© Copyright 2003 Frost & Sullivan. All Rights Reserved. U.S. Department of Defense (DoD) Research, Development, Test & Evaluation (RDT&E) Markets Transformation Policy Leads to Colossal Increase in 2004 RDT& E Budget Allocation “The Department of Defense’s RDT&E budget for 2004 is the single largest R&D account within the U.S. Federal Government, accounting for $61.8 billion” Defense Technologies Group

© Copyright 2003 Frost & Sullivan. All Rights Reserved. Industry Trends The 2004 RDT&E budget is $5 billion more than 2003, largest increase in real dollars since 1962 DoD’s ‘transformation’ policy is having significant impact on existing programs and new start-ups funding RDT&E funding is both positively and negatively impacted by war on terrorism and Middle East conflicts Majority of RDT&E funding is expected to increase in the near term Economic factors cast doubt on long-term budget forecasts

© Copyright 2003 Frost & Sullivan. All Rights Reserved. Key Features Frost & Sullivan Provides: Complete coverage of DoD RDT&E funding Expanded application categories New breakdown of program elements by development phase Complete coverage of all 14 agencies under the ‘Defense Wide’ that fall outside the three main branches of the armed services Budget forecasts for all categories other than classified Industry awards

© Copyright 2003 Frost & Sullivan. All Rights Reserved. Who Will Benefit? Current Market Participants  Find out how the focus and direction of the DoD RDT&E market is changing from year to year  Assess current and future drivers and restraints  Determine and exploit new programs and plan for future phase development of existing programs New Entrants  Analyze challenges associated with the industry  Identify growth segments within the RDT&E markets Investment Community  Analyze short- and long-term industry strategies  Identify growing/contracting DoD RDT&E markets  Assess attractiveness of investing in RDT&E markets of the U.S. defense industry

© Copyright 2003 Frost & Sullivan. All Rights Reserved.  Boeing  Boeing Sikorsky Comanche Team  Lockheed Martin Corp.  Northrop Grumman Corp.  Raytheon Co.  United Technologies Corp. Key Market Participants

© Copyright 2003 Frost & Sullivan. All Rights Reserved. Aerospace & Defense Sales Managers Marty Medwin: Aaron Kravetz: VP, Aerospace & Defense Gary Leikin Tel For More Information

© Copyright 2003 Frost & Sullivan. All Rights Reserved. Relevant F&S Syndicated Reports A286-22: North American Markets for Imagery, Data and Value-added services. (Vertical Markets) A024-22: North American GPS Markets A080-16: European Vertical Markets