Appendix 9A. the 100 Largest Arms-Producing Companies, 2003

Appendix 9A. The 100 largest arms-producing companies, 2003

EAMON SURRY and THE SIPRI ARMS INDUSTRY NETWORK*

I. Selection criteria and sources of data

Table 9A lists the world’s 100 largest arms-producing companies (excluding China), ranked by their arms sales in 2003. The table contains information on the companies’ arms sales in 2002 and 2003, and their total sales, profit and employment in 2003. It includes public and private companies, but excludes manufacturing or maintenance units of the armed services. Only companies with manufacturing activities in the field of military goods and services are listed, not holding or investment companies. Chi- nese companies are excluded because of the lack of data. Companies from other countries might also have been included at the lower end of the list had sufficient data been available. Publicly available information on arms sales and other financial and employment data of the arms industry worldwide are limited. The sources of data for table 9A.1 include: company annual reports and Internet sites; a SIPRI questionnaire; and corporation news published in the business sections of newspapers, military journals and by Internet news services specializing in military matters. Press releases, marketing reports, government publications of prime contract awards and country surveys were also consulted. In the absence of data from these sources, estimates have been made by SIPRI. The scope of the data and the geographical coverage are largely determined by the availability of information. All data are continuously revised and updated and may change between different editions of the SIPRI Yearbook. The source for the dollar exchange rates is the International Monetary Fund (IMF), as provided in its International Financial Statistics.

II. Definitions

Arms sales. Arms sales are defined by SIPRI as sales of military goods and services to military customers, including both sales for domestic procurement and sales for export. Military goods and services are those which are designed specifically for military purposes and the technologies related to such goods and services. They exclude sales of general-purpose goods (e.g., oil, electricity, office computers, clean- ing services, uniforms and boots). They include all revenue related to the sale of military equipment, that is, not only for the manufacture but also for the research and

* Participants in the network for this yearbook were: Ken Epps (Project Ploughshares, Canada), Jean-Paul Hébert (Centre Interdisciplinaire de Recherches sur la Paix et d’Etudes Stratégiques, Paris), Reuven Pedatzur (Tel Aviv University), Giovanni Gasparini (Istituto Affari Internazionali, Rome), Gülay Günlük-Senesen (Istanbul University), Paul Dunne (Uni- versity of the West of England, Bristol) and Julian Cooper (Centre for Russian and East Euro- pean Studies, University of Birmingham). ARMS PRODUCTION 405 development, maintenance, servicing and repair of the equipment. Sales related to post-war reconstruction are defined as arms sales if the contracts are awarded by a defence ministry. This definition serves as a guideline; in practice it is difficult to apply. Nor is there any good alternative, since no generally agreed standard definition of ‘arms sales’ exists. The data on arms sales in table 9A.1 often reflect only what each company considers to be the defence share of their total sales. The comparability of company arms sales in table 9A.1 is therefore limited. Total sales, profit and employment. Data on total sales, profit and employment are for entire companies, not for arms-producing divisions alone. All data are for consolidated sales, including those of national and foreign subsidiaries. The profit data represent profit after taxes. Employment data are year-end figures, except for those companies which publish only a yearly average. All data are presented on the financial year basis reported by the company in its annual report.

