics: products 149 7.2.15. General Dynamics: recent announcements and strategic initiatives 150 7.2.16. General Dynamics: alliances 152 7.2.17. General Dynamics: recent contract wins 153 7.2.18. General Dynamics: financial analysis 158 7.2.19. Boeing: overview 160 7.2.20. Boeing: products 160 7.2.21. Boeing: recent announcements and strategic initiatives 161 7.2.22. Boeing: alliances 163 7.2.23. Boeing: recent contract wins 165 7.2.24. Boeing: financial analysis 169 7.2.25. L-3 Technologies, Inc.: overview 171 7.2.26. L-3 Technologies Inc.: products 171 7.2.27. L-3 Technologies, Inc.: recent announcements and strategic initiatives 172 7.2.28. L-3 Technologies Inc.: alliances 174 7.2.29. L-3 Technologies Inc.: recent contract wins 175 7.2.30. L-3 Technologies: financial analysis 178 7.2.31. Northrop Grumman Corp.: overview 180 7.2.32. Northrop Grumman Corp.: products 180 7.2.33. Northrop Grumman Corp.: recent contracts and strategic initiatives 180 7.2.34. Northrop Grumman Corporation: alliances 182 7.2.35. Northrop Grumman Corp.: recent contract wins 184 7.2.36. Northrop Grumman Corp.: financial analysis 188 7.2.37. Science Application International Corp. (SAIC): overview 190 7.2.38. Science Application International Corp. (SAIC): products 190 7.2.39. Science Application International Corp. (SAIC): recent contracts and strategic initiatives 191 7.2.40. Science Application International Corp. (SAIC): alliances 192 7.2.41. Science Application International Corp. (SAIC): recent contract wins 193 7.2.42. Science Application International Corp. financial analysis 197 7.2.43. Honeywell International Inc.: overview 199 7.2.44. Honeywell International Inc.: products and services 199 7.2.45. Honeywell International Inc.: recent announcements and strategic initiatives 200 7.2.46. Honeywell International Inc.: alliances 201 7.2.47. Honeywell International Inc.: recent contract wins 202 7.3. Domestic Private Companies 205 7.3.1. Sikorsky Aircraft: overview 205 7.3.2. Sikorsky Aircraft: products 205 7.3.3. Sikorsky Aircraft: recent announcements and strategic initiatives 205 7.3.4. Sikorsky Aircraft: alliances 207 7.3.5. Sikorsky Aircraft: recent contract wins 209 7.3.6. General Electric Aviation: overview 212 7.3.7. General Electric Aviation: products 212 7.3.8. General Electric Aviation: recent contracts and strategic initiatives 213 7.3.9. General Electric Aviation: alliances 214 7.3.10. General Electric Aviation: recent contract wins 215 7.3.11. Bell: overview 217 7.3.12. Bell: products and services 217 7.3.13. Bell: recent announcements and strategic initiatives 217 7.3.14. Bell Helicopter Textron, Inc.: alliances 218 7.3.15. Bell Helicopter Textron, Inc.: recent contract wins 219 7.3.16. Textron Marine and Land Systems: overview 221 7.3.17. Textron Marine and Land Systems: products 221 7.3.18. Textron Marine and Land Systems: recent announcements and strategic initiatives 222 7.3.19. Textron Marine and Land Systems: alliances 223 7.3.20. Textron Marine and Land Systems: recent contract wins 224 8. Business Environment and Country Risk 226 8.1. Economic Performance 226 8.1.1. GDP Per Capita 226 8.1.2. GDP, Current Prices 227 8.1.3. Exports of goods and services in local currency 228 8.1.4. Imports of goods and services in local currency 229 8.1.5. Gross National Disposable Income (US$ Billion) 230 8.1.6. Market Capitalization of Listed Companies 231 8.1.7. Market Capitalization of Listed Companies (% of GDP) 232 8.1.8. Government Cash Surplus/Deficit as % of GDP 233 8.1.9. Goods exports as % of GDP 234 8.1.10. Goods imports as % of GDP 235 8.1.11. Service Imports as % of GDP 236 8.1.12. Service Exports as % of GDP 237 8.1.13. Foreign Direct Investment 238 8.1.14. Net foreign direct investment as % of GDP 239 8.1.15. Mining, Manufacturing, Utilities Output 240 9. Appendix 241 9.1. About SDI 241 9.2. Disclaimer 241