III. Calculations

Arms sales are sometimes estimated by SIPRI. In some cases SIPRI uses the figure for the total sales of a ‘defence’ division, although the division may also have some, unspecified, civil sales. When the company does not report a sales figure for a defence division or similar entity, estimates can sometimes be made based on data on contract awards, information on the company’s current arms production programmes and figures provided by company officials in media or other reports. The data for arms sales are used as an approximation of the annual value of arms production. For most companies this is realistic. The main exception is shipbuilding companies. For these companies there is a significant discrepancy between the value of annual production and annual sales because of the long lead (production) time of ships and the low production run (number). Some shipbuilding companies provide estimates of the value of their annual production. These data are then used by SIPRI for those companies. All data are collected in local currency and at current prices. For conversion from local currencies to US dollars, SIPRI uses the IMF annual average of market exchange rates. The data in table 9A.1 and most of the tables in chapter 9 are provided in current dollars. Changes between years in these data are difficult to interpret because the change in dollar values is made up of several components: the change in arms sales, the rate of inflation and, for sales conducted in local currency, fluctuations in the exchange rate. Sales on the international arms market are often conducted in dollars. Fluctuations in exchange rates then do not have an impact on the dollar values but affect instead the value in local currency. If the value of the dollar declines, then the company’s revenue in local currency falls and, if its production inputs are paid for in local currency—which most often is the case—this has a nega- tive impact on the company’s profit margins. Calculations in constant dollar terms are difficult to interpret for the same reasons. Without knowing the relative shares of arms sales derived from domestic procurement and from arms exports, it is impossible to interpret the exact meaning and implications of the arms sales data. These data should therefore be used with caution. This is particularly true for countries with strongly fluctuating exchange rates. 406 MILITARY SPENDI NG AND ARMAMENTS, 2004 . 10 000 . . 10 92 500 365 77 700 718808 157 000 122 600 126172 57 440 109 140 225278 46 860 38 700 519351 90 000 42 700 190 35 210 187 59 949 –820 101 380 1 053 130 000 1 004 67 600 2 361 203 300 15 002 305 000 2 85 78 48 87 77 79 70 24 20 57 89 24 26 55 40 32 12 100 sales % of as Profit Employment

2003 2002 2003 column 8 2003 2003 Arms sales Total Column 6 b Country/ USAUSAUSA Ac El Mi SpUK Ac El Mi Sp Ac El Mi SA/A Sh SpUSA 22 720 A Ac El Mi SA/A Sh 24 910 17 800Europe 15 760 A El MV Sh 24 370 18 870 14 070 Ac El Mi Sp 26 206 22 170 31 824 USA 20 542 50 485 USA 13 100USA El 8 010 9 820 Comp (Oth) Comp (Oth) 5 630 16 617 34 010 920 3 Japan 780 3 4 480 480 1 980 Ac MV Mi Sh 3 020 16 271 14 768 5 061 2 430 2 780 20 472 k m l i e g c f j d h EADS, Europe/ Finmeccanica, Italy)

The 100 largest arms-producing companies (excluding China), 2003

56 3 6 Raytheon General Dynamics USA El Mi 15 450 14 510 18 109 23 14 4 Boeing 5 Northrop Grumman 7 BAE Systems 8 79 9 Thales 8 EADS United Technologies, UTC USA El Eng France El Mi SA/A 210 6 5 640 8 350 31 034 6 840 11 929 1 2 Lockheed Martin S SS Pratt & Whitney (UTC) S MBDA (BAE Systems, UK/ USA Europe Mi Eng 2 710 030 3 1 690 2 490 2 710 7 505 1011 1012 1113 Finmeccanica 6614 L-3 Communications 16 Halliburton 1215 Computer Sciences Corp., CSC SAIC 13 Rolls Royce Italy17 15 A Ac El MV Mi SA/A General Electric 5 290 3 720 UK USA 9 339 Comp (Oth) Eng USA Eng 700 3 3 000 2 970 6 720 2 850 400 2 9 224 2 200 134 187 16 14 Mitsubishi Heavy Industries

Table 9A.1. Figures in columns 6, 7, 8 and 10 are US$ m., at current prices exchange rates. 12 3Rank 2003 2002 Company (parent company) region 4 Sector 5 6 7 8 9 1011 ARMS PRODUCTION 407 . . . 35 000 . 130 000 . . 92 13 320 46 12 780 55 29 310 15 14 350 60 10 300 6429 9 000 45 11 500 5 800 141165 7 300 35 480 391205 39 000 39 700 –36 60 000 333–97 8 860 20 890 259 43 000 100 20 000 258 14 500 578 190 100 183 32 300 506 362 060 162 13 000 –168 15 040 1 324 108 000 3 1 27 32 24 80 23 49 31 49 95 14 14 30 70 50 85 56 18 26 84 57 94 10 62 100 100 100 USAUSA Comp (Oth)France MV Sh 170 2 480USA 2 050 9 276 Comp (Oth) 1 730 1 870 1 370 2 050 Russia 1 870 AcJapan 660 1 1 359 Ac Eng Mi ShIndia . 1 370 A SA/A 420 1 . . 880UKUSA 960 10 008 USA Comp (Oth)Germany 1 500 Comp (Oth) . . 210 1 Eng El 14 000 1 180 1 426 090 1 010 1 930 730 920 1 300 1 775 940 920 610 153 992 1 001 m j w n s j v p t q r o u Services (Halliburton)

S – Dyncorp (CSC) S S Rheinmetall DeTec (Rheinmetall) Germany A El MV SA/AS – 810 1 Brown & Root 1 580 1 810 USAS Comp (Oth) S ThyssenKrupp Werften (TK) 540 1 Germany Sh . . . . . 110 1 950 . . 6 153 . . S S KBR (Halliburton) 2021 18 23 GKN DCN 2425 2126 29 ITT Industries 24 Groupe SNECMA Saab UK France USA Ac Eng El Sweden Ac El Mi 2 020 1 750 1 800 1 790 1 160 1 510 1 700 7 492 7 258 1 310 5 627 2 133 2223 30 20 Groupe Dassault Aviation Rheinmetall France27 Ac 32 CEA30 Germany31 A El MV SA/A 2232 4133 Textron 3434 810 1 Kawasaki Heavy Industries 25 810 1 35 Goodrich 31 1 14036 Israel Aircraft Industries 28 1 58037 Rockwell Collins 36 3 722 Ordnance Factories France 37 5 923 38 Harris39 Israel ThyssenKrupp, TK Oth 3340 3841 Smiths Ac El Mi USA 4542 QinetiQ USA 53 USA Titan 39 Ac El Eng MV DRS Technologies Germany El DaimlerChrysler, DC Comp (Ac) Sh 1 540 1 310 1 400 USA 1 100 1 260 1 390 El 1 320 UK 3 175 1 868 9 859 1 020 1 270 El 110 1 4 383 1 120 950 2 542 40 787 1 170 960 100 1 2 093 1 100 4 296 18 17 Honeywell International USA El 2 270 830 1 23 103 29 35 Sukhoi 28 26 ATK USA SA/A 460 1 1 250 2 366 19 19 United Defense, UD 408 MILITARY SPENDI NG AND ARMAMENTS, 2004 9 3 080 . 2 380 . . . 10 000 . 10 730 3646 7 600 58 5 200 25 . 8 640 3058 5 000 26 000 30 8 990 76 6 100 35 5 000 1919 5 670 6 540 33 2 800 187 11 750 135 14 680 387 98 990 129 . 102 9 490 –722 6 000 –1 698 132 000 3 3 88 12 55 77 23 35 95 23 78 50 34 80 91 36 68 84 89 22 100 100 100 100 sales % of as Profit Employment

2003 2002 2003 column 8 2003 2003 Arms sales Total Column 6 b Country/ USA Comp (Oth)FranceSpain El 920Japan Sh 640 El Mi 1 042 USAS. Korea Comp (Oth) 830 A El MV Mi Sh 830 820 620USA 700 590 3 590 670 Comp (Oth) 690 2 370 28 548 S. Korea 550Italy 570 Ac 21 476 Sh 640 . 430 . . 702 600 . . 610 570 . . 460 671 2 644 dd cc m y ee bb x z aa

S S ST Engineering (ST)S Singap. S Ac El MV SA/A Sh EG&G (URS Corporation) 890 USA 830 Comp (El Oth) 1 618 720 . 928 54 57 EDS 4445 42 4346 Elbit Systems47 Singapore Technologies, ST 4948 51 VT Group 48 Singap. Groupe SAGEM 51 SEPI Ac El MV SA/A Sh52 46 27 Israel53 890 Rafael URS Corporation 56 El55 83056 Krauss-Maffei Wegmann 60 UK57 59 7 290 58 Cobham 5559 Samsung 62 Sh Germany60 Oshkosh Truck USA 74 MV61 Hindustan Aeronautics 6162 ManTech International 67 Comp (El Oth) Israel63 Diehl 72 90064 RUAG 5265 Ac Mi SA/A Oth Babcock International Group 68 India 860 Korea Aerospace Industries 85 USA Fincantieri 720 UK UK Ac Mi 840 Alvis 900 710 790 MV . Comp (Ac El) Sh 660 570 720 187 3 1 096 Germany Switzerl. 710 830 Mi SA/A A Ac Eng SA/A 680 650 540 510 660 UK 620 620 1 360 590 816 630 MV Oth 470 440 1 926 510 907 739 1 751 570 340 570 43 50 Anteon 4950 44 54 GIAT Industries Mitsubishi Electric France A MV SA/A 820 730 820