List of Tables Table 1: The US Army Strength 29 Table 2: The US Navy (USN) Strength 31 Table 3: The US Air Force (USAF) Strength 33 Table 4: The US - Ongoing Development and Procurement Programs 35 Table 5: The US - Future Procurement Programs 38 Table 6: Top US Defense Procurement Programs by Value (US$ Million) 2018-2023 39 Table 7: US Defense Expenditure (US$ Billion), 2014-2023 44 Table 8: US GDP Growth vs. Defense Expenditure as Percentage of GDP, 2014-2023 48 Table 9: US Per Capita Defense Expenditure (US$), 2014-2023 50 Table 10: US Defense Budget Split by Base Budget, OCO, and Other Funds (US$ Billion), 2014-2023 52 Table 11: US Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 54 Table 12: US Defense Capital Expenditure (US$ Billion), 2014-2023 56 Table 13: US Defense Expenditure Allocation for Army, Air Force, Navy, and Defense-wide (%), 2014-2023 60 Table 14: The US Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Defense-Wide) 2014-2023 62 Table 15: The US Funding Allocations for Military’s Key Weapon Acquisition Programs - FY2018 64 Table 16: The US Requested Funding for Military’s Key Weapon Acquisition Programs - FY2019 65 Table 17: The US Requested Funding for Unmanned Systems by Departments (Air Force, Army, Navy and Defense Wide) - FY2019 67 Table 18: The US Requested Funding for Unmanned Systems by Categories - FY2019 68 Table 19: US Homeland Security Expenditure (US$ Billion), 2014-2023 69 Table 20: Terrorism Index, 2018 74 Table 21: Benchmarking with Key Markets: 2014-2018 vs. 2019-2023 77 Table 22: Top US Defense Market Sectors by Value (US$ Million) - 2018-2023 81 Table 23: The US Budget Formulation Process: 105 Table 24: The US Budget Enactment Timetable: 106 Table 25: Direct Commercial Sales (DCS) V/S Foreign military Sales (FMS) - A Comparative Analysis 110 Table 26: Top Defense Suppliers in The US Defense Industry - By Value (US$ Million) 2018-2023 114 Table 27: Competitive Landscape of the US Defense Industry 115 Table 28: Lockheed Martin Corp - product focus 117 Table 29: Lockheed Martin Corp. - Alliances 126 Table 30: Lockheed Martin Corp. - Recent Contract Wins 128 Table 31: Raytheon - Product Focus 136 Table 32: Raytheon - Alliances 139 Table 33: Raytheon - Recent Contract Wins 141 Table 34: General Dynamics - product focus 149 Table 35: General Dynamics - Alliances 152 Table 36: General Dynamics - Recent Contract Wins 153 Table 37: Boeing - product focus 160 Table 38: Boeing - Alliances 163 Table 39: Boeing - Recent Contract Wins 165 Table 40: L-3 Technologies, Inc. - Product Focus 171 Table 41: L-3 Technologies Inc. - Alliances 174 Table 42: L-3 Technologies Inc. - Recent Contract Wins 175 Table 43: Northrop Grumman Corp.- Product Focus 180 Table 44: Northrop Grumman Corporation - Alliances 182 Table 45: Northrop Grumman Corp. - Recent Contract Wins 184 Table 46: Science Application International Corp. (SAIC) - Product Focus 190 Table 47: Science Application International Corp. (SAIC) - Alliances 192 Table 48: Science Application International Corp. (SAIC) - Recent Contract Wins 193 Table 49: Honeywell International Inc. - product focus 199 Table 50: Honeywell International Inc. - Alliances 201 Table 51: Honeywell International Inc.- Recent Contract Wins 202 Table 52: Sikorsky Aircraft - Product Focus 205 Table 53: Sikorsky Aircraft - Alliances 207 Table 54: Sikorsky Aircraft - Recent Contract Wins 209 Table 55: General Electric Aviation - Product Focus 212 Table 56: General Electric Aviation - Alliances 214 Table 57: General Electric Aviation - Recent Contract Wins 215 Table 58: Bell - Product Focus 217 Table 59: Bell Helicopter Textron, Inc. - Alliances 218 Table 60: Bell Helicopter Textron, Inc. - Recent Contract Wins 219 Table 61: Textron Marine and Land Systems - Product Focus 221 Table 62: Textron Marine and Land Systems - Alliances 223 Table 63: Textron Marine and Land Systems - Recent Contract Wins 224 List of Figures Figure 1: US Defense Expenditure (US$ Billion), 2014-2023 44 Figure 2: US GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022 49 Figure 3: US Per Capita Defense Expenditure (US$), 2014-2023 51 Figure 4: US Defense Budget Split by Base Budget, OCO, and Other Funds (US$ Billion), 2014-2023 53 Figure 5: US Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 55 Figure 6: US Defense Capital Expenditure (US$ Billion), 2014-2023 57 Figure 7: US Defense Expenditure Allocation for Army, Air Force, Navy, and Defense-wide (%), 2014-2023 61 Figure 8: US Defense Expenditure Allocation By Military Services - Split by Army, Navy, Air Force and Defense-Wide Spending (US$ Billion), 2014-2023 63 Figure 9: US Homeland Security Expenditure (US$ billion), 2014-2023 70 Figure 10: Terrorism Heat Map, 2018 73 Figure 11: Terrorism Index, 2018 76 Figure 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 78 Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 79 Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 80 Figure 15: Land Based C4ISR Market Size (US$ Million), 2018-2023 83 Figure 16: Critical Infrastructure Protection (CIP) - Physical Security Market Size (US$ Million), 2018-2023 84 Figure 17: Critical Infrastructure Protection (CIP) - Network Security Market Size (US$ Million), 2018-2023 85 Figure 18: Multirole Aircraft Market Size (US$ Billion), 2018-2023 86 Figure 19: Airborne C4ISR Market Size (US$ Million), 2018-2023 87 Figure 20: Top US Defense Procurements in Terms of Their Supplier Relationships 89 Figure 21: US Defense Import Trend (US$ Million), 2013-2017 (TIV Values) 91 Figure 22: US Defense Imports by Country (%), 2013-2017 92 Figure 23: US Defense Imports by Category (%), 2013-2017 93 Figure 24: US Defense Exports (US$ Million), 2013-2017 96 Figure 25: US Defense Exports by Country (%), 2013-2017 97 Figure 26: US Defense Exports by Category (%), 2013-2017 98 Figure 27: Industry Dynamics - Porter’s Five Forces Analysis 100 Figure 28: Lockheed Martin Corp. - Revenue Trend Analysis (US$ billion), 2013-2017 134 Figure 29: Lockheed Martin Corp. - Operating Profit Trend Analysis (US$ billion), 2013-2017 135 Figure 30: Lockheed Martin Corp. - Net Profit Trend Analysis (US$ billion), 2013-2017 135 Figure 31: Raytheon - Revenue Trend Analysis (US$ billion), 2013-2017 147 Figure 32: Raytheon - Operating Profit Trend Analysis (US$ billion), 2012-2016 148 Figure 33: Raytheon - Net Profit Trend Analysis (US$ billion), 2012-2016 148 Figure 34: General Dynamics - Revenue Trend Analysis (US$ Billion), 2013-2017 158 Figure 35: General Dynamics - Operating Profit Trend Analysis (US$ Billion), 2013-2017 159 Figure 36: General Dynamics - Net Profit Trend Analysis (US$ Billion), 2013-2017 159 Figure 37: Boeing - Revenue Trend Analysis (US$ billion), 2013-2017 169 Figure 38: Boeing - Operating Profit Trend Analysis (US$ Billion), 2013-2017 170 Figure 39: Boeing - Net Profit Trend Analysis (US$ Billion), 2013-2017 170 Figure 40: L-3 Technologies - Revenue Trend Analysis (US$ billion), 2013-2017 178 Figure 41: L-3 Technologies - Operating Profit Trend Analysis (US$ Billion), 2013-2017 179 Figure 42: L-3 Technologies - Net Profit Trend Analysis (US$ Billion), 2013-2017 179 Figure 43: Northrop Grumman Corp. - Revenue Trend Analysis (US$ billion), 2013-2017 188 Figure 44: Northrop Grumman Corp. - Operating Profit Trend Analysis (US$ billion), 2013-2017 189 Figure 45: Northrop Grumman Corp. - Net Profit Trend Analysis (US$ billion), 2013-2017 189 Figure 46: Science Application International - Revenue Trend Analysis (US$ Billion), 2013-2017 197 Figure 47: Science Application International - Operating Profit Trend Analysis (US$ Million), 2013-2017 198 Figure 48: Science Application International - Net Profit Trend Analysis (US$ Million), 2013-2017 198 Figure 49: US GDP Per Capita, 2015-2025 226 Figure 50: US GDP, Current Prices (US$ Billion), 2015-2025 227 Figure 51: US Exports of goods and services (US$ Billion), 2005-2013 228 Figure 52: US Imports of goods and services (US$ Billion), 2005-2013 229 Figure 53: US Gross National Disposable Income (US$ Billion), 2005-2013 230 Figure 54: US Market Capitalization of Listed Companies (US$ Billion), 2005-2012 231 Figure 55: US Market Capitalization of Listed Companies (% of GDP), 2005-2012 232 Figure 56: US Government Cash Surplus/Deficit as % of GDP, 2005-2013 233 Figure 57: US Goods Exports as % of GDP, 2005-2014 234 Figure 58: US Goods Imports as % of GDP, 2005-2014 235 Figure 59: US Service Imports as % of GDP, 2005-2014 236 Figure 60: US Service Exports as % of GDP, 2005-2014 237 Figure 61: US Foreign Direct Investment (US$ Billion), 2005-2014 238 Figure 62: US Net foreign direct investment as % of GDP, 2005-2014 239 Figure 63: US Mining, Manufacturing, Utilities Output (US$ Billion), 2005-2014 240

Lockheed Martin Raytheon General Dynamics Boeing L-3 Technologies Inc. Northrop Grumman Corp. Science Application International Corp. (SAIC) Honeywell International Inc. Sikorsky Aircraft General Electric (GE) Aviation Bell Textron Marine and Land Systems