12 3Rank 2003 2002 Company (parent company) region 4 Sector 5 6 7 8 9 1011 ARMS PRODUCTION 409 ...... 2 900 . . . 2 600 . . . 8 400 . 6 680 2 300 . 1 990 33–8 5 120 4 800 4543 6 400 37 2 950 81 3 920 6 370 44 44 480 46 5 000 18 4 180 90 20 660 33 2 510 15 2 640 –1 51 580 128 21 100 354 143 390 –14 16 346 –50–53 10 930 3 300 1 3 92 39 12 64 95 36 46 88 93 84 92 77 90 58 76 38 46 55 92 96 18 26 65 80 89 97 UKItalyUSA Sh Eng Comp (Oth)USAJapan Comp (Oth) 560RussiaUSA El 570 560 ElRussia 490 MV 450 Ac 530 4 615 510Canada 1 436 El 624 450USA 490 581 490 Comp (Oth) 490 390 480 480 380 42 325 490Russia 450 582 430 Eng . 522 390 420 . . 780 785 . . 390 320 . . 407 ff r ii hh jj r kk mm gg m ll r Thales, France)

S SS Samsung Techwin (Samsung) S S. Korea US Marine Repair (UD) A El Eng MV USA 520 Comp (Sh) 420S 1 455 S ADI (Transfield Group/ 510S 240S Australia S El SA/A Sh S 545 MTU Aero Engines (DC) MTU Friedrichshafen (DC) Germany Germany 420 Eng Eng 330 462 390 380 430 480 2 144 1 458 S S Ericsson Microwave (Ericsson) Sweden El 400 110 407 6768 S69 6470 73 Avio Jacobs Engineering Group 8171 CACI International72 Engineered Support Systems 82 7173 Indra USA74 The Aerospace Corporation 7975 65 USA76 El NEC 8077 Aerokosmicheskoe Oborud. 6378 Comp (Oth) AM General Corporation 7679 Irkut 8480 Bharat Electronics 7881 Industries Israel Military 8882 CAE 7083 Denel Spain 86 540 Stewart & Stevenson 75 540 Israel Kongsberg Gruppen El 430 India Mitre 380 A MV SA/A El 843 USA 573 Norway MV El Mi SA/A87 46088 S. Africa 94 510 A Ac El MV Mi SA/A 89 350 Tenix 450 Ultra Electronics 360 460 430 514 320 1 114 410 330 450 587 450 599 UK 939 1 176 Australia El El SA/A Sh 370 370 280 320 571 465 66 69 Devonport Management Limited 85 – Ericsson Sweden El 400 110 14 561 84 93 EDO USA El 410 290 461 86 87 Ufimskoe MPO 410 MILITARY SPENDI NG AND ARMAMENTS, 2004 8 15 000 4. . 4. . 1 000 39 34 000 15 1 250 37 4 700 4352 4 740 4 660 46 5 310 34 3 480 249 161 000 233 31 640 –331–130 8 140 3 710 subsidiaries. A dash (–) in on to this appendix. ies in 2002. Company names /A = small arms/ammunition, e 2002 ranks may differ from company itself and sometimes within the parentheses; it is used 1 3 3 64 44 31 58 47 47 32 45 100 100 100 sales % of as Profit Employment

2003 2002 2003 column 8 2003 2003 Arms sales Total Column 6 b onics, Eng = engines, Mi missiles, MV military vehicles, SA Country/ JapanRussiaJapan El Mi Comp (Ac)RussiaJapan MV SA/A MVUSA Eng Sh Comp (Oth) 340 340 320 230 400 290 300 320 310 532 48 127 10 320 360 270 550 9 035 962 717 m nn r r m m Samsung, South Korea)

: This table includes companies supplying military goods and services to customers. For definitions see the introducti a

Companies are ranked according to the value of their arms sales in 2003. with designation S column 1 or 2 Key to abbreviations: A = artillery, Ac aircraft, El electr Notes a b S S Samsung Thales (Thales, France/ S. Korea El 300 260 300 S S Hägglunds Vehicle (Alvis, UK) Sweden MV 290 150 290 94 999697 MMPP Salyut 9798 58 Uralvagonzavod 83 Ishikawajima-Harima HI Silicon Graphics 8990 90 98 Cubic Corporation SMA USA Comp (El Oth) France 370 Comp (Ac) 310 634 360 230 360 9192 9193 – Moog 77 Curtiss-Wright Toshiba USA USA Comp (Ac) Comp (El Mi) 350 360 210 300 746 755 99 100 Meggitt UK Oth 290 230 658 95 92 Komatsu

column 2 indicates either that the company did not make arms sales in 2002 or it rank among 100 largest compan and structures are listed as they were on 31 Dec. 2003. Information about subsequent changes is provided in these footnotes. Th those published in the SIPRI Yearbook 2004 due to continual revision of data, most often because changes reported by because of improved estimations. Major revisions are explained in these footnotes. Sh = ships, Sp space and Oth other. Comp (. . .) components, services or anything less than final systems in the sectors only for companies that do not produce final systems. 12 3Rank 2003 2002 Company (parent company) region 4 Sector 5 6 7 8 9 1011 100 – Groupe SNPE France A SA/A 280 200 885 ARMS PRODUCTION 411 together with ) prime contracts ). EADS is regis- ctivities of Alenia z Dec. 2004. Arms sales pons programmes. Dec. 2003. be other companies that in Dec. 2004 to sell that rt. ee note isions are civilian in nature, re listed under KnAAPO. ch and Orbital Systems unit. revenues from the US DOD, nths of the year. Veridan was ture. The work done by these on. the contracts may be spread out ian rating agency, while data for company names are likely to change as owned by DaimlerChrysler (Germany), 30.2% Lagardère (France) Brown and Root Services, represent US Department of Defense (DOD For Japanese companies figures in the arms sales column represent new military contracts rather than sales. Data for Boeing arms sales are the Total Integrated Defense Systems unit, excluding of largely civilian Laun Data for General Dynamics’ arms sales include an estimate of $300 million the Veridian in first seven mo EADS (European Aeronautic Defence and Space Company) is 30.2% The Carlyle Group exited their investment in United Defense April 2004. Data for DCN are sales revenue rather than value of production. In the SIPRI Yearbook 2004 data were producti Dyncorp was acquired by Computer Sciences Corporation in March 2003. Veritas Capital subsequently agreed to acquire Data for Sukhoi are from the Centre Analysis of Strategies and Technologies. In SIPRI Yearbook 2004 data we Data for Lockheed Martin arms sales include management fees from the US Department of Energy nuclear wea Northrop Grumman completed its acquisition of TRW Inc. on 11 Dec. 2002. They provided pro forma data in their 2002 annual repo Computer Sciences Corporation is a provider of IT services and products to defence ministries. Figures for arms sales are This is the second year that Russian companies have been integrated into SIPRI list of arms-producing companies. There may Data for BAE Systems arms sales are total non-commercial sales, although it is known that some elements in its defence div Data for L-3 Communications’ arms sales include $470 million Vertex Aerospace, which was acquired by Communications in Arms sales data for Halliburton and its subsidiaries, KBR Matra Missiles and the missile a MBDA was established in Dec. 2001 through the merger of Matra BAe Dynamics, EADS-Aérospatiale c h d e f g i j k l m n o p q r acquired by General Dynamics in Aug. 2003. French financial institutions and Sogepa (a state holding company), 5.5% by SEPI Spanish company; s tered in the Netherlands. represent US DOD prime contracts awarded rather than arms sales. awarded rather than arms sales. An uncertain share of these contracts is for military applications, and revenues received from over several years. Some of the tasks performed under these contracts would usually be considered by SIPRI to civilian in na companies at times of war, however, presents particular definitional difficulties. See the section on sources and methods. Marconi Systems. The company is 37.5% owned by BAE Systems, EADS and 25% Finmeccanica. and that some elements in the commercial divisions are military nature. should be in the list, but insufficient data are available. The situation Russian arms industry is still very fluid, and they are restructured. For all companies except Sukhoi and Irkut, data for total sales profits from Expert RA, the Russ arms sales share estimates and employment are from the Centre for Analysis of Strategies Technologies. an unknown share of which is for military applications. Computer Sciences Corporation acquired Dyncorp in March 2003 and agreed company to Veritas Capital. Beginning in 2003 Boeing changed the way which they report their market segments. 412 MILITARY SPENDI NG AND ARMAMENTS, 2004 Hyundai Space and estimate of sales was ar. The military ship- ude DaimlerChrysler’s ency. In Feb. 2003 the ompany is now known as les. nse Technologies only from etained a 62.5% share. tate holding company which e of US DOD prime contract ivilian ‘security’ sales. r Force, Army and Navy, an les to departments of defense inistries, an unknown share of of $300 million in 2002. OD, an unknown share of which onsolidation of Samsung Aerospace, Daewoo Heavy Industries and activities of MTU Aero Engines and Friedrichshafen but excl tries. Figures for arms sales represent total to defence m istries. Figures for arms sales are total to the US D EDS is a provider of IT services and products to defence minis Data for Samsung arms sales are the estimated of Techwin in addition to 50% Tha Korea Aerospace Industries was established in 1999 through the c FiatAvio was acquired in July 2003 by the Carlyle Group (70%) and Finmeccanica (30%) renamed Avio SpA. Data for Jacobs Engineering Group arms sales represent US DOD prime contracts awarded rather than sales. ManTech International is a provider of IT services and products to defence ministries. Figures for arms sales are total sa Fincantieri is owned by Fintecna, which was formed in Nov. 2002 from the Institute for Industrial Reconstruction, an Italian s Data for DaimlerChrysler arms sales are the arms-producing Devonport Management Limited is owned by KBR, a subsidiary of Halliburton, USA. The Aerospace Corporation operates a Federally Funded Research and Development Center for the US DOD. Limited financial data are publicly available for AM General. The SIPRI estimate of arms sales is based on a three-year averag Titan is a provider of IT services and products to defence ministries. Figures for arms sales are total the US Ai Anteon is a provider of IT services and products to defence min DRS acquired Integrated Defense Technologies in the third quarter of 2003. financial data include for Defe Data for SAGEM’s arms sales are based on the company’s reported ‘aeronautics and defence’ sales, exclude their primarily c Data for Ordnance Factories are based on the Indian Ministry of Defence Annual Report 2003–2004. In SIPRI Yearbook 2004 an is the owner of Spanish shipbuilder Iz The state-owned holding company SEPI (Sociedad Estatal de Participaciones Industriales) QinetiQ was created on 1 July 2001 out of a major part the British Ministry Defence’s Defence Evaluation and Research Ag s w x t u v y z aa bb cc dd ee ff gg hh ii jj building activities of Izar were transferred to a new company, ‘New Izar’, also fully owned by SEPI, on 31 Dec. 2004 (the c Navantia). Arms sales data for 2002 are uncertain. unknown share of which is for military applications. had been in a process of liquidation since 2000. awards plus a rough estimate of their exports. British Government sold a 33.8% share in the company to the investment company the Carlyle Group, USA. The British government r British Government sold a 33.8% share in the company to investment Carlyle Group, USA. The government Aircraft Company. which is for military applications. 30.1% share in EADS. The private equity firm Kohlberg Kravis Roberts & Co. agreed Nov. 2003 to acquire MTU Aero Engines. made based on available total sales data for Apr.–Dec. 2002 and arms share 2001. is for military applications. 4 Nov. 2003 until the end of DRS financial year on 31 Mar. 2004. Integrated Defense Technologies had approximate arms sales and intelligence agencies, an unknown share of which is for military applications. ARMS PRODUCTION 413 iled information about f their ‘marine’ division is civil- y’ and ‘marine’ divisions, although it is known that an element o Mitre operates three Federally Funded Research and Development Centers for the US DOD. Silicon Graphics is a provider of IT services and products to defence ministries. Irkut was partly privatized in Mar. 2004 when 23.3% of the company sold on Russian stock exchange. provides deta Data for CAE arms sales are the total of their ‘militar kk ll mm nn the company on its website, and all data are from their own consolidated financial statements. ian in nature.